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9263732-13831	LYNCH, Circuit Judge. Feeling betrayed when he learned that a new, sterner regime in the United States Attorney’s Office had rejected an eight-year sentencing recommendation from an Assistant U.S. Attorney in favor of a ten-year recommendation, Darnell Moore fled from his sentencing hearing at the Boston courthouse in July 2002. While a fugitive, he wrote a pro se letter to the court, asking to withdraw his plea. He was apprehended on October 2, 2002, and brought before the court on October 9. Moore’s counsel was advised the day before of a court hearing on October 9. Thinking that the court would schedule a later sentencing hearing, counsel learned instead at the October 9 hearing that the court intended to go forward with sentencing. Counsel asked for a continuance. The court would have none of it; it denied both the continuance and a motion to withdraw the plea, and sentenced Moore to eighteen years, in light of his flight. Moore appeals both the denial of the motion to withdraw and the denial of the continuance. We affirm, with a cautionary note. I. Darnell A. Moore was charged with two counts of unarmed robbery, in violation of 18 U.S.C. § 2113(a), on July 19, 2000. He initially pled not guilty and then, on November 28, 2001, entered into a plea and cooperation agreement with the government. Under the plea agreement, the government agreed (1) to recommend an aceeptance-of-responsibility adjustment under U.S.S.G. § 3E1.1 if Moore accepted responsibility and did not engage in any untruthful or illegal conduct and (2) to recommend a downward departure pursuant to U.S.S.G. § 5K1.1 if Moore provided substantial assistance to the government. The plea agreement did not specify the particular sentence that the government would recommend if Moore rendered substantial assistance; it provided explicitly that “[t]he U.S. Attorney reserves the right to recommend a particular sentence or sentencing range, or to make no recommendation at Defendant’s sentencing.” On February 20, 2002, Moore informed the court that he wished to change his plea and proceed to trial. Then, on March 13, 2002, the government returned a superseding indictment that charged Moore with two additional bank robberies. At this point, Moore, who had already run into problems with the first appointed counsel, sought to have his second appointed attorney withdraw as counsel. Moore and his attorney filed motions to that effect, the attorney was allowed to withdraw, and Moore’s present attorney was appointed to represent him. The government agreed to dismiss the superseding indictment after sentencing if Moore pled guilty to the original indictment. At a Fed.R.Crim.P. 11 hearing on May 29, 2002, Moore pled guilty to the original indictment. The district court made the complete inquiry required by Rule 11(b); Moore does not argue otherwise. During the hearing, the court calculated the applicable guideline range. Moore was determined to be a career offender under U.S.S.G. § 4Bl.l(a). The offense statutory maximum for 18 U.S.C. § 2113(a) is twenty years of imprisonment, so Moore was assigned an offense level of 32 under § 4Bl.l(b)(C). That offense level was greater than the offense level that would have been applicable to 18 U.S.C. § 2113(a) had Moore not been a career criminal, so it became the relevant offense level pursuant to § 4Bl.l(b). The court projected a three-point acceptance-of-responsibility decrease in the offense level under U.S.S.G. §§ 3El.l(a) and (b), making the final offense level 29. Under § 4131.1(b), a career offender’s criminal history category is VI. The offense level of 29 and the category VI criminal history resulted in an applicable guideline range of 151 to 188 months of imprisonment. U.S.S.G. ch. 5, pt. A. The court’s calculation did not account for any downward departure. The government repeated before the court that it intended to recommend a sentence at the low end of that range. The court advised Moore that under the plea agreement the government was only promising to consider asking the court to decrease the sentence further pursuant to the substantial assistance downward departure motion. The court also explained to Moore that it would be under no obligation to follow the government’s recommendation, should the government choose to make one. Sentencing was scheduled for July 10, 2002, and Moore was permitted to remain on release, subject to conditions, until then. The day before the July sentencing hearing, Moore was in counsel’s office reviewing the presentence report. While Moore was there, his counsel received a call from the AUSA prosecuting the case, who informed him that his superiors had disagreed with the sentence he was going to recommend to the court in connection with the government’s § 5K1.1 departure motion. The AUSA had recommended 96 months of imprisonment (eight years) to his superiors, and he later acknowledged before the district court that he had “made prior representations [to Moore and counsel] based on my best estimate of where I thought our office was going to come out, where my immediate supervisor and my former supervisor thought our office was going to come out.” There was an intervening change in administration, however, and the new U.S. Attorney for Massachusetts and the downward departure committee disagreed with the AUSA’s request and decided upon a recommended sentence of 120 months of imprisonment (ten years). The AUSA also stated that he was no longer in a position to agree to Moore’s motion to self-report to serve any imposed term of imprisonment. Counsel relayed the bad news to Moore. That same day, the government filed its downward departure motion under seal. The next day, Moore and his attorney arrived at court at nine o’clock in the morning for the sentencing hearing and learned that the hearing was actually scheduled for two o’clock. Counsel told Moore that he could leave the courthouse and should return just before two o’clock. Moore returned to the courthouse with his girlfriend. He met his counsel and spoke to the AUSA separately. Before entering the courtroom, Moore told counsel that he wanted to say goodbye to his girlfriend. Counsel entered the courtroom without Moore and then, when he went back to look for Moore a few minutes later, Moore was nowhere to be found. The district court postponed the hearing until 3:45, declined to issue a bench warrant for Moore’s arrest at that time, and stated that “if we find him this afternoon I’m not going to hold it against him.” Moore never showed, so the court issued a bench warrant for his arrest. Counsel and the AUSA expressed to the court their surprise at Moore’s absence, given that Moore had met all of his other obligations, and the court indicated that Moore would “be treated with great respect” when brought back into court. While a fugitive, Moore filed a pro se motion to withdraw his guilty plea; the motion included a claim that he was innocent of the charges. The court denied the motion because Moore was a fugitive and because he still had court-appointed counsel. Moore was arrested by state authorities on October 2, 2002. That day, the government filed a motion under seal seeking to withdraw its § 5K1.1 motion and giving notice of its intent to abrogate the plea agreement. By letter dated October 2, the AUSA notified Moore’s counsel that Moore had now committed new crimes, subjecting him to lengthy imprisonment, and that the government had withdrawn its § 5K1.1 motion and would no longer recommend an acceptance-of-responsibility adjustment. On October 7, the prosecution sought and obtained a writ of habeas corpus to return Moore to federal custody on October 9. The application for the writ said “[ajppearanee is necessary for the purpose of sentencing.” The record does not indicate whether Moore’s counsel was served with this writ, or if he was, when he received it. Moore was brought into court on October 9, 2002. His counsel had been given only one day’s notice of Moore’s court appearance and had not been told that Moore would be sentenced that day. Moore’s counsel immediately moved for a continuance, saying that he had not had the opportunity to see his client since Moore had been apprehended and before he saw him at the hearing. The court’s response was to ask counsel whether he had been ready to go forward with sentencing on July 10. Counsel acknowledged that he had been so prepared. The court then denied the continuance motion, noting that “[t]he matter was fully prepared, and I see no reason to continue the disposition because it’s been delayed.” In light of the court’s statement, counsel did not press further his reasons for asking for a continuance. At Moore’s insistence, counsel next moved to withdraw as Moore’s attorney, but the district court convinced Moore that having counsel withdraw was unwise. Then, counsel moved to withdraw Moore’s guilty plea. After hearing from both counsel and Moore, the court denied the motion, stating that “[t]he plea as it was entered was knowing, intelligent and voluntary and all accurately explained.” The district court denied the government’s motion to withdraw its § 5K1.1 motion but noted that the government was not bound to its earlier sentencing recommendation. Because of Moore’s flight, the court refused to grant him an adjustment for acceptance of responsibility. The applicable offense level thus moved from 29 to 32, and the applicable guideline sentencing range became 210 to 262 months of imprisonment. The government recommended a sentence of 262 months based on a number of factors, including the defendant’s flight (which violated the conditions of his release order and the plea agreement) and his attempt to evade apprehension after his flight. Moore’s attorney recommended a § 5K1.1 departure and a sentence of 151 months. The district court declined to depart downward based on § 5K1.1, telling Moore that “in the exercise of discretion I think you threw it all away when you walked out of here.” The court declared Moore a career criminal and imposed a sentence of 216 months of imprisonment (eighteen years), concurrent on the two counts, with three years of supervised release, restitution of $6,166, and a $200 special assessment. II. Moore argues that the district court’s refusal to grant the motion to withdraw his plea was error. Our review of the denial of the motion to withdraw the guilty plea is for abuse of discretion. United States v. Santiago, 229 F.3d 313, 316 (1st Cir.2000); United States v. Gonzalez-Vazquez, 34 F.3d 19, 22 (1st Cir.1994). A defendant bears the burden of demonstrating a “fair and just reason” for seeking to withdraw his plea. Fed.R.Crim.P. 32(d) (2001) (amended 2002). “In its determination of whether a defendant has shown a sufficient reason for withdrawing his guilty plea before sentencing, the court focuses primarily on whether the plea was voluntary, intelligent and knowing within the meaning of the rule governing plea colloquies.” Santiago, 229 F.3d at 316-17. In addition, certain factors are often particularly relevant to the motion, including: “the plausibility of the proferred reason, the timing of the attempted retraction, the presence or absence of a protestation of innocence, and whether the circumstances cast serious doubt on the bona fldes of the original plea.” United States v. Torres-Rosa, 209 F.3d 4, 8-9 (1st Cir.2000); Santiago, 229 F.3d at 317. The thrust of Moore’s argument is that he should have been able to withdraw his plea because he was misled by the government. He maintains that the AUSA prosecuting his case made representations to him and to his counsel that the government was going to recommend a sentence of eight years based upon a § 5K1.1 downward departure. Moore argues that he did not understand that the AUSA’s eight-year recommendation could be changed by the U.S. Attorney and the downward departure committee to a ten-year sentence, and that this misunderstanding provided reason to withdraw his plea. Moore is, apparently, a veteran of the state criminal process in which there may be less oversight of recommendations by an individual prosecutor. Moore argues that his situation is unique: He was caught in the middle of administration and policy changes within the U.S. Attorney’s Office and those changes led to an allegedly rare occurrence — the internal rejection of an AUSA’s sentencing recommendation. The uniqueness of the situation, he says, establishes a “fair and just reason” for the withdrawal of his plea. There is also a contention that he is innocent, although he admitted his guilt when he entered his plea. The district court did not abuse its discretion in denying Moore’s plea withdrawal motion. Its determination that Moore’s plea was “knowing, intelligent and voluntary” is well-supported. The plea colloquy here was well-done, clear, and thorough, and Moore does not raise any challenge to its adequacy. The record shows that Moore was not misled; it was clear that the government had only agreed to consider supporting a downward adjustment. A change in policy within the United States Attorney’s Office was an unlucky break for Moore, “but the fact that a defendant finds himself faced with a staffer sentence than he had anticipated” certainly does not compel a conclusion that there is a fair and just reason for abandoning a guilty plea. Torres-Rosa, 209 F.3d at 9. The presence of a claim of innocence in Moore’s pro se motion for plea withdrawal is more serious. But he had admitted his guilt and gave no reason in the motion as to why that admission was not accurate. The district court was entitled to discount the claim of innocence. The pro se motion was obviously motivated by the disappointing news that the government’s recommended sentence would be ten years rather than eight. III.
4263217-17990	ANDERSON, District Judge. The defendant is the owner of United States Letters Patent No. 2,224,403. The plaintiff has brought a declaratory judgment action in three counts claiming (1) that the patent is invalid, that it is unenforceable because of the defendant’s misuse of it and that it is not infringed by the plaintiff; (2) damages and an injunction for the defendant’s violation of the anti-trust laws; and (3) damages and an injunction for the defendant’s acts of unfair competition. The defendant has counterclaimed for infringement and contributory infringement of the patent. The parties are at issue on these claims. Findings of Fact 1. Patent No. 2,224,403, now owned by the defendant, a Connecticut corporation, was issued December 10, 1940, to Harold A. Lines of West Haven, Connecticut. 2. The patent relates to electrical heating of the storage and transportation system for viscous liquids, particularly the transportation of heavy fuel oil from a storage tank to an oil burner. 3. At the time of the issuance of the patent and continuously since that time, it was found desirable for purposes of economy in heating hospitals, schools, public and large commercial buildings by means of oil to use very heavy grades of oil such as Nos. 5 and 6, sometimes called Bunker C, which has a high viscosity. 4. To transport such oil from supply tank to burner, it is necessary to apply heat to the oil to reduce the viscosity and render it readily flowable for pumping. 5. In the years immediately prior to and for some years following the issuance of the patent, the viscosity of this heavy oil used for oil burners was reduced by steam or hot water, immersion or spot heaters on the pipe lines, and coils inside of the supply tank. 6. The steam and hot water method was cumbersome, and it was expensive in time and money. ■ Where buildings were not in use for a period of time such as over a week-end, it was necessary to keep the heating device running and the oil circulating, for, if the flow were discontinued, the high viscosity would return in the areas of the system not immediately adjacent to the heaters, and great difficulty would be experienced in getting the flow started again. 7. At the time of the issuance of the patent there existed, therefore, a problem of achieving a simple and economical method of maintaining a low viscosity in the oil used in these systems, particularly a method which would not require the heating of all the oil in the supply tank. 8. The Lines patent was addressed to a solution of this problem. The three claims of the patent in issue are No. 4 which discloses a process, and Nos. 14 and 15 which disclose a unitary system or combination to achieve a specific result. 9. The patent shows a system for transporting oil from a tank to a burner and applying a current to the walls of the pipe to heat the pipe by its resistance to the current and, therefore, maintain the oil in flowable condition, at the same time delivering oil in excess quantity to the burner and returning the excess to the supply tank at a point immersed in the cold oil in the tank and adjacent the point of suction of the supply pipe whereby the heated oil is again drawn into the suction pipe with new oil. without being diffused through the cold oil in the tank. 10. The assembly of oil-conducting pipes called the “tank unit” which, in the patented system, ^goes down into the oil in the supply tank, consists of com centric pipes, with the suction pipe about half the' diameter of the larger return pipe. The suction pipe is somewhat shorter than the return pipe, and metal connections called “tongues” run from the bottom of the suction pipe to the bottom of the return pipe and form part of the circuit for the electricity which heats the pipes. This circuit runs through all or a substantial part of the oil conducting pipes, although the patent recognizes it may in some instances be desirable to heat only certain sections of the conductor pipes. The end of the return pipe is a short distance above the bottom of the inside of the oil supply tank. 11. For the most part the items which go to make up the patented system such as the thermostat, transformer, insulated flanges, etc., are old and unpatented although some are specially modified or designed for this purpose. 12. The defendant does not install its system but designs the system and sells component parts for it. It also furnishes the instructions for installation, inspects the installation and furnishes a performance guarantee. Otherwise it does not practice the method of claim 4 of the patent, nor does it manufacture or install the system recited in claims 14 and 15. 13. Initially the defendant had difficulty in securing public acceptance of the patented system; but, from gross sales of $6,641 in the year ending May 31, 1946, its business showed a steady increase to $291,640 for the year ending May 31, 1954, and a total of $246,886 for the following eight months. 14. William J. Trabilcy of Englewood, New Jersey, and Eugene J. Maupai, of Ridgewood, New Jersey, were owners of a majority of the stock in M. & T. Engineering Co., a New Jersey corporation, which was engaged in the business of installing oil burner systems. 15. In 1953, the plaintiff corporation was formed under the laws of New Jersey by Trabilcy and Maupai to sell a system to accomplish the same purposes for oil burner installations as that taught by the defendant’s patent. They own a substantial majority of the shares in the corporation. Trabilcy is president of both M. & T. Engineering Co. and the plaintiff and Maupai is an officer of both of them. 16. The plaintiff sold component parts and instruction drawings for the installation of such a system. 17. While the plaintiff did not actually install the system, the companion company, M. & T. Engineering Co., did. Except through M. & T. Engineering Co., the plaintiff does not practice the method of claim 4 of the patent in suit, nor does it manufacture or install the system recited in claims 14 and 15. 18. When the plaintiff commenced business and before actually making any sales, it offered the system for sale and the instruction drawing then held out to the public showed a drawing of the tank unit (Exhibit B) which was an exact copy of the defendant’s tank unit. 19. On protest by the defendant, the plaintiff withdrew its instruction drawing and later presented for sale a modified system, Exhibits 8a and 8b, for which it has continued to sell instruction drawings and parts up to the present time; and this is the claimed infringing system. 20. The plaintiff’s present system includes a tank unit composed, not of two concentric pipes, but of two parallel pipes five and one-half inches apart held together at their lower ends near the inside bottom of the oil supply tank by a metal hood or “bell” which keeps the hot return oil from being diffused through the mass of cold oil in the tank. 21. Of this tank unit the return pipe is of metal but the suction pipe is of fiber. Down through the full length of the center of the fiber suction pipe is a metal “rod heater.” 22. At the top of the tank unit outside the oil supply tank there are on the return and suction pipes insulated flanges so that no electricity is conducted through the pipes within the tank except for the rod heater. 23. To both the plaintiff’s and defendant’s systems there have been added electric immersion heaters. In the plaintiff’s system it is on the suction or supply pipe line between the tank and the burner. On the defendant’s it is located on the return pipe line between the burner and the tank. This immersion heater is an added refinement to the defendant’s system; it is not shown in its patent and is not necessary for the functioning of its system. 24. Except for a few other minor differences the systems are substantially alike. 25. The plaintiff’s system is designed to operate in such a way that, if it were being started up after being completely shut down and with cold oil in the tank and conduits, heat would be applied through the electric circuit in the pipes, in the rod heater in the suction pipe in the tank unit and through the immersion heater until the oil in the suction pipe in the tank and in the pipe lines outside of the tank is warm enough to be pumped, then by a cut-out switch the electric circuits, just mentioned, would be turned off, with the exception of the immersion heater, and in the same instant the pump and oil burner would be turned on and the system would run with them and the immersion heater as long as the burner called for oil. A cooling of the system following the completion of the operation of the burner and a raising of the degree of viscosity of the oil, would again require the application of heat to the pipes and in the suction pipe of the tank unit to make the oil fluid and flowable again. 26. The part of the system used by the plaintiff initially to reduce the viscosity of the oil in the transportation conduits as an essential prerequisite to its flow and the return of the hot oil adjacent to the suction pipe and the drawing up of the hot oil with new oil in the suction pipe are substantially the equivalents of the defendant’s patented system; it fulfills the same functions and cannot be differentiated in principle. 27. The part of the plaintiff’s system which comes into operation by invoking the use of the cut-out switch is an added embellishment which in no way denies that the plaintiff is in substance using the defendant’s system. Without doing so the plaintiff’s system would never start or operate at all. 28. The modifications made by the plaintiff in the defendant’s system by using parallel rather than concentric re-return and suction pipes, by using a somewhat larger hood or bell at the bottom of the tank unit instead of the “bell” formed by the shorter suction pipe inside of the larger return pipe, by increasing to a small degree the contact of returning hot oil with cold oil under the hood or bell, by supplying heat in a fiber suction pipe in the tank through a rod heater instead of heating the tank unit pipes by the electric circuit, by using the cut-out switch to turn off the electric circuit heating the oil conduit pipes and heat the oil by immersion heater only while it is being pumped instead of keeping the oil conduits continuously heated by the electric circuit and by a few other minor differences, were adopted by the plaintiff with the intention and for the purpose of asserting an unreasonably narrow and restricted interpretation of the defendant’s patent and then claiming noninfringement by virtue of the differences enumerated. 29. The usual presumption of validity arising from the granting of the patent in suit is strengthened in this case by the fact that patents representative of the closest prior art were considered by the Patent Office in the examination of the application on which the Lines patent in suit issued. 30. The defendant’s system, as delineated and described in the Lines patent, discloses a new combination of known elements producing a new method of operation and a new and beneficial result. 31. The plaintiff from its beginning knew of the defendant’s patent and sold the parts and instruction drawings which taught the system; and its companion corporation has sold and installed the infringing system. 32. The defendant gave written notice of infringement to the plaintiff and warned the plaintiff and its customers that legal action ■ would be instituted against them if unauthorized use was made of the patented system. 33. Although the defendant offered to license the plaintiff for a substantial geographic area around the plaintiff’s place of business, it has actually issued no written licenses under the patent in suit. 34. Defendant’s President Purdue threatened John A. Powell of the Conditioning Company, Inc., of Newark, New Jersey, a contractor, with litigation under the Lines patent in suit of Powell purchased the unpatented parts of plaintiff and installed them in accordance with the system taught by the Lines patent in fuel oil heating systems for certain public schools in Newark. 35. Paul Schmidt of Fluid Systems of New York, wholly owned subsidiary of defendant, threatened the contractor Fred Wendel of Paramus, New Jersey with litigation under the Lines patent in suit if the contractor purchased the unpatented parts of plaintiff and installed them in accordance with the system taught by the Lines patent in a fuel oil heating system in Northern Valley Regional High School. 36. The defendant had no intention of preventing nor did it in fact prevent the sale of the separate unpatented parts or items for uses outside of the defendant’s patented method and system. Discussion On the issue of validity the court has examined all of the claims of prior art and has compared them with the Lines patent. It has also studied the analyses of the patents relied upon by the plaintiff here and the appellant in the case of Great Lakes Equipment Co. v. Fluid Systems, Inc., 6 Cir., 217 F.2d 613, as anticipating the Lines patent and it is apparent that the Lines patent is sufficiently distinguished from them. In the present case the plaintiff also claims prior art in Martin #1983043, 1934, in a portion of a publication "Industrial Piping” (Exhibit 28), in DiBattista #1575152, 1925, and Carleton #1727585, 1927, none of which was before the Court of Appeals for the Sixth Circuit in the Great Lakes Co. case. Martin discloses suction and return pipes entering and leaving a supply tank. The ends of these pipes are within a hood inside of the tank, which runs from one side of the tank to the other. A cross-section of the tank and the hood inside of it shows that the hood takes up about one-half the horizontal distance through the tank and approximately one-fifth of the perpendicular distance. The oil or other viscous liquid under the hood is heated by an immersion heater which is also under the hood. It is obvious that a substantial amount of oil beneath the hood is heated by this immersion heater. There is disclosed no heating of the conduits by an electric circuit. The excerpt from the publication “Industrial Piping” deals with the application of heat to oil conducting pipes to reduce viscosity in general terms. It suggests wrapping the pipes in insulation and attaching spot heaters to the line. It does not suggest or describe having an electric circuit run through the pipes themselves to supply heat. DiBattista shows a device for heating by electric current a flexible hose and nozzle to Keep fluids warm while passing through the hose for spraying purposes. It has no return line and no circulation of liquid. It suggests a heating of the entire storage or supply tank which Lines is designed to avoid. Carleton discloses a device for supply tank or storage heating which Lines specifically eliminates. Although the Lines patent combines a number of known elements, the method of operation is new and the specific result achieved is new and beneficial. The element of invention, which the prior art does not disclose, appears in the method and system whereby the excess oil returns through the heated pipes to the lower end of the return pipe in the tank unit where this hot, returning oil meets new oil in the bottom of the return pipe and with it is drawn up into the shorter suction pipe without being diffused or circulated through the mass of cold oil in the supply tank. It is, therefore, not necessary to have an immersion heater or heated coils in the tank to heat up all the oil held there in storage. Once the simplicity and economy of the invention was able to be demonstrated, it met widespread public acceptance. While public acceptance is, of course, not by any means conclusive, it is something which may be considered. Goodyear Tire and Rubber Co. Inc., v. Ray-O-Vac, 1944, 321 U.S. 275, 278, 64 S.Ct. 593, 88 L.Ed. 721. There has been wide public acceptance of the defendant’s system. It appears, however, that considerable effort had to be expended to demonstrate that it was the solution to the current need. It was not obvious to those in the business when it was first launched. Mr. Trabilcy, the president of the plaintiff, had been in the business of designing oil burner systems since 1930. He was a mechanic skilled in the art. He was aware of the problem to be solved and of the prior arts pertinent to the subject. It was not obvious to him how the old elements could be combined to produce the teaching of the Lines patent; nor even after the Lines system was launched, did he adopt it as a solution to the problem until long after it had had wide public acceptance and marked financial success. The plaintiff urges that its system with parallel return and suction pipes, terminating in a hood or bell at the end of the tank unit, is distinguishable from the defendant’s method and system. It claims a larger mixing of hot returning oil and new cold oil under the bell than in the defendant’s system and argues that under the Lines patent, there can be no mixing at all of hot returning oil with new oil at the lower end of the tank unit, for if there is the slightest mixing, it is “diffused through the colder oil in the tank” and is something outside the patent. Such a narrow and restricted construction of the defendant’s patent claims flies in the face of all reason. Obviously there is new oil drawn into the suction pipe with the returning hot oil and the Lines patent makes this perfectly clear and no other interpretation of the patent is possible. The fact that the plaintiff’s system may produce a slightly larger degree of mixing of the hot returning oil and of the cold new oil under the bell does not show the use of any other principle than that of the Lines patent. Neither this feature nor other changes and added embellishments made by the plaintiff in adopting the defendant’s method and system saves it from infringement.
3525077-6733	HAYS, Circuit Judge: In this class action Mrs. Jefferies challenges the validity of New York Social Services Law § 131(4) (McKinney’s Consol.Laws, c. 55, Supp.1971 and regulations adopted pursuant thereto, 18 N.Y.C.R.R. §§ 385.1, 385.7. Mrs. Jef feries claims that the application of these provisions allows mothers who are enrolled in “vocational” training programs to receive welfare benefits if they are otherwise eligible, and denies such benefits to mothers who, except that they are enrolled in an “academic” course of instruction, are similarly situated and that these provisions thus applied violate her rights to due process and equal protection of the law, infringe her first amendment rights by penalizing her for going to college, and conflict with the federal Aid to Families with Dependent Children program, 42 U.S.C. § 601 et seq. (1970). Maxine Handel, Pearl Woods, and Alice Woods (hereinafter referred to as the Westchester plaintiffs), were permitted to intervene over the defendants’ objections. Mrs. Jefferies purports to represent the class of “parents of minor children who are otherwise eligible for public assistance [AFDC] but who are denied such assistance on the grounds that they are enrolled in ‘academic’ rather than ‘vocational’ education programs and [are] therefore deemed available for employment.” She is the mother of one child, and the father is absent. Before September, 1969 she was employed as a typist at a salary of $125 per week, and was not receiving any public assistance. She left her job to enter Queens Community College with the aim of becoming a teacher, aided by a full-tuition scholarship under the federally sponsored “College Discovery Program.” She received emergency assistance from the New York City Department of Social Services from September 11 to December 11, 1969, at which time benefits to both her and her child were terminated, pursuant to the provisions of state law challenged here, because she refused to accept employment. In a Decision After Fair Hearing, benefits for the child were reinstated, but the denial of benefits to Mrs. Jefferies was affirmed. The defendants urge that since she already has shown the ability to be self-supporting, she is not “otherwise eligible for welfare” and thus does not adequately represent the class she claims to represent. We disagree; since her child is “both needy and dependent,” Doe v. Swank, 332 F.Supp. 61, 63 (N.D.Ill.) (three-judge court), aff’d mem. sub nom. Weaver v. Doe, 404 U.S. 987, 92 S.Ct. 537, 30 L.Ed. 2d 539 (1971); Doe v. Shapiro, 302 F.Supp. 761, 764 (D.Conn.1969) (three-judge court), appeal dismissed as untimely docketed, 396 U.S. 488, 90 S.Ct. 641, 24 L.Ed.2d 677 (1970), the household is within the purview of the AFDC program, and she has standing to raise the issue of whether she can be denied benefits for refusal to accept employment while attending college, while those attending vocational schools and who refuse employment continue to receive benefits. The Westchester intervenors are in a different situation, and they perhaps present the issues in this case more clearly than does Mrs. Jefferies. They have from three to six minor children each and, since their husbands left the home, have continuously been receiving welfare benefits even when they have been employed. Thus, unlike Mrs. Jefferies, they have no history of being self-supporting in the regular economy. Each of them, with the approval of her caseworker, enrolled as a full-time student in a four-year college program, with a specific vocational objective. In June, 1971 each was advised that her welfare benefits would be terminated unless she enrolled in vocational training courses under the federal Work Incentive Program (WIN), 42 U.S.C. §§ 602(a) (19), 630 et seq. (1970). By now it is well settled that legislative classifications in the welfare area are not subject to the rule requiring “strict scrutiny.” “If the classification has some ‘reasonable basis,’ it does not offend the Constitution simply because the classification ‘is not made with mathematical nicety or because in practice it results in some inequality.’ ” Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970), quoting Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 55 L.Ed. 369 (1911). See also Jeffer son v. Hackney, U.S., 92 S.Ct. 1724, 32 L.Ed.2d 285 (1972). Applying this standard to the case at hand, we cannot find that the “academic-vocational” distinction embodied in New York’s welfare practices violates the equal protection clause. See Money v. Swank, 432 F.2d 1140 (7th Cir. 1970). Plaintiffs urge that the distinction is irrational in view of the purpose of the AFDC program to make families self-supporting, because college graduates are more employable than persons who have merely received vocational training. The statistics cited to us show that of approximately 25,000 welfare recipients receiving vocational training, only about 2,000 have become employed, and of those many continue to receive assistance, though this is principally because of the income exemption provisions of the Work Incentive Program, 42 U.S.C. § 602(a) (8) (A) (ii) (1970). However, this proves only that the WIN program in New York is not working very well, not that it would work any better if the state disregarded the distinction between academic and vocational training. Furthermore, it appears from the deposition of defendant Wyman, and from the regulations, 18 N.Y.C.R.R. § 385.1(4) (a recipient is not “employable” if enrolled in an approved “two-year college program with a specific vocational objective”) that the distinction in New York is really between, two-year and four-year programs. It is urged that even this classification operates irrationally, since some recipients will need pre-vocational training before they enter a two-year program, and thus will receive assistance for more than two years, while a recipient who has less than two years of a four-year program to complete is denied benefits. However, it is clear that the distinction is based upon the state’s desire to use its limited welfare funds to secure at least some useful training to a larger number of people, and not to assist persons whose education has gone beyond a certain point. We cannot say that such a policy is irrational. It is true that there is dictum in Townsend v. Swank, 404 U.S. 282, 291-292, 92 S.Ct. 502, 30 L.Ed.2d 448 and n. 8 (1971) that might be thought to be contrary, but at least as applied to these facts it is entitled to little or no weight. The plaintiffs’ contention that New York is infringing on their first amendment rights is plainly frivolous and need not detain us further.
6049441-28612	Reversed and remanded by published opinion. Judge DIAZ wrote the opinion, in which Judge NIEMEYER and Judge COGBURN joined. OPINION DIAZ, Circuit Judge: The Town of Cary, North Carolina (the “Town”), appeals the district court’s invalidation of its municipal sign ordinance as it applied to resident William David Bowden (“Bowden”). The district court held that the ordinance was a content based constraint on Bowden’s First Amendment rights. We disagree. Because the ordinance regulates speech for reasons independent of content, it is a content neutral restriction subject to intermediate scrutiny. Applying that scrutiny, we conclude the ordinance does not violate the First Amendment and reverse. I. A. Pursuant to the authority granted by the North Carolina legislature to state municipalities, the Town has implemented a comprehensive Land Development Ordinance (“LDO”) to regulate land use within its jurisdiction. The current LDO, adopted in 2003, consists of twelve chapters of regulations, with chapter 9 (the “Sign Ordinance”) governing the placement and display of residential signs. Characteristic of most sign regulations, the legislative intent of the Sign Ordinance is to promote aesthetics and traffic safety. Chapter 9.1.1(A) outlines the “purposes” of the Sign Ordinance: (1) To encourage the effective use of signs as a means of communication in the Town; (2) To maintain and enhance the pleasing look of the Town, which attracts to the Town major events of regional, national, and international interest; (3) To preserve Cary as a community that is attractive to business; (4) To improve pedestrian and traffic safety; (5) To minimize the possible adverse effects of signs on nearby public and private property; and (6) To implement relevant provisions of the comprehensive plan, as updated from year-to-year. J.A. 339. The Sign Ordinance also notes that “[attractive and integrated urban design features tend to improve a town’s image, raise overall property values, attract new business and residents, and improve the quality of life.” Id. Town officials confirm these objectives, see J.A. 1301 (“The Town’s concern for aesthetics, appearance, [and] visual appeal is a part of the Land Use Plan’s focus.”), and they pervade the LDO preamble, see J.A. 632 (“The regula tions are specifically intended to: Preserve the character and quality of residential neighborhoods,” “[Ijessen congestion in the streets,” and “[m]aintain and protect high quality aesthetic standards for development.”). Recognizing that residential signs serve an important purpose of providing residents with a forum in which to express their “opinion on matters of public interest,” in January 2005 the Town modified the Sign Ordinance to permit residents to display up to two residential signs that “shall not exceed five square feet per side in area and 42 inches in height.” J.A. 1023, 357. The LDO defines a “sign” broadly as “[a]ny device, fixture, placard or structure, that uses any color, form, graphic, illumination, symbol, or writing to advertise, attract attention, announce the purpose of, or identify the purpose of, a person or entity, or to communicate information of any kind to the public.” J.A. 1091. But the LDO also states expressly that “holiday decorations” and “public art” are not signs subject to the regulation. J.A. 1091. The LDO defines “holiday decorations” as “[displays erected on a seasonal basis in observance of religious, national, or state holidays which are not intended to be permanent in nature and which contain no advertising material,” J.A. 869, and “public art” as “[ijtems expressing creative skill or imagination in a visual form, such as painting or sculpture which are intended to beautify or provide aesthetic influences to public areas or areas which are visible from the public realm,” J.A. 883. B. William Bowden lived in Cary for many years, and had long quarreled with the Town over damage to his house allegedly caused by water discharge from municipal road-paving projects. Dissatisfied with the Town’s efforts to resolve the dispute, Bowden responded by painting the words “Screwed by the Town of Cary” across a fifteen foot swath of the facade of his home. Bowden chose a bright fluorescent orange paint to express his unhappiness, using lettering that varied in height from 14 to 21 inches. It was not long before a passing motorist alerted the police to Bowden’s handiwork. Following a short investigation, the Town issued a “Notice of Zoning Violation” referencing the chapter 9.3.2(S) size limitations for residential signs. After Bowden refused to remove the lettering, the Town issued a second notice citing two different LDO violations. First, as the display qualified as a “wall sign” rather than a residential sign, the Town alleged that it violated the size limitations of chapter 9.3.2(X)(2)(a), which requires that all such signs “not exceed two square feet in area.” J.A. 366. Second, the Town alleged that the sign violated the color restrictions of chapter 9.8.3(B), which prohibits the “use of high intensity colors or fluorescent pigments.” The second notice demanded Bowden remove the sign or suffer daily fines. The Town emphasized that it was not the content of Bowden’s sign, but rather its size and color, that was the problem. Accordingly, the Town recommended Bowden display his message through a medium that complied with the Sign Ordinance. Bow-den refused. Instead, he sued under 42 U.S.C. § 1983, asserting facial and as applied challenges to the constitutionality of the Sign Ordinance. Bowden principally argued that because the Sign Ordinance exempted certain signs from regulation while regulating his particular sign, it was a content based infringement on his First Amendment rights. Both parties moved for summary judgment. The district court ruled for Bowden. Relying principally on the Supreme Court’s decision in Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981) (plurality opinion), the district court first noted that the Sign Ordinance “specifies several types of signs[, including public art and holiday decorations,] which are exempt from the restrictions that apply to all other types of signs.” Bowden v. Town of Cary, 754 F.Supp.2d 794, 802 (E.D.N.C.2010). These exclusions, said the court, require the Town to engage in “a searching inquiry into the content of a particular sign ... to determine whether it is subject to or exempt from regulation.” Id. at 803. So, for example, because the Sign Ordinance requires examining the content of a sign such as “Scrooged by the Town of Cary” to discern whether it is a holiday decoration and thus excluded from regulation, the district court concluded that the Sign Ordinance was a content based regulation. Applying strict scrutiny, the court invalidated the Sign Ordinance, granted Bowden a permanent injunction, and awarded him nominal damages of one dollar. In a subsequent order, the district court also awarded Bowden $36,197.27 in attorney fees and costs. This appeal followed. II. Before passing on the constitutionality of the Sign Ordinance, we address two issues regarding our jurisdiction to hear the appeal. First, Mr. Bowden died during the pendency of this appeal, and in August 2011 we entered an order substituting the Administratrix of his estate, Dawn D. Brown (“Brown”), as Plaintiff-Appellee. We then directed supplemental briefing on the issue of whether Bowden’s § 1983 claim survived his death. Historically, the common law rule for survivability was that a cause of action died with the person. See Zatuchni v. Sec’y of Health & Human Servs., 516 F.3d 1312, 1324 (Fed.Cir.2008) (Dyk, J., concurring) (citing Restatement (Second) of Torts § 900(a) & cmt. a. (1979)). To displace the common law rule, some jurisdictions have provided by statute that certain legal claims survive the death of a party. See Moor v. Alameda County, 411 U.S. 693, 702 n. 14, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973). As 42 U.S.C. § 1983 does not provide for survival of claims, we consult the law of the forum state — the North Carolina survival statute — to determine whether the claim survives. See 42 U.S.C. § 1988(a); Robertson v. Wegmann, 436 U.S. 584, 588-90, 98 S.Ct. 1991, 56 L.Ed.2d 554 (1978). That statute prescribes a default rule of survival for all claims, with three excep tions, including for “causes of action where the relief sought could not be enjoyed, or granting it would be nugatory after death.” N.C. Gen.Stat. § 28A-18-l(b)(3). Analogizing Bowden’s federal civil rights claim to a corresponding action under North Carolina law, we are satisfied that the claim would survive under that statute. While it is axiomatic that prospective injunctive relief “could not be enjoyed” by a deceased litigant, Bowden also asserted a past deprivation of his constitutional rights. Considering that the default rule of the North Carolina statute is one of survival, as well as the fact that courts have applied this particular exception only to prospective remedies, see In re Higgins, 160 N.C.App. 704, 587 S.E.2d 77, 78-79 (2003); Elmore v. Elmore, 67 N.C.App. 661, 313 S.E.2d 904 (1984), we conclude that the controversy over this retrospective constitutional injury-—-even if only compensable by nominal damages-—would survive under North Carolina law, and therefore does not abate for our purposes. See McGowen v. Rental Tool Co., 109 N.C.App. 688, 428 S.E.2d 275, 276 (1993) (allowing a suit for retrospective personal injury to survive under North Carolina survival statute); see also Covenant Media of S.C. LLC v. City of N. Charleston, 493 F.3d 421, 424-25 (4th Cir.2007) (holding that a suit challenging a local sign ordinance was not rendered moot by the defendant’s amendment of the sign ordinance because even if claim for injunctive relief had become moot, plaintiff was still entitled to at least nominal damages for the alleged constitutional violation). Next, the Town contends that Bow-den lacks standing to challenge the exemptions of the Sign Ordinance but instead may challenge only the provisions regulating the size and pigment of residential signs, since only those restrictions caused him actual injury. The district court rejected this argument, a ruling that we consider de novo. See Piney Run Pres. Ass’n v. County Comm’rs, 268 F.3d 255, 262 (4th Cir.2001). As the district court correctly noted, Bowden’s complaint alleges an infringement of his First Amendment rights stemming from the LDO’s allegedly content based exemptions. Inasmuch as the relevant content distinction derives from the Town’s conscious choice to exempt certain signs from regulation, Bowden’s legal injury derives from the exemptions no less than from the substantive restrictions themselves, and he may therefore subject those exemptions to constitutional scrutiny. See Ark. Writers’ Project, Inc. v. Ragland, 481 U.S. 221, 227, 107 S.Ct. 1722, 95 L.Ed.2d 209 (1987) (explaining that standing to challenge exemptions exists where “others similarly situated were exempt from the operation of a state law adversely affecting the claimant.”); City of Ladue v. Gilleo, 512 U.S. 43, 50-51, 114 S.Ct. 2038, 129 L.Ed.2d 36 (1994). That is, after all, the essence of the content neutrality inquiry—analyzing what speech the Town has chosen to regulate and what speech it has chosen to exempt. Accordingly, we reject the Town’s standing challenge and proceed to the merits of the district court’s ruling. III. In assessing the Sign Ordinance’s constitutionality under the First Amendment, we review the district court’s summary judgment order de novo. Webster v. U.S. Dep’t of Agric., 685 F.3d 411, 421 (4th Cir.2012). Our first task is to determine whether the Sign Ordinance “is content based or content neutral, and then, based on the answer to that question, to apply the proper level of scrutiny.” Ladue, 512 U.S. at 59, 114 S.Ct. 2038 (O’Connor, J., concurring). Not surprisingly, the parties present opposing views of how we should assess content neutrality. Bowden argues that a regulation that depends on content distinctions is necessarily content based, while the Town argues that its regulation may distinguish speech based on its content so long as its reasons for doing so are not based on the message conveyed. We think the Town has the better argument. For reasons we explain below, we reject any absolutist reading of content neutrality, and instead orient our inquiry toward why — not whether — the Town has distinguished content in its regulation. Viewed in that light, we are satisfied that the Sign Ordinance is content neutral. Applying the intermediate scrutiny required for content neutral restrictions on speech, we hold that the Sign Ordinance does not violate the First Amendment. A. ‘While signs are a form of expression protected by the Free Speech Clause, they pose distinctive problems that are subject to municipalities’ police powers.” Ladue, 512 U.S. at 48, 114 S.Ct. 2038. Accordingly, “[i]t is common ground that governments may regulate the physical characteristics of signs — just as they can, within reasonable bounds and absent censorial purpose, regulate audible expression in its capacity as noise.” Id. What governments may generally not do, however, is “suppress, disadvantage, or impose differential burdens upon speech because of its content.” Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 642, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994). “The principal inquiry in determining content neutrality, in speech cases generally and in time, place, or manner eases in particular, is whether the government has adopted a regulation of speech because of disagreement with the message it conveys.” Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989). We consider the Town’s appeal in light of our recent decision in Wag More Dogs, LLC v. Cozart, 680 F.3d 359 (4th Cir.2012), a case the district court did not have before it. There, we assessed the constitutional bona fides of a sign ordinance that regulated the size of business signs while exempting noncommercial signs, as well as several additional types of government signs, from a mandatory permit process. Id. at 362, 368. In deciding whether these exemptions distinguished based on content, we read the Supreme Court’s treatment of content neutrality in Hill v. Colorado, 530 U.S. 703, 120 S.Ct. 2480, 147 L.Ed.2d 597 (2000), as “[e]schewing a formalistic approach to evaluating content neutrality that looks only to the terms of a regulation ... [and] instead embracing] a more practical inquiry.” Wag More Dogs, 680 F.3d at 366. Our pragmatic view of First Amendment principles in Wag More Dogs cannot be squared with the formalistic approach relied on by the district court and urged by Bowden on appeal. As the chief purpose of content neutrality is to prevent a government from supervising the “marketplace of ideas ... [by] choos[ing] which issues are worth discussing or debating,” Consol. Edison Co. v. Pub. Serv. Comm’n, 447 U.S. 530, 537-38, 100 S.Ct. 2326, 65 L.Ed.2d 319 (1980) (internal quotations omitted), the notion that any content distinction is intrinsically content based misapprehends the proper analysis.- Content neutrality bars only one particular sort of distinction — those made with a censorial intent “to value some forms of speech over others ... to distort public debate,” Ladue, 512 U.S. at 60, 114 S.Ct. 2038 (O’Connor, J., concurring), “to restrict expression because of its message, its ideas, its subject matter,” Police Dep’t of Chicago v. Mosley, 408 U.S. 92, 95, 92 S.Ct. 2286, 33 L.Ed.2d 212 (1972), or to “prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable,” Texas v. Johnson, 491 U.S. 397, 414, 109 S.Ct. 2533, 105 L.Ed.2d 342 (1989). We acknowledge that several of our sister circuits hew to an absolutist reading of content neutrality. See Neighborhood Enterprises, Inc. v. City of St. Louis, 644 F.3d 728, 736 (8th Cir.2011), cert. denied, - U.S. —, 132 S.Ct. 1543, 182 L.Ed.2d 163 (2012) (holding sign ordinance exemptions content based since “one must look at the content of the object.”); Serv. Emp. Int’l Union, Local 5 v. City of Houston, 595 F.3d 588, 596 (5th Cir.2010) (“A regulatory scheme that requires the government to examine the content of the message that is conveyed is content-based regardless of its motivating purpose.” (internal quotations omitted)); Solantic, LLC v. City of Neptune Beach, 410 F.3d 1250, 1263-66 (11th Cir.2005) (applying the absolutist approach). In our view, however, such an approach imputes a censorial purpose to every content distinction, and thereby applies the highest judicial scrutiny to laws that do not always imperil the preeminent First Amendment values that such scrutiny serves to safeguard. As we did in Wag More Dogs, we again join those circuits that have interpreted Hill as supporting a more practical test for assessing content neutrality. See ACLU of Ill. v. Alvarez, 679 F.3d 583, 603 (7th Cir.2012) (“A law is not considered ‘content based’ simply because a court must ‘look at the content of an oral or written statement in order to determine whether a rule of law applies.’ ” (quoting Hill, 530 U.S. at 721, 120 S.Ct. 2480)); Melrose, Inc. v. City of Pittsburgh, 613 F.3d 380, 389 (3d Cir.2010) (“[A] consideration of the sign’s content ... does not by itself constitute a lack of neutrality as to specific content.”); H.D. V.-Greektown, LLC v. City of Detroit, 568 F.3d 609, 622 (6th Cir.2009) (“There is simply nothing in the record to indicate that the distinctions between the various types of signs reflect a meaningful preference for one type of speech over another.”); G.K. Ltd. Travel v. City of Lake Oswego, 436 F.3d 1064, 1079 (9th Cir.2006) (“[The regulation] does not require Lake Oswego officials to evaluate the substantive message ... [and] certainly does not favor speech based on the idea expressed.” (internal quotations omitted)). We also reject the analogous principle that the Sign Ordinance is necessarily content based because “a searching inquiry into the content of a particular sign is required.” Bowden, 754 F.Supp.2d at 803. Rather, a more searching inquiry should merely be seen as indicative, not determinative, of whether a government has regulated for reasons related to content. See Reed v. Town of Gilbert, Ariz., 587 F.3d 966, 978 (9th Cir.2009) (“If applied without common sense, this principle would mean that every sign, except a blank sign, would be content based.”). B. Affirming the practical inquiry propounded in Wag More Dogs, we reiterate its operative test for content neutrality: A regulation is not a content-based regulation of speech if (1) the regulation is not a regulation of speech, but rather a regulation of the places where some speech may occur; (2) the regulation was not adopted because of disagreement with the message the speech conveys; or (3) the government’s interests in the regulation are unrelated to the content of the affected speech. Id. at 366 (quoting Covenant Media, 493 F.3d at 433). Distilling this three-part test into one succinct formulation of content neutrality, if a regulation is “justified without reference to the content of regulated speech,” Hill, 530 U.S. at 720, 120 S.Ct. 2480 (quoting Ward, 491 U.S. at 791, 109 S.Ct. 2746), “we have not hesitated to deem [that] regulation content neutral even if it facially differentiates between types of speech.” Wag More Dogs, 680 F.3d at 366. Our two most recent sign ordinance cases illustrate this purposive approach. In Covenant Media, the City of North Charleston, South Carolina enacted a sign ordinance that distinguished between “off-premises” and “on-premises” commercial signs “identifying or advertising a business, person, or activity, or goods, products, services or facilities.” 493 F.3d at 424-25. We applied intermediate scrutiny to this distinction because it served a content neutral purpose “to eliminate confusing, distracting and unsafe signs, assure the efficient transfer of information; and enhance the visual environment of the City of North Charleston.” Id. at 434 (internal quotation marks omitted). And in Wag More Dogs, we similarly concluded that an exemption for noncommercial signs could be justified for reasons independent of content since it served to “among other aims, promote traffic safety and the County’s aesthetics, interests unrelated to messages displayed.” 680 F.3d at 368. Applying intermediate scrutiny, we affirmed the district court’s ruling that the sign ordinance satisfied the First Amendment. Id. at 370. Metromedia, the principal case cited by Bowden and the district court, does not compel a different approach. That case invalidated a San Diego ordinance that permitted onsite commercial advertising while forbidding non-commercial advertising with exceptions for signs such as “religious symbols,” “signs carrying news items or telling the time or temperature,” and “temporary political campaign signs.” Metromedia, 453 U.S. at 494-95, 514, 101 S.Ct. 2882. The fatal defect of the Metromedia ordinance was that San Diego could not “explain how or why noncommercial billboards located in places where commercial billboards are permitted would be more threatening to safe driving or would detract more from the beauty of the city,” 453 U.S. at 513, 101 S.Ct. 2882, and that “[n]o other noncommercial or ideological signs meeting the structural definition [were] permitted, regardless of their effect on traffic safety or esthetics,” id. at 514, 101 S.Ct. 2882. Accordingly, it was the relationship — or lack thereof — between the content distinction and the legislative end of traffic safety that convinced the Metromedia Court that the city had discriminated for reasons of content. Implicit in the city’s failure to establish a content neutral justification for its content distinction was a belief “that the communication of commercial information concerning goods and services connected with a particular site is of greater value than the communication of noncommercial messages.” Id. at 513, 101 S.Ct. 2882. The Town, therefore, cannot disguise a content based restriction beneath a content neutral justification, but rather must demonstrate a “ ‘reasonable fit’ between its legitimate interests in [traffic] safety and esthetics” and its exemptions for public art and holiday decorations. City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 416, 113 S.Ct. 1505, 123 L.Ed.2d 99 (1993) ; see also Turner Broad., 512 U.S. at 642-43, 114 S.Ct. 2445 (“Nor will the mere assertion of a content-neutral purpose be enough to save a law which, on its face, discriminates based on content.”); Whitton v. City of Gladstone, Mo., 54 F.3d 1400, 1406 (8th Cir.1995) (“[W]hen a government supplies a content-neutral justification for the regulation, that justification is not given controlling weight without further inquiry.”). C. Separating the issue of whether the Sign Ordinance has distinguished content from whether it has distinguished because of content, we ask in this case whether those distinctions bear a reasonable relationship to the Town’s asserted content neutral purposes. Applying that test, it is clear that while the Sign Ordinance distinguishes content, the distinctions themselves are justified for reasons independent of content. Unlike Cincinnati, where the city’s content distinction “ha[d] absolutely no bearing on the [aesthetic] interests it ha[d] asserted,” 507 U.S. at 428, 113 S.Ct. 1505, the Sign Ordinance’s exemptions reasonably advance the legislative interests of traffic safety and aesthetics. And as with the exemptions at issue in Wag More Dogs, we think it reasonable to presume that public art and holiday decorations enhance rather than harm aesthetic appeal, and that seasonal holiday displays have a temporary, and therefore less significant, impact on traffic safety. We recognize, as Bowden urges, that a nativity scene or an elaborate work of art may implicate traffic safety no less than an ordinary residential sign. Similarly, a sign erected for a “Town-recognized event” or on behalf of a government agency may impair rather than promote aesthetic appeal. But the content neutrality inquiry is whether the Sign Ordinance’s exemptions have a reasonable, not optimal, relationship to these asserted interests. See Cincinnati, 507 U.S. at 424-26, 113 S.Ct. 1505. And “[w]e cannot determine with any degree of exactitude the precise restriction necessary to carry out [the Sign Ordinance’s] legitimate objectives. In practice, the legislature is better equipped to make such empirical judgments.” Randall v. Sorrell, 548 U.S. 230, 248, 126 S.Ct. 2479, 165 L.Ed.2d 482 (2006) (plurality opinion). Moreover, we agree with the Town that in conducting the relevant content based analysis, a court should not mechanically “scour the ordinance in question to see if it omits some categories of signs.” Appellant’s Br. at 25. Rather, we focus our attention on whether the restriction was adopted because of a disagreement with the message conveyed. Hill, 530 U.S. at 719, 120 S.Ct. 2480. Applying that focus here, we conclude that the Sign Ordinance places reasonable time, place, and manner restrictions only on the physical characteristics of messages- — -including those voicing political protest — and exempts certain categories of signs from those restrictions solely on the basis of the Town’s asserted and legitimate interests of traffic safety and aesthetics. Accordingly, we hold that the Sign Ordinance is content neutral and examine its constitutionality under intermediate scrutiny. D. The Sign Ordinance is constitutional if it “furthers a substantial government interest, is narrowly tailored to further that interest, and leaves open ample alternative channels of communication.” Wag More Dogs, 680 F.3d at 369 (quoting Am. Legion Post 7 of Durham, N.C. v. City of Durham, 239 F.3d 601, 609 (4th Cir .2001)). It is beyond dispute that the Town’s stated interests in promoting aesthetics and traffic safety are substantial. See Arlington County Repub. Comm. v. Arlington County Va., 983 F.2d 587, 594 (4th Cir.1993). Here, the Town also adequately documented its aesthetic concerns. Its legislative findings, manifested in the Land Use Plan, the LDO preamble, the Sign Ordinance, policy statements, and testimony of Town officials, were that unregulated signage would depress property values, cause visual blight, deter commercial and residential growth, harm environmental resources, and diminish the wholesome character of the Town. See J.A. 632-33, 758, 1024, 1300-04, 1312-17. We also reject Bowden’s contention that “in this case, there was no evidence of any specific traffic problems.” Appellee’s Br. at 24. To the contrary, the record shows that the bright fluorescent lettering sprayed across Bowden’s home distracted both a Cary police officer and a passing motorist, who “beeped his horn” to get the officer’s attention. J.A. 1276. Next, we ask whether the Sign Ordinance is narrowly tailored to further the Town’s substantial interests. Specifically, we must be satisfied that the Sign Ordinance does not “burden substantially more speech than is necessary to further the government’s legitimate interests.” Ward, 491 U.S. at 799, 109 S.Ct. 2746. We think the Sign Ordinance passes constitutional muster on this score, as its size, color and positioning restrictions “do no more than eliminate the exact source of the evil it sought to remedy[.]” Wag More Dogs, 680 F.3d at 369 (internal quotations omitted). Finally, unlike the flat ban of residential signs invalidated by Ladue, 512 U.S. at 56, 114 S.Ct. 2038, the Sign Ordinance “leave[s] open ample alternative channels of communication” by generally permitting residential signs subject to reasonable restrictions. Id. (internal quotations omitted); see also J.A. 1924 (depicting permissible signage displaying Bowden’s message). Within such limits, a sign can contain any message the speaker wishes to convey. Accordingly, we conclude that the Sign Ordinance survives intermediate scrutiny. TV. Bowden also contends that the Sign Ordinance exemptions are unconstitutionally vague. We do not agree. “A statute can be impermissibly vague for either of two independent reasons. First, if it fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits. Second, if it authorizes or even encourages arbitrary and discriminatory enforcement.” Hill, 530 U.S. at 732, 120 S.Ct. 2480.
4343218-15323	MEMORANDUM OPINION & ORDER JOHN D. BATES, United States District Judge Before the Court is plaintiffs’ [19] motion to"’alter or amend this Court’s judgment of July 30, 2013 and for leave to amend their complaint, both of which the EPA opposes. Plaintiffs, three New Hampshire cities, filed a complaint alleging that the Environmental Protection Agency (“EPA”) failed to perform nondiscretion-ary duties under the Clean Water Act, 33 U.S.C. § 1365(a)(2) (“CWA”). [ECF No. 1], The EPA moved to dismiss the complaint, arguing that plaintiffs lacked standing and that the complaint failed to state a claim. [ECF No. 8]. After holding that plaintiffs had standing, this Court proceeded to dismiss the complaint with prejudice for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). [ECF No. 18]. Now, plaintiffs seek to set that judgment aside so that they may file an amended complaint that, in their view, would survive a motion under Rule 12(b)(6). On October 4, 2013, the Court ordered the parties to submit supplemental briefs. [ECF No. 23]. For the reasons explained below, the Court will grant plaintiffs’ motion to alter or amend the July 30, 2013 judgment, and will grant plaintiffs’ motion for leave to amend their complaint. ANALYSIS This Court, in its decision of July 30, 2013, granted defendants’ motion to dismiss plaintiffs’ complaint and dismissed the complaint with prejudice. Order (July 30, 2013) [ECF No. 18]. The Court will assume familiarity with the particulars of this case, which are laid out in full in its earlier memorandum opinion. See Mem. Op. (July 30, 2013) [ECF No. 17]. In rejecting plaintiffs’ arguments that the EPA violated nondiscretionary duties under the CWA by not reviewing the document at issue (“the 2009 Document”) and by not permitting public participation, the Court noted that plaintiffs’ “real argument ... is that the EPA and DES have improperly given the report the force of law in subsequent decisions.” Id. at 10-11, 15, 16-17. And the Court pointed out that “that challenge must be raised in the context of those subsequent decisions.” Id. at 15. Plaintiffs interpreted this language as a suggestion that they assert a claim that the EPA violated the Administrative Procedure Act (“APA”) by considering the 2009 Document; hence, they seek to amend their complaint to assert such APA claims. I. Plaintiffs Must Satisfy Rule 59(e), Rather Than Just Rule 15(a)(2) As they must, plaintiffs attempt to present their new claims by way of a Rule 59(e) motion to alter or amend the Court’s judgment, combined with a motion for leave to file an amended complaint under Rule 15(a)(2). See Ciralsky v. CIA, 355 F.3d 661, 673 (D.C.Cir.2004) (noting that after judgment has been entered, plaintiffs must move to reopen the judgment before moving to amend). Although plaintiffs filed their motion as one under Rule 59, they argue that they only did so “as a matter of procedure”; moreover, they argue that because they “are not attempting to alter or amend this Court’s [substantive] ruling,” .it is inappropriate to apply the Rule 59(e) standard to their motion. Pis.’ Reply to Defs.’ Opp’n [ECF No. 22] 2 n.l. Instead, plaintiffs contend that they need only satisfy Rule 15(a)’s liberal standard. Id. at 2. But it is well settled in the D.C. Circuit—and in virtually every circuit to have considered the question —that “once a final judgment has been entered, a court cannot permit an amendment unless the plaintiff ‘first satisfies] Rule 59(e)’s more stringent standard’ for setting aside that judgment.” Ciralsky, 355 F.3d at 673 (quoting Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C.Cir.1996)). Plaintiffs read Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962), to hold that when a plaintiff files a Rule 59 motion for the sole purpose of amending her complaint to include a new claim, she need not satisfy Rule 59’s standard; instead, she need only meet Rule 15’s more liberal standard. In Foman, the Supreme Court held that petitioner’s combined post judgment Rule 59 motion to vacate and Rule 15 motion for leave to amend should have been granted. 371 U.S. at 182, 83 S.Ct. 227. Although the opinion is short on analysis, the Court noted that “the amendment would have done no more than to state an alternative theory for recovery.” Id. Plaintiffs seize upon this language as support for the proposition that they do not need to meet Rule 59(e)’s stricter standard, and in doing so effectively argue that courts have either ignored or misread Foman for the past fifty years. See Ciralsky, 355 F.3d at 673; Wright, Miller & Kane at § 1489 (collecting cases). But even if courts have misread Foman for half a century, this Court is bound by the D.C. Circuit’s interpretation of Foman, which does not support plaintiffs’ theory. See Ciralsky, 355 F.3d at 673. Hence, the Court rejects plaintiffs’ argument. Moreover, the approach pressed by plaintiffs—that they need only satisfy Rule 15(a)’s liberal standard—would circumvent the strict standards for altering final judgments in Rules 59(e) and 60(b). This approach is inconsistent with the principles, embodied by the Rules, of “favoring finality of judgments and the expeditious termination of litigation.” Wright, Miller & Kane at § 1489. Moreover, it is inconsistent with the settled law of this circuit requiring plaintiffs to satisfy Rule 59(e)’s standard in order to amend their complaint post judgment. See Ciralsky, 355 F.3d at 673 (citing Firestone, 76 F.3d at 1208). And the D.C. Circuit was hardly unaware of Foman when it held that plaintiffs must do so: indeed, it quoted Foman several times in Firestone, 76 F.3d at 1208. Accordingly, because this Court entered a final judgment against plaintiffs when it dismissed the complaint, plaintiffs must satisfy Rule 59(e)’s more stringent standard before the Court will consider whether to grant leave to amend under Rule 15(a)(2). II. It Was Clear Error To Dismiss Plaintiffs’ Case With Prejudice “ ‘A Rule 59(e) motion is discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.’ ” Ciralsky, 355 F.3d at 671 (D.C.Cir.2004) (quoting Firestone, 76 F.3d at 1208); see also Mobley v. Cont’l Cas. Co., 405 F.Supp.2d 42, 45 (D.D.C.2005) (“A motion for reconsideration ... will not lightly be granted.”). A Rule 59(e) motion “is not simply an opportunity to reargue facts and theories upon which a court has already ruled.” New York v. United States, 880 F.Supp. 37, 38 (D.D.C.1995). Plaintiffs do not assert in their motion that there has been an intervening change in controlling law or that new evidence has become available. Pls.’s Mot. [ECF No. 19] 2 (plaintiffs “are not seeking to have the Court alter or amend its substantive judgment on the merits”). Instead, they argue that it was clear error for the Court to dismiss their case with prejudice. Pls.’s Reply [ECF No. 22] 3 n.2. In the dismissal order here, this Court stated that plaintiffs’ action was dismissed with prejudice in its entirety. [ECF No. 18]. Under Firestone, “dismissal with prejudice is warranted only when a trial court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.” 76 F.3d at 1208 (internal quotation marks omitted); Rollins v. Wackenhut Seros., Inc., 703 F.3d 122, 131 (D.C.Cir.2012) (applying Firestone standard and noting that “[t]he standard for dismissing a complaint with prejudice is high”). And when dismissing with prejudice, a court should “adequately explain, in light of the standard set in Firestone, ” why it dismissed with prejudice. Belizan v. Hershon, 434 F.3d 579, 580 (D.C.Cir.2006). In its Memorandum Opinion, the Court explained that, even taking all the facts alleged in the complaint as true, plaintiffs could not state a claim under the CWA on either of their asserted claims. Mem. Op. [ECF No. 17] 10-11, 16-17. Consequently, the Court dismissed both claims, but did not give an explanation why it dismissed with prejudice. Id. Nevertheless, the EPA argues that the claims were properly dismissed with prejudice because the Court based its dismissal on two legal conclusions as to the requirements of the CWA. Defs.’ Suppl. Br. [ECF No. 26] 3. The Court held: (1) that the EPA did not have a nondiscretion-ary duty to take any action with respect to the document at the heart of this case (“the 2009 Document”) because New Hampshire had not adopted it as a provision of state law; and (2) that the Clean Water Act did not impose on the EPA a nondiscretionary duty to allow public participation with respect to the 2009 Document. Mem. Op. [ECF No. 17] 10-11, 16-17. Plaintiffs do not argue that New Hampshire has since adopted the 2009 Document as a provision of state law, a dispositive fact in itself on the first claim, and whether the EPA has a nondiscretion-ary duty to allow public participation was determined by this Court as a matter of statutory construction. Id. In other words, plaintiffs could not have alleged any additional facts “consistent with the challenged pleading” that would change the Court’s legal analysis of the requirements of the CWA. Firestone, 76 F.3d at 1209. Hence, argues the EPA, plaintiffs’ claims were properly dismissed with prejudice because amendment would have been futile. Id. The Court agrees with the EPA on this point—so far as it goes. The EPA, however, does not offer any argument that dismissal of the case as a whole with prejudice was proper; its arguments focus on the propriety of dismissing the two specific claims with prejudice. Defs.’ Suppl. Br. [ECF No. 26] 3. And Plaintiffs seek not only to allege additional facts but also to add additional claims to their complaint. Pis.’ Mot. [ECF No. 19]. Specifically, plaintiffs wish to assert claims that the EPA’s consideration of the 2009 Document in its section 303(d) listing and approval process violated the APA. Id. Plaintiffs aver that the new APA claims they seek to assert are viable even without the new facts they seek to plead. Pis.’ Suppl. Br. [ECF No. 25] 10. This case, then, is somewhat unusual. When a court dismisses both claims of a complaint, it would be unorthodox to dismiss the claims but not the complaint itself, which no longer seeks any relief. But here, this Court explicitly recognized possibly viable alternative .claims when dismissing plaintiffs’ claims, and yet it dismissed the complaint with prejudice. Without the suggestion of alternative claims, it may have been entirely reasonable to dismiss the whole complaint (because of the dismissal of both counts of the complaint), and to do so with prejudice— but an explanation, that plaintiffs could not possibly plead additional facts to cure the dismissed claims, should have been provided. And because the Court did suggest an alternative legal theory based on the facts pled, plaintiffs should have been permitted to test that theory. Courts routinely permit (under Rule 15(a)(2)) plaintiffs to assert alternative legal theories based on the same facts giving rise to the complaint, and hence these plaintiffs should be permitted to add their APA claims to their complaint. See Fed.R.Civ.P. 15(a)(2) (courts “should freely give leave [to amend] when justice so requires”). It was error, then, to dismiss plaintiffs’ complaint with, prejudice. Indeed, the Supreme Court held in similar circumstances that it was error to deny a motion to vacate a judgment to amend a complaint when “the amendment would have done no more than state an alternative theory for recovery.” Foman, 371 U.S. at 182, 83 S.Ct. 227. To hold otherwise would be to ignore the possibly preclusive effect of this Court’s judgment. Plaintiffs’ proposed APA claims could reasonably be characterized as arising out of the same transaction or occurrence as plaintiffs’ other claims, and as a result, if this Court’s dismissal with prejudice were to stand, plaintiffs could be precluded from asserting the APA claims in a new action. See, e.g., Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481 n. 22, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982) (“Res judicata has recently been taken to bar claims arising from the same transaction even if brought under different statutes.”) (citations omitted). Where new claims based on the same transaction or occurrence would be futile, it would not be error to prohibit the assertion of those claims and thereby potentially preclude them. See, e.g., Rollins, 703 F.3d at 130-31. And where a plaintiff seeks to assert new claims not based on the same transaction or occurrence, rejecting amendment and requiring the plaintiff to file a new complaint might be appropriate because of the lack of apparent preclusive concerns. Here, however, the Court has already recognized the (potential) viability of plaintiffs’ new claims, which appear to be consistent with the events giving rise to plaintiffs’ initial claims, and the EPA does not argue that permitting the APA claims would be futile. The Court also erred by not “adequately explaining], in light of the standard set in Firestone,’’ why it dismissed with prejudice. Belizan, 434 F.3d at 580. No explanation for the dismissal with prejudice appears in the Court’s opinion. Particularly in light of the Court’s suggestion that plaintiffs should have brought an APA claim, this was error. Taken together, the related errors of dismissing with prejudice and of failing to explain the dismissal with prejudice constitute “clear error” under Rule 59(e). Hence, the Court will reopen the judgment for the limited purpose of allowing plaintiffs to amend their complaint by adding the APA claims. As plaintiffs have met the stricter standard under Rule 59(e), they have also met the liberal amendment standard under Rule 15(a)(2), and the Court will allow plaintiffs to amend their complaint to add the additional claims contained in the amended complaint attached to their Rule 59(e) motion. To be clear, the Court does not disturb its previous judgment that the claims asserted by plaintiffs in their initial complaint, Counts I and II, are dismissed with prejudice: “the allegation of other facts consistent with the challenged pleading could not possibly cure the deficienc[ies]” in those claims. Firestone, 76 F.3d at 1209. Although the Court will grant plaintiffs’ motions under Rules 59 and 15, the result here relies substantially on two facts: the Court’s suggestion in its earlier opinion that plaintiffs bring an APA claim and the Court’s failure to explain why it dismissed the action with prejudice. Absent those facts, the Court likely would not grant plaintiffs’ motions, for the simple reason that plaintiffs should have asserted the APA claims earlier. Under Rule 15(a), plaintiffs were permitted to amend their complaint once as a matter of course at any time before a responsive pleading was filed (and before the case was dismissed). A motion to dismiss is not ordinarily considered a responsive pleading under Rule 15(a), so plaintiffs could have amended their complaint as of right before the Court’s decision on the motion. See Confederate Mem’l Ass’n, Inc., v. Hines, 995 F.2d 295, 299 (D.C.Cir.1993). Plaintiffs did not do so.
6053846-20387	OPINION RONALD LEE GILMAN, Circuit Judge. Billie Anderson was indicted on one count of Medicaid fraud. After the government presented its case in chief, Anderson moved to dismiss the indictment as duplicitous and, alternatively, requested specific jury instructions to cure the alleged duplicity. The district court denied the motion and refused to charge the jury with the requested instructions. After the jury found Anderson guilty, the court sentenced her to 24 months of imprisonment. She then filed a post-trial motion to dismiss the indictment, alleging that it failed to state an offense, but this motion was also denied by the court. Anderson now appeals the denial of both motions. For the reasons set forth below, we AFFIRM the judgment of the district court. I. BACKGROUND A. Factual background The government’s charge revolved around the absence of a medical director at Anderson Healthcare, Inc. (AHC), a long-term healthcare facility located in Gray, Tennessee, between March 2002 and January 2003. Anderson was accused of fraudulently concealing this absence, thereby allowing AHC to continue receiving Medicaid payments to which it was not entitled. AHC participated in Medicaid, a state-administered program through which healthcare providers are reimbursed with federal funds for providing certain services to the indigent. TennCare, a division of the Tennessee Department of Health, is responsible for processing eligible claims for services provided by healthcare facilities in Tennessee and paying reimbursements with a combination of state and federal funds. A facility’s ongoing participation in Medicaid is conditioned on its compliance with various federal, state, and local regulations, 42 C.F.R. § 483.75(b), including the requirement that a long-term healthcare facility “designate a physician to serve as medical director,” 42 C.F.R. § 483.75(i)(l). A medical director is responsible for coordinating medical care within the facility and implementing resident-care policies. Id. § 483.75(i)(2). At all relevant times, Billie Anderson was an owner and the administrator of AHC. In these positions, Anderson hired and fired AHC employees, made all of the financial decisions, and was responsible for paying the medical director. Glenna Taylor, a registered nurse who worked at AHC from 1981 until either 2001 or 2002, testified that for the entire time she was employed there, the facility had a medical director. For the last 10 years of Taylor’s employment, Dr. Daniel David served in that position. Dr. David was a faculty member at East Tennessee State University (ETSU), and the ETSU physicians group had a contract with AHC, providing that Dr. David would be the facility’s medical director. But on January 15, 2002, ETSU sent a letter to Anderson stating that its physicians group intended to terminate the contract with AHC effective March 15, 2002. In September 2002, the Tennessee Department of Health conducted its annual survey of AHC. Annual surveys are designed to determine a facility’s compliance with federal and state regulations regarding patient care. During the survey, an employee at AHC was given a Disclosure of Ownership and Control Interest Statement Form, which was signed by Anderson and given to the state team by the end of the survey. One of the questions on the form asked: “Has there been a change in Administrator, Director of Nursing -or Medical Director within the last year?” The form was checked “No” in response to this question and was dated September 19, 2002. Above the signature line was a bolded statement warning that the making of a false statement on the form could result in prosecution under federal or state laws, and that “knowingly and willfully failing to fully and accurately disclose the information requested may result in denial of a request to participate or[,] where the entity already participates, a termination of its agreement or contract with the state agency or the Secretary [of Health and Human Services].” AHC’s September 2002 survey revealed numerous “immediate jeopardies,” meaning that there were serious and immediate threats to the residents’ safety and health. The Tennessee Department of Health therefore conducted an extended survey, also in September 2002, to follow-up on the immediate jeopardies. As part of this more detailed survey, the Department prepared a list of items it would need from AHC, including the medical director’s license to practice medicine, the medical-director contract, and all other contracts that the facility had in place. The survey team was initially told that the medical director was Dr. David, but later was told that Dr. Frank Johnson was the medical director. On September 19, 2002, AHC could not produce the medical license for either physician. One day later, however, AHC faxed the survey team a copy of Dr. Johnson’s license. Rebecca Riddle became the office manager at AHC in either December 2001 or January 2002. She recalled overhearing a heated conversation between Anderson and Dr. David in January 2002 about the doctor’s resignation. Riddle testified that Anderson thus knew that Dr. David was leaving as the medical director. Sometime later, Riddle typed up a proposed medical-director contract for Dr. Johnson, which she then sent to him. Riddle was aware that Dr. Johnson had turned down the contract because he sent the contract back in the mail unsigned and “with a sticky note on it.” She further testified that Anderson did not hire anyone else as medial director after Dr. Johnson turned down the job, and that AHC did not have a medical director during the September 2002 surveys. Riddle told Anderson during the extended survey that the Tennessee Department of Health wanted to see the medical-director contract. Anderson, according to Riddle, said “[t]hey’ll close me down” when Riddle pointed out that the facility did not have a medical director. This prompted Anderson to have Riddle retrieve Dr. Johnson’s contract that he had sent back unsigned, to say “[l]et’s try this,” and to give Riddle the unexecuted contract for the latter to hand the survey team. When a member of the survey team told another AHC staff member that the team needed a signed version, Anderson took the contract back, signed it herself on behalf of AHC, and told Riddle to sign Dr. Johnson’s name, which Riddle did. Dr. Johnson had not authorized Riddle to sign for him, and Riddle eventually told state investigators in February of 2003 about this incident. Following the extended survey, Tenn-Care notified Anderson that, based on the deficiencies found during the surveys, it would recommend that her Medicaid provider agreement be terminated. Because AHC had furnished a medical license and a signed medical-director contract for Dr. Johnson, it was not cited for the absence of a medical director. Anderson subsequently submitted a plan of correction, which specifically mentioned the involvement of the medical director in implementing changes. She was thereafter notified that as of October 25, 2002, AHC was in compliance with the relevant regulations, so its contract would not be terminated. In response to the extended survey, Anderson hired nursing consultant Debra Verna in late fall or early winter 2002 to help keep AHC in compliance with federal and state regulations. Verna met Dr. Johnson while working at AHC and said she understood that he was the medical director. Dr. Johnson immediately stated that he was not the medical director, that Verna needed to inform Anderson of that, and that he had not signed any contract. When Verna informed Anderson the next day about this conversation, Anderson stated that she did not know why Dr. Johnson would say that, causing Verna to suggest that Anderson follow up with him. After Verna stopped working at AHC in approximately January 2003, she filed an anonymous complaint with the Tennessee Department of Health regarding the facility’s lack of a medical director. Dr. Robert Chapman Lee entered into a written contract with AHC on January 8, 2003 to become its medical director, and he began his employment on that date. Because “there were things going on that [he] didn’t feel comfortable with,” however, Dr. Lee sent Anderson a certified letter on February 1, 2003 notifying her that he was resigning as the medical director. In response to complaints about AHC, the Tennessee Department of Health began an investigation in February 2003 to determine whether there was a medical director at the facility. The Board of Nursing Home Administrators suspended Anderson’s administrator’s license in March 2003 because it found that “from on or around March 16, 2002 to on or around January 7, 2003, [Anderson] operated Anderson Healthcare, Inc. without a medical director.” Before this investigation, neither federal nor state officials knew that AHC was without a medical director during the period of time in question. At trial, the prosecution presented proof that TennCare had paid AHC over $1 million as a result of reimbursement claims filed and signed by Anderson each month from July 2002 through January 2003. B. Procedural history Anderson was originally indicted in June 2007 on eight counts of Medicaid fraud. In August 2007, the government moved to dismiss all but one count. The remaining count, brought pursuant to 42 U.S.C. § 1320a-7b(a)(3), read as follows: [I]n or about March 2002 until in or about January 2003, in the Eastern District of Tennessee, BILLIE FAYE ANDERSON, having knowledge of an event that affected her continued right to receive payments from a federal health care program, that is, Medicaid, that event being the absence of a medical director at Anderson Healthcare, Inc., as required by law, concealed and failed to disclose that event with the intent fraudulently to secure Medicaid payments when none were authorized, by submitting claims for payments to Medicaid knowing she was not entitled to receive such payments. Anderson’s jury trial began in September 2007 and lasted four days. At the close of the government’s proof, Anderson moved to dismiss the indictment as duplicitous, arguing that the government should have brought separate counts for each month during the period that AHC allegedly did not have a medical director, but was still submitting monthly reimbursement claims. She contended that without such a breakout, neither the parties nor the court would be able to tell if the jury unanimously determined when the offense occurred during the relevant months. Anderson thus claimed that her Sixth Amendment right to a unanimous jury verdict would be violated by the incorporation of ten specific offenses into one count. In response, the government argued that it was not charging Anderson with submitting false claims — an offense that could have been committed with each monthly request for reimbursement — but with the continuing failure to disclose the absence of a medical director at AHC. The district court noted that Anderson’s motion to dismiss should have been raised pretrial. It nevertheless proceeded to the merits of the motion by ruling that the indictment was not duplicitous because the filing of monthly reimbursement claims was not an element of the offense. The court thus concluded that the indictment charged a single violation that was continuous in nature. After the court denied Anderson’s motion, she requested the following jury instruction to cure the alleged duplicity of the indictment: Before you can find the defendant guilty of the charge in this indictment, you must unanimously agree that the government has proved the following three elements beyond a reasonable doubt, and those are the three elements that the government and the court and the defendant have agreed to, beyond a reasonable doubt for each of the 11 months charged in the indictment; that if there is even one month within the period where the government has failed to carry its burden as to these three elements, then you must acquit the defendant. Anderson later requested a second instruction regarding the “in or about” language in the indictment: The indictment charges that the crime commenced and ended “[i]n or about” various dates. The government does not have to prove that the crime began and ended on any exact date but the government must prove that the crime continued from the starting date that you find until the ending date that you find. Finally, Anderson sought special findings of fact from the jury regarding the dates for the commencement and termination of the crime. The government objected to each of these proposals, and the district court ultimately refused to include them. After less than two hours of deliberation, the jury found Anderson guilty. Following several sentencing continuances and an unsuccessful motion for a new trial filed by Anderson, the district court sentenced Anderson in September 2008 to 24 months of imprisonment, three years of supervised release, a $100 assessment, and a $25,000 fine. She subsequently filed a post-trial motion to dismiss the indictment for failure to state an offense pursuant to Rule 12(b)(3)(B) of the Federal Rules of Criminal Procedure, which the district court denied. Anderson has timely appealed the district court’s denial of her motions to dismiss the indictment as duplicitous and to dismiss the indictment for failure to state an offense. II. ANALYSIS A. Standard of review We review de novo the sufficiency of an indictment. United States v. Ahmed, 472 F.3d 427, 431 (6th Cir.2006). Similarly, we employ de novo review to determine if an indictment is duplicitous. United States v. Kakos, 483 F.3d 441, 443 (6th Cir.2007). But we review a district court’s denial of a requested jury instruction for abuse of discretion. United States v. Gray, 521 F.3d 514, 540 (6th Cir.2008). An abuse of discretion will not be found if the jury instructions “as a whole ... adequately informed the jury of the relevant considerations and provided a basis in law for aiding the jury in reaching its decision.” United States v. Frederick, 406 F.3d 754, 761 (6th Cir.2005). B. Failure to state an offense Anderson first challenges the district court’s denial of her post-trial motion to dismiss the indictment for failure to state an offense. A party may raise an allegation that the indictment does not state an offense at any time, including post-trial or on appeal. United States v. Gatewood, 173 F.3d 983, 986 (6th Cir.1999) (allowing a defendant to challenge the sufficiency of the indictment for the first time on appeal). “[A]n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense.” Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974). Anderson was charged under 42 U.S.C. § 1320a-7b(a)(3), which provides that [wjhoever, ... having knowledge of the occurrence of any event affecting ... his initial or continued right to any ... benefit or payment [under Medicaid], conceals or fails to disclose such event with an intent fraudulently to secure such benefit or payment either in a greater amount or quantity than is due or when no such benefit or payment is authorized, ... shall ... be guilty of a felony. Anderson’s indictment clearly tracked the language of the statute and thus contained the elements of the offense. Specifically, it charged that (1) Anderson had knowledge of an event affecting her right to receive Medicaid payments, (2) she concealed the event, and (3) in concealing the event, she acted knowingly and willfully with the intent to fraudulently secure Medicaid payments. See United States v. Collis, 128 F.3d 313, 317 (6th Cir.1997) (holding that an indictment was sufficient because “[t]he charged offense fully tracks the relevant language of’ the statute). Given these specific allegations, Anderson was fairly informed of the charge against which she had to defend. This satisfies the first prong of Hamling. (We recognize that both the statute and the indictment refer to an individual’s right to receive Medicaid payments. Here, the payments went to AHC, not to Anderson individually. But neither party has raised this potential discrepancy, so we decline to address it.) The indictment also included the relevant time period and the specific event that triggered the charge against her — the absence of a medical director. Anderson would accordingly be able to adequately plead an acquittal or conviction in bar of any future prosecutions arising from the same offense. The second requirement of Hamling is thus met. Indeed, Anderson does not dispute that the Hamling test is satisfied in the instant ease. She instead argues on appeal that the indictment is insufficient because there is allegedly no statute or regulation that would put Anderson on notice that her facility’s participation in Medicaid “would automatically disintegrate or immediately terminate with the instance of the loss of the Medical Director.” But this argument misses the point. Anderson is not so much contending that the indictment fails to state an offense, but rather that she could not be guilty under the statute because the absence of a medical director is not an event automatically terminating her facility’s right to receive Medicaid payments. This is an issue that Anderson was free to argue at trial; i.e., that one element of the statute was not satisfied because the absence of a medical director purportedly does not affect AHC’s right to Medicaid payments under federal and state rules. But the government was also free to include in its indictment the charge that the absence of a medical director does affect the continuing right to receive Medicaid payments. The indictment need only set forth elements that, if proven, constitute a violation of the relevant statute. See Hamling, 418 U.S. at 117, 94 S.Ct. 2887 (stating that the indictment may track the language of the statute, provided that the statute itself clearly “set[s] forth all the elements necessary to constitute the [offense] intended to be punished” (citation omitted)). In any event, the right of a long-term healthcare facility to participate in Medicaid payments is in fact conditioned on the presence of a medical director. See 42 C.F.R. § 483.75(b) (“The facility must operate and provide services in compliance with all applicable Federal, State, and local laws, regulations, and codes ....”); § 483.75(i)(l) (“The facility must designate a physician to serve as medical director.”). As the district court correctly noted, if a facility loses its medical director, then this event would affect the facility’s right to Medicaid payments because it would no longer be operating in accordance with federal regulations. And Anderson conceded that she was aware that her facility needed a medical director. Her defense at trial, which the jury obviously disbelieved, was that Dr. William Bailey, her personal physician, had agreed to serve as the medical director without compensation. Moreover, the statute under which Anderson was charged does not require that an individual conceal an event that would automatically terminate her facility’s Medicaid payments; the concealment of an event that would adversely affect the facility’s right to continued payments is sufficient to violate the statute. See 42 U.S.C. § 1320a-7b(a). In sum, the indictment satisfies both of Hamling’s requirements. The district court thus did not err in denying Anderson’s post-trial motion to dismiss the indictment for failure to state an offense. Anderson’s appellate brief appears to mix her arguments about the indictment’s alleged failure to state an offense with arguments about whether the statute or the indictment violates her right to due process for lack of fair notice. She contends, for example, that the indictment “fails to state an offense for which Mrs. Anderson or a person of ordinary intelligence would have fair notice that the conduct is a crime.” And at oral argument, her counsel contended that at most a person in Anderson’s position would have known that she would face civil penalties for failing to have a medical director, but could not have known that such a failure implicated criminal penalties.
808608-18878	JOHN R. BROWN, Chief Judge: Like so many of the contests between aggrieved taxpayers and the Internal Revenue Service, this one hinges upon the vagaries of motive and intention underlying an otherwise unexceptionable corporate transaction. Specifically, we must decide whether a desire to avoid payment of Federal income taxes was the principal purpose behind the acquisition of a loss corporation with a high net operating loss carryover and its subsequent merger with a business having taxable income against which these losses could be offset. Both the Commis sioner and the Tax Court determined that it was and accordingly disallowed the deduction under § 269 of the Internal Revenue Code. We affirm. For the most part the Tax Court’s findings of fact are stipulated, and many others are undisputed. But on the critical issue of subjective motivation we have to recognize that the fact as found has no express verbal testimony to support it, and it has to rest on inferences that at least offer a choice — a choice the fact-finder made. Scroll is a Florida-based corporation which since 1957 has been engaged in the design, manufacture and sale of cast aluminum furniture and other metal products. Initially it was a wholly owned subsidiary of Window, but by June 1959 Window’s financial condition had deteriorated to such an extent that its majority stockholder, Robert Russell, assumed direct control of its operations, consolidating profitable activities and disposing of those that were losing money. Scroll sustained large operating losses both before and after Russell took over and consequently was a prime candidate for disposition, particularly since Window also needed cash with which to buy up its outstanding bonds at substantial (65%) discounts. However, Scroll’s cast or wrought aluminum furniture products continued to enjoy favor in the trade because of their appearance and style. Capitalizing on this fact, Russell ejected the old management and in March 1960 hired a new general manager with some thirty-five years of experience in the furniture field. After a three month study he advised Russell that the business had the potential for making a profit. Though in deep financial straits at this point, Scroll was in no danger of going under. Beginning in March or April of 1961, by which time Scroll had started to turn the financial corner, Russell initiated discussions with the predecessor of Keller with the aim of an ultimate sale. Although such a transaction had been discussed by representatives of the two companies as early as 1959, the negotiations do not appear to have been too serious since Keller seemed to believe that Russell was in the better position to inject renewed vigor into Scroll’s operations and to reverse its declining corporate health. Consequently, prior to the 1961 meeting, Scroll had used extensive newspaper and high quality magazine advertising, hired design engineers, and under new management started to display its furniture in various showrooms around the country. The principal success was in tightening quality production, reducing losses and injury to reputation from faulty goods, and eliminating unprofitable items. When the March 1961 negotiations— in no way a continuation of the 1959 discussions — commenced, Scroll was still a loss corporation, but indications were that it might eventually prosper because by that time it had achieved a monthly profit of $1,000. In any event it was not on the brink of insolvency or otherwise facing imminent financial disaster. From the beginning of the 1961 discussions with Keller, Russell’s position was that he would accept nothing less than the net book value of Scroll’s assets. An audit was conducted, and in July of 1961 Keller agreed to purchase all of Scroll’s stock on Russell’s terms. The sale was made in October of 1961, backdated to July 1961, with the purchase price consisting of an assignment of certain of Scroll’s accounts receivable to Window and a non-interest bearing promissory note which Window assigned to one of its principal and pressing creditors. This note was ultimately paid at maturity in April 1963. After the sale Scroll’s operations continued much as they had before, except for the addition of several benefits resulting from its affiliation with Keller. Keller’s purchasing agents enabled Scroll to obtain aluminum castings from Japan at savings of 30%. Backed by the vastly superior economic strength of its parent Keller, Scroll opened two new showrooms and greatly expanded its advertising campaign. None of the advances would have been possible under the conditions existing at Window. But from a sequential standpoint the acquisition of Scroll by Keller was only the first of two steps. On January 31, 1962 Chair, another of Keller’s wholly owned subsidiaries engaged in the manufacture of tubular aluminum furniture at Waynesboro, Georgia, was merged into Scroll. As the surviving corporation, Scroll continued to operate what were for all practical purposes two separate and independent divisions — one marketing cast aluminum furniture (the old Scroll) and the other manufacturing tubular aluminum furniture (the former Chair). Each division continued to maintain separate plants under separate management while manufacturing substantially different kinds of aluminum furniture products. One of the most obvious advantages accruing to Keller and Chair as a result of the merger was the possibility — obviously anticipated by its corporate management, if not by its accountants and attorneys — of offsetting Scroll’s substantial pre-acquisition net operating loss carryover against Chair’s even more substantial post-acquisition profits. As a direct result of the merger, Keller and Chair obtained the benefit of a substantial loss carryover that neither would otherwise have enjoyed. But-there is additional evidence credited by the Tax Court that other non-tax purposes also motivated the transaction. One of these was a purported desire to relieve Chair of the burden of Georgia income taxes, and one of the ways this could be accomplished was by its merger with a corporation having out-of-state activities. Another was the ostensible wish to utilize the superior marketing expertise of Robert Crockett, Chair’s chief executive, in Scroll’s behalf. Among his other efforts, Crockett placed catalog advertising for Scroll’s products. In its return for the taxable year ending July 31, 1962 Scroll attempted to deduct its entire pre-acquisition net operating loss against the combined post-acquisition profits of the Scroll and Chair divisions (see notes 3 and 5, supra). The deduction was disallowed in its entirety. We begin our analysis with the observation that the merger of a loss corporation with a profit-making one, even when the losses, profits and resultant tax benefits are all considerable, will not automatically invalidate a loss deduction under the Internal Revenue Code of 1954. Congress has not dictated an across-the-board disallowance of all tax benefits in such circumstances, and the mere fact that taxes otherwise payable were eluded by legitimate corporate maneuvering or manipulation is not conclusive. Failing to recognize this simple legislative truth, we might be led to infer an absolute prohibition where only a conditional one is imposed. The condition, of course, is that the “principal purpose” underlying the acquisition must be the avoidance or evasion of taxes in order for § 269 to come into play. And by this Congress intended § 269 to “be operative only if the evasion or avoidance purpose outranks, or exceeds in importance, any other one purpose.” S.Rept. No. 627, 78th Cong. 1st Sess., reprinted in 1944 C.B. 973, 1017. Certainly we must recognize that as a matter of common sense and business acumen experienced corporate executives and their advisers may legitimately attempt to surround the proposed maneuver with factors which maximize at least one of the legitimate business purposes beyond the hope or expectation of the tax purpose. But equally as certain the key to this thorny problem of subjective intent does not lie in methodically characterizing all of the taxpayer’s asserted non-tax motives as spurious. Whether legitimate business purposes did in fact induce the transaction, and if so to what extent, whether they were mere window dressing or afterthoughts, or whether the tax-saving purpose outranked any one of the credited business motives are all questions of fact upon which the taxpayer has the burden. American Pipe & Steel Corp. v. Commissioner of Internal Revenue, 9 Cir., 1957, 243 F.2d 125, cert. denied 355 U.S. 906, 78 S.Ct. 333, 2 L.Ed.2d 261. Unless clearly erroneous, the finding of the Tax Court must stand. Commissioner of Internal Revenue v. Duberstein, 1960, 363 U.S. 278, 80 S.Ct. 1190, 4 L.Ed.2d 1218; 26 U.S.C.A. § 7482. We think the facts provided both the Commissioner and the Tax Court with sufficient grounds for concluding that the acquisition and subsequent merger were motivated principally by tax avoidance considerations. Despite the plausible motives asserted by Taxpayer as having provided the primary impetus for the transaction, the totality of circumstances reasonably supports the inference that the potential tax benefit far outweighed any one of the other non-tax business reasons. Whatever advantages (if any) Chair derived from the merger as a result of savings on Georgia corporate taxes were undoubtedly insubstantial when compared to the advantages Chair and Keller would derive from a reduction of taxable income by almost six hundred thousand dollars. As for the other benefits from Scroll’s former viewpoint, arising from its affiliation with Chair’s management and its superior marketing skill and purchasing power, there is nothing in the record even suggesting that these services could not have been utilized if both enterprises had continued their separate corporate existence — on the contrary, the fact that they were both subsidiaries of Keller allowed the trier of fact to conclude that these advantages would have been available even without a merger. Moreover, as the merger was one of corporate restructuring by means of an exchange of stock unaccompanied by any other substantial integration of management, physical facilities or operations, these reasons advanced to rationalize the maneuver were properly subjected to careful scrutiny. Regardless of whether these non-tax motives were actual or illusory, however, the practical effect of the entire trans- . action was to enable the corporation to set off substantial pre-acquisition losses against subsequent earnings and thereby to obtain a tax benefit not otherwise available. According to the Treasury Regulations, such a result by itself indicates a tax-avoidance motive irrespective of whether any other evidence points to the proscribed principal purpose. And, contrary to Taxpayer’s contention that the disallowance fails for want of verbal testimony linking (i) the initial acquisition of Scroll with (ii) the soon-to-follow merger of Chair into Scroll, the Tax Court was entitled to treat both acquisition and merger as interrelated steps in a single transaction. J. T. Slocomb Co. v. Commissioner of Internal Revenue, 2 Cir., 1964, 334 F.2d 269, 274. There is a good deal of practical wisdom in the regulation, whether its principle comes from the mind of a Judge or the pen of a regulation redactor. A § 269 problem is not one of torts in which the judicial inquiry artificially cuts off at the moment of wrong. What was intended by such a merger-acquisition can properly be ascertained both by initial actions and those taken shortly thereafter, especially when the subsequent steps are so obviously necessary that they must have been in the minds of the strategists. The record here is undisputed that Keller’s top management — including a former practicing certified public accountant — was aware in detail of this $600,000 loss carryover. We think a court experienced in the affairs of Federal income taxation was entitled to believe that no businessman in his right mind would allow this plum to go unplucked. To do nothing was to forsake forever the hope of a tax savings. To try, the structural change had to be made. If it worked, all was well. If it didn’t, the try was worth the risk — indeed, there was no risk at all because what is here “lost” is what would have been paid had the game plan not been chosen. The burden of proof on the taxpayer is not an easy one, and when the disputed tax benefits are so disproportionate to the value of the other asserted advantages, that burden may be practically impossible to sustain. J. T. Slo-comb Co. v. Commissioner of Internal Revenue, supra; Elko Realty Co. v. Commissioner of Internal Revenue, 3 Cir., 1958, 260 F.2d 949. But in addition to all of this there is also § 269(e), added by Congress in 1954 and establishing a specific objective guideline to assist the troublesome quest for the subjective. If the consideration paid in an acquisition is “substantially disproportionate” to the aggregate of the adjusted basis of the property acquired and the tax benefit not otherwise available, that fact will constitute prima facie evidence of a principal tax avoidance purpose. Although the Tax Court found it unnecessary to apply the statutory presumption, we see no reason why this legislative declaration should not be carried out. Giving full effect to the tax benefits —as hoped for or dreamed of by the corporate manipulators — it is undisputed that the purchase price paid was substantially “less than” the aggregate value of assets and tax benefits acquired. On argument we were troubled about whether the ratio was to be based upon (i) full potential tax benefits or (ii) merely those attributable to the post-acquisition earnings of the operations of the former loss corporation. Of course (ii) would more than reverse the ratio. But our anxiety has been dissipated, because the stipulated figures are controlling. As we have stated § 269(c) was added to eliminate some of the difficulties in demonstrating the proscribed motive. The problem was not that of denying the loss carryover respecting the post-acquisition income attributable to the operations of the former loss corporation. The problem was the expected use of the whole carryover against all post-acquisition income of both acquired and acquiring entity. The stipulation (note 14, supra) was no slip of the pen or a tactical-strategic error to be regretted in the light of the Court’s momentarily misguided anxieties. As most often true the pudding’s proof is in the eating. And what Taxpayer sought was precisely the whole — $600,000 to wipe out 60% of Chair’s $1 million profits quite without regard to Scroll Division’s piddling $34,000. It was this (here unsuccessful) strategy that Congress meant to penalize when it established the markedly “less than” ratio as presumptive evidence of the forbidden motive. We should sound this caveat. Of course we do not suggest that the Tax Court’s inferences drawn from the facts in evidence are the only reasonable ones or even that they are more reasonable than any others. The taxpayer’s evidence that its non-tax motives constituted the principal purpose for the acquisition and merger may provide a reasonable basis for a contrary inference and a different result. But the resolution of conflicts of this sort necessarily involves a factual inquiry into a subjective state of mind that resists direct and conclusive proof. The primary responsibility for this factual assessment lies with the trier of fact, Commissioner of Internal Revenue v. Duberstein, supra; Commissioner of Internal Revenue v. Heininger, 1943, 320 U.S. 467, 475, 64 S.Ct. 249, 254, 88 L.Ed. 171, 177, and we cannot say in light of all the circumstances that its conclusion here was clearly incorrect. Affirmed. . Simply stated, the record reveals that on October 31, 1961 Keller Industries (Keller) acquired all the stock of Scroll (Taxpayer), a corporate subsidiary of Miami Window Corporation (Window). Then, in January 1962, Keller’s high-profit subsidiary, Aluminum Chair Products Corporation (Chair), was merged into Scroll, thereby bringing into conjunction high tax losses and high taxable income. . 26 U.S.C.A. § 269 : “Acquisitions made to evade or avoid income tax (a) In general. — If * * * (2) any corporation acquires * * * directly or indirectly, property of another corporation, not controlled, directly or indirectly, immediately before such acquisition, by such acquiring corporation or its stockholders * * * and the principal purpose for which such acquisition was made is evasion or avoidance of Federal income tax by securing the benefit of a deduction, credit, or other allowance which such person or corporation would not otherwise enjoy, then the Secretary or his delegate may disallow such deduction, credit, or other allowance.” . Scroll’s accumulated net operating loss by the end of taxable year 1961 amounted to $596,799.15: Taxable Year Ended Loss February 28; 1958 $ 1,362.03 February 28, 1959 299,630.96 February 29, 1960 241,796.11 February 28, 1961 55,654.74 Total Losses $598,443.84 Less : Profit for period 1,644.69 3/1/61-7/31/61 * 1,644.69 Accumulated Net Operating Loss Carryover $596,799.15 * Prior to its acquisition by Keller, Scroll’s taxable year ended on the last day in February. Scroll filed a return for the partial year ending July 31, 1961. . The fact that there was no real integration of operational or managerial functions hears strongly on the issue of principal purposes, insofar as it suggests that “the transaction was not undertaken for reasons germane to the conduct of the business of the taxpayer.’’ Income Tax Reg. § 1.2G9-2(b). . The total combined taxable year 1962 profits were $1,011,595.25, of which only $34,954.25 was attributable to the Scroll division. The disproportionate size of the two operations is indicated by the following figures: POST-MERGER NET SALES Fiscal Year Chair Scroll Division’s Ended Products Percent of Com-July 31 Division Scroll Division bined Net Sales 1962 $5,318,893 $ 538,658 9.2% 1963 5,859,102 549,985 8.6% 1964 7,397,575 664,127 8.2% 1965 7,425,258 756,151 9.2% 1966 6,272,595 841,048 11.8% 1967 6,368,824 859,605 11.9% 1968 6,128,171 1,086,083 15.1% . In absolute terms, utilizing the applicable tax rate of 52%, the dollar value of the tax benefit acquired was $310,335.56. . The Government apparently made no effort to discredit the testimony regarding either of these motives. There is no evidence to indicate whether substantial savings on Georgia taxes did result from the merger (nor what proportion such savings, if any, bore to the total benefits derived from the net operating loss deduction) or whether Crockett’s efforts did materially enhance Scroll’s competitive position.
6533353-13417	MEMORANDUM OPINION AND ORDER EDWARD B. TOLES, Bankruptcy Judge. This cause coming on to be heard upon the adjourned first meeting of creditors, the adjourned hearing on indemnity and the adjourned hearing on adjudication or dismissal, pursuant to Section 481(2) of the 1898 Bankruptcy Act (“Bankruptcy Act”) and Chapter XII Rule 12-41(b) and Chapter XII Rule 12-19(d) of the Rules of Bankruptcy Procedure, and due and proper notice of these hearings having been given to all parties entitled thereto, and The Court having held hearings on the above-mentioned matters on June 3, 4, 5, 24, 25, and 30,1980, and on October 9,1980, and the Court having heard evidence, and the Court having examined the pleadings and files in this cause, and having heard arguments of counsel, and being fully advised in the premises; The Court Finds: 1. The Debtors, KMJ-72 and WICKEN-BURG INN DEVELOPMENT COMPANY (“Debtors”), represented by the law firm of NACHMAN, MUNITZ & SWEIG, LTD., are both Arizona limited partnerships. The Creditor, ALAMAND CORPORATION, is a Delaware corporation, and the Creditor, DIXIT CORPORATION, is a California corporation and a wholly owned subsidiary of ALAMAND CORPORATION. ALAMAND CORPORATION and DIXIT CORPORATION (“Creditors”) are represented in this proceeding by the law firm of KATTEN, MUCHIN, GITLES, ZAVIS, PEARL & GALLER. 2. In September 1973, February 1974, and between February 1974 and February 1975, the Creditor, ALAMAND CORPORATION, through its predecessor in interest, BENEFICIAL STANDARD MORTGAGE INVESTORS (“BSMI”), loaned the Debtors the aggregate sum of $4,400,000.00 for the construction and development of the Wick-enburg Inn (“Inn”). The Inn is a 160 acre tennis and dude ranch located in Wieken-burg, Arizona, about 60 miles north of Phoenix, Arizona. The Inn is surrounded by 2,400 acres of undeveloped desert land which is the subject of two land trusts, White and Suggs (“Trusts”), in which the Debtor, KMJ-72, held second beneficial interests. 3. On August 11,1976, as further security for payment on the above-mentioned obligations, the Debtor, KMJ-72, assigned its second beneficial interests in the Trusts to the Creditor, ALAMAND CORPORATION. In the autumn of 1978 the Creditor, DIXIT CORPORATION, purchased the first beneficial interests in the Trusts. 4. In 1975 the Creditors instituted a foreclosure action against the Debtors in the Superior Court of Yavapai County, Arizona, which was settled by agreement among the parties on August 11, 1976. On July, 18, 1977, a second foreclosure action was instituted by the Creditors in the Superior Court of Yavapai County, Arizona, and the Debtors have denied liability and have counterclaimed on the grounds of fraud and breach of the 1976 settlement agreement. On September 30, 1977, the Superior Court of Yavapai County, Arizona appointed Ira Edward Cheek receiver of the Inn and the surrounding 2,400 acres of undeveloped desert land. 5. On January 26, 1978, the Debtors were notified that they were in default on the Trusts and that they had until November 7, 1978, at 2:00 P.M., Mountain Standard Time, to cure such defaults or forfeit their interests in the Trusts. On November 7, 1978, at 2:30 P.M., Central Standard Time, the Debtors filed two separate Petitions for Arrangements under Chapter XII of the Bankruptcy Act in the United States District Court for the Northern District of Illinois situated in Chicago, Illinois; said cases were assigned to the Honorable Frederick J. Hertz, Bankruptcy Judge, as Case Numbers 78 B 8732 and 8733, and were consolidated on November 7, 1978. 6. On March 29, 1979, the Debtors filed a plan of arrangement, and then filed an amended plan of arrangement on September 21,1979. On October 6,1980, the Debtors filed a second amended plan of arrangement after proofs were closed on the hearings on adjudication or dismissal on June 30,1980, and pending this Court’s final decision. On July 23,1979, the Creditors filed a plan of arrangement. Sufficient acceptances have not been filed to confirm the Debtors’ amended plan of arrangement filed on September 21, 1979, or the Creditors’ plan of arrangement filed on July 23, 1979. On October 9, 1980, the Clerk of the United States Bankruptcy Court for the Northern District of Illinois filed a memorandum with this Court which reads as follows: 7. On November 7, 1978, the Debtors filed a complaint for a temporary restraining order and a complaint for an injunction against foreclosure on the Trusts in the Arizona state court before the Honorable Frederick J. Hertz, Bankruptcy Judge, and a temporary restraining order was entered on November 7,1978. On January 23,1979, a preliminary injunction was entered restraining the Creditors from foreclosing upon the Debtors’ interests in the Trusts in Arizona state court, and on January 29, 1979, the Creditors filed a notice of appeal from the January 23, 1979, order. Said appeal is currently pending before the Honorable Hubert L. Will, United States District Court Judge for the Northern District of Illinois, Case Number 79 C 805. 8. On November 27, 1978, the Creditors filed a motion to dismiss Case Number 78 B 8732 for want of jurisdiction or in the alternative to dismiss or transfer both of the above-entitled cases for improper venue. On July 27, 1979, the Honorable Frederick J. Hertz, Bankruptcy Judge, denied the Creditors’ motion, and on July 30, 1979, the Creditors filed a notice of appeal to the United States District Court for the Northern District of Illinois. Said appeal is currently pending before the Honorable Hubert L. Will, United States District Court Judge for the Northern District of Illinois, Case Number 79 C 3587. 9. On February 9,1979, more than three months after the filing of these Chapter XII proceedings and one month after the entry of the preliminary injunction on January 23, 1979, the Debtors first filed their complaint to determine the validity and extent of liens. Said complaint is similar to the Debtors’ counterclaim of fraud and breach of the 1976 settlement agreement filed in the second foreclosure action pending before the Superior Court of Yavapai County, Arizona. On April 27, 1979, five months after the filing of this case, the Debtors amended said complaint. On March 9, 1979, the Creditors filed their answer and for the first time filed a counterclaim to lift or modify the automatic stay, pursuant to Rule 12-43(d) of the Rules of Bankruptcy Procedure which provides for hearings for relief from the stay at, “the earliest possible date, and it shall take precedence over all matters except older matters of the same character.” 10. In order to prepare for trial on matters pending before the Honorable Frederick J. Hertz, Bankruptcy Judge, the Creditors sought extensive discovery. On January 29,1980, Judge Hertz ordered the Debtors to produce all written agreements or memoranda of verbal agreements pertaining to the creation of a joint venture for the development, sale, financing or refinancing of the Inn by and among the Debtors and various financing sources, including John B. Wogan, Jr. (“Wogan”), a real estate developer in Denver, Colorado. Under said order, the Creditors were precluded from showing or delivering said documents or passing on information contained therein to any other person, firm or corporation, and the use of said documents was limited to the pending Chapter XII proceeding. 11. On December 3, 1979, some 13 months after the filing of this Chapter XII proceeding, the Creditors filed a petition for withdrawal of reference from the Honorable Frederick J. Hertz, Bankruptcy Judge, with the Executive Committee of the United States District Court for the Northern District of Illinois (“Executive Committee”), and alleged undue delay of this proceeding. On December 7, 1979, the Executive Committee denied the Creditors’ petition without prejudice, with leave to renew said petition in ninety days. On February 29, 1980, the Creditors filed a second petition for withdrawal of reference with the Executive Committee. On March 7, 1980, the Executive Committee withdrew the reference of the above captioned matter from the Honorable Frederick J. Hertz, Bankruptcy Judge, and this case was reassigned to the undersigned, Edward B. Toles, Bankruptcy Judge. 12. On April 25,1980, after due notice to the parties, this Court, the undersigned presiding, set the adjourned first meeting of creditors, the adjourned hearing on indemnity, and the adjourned hearing on adjudication or dismissal for June 3, 4, and 5, 1980. Said hearings were held on the above-mentioned dates, and further hearings were held on June 24, 25, and 30,1980. On May 9, 1980, this Court modified the January 29, 1980, order entered by Judge Hertz, and required the Debtors to produce to the Creditors for inspection within 15 days documents pertaining to the creation of a joint venture for the development, sale, financing or refinancing of the Inn. The documents to be produced specifically included the following: correspondence, memoranda, written proposals, applications to lenders, commitment letters, financial statements, reports, projections and development plans. On May 12, 1980, the Creditors filed a notice of deposition of Wogan, who resides in Denver, Colorado, and on May 21,1980, this Court denied the Debtors’ motion to quash the deposition of Wogan. On May 27, 1980, upon the Creditors’ motion, the Honorable John F. McGrath, Bankruptcy Judge, United States Bankruptcy Court, District of Colorado, in Denver, Colorado, issued a subpoena duces tecum, and required Wogan to appear for a deposition on May 29, 1980, with his business records pertaining to the development of the Inn. On May 29, 1980, Wogan filed a motion to quash the subpoena duces tecum, and on that date Judge McGrath ordered Wogan to deliver said records to this Court for in camera inspection and a ruling whether said records should be released to the Creditors. Pursuant to the order of Judge McGrath, on May 30, 1980, eight folders of documents were received by this Court from the law firm representing Wogan in Denver, Colorado, BADER & COX. On June 3, 1980, this Court received an additional folder of documents from the law firm of BADER & COX. On June 13,1980, the Creditors filed a motion for the production of the documents received by this Court on May 30, 1980, and on June 3, 1980. On June 23, 1980, the Creditors were permitted to examine said documents, in chambers, and introduced relevant portions into evidence at the hearings on adjudication or dismissal. On June 30, 1980, proofs were closed, and this Court, after arguments of counsel, ordered the parties to file proposed findings of fact and conclusions of law on or before July 31, 1980. Said findings were filed on that date. 13. Clearly, from the facts heretofore stated all parties, Creditors and Debtors, were dilatory in prosecuting this action during the 16 month period in which it pended before the Honorable Frederick J. Hertz, Bankruptcy Judge. Apparently, during said period the parties were attempting to arrive at a settlement of the matters, as transpired in the first foreclosure action filed in 1975 and settled by agreement of the parties on August 11, 1976. The testimony before this Court of Joseph Ehrenr-eich, chief financial officer of the Creditor, ALAMAND CORPORATION, demonstrates that the parties were involved in extensive and detailed settlement negotiations while this ease pended before Judge Hertz. (See Debtors’ Exhibit One received in evidence, Letter dated June 20, 1979, from Joseph Ehrenreich, chief financial officer of ALAMAND CORPORATION). The Court Concludes and Further Finds: 1. The purpose of Chapter XII of the Bankruptcy Act is to provide a means for the rehabilitation of debtors, other than corporations, who are insolvent, and whose debts are secured by real property. Typically, a Chapter XII proceeding includes creditors having a security interest in the debtor’s real property, and may encompass both secured and unsecured creditors. Under Chapter XII of the Bankruptcy Act the goal is to keep the debtor in business during the preparation of a plan of arrangement by which all creditors are to be paid. Once a debtor files a voluntary petition for an arrangement under Chapter XII of the Bankruptcy Act, the bankruptcy court obtains exclusive jurisdiction over the debtor’s property, wherever situated. In order to insure that the debtor has an opportunity to propose a viable plan, Chapter XII of the Bankruptcy Act provides for the stay of all lien enforcement proceedings. Once the debtor proposes a plan of arrangement, it is reviewed by the court at the meeting of creditors. Also, certain creditors may file a proposed plan of arrangement. 2.Under Section 481(2) of the Bankruptcy Act and Rule 12 — 41(b)(1) of the Bankruptcy Rules of Procedure a case may be dismissed for want of prosecution. Rule 12-41(b)(l) of the Bankruptcy Rules of Procedure reads as follows: (b)Dismissal or Conversion to Bankruptcy for Want of Prosecution, Denial of Confirmation, Default, or Termination of Plan. The court shall enter an order, after hearing on such notice as it may direct dismissing the case, or adjudicating the debtor a bankrupt if he has not been previously so adjudged, or directing that the bankruptcy case proceed, whichever may be in the best interest of the estate —(1) for want of prosecution....
575226-14348	Amended Memorandum WEINSTEIN, Senior District Judge: This case raises two interesting “law of the case” questions. First, after the court of appeals has vacated a sentence and remanded for imposition of a specified mandatory minimum prison term, does a superseding act of Congress relieve the district court of its duty to impose that term? Second, if at the original sentencing and on appeal the issue of proper application of the Federal Sentencing Guidelines was not raised, may the district court, on remand, impose a Guidelines sentence below the term required by the mandate? The answer to both questions is “yes.” As indicated below, proper application of the “law of the case” doctrine, as well as of the Guidelines, requires this court to impose not the ten-year prison term specified by the court of appeals but a sentence of time served, some thirty months. Facts Before her arrest on drug possession charges, Caroline Ekwunoh had full responsibility for the support and care of her three children. She was steadily employed, selling clothes and working part-time as a home attendant. For a more complete discussion of the background of this case, see United States v. Ekwunoh, 813 F.Supp. 168 (E.D.N.Y.1993) [Ekwunoh I], rev’d, 12 F.3d 368 (2d Cir.1993) [Ekwunoh II], subsequent memorandum, 888 F.Supp. 364 (E.D.N.Y.1994) [Ekwunoh III]. On June 15, 1991, Ms. Ekwunoh, at the request of her boyfriend, met a courier at Kennedy Airport. The courier, who turned out to be a DEA informant, handed her an attache case containing 1,013 grams of heroin. Ms. Ekwunoh placed the case in the trunk of a car without examining its contents. She was then arrested. Ms. Ekwunoh pled guilty to a single count of possessing heroin with intent to distribute, in violation of 21 U.S.C. § 841(a). At the sentencing hearing she testified that, based on past dealings, she believed the attache case would contain no more than 400 grams of heroin. She was at all times a candid and credible witness. Her testimony was consistent with the facts in this and many other cases observed by the trial judge. On the basis of the defendant’s testimony, and the court’s knowledge of the drug trade within the Eastern District of New York, the court found that Ms. Ekwunoh did not know that the case contained more than 400 grams of heroin; that she believed it would contain no more than 400 grams; and that this belief was reasonable for a person in her position. Mindful of the importance of mens rea to individual defendants and the criminal justice system, the court attributed to Ms. Ekwunoh the quantity of drugs she had believed she had possessed. See United States v. Cordoba-Hincapie, 825 F.Supp. 485 (E.D.N.Y.1993). At the time of sentencing, the minimum penalty for possession of more than one kilogram of cocaine was ten years’ imprisonment, without possibility of parole. 21 U.S.C. § 841(b). A similar offense involving between 100 grams and one kilogram carried a five-year minimum sentence. Id. The court sentenced Ms. Ekwunoh to five years’ imprisonment, followed by five years’ supervised release. Ekwunoh I, 813 F.Supp. 168 (E.D.N.Y.1993). The government appealed. The court of appeals considered only one issue: “[Wjhether the district court improperly refused to impose the 10-year mandatory minimum sentence for possession of more than one kilogram of heroin.” Ekwunoh II, 12 F.3d 368, 369-70 (2d Cir.1993). Though split on whether the issue was one of fact or law, the court of appeals determined that Ms. Ekwunoh should be sentenced for the full amount of heroin in her possession. Id. at 371. It ordered “[t]he sentence ... vacated, and the matter ... remanded for resentencing consistent with” its opinion. Id. Upon remand, the government indicated it was willing to stipulate to a shorter sentence. Ms. Ekwunoh petitioned the court of appeals to amend its mandate, based upon what appeared to be a concession by the government that a ten-year sentence was too harsh. See Ekwunoh III, 888 F.Supp. at 368 (E.D.N.Y.1994) (withholding resentencing pending decision on petition to amend the mandate, at request of both defense and prosecuting attorneys). The court of appeals denied the petition. On September 13, 1994, Congress enacted the Violent Crime Control and Law Enforcement Act of 1994. H.R. 3355, 103rd Cong., 2d Sess. (1994). The Act contains a “safety valve” provision, effective ten days after passage, limiting application of the statutory mínimums to the most serious drug offenders. Id. § 80001(a), codified at 18 U.S.C. § 3553(f). The provision permits courts to sentence non-violent drug offenders with minimal criminal histories, who are not organizers and who cooperate with the government, to Guidelines, rather than mandatory minimum, terms. It applies whenever (1) the defendant does not have more than 1 criminal history point, as determined under the sentencing guidelines; (2) the defendant did not use violence of credible threats of violence or possess a firearm or other dangerous weapon (or induce another participant to do so) in connection with the offense; (3) the offense did not result in death or serious bodily injury to any person; (4) the defendant was not an organizer, leader, manager, or supervisor of others in the offense, as determined under the sentencing guidelines, and was not engaged in a continuing criminal enterprise, as defined in 21 U.S.C. § 848; and (5) not later than the time of the sentencing hearing, the defendant has truthfully provided to the Government all information and evidence the defendant has concerning the offense or offenses that were part of the same course of conduct or of a common scheme or plan, but the fact that the defendant has no relevant or useful other information to provide or that the Government is already aware of the information shall not preclude a determination by the court that the defendant has complied with this requirement. 18 U.S.C. § 3553(f). The statute is applicable to sentences imposed after September 23, 1994. Id. An amendment to the Sentencing Guidelines repeats the provision essentially verbatim. U.S.S.G. § 5C1.2 (November 1, 1994). Applicability of the Safety Valve to Ms. Ekwunoh Section 3553(a)(4)(A) of Title 18 directs the district court to apply the version of the Guidelines in effect “on the date the defendant is sentenced.” See also U.S.S.G. § 1B1.11(a) (same); United States v. Bermudez, 974 F.2d 12, 14 (2d Cir.1992) (“on remand, the current Guidelines should be consulted in resentencing” defendant); United States v. Ziegler, 39 F.3d 1058, 1064 (10th Cir.1994) (collecting authorities). An exception is made if following current Guidelines would violate the ex post facto clause of Article 1 of the Constitution. Miller v. Florida, 482 U.S. 423, 429-35, 107 S.Ct. 2446, 2450-53, 96 L.Ed.2d 351 (1987). However, “[t]he amendment to § 3553 does not ... add anything to any sentence. On the contrary, it provides relief----” United States v. Singh, No. 93-931, 1994 WL 510053, at 2, 1994 U.S.Dist. LEXIS 13214, at 6-7 (S.D.N.Y. Sept. 16, 1994). An order vacating a sentence requires the trial court to sentence de novo. In United States v. Maldonado, 996 F.2d 598, 599 (2d Cir.1993), the court of appeals held that, for purposes of Federal Rule of Criminal Procedure 32, “when a sentence has been vacated, the defendant is placed in the same position as if he had never been sentenced.” Vacation by the court of appeals of the original sentence requires a district court to sentence the defendant as if for the first time. See United States v. Smith, 930 F.2d 1450, 1456 (10th Cir.) (“‘fully de novo resentencing is entirely appropriate” after vacation and remand), cert. denied, 502 U.S. 879, 112 S.Ct. 225, 116 L.Ed.2d 182 (1991); United States v. Ekhator, 853 F.Supp. 630, 634 (E.D.N.Y.1994) (de novo sentence appropriate on remand, given absence of “any authority to the contrary”). Under 18 U.S.C. § 3742(f), the court of appeals has the power to vacate a sentence or to remand for additional proceedings with out vacating. Compare Ekwunoh II, 12 F.3d at 368-69 (“we vacate the district court’s judgment and remand for resentencing”), with Dunston v. United States, 878 F.2d 648, 650 (2d Cir.1989) (remanding to district court “[ajlthough we do not vacate [defendant’s] sentence”); see also Ekhator, 853 F.Supp. at 634-35 (analyzing language of court of appeals’ sentencing mandates). The law of the case doctrine and its corollary, the “mandate rule,” pose no obstacle to the application of § 3553(f) in the resentencing of Ms. Ekwunoh. The mandate rule requires a “district court on remand to follow the decision of the court of appeals.” Day v. Moscow, 955 F.2d 807, 812 (2d Cir.), cert. denied, — U.S. -, 113 S.Ct. 71, 121 L.Ed.2d 37 (1992). When an intervening statute conflicts with the mandate of an appellate court, the statute prevails. In Banco Nacional de Cuba v. Farr, 383 F.2d 166, 178 (2d Cir.1967), cert. denied, 390 U.S. 956, 88 S.Ct. 1038, 19 L.Ed.2d 1151 (1968), the court recognized that courts in applying the law of the case rule have held that a lower court is not bound to follow the mandate of an appellate court if the mandate is, in the interim, affected by an authority superior to the court issuing the mandate____ On this basis, the court held that a Supreme Court mandate must yield to “a subsequently enacted federal statute.” Id. The court went on to declare that the Constitution would preclude application of the Supreme Court’s mandate, since [t]he law of the case is ... only a doctrine of judicial administration based on the practice of the courts, Messenger v. Anderson, 225 U.S. 436, 443[, 32 S.Ct. 739, 740, 56 L.Ed. 1152] (1912); King v. West Virginia, 216 U.S. 92, 100[, 30 S.Ct. 225, 229, 54 L.Ed. 396] (1910). A federal statute, on the other hand, is an assertion of its constitutional power by Congress and is entitled to respect as the supreme law of the land. Id. (citation form altered). See also, e.g., United States v. Thomas, 11 F.3d 732, 736 (7th Cir.1993) (court on remand “permitt[ed] ... to revisit an issue [after] an intervening change in the law”), cert. denied, — U.S. -, 115 S.Ct. 419, 130 L.Ed.2d 334 (1994); United States v. Bell, 5 F.3d 64, 67 (4th Cir.1993) (“a showing] that controlling legal authority has changed” creates an exception to the mandate rule) (citation omitted); United States v. Williams, 983 F.2d 1070 (6th Cir.1992) (“[I]ntervening change of law ... militat[es] ... against the application of the law of the case doctrine.”); Miles v. Kohli & Kaliher Assocs., 917 F.2d 235, 241 (6th Cir.1990) (the law of the case “[d]octrine is not an inexorable command ... and will not preclude reconsideration of issues when ... there has been an intervening change of law”) (citation omitted). Cf. United States v. Fernandez, 506 F.2d 1200, 1203 (2d Cir.1974) (“[I]n a case where Erie applies, a change in state law must be given effect by a federal court, even if that means changing the law of the case.”) (emphasis added). Ms. Ekwunoh is eligible for relief from the mandatory minimum provision, of § 841(b) if she meets the five criteria of § 3553(f). The court finds that she does. Caroline Ekwunoh has no criminal history points. She did not use violence or threats of violence or possess a firearm or other dangerous weapon. Her offense did not result in death or bodily injury. She was not an organizer, leader, manager or supervisor of others in the offense, and she was not engaged in a continuing criminal enterprise under 21 U.S.C. § 848. Finally, she has provided to the government all information and evidence that she was asked to provide. Consequently, the court must avoid the former mandatory minimum sentence of ten years and must sentence Ms. Ekwunoh pursuant to the Guidelines. Guidelines Sentence Under the Sentencing Guidelines, the base level for possession of 1,013 grams of heroin is 32. In its original sentencing memorandum, 813 F.Supp. at 179, this court found that Ms. Ekwunoh was a “minimal participant” operating under the domination of her boyfriend, and deducted four points. See § 3B1.2(a) It also found that Ms. Ekwunoh has accepted responsibility for her acts, and deducted three additional points. See § 3El.l(b). No information has come to light that would cause the court to modify these findings. The passage of time leads the court to make additional findings that require reduction of Ms. Ekwunoh’s sentence. As an initial matter, it should be noted that “the law of the case” doctrine does not prevent the court from making findings on questions not considered by the court of appeals. See United States v. Minicone, 994 F.2d 86, 89 (2d Cir.1993) (“[I]f an issue was not part of the appellate decision, a trial court may consider the matter” on remand); United States v. Uccio, 940 F.2d 753, 757 (2d Cir.1991) (mandate rule has “no applicability” to issues not decided by appellate court). There is ample authority permitting a court to weigh at a resentencing factors it had either considered or chosen not to consider at the initial sentencing proceeding. See, e.g., United States v. Sanchez Solis, 882 F.2d 693, 699 (2d Cir.1989) (“[I]n the interests of truth and fair sentencing a court should be able on a sentence remand to take new matter into account on behalf of either the Government or the defendant.”). See also Uccio, 940 F.2d at 757 (district court not barred from reconsidering a sentencing ruling, on remand, if its original ruling on the issue had not been before the appellate court); cf. United States v. Connell, 6 F.3d 27, 31 (1st Cir.1993) (district court retains “substantial latitude ... in deciding whether to rethink matters previously set to rest”). Neither of the two issues considered below— defendant’s family ties and the effect of the sentencing system on her state of mind — was previously considered by this court or the court of appeals. See Ekwunoh II, 12 F.3d at 369 (describing “[t]he only issue on appeal”). a) Family ties Caroline Ekwunoh is the sole support of her three young children, who ranged in age from five to eight at the time of her arrest, and who are now eight, nine and eleven. At her resentencing on November 28, 1994, Ms. Ekwunoh described the emotional difficulties of her oldest child — difficulties inextricably linked to her incarceration.
3732606-11272	MEMORANDUM OPINION AND ORDER HADEN, Chief Judge. The Plaintiff brought this action against Defendants Union Oil Company of California and Heater Oil Company, Inc. in the Circuit Court of Kanawha County seeking monetary damages and specific performance of an alleged oral contract to sell to Plaintiff a service station in Kanawha County owned by Heater Oil. The trial was scheduled to commence in Circuit Court on April 23, 1984. However, just prior to this scheduled trial date, the Plaintiff settled his claims against Heater Oil and pursuant to the settlement agreement dismissed Heater Oil as a defendant. Because Heater Oil was the non-diverse defendant in the action its dismissal created complete diversity between the parties, thus giving rise to federal diversity jurisdiction. See 28 U.S.C. § 1332; Strawbridge v. Curtiss, 7 U.S. 267 (3 Cranch 267), 2 L.Ed. 435 (1806) and its progeny. On April 18, 1984, Union Oil removed the case to this Court pursuant to 28 U.S.C. § 1446 based upon diversity of citizenship and federal question jurisdiction. After filing the initial petition for removal, counsel for Union Oil concluded that no federal question basis for removal existed and on May 8, 1984, filed an Amended Petition for Removal asserting solely diversity jurisdiction as the basis for removal. This matter is now before the Court on Plaintiffs motion to remand this action to state court. I. Plaintiffs Motion to Remand The Plaintiff asserts two grounds in support of his motion to remand this action to state court. First, Plaintiff argues Defendant’s removal petition was not timely filed and, as a consequence, Defendant has waived his right to remove. Second, Plaintiff points out that this case was pending in the Circuit Court of Kanawha County for over two years, had been pretried by Judge Harvey of that court, who had also heard testimony and ruled on Plaintiff’s motion for injunctive relief, and that to allow Defendant to remove the case to federal court will result in prejudice to the Plaintiff and a duplication of judicial time and effort. The Court will address these contentions in reverse order. A. Prejudice. As to the second ground asserted by Plaintiff, the Court has no doubt that the removal of this action less than one week before the scheduled trial date has served to prejudice and inconvenience Plaintiff and his counsel. However, the Court has been referred to no case, and the Court’s research discloses none, which would support the contention that removal on the eve of trial is improper. To the contrary, the case law reveals that the timing of the removal petition, in relation to the status of the state court proceedings, is irrelevant as long as the petition is filed within thirty days of the date it became apparent the case was removable to federal court. See e.g., Gottlieb v. Firestone Steel Products Co., 524 F.Supp. 1137, 1140 (E.D.Pa.1981) wherein the court held that: “Plaintiff’s claim of prejudice by removal on the eve of trial is insufficient to compel remand since, an action may be properly remanded only for the specific reasons delineated in the controlling statute. s)s sf: ¡fs * * * Moreover, where counsel dismisses non-diverse, unknown defendants just before the case goes to the jury, removal is proper. First National Bank in Little Rock v. Johnson, 455 F.Supp. 361 (E.D. Ark.1978). In one case a removal petition was held properly filed when fictitious defendants were dismissed during jury deliberations. Heniford v. American Motors Sales Corp., 471 F.Supp. 328 (D.S.C.1979) appeal dismissed, 622 F.2d 584 (4th Cir.1980) [emphasis supplied in Gottlieb ]” Applying the authorities discussed in the Gottlieb case, the Court concludes that prejudice to the Plaintiff and duplication of judicial resources, while unfortunate, do not constitute grounds for remand however compelling and persuasive grounds they may be from a practical standpoint. B. Defendant’s Waiver of its Right to Removal. Plaintiff argues that federal question jurisdiction arose on May 11,1983, when Judge Harvey entered an order (more than thirty days prior to removal), denying Plaintiff’s motion for injunctive relief, wherein the Court concluded it had jurisdiction to “decide any and all issues presented with respect to PMPA [Petroleum Marketing Practices Act], 15 U.S.C. § 2801.” If Plaintiff is correct in this assertion, then the later removal on diversity grounds was unseasonable. Union Oil responds to this argument by citing to the Court several cases from this Circuit supporting the proposition that in order to make removal proper on federal question grounds, the federal question must arise from the Complaint itself. See e.g., Burgess v. Charlottesville Savings and Loan Association, 477 F.2d 40, 43 (4th Cir.1973): “As stated in the order of the District Court, federal subject-matter jurisdiction in this case is predicated entirely on the claim that the suit ‘arises under’ federal law. Such a claim of federal question jurisdiction is to be resolved on the basis of the allegations of the complaint itself. To sustain it, the complaint must, however, contain allegations ‘affirmatively and distinctly' establishing federal grounds ‘not in mere form, but in sub stance’ and ‘not in mere assertion, but in essence and effect.’ ****** In ascertaining whether there is a real federal issue upon ‘which the result depends’ the Courts have observed ‘the distinction between controversies that are basic and those that are collateral, between disputes that are necessary and those that are merely possible’ and federal question jurisdiction attaches only ‘to cases where the plaintiff’s cause of action, the rule of substance under which he claims the right to have a remedy, is the product of federal law.’ ” [footnotes omitted; emphasis in the original]. See also, Eure v. NVF Co., 481 F.Supp. 639 (E.D.N.C.1979); O.F. Shearer & Sons, Inc. v. Decker, 349 F.Supp. 1214 (S.D.W. Va.1972); Meyerhoff v. Garten, 232 F.Supp. 363 (D.Md.1964). The Defendant also correctly points out that a federal question arising by way of defense to Plaintiff’s claims does not support removal. See Gully v. First National Bank in Meridian, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Tennessee v. Union and Planter’s Bank, 152 U.S. 454, 14 S.Ct. 654, 38 L.Ed. 511 (1894); Levitt & Sons, Inc. v. Prince George County Congress of Racial Equality, 221 F.Supp. 541 (D.M.D.1963). This principle is not applicable to the case at bar, however, because the federal statute giving rise to federal question jurisdiction was not raised as a defense; the PMPA was asserted by the Plaintiff as a basis for affirmative relief. See discussion infra at pp. 793-794. Before addressing the Defendant’s arguments, it is advisable to review the relevant portion of the removal statute here in controversy: “The petition for removal of a civil action or proceeding shall be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a petition for removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. [Emphasis added].” 28 U.S.C. § 1446(b). Because there is no disagreement that Plaintiff’s complaint stated only state law-based claims for relief, the focus in this case must center on the second paragraph of the above reproduced statute. O’Bryan v. Chadler, 496 F.2d 403, 409 (10th Cir. 1974) (Section 1446(b) “is designed to allow a defendant to remove a state action when it was not originally removable as stated by the plaintiff’s initial complaint in the state court, but has become removable due to the filing in state court of ‘an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable’ ”). For this reason, the cases relied upon by the Defendant for the proposition that the complaint itself must raise a federal question to make the case removable to federal court are inapposite. The issue here is not whether the initial pleading raised a federal question, but whether a federal question sprung from subsequent proceedings in the case. After reviewing the parties’ memoranda submitted to the Circuit Court preparatory to the hearing on Plaintiff’s motion for injunctive relief, the Court finds that a federal question was clearly raised at that point in the state court proceedings. The parties’ briefed the issue of the applicability of the PMPA and Plaintiff’s memoran dum specifically and “voluntarily” requested relief under the PMPA: “Union’s sale of the property to Heater was in violation of the Petroleum Marketing Practices Act, 15 U.S.C. 2801, et seq., copy attached. The Act, at 2802, which outlines the requirements for notification of termination or nonrenewal of the franchise relationship, requires the franchiser to do as follows: [Subsection (D) of Section 2802 is reproduced verbatim in the Plaintiff’s memorandum].” Plaintiff’s memorandum in support of injunction at pp. 9-10. Further, the entirety of Plaintiff’s reply memorandum, filed in the Circuit Court, is devoted to requesting relief under the PMPA. These pleadings are more than sufficient to satisfy the “amended pleading, motion, order or other paper” requirement of Section 1446(b). See O’Bryan v. Chadler, 496 F.2d at 408 (modification of memorandum to trial court held sufficient to constitute “an amended pleading” for purposes of satisfying Section 1446(b)). The fact that the Plaintiff affirmatively sought relief under a federal statute distinguishes this case from those cited by the Defendant for the proposition that a federal question asserted as a defense does not make a case removable on the basis of federal question jurisdiction. See cases cited supra at p. 793. From the procedural history of this case at the Circuit Court level and applying the case law previously discussed, the Court concludes that a federal question making this action one properly removable under Section 1446(b) arose at the time Plaintiff filed his memorandum in support of his motion for injunctive relief (and it certainly should have been clear to all concerned that a federal question existed when Judge Harvey ruled expressly referring to the PMPA and the Circuit Court’s jurisdiction consider relief under that federal statute). Further, inasmuch as Plaintiff’s motion for injunctive relief was briefed and ruled upon in 1983 (the Circuit Court’s order was entered on May 11, 1983, and Union Oil’s original petition for remand was not filed until April 18, 1984), the removal petition was not timely filed as to the federal question ground for removal; however, Defendant’s petition was filed within thirty days of the date diversity jurisdiction arose.
2022783-23677	BONE, Circuit Judge. Appellant, Adaman Mutual Water Co., is the crux of a land utilization program of some complexity. In 1943 Goodyear Farms, a corporation, formed from lands which it owned in Maricopa County, Arizona, a Reclamation Project designed to demonstrate the feasibility of dividing large land holdings into traditional family sized farms. The area encompassed by this Project was exceedingly dry, and surface water for irrigation was unobtainable. Underground water had to be pumped and distributed, and to provide this service to the small farms envisioned in the Project, at minimum cost, appellant, a mutual, non-profit corporation, was organized. Appellant’s articles of incorporation prohibit anyone from holding company stock who neither owns land within the Project outright nor under agreement of sale. The owners of Project land, on the other hand, may subscribe for that number of shares equal to the number of acres owned. Each share of stock entitles its holder to a prorata share of water, and both water rights and stock are made appurtenant to the land upon which the water is to be used. In addition, the stock and the land to which it is appurtenant are subject to prorata assessments to be made from time to time by appellant to pay both for the capital investment in the irrigation facilities and for the operation and maintenance of the irrigation system. The assessments, once made, become a lien on the land and on the stock and water rights appurtenant thereto. If an assessment is not paid on time, appellant may foreclose upon the debtor’s land and stock. No assessment can be made, however, upon stock appurtenant to land that has never been cultivated, that is, until cultivation begins. The stock subscription agreement, which must be signed by each landowner receiving appellant’s stock, stipulates that the stock and the right to receive water are to be forever inseparable from the land, that the transfer of the land automatically transfers the stock and the rights to water, and that the transfer of land without stock or stock without land is of no effect. If, however, it becomes impracticable to irrigate a segment of Project land the water rights appurtenant thereto may be severed from the land upon the owner’s request. In addition, water rights may be forfeited by voluntary abandonment, by non-use for the term prescribed by law, or by failure of the owner of the land to which the rights are appurtenant to pay assessments levied by the company. By subscribing for stock, the landowner agrees to abide by the articles of incorporation, by-laws and regulations of appellant. No provision is made for termination of the duty to pay assessments once the landowner accepts that burden by subscribing for appellant’s stock and commencing to cultivate his land. The duty to pay assessments apparently is to continue even in the event that the right to water for the assessed land is forfeited. By not gearing the duty to pay assessments to the use of appellant’s irrigation facilities, the backers of the Project avoided possible catastrophe. For if the duty to pay assessments were to terminate with the cessation of water use, the cost of irrigation to those continuing to work the land could become increasingly intolerable as their more easily discouraged neighbors discarded desert farming for some other occupation. In 1953 the United States entered the picture by bringing condemnation proceedings against 233 acres or 8.3% of the land area within the Project. Most, but not all, of this segment had been transferred by Goodyear through warranty deed or agreement of sale. Only a small fraction of the condemned land was held under lease from the original owner. The compensation claims of those in possession have all been settled. In addition, appellant has been paid for ditches and other physical facilities located upon the condemned area of land. The only question presently raised is whether or not appellant is entitled to be compensated for the loss of a portion of Project land since the remaining area will be subject to increased assessments in the future to pay for the maintenance, replacement and operation of the communal irrigation system, the cost of which has not been appreciably lessened by the condemnation. In other words, does the diminution of appellant’s assessment base constitute the taking of a compensable interest under the Fifth Amendment? We take as a point of departure what the Supreme Court said in United States v. General Motors Corp., 1945, 323 U.S. 373, at pages 377-380, 65 S.Ct. 357, at pages 359-360, 89 L.Ed. 311: “The critical terms are ‘property,’ ‘taken’ and ‘just compensation.’ It is conceivable that the first was used in its vulgar and untechnical sense of the physical thing with respect to which the citizen exercises rights recognized by law. On the other hand, it may have been employed in a more accurate sense to denote the group of rights inhering in the citizen’s relation to the physical thing, as the right to possess, use and dispose of it. In point of fact, the construction given the phrase has been the latter. When the sovereign exercises the power of eminent domain it substitutes itself in relation to the physical thing in question in place of him who formerly bore the relation to that thing, which we denominate ownership. In other words, it deals with what lawyers term the individual’s ‘interest’ in the thing in question. That interest may comprise the group of rights for which the shorthand term is ‘a fee simple’ or it may be the interest known as an ‘estate or tenancy for years’, as in the present instance. The constitutional provision is addressed to every sort of interest the citizen may possess. “In its primary meaning, the term ‘taken’ would seem to signify something more than destruction, for it might well be claimed that one does not take what he destroys. But the construction of the phrase has not been so narrow. The courts have held that the deprivation of the former owner rather than the accretion of a right or interest to the sovereign constitutes the taking. Governmental action short of acquisition of title or occupancy has been held, if its effects are so complete as to deprive the owner of all or most of his interest in the subject matter, to amount to a taking. “But it is to be observed that whether the sovereign substitutes itself as occupant in place of the former owner, or destroys all his existing rights in the subject matter, the Fifth Amendment concerns itself solely with the ‘property’ i. e., with the owner’s relation as such to the physical thing and not with other collateral interests which may be incident to his ownership. ****** “The sovereign ordinarily takes the fee. The rule in such a case is that compensation for that interest does not include future loss of profits, the expense of moving removable fixtures and personal property from the premises, the loss of good-will which inheres in the location of the land, or other like consequential losses which would ensue the sale of the property to someone other than the sovereign. No doubt all these elements would be considered by an owner in determining whether, and at what price, to sell. No doubt, therefore, if the owner is to be made whole for the loss consequent on the sovereign’s seizure of his property, these elements should properly be considered. But the courts have generally held that they are not to be reckoned as part of the compensation for the fee taken by the Government. We are not to be taken as departing from the rule they have laid down, which we think sound. Even where state constitutions command that compensation be made for property ‘taken or damaged’ for public use, as many do, it has generally been held that that which is taken or damaged is the group of rights which the so-called owner exercises in his dominion of the physical thing, and that damage to those rights of ownership does not include losses to his business or other consequential damage.” (Footnotes are omitted in the above quotation.) Stated more succinctly, the Government must pay for all tangible interests actually condemned and for intangible interests directly connected with the physical substance of the thing taken. Comment, 18 U.Chi.L.Rev. 349 (1951). The consequential loss rule, much maligned, ibid; Comment, 67 Yale L.J. 61 (1957); and somewhat dented, United States v. General Motors Corp., supra; Kimball Laundry Co. v. United States, 1949, 338 U.S. 1. 69 S.Ct. 1434, 93 L.Ed. 1765, is with us still. It cannot be ignored. When a parcel of land is condemned, the courts have tended to identify direct, compensable losses with interests includible in the bundle of rights which form conceptually the fee itself, rights which are said to be interests or estates in the land. See United States v. Welch, 1910, 217 U.S. 333, 30 S.Ct. 527, 54 L.Ed. 787 (easement); Brooklyn Eastern District Terminal v. City of New York, 2 Cir., 1944, 139 F.2d 1007, 152 A.L.R. 296 (same); Creasy v. Stevens, D.C.W.D.Pa.1958, 160 F.Supp. 404, 411 (right of access); Tucker v. United States, D.C.D.R.I.1922, 283 F. 428 (profit a prendre). Since this distinction is apparently designed to accord some degree of predictability to the classification of remote and direct losses, it need not be applied as an unwavering principle. See Caltex (Philippines), Inc. v. United States, 1951, 100 F.Supp. 970, 974, 120 Ct.Cl. 518, reversed on other grounds, 1952, 344 U.S. 149, 73 S.Ct. 200, 97 L.Ed. 157. Nonetheless, if an interest in land is lost as a result of the taking of the parcel to which the interest attached, a direct connection with the physical substance condemned is established, and the pitfalls of the consequential loss doctrine are avoided. Of course, even an interest in land may be non-compensable if it is so contingent as to defy evaluation. Peopie of Puerto Rico v. United States, 1 Cir., 1942, 132 F.2d 220, 221-222. We think that the duty to pay assessments in the instant case is an equitable servitude or restrictive covenant binding upon any once-cultivated segment of Project land serviced by appellant. Appellant has lost the benefit derived from this servitude, and the loss is compensable, for the Government has destroyed an intangible right directly connected with the physical substance of the land condemned. The facts clearly show that Goodyear and those to whom Goodyear conveyed land intended to create an integrated, agricultural development. Both the warranty deed and the agreement of sale used by Goodyear reserved to it the rights in whatever water lay underneath Project land. The grantee or buyer could use the water under his parcel only for domestic purposes. Owners by deed held their segment subject to any liabilities or obligations imposed upon the land by reason of its inclusion within the boundaries of the water company, and those who entered into agreements of sale were bound to pay assessments levied by the water company on pain of foreclosure on their interests. These documents indicated that those who took from Goodyear were well aware of appellant’s connection with the Project. In all probability a subscription for appellant’s stock accompanied the execution of each deed or agreement of sale. In any event, the rights and duties imposed by the stock subscription agreement were apparently intended both to be incorporated by reference into the uniformly used deed and agreement of sale and also to apply uniformly throughout the development for the benefit of each landowner by providing irrigation at the lowest possible cost. As an integral facet of the overall plan, the duty to pay assessments attached to all land to which stock was appurtenant and upon which cultivation had commenced. We think this burden constituted an equitable servitude enforcible under Arizona law. See Murphey v. Gray, 1958, 84 Ariz. 299, 327 P.2d 751; Kengla v. Stewart, 1957, 82 Ariz. 365, 313 P.2d 424; O’Malley v. Central Methodist Church, 1948, 67 Ariz. 245, 194 P.2d 444. That the duty to pay is an affirmative obligation rather than a negative restriction on use does not alter our conclusion. Although no Arizona decision is directly in point, the majority of American jurisdictions enforce with equal vigor affirmative and negative obligations that run with land. See cases collected in Notes, 41 A.L.R. 1363 (1926), 102 A.L.R. 781 (1936), 118 A.L.R. 982 (1939), and in Fitzstephens v. Watson, Or.1959, 344 P.2d 221, 232. The benefit derived from this servitude, in the form of lower irrigation costs, adheres to every acre of land within the Project to which stock is appurtenant. The benefit is encompassed by the water rights appurtenant to each parcel and runs with the land to the same extent as does the burden to pay assessments. Appellant must be viewed as claiming the loss of this benefit as the representative of its shareholders, not in their role as shareholders but as landowners in the Project. By recognizing this relationship, we neither ignore the corporate form, nor by “blind adherence to an ancient formula,” hide from the realities of the situation. Neponsit Property Owners’ Ass’n, Inc. v. Emigrant Industrial Savings Bank, 1938, 278 N.Y. 248, 15 N.E.2d 793, 798, 118 A.L.R. 973. By calling appellant’s claim an equitable servitude we conclude no issue, for the courts are split as to whether such a restriction is an interest in land for purposes of compensation when the property to which it attaches is taken for public use. The federal rule is uncertain; Arizona has not yet been faced with the issue. Indeed, the distinction between rights in land and consequential losses has been blurred in restrictive covenant cases by policy considerations other than the need to draw a predictable line between direct and remote interests. The federal decisions mirror this difficulty. In United States v. Certain Lands in Town of Jamestown, C.C.D.R.I.1899, 112 F. 622, affirmed sub nom. Wharton v. United States, 1 Cir., 1907, 153 F. 876, the court held that a covenant restricting use had not been breached by the Government’s utilization of the land. Going further, the court said: “But it is said these claimants have a property right which is valuable, and which is appurtenant to their estates, namely, the right to enjoin all uses of the property inconsistent with these conditions. The difficulty seems to me to be in the contention that there can be any property right whatever, springing from private grant, that the lands of another shall not be used for necessary governmental purposes. Suppose a deed to contain the condition that the grantee’s property should never be used by the United States for a fort, or by the state for a state capital [sic], armory, or school house; would not such a condition on its face be void, as against public policy? As each owner of land holds his property subject to the divesting of his title through the action of that state or of the United States, based on public necessity, can he by any means, directly or indirectly, impose upon the state or the United States the burden of compensating him for damage resulting from that public use which does not directly invade his land? If the lands on the southern end of Conanicut Island were held in fee by a number of owners, without restrictive conditions in their deeds, and the national government found it necessary to condemn any one of the estates, the adjoining owners, or those occupying other portions of the tract, could recover no damages whatever for the depreciation caused to their estates by the public use. Can it be possible that these owners, by mutual agreements or covenants that they or their successors in title will not do things which may be necessary for national defense, and by agreeing that these things are noxious and offensive to them, compel the United States to pay them for the right to do, upon lands taken, what is necessary for the protection of the nation?” 112 F. at page 628. The appellate court affirmed on the strength of the finding that the covenant had not been violated, but indicated in addition that the interest involved was not a true interest in land. See 153 F. at page 876. This notion that a restrictive covenant is not an interest in land and therefore non-compensable was relied upon in Moses v. Hazen, 1934, 63 App.D.C. 104, 69 F.2d 842, 98 A.L.R. 386. Two lines of thought emerge from these cases; one, that a restrictive covenant is not a property interest and therefore too remote to merit compensation when the land to which it attaches is condemned, and two, that a restrictive covenant is an impermissible means of enhancing one’s own property and thereby burdening the power of eminent domain, Despite these decisions the court in a more recent federal case said: “Whether the federal government, as distinguished perhaps from the State of New York, can brush aside the restrictive covenants concerning the character of buildings to be erected upon the condemned property, without making compensation to the remaining lot owners, is too serious an issue to be disposed of upon a mere motion to intervene. * * * “The same remark applies to the matter of the increased financial burdens of maintenance resulting from the taking, which will necessarily rest upon the remaining owners.” United States v. Certain Lands at Great Neck, D.C.E.D.N.Y. 1943, 49 F.Supp. 265, 267. Citation was made to Peters v. Buckner, 1921, 288 Mo. 618, 232 S.W. 1024, 17 A.L.R. 543, in which a restrictive covenant was deemed a compensable property right. In light of this conflict, we do not feel bound by precedent. Moreover, the state decisions afford little help, They are numerous, in hopeless conflict, and collected in 2 Nichols, Eminent Domain § 5.73. Presently, a restrictive covenant is generally deemed a property right under federal law. Chapman v. Sheridan-Wyoming Coal Co., 1950, 338 U.S. 621, 70 S.Ct. 392, 94 L.Ed. 393. We think it should be treated similarly in an eminent domain context where the purpose of the distinction between property interests and other rights is to differentiate losses directly connected with the land taken from losses comparatively more remote. It follows from this that any right or duty, benefit or burden, which moves or is transferred as one with either the land or an estate in it must be deemed’ an interest in that land and compensable upon condemnation of the fee. Because the transfer of these rights and duties are subject to legal principles different from those which govern the passing of other interests, a unique, direct connection with the land is established. This connection justifies the distinction mentioned above. Accordingly, we think that under the Fifth Amendment a restrictive covenant imposing a duty which runs with the land taken constitutes a compensable interest. The argument that an impermissible burden is put upon the power of eminent domain by a restrictive covenant is untenable. Why should a party receive compensation for an easement right which enhances the value of his property and yet be denied compensation for a right obtained by a restrictive covenant which similarly adds to the value of his holdings? Both interests are directly connected to the land and we are unable to find a distinction between them which will justify dissimilar treatment at the hands of a condemning authority. The case at bar is, of course, decisively unlike those cases in which the loss of the power to assess amounted to no more than a diminution of the statutory taxing power possessed by the instrumentality claiming the loss. When the right to assess cannot be distinguished from the taxing power, the interest lost is clearly non-compensable. To allow compensation would be to subject the United States to the taxing power of the several states, a result offensive to the Constitution since M’Culloch v. State of Maryland, 1819, 4 Wheat. 316, 17 U.S. 316, 4 L.Ed. 579. See Mullen Benevolent Corp. v. United States, 1933, 290 U.S. 89, 54 S.Ct. 38, 78 L.Ed. 192; Yoknapatawpha Drainage District No. 2, etc. v. United States, 5 Cir., 242 F.2d 925, 929, certiorari denied 1957, 355 U.S. 882, 78 S.Ct. 149, 2 L.Ed.2d 112; People of Puerto Rico on Behalf of Isabela Irrigation Service v. United States, 1 Cir., 134 F.2d 267, 271, certiorari denied 1943, 320 U.S. 753, 64 S.Ct. 59, 88 L.Ed. 448; United States v. 1,000 Acres of Land, D.C.E.D.La.1958, 162 F.Supp. 219, 223; Public Water Supply District No. 3 of Jackson County, Mo. v. United States, 1955, 135 F.Supp. 887, 890, 133 Ct.Cl. 348. In the instant ease the right to assess does not lie with any governmental authority endowed by legislation with the power to tax. Accordingly, the award of compensation here would in no way impinge upon the basic principles of federalism at play in the cases cited above. The lower court found as facts that appellant had reserved only its right to claim compensation for the loss of 8.3% of the area within the Project; that this was the area taken by the Government; that appellant could not therefore make and collect any future assessments on this taken area, and that future assessments had not been made as of the date of the taking. We have no quarrel with the findings as to these facts, but for the reasons mentioned in this opinion we do not think that the lower court was warranted in concluding that appellant has lost no compensable interest. In formulating this opinion we have indulged the assumption that the land condemned and taken by the Government had corporate stock appurtenant to it and had also been brought under cultivation. Such an assumption can be inferred both from the findings of fact and from the evidence in the record. Whatever may be the actual facts we think that specific findings of fact on these crucial points are desirable and should be made. This is because the stock subscription agreement itself created the aforesaid equitable servitude in favor of other stockholding landowners, and the duty to pay assessments would not arise until the land to which it attached had actually been brought under cultivation. The judgment of the lower court is vacated, and the cause remanded for further proceedings not inconsistent with this opinion, including additional, specific findings of fact as to (1) whether or not water company shares were appurtenant to the acreage condemned by the Government, and (2) whether or not the land so taken by the United States had ever been brought under cultivation. It is so ordered. . “Owners” and “landowners” will henceforth be used to designate parties who bold Project land either by deed or agreement of sale. . As to intangible interests, such has not always been the case. See Cormack, Legal Concepts in Oases of Eminent Domain, 41 Yale L.J. 221 (1931). . In this regard, compare Omnia Commercial Co. v. United States, 1923, 261 U.S. 502, 43 S.Ct. 437, 67 L.Ed. 773, in which the holder of a contract for steel plate was denied compensation upon the taking by the Government of the producer’s entire output, with International Paper Co. v. United States, 1931, 282 U.S. 399, 51 S.Ct. 176, 75 L.Ed. 410, in which the holder of a landed interest in the use of water supplied by a power company was awarded compensation upon the Government’s requisition of the Supplier’s water. See also Southern Counties Gas Co. of California v. United States, Ct.Cl. 1958, 157 F.Supp. 934. The court there denied compensation for a loss of customers incurred when the United States condemned an entire community to which the appellant delivered gas. The claimant had established no interest or estate in the land taken.
10536918-14325	GARWOOD, Circuit Judge: Plaintiff-appellant Daniel P. Hulsey (Hul-sey), a commercial pilot, brought this civil action against his former employer, defendant-appellee USAir, Inc. (USAir), seeking declaratory relief and money damages for USAir’s alleged violation of the Airline Deregulation Act of 1978, § 43(d), 49 U.S.C. App. § 1552 (1987). The district court, Judge Barefoot Sanders, rendered summary judgment in favor of USAir. We affirm. Facts and Proceedings Below The following facts were found by the district court and are not in dispute. Hulsey was employed as a commercial airline pilot for Braniff Airways, Inc., from 1973 to 1982, when Braniff ceased operations and filed bankruptcy. In June 1982, after Braniff ceased operations, Hulsey, an employee eligible for protection under the Airline Deregulation Act of 1978 (the Act), applied for employment as a pilot with USAir, an interstate air carrier subject to the provisions of the Act. In September 1982, USAir hired Hulsey on probationary status. USAir requires all new pilots to serve a one-year probationary period, after which the pilots can be fired only for cause. Hulsey was on nonprobationary status when he worked for Braniff. During his training and first three months of active service with USAir, Hul-sey was a defendant in a federal criminal prosecution for several income tax-related felonies, and his participation in that trial caused him to miss work periodically. On March 12, 1983, a jury found him guilty of one count of conspiring to defraud the federal government under 18 U.S.C. § 371, and three counts of willfully subscribing false individual income tax returns under 26 U.S.C. § 7206(1) (1976), and on April 22, 1983 he was sentenced to concurrent thirty months’ imprisonment terms on each count and a $5,000 fine. On March 15, 1983, USAir suspended Hulsey without notice or opportunity to be heard, and on May 1, 1983, following his sentencing, Hulsey was fired. USAir’s stated reasons for Hulsey’s termination were his frequent unavailability for work and his criminal convictions. Hulsey then filed the present action against USAir in November 1983. Hulsey alleged in his complaint that USAir had violated its duty under the Act’s first right of hire provision, which requires that airlines give a hiring preference to employees dislocated as a result of the deregulation of the airline industry. He further alleged that he was denied employment opportunities because of this violation. The Act’s first right of hire provision, which is codified at 49 U.S.C.App. § 1552(d)(1), states in pertinent part: “Each person who is a protected employee of an air carrier which is subject to [the Act] who is ... terminated by such an air carrier (other than for cause) prior to the last day of the 10-year period beginning on October 24, 1978 shall have first right of hire, regardless of age, in his occupational specialty, by any other air carrier hiring additional employees _ Each such air carrier hiring additional employees shall have a duty to hire such a person before they hire any other person....” According to Hulsey, USAir circumvented its duty under this provision by hiring him on probationary status, which permitted the carrier to terminate his employment without cause during the first year of employment notwithstanding the statutory-hiring preference. USAir responded by filing a motion to dismiss and a motion for summary judgment. USAir argued that by hiring Hulsey it had satisfied its duty under the first right of hire provision and that Hulsey’s subsequent discharge did not constitute a violation of that provision. In an order dated October 20, 1987, the district court granted USAir’s motion for summary judgment stating that USAir’s duty to hire under the first right of hire provision does not imply protection beyond hiring. The district court noted that pursuant to its collective bargaining agreement with the Air Line Pilots Association, USAir hires all its pilots for a one-year probationary period, and during that period any pilot can be terminated at USAir’s discretion. The court further noted that while the Act imposed a duty on USAir to hire Hulsey, once Hulsey was hired USAir owed no greater duty to him than it did to any of its other newly hired pilots. The court therefore concluded that once Hulsey was hired, USAir could terminate him without cause within the one-year probationary period, just as it could terminate any of its other newly hired pilots. Hulsey now appeals that decision. Discussion On appeal, Hulsey contends that the district court misinterpreted the Act when it concluded that the first right of hire requirement is satisfied once the “protected” employee is hired. According to Hulsey, this interpretation renders the first right of hire provision meaningless, for a carrier could theoretically satisfy its obligation under the provision by hiring a protected employee one moment and firing him the next, and then hiring the carrier’s first choice without the restrictions of statutory hiring preferences. This kind of protection, Hul-sey argues, is no protection at all. Thus, Hulsey contends that for the provision to have meaning, it must be interpreted to impose a duty of hiring protected employees on a permanent rather than probationary status. Furthermore, Hulsey contends that to give meaning to the first right of hire privilege, the “protected” employees must be allowed to challenge a wrongful termination in a grievance procedure (including labor arbitration) or in the federal courts. Hulsey contends that such an interpretation of the Act “would be consistent with a long series of rights deemed by the courts to flow from the duty to bargain in good faith provided under the Railway Labor Act, 45 U.S.C. § 152, ... and the Labor Management Relations Act, 29 U.S. C. § 158(a)(5).” We reject these arguments for the reasons set forth in the district court’s opinion, which is reproduced as the appendix hereto. After reviewing the legislative history of the first right of hire provision, the district court concluded that Congress intended to limit the employment protection to a hiring preference. Beyond the hiring, the district court concluded, the law does not afford the protected employees preferential treatment. We agree with these conclusions. In short, we are in agreement with the district court’s opinion and we affirm on that basis. We add, however, that we do not read the district court's opinion as saying that USAir discharged Hulsey as a forced hire when it would not have discharged a nonforced hire probationary pilot, or indeed a nonprobationary pilot, under the same circumstances; indeed, there is no evidence to this effect. In this case, it is undisputed that USAir will not employ pilots who are convicted felons, and it is undisputed that Hulsey was fired because of his multiple felony convictions after he was sentenced to thirty months’ imprisonment. There is no allegation or summary judgment evidence that USAir has retained, or has a policy of retaining, probationary (or nonprobationary) pilots who are not protected by the Act despite felony convictions with sentences of imprisonment; thus, there is no evidence that Hulsey was treated any differently from any other USAir pilot who is convicted of a felony offense and sentenced to prison therefor. The undisputed evidence indicates that Hulsey was afforded preferential treatment when he was hired, and that in subsequently discharging him USAir treated Hulsey as it would treat its other pilots under similar circumstances, as it is permitted to do under the law. Thus, since there was no genuine issue of material fact, the district court properly found that USAir is entitled to judgment as a matter of law. Conclusion For the reasons set forth in the district court’s opinion, we find no merit in Hul- sey’s arguments. Accordingly, the judgment in favor of USAir is AFFIRMED. APPENDIX IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION DANIEL P. HULSEY, Plaintiff, v. USAIR, INC., Defendant, CIVIL ACTION NO. 3-83-2017-H MEMORANDUM OPINION AND ORDER SANDERS, Acting Chief Judge. Before the Court are Defendant’s Motion to Dismiss and Motion for Summary Judgment, filed July 31, 1987; Plaintiffs Response, filed August 31, 1987; and Defendant’s Reply, filed September 18, 1987. This is a civil action for declaratory relief and money damages attributable to Defendant’s alleged violation of the Airline Deregulation Act of 1978, § 43(d), 49 U.S.C. App. § 1552 (1987) (“the Act”). Plaintiff’s Original Complaint (“Complaint”) at 1. Plaintiff alleges that Defendant violated its duty under the Act to first hire employees dislocated as a result of deregulating the airline industry. Specifically, Plaintiff alleges that Defendant circumvented its duty to offer Plaintiff the “first right of hire” by hiring him on probationary status, since probationary employees may be terminated at any time without cause. Plaintiff contends that if probationary employment is considered to satisfy the Act, the protection afforded is illusory. The material facts in this case are undisputed. Plaintiff was a pilot on non-probationary status with Braniff Airways, Inc. (“Braniff”) from 1973 until Braniff ceased operations and filed for bankruptcy in 1982. Complaint at 2-3; Affidavit of Daniel P. Hulsey fl 3. On or about June 1, 1982, Plaintiff applied to Defendant as an employee eligible for the protection of the Act. Complaint at 3. Defendant is an interstate air carrier and is subject to the Act. Complaint at 2. Plaintiff was hired by Defendant on probationary status in September, 1982. Complaint at 3. Defendant requires all new pilots to serve a one-year probationary period. Collective Bargaining Agreement between USAir and the Air Line Pilots Association, Chap. 18. During the period of Plaintiff’s training and his first three months of active service with Defendant, Plaintiff was a defendant in a trial in the United States District Court for the Northern District of Texas, Fort Worth Division, in which he was charged with tax crimes. Complaint 11115.2, 5.8, 5.10, 5.12. Participation in the trial required Plaintiff to periodically miss work. Complaint Hit 5.8, 5.10, 5.11. Plaintiff was found guilty on March 12, 1983 of conspiring to defraud the federal government and willfully subscribing false individual income tax returns. His conviction was affirmed by the Fifth Circuit Court of Appeals. Complaint 11 5.12 and United States v. Daly, 756 F.2d 1076, 1079 (5th Cir.), cert. denied, 474 U.S. 1022, 106 S.Ct. 574, 88 L.Ed.2d 558 (1985). On March 15, 1983 Defendant suspended Plaintiff without notice or opportunity to be heard and on May 1, 1983 Plaintiff was terminated. Complaint II 5.13. The stated reason for Plaintiff’s termination was his frequent unavailability for work and his criminal conviction. Complaint 115.15. Existence of Genuine Issues of Material Fact Summary judgment is proper when pleadings and evidence on file show that no genuine issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R. Civ.P. 56. The substantive law determines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Disputed facts unnecessary to the cause of action will not be considered. Id. The elements of Plaintiff’s cause of action for violating the Act are as follows: (1) Plaintiff is a protected employee under the Act; (2) Defendant is subject to the Act; and (3) Defendant violated its duty under the Act when it hired Plaintiff on probationary status rather than permanent status. The first two elements are not in dispute. Compare Complaint ¶¶ 5.5, 4.2 with Brief in Support of Defendant’s Motion to Dismiss and Motion for Summary Judgment II H.A.3., 4. The third element is a legal issue. Defendant’s Entitlement to Judgment as a Matter of Law The question before the Court is whether hiring the Plaintiff on probationary status circumvents the right of first hire provided in the Act. Defendant contends that its duty was satisfied once Plaintiff was hired. Plaintiff contends that hiring him on probationary status nullifies the protection afforded by the Act, because he could be terminated without cause at any time during the one year probation period. The Act provides that [e]ach person who is a protected employee of an air carrier which is subject [to this Act] who is ... terminated by such an air carrier (other than for cause) ... shall have first right of hire, regardless of age, in his occupational specialty, by any other air carrier hiring additional employees_ Each such air carrier hiring additional employees shall have a duty to hire such a person before they hire any other person.... The legislative history of the Act does not specifically address the scope of the duty to hire. As introduced, the House version of the Act (HR 12611) required the protection afforded to airline workers to be no less favorable than that afforded to railway workers under the Interstate Commerce Act § 5(2)(f) and the Rail Passenger Service Act § 405. Interstate Commerce Act, 49 U.S.C. § 11347 and Rail Passenger Service Act, 45 U.S.C. §§ 565(a) and (b); see Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 694, 107 S.Ct. 1476, 1485, 94 L.Ed.2d 661, 676 (1987). These statutes referred to in the House bill specify that railway workers are protected from a worsening of their employment position as a result of action taken pursuant to these statutes. However, the final version of the Act did not contain language referring to the broad protections afforded employees under the Interstate Commerce Act and the Rail Passenger Service Act. The regulations promulgated by the Secretary of Labor pursuant to the grant of authority in the Act for administering the duty to hire refer to these provisions as the “Rehire Program.” 29 C.F.R. § 220.02 (1986). The regulations specify that the covered air carrier has the duty to hire a protected employee before it hires any other applicant. Id. § 220.20(a). The protected employee must meet the qualification requirements established by the air carrier, other than those qualifications concerning initial hiring age or recall rights. Id. § 220.21(a).
1536232-9478	PER CURIAM: Appellant Daniel de la Torres challenges the district court’s dismissal of his employment discrimination suit against the Postmaster General. Because the district judge correctly found that de la Torres was not handicapped within the meaning of the Rehabilitation Act of 1973, as amended, we affirm. I The United States Postal Service hired Daniel de la Torres as a part-time flexible letter carrier for a ninety-day probationary period beginning on June 3, 1978. De la Torres is left-handed. He received a routine three-day general orientation and three days of initial training in street mail delivery. His supervisor recommended additional training because de la Torres took too long to complete his rounds. De la Torres received sixteen additional hours of training. Both of de la Torres’ trainers instructed him to use his right hand to finger and deliver mail because he appeared awkward when he used his left hand. De la Torres used his left hand to deliver mail, however, on unsupervised rounds. De la Torres violated postal safety regulations when he allowed his son to ride with him in a postal vehicle on July 2, 1978. He received an unsatisfactory rating in four out of twelve categories on his thirty-day evaluation report. The four unsatisfactory ratings were for progress in learning the job, progress in learning required schemes, productivity and work habits, and safety. The Postal Service terminated de la Torres on July 14, 1978, purportedly because of his unsatisfactory slowness in delivering mail. After an unsuccessful appeal to the Equal Employment Opportunity Commission, de la Torres filed suit against the Postmaster General in the United States District Court for the Northern District of Texas. He alleged that his supervisors regarded his left-handedness as a handicap and that his discharge because of that handicap was unlawfully discriminatory under the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq. (the Act). The district court dismissed de la Torres’ suit after a bench trial. 610 F.Supp. 593. The judge found de la Torres’ evidence that his discharge was due to being left-handed rather than slowness was credible. The judge dismissed the case, however, because he found that de la Torres had not demonstrated he was a “handicapped individual” within the meaning of the Act. II Section 501 of the Rehabilitation Act of 1973 provides for the establishment of an affirmative action program for the employment of handicapped individuals within the United States Postal Service. 29 U.S.C. § 791(b). Section 504 prohibits the United States Postal Service from discriminating against any “otherwise, qualified handicapped individual ... as defined in section 706(7) ... solely by reason of his handicap ” 29 U.S.C. § 794. Amendments to the Act in 1978 provided that claims under section 501 should be patterned after Title VII of the Civil Rights Act of 1964, and that claims under section 501 should be patterned after Title VI of the Civil Rights Act of 1964. 29 U.S.C. §§ 794a(a)(l), (2). To maintain a suit under either provision, a plaintiff must first demonstrate that he is a “handicapped individual” within the meaning of the Act. Doe v. Region 13 Mental Health-Mental Retardation Comm’n, 704 F.2d 1402, 1407-08 (5th Cir.1983) (§ 504); Guinn v. Bolger, 598 F.Supp. 196, 200 (D.D.C.1984) (§ 501). For purposes of sections 501 and 504, the Act defines “handicapped individual” as “any person who (i) has a physical or mental impairment which substantially limits one or more of such person’s major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment.” 29 U.S.C. § 706(7)(B). Although the Act does not clarify this definition, regulations adopted by the Equal Employment Opportunity Commission (EEOC) provide further guidance. The section of the Act that provides for the establishment of affirmative action programs, section 501, authorizes these regulations. See heading preceding 29 C.F.R. § 1613.-701. The express purpose of the regulations, however, is to assure that these affirmative action programs- continue and to outline the procedures a federal agency should follow in processing complaints alleging handicap discrimination. 29 C.F.R. § 1613.701(a). Furthermore, the EEOC regulations contain the same definition of “handicapped individual” that the Act provides in reference to both sections 501 and 504. Compare 29 C.F.R. § 1613.-702(a) with 29 U.S.C. § 706(7)(B). The additional definitions provided by the regulations apply, therefore, to an analysis of a claim of handicap discrimination under either of these sections. The following explanations accompany the definition of a handicapped person in the EEOC regulations: (b) “Physical or mental impairment” means (1) any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or (2) any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. (c) “Major life activities” means functions, such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working. (d) “Has a record of such an impairment” means has a history of, or has been classified (or misclassified) as having a mental or physical impairment that substantially limits one or more major life activities. (e) “Is regarded as having such an impairment” means (1) has a physical or mental impairment that does not substantially limit major life activities but is treated by an employer as constituting such a limitation; (2) has a physical or mental impairment that substantially limits major life activities only as a result of the attitude of an employer toward such impairment; (3) or has none of the impairments defined in (b) of this section but is treated by an employer as having such an impairment. 29 C.F.R. § 1613.702(b)-(e). De la Torres asserts that the district judge erred in looking to these regulations. He claims the appropriate definitions are those in 41 C.F.R. 60-741.2, and that under those definitions his left-handedness substantially limited his ability to obtain and maintain employment. Section 503 of the Rehabilitation Act, 29 U.S.C. § 793, authorizes those regulations. See heading preceding 45 C.F.R. § 60-741.1. Section 503 places affirmative action duties on federal entities that contract for personal property and nonpersonal services for a price in excess of $2500. See 29 U.S.C. § 793. The case at bar concerns a United States Postal Service employment matter, to which section 501 expressly speaks, and not a contract matter encompassed by section 503. The district judge applied the appropriate regulations in adjudicating de la Torres’ case. Ill The district court held that de la Torres failed to satisfy the threshold requirement for a handicap discrimination suit. The judge found that being left-handed was not an “impairment” under the Act and did not “substantially limit” de la Torres’ ability to work. Because we hold that de la Torres failed to satisfy the first element of the definition of “handicapped individual” by showing that being left-handed is an “impairment,” we need not address the second element of the definítion — whether being left-handed “substam tially limited” one of de la Torres’ “major life activities.” Case law interpreting the definition of “handicapped individual,” and of “impairment” in particular, is limited. One court has held that “impairment” does not include “transitory illnesses which have no permanent effect on the person’s health.” Stevens v. Stubbs, 576 F.Supp. 1409, 1414 (N.D.Ga.1983) (citing cases). The employer in that ease downgraded the plaintiff’s position because of the plaintiff’s unsatisfactory performance and excessive use of sick leave, after a physician certified the plaintiff healthy and able to return to work. The court held that the plaintiff had not demonstrated a handicap as defined by the Act, but only that he “may have suffered from an undisclosed transitory illness which may have required him to take periods of sick leave.” Id. The court further determined that the plaintiff’s supervisors “perceived him as physically fit to perform his job.” Id. at 1415 (emphasis in original). Their concern was for his excessive use of sick leave for questionable reasons and his “inability to perform his job functions.” Id. at 1414. Another court has held that a plaintiff who could not meat his prospective employer’s valid weight requirements because of his voluntary, avid body building program had no impairment cognizable under the Act. Tudyman v. United Airlines, 608 F.Supp. 739, 746 (C.D.Cal.1984). The court noted that “[w]hat [the] plaintiff is really suing for is his right to be both a body builder and a flight attendant, a right that § 504 was not intended to protect.” Id. Similarly, the Sixth Circuit has noted that “[e]haracteristies such as average height or strength that render an individual ineapa-ble of performing particular jobs are not covered by the statute because they are not ‘impairments.’” Jasany v. United States Postal Service, 755 F,2d 1244, 1249 (6th Cir.1985) (emphasis in original) (footnote omitted).
857543-5301	HILL, Circuit Judge. This is a Miller Act case brought below by appellee Pool Construction Company, a partnership, against appellants Woods Construction Company, Inc., as prime contractor on a government project, its surety, under the Miller Act, American Casualty Company, a corporation, and Smith Road Construction Company, Inc., a subcontractor on the project, to recover for materials “furnished and supplied.” The parties will be hereinafter referred to as Pool, Woods and Smith Road. Upon the original trial, judgment was rendered in favor of the plaintiff and against all of the defendants. On appeal, we vacated the judgment and remanded the case for the making of findings of fact in accordance with Rule 52(a), F.R.Civ.P., and left the case open for the taking of additional evidence, if necessary. Thereafter, the trial judge received additional evidence, made findings of fact and conclusions of law and entered judgment for the plaintiff and against all of the defendants. Woods and American Casualty have appealed from that judgment. At the outset we are confronted with the question of whether Pool was a fur-nisher or supplier of materials under the Miller Act. The crucial facts pertaining to this question, and as found generally by the trial court, are as follows: Pool had a lease from the landowner on a rock quarry site, by the terms of which he was permitted to mine and take rock from the quarry. As consideration for the lease, he was required to pay the landowner royalty on the rock removed. Woods was the prime contractor on a government project, within the Miller Act, relocating certain state highways. This project was located in the general area of the rock quarry. Smith Road, a subcontractor on the project under Woods, by an agreement or “arrangement,” as it was called by the trial judge, with Pool, moved a rock crusher to the quarry site, mined, removed and crushed rock for its use in the performance of the subcontract. Smith Road agreed to pay Pool royalty for the rock mined at the rate of thirteen cents per ton measured after crushing. Its alleged failure to fully pay for rock taken brought about this litigation. We are aware of the numerous decisions holding in effect that the Miller Act is remedial in character and entitled to a liberal' construction in order to effectuate the congressional intent. But, it must also be kept in mind that the right of action itself is a statutory one and we believe that recovery should only be permitted where one claiming to be a materialman actually qualifies as such. Counsel on neither side has cited any case directly in point and our own research has revealed none. In denoting those who come within the Act as materialmen, the statute reads, “who has furnished labor or material” and “material was furnished or supplied by him.” For Pool to be such a materialman, we must be able to conclude, as a matter of law, under the facts that he furnished or supplied material. With reference to their use in this statute the words “furnished or supplied” have no special meaning or connotation and we must consider them as ordinarily used. We do agree with appellee to the extent that there may be circumstances under which someone other than the owner could be deemed, under the Act, as a furnisher or supplier but no such circumstances are present in this case. Under the lease from the landowner, Pool did not have title to the rock in place, but acquired only the exclusive possession of the deposits of rock together with the right to mine and reduce the same to ownership. Therefore, under his so-called “arrangement” with Smith Road, he could only give to it whatever right he had acquired from the landowner, that being the right to go upon the land to mine and reduce the rock to ownership. Smith Road only paid for and exercised this right given to it by Pool. As a lessee of the quarry, Pool merely subleased the quarry to Smith Road thus permitting Smith Road to move its rock crushing machinery to the site of the quarry, mine the rock and crush it. For this right Smith Road paid a royalty to Pool on the basis of the quantity of rock mined from the quarry. Another factual matter should also be noted, as we believe it further removes Pool from his claimed position as a materialman. The mined rock, which Smith Road removed from the quarry and reduced to ownership, was then processed by crushing, in which new form it went into the road project. We cannot say under these circumstances that Pool “furnished or supplied” material for the project. Appellant asserted several other defenses in the trial court, all of which were rejected but again urged here. In view of our disposition of the material-man question, we need not give consideration to those additional questions. That part of the judgment appealed from is reversed. . 40 U.S.C. § 270a et seq. . Woods Construction Company v. Pool Construction Company, 314 F.2d 405 (10th Cir., 1963). . The agreement between Pool and Smith Road was oral but was partially verified by letter from Smith Road to Pool as follows: “Dear Sir: This letter is to verify the conversation between Mr. Wm. R. Smith and Mr. Vernon Pool stating that the amount of $ .13 per ton Royalty would be paid for materials removed from your pit located at Nowata, Oklahoma.”
11775734-9596	BOWNES, Senior Circuit Judge. This is an appeal by defendants-appellants, the Belchertown Public School System and Robert B. Byard, Superintendent of Schools, from a summary judgment of the district court awarding attorney’s fees and costs to plaintiffs-appellees, Alison H., p/p/a Donald H. The attorney’s fees award was the aftermath of a dispute between plaintiffs and defendants over the special education services to be provided Alison H. by defendants. The settlement, which is not attacked by plaintiffs, was entered into prior to a hearing before the Massachusetts Bureau of Special Education Appeals. After settlement, plaintiffs demanded attorney’s fees from defendants on the basis that they were the prevailing parties and were therefore entitled to .attorney’s fees pursuant to 20 U.S.C. § 1415(i)(3)(B). After defendants rejected the demand for attorney’s fees, suit was brought seeking an order awarding plaintiffs attorney’s fees. I. Defendants raise five issues on appeal. The only one we discuss is dispositive of the appeal so we do not consider the others, interesting and intriguing as they may be. We find and rule that plaintiffs waived the claim to attorney’s fees under the terms of the settlement agreement. Because this is an appeal from a grant of summary judgment our standard of review is de novo. DeNovellis v. Shalala, 124 F.3d 298, 305 (1st Cir.1997); Dubois v. United States Dep’t of Agric., 102 F.3d 1273, 1283 (1st Cir.1996), cert. denied, — U.S. -, 117 S.Ct. 2510, 138 L.Ed.2d 1013 (1997); Coyne v. Taber Partners I, 53 F.3d 454, 457 (1st Cir.1995). Plaintiffs cite a host of Massachusetts cases to the effect that “abuse of discretion” is the standard of review in Massachusetts. Because the standard of review is a procedural matter, not a substantive one, we are bound by federal law. It makes no difference, however, in this ease because we rule that the district court made an error of law on the issue before us. This constitutes an abuse of discretion. In Klonoski v. Mahlab, 156 F.3d 255, 276 (1st Cir.1998), in which we said: As- the Supreme Court has stated, ‘[a] district court by definition abuses its discretion when it makes an error of law.’ Koon v. United States, 518 U.S. 81, 94-102, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996); see United States v. Marroquin, 136 F.3d 220, 223 (1st Cir.1998); Golas v. HomeView, Inc., 106 F.3d 1, 3 (1st Cir.1997). The Facts Alison H. is a minor female who resides with her parents in Belchertown, Massachusetts. The Belchertown Public School System is responsible for providing special education to students with learning disabilities.It began providing special education services to Alison at the beginning of the fifth grade; they were discontinued halfway through grade five. From then on, Alison’s parents had a running dispute with the school as to the special education services Alison should receive and where they would be given. No agreement could be reached on an appropriate individualized educational plan (IEP) for Alison. On January 30, 1996, plaintiffs retained Attorney Clame Thompson to represent them in the dispute with the school. She filed a request for a hearing with the Bureau of Education Appeals. Thereafter Attorney Thompson negotiated for the parents on the question of an appropriate IEP for Alison. During the negotiations, the plaintiffs made clear that they thought that White Oak School was the most appropriate placement for Alison and would meet their IEP demands. White Oak School is a private institution specializing in special education for children with learning disabilities. Defendants sent a proposed new IEP for Alison on June 28, 1996 to Attorney Thompson. She replied on July 31, 1996, making additional demands and proposing further conditions. On August 21,1996, the attorney for the school faxed the following letter to Attorney Thompson: Rick Mclnerney received a copy of your letter in which you requested additional changes in the IEP for Allison. After Mr. Mclnerney’s review of your letter and requested changes, he came to the conclusion that it was unlikely that you or your clients would ever be satisfied with the IEP developed by Belchertown or the educational program provided by Belchertown. Therefore, he contacted White Oak School in order to ascertain if it had an available place for Allison to attend school starting in September 1996. He has confirmed that White Oak does have a space available for Allison and therefore, would offer to Mr. and Mrs. H. the opportunity for Allison to attend White Oak for the 1996-1997 school year. As a condition of finalizing this agreement, Belchertown would be looking for the withdrawal of the request for hearing, which hearing is scheduled for September 11, 1996, as well as a release of any and all claims arising prior to the execution of the agreement. If your clients are interested in this offer, please contact me by Friday, August 23, 1996, since White Oak is requiring an answer by that date in order to continue to hold a place for Allison for the 1996-1997 school year. Should you have any further questions, please feel free to contact me. (Emphasis added.) Within a matter of hours Attorney Thompson replied by fax: On behalf of Don and Judy H., I hereby accept Belchertown’s offer to place Alison at White Oak School for the 1996-1997 school year. Please forward a new I.E.P. for the H’s signature. The school prepared a new IEP for Alison’s attendance at White Oak School. It was accepted by the parents on September 3, 1996. The scheduled hearing before the Bureau of Special Education Appeals was canceled. Alison attended White Oak School for the 1996-97 school year. Belchertown School paid a total of $22,295.20 for Alison’s tuition and transportation. By letter dated November 6, 1996 Attorney Thompson asked that Belchertown School pay her attorney’s fees “totaling $6,112.40 through August 26, 1996.” The letter also stated: Unless the parties are able to negotiate settlement by November 30, 1996, I will be compelled to file a Complaint for attorney’s fees in U.S. District Court. (Emphasis in original.) Belchertowm rejected the demand for attorney’s fees. Defendants took the position that plaintiffs had waived any claim for attorney’s fees by accepting Belchertown’s offer to place Alison in Wdiite Oak School. Plaintiffs complaint asserting their right to attorney’s fees was filed on December 6,1996.- II. The issue is a classic one of contract construction: did plaintiffs’ acceptance of Belchertown’s offer to place Alison in White Oak School subject to the condition that there be “a release of any and all claims arising prior to the execution of the agreement” constitute a waiver of plaintiffs’ claim for attorney’s fees. The district court ruled that there was no waiver. After finding that the plaintiffs were the prevailing parties, it stated: Second, I do not believe that there was any waiver here. There was never a release sent by the defendants to the plaintiffs. The language refers to things oc-eurring prior to this agreement while the entitlement to attorney’s fees did not really arise until after the agreement was executed. The drafting was ambiguous and my normal tenets of construction is that these ambiguities should be construed in the plaintiffs’ favor and against the drafter. In addition, the plaintiffs’ response to the offer, it seems to me, clearly only accepted the offer to place Alison at White Oak School and did not even purport to give up anything else, so there was no waiver. With respect, we disagree. We analyze the ruling sentence by sentence. It is true that a release was never sent by defendants to plaintiffs for execution. It would have been better if this had been done. But the offer letter neither states nor suggests that a release would be sent. We think, moreover, that the plain and unambiguous language of the offer meant that acceptance by the plaintiffs meant they had released the defendants from “any and all claims arising prior to the execution of the agreement.” Surely the phrase “any and all claims” encompasses attorney’s fees which are a major factor and bone of contention in this type of litigation. See, e.g., State of New Hampshire v. Adams, 159 F.3d 680, 683-84 (1st Cir.1998). Kathleen H. v. Massachusetts Dep’t of Educ., 154 F.3d 8, 14 (1st Cir.1998); Fowler v. Unified Sch. Dist. No. 259, 128 F.3d 1431, 1439 (10th Cir.1997); County of San Diego v. California Special Educ. Hearing Office, 93 F.3d 1458, 1468 (9th Cir.1996). The next sentence is puzzling. The court, after noting that “[t]he language refers to things occurring prior to this agreement,” states that the “entitlement to attorney’s fees did not really arise until after the agreement was executed.” It is true that a claimant cannot collect attorney’s fees in such a case until it prevails, but the amount of the entitlement was based on services rendered prior to execution of the settlement. It is what was asked for in the First Amended Complaint. Paragraph A asks that the court: A. Award the plaintiffs their reasonable attorney’s fees and costs in the sum of $6,112.40 through August 26,1996; (Emphasis ours.) The court then found the contract ambiguous and construed it in favor of the plaintiffs and against the defendants. We rule to the contrary. We realize that the question of ambiguity is a judgment call, but there are established guidelines that lead to a well trodden path. A contract is formed upon acceptance of an offer. Ismert and Assocs., Inc. v. New England Mut. Life Ins. Co., 801 F.2d 536, 541 (1st Cir.1986).
10590325-16051	LEWIS R. MORGAN, Circuit Judge: This appeal presents the situation where an alien who was subpoenaed while present in the United States is required to testify before a grand jury even though the very act of testifying will probably subject him to criminal prosecution in his country of residence. The case arises as an appeal from the Southern District of Florida of an order of commitment for civil contempt for refusal to answer grand jury questions. Anthony R. Field contends that the requirement that he testify is a violation of his Fifth Amendment rights. Field, moreover, contends that he should not be required to testify as a matter of comity between nations. Finally, he attacks the power of the government to issue the subpoena and the procedures used in issuing this particular subpoena. We find that requiring Field to testify violates neither the Constitution nor international comity and that the subpoena was properly issued. Therefore, we affirm the district court. Presently, a grand jury in the Southern District of Florida is investigating possible criminal violations of tax laws. Part of this investigation centers on the use of foreign banks to evade tax enforcement. Field, a Canadian citizen, is the managing director of Castle Bank and Trust Company (Cayman), Ltd. which is located in Georgetown, Grand Cayman Island, British West Indies. On January 12, 1976, Field, while in the lobby of the Miami International Airport, was served with a subpoena directing him to appear before the grand jury on January 20. During his testimony, Field was asked several questions concerning his activities on behalf of Castle and its clients. Field, however, refused to answer these questions on the ground that he would incriminate himself in violation of his Fifth Amendment rights and also on the ground that his testimony would violate the bank secrecy laws of the Cayman Islands. On February 18, 1976, Field was granted immunity and ordered to resume his testimony. Field still refused to answer the questions. A hearing was held on Field’s motion to quash and the government’s motion to compel testimony on March 18, 1976. At that hearing, the government demonstrated that Castle Bank had engaged in activities within the United States including maintaining deposits in American banks and engaging in certain securities transactions. The government also demonstrated that another bank, Castle Bank and Trust Company (Bahamas), had extensive dealings in the United States in real estate. Pointing out that Castle (Cayman) and Castle (Bahamas) had several of the same officers and that apparently the two organizations had commingled funds, the government argued that much of the activity of Castle (Bahamas) should be imputed to Castle (Cayman). The government did not demonstrate that Field held any office in or was an employee of Castle (Bahamas). Nor did the government present any evidence concerning tax evasion or explain in detail what evidence it planned to present before the grand jury. Besides characterizing Castle (Cayman) activities in the United States as minor, Field did not seriously challenge the government’s evidence. On the other hand, Field argues that requiring his testimony before the grand jury concerning matters pertaining to Castle (Cayman) would violate the law of the Cayman Islands. He submitted an affidavit by an expert on Cayman law that stated that Field could be subject to criminal punishment for answering the questions before the grand jury. The affidavit, moreover, stated that the bank examiner of the Cayman Islands could require Field to state whether he had testified before the grand jury. If Field refused to answer the questions of the bank examiner, he was subject to a criminal penalty of up to six months imprisonment. The government did not contest that Field in testifying before the grand jury would subject himself to criminal prosecution in the Cayman Islands, his place of employment and residence. After ordering Field to testify the district court stated, I think the record should show that this court finds that there is, in fact, a reasonable probability that Mr. Field is going to be exposed to some criminal charges and some criminal punishment for violating the Cayman Bank Secrecy Act. Upon stipulation that Field would continue to refuse to answer the questions before the grand jury, the district court held him in civil contempt and Field appeals pursuant to 28 U.S.C. § 1826(b). Before discussing in detail Field’s contentions, we should make clear what is not involved in this case. Field does not argue that the content of his answers before the grand jury will subject him to prosecution in the Cayman Islands. The problem is not the answers that Field will give to the grand jury but the fact that he will give any answers at all. A different case would be presented if Field had demonstrated that the content of his answers could be used as evidence against him in foreign prosecutions. See, In re Tierney, 465 F.2d 806 (5th Cir. 1972), cert. denied, 410 U.S. 914, 93 S.Ct. 959, 35 L.Ed.2d 276 (1973). In such a case, a difficult question concerning Fifth Amendment protection against self-incrimination would be present. Zicarelli v. New Jersey Investigation Commission, 406 U.S. 472, 478, 92 S.Ct. 1670, 1674, 32 L.Ed.2d 234, 239 (1972). Field does argue that the Fifth Amendment prohibition against compulsory self-incrimination encompasses his present situation. In essence, he contends that since the act of testifying subjects him to foreign prosecution, requiring his testimony would be compelling Field to be a witness against himself. We believe Field has misconstrued the scope of the protection against self-incrimination. The Fifth Amendment, as the Supreme Court stated in Lefkowitz v. Turley, 414 U.S. 70, 94 S.Ct. 316, 38 L.Ed.2d 274 (1973) protects against only the use of testimony. There the Court stated, A witness protected by the privilege may rightfully refuse to answer unless and until he is protected at least against the use of his compelled answers and evidence derived therefrom in any subsequent criminal case in which he is a defendant. (Emphasis added.) Id. at 78, 94 S.Ct. at 322, 38 L.Ed.2d at 282. As this passage indicates the fact of testifying is not protected by the Fifth Amendment. See also, Kastigar v. United States, 406 U.S. 441, 453, 92 S.Ct. 1653, 1661, 32 L.Ed.2d 212, 221 (1972). The consistent interpretation of the Amendment has been to insure that a person would not be required to give testimony that tended to show that the person had committed a crime. Counselman v. Hitchcock, 142 U.S. 547, 563, 12 S.Ct. 195, 198, 35 L.Ed. 1110, 1114 (1892). Historically, the privilege was adopted to restrain the state from submitting to the temptation of resorting to the expedient of compelling incriminating evidence from one’s own mouth. Couch v. United States, 409 U.S. 322, 327, 93 S.Ct. 611, 615, 34 L.Ed.2d 548, 553 (1973). This subpoena is not an attempt to elicit information from Field which will later be used against him in a criminal case. The Fifth Amendment simply is not pertinent to the situation where a foreign state makes the act of testifying a criminal offense. Field’s second contention is that as a matter of international comity this court should refuse to enforce the subpoena. In this contention, Field requests that an appropriate accommodation between the law of the United States and that of the Cayman Islands is for this court, exercising its discretion, to decline enforcement. Field argues that nations should make every effort to avoid the situation present here, where one nation requires an act that the other nation makes illegal. See United States v. First National City Bank, 396 F.2d 897 (2d Cir. 1968); Restatement (2nd), Foreign Relations Law of the United States, § 40 (1965). We begin with the proposition that the fact that the district court’s order will subject Field to criminal prosecution in his country of residence does not of itself prohibit enforcement of the subpoena. Restatement (2nd), Foreign Relations Law of the United States, § 39 (1965). See also, American Industrial Contracting, Inc. v. Johns-Manville Corp., 326 F.Supp. 879 (W.D.Pa.1971). The Restatement position requires a balancing of the several factors in determining whether the United States or, in this case, the Cayman Islands’ legal command will prevail. The first and most important factor to be considered is the relative interest of the states involved. In this ease, the United States seeks to obtain information concerning the violation of its tax laws. In contradistinction, the Cayman Islands seeks to protect the right of privacy that is incorporated into its bank secrecy laws. Unfortunately, the Cayman Government position appears to be that any testimony concerning the bank will violate its laws. Therefore, either the United States or the Cayman interest must give way. Under our system of jurisprudence the grand jury’s function in investigating possible criminal violations is vital. Recently, the Supreme Court has succinctly explained why undue restrictions on our criminal justice system’s ability to obtain evidence would be unwarranted. The Court stated: The ends of criminal justice would be defeated if judgments were to be founded on a partial or speculative presentation of the facts. The very integrity of the judicial system and the public confidence in the system depends on full disclosure of all facts, within the framework of the rules of evidence. To ensure that justice is done, it is imperative to the function of the courts that compulsory process be available for the production of evidence needed either by the prosecution or by the defense. United States v. Nixon, 418 U.S. 683, 709, 94 S.Ct. 3090, 3108, 41 L.Ed.2d 1039, 1064 (1974). To the degree that the ability to obtain evidence is crucial to all criminal justice proceedings, the need for broad authority in the grand jury is greatest. The Supreme Court has stated “the grand jury’s authority to subpoena witnesses is not only historic but essential to its task.” Branzburg v. Hays, 408 U.S. 665, 688, 92 S.Ct. 2646, 2660, 33 L.Ed.2d 626, 643 (1973). Courts have repeatedly allowed the grand jury wide discretion in seeking evidence. See, United States v. Dionisio, 410 U.S. 1, 93 S.Ct. 764, 35 L.Ed.2d 67 (1973). Generally, the normal rule providing for the exclusion of evidence obtained by illegal means does not apply to the grand jury. See, United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974); Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956). The Supreme Court, as well as this court, has rejected not insubstantial First Amendment claims which would have restricted the power of the grand jury to obtain the information. Branzburg v. Hays, supra; Beverly v. United States, 468 F.2d 732 (5th Cir. 1972). Even the President of the United States under proper circumstances can be required to produce evidence before the grand jury. Nixon v. Sirica, 159 U.S.App.D.C. 58, 487 F.2d 700 (1973). Finally, courts have consistently rejected the contention that one may refuse to testify before grand juries due to fear of personal safety. See, e. g., United States v. Leyva, 513 F.2d 774, 780 (5th Cir. 1975); In re Long Vistor, 523 F.2d 443, 447-48 (8th Cir. 1975). To defer to the law of the Cayman Islands and refuse to require Mr. Field to testify would significantly restrict the essential means that the grand jury has of evaluating whether to bring an indictment. In addition to the necessity of the grand jury being able to obtain evidence, this country allows wide discretion to investigatory bodies in obtaining information concerning bank activities. United States v. Miller, - U.S. -, 96 S.Ct. 1619, 48 L.Ed.2d 71, 44 L.W. 4528 (1976). There could be no question that Mr. Field would be required to respond to the grand jury’s questions if this was solely a domestic case. Nor is the United States alone in granting wide discretion to its investigators in obtaining information from financial institutions, particularly where tax evasion is concerned. In the United Kingdom apparently such evidence can be obtained. See Clinch v. England Revenue Commissioners, [1974] 1 Q.B. 76; [1973] 2 W.L.R. 862; [1973] 1 All.E.R. 976; Williams v. Summerfield, [1972] 2 Q.B. 512; [1972] 3 W.L.R. 131; [1972] 2 All.E.R. 1334. Indeed, even the Swiss government, which is notorious for protecting the privacy of financial transactions, might provide under certain circumstances to the United States information concerning Swiss banks. See Note, 15 Harv.Int’l.L.J. 349, 359 (1974). Finally, at oral argument, appellant’s attorney conceded that under Cayman law the director of banking in the Cayman Islands would be able to obtain information from Field concerning the bank’s operations in investigations instituted by legal authority in the Cayman Islands. In short, Field seeks to prohibit a United States grand jury from obtaining information that would have been obtainable by officials there for their own investigations. Since the general rule appears to be that for domestic investigations such information would be obtainable, we find it difficult to understand how the bank’s customers’ rights of privacy would be significantly infringed simply because the investigating body is a foreign tribunal. Finally, we reject Field’s contention that what is involved here is only economic regulation. The collection of revenue is crucial to the financial integrity of the republic. In addition, the subject being investigated by this grand jury has received considerable attention and has been demonstrated to be a severe law enforcement problem. A report from the House Committee on Banking and Currency outlines the problems created and the type of activities investigated by the grand jury. Secret foreign bank accounts and secret foreign financial institutions have permitted a proliferation of ‘white collar’ crimes; have served as the financial underpinning of organized criminal opera tion in the United States; have been utilized by Americans to evade income taxes, conceal assets illegally and purchase gold; have allowed Americans and others to avoid the law and regulations governing securities and exchanges; have served as essential ingredients in frauds including schemes to defraud the United States; have served as the ultimate depository of black market proceeds from Vietnam; have served as a source' of questionable financing for conglomerate and other corporate stock acquisitions, mergers and takeovers; have covered conspiracy to steal from the U. S. defense and foreign aid funds; and have served as the cleansing agent for ‘hot’ or illegally obtained monies . The debilitating effects of the use of these secret institutions on Americans and the American economy are vast. It has been estimated that hundreds of millions in tax revenues have been lost. H.R.Rep.No.91-975, 91 Cong. 2d Sess. 12 (1970), U.S.Code Cong. & Admin.News 1970, p. 4397. If this court were to countenance Mr. Field’s refusal to testify it would significantly restrict the ability of the grand jury to obtain information which might possibly uncover criminal activities of the most serious nature. In light of the traditional discretion given the grand jury and the significant interest this nation has in tax enforcement, without any specific direction from Congress, we see no reason not to enforce the subpoena. Field also contends that the procedure used in issuing this subpoena was unconstitutional as a deprivation of due process. This subpoena was issued pursuant to Rule 17, Fed.R.Cr.P. which provides that a subpoena shall be issued by the Clerk. Field’s position is that he was entitled to a hearing before the subpoena could be issued since the requirement that he appear before the grand jury at a certain time and place was a deprivation of liberty. He relies solely on Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972).-
3955967-17175	MEMORANDUM OPINION AND ORDER TOM S. LEE, District Judge. This cause is before the court on the motion of plaintiffs Albert R. Garner, Sig-rid Garner, Thomas I. Garner, R & S Developers, LLC, RTC Properties, LLC, MGR Construction, LLC, Pavilion Properties, LLC, Storage Zone of Jackson, LLC, and Storage Zone of Jackson to abstain and remand. Defendant BankPlus has responded in opposition to the motion and the court, having considered the memoran-da of authorities, together with attachments, submitted by the parties, concludes that plaintiffs’ motion to abstain and remand should be granted. Plaintiffs commenced the present action in the Circuit Court of Hinds County, Mississippi on July 26, 2011, asserting state law claims against BankPlus for breach of contract, misrepresentation, estoppel and injunctive relief, all centered on their allegation that BankPlus reneged on a loan restructuring agreement entered into with plaintiffs. More specifically, plaintiffs alleged that in July 2010, BankPlus represented and committed to plaintiffs to renew, extend, re-amortize and reduce the interest rate on some seventeen outstanding loans to the various Garner businesses and the Garner family, yet the Bank did not restructure the loans as represented and instead filed suit in state court seeking to recover on the loans and initiated foreclosure of certain real property that was collateral for the loans. Plaintiffs herein seek to estop the Bank from enforcing the loans “other than in accordance with the Bank’s representations, promises and commitments”; to enjoin the Bank from foreclosing on the collateral since, plaintiffs allege, they are not in default under the terms of their agreements, as modified; a declaratory judgment as to the parties’ rights and responsibilities under the loan documents, as restructured; and damages allegedly incurred as a result of the Bank’s breach of contract or due to their reliance on its misrepresentations. On August 8, 2011, two weeks after this suit was filed, one of the plaintiffs, RTC Properties, filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Southern District of Mississippi, Case No. 11-02754-ee. BankPlus promptly removed the case to this court on the basis of bankruptcy jurisdiction pursuant to 28 U.S.C. § 1834, following which plaintiffs filed their present motion requesting that the court abstain from hearing the case and remand it to state court. Subsequent to completion of briefing on the motion, the court has been informed that four additional plaintiffs — Pavilion Properties and the three individual plaintiffs — have filed for bankruptcy protection in the Mississippi Southern District Bankruptcy Court, in Case Nos. 11-03994-ee, 12-00171-ee and 12-00170-ee, respectively. In their motion, plaintiffs acknowledge that pursuant to 28 U.S.C. § 1334, the case was properly removed and that this court has jurisdiction as the case is “related to” the referenced bankruptcy cases. See 28 U.S.C. § 1334(providing “the district court shall have original and exclusive jurisdiction of all cases under title 11,” and “shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11”); Feld v. Zale Corp., 62 F.3d 746, 752 (5th Cir.1995) (“[A]n action is related to bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action (either positively or negatively) and ... in any way impacts upon the administration of the bankrupt estate.”) (citations omitted). However, they argue that this court must abstain pursuant to § 1334(c)(2), which states: Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction. They request alternatively discretionary abstention and/or equitable remand pursuant to 28 U.S.C. § 1334(c)(1) or 28 U.S.C. § 1452(b), respectively. For mandatory abstention to apply under § 1334(c)(2), the following conditions must exist: (1) a motion has been timely filed requesting abstention; (2) the cause of action is essentially one that is premised on state law; (3) the proceeding is non-core or related to the bankruptcy case; (4) the proceeding could not otherwise have been commenced in federal court absent the existence of the bankruptcy case; and (5) the proceeding has already been commenced and can be timely adjudicated in a state court forum. Williamson v. Central Mississippi Med. Ctr., Civ. Action No. 3:06CV201LS, 2006 WL 2043029, *1-2 (S.D.Miss. July 20, 2006). Plaintiffs submit that each of these conditions is present, and that the court must therefore abstain and remand. For its part, BankPlus does not dispute that plaintiffs timely moved for abstention, that their causes of action are premised on state law, and that this case could not have been commenced in this court absent the existence of plaintiffs’ bankruptcy cases. However, it maintains that mandatory abstention does not apply both because plaintiffs’ claims against it constitute core proceedings, and because plaintiffs have not established that the action can be timely adjudicated in state court. The court rejects that latter contention, as it has no reason to believe that upon remand, the cause will not be handled in a timely manner. Moreover, the court concludes that plaintiffs’ claims do not constitute core proceedings. Pursuant to 28 U.S.C. § 157(b)(1), “[bjankruptcy judges may hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11 ... and may enter appropriate orders and judgments.” Although the statute does not define “core proceedings,” the Fifth Circuit has interpreted the statute as equating core proceedings with the categories of “arising under” and “arising in” proceedings. Matter of Wood, 825 F.2d 90, 97 (5th Cir.1987). It has in turn read the phrase “arising under title 11” to describe those proceedings that “invoke[] a substantive right provided by title 11,” and the phrase “arising in” as describing matters “that could arise only in bankruptcy.” Id. Thus, “a proceeding is core under sec tion 157 if it invokes a substantive right provided by title 11 or if it is a proceeding that, by its nature, could arise only in the context of a bankruptcy case.” Id. “If the proceeding does not invoke a substantive right created by the federal bankruptcy law and is one that could exist outside of bankruptcy it is not a core proceeding; it may be related to the bankruptcy because of its potential effect, but ... it is [a] non-core proceeding.” Id. Subsection (b)(2) provides a list of sixteen categories of “arising under” and “arising in” proceedings, some specific and others more general. See Stem v. Marshall, — U.S.-, 131 S.Ct. 2594, 2605, 180 L.Ed.2d 475 (2011) (holding that “core proceedings are those that arise in a bankruptcy case or under Title 11[,]” and explaining that “[t]he detailed list of core proceedings in § 157(b)(2) provides courts with ready examples of such matters.”). BankPlus submits that two of the general categories apply here, namely, § 157(b)(2)(A), which includes “matters concerning the administration of the estate,” and 157(b)(2)(0), which includes “other proceedings affecting ... the adjustment of the debtor-creditor relationship.” BankPlus reasons that this case concerns the administration of the debtors’ bankruptcy estates, first, because the debtors’ causes of action herein are property of their bankruptcy estates, and second, because plaintiffs’ complaint seeks enforcement of an alleged modification of loans as to which BankPlus is a creditor in the bankruptcy proceedings, or put another way, because the plaintiffs are suing in this case to modify obligations that are involved in the pending bankruptcies. BankPlus further submits that since plaintiffs seek herein a restructuring of their loan obligations, then their claims fit within subsection (O) as they seek to affect “the adjustment of the debtor-creditor relationship.” The Fifth Circuit has cautioned against a broad reading of these “catchall” provisions; “otherwise, the entire range of proceedings under bankruptcy jurisdiction” — including claims that qualify as merely “related to” the bankruptcy case — “would fall within the scope of core proceedings,” a result contrary to the purpose of the 1984 Bankruptcy Act. Wood, 825 F.2d at 95. See also In re Doctors Hosp.1997, L.P., 351 B.R. 813, 844 (Bkrtcy. 5.D.Tex.2006) (stating that Fifth Circuit “warns against a broad interpretation of § 157(b)(2)(0) and prefers to deem a proceeding as core under the more specific examples rather than fitting a particular proceeding into the catch-all language of subsections (b)(2)(A) and (b)(2)(0)”) (citing Wood, 825 F.2d at 95); Mirant Corp. v. The Southern Co., 337 B.R. 107, 116 (N.D.Tex.2006) (observing Fifth Circuit’s caution in Wood that statutory listing in § 157(b)(2) should not be read so broadly as to violate the dictates of Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982)). In other words, since a broad interpretation of these provisions could result in the court’s ascribing core status to claims that are only “related to” the bankruptcy proceeding, then these catchall provisions must be narrowly read to extend only to those “matters concerning the administration of the estate” or “other proceedings affecting ... the adjustment of the debtor-creditor relationship” which “invoke[] a substantive right provided by title 11” or which “by its nature, could arise only in the context of a bankruptcy case.” Wood, 825 F.2d at 97. Contrary to BankPlus’s urging, plaintiffs’ claims in this cause are not core simply because they are an asset of the bankruptcy estates. See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 56, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989) (common-law actions to augment the size of the estate involving disputed facts for jury are not core); Anderson v. Nissan Motor Acceptance Corp., 326 F.Supp.2d 760, 766 (S.D.Miss.2003). Moreover, plaintiffs’ demand herein for enforcement of an alleged modification of the terms of their loan agreements with BankPlus, a creditor in bankruptcy, is not a “proceedings affecting ... the adjustment of the debtor-creditor relationship” within § 157(b)(2)(0), as that provision refers to the restructuring of debtor-creditor relations under the Bankruptcy Code, which is distinct from the “adjudication of state-created private rights.” See Northern Pipeline, 458 U.S. at 71, 102 S.Ct. 2858, 73 L.Ed.2d 598 (plurality opinion) (distinguishing “the restructuring of debtor-creditor relations, which is at the core of the federal bankruptcy power, ... from the adjudication of state-created private rights”). And, while a resolution of plaintiffs’ claims against Bank-Plus could potentially affect the administration of the bankruptcy estate — which is necessary in order that the court have jurisdiction at all — the claims do not invoke a substantive right provided by title 11 and could exist outside the bankruptcy case and hence are not core. This action is not a proceeding that could arise only in the context of a bankruptcy. None of plaintiffs’ claims implicates the peculiar rights and powers of bankruptcy, nor do any of the claims depend on the bankruptcy laws for their existence. Mirant Corp., 337 B.R. at 117 -118. The claims do not involve a substantive right provided by title 11, nor is any of a nature that it could arise only in the context of a bankruptcy case or based on any right created by the federal bankruptcy law. Id. Rather, all the claims are based entirely on state law. Plaintiffs’ causes of action arose entirely before the debtors filed their bankruptcy petitions and, but for the bankruptcy filings, could have proceeded in state court. See Wood, 825 F.2d at 96 (“controversies that do not depend on the bankruptcy laws for their existence — suits that could proceed in another court even in the absence of bankruptcy — are not core proceedings”). Therefore, the court finds that plaintiffs’ claims in this suit are non-core proceedings. From this conclusion, it follows that mandatory abstention applies, and that plaintiffs’ motion is therefore due to be granted. Accordingly, it is ordered that plaintiffs’ motion to abstain and remand is granted. SO ORDERED. . The plaintiffs in this case include three individuals, Albert R. Garner and Sigrid Garner, husband and wife, and their son, Thomas I. Garner, and six businesses they own: R & S Developers, LLC; RTC Properties, LLC; MGR Construction, LLC; Pavilion Properties, LLC; Storage Zone of Jackson, LLC; and Storage Zone of Florence, LLC. . BankPlus informed the court of the various bankruptcy petitions and proceedings by letters to the undersigned dated December 6, 2011, January 19, 2012 and January 20, 2012, and docketed by counsel in the court record. In each of these letters, which BankPlus docketed as “Supplemental Authorities in Support of” its response to plaintiffs’ motion, Bank-Plus advised that the bankruptcy “affected” portions of its brief in opposition to plaintiffs’ motion but did not elaborate further as to how its arguments were "affected,” leaving it to the court to speculate as to how these matters might affect the Bank's position. Had counsel wished only to apprise the court of the additional bankruptcy filings, a notice to that effect would have been appropriate. And, if counsel had wished to supplement their memorandum on a pending motion, the proper method by which to have done so was not by e-filing correspondence to the undersigned that does not contain any actual supplemental argument, but rather by filing a supplemental memorandum setting forth their argument. . Section 1334 lists four types of matters over which there is bankruptcy jurisdiction: (1) cases “under title 11”, which refers to the bankruptcy case itself; (2) proceedings “arising under” title 11; (3) proceedings “arising in” a case under title 11, which are "core” proceedings; and (4) proceedings "related to” a case under title 11. Here, there is no dispute that this case is at least "related to” the pending bankruptcies since the outcome of the case could conceivably have an effect on the bankruptcy estates. . 28 U.S.C. § 1334(c)(1) states: Nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11. 28 U.S.C. § 1452(b) states: The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order entered under this subsection remanding a claim or cause of action, or a decision to not remand, is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title. . Section 157(b)(2) provides: Core proceedings include, but are not limited to— (A) matters concerning the administration of the estate; (B) 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; (C) counterclaims by the estate against persons filing claims against the estate; (D) orders in respect to obtaining credit; (E) orders to turn over property of the estate; (F) proceedings to determine, avoid, or recover preferences; (G) motions to terminate, annul, or modify the automatic stay; (H) proceedings to determine, avoid, or recover fraudulent conveyances; (I) determinations as to the dischargeability of particular debts; (J) objections to discharges; (K) determinations of the validity, extent, or priority of liens; (L) confirmations of plans; (M) orders approving the use or lease of property, including the use of cash collateral; (N) orders approving the sale of property other than property resulting from claims brought by the estate against persons who have not filed claims against the estate; (O) other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor or the equity security holder relationship, except personal injury tort or wrongful death claims; and (P) recognition of foreign proceedings and other matters under chapter 15 of title 11.
10535514-19521	OPINION OF THE COURT BECKER, Circuit Judge. Following an administrative proceeding, appellants, Facchiano Construction Company, Inc. (“Facchiano Construction”) and one of its principals, Michael Facchiano, Jr., were debarred in 1986 by the Department of Housing and Urban Development (“HUD”), from participating for a period of 18 months in HUD-sponsored contracts. This debarment was based upon the conviction of Michael Facchiano and Facchiano Construction on mail fraud charges which arose out of the determination of the Department of Labor (“DOL”) that they had falsified records to conceal violations of the Davis-Bacon Act, 40 U.S.C. § 276a et seq. (1982), and the Contract Work Hours and Safety Standards Act, 40 U.S.C. §§ 327-333 (1982) in connection with work on HUD-sponsored contracts. DOL thereupon sought to debar appellants, Facchiano Construction, and its officers, Michael Facchiano, Jr., and John Fac-chiano, from all government contracts for a period of three years on the grounds of the underlying Davis-Bacon violations. Appellants responded with a suit in the district court for the Western District of Pennsylvania seeking to enjoin the administrative proceeding on the grounds that it was precluded by the previous debarment. The district court granted summary judgment for DOL. This appeal presents the question whether a suit for injunctive relief will lie in the district court under these circumstances, or whether appellants must instead, pursuant to the exhaustion of administrative remedies doctrine, present the preclusion defense in the administrative proceedings. Although a court can enjoin administrative proceedings when an agency undertakes vexatious litigation, the district court found that not to be the case here, and its finding is supported. However, the district court failed to consider the well-established principle that administrative tribunals are fully capable of considering preclusion defenses, and it contravened the related exhaustion doctrine by reaching the merits and determining that the HUD debarment in fact had no preclusive effect on the DOL debarment proceeding. Therefore, while we will affirm the grant of summary judgment against appellants insofar as it denied injunctive relief, we will vacate the opinion of the district court insofar as it adjudicates the merits of the preclusion issue. The agency will be able therefore to resume its proceedings and address the issue itself. I. After Facchiano Construction had performed a number of construction projects sponsored by HUD’s Community Development Block Grant program, DOL conducted an investigation which revealed that it had been falsely certifying the wages paid to the employees who were working on the HUD-sponsored projects. The investigation, completed in 1984, disclosed that the wages and overtime pay were below those required by the Davis-Bacon Act, 40 U.S.C. § 276a et seq. (1982), and the Contract Work Hours and Safety Standards Act, 40 U.S.C. §§ 327-332 (1982). Because of false wage certifications sent through the mails, Michael Facchiano, Jr. and Facchiano Construction were indicted for mail fraud. In February 1985, they waived indictment and pleaded guilty. The district court required them to make restitution of $126,000 to the employees and' fined Michael Facchiano and the Facchiano Construction $2,000 each. Michael Facchiano also received a prison sentence of six months followed by five years probation. In May 1985, following the mail fraud conviction, HUD initiated an administrative action to debar Michael Facchiano, Jr. and Facchiano Construction from HUD-sponsored contracts pursuant to 24 C.F.R. § 24.6(a)(1), (4), and (9) (1985). Under these regulations, HUD can debar contractors who have been convicted of crimes committed in the pursuit, the attempt to pursue, or the performance of public or private contracts, where the conviction(s) have put the contractors’ integrity in doubt or where the conduct involved is deemed “serious” by the Assistant Secretary of HUD. On May 15, 1985, HUD notified Michael Facchiano and Facchiano Construction of its proposed debarment and requested submission of briefs and supporting material in accordance with 24 C.F.R. § 24.7(a) (1985). In a final order dated March 5, 1986, the HUD administrative law judge ordered an 18-month debarment from contracts awarded by HUD. This order was not appealed. In December 1985, DOL notified appellants that it was initiating its own debarment proceeding under 29 C.F.R. § 5.12(b)(1) (1985). This regulation enables DOL to debar contractors for willfully violating the Davis-Bacon Act and other regulatory labor standards. DOL sought to debar appellants from all government contracts for three years. Rather than avail themselves of the opportunity to contest this second debarment in the administrative forum, appellants immediately sued in the District Court for the Western District of Pennsylvania, seeking a permanent injunction or a writ of mandamus to prevent DOL’s administrative proceedings. The district court issued a preliminary injunction staying the administrative proceedings pending the outcome of the suit. Both parties moved for summary judgment, and the district judge assigned the case to a magistrate for a report and recommendation. In their summary judgment memorandum, appellants contended that the DOL’s proposed debarment was founded on the same cause of action as the HUD debarment, and hence was barred by principles of claim preclusion. Acknowledging that the HUD debarment was based upon a conviction, and the DOL proceeding upon the underlying facts the concealment of which led to the conviction, appellants submitted that the distinction was without a difference and that the claims were essentially the same. In appellants’ view, DOL and HUD were privies, as agencies in the executive branch, and hence, DOL’s claim should have been raised in the prior debarment proceeding since otherwise the same government could repeatedly punish a contractor for the same conduct. DOL, however, rejoined that the HUD debarment had no claim preclusive effect on the DOL debarment proceeding precisely because the mail fraud conviction and the underlying regulatory violations represented different causes of action. The magistrate began by noting that exhaustion is not required when, by not observing the principles of preclusion, “ ‘the challenged agency action presents a clear and unambiguous violation of statutory or constitutional rights.’ ” App. at 147 (quoting Susquehanna Valley Alliance v. Three Mile Island, 619 F.2d 231, 245 (3d Cir.1980), cert. denied, 449 U.S. 1096, 101 S.Ct. 893, 66 L.Ed.2d 824 (1981). He found, however, that this case did not fall within this exception to the exhaustion doctrine. Then addressing the preclusion issue, he determined that the HUD and the DOL debarments were different in two respects: (1) the HUD debarment was limited to HUD contracts whereas the DOL debarment would be government wide; and (2) the HUD debarment was based on appellants’ criminal conviction whereas the DOL debarment would be based on the conduct underlying the mail fraud, i.e., the violations of the Davis-Bacon Act. The magistrate believed that, because of these differences, the two separate agency actions arose from different causes of action and subsumed different issues, and that neither issue preclusion or claim preclusion should apply. The magistrate therefore recommended that injunctive relief be summarily denied on the grounds that no preclusive effect exists and that, as a consequence, appellants failed to meet the requirements for the exception to the exhaustion doctrine. Adopting the magistrate’s recommendation and findings, the district court granted DOL’s motion for summary judgment. This appeal followed. II. The doctrine of exhaustion of remedies requires that parties first use all prescribed administrative measures for resolving a conflict before they seek judicial remedies. See Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-52, 58 S.Ct. 459, 463-64, 82 L.Ed. 638 (1938). This doctrine serves judicial economy by preventing piecemeal judicial review of agency actions and facilitates judicial review by allowing the administrative tribunal to use its exper tise to develop a complete factual record. See Cerro Metal Products v. Marshall, 620 F.2d 964, 970 (3d Cir.1980). Further, the doctrine serves to prevent the courts from frustrating congressional decisions to have certain disputes resolved originally in administrative forums. See Babcock & Wilcox Co. v. Marshall, 610 F.2d 1128, 1136 n. 21 (3d Cir.1979). The doctrine of claim preclusion is important in the administrative as well as the judicial context, because of the “obvious principle that a controversy should be resolved once, not more than once.” K. Davis, 4 Administrative Law Treatise § 219 (2d Ed.1983). In general, [w]here an administrative forum has the essential procedural characteristics of a court ... its determinations should be accorded the same finality that is accorded the judgment of a court. The importance of bringing a legal controversy to conclusion is generally no less when the tribunal is an administrative tribunal than when it is a court. Hence, the rule of claim preclusion is properly applied to administrative adjudications of legal claims. Restatement (Second) of Judgment § 83 comment b (1982). Thus, there are compelling reasons for allowing the doctrine of claim preclusion to operate in administrative determinations. We note, however, that preclusion does not apply in all administrative law cases. In United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966), the Supreme Court held that preclusion principles apply to administrative proceedings [only] when the administrative agency in the first action was “acting in a judicial capacity” and the parties had an adequate opportunity to present their case. See also Bowen v. United States, 570 F.2d 1311, 1320-21 (7th Cir.1978). Moreover, we have noted that administrative preclusion “must be tempered by fairness and equity” and is not as rigidly enforced as preclusion in judicial proceedings. Purter v. Heckler, 771 F.2d 682, 691 (3d Cir.1985). Nevertheless, “a valid and final adjudicative determination by an administrative tribunal has the same effects under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court.” Restatement (Second) of Judgments § 83(1) (1982); see also K. Davis, supra, § 21:2 (detailing the development of administrative preclusion). Therefore, an administrative tribunal cannot refuse to observe these preclusion principles when they do apply. In the case before us, the HUD debarment was sufficiently adjudicatory and final to enable appellants to raise a preclusion defense in the later DOL debarment. Appellants had ample notice, and they had an opportunity to present their case to the HUD AU in briefs and documentary evidence. Moreover, the HUD AU filed a detailed opinion containing his factual findings and rulings. In re Michael Facchiano, Jr. and Facchiano Construction Co., Inc., HUDBCA No. 85-962-D33 (March 5, 1986) [available on WEST-LAW, 1986 WL 19673]. Appellants do not argue that consideration of preclusion in the administrative tribunal would lead to inequities or unfairness, and we perceive none. We thus conclude that, unless the doctrine is somehow waived, the DOL AU must at least consider appellants’ preclusion defense, and concomitantly that the doctrine of exhaustion prevents the district court from deciding the preclusion defense in the first instance. III. As with many legal doctrines, the doctrine of exhaustion is not absolute. The doctrine exists within a court’s discretion rather than as a strict rule of law. See Cerro Metal Products, 620 F.2d at 970 (“Except when required by statute, exhaustion of administrative remedies is not an inexorable command, but is a matter of sound judicial discretion”); K. Davis, supra, § 26:1, at 414-417. This court has developed three broad exceptions to the doctrine: We have declined to require exhaustion [1] when the challenged agency action presents a clear and unambiguous violation of statutory or constitutional rights, [2] when resort to administrative procedures is “clearly shown to be inadequate to prevent irreparable injury,” or [3] when exhaustion is “futile.” Susquehanna Valley Alliance v. Three Mile Island, 619 F.2d 231, 245 (3d Cir.1980), cert. denied, 449 U.S. 1096, 101 S.Ct. 893, 66 L.Ed.2d 824 (1981) (citations omitted). We address the exceptions now, except that since there is no claim of futility, we need not address that exception. The requirement of exhaustion may be waived under the first exception in Susquehanna when an agency’s malicious prosecution and disregard for the principles of preclusion amount to a violation of a party’s due process. Appellants claim that this case falls within the due process exception to the exhaustion doctrine. They contend that they should not be required to litigate the DOL debarment in an administrative forum because the HUD debarment proceeding so clearly precludes other debarments by executive agencies. The applicable principle is summarized by Professor Moore: [That a] claim asserted in a subsequent proceeding is barred by the res judicata effect of a prior judgment is not itself grounds for an injunction against the claimant. Vexatious, damaging or harassing potentialities of the proceeding to be enjoined must be established to authorize relief. Bad faith, if any, of the party seeking relitigation, difficulties imposed by a subsequent suit or suits on the party seeking an injunction, in the expense of time, money and energy required to defend, and the effect of continued litigation on his business or reputation, are considered by courts when asked to enjoin relitigation of matters previously adjudged. J. Moore, J. Lucas & T. Currier, IB Moore’s Federal Practice II 0.408[2] (1988) (footnotes omitted). In Continental Can Co. v. Marshall, 603 F.2d 590 (7th Cir.1979), for example, the Court of Appeals enjoined the Occupational Safety and Health Review Commission (“OSHRC”) from citing the Continental Can Company for noise level violations. In 1973, an administrative law judge had vacated eight OSHRC citations against Continental Can because OSHRC’s interpretation of the statutory noise reduction standards was invalid. Despite this ruling OSHRC proceeded to litigate citations issued to sixteen other Continental Can plants under the same (invalid) interpretation. Since all of Continental Can’s eighty plants used the same machinery as the cited plants, the court found that Continental Can faced the possibility of relitigat-ing “the issue ‘over and over in an untold number of hearings.’ ” Id. at 596 (quoting the district court). The repetitious litigation in this case, therefore, amounted to “ ‘harassment of a capricious kind’ ” and violated Continental Can’s due process rights. Id. Since requiring Continental Can to face the administrative tribunal would only exacerbate this unconstitutional injury, the court deemed exhaustion waived. The circumstances in Continental Can are distinguishable from those before us for three reasons. First, Continental Can faced the possibility of relitigating the same issue an “untold” number of times because the OSHRC AU refused to apply preclusion to the relitigated issue. In the case at bar, there is no indication that either HUD or DOL (or any other government agency) would pursue any debarment actions other than those already taken. Moreover, DOL’s ALJ in the case at bar did not have a chance to address appellants preclusion defense before they sought in-junctive relief. Second, although we intimate no view on the underlying issue, it is undoubted that this case, on its face, does not present the elements of preclusion in an aggravated form as did Continental Can. This case involves two different agencies pursuing two debarments differing in length and scope under two different sets of regulations. Continental Can, on the other hand, involved the same agency trying repeatedly to relitigate what was undoubtedly the same issue against the same company. Third, unlike the Continental Can Company, appellants lost their earlier administrative proceedings; therefore, DOL was not harassing a previously vindicated party. See International Harvester Co. v. Occupational Safety and Health Review Commission, 628 F.2d 982, 986 n. 4 (7th Cir.1980) (distinguishing Continental Can and finding no harassment because OSHA had not repeatedly cited Harvester for conduct that was previously found lawful). In addition to the foregoing, DOL’s action does not rise to the level of vexatiousness because we cannot see, nor do appellants show us, how they will be harmed by litigating in the administrative forum. Appellants give no indication that the administrative action would impose intolerable litigation costs. Cf. United States v. American Honda Motor Co., 273 F.Supp. 810, 819 (N.D.Ill.1967) (finding repetitious litigation vexatious because it involved subpoenas calling for more than 6,000 pages of documents from all over the country). Appellants have failed to show that the DOL debarment proceeding will amount to a clear and unambiguous violation of their statutory or constitutional rights. We find no evidence that the administrative litigation would be any more costly than the litigation before us; in fact, we think it more likely that the administrative litigation could have been more efficient and economical than appellants’ pursuit of an injunction. Indeed, even if the administrative tribunal rejects the preclusion defense, it still might feel no need to impose any additional penalties on the appellant. In sum, this case does not fall within the exception to the exhaustion doctrine carved out by Continental Can and Babcock because, even if appellants have a valid claim preclusion defense, DOL’s action does not amount to vexatious prosecution. IV. The short of it is that, rather than seeking to enjoin the DOL debarment through collateral judicial action, appellants must first try to litigate their case before an administrative officer. By seeking to enjoin the administrative proceedings, appellants have closed off an efficient administrative forum in which to resolve a number of issues. Absent any indication of a due process violation or vexatious prosecution, we find no reason to frustrate the policies underlying the doctrine of exhaustion by circumventing the doctrine. We will therefore affirm the judgment of the district court insofar as it denied injunctive relief. However, because the opinion of the district court adjudicates the merits of the preclusion issue, we will vacate it so that the agency may resume its own proceedings and address the issue. . DOL also sought to debar Michael Facchiano, Sr., who is not a party to this suit. . Although appellants requested an oral hearing, they were not entitled to a hearing under 24 C.F.R. § 24.5(c) (1985). App. at 33a. The HUD administrative law judge therefore based his determinations on the documentary evidence and written briefs submitted by the parties. . Although appellants also relied upon issue preclusion, that doctrine would not appear apposite. Moreover, it would appear to be of doubtful utility to appellants since all the issues in the HUD debarment were decided against appellants.
5918042-13285	OPINION THOMAS, Circuit Judge: This case requires us to decide whether an attorney who prepares an order to show cause for a judge is entitled to absolute quasi-judicial immunity. We hold that he is not and affirm the judgment of the district court. I Freddy Joe Burton (“Burton”) was injured in a bicycle-automobile collision. He incurred $271,101.87 in related medical expenses and loans and retained Jan Paul Koch (“Koch”) to file a lawsuit on his behalf. Burton granted certain creditors, including Valley Hospital Medical Center, liens on his personal injury claim. Valley Hospital then sold its account receivable to Infinity Capital Management (“Infinity”), the president of which is Anne Pantelas (“Pantelas”). Koch settled Burton’s personal injury claim for $185,000. Koch placed the settlement funds in his client trust fund account and paid himself his attorney fee and costs. Koch then recommended that Burton declare bankruptcy and hire bankruptcy attorney David Crosby (“Crosby”). After paying a retainer fee to Crosby and receiving his personal injury settlement exemption, Burton had $104,088.10 left of his settlement in the trust fund account. That same month, Nancy Allf (“Allf’), who represented Infinity at the time, told Koch that a state interpleader action would resolve the interests of the lien holders more quickly than the bankruptcy court. Infinity filed an interpleader lawsuit in state court against all other similarly situated lien holders making a claim upon Burton’s settlement. Neither Burton nor Koch were named as parties in the state interpleader case. The Honorable Ronald Israel (“Judge Israel”) was assigned to the case. Salvatore Gugino (“Gugino”) was substituted for Allf as Infinity’s attorney of record. Crosby filed Burton’s bankruptcy petition in bankruptcy court. Four days later, Judge Israel held a status hearing on the state interpleader case, and Koch attended that hearing at Judge Israel’s request. At the hearing, Gugino appeared for Infinity, and Steven Baker (“Baker”) appeared for one of the defendants in the case. Judge Israel questioned Koch as to why he had not interpled all of the funds that Burton had received for his settlement to the court clerk as required by Michel v. Eighth Judicial District Court ex rel. County of Clark, 117 Nev. 145, 17 P.3d 1003 (2001). Koch informed Judge Israel that Burton had filed bankruptcy and he would be depositing the remaining settlement funds with the bankruptcy clerk. Those present at the hearing were confused about the proper course to take given the bankruptcy proceeding and the fact that Burton was neither a plaintiff nor defendant in interpleader. Both Gugino and Baker voiced concern about the inter-pleader case moving forward in light of the bankruptcy. Judge Israel ordered the parties to appear approximately two months later for a status hearing regarding the state of the bankruptcy proceeding. Three days before the status hearing, Gugino sent all parties to the interpleader case and Koch a letter with a copy of the minutes from the prior hearing and an update on the bankruptcy case, including both an explanation of his initial attempt to resolve the interpleader issue with the trustee and confirmation that Koch had deposited the settlement funds with the trustee. Koch did not appear at the status hearing. At the hearing, Gugino handed a copy of his letter to Judge Israel, and he informed the court that Koch had deposited the settlement funds with the bankruptcy trustee. Judge Israel responded, “I ordered Mr. Koch to place all the funds in here.... I’m going to issue an order to show cause. I want Mr. Koch to appear and show — tell us why he didn’t deposit his attorney’s fees into — pursuant to Michel. ... I want him to personally appear and tell why he hasn’t; otherwise, I’ll hold him in contempt.” Neither Gugino nor Baker voiced any opposition to Judge Israel in light of the bankruptcy. The following colloquy then occurred: MR. GUGINO: Well, the plaintiff in the case, the injured party was — in addition to the — the money that Mr. Koch was giving himself for his attorney’s fees, he also paid Mr. Burton 16,500 under NRS 21.090. So. MR. BAKER: Which is a fraudulent transfer. THE COURT: So— MR. GUGINO: I — I don’t know what to say. THE COURT: — is—well, obviously the bankruptcy court’s going to have to deal with part of that, but who wants to prepare the order? MR. GUGINO: What day? THE COURT: Mr. Gugino? MR. GUGINO: IT prepare it, Your Honor. THE COURT: Thirty days. THE CLERK: Thirty days, we’ll set it for July 11th and that’ll be 9 a.m. MR. GUGINO: Okay. On that same day, Gugino prepared a proposed order to show cause and sent it to all of the interpleader parties and Koch. A cover letter stated that, unless Gugino heard from them to the contrary, he would assume it met with their approval and would submit it to the court for the judge’s signature. The proposed order ordered Koch to appear “to explain to [the court] why he should not be held in contempt for failure to comply with Michel ... as directed by [the court].” That same day, Koch replied by sending Gugino a fax objecting to the order and stating, “You are violating the automatic stay provisions of 11 U.S.C. § 362.” The following day, Koch sent Gugino a fax and a fourpage letter. The letter stated that the automatic stay prevented proceedings directed toward the property of the bankruptcy estate, threatened that he would file a complaint against Gugino, Infinity, Pantelas, and Judge Israel if “at any time [he] bec[a]me aware of further action in the Infinity litigation (pursued by anyone ),” and made personal attacks on Gugi-no’s competency. The fax stated that the complaint was “90% complete” and included a draft copy of the seven-page complaint. The order drafted by Gugino was never filed. Instead, Judge Israel faxed the minute order from the June 6th status check hearing to the parties of the interpleader case and Koch. The minute order stated: Mr. Gugino noted the letter provided to the Court changes things. Mr. Gugino further noted Mr. Koch took the remaining money and gave it to the bankruptcy trustee. Colloquy regarding Mr. Koch not present today and issues regarding following the Michel Case. Court directed Counsel to prepare an order for a show cause hearing and Court set hearing. COURT ORDERS All parties to appear, including Mr. Koch, to advise the Court of; 1.The bankruptcy. 2. Why the bankruptcy can effect [sic] and stay these proceedings, since Mr. Burton is not a party to this action. 3. Why Mr. Koch should interplead the entire proceeds of the settlement per the Michel case into this court immediately. 4. Status on lifting the stay. COURT ORDERED Matter re-set from a show cause hearing to a Status Check regarding: bankruptcy / interpleader. Later that day, Gugino faxed a letter to Koch that included the minute order. The letter stated in part: First, let me make it clear that you did not attend the June 6, 2011 status check before Judge Israel, even though you were aware of the hearing date. Had you been present, all of this might have been avoided. At the hearing, I presented the Court with my June 3, 2011 letter and attachments, which had been previously sent to you and the attorneys involved in this litigation. It was my expectation that we would be going forward in the Bankruptcy Court under some sort of stipulation and order. However, at the hearing, Judge Israel ordered that an Order To Show Cause be issued against you, and he then directed me to prepare the Order. This was not my idea, nor did I recommend it to the Court. After preparing a draft of the proposed Order, I sent it to your attention for your review. Had you called me upon receipt, you could have avoided incurring the hours you claim to have spent preparing a class action complaint against my client, her company, myself and Judge[ ] Israel.... Gugino also included a footnote stating, “It is not my habit to refuse to obey a directive of a judge. I simply followed his directive to prepare a draft of the order. ...” Later that same day, Koch faxed a response to Gugino stating, “In response to your 6-9-11 letter.... Attached hereto please find the rough draft of the Federal Lawsuit that I am filing.” The following day, Koch sent Gugino a copy of a Memorandum in Support of Jurisdiction by fax and stated in part, “Why don’t you dismiss the interpleader, and get your funds from the bankruptcy trustee? Otherwise, what do you suggest? I’ll hold up and won’t send copies to Judge Israel, pending your reply.” Nearly a month later, Koch sent Gugino a fax stating, “Don’t know why you never responded to my last entreaty. Guess it matters not. It’s been filed. Here’s a copy. See ya in Court.” Koch then filed a complaint in federal district court, on behalf of himself and Burton, alleging that all defendants violated the automatic-stay provision of 11 U.S.C. § 362(a). He claimed actual damages of $1,000, plus attorney fees, and sought “damages in excess of $10,000.” Judge Israel filed a motion to dismiss the complaint, arguing that Koch’s claims were barred as a matter of law by the doctrine of absolute judicial immunity. Gugino filed a separate motion to dismiss, arguing that because his acts were taken under the direction of Judge Israel, Koch’s claims were barred by the doctrine of absolute quasi-judicial immunity. The district court converted both motions to dismiss into motions for summary judgment because the parties attached various exhibits outside of the pleadings. The court held Judge Israel was entitled to absolute judicial immunity. However, the court held “Gugino [was] not entitled to quasi-judicial immunity because Gugino volunteered to prepare the order in direct violation of the stay. Gugino had a duty to not prepare or present the order.” This appeal followed. We review a district court’s order denying a converted motion for summary judgment de novo. Lewis v. United States, 641 F.3d 1174, 1176 (9th Cir.2011). We must view the evidence in the light most favorable to the nonmoving party, here Koch and Burton. Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir.2001). The proponent of a claim for absolute immunity “bears the burden of establishing that such immunity is justified.” Curry v. Castillo (In re Castillo), 297 F.3d 940, 947 (9th Cir.2002). II This case does not concern whether the automatic stay is violated when an attorney drafts, at the behest of a judge, an order to show cause that was never filed, much less whether such an act is actionable in a damage suit under 11 U.S.C. § 362(k). Rather, the sole question in this appeal is whether an attorney who drafts an order at the request of a judge is entitled to absolute quasi-judicial immunity. We conclude that he is not. Absolute judicial immunity “insulates judges from charges of erroneous acts or irregular action.” Castillo, 297 F.3d at 947 (citing Forrester v. White, 484 U.S. 219, 227-28, 108 S.Ct. 538, 98 L.Ed.2d 555 (1988)). Absolute immunity “is not reserved solely for judges, but extends to nonjudicial officers for ‘all claims relating to the exercise of judicial functions.’ ” Id. (quoting Burns v. Reed, 500 U.S. 478, 499, 111 S.Ct. 1934, 114 L.Ed.2d 547 (1991) (Scalia, J., concurring in part and dissent ing in part)). “The Supreme Court has been quite sparing in its recognition of absolute immunity, and has refused to extend it any further than its justification would warrant.” Id. (internal quotation marks and alterations omitted). The justification for absolute immunity is the protection of the judicial process. It shields independent and impartial adjudication and prevents the “deflection of [an officer’s] energies from his public duties.” Burns, 500 U.S. at 485, 111 S.Ct. 1934. The Supreme Court has “made it clear that it is the interest in protecting the proper functioning of the office, rather than the interest in protecting its occupant, that is of primary importance.” Kalina v. Fletcher, 522 U.S. 118, 125, 118 S.Ct. 502, 139 L.Ed.2d 471 (1997). Thus, we take a functional approach to determining whether a nonjudicial officer is entitled to absolute quasi-judicial immunity by looking to “the nature of the function performed and not to the identity of the actor performing it.” Castillo, 297 F.3d at 948. To qualify for absolute immunity, the function performed must be a judicial act with “a sufficiently close nexus to the adjudicative process.” Id. However, “it is only when the judgment of an official other than a judge involves the exercise of discretionary judgment that judicial immunity may be extended to that nonjudicial officer.” Id. at 949. The Supreme Court established the requirement for discretionary judgment in Antoine v. Byers & Anderson, Inc., where it declined to extend the immunity to court reporters because transcribing verbatim transcripts does not involve the level of authoritative or “discretionary decision-making that the doctrine of judicial immunity is designed to protect.” 508 U.S. 429, 435, 113 S.Ct. 2167, 124 L.Ed.2d 391 (1993). To be protected, the function performed must “involve the exercise of discretion in resolving disputes.” Castillo, 297 F.3d at 948 (citing Antoine, 508 U.S. at 435, 113 S.Ct. 2167).
7399166-12232	RULING ON MOTION FOR SUMMARY JUDGMENT DORSEY, District Judge. 1. Facts and Procedural History “On August 5, 1976, while an employee of the United States Postal Service, defendant filed a claim for benefits under the Federal Employees’ Compensation Act (‘FECA’),” Statement, Ti 1, for hypertension, cephalalgia, sleeplessness, and high blood pressure, allegedly as a result of occupation related events. Apparently, in the early 1970s, defendant, along with a number of associates, owned several parcels of property in Stamford, Connecticut, which were offered for sale to the Postal Service. Defendant’s involvement with these properties and his potential conflict of interest prompted investigations by his superiors and the United States Attorney. A subsequent indictment resulted in defendant’s eventual conviction in 1979 on a charge that he participated, as a government employee, in a decision or recommendation which he knew he had a financial interest, in violation of 18 U.S.C. § 208(a). See Employees’ Compensation Appeals Board (“ECAB”) Decision and Order (3/18/82). Defendant claimed that the investigations, the suspension of further merit increases until the investigations were concluded, and the attack on his honor and integrity caused his medical problems. Id. “Compensation was awarded from September 30,1976 through February 28,1977 and April 1977 through February 5, 1981.” Statement, 113. “On February 23, 1981 the Director of Office of Workers’ Compensation Programs (“OWCP”) issued an order rejecting defendant’s claims.” Id., ¶ 4. The Director found that defendant’s medical problems were not the result “of his Federal employment as a Postmaster, but related to his outside business activities.” Compensation Order at 1 (2/23/81). Defendant’s subsequent application for review was denied. Statement, ¶¶ 6-7. After the OWCPL’s decision, defendant was informed that he had been overpaid in the amount of $102,329.32. Id., 119. Defendant sought review of both the denial of his benefits and a review of the overpayment order. Id., 111111-15. On March 18, 1982, the ECAB affirmed OWCP’s decision denying defendant further benefits. Id., HIT 16-17. “On August 9, 1984 an OWCP hearing representative (“HR”) conducted a hearing on the issues of: a. overpayment; b. amount of overpayment; c. existence of absence of fault by defendant.” Id., 1122. The HR found that the correct amount of overpayment was $102,-329.32 and that defendant was not without fault in causing the overpayment. See Decision of HR (1/25/85). Specifically, the HR found that defendant should have known that he was not entitled to benefits because his problems related to his “outside business association and his financial interest in certain parcels of property.” Id. at 4. By representing that his medical problems were job related, defendant was found to have violated 5 U.S.C. § 8129(a). “On July 23,1985 OWCP moved the ECAB to remand for a further hearing as there had been an incorrect finding as to [defendant’s] fault.” Statement, 1126. The motion was subsequently granted. Id., 1128. On remand, the HR issued a new decision on January 7, 1986, and found defendant without fault in creating the overpayment. Id., UK 30-32. However, waiver of the overpayment was denied. Although defendant was found to be without fault in causing the payments, the HR concluded that recovery would not defeat the purpose of the FECA and would not be against equity and good conscience. This conclusion was based on the HR’s finding that defendant had sufficient assets to afford repayment. Defendant appealed the HR decision on April 9, 1986. On March 31, 1987, the ECAB affirmed the HR’s decision denying a waiver based on defendant’s estimated asset worth of $584,833.78. See ECAB Decision and Order (3/31/87). Several demand letters have subsequently been sent to defendant requesting overpayment. No payment has yet been made. On October 2, 1987, plaintiff instituted this action seeking recovery from defendant of the $102,329.32 in FECA over-payments made to him, plus interest to date of judgment. Defendant denies plaintiff's entitlement to repayment on the basis that the procedures “followed by the U.S. Department of Labor, Office of Workers’ Compensation Programs in purporting to determine and assess the amount of alleged overpayment to defendant violated the due process rights guaranteed to the defendant by the Fifth Amendment to the U.S. Constitution.” Defendant’s Answer at 1. Plaintiff has moved for summary judgment. For the reasons set forth herein, the motion is denied in part and granted in part. II. Discussion A.Summary Judgment ... Fed.R.Civ.P. 56(c) provides, in part, that summary judgment shall be rendered only when a review of the entire record demonstrates “that there is no genuine issue as to any material fact.” The burden falls on the moving party to establish that no relevant facts are in dispute. Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1319-20 (2d Cir.1975); accord Addickes v. S.H. Kress & Co., 398 U.S. 144, 157 [90 S.Ct. 1598, 1608, 26 L.Ed.2d 142] (1970). Moreover, in determining whether a genuine issue has been raised, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 [82 S.Ct. 993, 994, 8 L.Ed.2d 176] (1962) (per curiam); Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980). Properly employed, summary judgment allows the court to dispose of meritless claims before becoming entrenched in a frivolous and costly trial. Knight v. U.S. Fire Ins. Co., 804 F.2d 9 (2d Cir.1986), cert. denied, [— U.S. -], 107 S.Ct. 1570 [94 L.Ed.2d 762] (1987). It must, however, be used selectively to avoid trial by affidavit. Judge v. Buffalo, 524 F.2d 1321 (2d Cir.1975). Hence, the fundamental maxim remains that on a motion for summary judgment a court “cannot try issues of fact; it can only determine whether there are issues to be tried.” Heyman, 524 F.2d at 1319-20. As long as the plaintiff has adduced sufficient facts to substantiate the elements of his claim, summary judgment is inappropriate. Celotex Corp. v. Catrett, [477 U.S. 317] 106 S.Ct. 2548, 2554 [91 L.Ed.2d 265] (1986). Donahue v. Windsor Locks Bd. of Fire Comm’rs, 834 F.2d 54, 57-58 (2d Cir.1987). B. Plaintiffs Argument Relying principally on 5 U.S.C. § 8128(b), plaintiff contends that the decision of March 31, 1987, is final and unreviewable. Section 8128(b) provides, in relevant part: The action of the Secretary or his desig-nee in allowing or denying a payment under this subchapter is— (1) final and conclusive for all purposes and with respect to all questions of law and fact; and (2) not subject to review by another official of the United States or by a court by mandamus or otherwise. Under plaintiff’s reading of the statute, the court only has the authority to hear constitutional challenges to the actions of the Secretary. It argues that defendant’s fifth amendment challenge in this case is merit-less as it is clear that the Secretary followed the regulations set out at 20 C.F.R. § 10.321 and in so doing provided defendant the process to which he was due. C. Defendant’s Argument Defendant argues that § 8128(b) does not preclude judicial review in this instance as he is not seeking reconsideration of a decision “allowing or denying payment,” but the decision on his obligation to reimburse the government for payments which were found in retrospect to have been incorrectly made. His contention, therefore, is that denial of judicial review of the Secretary’s decision in this regard would amount to a deprivation of property without due process of law. Defendant also argues that whether repayment would defeat the purpose of the FECA or “would be against equity and good conscience” are questions which are inappropriate for summary judgment. III. Conclusion A. Constitutional Challenge Plaintiff concedes that the court is authorized to hear constitutional challenges to the Secretary’s actions. See Paluca v. Secretary, 813 F.2d 524, 526 (1st Cir.), cert. denied, — U.S. -, 108 S.Ct. 328, 98 L.Ed.2d 355 (1987), citing Rodrigues v. Donovan, 769 F.2d 1344, 1347-48 (9th Cir. 1985) (§ 8128(b)’s language “under this subchapter” “refers to statutory, and not constitutional action”). One may not circumvent the statute by disguising a claim for benefits or an objection to the denial of benefits as a constitutional challenge. Traynor v. Walters, 791 F.2d 226, 228 (2d Cir.1986), cert. granted, — U.S. -, 107 S.Ct. 1368, 94 L.Ed.2d 684 (1987); Pappanikoloaou v. Administrator of the VA, 762 F.2d 8, 9 (2d Cir.), cert. denied, 474 U.S. 851, 106 S.Ct. 150, 88 L.Ed.2d 124 (1985). To be considered, the Secretary’s actions must be challenged as constitutionally defective, viz, in this case, that the decision to recoup and determine the amount of the alleged overpayment constituted a deprivation of property without due process of law. In this light, defendant’s argument that these questions are inappropriate for summary judgment is unsound. Whether the Secretary made the correct decision depends on the merits of the dispute and presents a statutory challenge; whether he afforded defendant the due process rights guaranteed to him by the fifth amendment is a constitutional question and does not involve the merits of the dispute. The correctness of the decision raises questions of material fact which preclude summary judgment. See infra. The due process issue poses no questions of fact and warrants the entry of judgment for plaintiff. Defendant had a property interest in the retention of the benefits paid to him. See Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). Before he is deprived of that interest he must be afforded notice and opportunity for a hearing appropriate to the nature of the case. Bell v. Burson, 402 U.S. 535, 542, 91 S.Ct. 1586, 1591, 29 L.Ed.2d 90 (1971). “Procedural due process rules are meant to protect persons not from the deprivation, but from the mistaken or unjustified deprivation of life, liberty, or property.” Carey v. Piphus, 435 U.S. 247, 259, 98 S.Ct. 1042, 1050, 55 L.Ed.2d 252 (1978). In determining what process is due, “we must weigh the strength of the individual’s interest, the risk of erroneous deprivation, the probable value, if any, of requested additional procedures, and the state’s interest in providing (or not providing) those procedures.” Baden v. Koch, 799 F.2d 825, 831 (2d Cir.1986); accord Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). The record illustrates the procedures afforded defendant to ensure that his position was heard and considered. Those procedures, detailed at 20 C.F.R. § 10.321, undeniably provide defendant with the notice and opportunity to be heard to which he is constitutionally entitled. The record also illustrates that defendant took advantage of each of these procedures. Indeed, he succeeded in obtaining a reversal of the HR’s initial decision that he was at fault in causing the benefits to be paid. Defendant’s only claim as to this procedure is that the court should be part of the process. But the fifth amendment does not require that the courts act as forums for final review on the merits of individual cases. Bishop v. Wood, 426 U.S. 341, 349-50, 96 S.Ct. 2074, 2079-80, 48 L.Ed.2d 684 (1976). It only requires that the court ensure that the procedures afforded one whose life, liberty or property is subject to deprivation are adequate. The procedures set out at § 10.321 are found to be adequate and have been provided to defendant. Accordingly, so much of the defense which is based on a constitutional challenge must be rejected and summary judgment entered for plaintiff in this regard. B. Statutory Challenge The heart of defendant’s challenge is that he is entitled to review of the Secretary’s decision that requiring him to return the payments would be consistent with the purposes of the FECA and not against equity or good conscience. As noted previously, this question and the question regarding how much money should be repaid are not constitutional challenges, but challenges to the application of the statute.
1753267-7800	MURPHY, Circuit Judge. This appeal is taken from an order of the district court dismissing a verified civil rights complaint filed pursuant to 28 U.S.C. § 1983 by Jody Mapp, who was at the time an inmate at the Wyoming State Penitentiary. In his complaint, Mr. Mapp sought damages and injunctive relief, alleging the denial of medical care in violation of the Eighth Amendment to the United States Constitution. See Appellant’s App., Vol. I at 1-14. Specifically, he contended that prison officials had shown deliberate indifference to two serious medical needs — diabetes and hypertension. See id. at 5. The magistrate judge, upon determining that Mr. Mapp had alleged imminent danger of serious physical injury, granted leave to proceed in forma pauperis in December of 1997. See 28 U.S.C. § 1915(g). Mr. Mapp filed numerous subsequent pleadings, including an application for a temporary restraining order/preliminary injunction, see Appellant’s App., Vol. I at 43-50; a motion for limited discovery, see id. at 51-52; a request for production of documents (primarily those relating to his and other inmates’ medical care), see id. at 81-85; a “request for judicial notice,” and an addendum thereto, detailing his inability to secure needed medical treatment and the consequences, which included temporary blindness, denial of insulin for over a year, and improper diet, see id. at 86-101; and an opening brief, see id. at 105-16. He also filed several affidavits in support of his claims, see id. at 26-32, 120-21, ISO-37. In March of 1998, Mr. Mapp moved for a court-ordered physical examination. See id. at 117-19. In his accompanying affidavit, he claimed that his life was in danger because of the indifference of defendants to his medical problems. Mr. Mapp also expressed fear of losing his sight, potential limb amputations, and heart problems associated with the diabetes and hypertension. See id. at 120-21. Also in March, the magistrate judge granted Mr. Mapp’s motion to compel discovery. See. id. at 122-23. That order was vacated a week later with the notation that defendants had not been served with the complaint, see id. at 125, which was the last action taken by the magistrate judge in this case. The following month Mr. Mapp underwent quadruple open heart bypass surgery. See id. at 196. In August, the district court dismissed the complaint for failure to state a claim for relief and for failure to pay the filing fee, having determined that Mr. Mapp’s allegations amounted to a mere disagreement as to his medical treatment, not giving rise to a constitutional cause of action. See id. at 145-51. Mr. Mapp filed a timely motion to alter or amend the judgment under Fed. R.Civ.P. 59(e), along with a statement of disputed facts, an affidavit and a memorandum, see id. at 152-72, arguing that the district court had improperly resolved disputed issues of fact. He also tendered an amended complaint. Mr. Mapp died in the prison infirmary on October 31, 1998, of acute blockage of the coronary artery bypass graft. See Appellant’s Br. at 4. The district court subsequently denied the motion to alter or amend and leave to submit an amended complaint. See id. at Appendices E and F. We have substituted the co-administrators of Mr. Mapp’s estate as appellants. We review the dismissal of Mr. Mapp’s complaint de novo. See Perkins v. Kansas Dep’t of Corrections, 165 F.3d 803, 806 (10th Cir.1999) (holding standard of review of complaint dismissed under 28 U.S.C. § 1915(e)(2)(B)(ii) for failure to state a claim is de novo). Dismissal of a pro se complaint for failure to state a claim is proper only where it is obvious that the plaintiff cannot prevail on the facts he has alleged and it would be futile to give him an opportunity to amend. In determining whether dismissal is proper, we must accept the allegations of the complaint as true and we must construe those allegations, and any reasonable inferences that might be drawn from them, in the light most favorable to the plaintiff. Further, we must liberally construe the allegations of a pro se complaint. See id. (citations omitted). Here, the district court recognized that Mr. Mapp had alleged that his medical needs were serious, but concluded that Mr. Mapp had “failed to allege a factual basis to establish that the defendants were deliberately indifferent to his health.” See Appellant’s App., Vol. I at 148. We disagree. Mr. Mapp alleged that a heart attack he suffered in August of 1997 and the subsequent bypass surgery were caused by the inadequate treatment he received for his diabetes and hypertension. See id. at 140-41. He alleged that in June of 1996 he was denied insulin by a doctor even though it had been earlier prescribed for him by another prison doctor. See id. at 130. He further claimed that this denial lasted over a year, see id. at 131, and that he was only able to obtain it as a result of an apparent heart attack in 1997, see id. The district court so noted in the statement that “he [Mr. Mapp] states that Dr. Long did not believe there was a need for insulin, but that he [Mr. Mapp] was later given insulin.” See id. at 149. However, Mr. Mapp further contended that once he was released from the hospital back to the prison (apparently after a three-day stay), insulin was again denied him. See id. at 131. Mr. Mapp also alleged that certain medically-recommended procedures were not performed, see id. at 118, 132; that he was denied proper diagnosis and treatment because of the lack of a primary-care physician employed at the prison, see id. at 135; that special diets prescribed for him were not provided, see id. at 135-36; that prescribed medication was confiscated by prison officials, see id. at 136; and that he was not treated for elevated blood sugar (caused by the diabetes) or his chronic hypertension, see id. at 108. We cannot agree with the district court that the facts as alleged by Mr. Mapp, which we must at this stage of the proceedings accept as true, reflect a “mere disagreement with his medical treatment,” not giving rise to a constitutional claim. See id. at 149. Nor does the fact that he has seen numerous doctors necessarily mean that he received treatment for serious medical needs, i.e., that treatment was prescribed at all or that prescribed treatment was provided. Prison officials violate the Eighth Amendment’s prohibition against cruel and unusual punishment when they act deliberately and indifferently to serious medical needs of prisoners in their custody. This is true whether the indifference is manifested by prison doctors responding to the prisoner’s needs or by guards’ intentionally delaying or denying access to medical care that has been prescribed. See Estelle v. Gamble, 429 U.S. 97, 104-06, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976). Deliberate indifference has both an objective and subjective component. See Farmer v. Brennan, 511 U.S. 825, 834, 114 S.Ct. 1970, 128 L.Ed.2d 811 (1994). The medical need must be sufficiently serious to satisfy the objective component. See id. We have held that a medical need is sufficiently serious “if it is one that has been diagnosed by a physician as mandating treatment or one that is so obvious that even a lay person would easily recognize the necessity for a doctor’s attention.” Ramos v. Lamm, 639 F.2d 559, 575 (10th Cir.1980) (quotation omitted). In terms -of the subjective component, i.e., the requisite deliberate indifference, a plaintiff must establish that defendant(s) knew he faced a substantial risk of harm and disregarded that risk, “by failing to take reasonable measures to abate it.” Farmer, 511 U.S. at 847, 114 S.Ct. 1970. The Eighth Amendment also protects against future harm to an inmate. See Helling v. McKinney, 509 U.S. 25, 33, 113 S.Ct. 2475, 125 L.Ed.2d 22 (1993).
1409708-4147	GOURLEY, District Judge. This matter relates to a motion for new trial. The plaintiff is a resident of Pennsylvania and the defendant a Maryland corporation. The accident occurred in Pennsylvania. Federal jurisdiction is based solely on diversity of citizenship. The Court must, therefore, apply the law of the state in which the action is brought, including such state’s conflict of laws rules. Reference must, therefore, be made to the place of the tort for the legal effect to be given the facts and evidence. Moran v. Pittsburgh-Des Moines Steel Co., 3 Cir., 166 F.2d 908; Erie Railroad Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188. Pennsylvania law, therefore, applies. Bernard A. Farabaugh and Anna Fara-baugh, his wife, brought action against the defendant for damages resulting from the alleged negligence of the defendant, in causing a collision between defendant’s train and the automobile owned and operated by Bernard A. Farabaugh. Anna Fara-baugh was a passenger in said automobile. The actuality of the accident is not disputed. It occurred at about 12:30 P. M., on November 25, 1948, at Leeper, Pennsylvania, when the plaintiff’s automobile, proceeding southwardly on Pennsylvania Highway Route No. 36, was struck on the right side by the defendant’s train, at an unguarded railroad crossing. The case was administered by jury trial and verdict returned in favor of the defendant, Baltimore and Ohio Railroad Company. Interrogatories were submitted to the jury, each of which was answered consistent with the verdict. The jury found in answer to the interrogatories that the -defendant was not guilty of negligence and that the accident was caused by the contributory negligence of the plaintiff, Bernard A. Farabaugh. It is contended in the motion for new trial- — (1) The verdict was against the evidence. (2) The verdict was against the weight of the evidence. (3) The verdict was against the law. (4) The verdict was against the charge of the Court. It is my duty to recognize that the Court is not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions, or because the Court regards another result as more reasonable. Tennant, Administratrix, v. Peoria & Pekin Union Ry. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520; Masterson v. Pennsylvania R. R. Co., 3 Cir., 182 F. 2d 793. It is earnestly presented that it was error, over objection of the plaintiff, to permit the defendant to recall an employee witness for further direct examination, which was subsequent to a recess and after the witness had been examined on direct and cross-examination. The testimony of said witness was materially changed as to the circumstances which existed prior to and at the time of the accident. He explained that during recess he had read a written statement given to an investigator for the defendant a short time after the accident; that his memory had been refreshed and he realized his previous statements were incorrect. The matter of recalling witnesses is ordinarily within the discretion of the trial judge. United States v. Klass, 3 Cir., 166 F.2d 373; Hauck v. Frey, D.C., 228 F. 779; Faust v. United States, 163 U.S. 452, 16 S.Ct. 1112, 41 L.Ed. 224; Wigmore on Evidence, Vol. VI, 3rd Ed., §§ 1867 and 1898. Where a witness is recalled to testify after his direct and cross-examination, he should be permitted to state the reason for altering or modifying his testimony. This should be allowed in order that the jury could properly evaluate the credibility to be given the whole of the testimony presented by said witness. In the exercise of my discretion, I believe it was proper to permit said witness to be recalled under all the circumstances. The question raised as to the admissibility of defendant’s photographs is without merit. I do not believe the verdict was against the evidence, the weight of the evidence or against the law. It is contended the instructions as to the duty of the defendant to give warning to the users of a public highway that the tracks of the railroad intersect or cross the highway was improper.
780966-24684	OPINION OF THE COURT AMBRO, Circuit Judge. Reliance Standard Life Insurance Company argues that the District Court incorrectly held arbitrary and capricious its determination that Stephen Lasser was not disabled within the terms of his disability insurance policy. We conclude that the Court did not err and therefore affirm. I. Background Dr. Stephen Lasser is an orthopedic surgeon who was employed by Townsquare Orthopedic Associates (“Townsquare”), a four-doctor practice group. He sued to obtain disability benefits he alleges Reliance Standard Life Insurance Company (“Reliance”) owes him under the disability insurance policy Townsquare purchased from Reliance (the “Policy”). The Policy pays disability benefits when, because of injury, illness or disease, a claimant “is capable of performing the material duties of his/her regular occupation on [only] a part-time basis or [only] some of the material duties on a full-time basis.” Dr. Lasser suffers from coronary artery disease. In 1986, at age 46, he underwent coronary bypass surgery. As later became apparent, the surgery was not correctly performed. Although Dr. Lasser did not experience symptoms for the next decade following the 1986 surgery, in 1996 he suffered a myocardial infarction (colloquially, a “heart attack”). Dr. Robert Aid-rich, Lasser’s treating physician, prescribed a treatment regimen of change of diet, exercise, and drug therapy. Dr. Aid-rich also advised Lasser to reduce his stress level, including work-related stress. Accordingly, in September 1996 Dr. Las-ser returned to work on a reduced schedule. He decreased his patient load by 50%, he was no longer “on-call” at night or on weekends, and he did not perform emergency surgery. On December 26, 1996, Reliance approved Dr. Lasser’s application for long-term disability benefits under the Policy. However, in December 1997, after a periodic review of Dr. Lasser’s condition — and primarily in response to a medical evaluation issued by Dr. William Burke, whom Reliance hired to evaluate Dr. Las-ser — Reliance terminated Lasser’s benefits on the ground that he was not disabled as defined by the Policy. Dr. Lasser invoked Reliance’s administrative appeal procedures, which prompted Reliance to obtain two additional medical opinions — from Drs. Karel Raska and John Field — as well as to commission a labor market survey to determine the material duties of Dr. Lasser’s general occupation. Based on these medical opinions and the survey — as well as the fact that Dr. Lasser returned to work at a full-time schedule (including on-call and emergency surgery duties) — in April 1999 Reliance concluded that Dr. Lasser was not disabled from performing the material duties of his occupation and affirmed its earlier denial of benefits. Dr. Lasser then filed a complaint in the District Court. In a February 8, 2001 opinion, it denied both parties’ cross-motions for summary judgment and stated that it would hold a hearing to determine the proper standard of review. Lasser v. Reliance Standard Life Ins. Co., 130 F.Supp.2d 616, 630 (D.N.J.2001). After holding that hearing and deciding that a moderately heightened arbitrary and capricious standard of review was appropriate, the Court reviewed the record before Rebanee. On the basis of its review, it held Reliance’s determination of nondisa-bility arbitrary and capricious and that Dr. Lasser was entitled to benefits. Rebanee appeals. II. Jurisdiction The insurance policy at issue is covered by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. Dr. Lasser sued to recover benefits under the Policy, and ERISA preempts state-law claims in this context. Id. § 1132(a). Thus, the District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We exercise appebate jurisdiction under 28 U.S.C. § 1291. III. Standard of Review The standard-of-review inquiry is more involved in this case than in most. The Supreme Court has mandated that courts review under the arbitrary and capricious standard claim denials in ERISA cases if “the benefit plan gives the administrator or fiduciary discretionary authority to determine ehgibihty for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). “Under the arbitrary and capricious standard, an administrator’s decision wib only be overturned if it is without reason, unsupported by substantial evidence or erroneous as a matter of law [and] the court is not free to substitute its own judgment for that of the defendants in determining ehgi-bihty for plan benefits.” Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 387 (3d Cir.2000) (internal quotation marks omitted). Here both parties agree that the Policy grants Reliance such authority. However, if the same entity that determines whether a claimant is disabled must also pay for disability benefits, that entity has a financial incentive to find him or her not disabled. Thus, we have noted that, when the insurer of an ERISA plan also acts as a claims administrator, there is a structural or inherent conflict of interest that mandates a “heightened” arbitrary and capricious standard of review. Id. at 378. In Pinto we employed a “sliding scale” approach in which the level of scrutiny applied to the fiduciary’s decision is “a range, not a point.” Id. at 392 (quoting Wildbur v. ARCO Chem. Co., 974 F.2d 631, 638 (6th Cir.1992)). It is “more penetrating the greater is the suspicion of partiality, less penetrating the smaller that suspicion is.” Id. at 392-93. The District Court held a hearing on the extent of Reliance’s conflict of interest to determine the standard of review. Because the Court found no evidence of conflict other than the inherent structural conflict, it held that the correct standard of review was “at the mild end of the heightened arbitrary and capricious scale,” and thus afforded a “moderate degree of deference” to Reliance’s determinations. Neither party disputes this conclusion on appeal. However, Reliance argues that the District Court misapplied the standard by not deferring to Reliance’s allegedly reasonable conclusions. IV. Discussion A. Dr. Lasser’s Regular Occupation Under the explicit terms of Dr. Lasser’s Policy, he is disabled, inter alia, if as a result of injury, illness or disease he is capable only “of performing the material duties of his/her regular occupation on a part-time basis or some of the material duties on a full-time basis.” To determine whether Reliance correctly decided that Dr. Lasser did not qualify for disability benefits, we first determine what is his “regular occupation,” as the Policy leaves this term undefined. Reliance argues that “regular occupation” is broad, indeed generic. In initially denying Dr. Lasser benefits in December 1997, Reliance said that “regular occupation is not your job with a specific employer, it is not your job in a particular work environment, nor is it your speciality in a particular occupational field. In evaluating your eligibility for benefits, we must evaluate your inability to perform your own or regular occupation as it is performed in a typical work setting for any employer in the general economy.” We recognize that, if the meaning of “regular occupation” is ambiguous, Reliance’s definition is entitled to deference under the applicable arbitrary and capricious standard of review. Skretvedt v. E.I. DuPont de Nemours & Co., 268 F.3d 167, 177 (3d Cir.2001) (insurer’s interpretation of an ambiguous insurance provision is entitled to deference unless it is contrary to the plan’s plain language). However, we believe that “regular occupation” is not ambiguous. The Policy states that it protects the insured from inability to “perform the material duties of his/her regular occupation.” Both the purpose of disability insurance and the modifier “his/her” before “regular occupation” make clear that “regular occupation” is the usual work that the insured is actually performing immediately before the onset of disability. Applying the text as written, Dr. Lasser’s regular occupation was as an orthopedic surgeon responsible for emergency surgery and on-call duties in a relatively small practice group and within a reasonable travel distance from his home in New Jersey. Even assuming “regular occupation” is susceptible to multiple interpretations and therefore ambiguous, Reliance’s definition of the term nonetheless must be reasonable before deference is conferred. See Skretvedt, 268 F.3d at 177 (noting that courts defer to a claims administrator’s interpretation if it is not arbitrary or capricious). Yet Reliance’s definition is different from that in the caselaw pertaining both to it and disability policies containing the “regular occupation” modifier. See O’Bryhim v. Reliance Standard Life Ins. Co., 188 F.3d 502 (Table), 1999 WL 617891 (4th Cir.1999) (unpublished per curiam) (on arbitrary and capricious review, holding that claimant could not perform material duties of his regular occupation and defining “regular occupation” with reference to specific duties performed for his employer). Even were a court not to limit itself exclusively to the claimant’s extant duties, that person’s “regular occupation” nonetheless requires “some consideration of the nature of the institution [at which the claimant] was employed.” Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 253 (2d Cir.1999). Moreover, Kinstler adopted the reasoning of an earlier district court case, Dawes v. First Unum Life Insurance Co., 851 F.Supp. 118, 122 (S.D.N.Y.1994), which defined “regular occupation” as “a position of the same general character as the insured’s previous job, requiring similar skills and training, and involving comparable duties.” Id. at 122. Notably, Dawes was decided before Dr. Lasser applied for disability benefits. ' The plain meaning of “regular occupation” is one of which both parties were aware when the Policy began on June 1, 1993. There is no reason to believe that Dr. Lasser was aware of Reliance’s different definition until it denied him benefits in December 1997. Because Reliance has shown no intent to “opt out” of this plainly understood term (indeed, it had the opportunity to do so each June when the Policy came up for renewal), it is unreasonable for it to argue it has done so post hoc. Even if we fall back to the interpretation of “regular occupation” imparted by Dawes and Kinstler, it too undermines Reliance’s generic understanding. Compare also Gaines v. The Amalgamated Ins. Fund, 753 F.2d 288, 290 n. 5. (3d Cir.1985) (deferring to a plan administrator’s construction of an ERISA-governed insurance policy when there was no caselaw interpreting the provision at issue); Epright v. Envtl. Res. Mgt, Inc. Health & Welfare Plan, 81 F.3d 335, 340 (3d Cir.1996) (holding a plan construction unreasonable when, among other deficiencies, the administrator pointed to no statutory provision to interpret the term and when its definition seemed self-serving). In this context, it is unreasonable for Reliance to define “regular occupation” differently from its plain meaning or even the somewhat more relaxed understanding of Dawes and Kinstler without explicitly in- eluding that different definition in the Policy. B. Material Duties of Dr. Lasser’s Regular Occupation Having determined that Dr. Las-ser’s regular occupation under the Policy was that of an orthopedic surgeon in a four-person practice group in New Jersey, and that it was unreasonable for Reliance post hoc to argue that the Policy’s plain language was otherwise, we turn to what Dr. Lasser did in the course of his regular occupation. He saw patients during office hours, performed scheduled surgeries, took night call, and performed emergency surgeries. When he no longer handled night call and emergency surgeries, were they material? The District Court answered yes. 146 F.Supp.2d at 641. The Court’s conclusion is supported by comparing Dr. Lasser’s pre-disability earnings with his post-disability earnings from a reduced schedule. The Townsq-uare shareholders’ agreement requires reduction by one-third of a doctor’s salary when he or she no longer takes night call. Moreover, Dr. Lasser’s salary was, on average, approximately $26,000 per month when he was performing all duties, but fell to between $4,000 and $6,000 per month immediately before Reliance terminated benefits. During this latter period, however, Dr. Lasser was working less than forty hours per week, as he reduced his patient load by one-third and no longer was operating in the afternoon' after seeing patients in the morning. Even assuming he was working twenty hours per week instead of forty (an assumption supported by record evidence), and assuming that he would have made $8,000 to $12,000 per month had he worked forty hours per week (i.e double his twenty-hour-per-week earnings), it stands out that, by not performing on-call or emergency surgery duties, Dr. Lasser’s earnings have declined by over 50%. This substantial earnings decline lays out as little else can the materiality of those activities to his regular occupation. Looking at the occupation of an orthopedic surgeon generieally without reference to Dr. Lasser’s particular duties, Reliance commissioned a labor market survey to determine whether performing emergency surgery and being on-call are material duties for an orthopedic surgeon. The survey asked: In general, in your experience is it reasonable that an Orthopedic Surgeon can practice in this field if one: [1.] Cannot perform “on-call” duties, do night calls, or carry a pager[;] [2.] Cannot perform emergency surgery (even if one can do non-emergency, elective surgery) [;] [3.] If you have responded YES to either, can you estimate in your experience the appx. prevalence of such jobs for an orthopedic surgeon in the general economy where one would not need to perform “on-call” or perform emergency surgery duties? Reliance’s vendor sent 100 surveys, to which it received fourteen responses, only nine of which were returned in time to be considered. Five of those nine respondents opined that an orthopedic surgeon could “practice in this field” without performing on-call or emergency surgery duties. On the basis of the survey, and on the absence of any affirmative showing from Dr. Las-ser that performing emergency surgery and being on-call are material duties of an orthopedic surgeon generally, Reliance concluded that these duties are immaterial, thereby precluding Dr. Lasser from disability benefits within his Policy’s terms. While Reliance selected survey responses to argue that on-call and emergency surgery duties were not material for Dr. Lasser, we (like the District Court) conclude that Reliance’s survey actually favors Dr. Lasser’s argument that these duties are material even on a generic basis. When all fourteen responses are considered and when the respondents’ comments are viewed along with the answers to the yes/no questions, the survey indicates that performing emergency surgery and being on-call are material duties of an orthopedic surgeon. Eight out of fourteen responses suggest that practice without these duties would be impossible or would result in an occupation fundamentally different from orthopedic surgery. One respondent wrote that the practice Reliance proposed would be very unusual and would essentially be a non-operative practice. Another stated that “[t]he only jobs that I know of that would fulfill your restrictions would be someone who restricted themselves [sic] to writing reports. Work-comp, or med-legal.” A third respondent noted that “[i]n your example, you are describing a physician who is not an orthopaedic surgeon, but might be considered an orthopaedist. An orthopaedic surgeon should be able to fulfill all duties.” Five other respondents flat-out said that what Reliance proposed was impossible. In this context, both Dr. Lasser’s particular case and the survey for orthopedic surgeons in general lead to the conclusion that on-call and emergency surgery duties were material to his regular occupation. C. Ability of Dr. Lasser to Perform the Material Duties of His Regular Occupation 1. Merits We next determine whether Dr. Las-ser’s medical condition precludes him from safely performing material duties of his regular occupation. He argues that he cannot safely perform emergency surgery or perform on-call duties. To fulfill our appellate review function under the arbitrary and capricious standard, we examine the entire record to determine whether Reliance’s determination is supported by substantial evidence. Pinto, 214 F.3d at 387. Reliance’s primary motivation for discontinuing Dr. Lasser’s benefits in December 1997 appears have been a report issued by Dr. Burke. He examined Dr. Lasser, subjected him to a treadmill test in November 1997, and concluded that Dr. Lasser “does not demonstrate any cardiovascular disability.” During an earlier treadmill test performed by Dr. Steven Roth in April 1997, Dr. Lasser “achieved greater than 90% of age-predicted maximum [heart rate]” and experienced only “mild fatigue [after] 14 minutes.” A nuclear cardiologist, Dr. Christos Christou, noted that planar imaging of Dr. Lasser’s heart conducted during the cardiovascular testing revealed only a “very small and probably clinically insignificant” heart defect. Furthermore, Reliance notes that Dr. Lasser’s physician, Dr. Aldrich, considered Lasser to be in New York Heart Association Functional Class II (“Patients with cardiac disease with slight limitation of physical activity. They are comfortable with mild exertion but experience symptoms with the more strenuous grades of ordinary activity.”) and Therapeutic Class C (“Patients with cardiac disease whose ordinary physical activity should be moderately restricted and whose more strenuous efforts should be discontinued.”) — classifications that do not suggest significant limitations-on Dr. Lasser’s ability to work as an orthopedic surgeon. Dr. Lasser, however, contends that Reliance’s conclusion is unsupported by substantial evidence. He notes that, after appealing the discontinuation of his benefits, Reliance engaged two other physicians to evaluate him, both of whom issued reports supporting his position. The first, Dr. Raska, concluded that Dr. Lasser “should avoid stressful situations — i.e., those that require night call [and] medical emergencies,” and that “[a] reduced stress work environment and schedule is absolutely necessary to maintain this patient’s health.” Dr. Raska reasoned that “[s]tress regardless of exercise tolerance is a recognized independent risk factor for recurrent coronary artery disease ... [and that] there are multiple studies ... which demonstrate that stress causes flux in the level of catecholamines in the circulation which have been shown to be a precipitant of acute myocardial infarction and sudden death.” In Dr. Raska’s opinion, Lasser’s unsuccessful vein graft made stress reduction especially important, as increased stress could bring about even earlier failure of the graft. In this context, he opined that Dr. Lasser’s disability benefits should not have been revoked because he “cannot safely perform the material duties of an orthopedic surgeon.” After receiving this report, however, Reliance realized that Dr. Raska had a conflict of interest: he practiced in the same physician group as a doctor from whom Dr. Lasser previously sought an evaluation, Dr. Lubow (whose evaluation is discussed below). In response, Reliance engaged Dr. Field as another evaluating physician. While Dr. Field noted that “[t]here is little definitive evidence that emotional or job stress is causally related to the development or acceleration of coronary artery disease,” he did acknowledge that “both physical and emotional stress are identified triggers of acute myocardial infarction [heart attack].” He concluded that Dr. Lasser could work a forty-hour week, but “is not capable of resuming all of the customary duties and responsibilities of an orthopedic surgeon.” In particular, Dr. Field opined that Lasser should restrict his on-call or emergency surgery duties, given their stressful nature. Dr. Lasser also relies on the evaluation of his treating cardiologist, Dr. Aldrich, as well those of Drs. Barry Lowell and Lawrence Lubow, who all opined that he is disabled. First, Lasser argues that the evaluation issued by Dr. Aldrich suggests that he is incapable of working in his regular occupation. When Rebanee asked Dr. Aldrich to complete a form detailing Dr. Lasser’s “current restrictions and hmita-tions,” he responded that Lasser should “hmit exposure to physical and emotional stress.” He noted also that “[s]tress is a well-documented risk factor not only for the development of coronary artery disease itself, but within that context, to the precipitation of a myocardial infarction.” As a result, in a letter to Rebanee dated June 3, 1998, Dr. Aldrich expressed to Rebanee that he believed Dr. Lasser is disabled and incapable of “resuming ab of the customary duties and responsibilities of an orthopedic surgeon on a full-time basis[,] or at least that he could not do so without exposing himself to a high degree of risk.” Dr. Aldrich’s reasoning underlying this conclusion was that, even though “by all objective criteria Dr. Lasser is doing very well at this point in time,” work-related stress might induce a deterioration in Dr. Lasser’s condition. Moreover, according to Dr. Aldrich’s reasoning, a favorable classification under the New York Heart Association guidelines is of bmited use in Dr. Lasser’s situation, as that classification system addresses a cardiac patient’s ability to perform certain physical tasks without regard to stress. Dr. Lowell, who performed a cardiac catheterization on Dr. Lasser, also opined that Lasser was disabled. He agreed with Dr. Burke that Lasser’s “functional stress test at the present time is excellent,” but cautioned that “the stress of his profession will contribute to poorer control of blood pressure and lipid therapies” and that “a less stressful environment would contribute to his graft longevity.” Dr. Loweb concluded that “the severity of Dr. Las-ser’s heart condition, while not readily measured by traditional testing methods, renders him just as disabled as the patient whose disability would not be questioned because he presents with more overt symptoms.” Finally, Dr. Lubow, a physician who examined Dr. Lasser at the request of Las-ser’s counsel, reached a conclusion similar to that of Drs. Aldrich, Raska, and Lowell. He opined that, “[b]ased on the recurrence of significant arteriosclerotic heart disease manifest[ed] by an acute infarction plus the need for urgent angioplasty and stent-ing after a ten year hiatus when he had no symptoms, the decision to grant this patient permangnt partial disability was certainly correct, particularly in view of his anatomy.” Thus, all evaluating physicians — with the exception of Dr. Burke, whose report the others discredited — agreed that Dr. Lasser’s heart condition precludes him from safely performing on-call duties and emergency surgery. Reliance’s conclusion to the contrary thus is arbitrary and capricious. To the extent that Reliance’s determination of nondisability was that “it was unreasonable ... to expect Reliance ... to simply accept the opinion [that stress would exacerbate Dr. Lasser’s condition] without any range of the probability or actual proof that Dr. Lasser was at increased harm,” we believe its determination was faulty. 2. Clarification Regarding Burden of Proof We conclude with a clarification regarding the burden of proof in disability cases. While the burden of proving disability ultimately lies with Dr. Lasser, to require him to provide statistics detailing the harm that working in his regular occupation might precipitate — as the dissent would require — raises the bar too high. Most disability claimants will not have the means at their disposal (financial or otherwise) to obtain this kind of evidence. Therefore, once a claimant makes a prima facie showing of disability through physicians’ reports (as Dr. Lasser has done here through physicians’ reports stating that stress will exacerbate his heart condition) and if the insurer wishes to call into question the scientific basis of those reports (as Reliance has attempted to do here), then the burden will lie with the insurer to support the basis of its objection. It has not met that burden here. D. Relevance of Alleged Resumption of Dr. Lasser’s On-Call and Emergency Surgery Duties
2195433-5000	KERNER, Circuit Judge. Plaintiff-appellant Jones seeks a review of an order of the District Court dismissing his complaint which alleged a violation of his civil rights and was brought under 42 U.S.C. § 1983. The Court takes judicial notice of a series of legal actions between the Jones’ in the Illinois courts beginning in the middle 1950’s. Plaintiff-appellant Jones and defendant-appellee Jones were hus band and wife and the various actions filed dealt with their marital matters. One of the actions involved a petition by-Evelyn Jones for alimony and child support. An order for temporary child support was entered in the Circuit Court of Cook County, Illinois. J. Edward Jones refused to make any payments and was held in contempt and committed to jail. On appeal before the Illinois Appellate Court, First District, certain aspects of the proceedings were reversed and the contempt and commitment orders were sustained. Jones v. Jones, 40 Ill.App.2d 217, 189 N.E.2d 33 (1963). The civil rights action filed in the United States District Court named as defendants, Evelyn S. Jones, members of her family, her lawyers, judges of the Circuit Court and judges of the Illinois Appellate Court, and alleged that these defendants had combined to unconstitutionally deprive him of his constitutional rights. Motions to dismiss were' filed and were granted on January 5, 1967. Notices of the dismissal were mailed. Appellant filed a motion to vacate the order of dismissal under Rule 60(b) on January 3, 1968. This motion to vacate was denied and plaintiff-appellant appeals. Circuit Judges David A. Canel, Raymond P. Drymalski and Alphonse A. Wells, and Appellate Judges Ulysses S. Schwartz, John V. McCormick and John T. Dempsey are named defendants. Each of these judges performed judicial functions in matters involving the various suits of the Jones.’ The immunity of judges from liability in the regular performance of their official duties under 42 U.S.C. § 1983, is well established and finds its root in the common law and was most recently confirmed in Pierson v. Ray, 386 U.S. 547, 554, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1966); Brown v. Dunne, 409 F.2d 341 (7th Cir. Feb. 13, 1969); Stambler v. Dillon, 288 F.Supp. 646 (S.D.N.Y.1968). Attorneys Warchol, Brody and Turek are lawyers who represented Evelyn Jones in proceedings before the Circuit and Appellate Courts of Illinois in private litigation. Lawyers who are not also parties in interest and are engaged in private litigation on behalf of clients do not act under color of state law within the meaning of 42 U.S.C. § 1983. Every litigant is entitled to a zealous advocate in the presentation of his matters before the court. The state merely provides a forum for the litigants and although lawyers are considered “officers of the court,” they are not officers of the state within the meaning of the Civil Rights Act. See Skolnick v. Spolar, 317 F.2d 857 (7th Cir. 1963), cert. denied, 375 U.S. 904, 84 S.Ct. 195, 11 L.Ed.2d 145, reh. denied, 375 U.S. 960, 84 S.Ct. 439, 11 L.Ed.2d 318; Skolnick v. Martin, 317 F.2d 855 (7th Cir. 1963) ; Meier v. State Farm Mutual Auto Ins. Co., 356 F.2d 504 (7th Cir. 1966), cert. denied, 385 U.S. 875, 87 S.Ct. 151, 17 L.Ed.2d 102, and United States v. Price, 383 U.S. 787, 86 S.Ct. 1152, 16 L.Ed.2d 267 (1966). Cf. Link v. Greyhound Corp., 288 F.Supp. 898 (E.D.Mich.1968). Moreover, it would be improper for attorneys and judges who were not parties in interest to be joined with the other parties defendant. Brown v. Dunne, supra. Evelyn S. Jones, Richard G. Stege and Gertrude Stege, his wife, are the only other defendants not previously dealt with in this opinion. Plaintiff-appellant Jones’ allegations involving these defendants refer back to the year 1962, four years prior to the filing of his action in the federal District Court. Neither federal common law nor the federal Civil Rights statute fixes a time limit within which suits for alleged violations must be commenced. The cases are clear that there being no federal statute fixing a limitation, the applicable statute of the forum state which governs the closest analogous state action will control. These last named defendants filed motions to dismiss the complaint and among other motions, pleaded the statute of limitations. O’Sullivan v. Felix, 233 U.S. 318, 322, 34 S.Ct. 596, 58 L.Ed. 980 (1913); Wilson v. Hinman, 172 F.2d 914-915 (10th Cir. 1949), cert. denied, 336 U.S. 970, 69 S.Ct. 933, 93 L.Ed. 1121; Mohler v. Miller, 235 F.2d 153, 155 (6th Cir. 1956); Crawford v. Zeitler, 326 F.2d 119, 121 (6th Cir. 1964). In considering the substance of the alleged injury and not merely the name given to it by the parties, we hold that the statute of limitation in Chapter 83, Illinois Revised Statutes, § 15 (§ 14 of the Limitations Act) applies: Actions for damages for an injury to the person, or for false imprisonment, or malicious prosecution * * * shall be commenced within two years next after the cause of action accrued.
1002337-26970	STEPHENS, Circuit Judge. This is an appeal by O. M. Grant, David Mutchler, and John Mutchler from a decree against them declaring a trust in favor of appellee Edna G. Pilgrim to certain interests in a mining lode claim, together with a money award against each in an accounting of the proceeds of mining on the claim conducted by them and one George Mutchler. George Mutchler was named as a defendant, but was not served with process, and did not appear in the case as a party, although he appeared as a witness. Two lode mining claims join with a common northerly and southerly line. One called the Irishman No. 1, or Irishman, lies to the east, and one called the Wasp, lies to the west of this line. There is a claim called Irishman No. 2, but it is not involved in this action. The plaintiff in the trial court, appellee here, owns a one-half undivided interest in the Irishman and is-cotenant with the owners of the other one-half interest, the de fendant Grant and his grantees. Grant and. George Mutchler were prospecting the Wasp claim while they were mining on the Irishman side of the separating line. While thus engaged, they purchased the Wasp for $300. The plaintiff alleges and the court found „that while they were thus engaged they discovered that the vein in which they were mining was under the surface of the Irishman and was in fact an extension of a lode having its apex or top under the surface of the Wasp claim. That is, while the upper portion of the ore-bearing vein was on the Wasp, it slanted easterly on its downward course until it passed unde'r the surface of the Irishman claim. This is called the “dip” of the ledge. The apex is the top of the ledge as it extends lengthwise along the claim. The owners of a claim containing the apex of a mining vein, either outcropping or not, may follow this vein along its dip under the surface of any other claim within the end lines. “The locators * * * shall have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations, and of all veins, lodes, and ledges throughout their entire depth, the top or apex of which lies inside of such surface lines extended downward vertically, although such veins, lodes', or ledges may so 'far depart from a perpendicular in their course downward as to extend outside the vertical side lines of such surface locations.” 30 U.S.C.A. § 26, Rev.St. § 2322. If, then, the apex of the -ledge being mined is situated within the Wasp’s boundaries or under the Wasp’s surface, the min-, erais in this ledge under the surface of the Irishman and between' the Wasp end lines extended may be taken by the Wasp owners. 30 U.S.C.A. § 26, Rev.St. § 2322; Tyler Mining Co. v. Last Chance Mining Co., 1895, C.C., 71 F. 848; Lindley on Mines, 3d Ed. § 581 et seq. The right to take minerals in such circumstances is called “extra-lateral” rights. All minerals lying below and within a claim’s boundaries belong prima facie to such claim, but such claim yields to this “extralateral rights” rule. Grant -and the defendants, so plaintiff alleges, secretly and fraudulently purchased the Wasp, thereby acquiring extralateral rights pertinent to such lode which constitutes an outstanding adverse title to her title and interests in the Irishman. As a cotenant plaintiff claims the right to share in the purchase, and upon learning of it she promptly tendered payment to Grant and George Mutchler, the purchasers, of one-half the purchase’price, but this they refused to accept. A dispute exists between the parties as to the correct location of the line dividing the two claims. If the plaintiff is right, the mining shaft is sunk immediately east of the line dividing the two claims and practically all of the paying ore has been extracted from beneath the surface of the Irishman. If Grant and the Mutchlers are right, this paying vein is under the surface of the Wasp. The trial court found in favor of the plaintiff upon this issue. The location of the line between the Irishman and the Wasp depends on where the southwest corner of the Irishman was placed, since there is no dispute about the’ position of the northwest corner, or of any of the other corners. Putting it more definitely, defendants claim the southwest corner is considerably.to the east of the location the plaintiff claims it to be. We use a reproduction of Defendants’ Exhibit C for clarity and for survey data. NOTES EXPLAINING THE MAP: The map is a reproduction to scale of Defendants’ Trial Exhibit C. In the original the scale of 1 inch equals 200 feet and in the reproduction 1 inch equals 400 feet. The southerly extension line from corner 3 of Irishman No. 1 is marked “S. 8° 01' W. 1633 ft. Cor. No. 3. Sur. 847,” on the original. The southerly extension line from corner 4 of Irishman No. 1 is marked “S. 0° 30' W. 2087 ft. to cor. No. 3 Sur. 847” on the original. The shaded drawing north-center Irishman represents the “Irishman Lode” workings. The irregular drawing near southeast corner Wasp represents the “Wasp Lode” workings. By extending the southerly line of Irishman westerly by the proper scale 154.5 feet and conecting the point so ascertained with corner 1, or the northwest corner of Irishman, it will he seen that the mine workings on the Wasp lode fall to the east of this line, which is the true dividing line between the Wasp and the Irishman claims. This is in complete accord with Earl Pilgrim’s testimony that the true line between the Irishman’s northwest and southwest corners passes immediately west of the Wasp lode shaft. The extralateral rights of the Wasp lode owners as the dip extends easterly under the Irishman are confined to the area lying southerly of the Irishman north line and northerly of an extension across the Irishman of the Wasp’s southerly line. The true line between Wasp and Irishman, and the extension of the Wasp end lines across the Irishman, are sketched in by dashes and are not parts of the exhibit as introduced in evidence. The locator of the Irishman, Earl Pilgrim, testified that he and Grant staked the claim in June, 1928; that in 1933 the southwest stake was gone; he found a stake below the road at approximately where Grant had placed it on a former location of a claim called “Gold Lode”; this stake was marked “southwest corner Irishman No. 2.” The distance between the place where he staked the southwest corner and this stake was approximately 155 feet. Grant testified that the stake marked “southwest corner Irishman No. 2” was the true southwest corner of Irishman No. 1, that he had mistakenly written a “two” on the stake instead of a “one.” Pilgrim also ■ testified that later he went upon the ground with surveyor, John Quenboe, and pointed out the place where he put the southwestern stake of the Irishman No. 1, and that, further east, he and Quenboe found the stake Grant had mistakenly marked “southwest corner Irishman No. 2.” The point indicated by Pilgrim, as the true location of the southwest corner, is 154.5 feet from the Grant, or last mentioned, stake. The shaft almost intersects the line between the claims; it is a “little bit” east of the line. Pilgrim testified that he built a cabin on the Irishman near the place he and Grant had put the southwest corner stake, but not the one Grant mismarked, long before any dispute arose. To find that the Grant stake correctly indicates the disputed southwest corner would be to find that Pilgrim had deliberately built his cabin some one hundred and more feet westerly of his own line. The reproduced map (Defendants’ Exhibit C) was prepared by a surveyor by the name of E. F. Wann. This map is drawn to scale of 1 inch to 200 feet. (Reduced by one half in the reproduction.) By scaling along an extension of the west end line of the Irishman claim on this map to a point 154.5 feet westerly, and then connecting this point with the northwestern corner of the Irishman as it is located on this map, most of the Wasp lode workings will be shown to lie on the Irishman side of the line. Other calculations on maps and surveys introduced, using only such parts thereof substitute word “as” are ascertained from known data, show confirmation of the correctness of this location of the line connecting the southwest and northwest corners. ' (True line sketched on map in dashes.) The plaintiff testified that she saw the stake at the place indicated by Pilgrim. W. W. Estes testified that he saw the stake there between September and November in 1928 or 1929. Grant admit-ed (a) to Fred Deeming that the stake was at such place; (b) to Farrell that the stake was at or near such place; and (c) in his written statement furnished plaintiff that he was mining on the Irishman. This, with other evidence not necessary to be detailed here, convinces us, as it did the trial court, that the southwest corner of the Irishman is at the place indicated by Earl Pilgrim and claimed by the plaintiff. A glance at the reproduced map will show that practically all of the ore extracted from the Wasp lode by defendants was taken from an area directly under the surface of the Irishman. There is no evidence that attempts to point out the extent of the comparatively small amount that was taken from under the surface of the Wasp claim. Since a “discovery,” or the finding of a vein of mineral-bearing ore, is a necessary element of a valid mining location, a word regarding the subject of “discovery” will be appropriate. The first mining work done on either of the claims was by Earl R. Pilgrim and Grant on the Irishman. They sank a shaft near the center lengthwise line of the Irishman claim and by drifting discovered a mineral-bearing vein. This was a “discovery” for the Irishman claim. This vein is called the Irishman lode. Thereafter, in November, 1928, they signed notices and recorded them. If the other vein, known as the Wasp lode situated near the dividing-line, apexes upon the Wasp, as it is claimed it does (and as we find), then discovery is sufficiently established as to this claim. See foot note 1. We next turn our attention to the location of the apex of the vein upon which Grant and the Mutchlers were working when they purchased the Wasp claim. “On principle, the identity of the apex of a vein with its spurs or extensions must be the crucial test by which are to be fixed the proprietary rights to that vein and the mineral therein.” Butte & Boston M. Co. v. Societe Anonyme des Mines, 23 Mont. 177, 58 P. 111, 113, 75 Am.St.Rep. 505. Earl R. Pilgrim, husband of plaintiff, testified that the Wasp lode shaft was about 100 feet, down to a drift southerly along the lead or vein about 100 feet. That there were stopes opened with chutes and raises driven up in the vein. The vein dipped about 40° above the level and inclined westward toward the top of the vein. Irving McK. Reed, a mining engineer occupying the position of United States Game Commissioner and United States Mineral Surveyor, made an underground survey and map of these workings. (Plaintiff’s Exhibit 3.) Admission of the map in evidence was objected to because the witness assumed the location of two corners in his survey. The court properly overruled the objection as the claimed defect could not affect the extent of the undersurface workings for which alone it was used. Mr. Reed testified that the pitch of chute No. 4 was 35 feet up to 60 feet out; that the apex was beyond any point that was uncovered at that time, but while it was possible, it was not probable, that the vein doubled back into the Irishman. Henry Joesting, a geologist and instructor of civil engineering at the University of Alaska, worked under the direction of Mr. Reed surveying the lode claim and assisting in drawing the map, Plaintiff’s Exhibit 3. He testified that the map “correctly shows the pitch of the vein where the vein has been worked out and consequently would show the pitch of the vein.” A glance at these drawings indicates a consistent slope of the vein upward, from east to west, from the hundred-foot level to but a few feet from the surface. There is other evidence tending in the same way and no evidence inconsistent with this testimony. The Wasp claim is a little more than 600 feet wide, and it seems to us that the evidence practically demonstrates that the apex of the lode or vein was within the boundaries of, or under the surface of, the Wasp, and we so hold. By referring to the reproduced map, with its corrected line between the claims, it will be seen that the ore was taken from beneath the surface of the Irishman and between the converging end lines of the Wasp. Thus the extralateral extension of the Wasp lode included the area from which the ore was taken. At this point we may note that the end lines of the Wasp claim are not exactly parallel, but are substantially parallel. Since they converge in the direction of the vein dip, that part of the lode, extending beneath the Irishman surface and also within the Wasp end lines extended easterly, is pertinent to the Wasp lode, and is subject to the trust which we herein declare under the doctrine of extra-lateral rights. See foot note 1. On September 24, 1932, Grant optioned and one-half of his interest in the Irishman to the three Mutchlers in equal portions. This option provided for immediate possession and constituted the four named persons cotenants. Ever since such date the property has been mined by them together. On June 26, 1934, Grant and • the Mutchlers and Farrell entered into an instrument in writing called “Assignment and Agreement,” in which it is provided Farrell shall succeed to an equal interest with the Mutchlers in and to the option of September 24, 1932, which granted to the Mutchlers certain rights in Grant’s interest in the Irishman, and Farrell assigns in equal portions his lease with the plaintiff. This lease dated January 20, 1934, granted to one C. E. Farrell certain mining rights on the Irishman. The agreement of June 26, 1934 further provides that Grant, the Mutchlers, and C. E. Farre-11 are equal owners and partners in the Irishman, and that Grant will forthwith transfer to each of the others from his one-half interest an undivided "one-tenth interest in and to the Irishman. It is apparent from this recital that the option under which the Mutchlers became interested in the Irishman through Grant has continued in full force and effect and was eventually ripened into a completed transfer of title to them. After the Mutchlers first became interested they, with Grant, worked the Irishman lode, quitting it on May 14, 1933, and going to work on the Wasp lode. The plaintiff succeeded to her husband’s interest in the Irishman December 18, 1929, frorq which date the two, Grant and plaintiff, have been cotenants in the Irishman. And as we shall presently see, plaintiff and Grant have been cotenants of the Wasp since its purchase by Grant and George Mutchler about July 6, 1933. After acquainting themselves with the dip of the lode upon which Grant and the Mutchlers were working, Grant and George Mutchler negotiated the purchase of the Wasp without consulting or notifying their cotenant, the plaintiff, in any manner, withholding recordation of the conveying deed for some six or eight months. The correlative duties of cotenants of adjoining mining claims in circumstances strikingly similar to those obtaining in our case have been ably discussed and determined in Cedar Canyon Consol. Min. Co. v. Yarwood, 27 Wash. 271, 67 P. 749, 752, 91 Am.St.Rep. 841. In the cited case, some of the cotenants purchased interests in a bordering claim, the “Elephant,” to protect the mining operations on the cotenant’s claim, the “Legal Tender,” when it became apparent that the Legal Tender operations were upon an extralateral extension of a vein apexing on the Elephant. The court said: “It was for the purpose of controlling such superior title in the interest of their common property that the purchase of the interest in the Elephant was made. The common title was assailed. It was believed that another had a better title, and one of the holders of the common title purchased an outstanding interest in such superior title. Under such circumstances we believe there was a tangible substance to which a cotenancy would attach, and that the parties sustained to each other the relation of co-tenants. A co-tenant will not be permitted to question the common title upon a contest between him and his co-tenants. Bornheimer v. Baldwin, 42 Cal. 27; Olney v. Sawyer, 54 Cal. 379; Freem. Co-Ten., 2d Ed. § 152. When the Deer Trail Mining Company No. 2” (one of the co-tenants) “purchased an interest in the Elephant claim, it was not in a position to question the common title to the Legal Tender, and, since the plaintiff company is the successor as grantee of the interest so purchased, it is not in position to assail the common title as a basis for establishing its own right of recovery. It must recover upon the strength of its own title, and we therefore think it is estopped to claim that there was no valid location made on the Legal Tender claim.” This is a state case and is not controlling, but we are impressed with the course and clarity of the reasoning used. “But, it is said * * * that when a tenant in common makes use of the co-tenancy, or title, right, or claim under which it exists or is claimed to exist, to acquire such outstanding title, that upon this ground alone he will be held to have acquired it in trust for his co-tenants; and this proposition appears to be both reasonable and just.” Myers v. Reed, C. C., 17 F. 401, 406. See, also, Hodgson v. Federal Oil & Development Co., 274 U.S. 15, 47 S.Ct. 502, 71 L.Ed. 901, 54 A.L.R. 869. In the case of Turner v. Sawyer, 150 U.S. 578, 14 S.Ct. 192, 195, 37 L.Ed. 1189, wherein a cotenant acquired patent to a mining claim to himself alone, the court said: “It is well settled that cotenants stand in a certain relation to each other of mutual trust and confidence; that neither will be permitted to act in hostility to the other in reference to the joint estate; and that a distinct title acquired by one will inure to the benefit of all. A relaxation of this rule has been sometimes admitted in certain cases of tenants in common who claim under different conveyances and through different grantors. However that may be, such cases have no application to the one under consideration, wherein a tenant in common proceeds surreptitiously, in disregard of the rights of his cotenants, to acquire a title to which he must have known, if he had made a careful examination of the facts, he had no shadow of right. We think the general rule, as stated in Bissell v. Foss, 114 U.S. 252, 259, 5 S.Ct. 851, [29 L.Ed. 126], should apply; that ‘such a pur'chase [of an outstanding title or incumbrance upon the joint estate for the benefit of one tenant in common] inures to the benefit of all, because there is an obligation between them, arising from their joint claim and community of interest; that one of them shall not affect the claim to the prejudice of the others.’ Rothwell v. Dewees, 2 Black 613, [17 L.Ed. 309]; Van Horne v. Fonda, 5 Johns.Ch. [N.Y.] 388; Lloyd v. Lynch, 28 Pa. 419, [70 Am.Dec. 137]; Downer’s Adm’rs v. Smith, 38 Vt. 464. “A title thus acquired the patentee holds in trust for the true owner, and this court has repeatedly held that a bill in equity will lie to enforce such trust. Johnson v. Towsley, 13 Wall. 72, [20 L.Ed. 485]; Moore v. Robbins, 96 U.S. 530, [24 L.Ed. 848]; Marquez v. Frisbie, 101 U.S. 473, [25 L.Ed. 800]; Rector v. Gibbon, 111 U.S. 276, 291, 4 S.Ct. 605, [28 L.Ed. 427]; Monroe Cattle Co. v. Becker, 147 U.S. 47, 13 S.Ct. 217 [37 L.Ed. 72].” See, also, section 2817, Comp.Laws Alaska, 1933; Wilkins v. Burton, 1833, 5 Vt. 76, 84; Comer v. Landrum, 1925, Tex. Civ.App., 277 S.W. 743. We hold that the plaintiff and defendants (excluding George Mutchler) occupied the position of cotenants of the Irishman claim, and that Grant and George Mutchler learned through mining in the Irishman that the paying vein was an ex-tralateral extension of the Wasp lode with apex on the Wasp claim, and that this knowledge was not communicated to their cotenant, the plaintiff, but that they proceeded surreptitiously to purchase the Wasp for their own exclusive benefit. In the circumstances Grant (excluding George Mutchler) held and does now hold in trust for plaintiff one-half of his acquired interest of that portion of the Wasp lode which extends extralaterally beneath the Irishman claim and within the extended end lines of the Wasp claim. There are cases in which courts have gone further than we have gone ill this case and have impressed the trust as to the whole property purchased. Without taking the pains to distinguish such cases from the instant one, we think it is obvious that complete equity is done here by limiting the trust to the Wasp dip underlying the Irishman surface. There is no dispute as to the net return from the Wasp; it is $24,581.61. Grant and the three Mutchlers were working this lode under the option agreement of September 24, 1932, under which the three Mutchlers together were operating with a one-fourth undivided interest and Grant a one-fourth undivided interest. If the plaintiff equitably owns one-half of that part of the lode from which the paying ore was taken, there can be no question but that she is entitled to one-half of this net sum. Or rather, in this case, the three defendants who were served with process must contribute to plaintiff in the following proportions to the whole sum: Grant must contribute one-half of one-half, and David and John Mutchler must contribute each one-third of one-half of such sum. There should be $75 credited to Grant on account of his pro rata-payment in the purchase of the Wasp which plaintiff has tendered. The net sums to be paid on this calculation are: By Grant, — $6,220.40; and by each John and David Mutchler, $2,046.46. It is true that Grant and the Mutchlers together did some work on, but took no ore out of, the Irishman lode, as distinguished from the Wasp lode, but all we know about that is that such work was comparatively small in amount. Lacking the data we cannot include its cost in the. operating expense. In the course of thg trial plaintiff introduced Grant’s written statement of expenses and receipts incident to his operations on the Irishman up to July, 1933, and this statement shows a net loss of more than his share of the total recovery from both Irishman and Wasp lodes. Plaintiff has not questioned these figures. A co-tenant working independently upon a mining claim need only divide the net return with his cotenant where expenditures have been reasonably necessary in developing the mine. The decree should provide for this situation, and since such expense far exceeds the net return to Grant from the Wasp lode, no money judgment should be entered against him. Nothing herein shall be taken to limit the right of Grant to offset the balance between his expenses and recovery in future accountings betweem himself and plaintiff, amounting to the sum of $11,499.-84. It is quite unnecessary to consider possible interests of C. E. Farrell. He is not a party to the action, and although he entered into an agreement with the plaintiff, and also an agreement with Grant and the Mutchlers regarding their several interests in the Irishman, it does not appear that either of these agreements directly affects the issues of this case. We shall here notice certain assignments of error. Objection was made to the receipt in evidence of a map (Plaintiff’s Exhibit 1). Since its use was specifically limited to the purpose of illustrating the witness’ (Earl Pilgrim) testimony, we perceive no error in its admission. Objection was made to the receipt in evidence of a map (Plaintiff’s Exhibit 2) on the ground that “It was not the best evidence.” Proper foundation had not been laid but this was remedied, so far as the uses to which it was put by the trial court and by us, when its surveyor, John Quenboe, testified that he had made the parts so used from his own survey and that they are correct. Defendants assign as error the sustaining of an objection to the question propounded to Grant regarding his intention when he contracted for purchase of the Wasp and whether it was to protect his interest in the Irishman, but the question was fully answered during the exchange of statements immediately following the objection. Appellant assigns as error that: “The Court erred in proceeding with the trial of the case before all the necessary parties were properly before it, in that George Mutchler, one of the defendants, was a necessary party and had not been served with process and was not then before the court.” Section 2866, Comp.Laws Alaska, 1933, provides: “A tenant in common may maintain any proper action or proceeding agajnst his co-tenant, for receiving more than his just proportion of. the rents and estates owned by them in common. * * * ” And section 3393, Comp.Laws Alaska, 1933, provides : “The court may determine any controversy between parties before it when it can be done without prejudice to the rights of others, or by saving their rights; but when a complete determination of the controversy cannot be had without the presence of other parties, the court shall cause them to be brought in.” The controversy between the parties in this case was determined without prejudice to the rights of George Mutchler, or any other person. The appellant assigns as error the denial by the trial court of a motion to dismiss the action for the reason that no decision .was rendered in the term in which the case was tried. The Alaska statute dealing with the disqualification of judicial officers and depriving them of authority to act as such when disqualified specifically provides that “this section does not apply to an application to change the place of trial or the regulation of the order of business in court.” Comp.Laws Alaska, 1933, § 3305. Judge Pratt’s signing of a general order extending the term clearly falls within the italicized portion of the quoted statute, and, since this is the whole purport of the assignment, it falls to tire ground. The defendants at the trial objected to the determination of the dispute over the line dividing the Wasp and the Irishman and objected to the determination, as to where the Wasp lode apexed, by the court sitting in equity, claiming that these were law issues and that the United States Constitution guarantees jury trials for such issues. They assign as error the court’s overruling of such objections. The Seventh Amendment to the Federal Constitution guarantees the right to jury trials in all common-law actions involving more than $20, and this provision is effective in the Territory of Alaska, as it is in other territories. 48 U.S.C.A. § 23. Thompson v. Utah, 170 U.S. 343, 346, 18 S.Ct. 620, 42 L.Ed. 1061.
7395325-9894	MEMORANDUM LOUIS H. POLLAK, District Judge. I. On December, 19, 1988, plaintiff commenced this wrongful death and survival action in the Court of Common Pleas of Philadelphia County, Pennsylvania. The complaint alleges that the defendants, Glassman’s Wynnefield, Inc., d/b/a/ City Line Stop ‘N’ Go, Jae Lee (an officer and shareholder of Glassman’s Wynnefield), Philadelphia Realty Associates, National Railroad Passenger Corporation (operating under the name “Amtrak”), Consolidated Rail Corporation, Penn Central Corporation, and Southeastern Pennsylvania Transportation Authority, are jointly and severally liable to plaintiff for the death of his son, John R. McManus. Decedent allegedly “fell and/or jumped off from a certain railroad signal tower” in 1987 after consuming alcoholic beverages that he had purchased at the City Line Stop ‘N’ Go. Plaintiff’s Complaint, at ¶II 5, 14. On January 20, 1989, defendant National Railroad Passenger Corporation (hereinafter “Amtrak”) filed a petition for removal to this court pursuant to 28 U.S.C. §§ 1441(a) and 1441(c). The petition represents that Amtrak is a corporation created by an Act of Congress that is more than one-half owned by the federal government. Removal Petition, at HU 4-5. Plaintiff subsequently moved to remand the case on the ground that Amtrak’s codefendants did not join in the removal petition. In its response to plaintiff’s motion, Amtrak contends that § 1441(a) does not require unanimity of defendants to remove an action where the defendant seeking removal is a federally-chartered and federally-owned corporation. Amtrak argues in the alternative that its codefendants have since joined in its removal petition, as reflected by the stipulation attached to its response. II. Courts have long held that federal district courts have original jurisdiction over suits in which one of the parties is a federally chartered corporation. Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824); Pacific Railroad Removal Cases, 115 U.S. 1, 5 S.Ct. 1113, 29 L.Ed. 319 (1885). Such suits are viewed as arising under federal law even if the federally-chartered corporation is joined with state corporate or individual defendants in an action that is otherwise non-federal in character. See, e.g., Matter of Dunn, 212 U.S. 374, 384, 29 S.Ct. 299, 301, 53 L.Ed. 558 (1908) (in a negligence action against a federal corporation and private individuals, “[t]he Federal character permeates the whole case, including the individual defendants as well as the corporation”). Jurisdiction based on the presence of a federally-chartered corporation is subject to the requirement that the United States own more than one-half of the corporation’s capital stock. 28 U.S.C. § 1349. Since Amtrak is a federally-chartered and federally-owned corporation, this suit arises under federal law within the meaning of 28 U.S.C. § 1331, and thus is one over which federal district courts have original jurisdiction. Removal of this action is governed by 1441(a), which states that, except as otherwise expressly provided by Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. The question presented in this remand motion is whether the language in § 1441(a) permitting “defendant or the defendants” to remove certain actions to federal district court permits Amtrak to remove this suit without obtaining, within the thirty-day period set forth in 28 U.S.C. § 1446(b), the consent of its codefendants. As a general matter, courts have construed § 1441(a) as requiring, in cases involving multiple defendants, that all defendants join in the petition for removal. Hess v. Great Atlantic & Pacific Tea Company, 520 F.Supp. 373, 375 (N.D.Ill.1981); 1A Moore’s Federal Practice ¶ 0.168 at pp. 548-49 (2d ed.1987). Although the issue seems to arise more frequently in the context of diversity cases, the requirement that defendants unanimously join in a removal petition extends as well to federal question cases. Hess, 520 F.Supp., at 375. The unanimity requirement advances, among other things, the congressional purpose of giving deference to a plaintiffs choice of a state forum and of resolving doubts against removal and in favor of remand. See Shamrock Oil & Gas Corporation v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941) (“Not only does the language of the Act of 1887 evidence the Congressional purpose to restrict the jurisdiction of the federal courts on removal, but the policy of the successive acts of Congress regulating the jurisdiction of federal courts is one calling for the strict construction of such legislation.”). Thus, in federal question suits involving multiple defendants, courts ordinarily require all defendants to join in a petition to remove. This strict construction of § 1441(a)’s language serves the congressional purpose underlying the statute and strikes an appropriate balance between defendants’ collective right to a federal forum and the right of objecting defendants and plaintiff to remain in plaintiff’s chosen forum. If Amtrak is to prevail on this motion, it must argue that the presence of a federally-chartered corporation in this action somehow alters this balance. Such a position, however, is foreclosed. As early as 1900, the Supreme Court refused to permit a federal corporation to remove an action to federal court where its codefend-ant, a state corporation, did not join in the removal petition. Chicago, Rock Island & Pacific Railway Company v. Martin, 178 U.S. 245, 248, 20 S.Ct. 854, 855, 44 L.Ed. 1055 (1900) (construing “defendant or defendants” in the Judiciary Act of 1887-1888, a predecessor statute to § 1441, as prohibiting removal “unless all the parties on the same side of the controversy unite[ ] in the petition”); see also Matter of Dunn, 212 U.S. 374, 387, 29 S.Ct. 299, 303 (denying remand petition because, unlike Martin, “all of the defendants [ ] joined” in the application of their codefendant, a federally-chartered corporation). Thus, removal of this action requires that all defendants properly join in Amtrak’s petition. The remaining question is whether Amtrak’s submission of a stipulation reflecting its codefendants’ acquiescence in the removal petition satisfies the timeliness requirement of § 1446(b). Amtrak does not dispute that the stipulation was filed more than thirty days following defendants’ receipt of plaintiff’s initial pleading. Although § 1446(b)’s thirty-day requirement is not jurisdictional, “the time limitation is mandatory and must be strictly construed.” Fellhauer v. City of Geneva, 673 F.Supp. 1445, 1447 (N.D.Ill.1987). If all defendants do not join the removal petition within the thirty-day period, remand is the proper course. Id.; Stokes v. Victory Carriers, 577 F.Supp. 9, 10 (E.D.Pa.1983) (“28 U.S.C. § 1446(b) has consistently been interpreted to require all served defendants to join in the removal petition within thirty days of their receipt of the initial pleading.”). Amtrak offers no basis for departing from the presumption that § 1446(b)’s thirty-day filing period shall be enforced. Accordingly, plaintiff’s Motion to Remand will be granted in an accompanying Order. ORDER For the reasons stated in the accompanying Memorandum, plaintiffs Motion to Remand is GRANTED, and this action is hereby REMANDED to the Court of Common Pleas of Philadelphia County. On Motion To Reconsider Defendant Amtrak seeks reconsideration of this court’s April 28,1989 Order remanding this action to the Court of Common Pleas of Philadelphia County pursuant to 28 U.S.C. § 1447(c). Such Order, however, cannot be reconsidered “once [it] has been entered and a certified copy of the order has been mailed to the clerk of the state court.” Cook v. J.C. Penney Company, 558 F.Supp. 78, 79 (N.D.Ia.1983) (citing Federal Deposit Insurance Corp. v. Santiago Plaza, 598 F.2d 634, 636 (1st Cir.1979); In re La Providencia Development Corp., 406 F.2d 251, 252 (1st Cir.1969); Bucy v. Nevada Construction Co., 125 F.2d 213, 217 (9th Cir.1942); Rosenburg v. GWV Travel, Inc., 480 F.Supp. 95, 97 (S.D.N.Y.1979); Yarbrough v. Blake, 212 F.Supp. 133, 147 (W.D.Ark.1962)). This position is mandated by 28 U.S.C. § 1447(d), which “has been universally construed to preclude not only appellate review but also reconsideration by the district court." Seedman v. United States District Court for the Central District of California, 837 F.2d 413, 414 (9th Cir.1988) (granting writ of mandamus after district court reconsidered its order of remand). .By conceding, for the purposes of this motion, that plaintiff's complaint alleges "an interlocked series of transactions,” Amtrak apparently withdraws as a basis for its removal petition the reference to 28 U.S.C. § 1441(c). Amtrak response, at ¶ 2; see also ¶ 4 (stating that § 1441(a) provides the basis for the petition). Section 1441(c) permits, in certain circumstances, the removal of separate and independent claims. . Amtrak filed the response to which the stipulation is attached on February 15, 1989 — more than thirty days after Amtrak received service of plaintiffs initial state-court pleading. . Section 1446(b) provides, in part: The petition for removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has been filed in court and is not required to be served on the defendant, whichever period is shorter.
222869-7763	LEVIN Judge. H. CAMPBELL, Circuit Russell Sawaya appeals from the denial of his pro se petition to vacate sentence filed under 28 U.S.C. § 2255. Sawaya is currently serving a five-year sentence imposed on April 5, 1971, following his plea of guilty to charges of possessing and transferring $150,000 in counterfeit federal reserve notes in violation of 18 U.S.C. §§ 472, 473. Citing United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972), he contends that the district court, when imposing sentence, improperly took into account prior convictions which, because uncounselled, were constitutionally invalid. Sawaya’s original § 2255 petition alleged merely that the sentencing court did not have a “certified record” of prior convictions and had considered convictions that were invalid: The United States Magistrate, to whom the petition was referred, inferred from Saway-a’s citing of Tucker that “he might be relying on the fact that he was without counsel during some of the prior convictions.” The Magistrate reviewed the transcript, a copy of which he appended to his report, and concluded that there was nothing therein to indicate that the “judge had considered Sawaya’s prior record.” The Magistrate recommended dismissal of the claim for that reason and also because “nowhere does it appear that any prior conviction of Sa-waya has been set aside for the reason that he lacked counsel.” After the court dismissed the petition, Sawaya moved for reconsideration, asserting that the sentencing judge had had a pre-sentence report before him listing prior convictions and that the invalidity of the prior convictions (which it now appears were state convictions) should be decided by the federal court. The motion for reconsideration was denied, and the present appeal filed. On appeal, Sawaya for the first time lists the specific data, purportedly in the pre-sentence report, to which he objects. This falls into four categories: (1) convictions as to which Sawaya does not claim he was uneounselled; (2) uncoun-selled traffic violations with no disposition indicated; (3) a series of proceedings, allegedly uncounselled, stemming from neglect or non-support of an illegitimate child, in which he was given probation; and (4) an allegedly uncoun-selled guilty plea in a 1951 juvenile court proceeding, when Sawaya was 15, resulting in a year of probation for assault and battery with a dangerous weapon. We would ordinarily not consider allegations of fact not presented to the district court. But appellant is incarcerated and acting pro se; no interest would be served by delay. We accordingly consider the data alleged on appeal as if forming part of the original § 2255 petition. Turning to the substance of the claim, it is obvious that Sawaya cannot complain to the extent the judge was advised of prior counselled convictions. In Tucker, the judge had given exploit consideration to previous felony convictions which had later been overturned as unconstitutional under Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L. Ed.2d 799 (1963). The first category of data thus fails to demonstrate possible error. Nor do we see impropriety in the judge's awareness of the motor vehicle cases, whether counselled or uncounselled. Sawaya does not allege that he was imprisoned or that there was any likelihood of imprisonment or even that the recorded dispositions were adverse. There is no reason to suppose that those cases resulted in invalid convictions. See Argersinger v. Hamlin, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972). The non-support convictions are open to greater question. Conviction in Massachusetts for non-support carries a permissible two-year sentence. M.G.L. c. 273, §§ 15, 16. Although Argersinger precludes imprisonment without appointed counsel or waiver thereof, it is, possible to read it as validating uncounselled minor-offense proceedings where the punishment is less than imprisonment. Sweeten v. Sneddon, 463 F.2d 713 (10th Cir. 1972); but cf. Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L. Ed.2d 799 (1963). If so Sawaya’s nonsupport convictions may be valid eve.n if uncounselled unless they are major offenses as a matter of federal constitutional law. Even if Argersinger invalidates uncounselled non-support convictions imposing only probation, it may not be relevant to the offenses in question because the Supreme Court has yet to hold Argersinger retroactive. In any event, it would be premature for us to attempt to resolve these difficult constitutional conundrums. Sawaya’s contentions may well be capable of disposition on non-constitutional grounds. Ashwander v. T. V. A., 297 U.S. 288, 346-348, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (concurring opinion). The circumstances of the present case, unlike those of Tucker, do not compel us to conclude that Sawaya’s prior record had an appreciable influence on the sentencing judge. Moreover, even if the nonsupport convictions affected the sentence, we do not yet know if Sawaya was without counsel, was entitled to state-provided counsel, or validly waived any right he may have had to the assistance of counsel. The uneounselled convictions in Tucker had been declared void in state collateral proceedings before the § 2255 petition was filed. Until these factual issues are resolved, the possible unconstitutionality of the nonsupport convictions is not ripe for adjudication. The fourth category of data mentioned by Sawaya relates to a juvenile proceeding in 1951. At that time Sawaya pled guilty to an offense which would have resulted in a criminal felony proceeding but for his age. Due process requires that a child and his parents be informed that he has the right to be represented by counsel and that the state will appoint counsel for the indigent. In re Gault, 387 U.S. 1, 34-42, 87 S.Ct. 1428, 18 L.Ed.2d 527 (1967). However, Tucker does not hold that a sentencing judge may not be aware of prior convictions, even constitutionally infirm ones. It holds only that the court must be aware of the infirmities. Consequently, a determination would have to be made as to whether the sentencing judge actually knew or assumed that Sawaya’s juvenile proceeding in 1951 was uncounselled. While the ultimate merits .of Sawaya’s claim have yet to be established, it was prematurely dismissed as facially invalid. In comparable cases other circuits have held that the petitioner is entitled to have the district court determine whether his original sentence would still be appropriate were the challenged prior convictions to be treated as void. Lipscomb v. Clark, 468 F.2d 1321, 1323 (5th Cir. 1972); Brown v. United States, 483 F.2d 116 (4th Cir. 1973) 5; cf. McAnulty v. United States, 469 F.2d 254, 255 (8th Cir. 1972). Only if the court concludes that the sentence would not be appropriate is the petitioner entitled to a hearing on the validity of the convictions. Adopting the procedure described in Lipscomb, we remand to the district court with directions that it review the records of trial and pre-sentence report and determine if, treating the state convictions (other than traffic violations) alleged to have been uncounselled as void, the sentence given would still be appropriate. If the district court finds the sentence still appropriate, an order so setting forth shall be deemed by us to be sufficient compliance with Tucker, and the petition may be dismissed. If, however, the district court finds that should these prior convictions be disregarded the sentence is no longer appropriate, it should grant Sawaya an ev-identiary hearing on his claim that the prior convictions were uncounselled and, if so, unconstitutional. If the district court sustains petitioner’s claims, it may then properly resentence.
7649595-16053	RYAN, Circuit Judge. Mary Ann Crawford filed suit against her employer, Medina General Hospital, as well as her supervisors, Darla Kermendy, Kenneth Milligan, and Rex Slee, alleging that the defendants discriminated against her in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621-634, by creating a hostile working environment. She also filed supplemental state-law claims for false imprisonment and assault and battery. The district court disposed of the ADEA claim on summary judgment, reasoning that Crawford had failed to prove her prima facie case, and declined to exercise jurisdiction over the state-law claims. On appeal, Crawford contends that the district court erred in granting summary judgment. For the reasons that follow, we will affirm. I. The billing department at Medina General Hospital appears to have deep morale problems. To get the flavor of the situation, as well as to appreciate our resolution of the issue, requires that we burden our opinion with a rather detailed recitation of the evidence. The plaintiff, Mary Ann Crawford, began working at Medina in September 1964, when she was 28 years old. The defendant, Darla Kermendy, whose age is not apparent from the record, became Crawford’s supervisor in June 1991. It is unclear what the atmosphere in the Medina billing department was like prior to Kermendy’s tenure, but once she came aboard, at least Crawford became unhappy. Crawford complains that beginning with Kermendy’s hire, “there were racial remarks flying, old age remarks flying, [and] the younger women would make remarks and insulting remarks.” There were also “sexual remarks, filthy remarks, and [Kermendy] had a habit of putting her hands” on Crawford, apparently in an aggressive manner. Crawford points to several “old age remarks” in support of her hostile environment claim. Crawford alleges that “Kermendy made a comment, T don’t think women over 55 should be working.’ ” Crawford did not hear that remark, since she was at home ill at the time the alleged remark was made, but two coworkers told her that Kermendy “had made that remark in their presence.” They told Crawford that Kermendy was talking to them about Crawford when she made the comment. Kermendy filed an affidavit countering that her comment was simply that she would like to retire by the age of 55, and that “[t]he comment was not directed to anyone other than [her],” as she “do[es] not care at what age anyone else may desire to retire.” Her affidavit purported to explain that she wanted to retire at 55 because various family members had gotten sick shortly after attaining that age. Next, Crawford complains that Kermendy said, within Crawford’s hearing, that “[o]ld people should be seen and not heard.” Crawford was “embarrassed” and “humiliated” by the comment. She does not know to whom the comment was made, because she could not actually see Kermendy at the time; she could only hear her voice, which was “[r]ude and unpleasant.” Crawford, however, assumed the comment “was meant to include [her].” Crawford therefore “leaned around the file cabinet and ... said, T heard that, Darla.’ And she didn’t respond.” Crawford feels that Kermendy meant to suggest that “old people were somehow less than young people.” Crawford also generally alleges that “there were about five different girls” in the billing department “who would just constantly make ... miserable” the lives of “the older ladies”; those five would “every once in a while” make negative comments, and “equate old with being stupid, useless, dumb.” For instance, Crawford was once passing the door of a room where a group of people were having a pizza party, and one of the five looked out and saw her pass, and said, “It’s just my luck in an office with an old dumb side to have to sit on that side.” Crawford claims that Kermendy was in the room at the time, and “laughed and pointed and looked at [the woman making the comment],” and said “Oh, that’s good.” That comment apparently referred to the fact that a number of the older women sat on one particular side of the office. Crawford claims that the side was referred to as “the old side, the dumb side, worthless side.” She also claims that Ker-mendy “refused to walk on that side of the office for a whole day once.” In sum, Crawford asserts that the office is “totally divided” on the basis of age. She contends that in addition to verbal insults, the older women are “not included in anything,” such as parties, as well as information about minor changes in office procedures. She further contends that Kermendy “calls the young people in[to Kermendy’s office] and questions them about what the older people are doing, what they’re saying, and then she encourages them to go out and confront those people.” She claims that Ker-mendy “called attention” to Crawford’s “extremely sensitive hearing” in a staff meeting once, and that Kermendy said that all another older worker, who had false teeth, “wanted for Christmas was her front teeth”; it is Crawford’s belief that these comments are age-related. That there was tension in the billing department is by now apparent. While it is Crawford’s contention that the hostility directed at her was age-based, it is clear that Crawford treated others with hostility as well. For example, she refused to sign one coworker’s birthday card, because, as Crawford explained, “I don’t like her ... because she’s mean to me.” She referred to one coworker as “the widow” because “she always wears black.” She nicknamed one supervisor “Pat” because “at times [Crawford] feel[s] [the supervisor is] pathetic.” Another coworker is nicknamed “Sluggo” because “she reminds [Crawford] of that cartoon character.” Another is “Freak” because “she wears outlandish clothes and hairdos and that type of thing.” She calls two coworkers “Miss Piggy,” and another “fatso.” Moreover, Crawford argued even with those other workers whom she considered her allies; for example, a note from one of Crawford’s diaries, referring to a coworker that Crawford described as “older,” reads as follows: Ruth has gone over the other side. Tell her nothing from now on. According to Crawford, “the other side” denoted “the people who were against the older people.” Crawford herself says that, despite the incidents complained of, and despite being “unhappy” about the way Kermendy treated her, she “liked [her] job very well.” She has continued to work at Medina throughout this course of events, and has suffered no demotion or reduction in pay. But in November 1993, she filed a complaint in federal district court, alleging that she was being subjected to a hostile working environment as a result of age discrimination. Her complaint also contained state-law claims for false imprisonment and for assault and battery, based on incidents not germane to her age discrimination claim. The district court disposed of the plaintiffs ADEA claim on summary judgment, and dismissed the supplemental state-law claims. Although holding that a hostile work environment claim was cognizable under the ADEA, the district court concluded that the plaintiff had failed to produce evidence that the alleged harassment had the effect of unreasonably interfering with her performance and creating an intimidating, hostile, or offensive work environment that seriously affected her psychological well-being. The court noted, moreover, that most of the incidents complained of by Crawford “indicate[d] hostility between coworkers rather than an age-related hostile environment.” Crawford filed a timely notice of appeal as to defendants Medina, Kermendy, and Milli-gan only, thus abandoning her claims against defendant Slee. See Fed. R.App. P. 3(c). We note further that the notice of appeal named one Judy Reidell; because this is an individual not named in Crawford’s complaint, it is clear that Reidell is not properly a party to this appeal. II. The ADEA makes it unlawful for any employer to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, condi tions, or privileges of employment, because of such individual’s age. 29 U.S.C. § 623(a)(1). As the Supreme Court has recently explained, [t]he ADEA, enacted in 1967 as part of an ongoing congressional effort to eradicate discrimination in the workplace, reflects a societal condemnation of invidious bias in employment decisions. The ADEA is but part of a wider statutory scheme to protect employees in the workplace nationwide. See Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1988 ed. and Supp. V) (race, color, sex, national origin, and religion); the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (1988 ed., Supp. V) (disability); the National Labor Relations Act, 29 U.S.C. § 158(a) (union activities); the Equal Pay Act of 1963, 29 U.S.C. § 206(d) (sex).... The substantive, antidiscrimination provisions of the ADEA are modeled upon the prohibitions of Title VII.... The ADEA and Title VII share common substantive features and also a common purpose: “the elimination of discrimination in the workplace.” McKennon v. Nashville Banner Publishing Co., - U.S. -, -, 115 S.Ct. 879, 884, 130 L.Ed.2d 852 (1995) (some citations omitted). Bearing the similarity of the ADEA and Title VII in mind, then, it is unsurprising that the standards, methods, and manner of proof established in Title VII case law are persuasive authority in eases arising under the ADEA and that courts routinely employ Title VII and ADEA case law interchangeably. See, e.g., Wallace v. Dunn Constr. Co., 62 F.3d 374, 378 (11th Cir.1995) (en banc); Newman v. GHS Osteopathic, Inc., 60 F.3d 153, 157 (3d Cir.1995). It is well-established under Title VII that an employee has a cause of action when an employer maintains a hostile working environment. The “hostile environment” cause of action was first recognized in Rogers v. EEOC, 454 F.2d 234 (5th Cir.1971), cert. denied, 406 U.S. 957, 92 S.Ct. 2058, 32 L.Ed.2d 343 (1972), when the court held that an employee of Spanish origin had a cause of action against an employer for “the practice of creating a working environment heavily charged with ethnic ... discrimination.” Id. at 238. The doctrine has since been applied in Title VII cases alleging sex discrimination, see, e.g., Harris v. Forklift Sys., Inc., 510 U.S. 17, 114 S.Ct. 367, 126 L.Ed.2d 295 (1993); Meritor Sav. Bank v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986); Yates v. Avco Corp., 819 F.2d 630 (6th Cir.1987), as well as race and national origin discrimination, see, e.g., Erebia v. Chrysler Plastic Products Corp., 772 F.2d 1250 (6th Cir.1985), cert. denied, 475 U.S. 1015, 106 S.Ct. 1197, 89 L.Ed.2d 311 (1986); Risinger v. Ohio Bureau of Workers’ Compensation, 883 F.2d 475 (6th Cir.1989). The elements and burden of proof are the same, regardless of the discrimination context in which the claim arises. Risinger, 883 F.2d at 485. The theoretical rationale for the doctrine is that sufficiently abusive harassment adversely affects a “term, condition, or privilege” of employment within the meaning of Title VII. See Ellison v. Brady, 924 F.2d 872, 876 (9th Cir.1991). While, as far as we can discern, no circuit has as yet applied the hostile-environment doctrine in an ADEA action, but see Sischo-Nownejad v. Merced Community College Dist., 934 F.2d 1104, 1109 (9th Cir.1991); Young v. Will County Dep’t of Pub. Aid, 882 F.2d 290, 294 (7th Cir.1989), we find it a relatively uncontroversial proposition that such a theory is viable under the ADEA For at least these reasons, in light of the ADEA’s employment of the “terms, conditions, or privileges of employment” language, we have no doubt that a hostile work environment claim may be stated. The broad application of the hostile-environment doctrine in the Title VII context; the general similarity of purpose shared by Title VII and the ADEA; and the fact that the Title VII rationale for the doctrine is of equal force in the ADEA context, all counsel this result. We thus hold that a plaintiff may advance a hostile-environment claim under the ADEA These are the criteria for a prima facie claim: 1. The employee is 40 years old or older; 2. The employee was subjected to harassment, either through words or actions, based on age; 3. The harassment had the effect of unreasonably interfering with the employee’s work performance and creating an objectively intimidating, hostile, or offensive work environment; and 4. There exists some basis for liability on the part of the employer. Cf. Risinger, 883 F.2d at 484; EEOC Compliance Manual § 615.7. While the meaning of the first and second prongs is reasonably self-evident, the third prong is more subtle, and we must explain carefully the standard for determining when a plaintiff has produced sufficient evidence to allow a jury to conclude that the harassment is actionable, because sufficiently severe. The Supreme Court, in its initial decision on the subject, held that in order for harassment to be actionable, “it must be sufficiently severe or pervasive to alter the conditions of [the victim’s] employment and create an abusive working environment.” Meritor, 477 U.S. at 67, 106 S.Ct. at 2405 (internal quotation marks and citation omitted). In a more recent case, the Court clarified that the appropriate viewpoint for determining the severity or pervasiveness is an objective one: This standard ... takes a middle path between making actionable any conduct that is merely offensive and requiring the conduct to cause a tangible psychological injury. As we pointed out in Meritor, “mere utterance of an ... epithet which engenders offensive feelings in a[n] employee” ... does not sufficiently affect the conditions of employment to implicate Title VII. Conduct that is not severe or pervasive enough to create an objectively hostile or abusive work environment — an environment that a reasonable person would find hostile or abusive — is beyond Title VII’s purview. Likewise, if the victim does not subjectively perceive the environment to be abusive, the conduct has not actually altered the conditions of the victim’s employment, and there is no Title VII violation. But Title VII comes into play before the harassing conduct leads to a nervous breakdown. A discriminatorily abusive work environment, even one that does not seriously affect employees’ psychological well-being, can and often will detract from employees’ job performance, discourage employees from remaining on the job, or keep them from advancing in their careers. Moreover, even without regard to these tangible effects, the very fact that the discriminatory conduct was so severe or pervasive that it created a work environment abusive to employees because of their race, gender, religion, or national origin offends Title VII’s broad rule of workplace equality. The appalling conduct alleged in Meritor, and the reference in that case to environments “ ‘so heavily polluted with discrimination as to destroy completely the emotional and psychological stability of minority group workers,’ ”... merely present some especially egregious examples of harassment. They do not mark the boundary of what is actionable. Harris, 510 U.S. at 22, 114 S.Ct. at 370-71. Thus, while a plaintiff must subjectively feel that an environment is hostile, and the environment must in fact be objectively hostile, it is not necessary that the plaintiff be committed to a psychiatric institution in order to have a legal complaint. The Court counseled that the totality of the circumstances be considered in applying this standard: [W]e can say that whether an environment is “hostile” or “abusive” can be determined only by looking at all the circumstances. These may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance. Id. at 23, 114 S.Ct. at 371.
10516551-31137	REAVLEY, Circuit Judge: Hodge E. Mason, Hodge Mason Maps, Inc., and Hodge Mason Engineers, Inc. (collectively Mason) sued Montgomery Data, Inc. (MDI), Landata, Inc. of Houston (Lan-data), and Conroe Title & Abstract Co. (Conroe Title), claiming that the defendants infringed Mason’s copyrights on 233 real estate ownership maps of Montgomery County, Texas. The district court initially held that Mason cannot recover statutory damages or attorney’s fees for any infringement of 232 of the copyrights. The court later held that Mason’s maps are not copyrightable under the idea/expression merger doctrine, and granted summary judgment for the defendants. We agree with Mason that the maps are copyrightable, so we reverse the district court’s judgment and remand the case. But we agree with the district court that, if Mason proves that the defendants infringed his copyrights, he can only recover statutory damages and attorney’s fees for the infringements of one of the 233 maps. I. BACKGROUND Between August 1967 and July 1969, Mason created and published 118 real estate ownership maps that, together, cover all of Montgomery County. The maps, which display copyright notices, pictorially portray the location, size, and shape of surveys, land grants, tracts, and various topographical features within the county. Numbers and words on the maps identify deeds, abstract numbers, acreage, and the owners of the various tracts. Mason obtained the information that he included on the maps from a variety of sources. Relying on these sources, Mason initially determined the location and dimensions of each survey in the county, and then drew the corners and lines of the surveys onto topographical maps of the county that were published by the United States Geological Survey (USGS). He then determined the location of the property lines of the real estate tracts within each survey and drew them on the USGS maps. Finally, Mason traced the survey and tract lines onto transparent overlays, enlarged clean USGS maps and the overlays, added names and other information to the overlays, and combined the maps and overlays to print the final maps. Mason testified that he used substantial judgment and discretion to rec oncile inconsistencies among the various sources, to select which features to include in the final map sheets, and to portray the information in a manner that would be useful to the public. From 1970 to 1980, Mason revised the original maps and eventually published 115 new maps with copyright notices, for a total of 233 maps. Mason sold copies of his maps individually and in sets. Mason’s infringement claims are based on the defendants’ use of his maps as part of a geographical indexing system that Landata created to continuously organize and store ever-changing title information on each tract in Montgomery County. To create this sytem, Landata purchased a set of Mason’s maps and reorganized them by cutting and pasting them into 72 map sheets. Landata then attached a transparent overlay to each of the 72 sheets, and depicted on these overlays numerous updates and corrections to the information on Mason’s maps. Landata arbitrarily assigned identification numbers (“arb numbers”) to tracts or areas within the county, and added these numbers to the overlays. Using this process, Landata created an inked mylar “master overlay” for each of the 72 reorganized map sheets. Landata then made sepia copies of the master overlays, and began registering ownership and other changes on the sepia copies from the hundreds of land grants that are recorded in the county each day. Using this system, the defendants are able to retrieve current ownership and other information on any tract by locating its arb number on the appropriate overlay and entering that number into a computer database that contains data on each tract. In 1985, several title companies, including Conroe Title, incorporated MDI as a joint title plant. MDI and Landata then entered into a series of agreements under which Conroe Title and MDI’s other shareholders can use Landata’s system when they issue title insurance policies. On September 17, 1985, Landata asked Mason for permission to use his maps as part of its system, but Mason denied the request because Landata refused to pay a licensing fee. Landata then provided its products to MDI without Mason’s permission. Each of MDI’s shareholders purchased an original set of Mason’s maps, and either MDI or the shareholders reorganized the maps from 118 to 72 map sheets according to Landa-ta’s specifications. Landata provided MDI with a set of sepia copies of the master overlays for each set of reorganized maps and with access to its computer database. Annually from 1982 through 1986, and again in 1989, Landata or MDI produced new, updated editions of the master overlays. Mason registered the copyright for one of the original 118 maps in October 1968. After learning of Landata’s use of his maps, Mason registered the copyrights for the remaining 117 original maps and the 115 revised maps between October and December 1987. Mason filed this suit in September 1988, claiming infringement of his 233 copyrights under 17 U.S.C. § 106, and seeking statutory damages and attorney’s fees under 17 U.S.C. §§ 504-05. In December 1989, the defendants sought a partial summary judgment that, even if Mason proves copyright infringement, 17 U.S.C. § 412 precludes an award of statutory damages or attorney’s fees for any infringement of the 232 maps that Mason registered in 1987. The district court granted this motion on June 1, 1990. Mason v. Montgomery Data, Inc., 741 F.Supp. 1282, 1287 (S.D.Tex.1990). In September 1990, Mason filed a motion for partial summary judgment that the defendants had infringed his copyrights. The defendants countered with motions for summary judgment in which they asserted that Mason’s maps are not copyrightable and, even if they are, the defendants’ use of the maps does not constitute infringement. The district court granted the defendants’ motions after holding that Mason’s maps are not copyrightable because the idea embodied in the maps is inseparable from the maps’ expression of that idea. Mason v. Montgomery Data, Inc., 765 F.Supp. 353, 356 (S.D.Tex.1991). The court dismissed Mason’s claims with prejudice and awarded the defendants costs and attorney's fees. II. DISCUSSION A. The CopyRIGhtability of Mason’s Maps 1. The Idea/Expression Merger Doctrine The Copyright Act extends copyright protection to “original works of authorship fixed in any tangible medium of expression.” 17 U.S.C.A. § 102(a) (West Supp. 1992). The scope of that protection, however, is not unlimited. “In no case does copyright protection for an original work of authorship extend to any idea, ... regardless of the form in which it is described, explained, illustrated, or embodied in such work.” Id. § 102(b) (emphasis added). Thus, while a copyright bars others from copying an author’s original expression of an idea, it does not bar them from using the idea itself. “Others are free to utilize the ‘idea’ so long as they do not plagiarize its ‘expression.’ ” Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738, 741 (9th Cir.1971). In some cases, however, it is so difficult to distinguish between an idea and its expression that the two are said to merge. Thus, when there is essentially only one way to express an idea, “copying the ‘expression’ will not be barred, since protecting the ‘expression’ in such circumstances would confer a monopoly of the ‘idea’ upon the copyright owner free of the conditions and limitations imposed by the patent law.” Id. at 742. By denying protection to an expression that is merged with its underlying idea, we “prevent an author from monopolizing an idea merely by copyrighting a few expressions of it.” Toro Co. v. R & R Products Co., 787 F.2d 1208, 1212 (8th Cir.1986). The district court applied these principles to the present case and concluded that “the problem with the Hodge Mason maps is ... that [they] express the only pictorial presentation which could result from a correct interpretation of the legal description and other factual information relied upon by the plaintiffs in producing the maps.” Mason, 765 F.Supp. at 355. The court believed that, [t]o extend copyright protection to the Hodge Mason maps, which resulted from facts essentially in the public domain, would give the plaintiffs a monopoly over the facts. In other words, anyone who has the desire and ability to correctly interpret the legal descriptions and toil through the factual information relied upon by the plaintiffs in creating their maps, would create a pictorial presentation so substantially similar to the plain-tiffsf] that they could be accused of copyright infringement. This result would clearly upset Congress’ intent to balance the “competing concerns of providing incentive to authors to create and of fostering competition in such creativity.” Id. at 356 (quoting Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1253 (3rd Cir.1983), cert, dismissed, 464 U.S. 1033, 104 S.Ct. 690, 79 L.Ed.2d 158 (1984)). The court thus concluded that “the plaintiffs’ idea to create the maps, based on legal and factual public information, is inseparable from its expression embodied within the maps, and hence not subject to copyright protection.” Id. We agree with Mason that the district court erred in applying the merger doctrine in this case. To determine whether the doctrine is applicable in any case, the court must “focus on whether the idea is capable of various modes of expression.” Apple Computer, 714 F.2d at 1253. Thus, the court must first identify the idea that the work expresses, and then attempt to distinguish that idea from the author’s ex- pression of it. If the court concludes that the idea and its expression are inseparable, then the merger doctrine applies and the expression will not be protected. Conversely, if the court can distinguish the idea from its expression, then the expression will be protected because the fact that one author has copyrighted one expression of that idea will not prevent other authors from creating and copyrighting their own expressions of the same idea. In all cases, “[t]he guiding consideration in drawing the line is the preservation of the balance between competition and protection reflected in the patent and copyright laws.” Herbert Rosenthal Jewelry, 446 F.2d at 742. The district court determined that Mason’s idea, “which includes drawing the abstract and tract boundaries, indicating the ownership name, the tract size, and the other factual information” on a map of Montgomery County, was “to create the maps, based on legal and factual public information.” Mason, 765 F.Supp. at 356. Mason argues that the court clearly erred in finding that this idea can be expressed in only one or a limited number of ways. We agree. The record in this case contains copies of maps created by Mason’s competitors that prove beyond dispute that the idea embodied in Mason’s maps is capable of a variety of expressions. Although the competitors’ maps and Mason’s maps embody the same idea, they differ in the placement, size, and dimensions of numerous surveys, tracts, and other features. The record also contains affidavits in which licensed surveyors and experienced mapmakers explain that the differences between Mason’s maps and those of his competitors are the natural result of each mapmaker’s selection of sources, interpretation of those sources, discretion in reconciling inconsistencies among the sources, and skill and judgment in depicting the information. MDI argues that this evidence is irrelevant because there is no proof that Mason and his competitors obtained their information from the same sources. But the fact that different mapmakers with the same idea could reach different conclusions by relying on different sources only supports our result. Whether Mason and his competitors relied on different sources, or interpreted the same sources and resolved inconsistencies among them differently, or made different judgments as to how to best depict the information from those sources, the differences in their maps confirm the fact that the idea embodied in Mason’s maps can be expressed in a variety of ways. By selecting different sources, or by resolving inconsistencies among the same sources differently, or by coordinating, arranging, or even drawing the information differently, other mapmakers may create — and indeed have created — expres sions of Mason’s idea that differ from those that Mason created. Finally, the defendants contend that this court’s decision in Kern River Gas Transmission Co. v. Coastal Corp., 899 F.2d at 1458, requires application of the merger doctrine in this case. Kern River concerned the copyrightability of maps on which Kern River Gas Transmission Company (Kern River) depicted the location that it proposed for construction of a gas pipeline. The idea at issue in Kern River was simply the placing on a map of Kern River’s certain “proposed location for a prospective pipeline.” Id. at 1464. This court concluded that that idea merged with Kern River’s expression because there was only one way to effectively express that idea. Id. The defendants argue that the merger doctrine applies in this case because drawing lines on a public map is the only way to depict the locations of surveys and boundary lines in Montgomery County, just as it was the only way to depict the location of a pipeline in Kern River. But the distinction between Kern River and this case is not in the methods available for depicting an object’s location on a map, but in the ideas that the maps in the two cases embody. We cannot determine whether an idea is capable of a variety of expressions until we first identify what that idea is. A court’s decision whether to apply the merger doctrine often depends on how it defines the author’s idea. For this reason, in defining the idea the court should be guided by “the balance between competition and protection reflected in the patent and copyright laws.” Herbert Rosenthal Jewelry, 446 F.2d at 742. We focus in this ease on an earlier point in the mapping process, a point prior to the selection of information and decisions where to locate tract lines. The idea here was to bring together the available information on boundaries, landmarks, and ownership, and to choose locations and an effective pictorial expression of those locations. That idea and its final expression are separated by Mason’s efforts and creativity that are entitled to protection from competitors. The evidence in this case demonstrates that a mapmaker who desires to express the idea of depicting the location and ownership of property in Montgomery County in map form must select information from numerous sources, reconcile inconsistencies among those sources, and depict the information according to the mapmaker’s skill and judgment. Although Mason sought to depict the information accurately, the conflicts among the sources and the limitations inherent in the process of representing reality in pictorial map form required him to make choices that resulted in independent expression. Extending protection to that expression will not grant Mason a monopoly over the idea, because other mapmakers can express the same idea differently. The protection that each map receives extends only to its original expression, and neither the facts nor the idea embodied in the maps is protected. “[T]he facts and ideas ... are free for the taking.... “[T]he very same facts and ideas may be divorced from the context imposed by the author, and restated or reshuffled by second comers, even if the author was the first to discover the facts or to propose the ideas.” Feist, 111 S.Ct. at 1289 (quoting Jane C. Ginsburg, Creation and Commercial Value: Copyright Protection of Works of Information, 90 Colum.L.Rev. 1865, 1868 (1990)). For these reasons, we conclude that the district court erred by applying the merger doctrine in this case. Because the idea embodied in Mason’s maps can be expressed in a variety of ways, the merger doctrine does not render Mason’s expression of that idea uncopyrightable. 2. The “Originality” Requirement Landata contends that, even if the merger doctrine does not apply, Mason’s maps are uncopyrightable because they are not “original” under Feist. Although the district court applied the merger doctrine to hold that Mason’s maps are not copyrightable, it found that “the problem with the Hodge Mason maps is not a lack of originality.” Mason, 765 F.Supp. at 355. We agree that Mason’s maps are original. Originality does not require “novelty, ingenuity, or aesthetic merit.” H.R.Rep. No. 1476, 94th Cong., 2d Sess. 51 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5664; see also Feist, 111 S.Ct. at 1287. Instead, originality “means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.” Feist, 111 S.Ct. at 1287 (citing 1 M. Nimmer & D. Nimmer, Copyright § 2.01[A]-[B] (1990)). The parties do not dispute Mason’s claim that he independently created his maps, but Landata contends that they do not possess the degree of creativity necessary to qualify them as original under Feist. Mason’s maps pass muster under Feist because Masons’ selection, coordination, and arrangement of the information that he depicted are sufficiently creative to qualify his maps as original “compilations” of facts. Under the originality standard, bare facts are never copyrightable “because facts do not owe their origin to an act of authorship.” Id. at 1288. A compilation of facts, however, may be copyrightable if the author made choices as to “which facts to include, in what order to place them, and how to arrange the collected data so that they may be used effectively by readers.” Id. at 1289. The author’s selection, coordination, and arrangement of facts, however, are protected only if they were “made independently ... and entail a minimal degree of creativity.” Id. In Feist, the Court held that the defendant, who copied a list of names, towns, and telephone numbers from the white pages of the plaintiff’s telephone directory, did not copy anything that was “original” to the plaintiff. Id. at 1296. The Court explained that the plaintiff’s selection of facts to publish — the name, town, and telephone number of each person who applied for telephone service — “lacks the modicum of creativity necessary to transform mere selection into copyrightable expression.” Id. And the plaintiff’s arrangement of these facts, which involved “nothing more than listpng] ... [the] subscribers in alphabetical order,” is “not only unoriginal, it is practically inevitable.” Id. at 1297. Because the plaintiff “simply [took] the data provided by its subscribers and list[ed] it alphabetically by surname ..., [t]he end product is a garden-variety white pages directory, devoid of even the slightest trace of creativity.” Id. at 1296. But the evidence in this case demonstrates that Mason exercised sufficient creativity when he created his maps. In his deposition and affidavit, Mason explained the choices that he independently made to select information from numerous and sometimes conflicting sources, and to depict that information on his maps. Ma son’s compilation of the information on his maps involved creativity that far exceeds the required minimum level. Mason’s maps also possess sufficient creativity to merit copyright protection as pictorial and graphic works of authorship. Historically, most courts have treated maps solely as compilations of facts. See Wolf, supra note 4, at 227. The Copyright Act, however, categorizes maps not as factual compilations but as “pictorial, graphic, and sculptural works” — a category that includes photographs and architectural plans. 17 U.S.C.A. § 101 (West Supp.1992). Some courts have recognized that maps, unlike telephone directories and other factual compilations, have an inherent pictorial or photographic nature that merits copyright protection. See, e.g., Rockford Map Publishers, Inc. v. Directory Service Co., 768 F.2d 145, 149 (7th Cir.1985) (“Teasing pictures from the debris left by conveyancers is a substantial change in the form of the information. The result is copyrightable-”), cert, denied, 474 U.S. 1061, 106 S.Ct. 806, 88 L.Ed.2d 781 (1986); United States v. Hamilton, 583 F.2d 448, 451 (9th Cir.1978) (“Expression in cartography is not so different from other artistic forms seeking to touch upon external realities that unique rules are needed to judge whether the authorship is original.”). We agree with these courts. As Wolf explains in his article: It is true that maps are factual compilations insofar as their subject matter is concerned. Admittedly, most maps present information about geographic relationships, and the “accuracy” of this presentation, with its utilitarian aspects, is the reason most maps are made and sold. Unlike most other factual compilations, however, maps translate this subject-matter into pictorial or graphic form.... Since it is this pictorial or graphic form, and not the map’s subject matter, that is relevant to copyright protection, maps must be distinguished from non-pictorial fact compilations_ A map does not present objective reality; just as a photograph’s pictorial form is central to its nature, so a map transforms reality into a unique pictorial form central to its nature. Wolf, supra note 4, at 239-40. The level of creativity required to make a work of authorship original “is extremely low; even a slight amount will suffice.” Feist, 111 S.Ct. at 1287. We think that the process by which Mason, using his own skill and judgment, pictorially portrayed his understanding of the reality in Montgomery County by drawing lines and symbols in particular relation to one another easily exceeds that level. Because Mason’s maps possess sufficient creativity in both the selection, coordination, and arrangement of the facts that they depict, and as in the pictorial, graphic nature of the way that they do so, we find no error in the district court’s determination that Mason’s maps are original. B. Availability of Statutory Damages Mason sought statutory damages rather than actual damages. The district court held that section 412 of the Copyright Act precludes an award of statutory damages (and attorney’s fees) for any alleged infringement of all but one of Mason’s maps. See Mason, 741 F.Supp. at 1285-87. Mason calls that holding error, but we agree with the district court. Section 412 provides that: no award of statutory damages or of attorney’s fees, as provided by sections 504 and 505, shall be made for ... (2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work. 17 U.S.C.A. § 412 (West Supp.1992). Mason argues that Congress’ use of the phrase “for any infringement” in this section reveals its intent that courts treat each of a defendant’s infringing acts separately and deny statutory damages only for those specific infringing acts that commenced pri- or to registration. Thus, Mason argues, section 412 allows him to recover statutory damages and attorney’s fees for any infringement that the defendants commenced after he registered the copyrights, even though they commenced other, separate infringements of the same work prior to registration. The district court rejected this argument because it interpreted the term “infringement” to mean all of a defendant’s acts of infringement of any one work. Thus, the court interpreted “the words ‘commencement of infringement’ to mean the first act of infringement in a series of on-going separate infringements.” 741 F.Supp. at 1286. We find section 412 to be ambiguous and open to either interpretation. But we find support for the district court’s interpretation in the legislative history of section 412. The House Report explains that “clause (2) [of section 412] would generally deny an award of [statutory damages and attorney’s fees] where infringement takes place before registration.” H.R.Rep. No. 1476 at 158, reprinted in 1976 U.S.C.C.A.N. at 5659, 5774 (emphasis added). In contrast to the “for any infringement” language of section 412, this language reveals Congress’ intent that statutory damages be denied not only for the particular infringement that a defendant commenced before registration, but for all of that defendant’s infringements of a work if one of those infringements commenced prior to registration. In addition to the legislative history of section 412, we find support for the district court’s interpretation in 17 U.S.C. § 504. We look to section 504 for assistance in understanding section 412 because section 412 bars an award of statutory damages “as provided by section 504.” Section 504 provides that: the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $500 or more than $20,000 as the court considers just. 17 U.S.C.A. § 504(c)(1) (West Supp.1992) (emphasis added). Under this section, the total number of “awards” of statutory damages (each ranging from $500 to $20,-000) that a plaintiff may recover in any given action depends on the number of works that are infringed and the number of individually liable infringers, regardless of the number of infringements of those works. So if a plaintiff proves that one defendant committed five separate infringements of one copyrighted work, that plaintiff is entitled to only one award of statutory damages ranging from $500 to $20,000. And if a plaintiff proves that two different defendants each committed five separate infringements of five different works, the plaintiff is entitled to ten awards, not fifty. It would be inconsistent to read section 504 to include all of one defendant’s infringements of one work within “an award of statutory damages,” and then read section 412 to treat each infringement separately for purposes of barring that award. Moreover, section 504 provides that the plaintiff may elect to recover an award of statutory damages for all of one defendant’s infringements of any one work “instead of actual damages and profits.” Thus, if all of one defendant’s infringements commenced after registration, the plaintiff may not elect to recover statutory damages for some of those infringements and actual damages for the rest. See H.R.Rep. No. 1476 at 161, reprinted in 1976 U.S.C.C.A.N. at 5659, 5777 (“Recovery of actual damages and profits under section 504(b) or of statutory damages under section 504(c) is alternative.”). Under Mason’s argument, a plaintiff could recover actual damages for infringements that a defendant commenced before registration, and still recover statutory damages for infringements of the same work that the same defendant commenced after registration. This argument must fail because “an award of statutory damages” — which section 504 giveth and section 412 taketh away — encompasses all of one defendant’s infringements of one work. Finally, our conclusion accords with the purpose of section 412. Congress included section 412 in the Copyright Act of 1976 because “[cjopyright registration for published works, which is useful and important to users and the public at large, would no longer be compulsory [under the 1976 Act], and should therefore be induced in some practical way.” H.R.Rep. No. 1476 at 158, reprinted in 1976 U.S.C.C.A.N. at 5659, 5774. Denying an “award of the special or ‘extraordinary’ remedies of statutory damages or attorney’s fees where ... infringement commenced after publication and before registration” encourages early registration of copyrights. Id. As one court has noted, “[t]he threat of such a denial would hardly provide a significant motivation to register early if the owner of the work could obtain those remedies for acts of infringement taking place after a belated registration.” Singh v. Famous Overseas, Inc., 680 F.Supp. 533, 536 (E.D.N.Y.1988). We thus conclude that a plaintiff may not recover an award of statutory damages and attorney’s fees for infringements that commenced after registration if the same defendant commenced an infringement of the same work prior to registration. Mason published his 233 maps between 1967 and 1980, and registered the copyright in one map in October 1968. By the time he registered the remaining 232 copyrights in 1987, the defendants had reorganized Mason’s maps and created and used the overlays and computer database. As to each work and each defendant, the alleged acts of infringement that could give rise to an award of statutory damages had commenced prior to registration of 232 of the works. We thus uphold this ruling of the district court. If Mason proves infringement, he may elect to recover statutory damages and attorney’s fees only for the infringements of the map that he registered in 1968. C. Defendants’ Costs and Attorney’s Fees Because we reverse the district court’s final judgment, the defendants are not presently entitled to costs and attorney’s fees as “prevailing parties.” See 17 U.S.C. § 505. We thus reverse the court’s amend ed final judgment of June 5, 1991 that awarded costs and attorney’s fees to the defendants. III. CONCLUSION We REVERSE the court’s judgments dismissing plaintiff’s action and awarding the defendants costs and attorney’s fees, and we REMAND the case for further proceedings consistent with this opinion. REVERSED and REMANDED. . In addition to arguing that Mason’s maps are not copyrightable, the defendants argued in their motions for summary judgment that their actions did not constitute actionable infringement of those copyrights. Although the district court did not address these arguments when it granted summary judgment, Landata asks us to affirm the summary judgment in the defendants’ favor on these grounds. We decline this invitation, and remand the case for the district court to address these issues. . These sources included tax, deed, and survey records from Montgomery County; data provided by the San Jacinto River Authority; survey records, maps, and abstracts of land titles from the Texas General Land Office; title data and subdivision information provided by Conroe Title; a map from the City of Conroe, Texas; and maps from the United States Coast and Geodetic Survey. .The USGS has mapped much of the United States, including Montgomery County. Most private mapmakers, like Mason, use USGS topographical maps as starting points for their own maps. See David B. Wolf, Is There any Copyright Protection for Maps after Feist?, 39 J. Copyright Soc'y USA 224, 226 (1992).
160994-15971	ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT KAY, Chief Judge. BACKGROUND Brian Tanoue (“Plaintiff’) was interviewed by the Internal Revenue Service (“IRS”) on several occasions in 1993 and 1994 during the course of a criminal tax investigation of David Chang. The IRS made recordings, memoranda, and notes of those interviews. On May 18, 1994, Plaintiff, as directed by summons, appeared before special agent Teraoka to give a handwriting exemplar. At the meeting Plaintiff refused to comply with the summons, refusing to give the exemplar. On August 17, 1994, the IRS filed a petition to enforce the summons. United States v. Brian Tanoue, Misc. No. 94-00096. The district court ordered Plaintiff to comply with the summons on February 16, 1995. Plaintiff has appealed the order. By letter dated October 19,1994, Plaintiffs attorney made a Freedom of Information Act (“FOIA”) request on Plaintiffs behalf. He sought all statements, memoranda, notes and recordings of the interviews that Plaintiff gave on December 2, 1993, February 9, 1994 and May 18,1994. On or about November 7, 1994, the parties agreed to extend the IRS’s response deadline 30 days. After the IRS failed to respond, Plaintiff filed this action on January 5, 1995. STANDARD OF REVIEW I. Motion to Dismiss Standard. On a motion to dismiss for lack of subject matter jurisdiction under 12(b)(1), Federal Rules of Civil Procedure, the plaintiffs allegations are not presumed to be truthful, and the plaintiff has the burden of proof that jurisdiction exists. Thornhill Publishing Co., Inc. v. General Telephone & Electronics Corporation, 594 F.2d 730, 733 (9th Cir.1979). “[A] Rule 12(b)(1) motion can attack the substance of a complaint’s jurisdictional allegations despite their formal sufficiency,” whereupon the plaintiff must “present affidavits or any other evidence necessary to satisfy its burden.” St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.1989), cert. denied, 493 U.S. 993, 110 S.Ct. 541, 107 L.Ed.2d 539 (1989). II. Summary Judgment Standard. Summary judgment shall be granted where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(e). One of the principal purposes of the summary judgment procedure is to identify and dispose of factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The United States Supreme Court has declared that summary judgment must be granted against a party who fails to demonstrate facts to establish an element essential to his case where that party will bear the burden of proof of that essential element at trial. Id. at 322, 106 S.Ct. at 2552. “If the party moving for summary judgment meets its initial burden of identifying for the court the portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact [citations omitted], the nonmoving party may not rely on the mere allegations in the pleadings in order to preclude summary judgment.” T.W. Electrical. Serv. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir.1987). Instead, Rule 56(e) requires that the nonmoving party set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial. Id. At least some “significant probative evidence tending to support the complaint” must be produced. Id. Legal memoranda and oral argument are not evidence and do not create issues of fact capable of defeating an otherwise valid motion for summary judgment. British Airways Bd. v. Boeing Co., 585 F.2d 946, 952 (9th Cir.1978). The standard for a grant of summary judgment reflects the standard governing the grant of a directed verdict. See Eisenberg v. Ins. Co. of North America, 815 F.2d 1285, 1289 (9th Cir.1987), citing, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Thus, the question is whether “reasonable minds could differ as to the import of the evidence.” Id. The Ninth Circuit has established that “[n]o longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment.” California Architectural Bldg. Products, Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir.1987). Moreover, the United States Supreme Court has stated that “[w]hen the moving party has carried its burden under Rule 56(c), its opponent 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, 1355, 89 L.Ed.2d 538 (1986). Indeed, “if the factual context makes the nonmoving party’s claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial.” Franciscan Ceramics, 818 F.2d at 1468 (emphasis original), citing, Matsushita, supra, 475 U.S. at 587, 106 S.Ct. at 1356. Of course, all evidence and inferences to be drawn therefrom must be construed in the light most favorable to the nonmoving party. T.W. Elec. Services, 809 F.2d at 630-31. DISCUSSION I. Freedom of Information Act. The Freedom of Information Act places a general obligation on agencies to disclose all information used in agency decision making, including information submitted by outside parties. See 5 U.S.C. § 552(a); Chrysler Corp. v. Brown, 441 U.S. 281, 292, 99 S.Ct. 1705, 1712, 60 L.Ed.2d 208 (1979); Pacific Architects and Engineers v. United States Department of State, 906 F.2d 1345, 1346 (9th Cir.1990). Subsection (b) of the Act, however, grants agencies the discretion to withhold nine classes of information. 5 U.S.C. § 552(b); Chrysler, 441 U.S. at 292-93, 99 S.Ct. at 1712-13. In particular, 5 U.S.C. § 552(b)(3) allows agencies to withhold information that is; specifically exempted from disclosure by statute (other than section 552(b) of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matter to be withheld. The Internal Revenue Code exempts many documents from disclosure under 26 U.S.C. § 6103(a). In particular, the statute states that a person’s tax returns, and “return information” is confidential and cannot be released except under defined situations. Courts agree that § 6103 of the Internal Revenue Code is the sort of statute referred to by the FOIA in 5 U.S.C. § 552(b)(3). DeSalvo v. Internal Revenue Service, 861 F.2d 1217, 1219 (10th Cir.1988) (noting that the Third, Fifth, Ninth, Eleventh, and District of Columbia Circuits have all held that § 6103 applies as an exempting statute under FOIA). Accordingly, if § 6103 forbids the disclosure of material, it may not be produced in response to a request under the FOIA. Church of Scientology of California v. Internal Revenue Service, 484 U.S. 9, 11, 108 S.Ct. 271, 272, 98 L.Ed.2d 228 (1987); Kamman v. IRS, 56 F.3d 46, 47 (9th Cir.1995). II. Motion to Dismiss Due to Lack of Subject Matter Jurisdiction. The IRS contends that this Court lacks jurisdiction because Plaintiff has not exhausted his administrative remedies. FOIA requires parties to exhaust administrative remedies before seeking judicial review. United States v. Steele (in re Steele), 799 F.2d 461, 465 (9th Cir.1986); Stebbins v. Nationwide Mut. Ins. Co., 757 F.2d 364, 366 (D.C.Cir.1985); Hedley v. United States, 594 F.2d 1043, 1044 (5th Cir.1979). Where a Plaintiff has not attempted to comply fully with agency procedures, a court should assert lack of jurisdiction under the exhaustion doctrine. Steele, 799 F.2d at 466; Hedley, 594 F.2d at 1044. Each federal agency is required to publish in the Federal Register procedures to be followed in permitting access to its records under FOIA. See 5 U.S.C. § 552(a)(3)(B). In the instant case, 26 C.F.R. § 601.702(c) determines the process that a party must follow to gain access to the type of information Plaintiff seeks. Essentially, the party must identify themselves and the fact that they are making a FOIA request, send the request to the director of the IRS (where the records are located or to the local director), reasonably describe the records sought, and provide a return address for notification by the IRS of whether the request is to be granted or denied. In the case of a request for documents that are restricted by statute or regulation, such as the Privacy Act, the requestor must establish a right to the documents requested. 5 U.S.C. § 552(a)(6)(A)® requires agencies to determine within 10 days of receipt of a request for information whether or not the request will be granted. The agency must then immediately notify the person making the request of the determination and the reasons thereof. See also 26 C.F.R. § 601.702(c)(7)(iii) (“[I]f the IRS decides to deny a request, the person making the request will be so notified by mail. The letter of notification will ... contain a brief statement of the grounds for not granting the request in full.”) Section 552(a)(6)(B) allows agencies up to 10 extra days to make their determination due to certain extenuating circumstances. Here, Plaintiffs filings with this Court show that the original request was filed on October 19, 1994. On or about November 7, 1994, the parties agreed to a 30 day extension. However, Defendants failed entirely to respond to Plaintiffs request before Plaintiff filed the current action, well beyond the 30 day extension period. The IRS contends that it did not respond to Plaintiffs request because he did not submit a consent form signed by Mr. Chang. The IRS claims Chang’s consent is needed because the information sought falls within the definition of Mr. Chang’s “return information” and is therefore non-disclosable, except under certain defined situations, under 26 U.S.C. § 6301. It is Plaintiffs contention that the information sought is not the “return information” of Mr. Chang and that he did not need Chang’s consent to obtain it. The IRS cites two cases to support their premise that an improperly formatted request fails to satisfy the exhaustion requirement. Church of Scientology v. IRS, 792 F.2d 146 (D.C.Cir.1986); Marks v. Department of Justice, 578 F.2d 261 (9th Cir.1978). Both of these cases, however, deal with situations where the requesting party did not provide the federal agency with sufficient information to reasonably direct the agency in its search for the requested documents. Moreover, these cases simply stand for the proposition that overly broad requests can be denied. The courts did not hold that the agencies could ignore the FOIA requests. For instance, the Mason court held that an agency could deny a request that did not adequately describe the documents requested after the agency made a good faith effort to locate such documents. Mason v. Callaway, 554 F.2d 129, 131 (4th Cir.1977). In the case at bar, the IRS failed to show that it even made an effort to locate the documents prior to Plaintiffs filing of this action. In any event, the IRS does not contend that Plaintiffs request was too broad; it contends that the information was privileged and that Plaintiff failed to establish a right to the information. That the IRS may conclude that the information is “return information” and unreleasable without consent does not mean that it can ignore the request. If the IRS decided to deny the request it was obligated under 5 U.S.C. § 552(a)(6)(A)® and 26 C.F.R. § 601.702(c)(7)(iii) to notify Plaintiff of the reasons for the denial. Plaintiffs request was properly formatted and sufficiently explicit so as to direct the IRS to the requested documents. (Pi’s. FOIA Req., Defs Mot. for Summ.J. Ex. A.) He gave names, dates and the subject matter of the documents requested. Furthermore, the IRS’s request for an extension of the time requirement shows that it received Plaintiffs request. 5 U.S.C. § 552(a)(6)(C) states in pertinent part: Any person making a request to any agency for records ... shall be deemed to have exhausted his administrative remedies with respect to such request if the agency fails to comply with the applicable time limit provisions of this paragraph. Since the IRS did not respond to Plaintiffs request within the agreed upon time limit, Plaintiff is deemed to have exhausted his administrative remedies. This Court therefore has jurisdiction to hear his complaint. The IRS’s motion to dismiss for lack of jurisdiction is hereby DENIED. III. Motion for Summary Judgment. The Government has the burden of proving that information is exempt from disclosure. Kamman, 56 F.3d at 47. The government contends that the information requested by Plaintiff falls within exception 3 of FOIA because it is “return information” which the government is prohibited from disclosing, except in limited situations, by 26 U.S.C. § 6103. The statute defines “return information” as: ... data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax, penalty, interest, fine, or forfeiture, or any other imposition, or offense ... 26 U.S.C. § 6103(b)(2). To support their contention, the IRS has submitted the declaration of Disclosure Officer Jerry Hiromoto, describing the information sought by Plaintiff and describing how it was received or prepared in connection with the investigation of the possible tax liability of Mr. Chang. Also, the Declaration of Special Agent John Teraoka supports a conclusion that the information was collected as part of an investigation of Mr. Chang. Accordingly, the Court finds that the information is the “return information” of Mr. Chang, and is exempt from disclosure to Plaintiff absent a waiver from Chang. See DeSalvo v. Internal Revenue Service, 861 F.2d 1217, 1222 (10th Cir.1988); Mason, 554 F.2d at 131. Plaintiff contends that his own statements cannot be Mr. Chang’s “return information”. This argument lacks merit. In determining whether information is “return information” the focus is on the individual whom the information pertains to, not the individual who gave the information. Martin v. Internal Revenue Service, 857 F.2d 722, 726 (10th Cir.1988). Also, “the identity of the requesting party has no bearing on the merits of his or her FOIA request.” United States Department of Justice et al. v. Reporters Committee for Freedom of the Press et al., 489 U.S. 749, 771, 109 S.Ct. 1468, 1480, 103 L.Ed.2d 774 (1989). “Congress ‘clearly intended’ the FOIA ‘to give any member of the public as much right to disclosure as one with a special interest (in a particular document).’ ” Id., quoting NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149, 95 S.Ct. 1504, 1515, 44 L.Ed.2d 29 (1975); See also, NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 221, 98 S.Ct. 2311, 2316, 57 L.Ed.2d 159 (1978). Therefore the fact that Plaintiff is asking for information that he provided the agency affords him no special treatment un der FOIA. The basic character of the information remains the same; it is still “return information” of Mr. Chang and therefore exempt from disclosure. Plaintiff also seems to imply that he too was a target of the investigation, and that therefore the information he requests pertains as much to him as it does to Mr. Chang. The only document that supports Plaintiffs contention is Plaintiffs Concise Statement of the Facts. The affidavits filed in this case do not support Plaintiffs allegation. As set forth above, Plaintiff may not rely on mere allegations in the pleadings in order to avoid summary judgment. T.W. Electrical Serv., 809 F.2d at 630.
2270528-6047	KOELSCH, Circuit Judge. This matter involves a dispute between the government and a group of persons, defendants, below, who are asserting an easement for a road across public lands. It is here on defendant’s appeal from partial summary judgment holding defendants trespassers and the government entitled to immediate possession of the government lands over which defendants were constructing portions of the road at the time this suit was commenced. We conclude the judgment cannot stand. Summary judgment may not be entered unless, in the language of Rule 56(c) Fed.R.Civ.P., “. . . 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.” This record discloses several such issues. Defendants asserted the doctrine of easement by implication and necessity as the basis for the road. They relied upon affidavits, etc. which tended to show that they succeeded, through mesne conveyances, to the ownership or control of a number of sections and partial sections of land which had been patented in the year 1906 to the Southern Pacific Railway Company, pursuant to Congressional grant to aid in the construction of railroads (Act of July 27, 1866, 14 Stat. 292; Act of Mar. 3, 1871, 16 Stat. 573); that the lands so patented were and are wholly surrounded by public lands and that no roads to defendants’ lands have ever existed nor do the patents make any provision for access; that the lands, although never exploited commercially, have utility for some purposes and that defendants desire to “develop” them and sell parcels for home-sites and recreational uses; that the defendants, to that end, laid out and coim menced to construct a two lane surfaced road suitable for vehicular travel, linking said sections together and providing access to them; that upon completion defendants intended to dedicate the road to the public. They make further statements concerning the route selected and the width of the road, which tend to show that the course is predominantly dictated by the nature of the surrounding terrain and that the size is commensurate with the probable need. The court held this showing insufficient to meet the government’s motion. It gave two reasons. The first that no necessity appeared. Said the court: “It is interesting in connection with the claim of the defendants to a way of necessity that they have not shown that any of the parcels as to which defendants claim an interest is entirely landlocked.” Even if the record bore out this statement, such fact would not necessarily have ended the matter. However, the record is to the contrary; it includes, in addition to defendants’ statements concerning lack of access to their lands, a plat which tends to show that most, if not all, of defendants’ lands are wholly surrounded by those of the government. The district court, as the second basis for its ruling, declared in effect that, assuming an easement, the road exceeded in scope that contemplated by the government at the time patent issued. But that fact does not support, let alone require, the conclusion reflected in the summary judgment that defendants are wholly without a right nor does it justify the broad order directing them to quit the public land altogether. The defendants, having raised a factual issue as to whether or not they hold an easement, are entitled to a hearing to determine not only that issue, but the incidental ones that relate to it. The judgment is vacated and the cause is remanded to the district court for further proceedings consistent with this opinion. . The complaint names several persons as defendants, but the judgment, as well as the writ, runs solely against one of them— Michael Dunn, and leaves the present status of the others unclear. References to “the defendants” throughout this opinion include not only Dunn but any other of the defendants who are interested. . Since the government did not, in our judgment, raise the point upon which Judge Wright bases his dissent, we have not discussed it in the opinion, but nevertheless did give it due consideration and concluded that it lacked merit. 3 Powell, Real Property, 443-444. See Superior Oil v. United States, 353 F.2d 34 (9th Cir. 1965). The doctrine applies to roads: “A way of necessity arises where there is a conveyance of a part of a tract of land of such nature and extent that either the part conveyed or the part retained is entirely surrounded by the land from which it is severed or by this land and the land of strangers. It is a universally established principle that where a tract of land is conveyed which is separated from the highway by other lands of the grantor or surrounded by his lands or by his and those of third persons, there arises, by implication, in favor of the grantee, a way of necessity across the premises of the grantor to the highway. . ” (17 Am.Jur. Easements, § 58). The court, apparently as a third basis for its ruling, gratuitously held that defendants had no right by statute to an easement. Thus, in the course of its opinion the court declared “ [t] he Congressional statute provides for the construction of public highways by duly constituted public authorities over public lands, but it does not provide for the construction of roads of the nature here involved on the public lands by private persons.” The court did not designate the statute referred to but no doubt had in mind 43 U.S.C. § 932, for both parties now discuss that statute in their briefs on appeal and defendants place considerable reliance upon it as a. separate basis for their attack on the summary judgment. Since the cause must go back to the district court, we will assume that the reference was to 43 U.S.C. § 932 and undertake to consider it. 43 U.S.C. § 932 reads as follows: “The right of way for the construction of highways over public lands, not reserved for public uses, is hereby granted.”
3985155-17435	OPINION OF THE COURT AND ACTION ON PETITION FOR EXTRAORDINARY RELIEF IN THE NATURE OF A WRIT OF CORAM NOBIS KERN, Senior Judge: This is a petition for extraordinary relief in the nature of a writ of coram nobis. See 28 U.S.C. § 1651(a) (2006). Petitioner, whose direct appeal is final and is now facing deportation, alleges that he received ineffective assistance of counsel when his trial defense counsel failed to inform him that he could be deported if he pleaded guilty. In this respect, petitioner is seeking the retroactive application of Padilla v. Kentucky, 559 U.S. 356, 130 S.Ct. 1473, 176 L.Ed.2d 284 (2010), to his ease. We hold that petitioner is not entitled to coram nobis relief because Padilla established a new rule that is not retroactively applicable. We further conclude that, even were we to assume deficient performance in this ease, petitioner’s claim does not establish prejudice. I In February 2005, petitioner was approached by a finance clerk, whom he knew as “Frank,” with a scheme to steal money from the U.S. government. Pursuant to the scheme, petitioner would make a false claim for entitlements he was not authorized to receive, and Frank would fraudulently arrange for money to be paid from the U.S. government to petitioner. Frank and petitioner would then share the stolen funds. Petitioner agreed to the scheme, and in the months that followed, Frank arranged for the deposit of over $60,000.00 to petitioner’s bank account. These thefts were ultimately discovered, and petitioner made a full confession about his role in the fraudulent scheme. On 2 June 2006, a military judge sitting as a general court-martial convicted petitioner, pursuant to his pleas, of conspiracy, larceny, and making a false claim, in violation of Articles 81, 121, and 132, Uniform Code of Military Justice, 10 U.S.C. §§ 881, 921, 932 (2000) [hereinafter UCMJ]. The military judge sentenced petitioner to a bad-conduct discharge, confinement for thirteen months, total forfeiture of all pay and allowances, and reduction to the grade of E-l. The convening authority approved the adjudged sentence. Petitioner’s case was then reviewed by this court pursuant to Article 66, UCMJ, and the findings and sentence were summarily affirmed. United States v. Casa-Garcia, ARMY 20060508 (Army Ct.Crim.App. 8 June 2007). Petitioner did not file an appeal to the Court of Appeals for the Armed Forces (CAAF), and his bad-conduct discharge was ordered executed on 26 October 2007. On 23 November 2011, petitioner filed with this court the instant petition for extraordinary relief in the nature of a writ of coram nobis, alleging that he received ineffective assistance of counsel when his defense coun sel failed to inform him of the immigration consequences of his guilty pleas. We ordered the government to show cause why the writ should not issue, and it filed an answer brief on 21 December 2011. Petitioner thereafter filed an affidavit and a reply brief. In his affidavit, petitioner states that he is a Cuban national who became a lawful permanent resident of the United States in 1999. After serving his court-martial sentence, petitioner visited Cuba in 2010, and upon reentry to the United States, was informed that he was a visiting alien. On 9 November 2010, a deportation order was issued for petitioner to be immediately deported from the United States as a consequence of his court-martial conviction. Petitioner avers that his defense counsel, Captain (CPT) JR, did not advise him of the deportation consequences associated with a court-martial conviction. Petitioner states that he did not know deportation could occur as a result of his conviction, and further states, “Had I known that my plea would result in such consequences I would not have pled guilty to the charges against me at that time.” Captain JR thereafter filed an affidavit, confirming that he did not advise petitioner of the potential immigration consequences of his guilty pleas. Captain JR states that petitioner informed him of his nationality, but did not request any information regarding the immigration consequences of his pleas. Instead, petitioner’s main concerns were limiting any potential confinement and avoiding a punitive discharge. Captain JR states, “From the beginning of my representation of [petitioner, he] insisted that he wanted to plead guilty and wanted to benefit from cooperating with the government.” Captain JR further noted that petitioner was not married and did not have any dependents. After receiving the affidavits from petitioner and CPT JR, we ordered further briefing on the issue of ineffective assistance of counsel in light of the facts set forth in the affidavits. Petitioner points to CPT JR’s candid admission that he knew of his nationality but failed to advise him of potential immigration consequences as conclusive proof of deficient performance. In response, the government argues that we need not reach the issue of deficient performance because petitioner cannot establish prejudice. II Petitioner’s claim of ineffective assistance of counsel is before this court in a petition for extraordinary relief in the nature of a writ of coram nobis. Pursuant to the All Writs Act, military Courts of Criminal Appeals are empowered to issue “all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” 28 U.S.C. § 1651(a) (2006). See Denedo v. United States (Denedo I), 66 M.J. 114, 124 (C.A.A.F.2008); United States v. Frischholz, 16 U.S.C.M.A. 150, 152, 36 C.M.R. 306, 308, 1966 WL 4467 (1966). In modern practice, writs of comm nobis may issue to correct factual errors and legal errors of the most fundamental character, to include violations of constitutional rights. United States v. Denedo (Denedo II), 556 U.S. 904, 911, 129 S.Ct. 2213, 173 L.Ed.2d 1235 (2009). Intrinsically, coram nobis relief is “an extraordinary remedy predicated on exceptional circumstances not apparent to the court in its original consideration of the case.” Dew v. United States, 48 M.J. 639, 649 (Army Ct.Crim.App.1998) (en banc) (plurality opinion). More precisely, in the military justice system a petitioner must satisfy several stringent threshold requirements in order to obtain coram nobis relief: (1) the alleged error is of the most fundamental character; (2) no remedy other than coram nobis is available to rectify the consequences of the error; (3) valid reasons exist for not seeking relief earlier; (4) the new information presented in the petition could not have been discovered through the exercise of reasonable diligence prior to the original judgment; (5) the writ does not seek to reevaluate previously considered evidence or legal issues; and (6) the sentence has been served, but the consequences of the erroneous conviction persist. Denedo I, 66 M.J. at 126 (citing United States v. Morgan, 346 U.S. 502, 512-13, 74 S.Ct. 247, 98 L.Ed. 248 (1954); Loving v. United States (Loving I), 62 M.J. 235, 252-53 (C.A.A.F.2005)). This court applies a two-tiered evaluation for coram nobis review of ineffective assistance of counsel claims. “In the first tier, the petitioner must satisfy the threshold requirements for a writ of coram nobis, as described above. If the petitioner does so, the court then analyzes, in the second tier, the ineffective assistance of counsel claim_” Denedo I, 66 M.J. at 126. In this ease, petitioner’s writ meets the threshold criteria for coram nobis review. The first three criteria are satisfied because the error is of fundamental character, there is no other remedy, and the immigration consequences of his plea did not become known to petitioner until deportation proceedings were initiated, which was well after direct review of his case was completed. As for the fourth criteria (whether the immigration consequences could have been discovered using reasonable diligence), we also conclude it is satisfied. Although petitioner did not specifically ask about the immigration consequences of his plea, petitioner did inform his defense counsel that he was originally from Cuba. In these circumstances, the current state of the law would place a duty upon a defense counsel to advise his client of the immigration consequences of his plea. Padilla v. Kentucky, 559 U.S. 356, 130 S.Ct. 1473, 176 L.Ed.2d 284 (2010). Therefore, in evaluating the petition currently before us, we conclude petitioner exercised reasonable diligence in relying on his defense counsel’s advice. The final two criteria are also satisfied as this issue was not previously litigated and, although the sentence has been served, serious consequences of appellant’s conviction persist. III After reaching our conclusion that petitioner’s writ warrants review, the paramount question for this court is whether the duty established in Padilla applies retroactively in evaluating the merits of petitioner’s ineffective assistance of counsel claim. The Sixth Amendment guarantees an accused the right to effective assistance of counsel. U.S. Const. amend. VI; United States v. Gooch, 69 M.J. 353, 361 (C.A.A.F.2011) (citing United States v. Gilley, 56 M.J. 113, 124 (C.A.A.F. 2001)). “In assessing the effectiveness of counsel we apply the standard set forth in Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), and begin with the presumption of competence announced in United States v. Cronic, 466 U.S. 648, 658, 104 S.Ct. 2039, 80 L.Ed.2d 657 (1984).” Gooch, 69 M.J. at 361. To overcome the presumption of competence, the Strickland standard requires appellant to demonstrate “both (1) that his counsel’s performance was deficient, and (2) that this deficiency resulted in prejudice.” United States v. Green, 68 M.J. 360, 361 (C.A.A.F.2010) (citing Strickland, 466 U.S. at 687, 104 S.Ct. 2052). In Padilla v. Kentucky, 559 U.S. 356, 130 S.Ct. 1473, 176 L.Ed.2d 284 (2010), the Supreme Court held that a defense counsel’s performance is deficient where he or she fails to inform a non-U.S. citizen of the immigration consequences of pleading guilty. The Supreme Court applied the standard from Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), and Hill v. Lockhart, 474 U.S. 52, 106 S.Ct. 366, 88 L.Ed.2d 203 (1985), and concluded that the “weight of prevailing professional norms supports the view that counsel must advise her client regarding the risk of deportation.” Padilla, 130 S.Ct. at 1482. “It is quintessentially the duty of counsel to provide her client with available advice about an issue like deportation and the failure to do so ‘clearly satisfies the first prong of the Strickland analysis.’ ” Id. at 1484 (quoting Hill, 474 U.S. at 62, 106 S.Ct. 366 (White, J., concurring in judgment)). In this case, petitioner was not informed by his defense counsel, CPT JR, that he could face deportation from the United States as a result of his convictions. Citing Padilla, petitioner alleges that he was therefore denied the effective assistance of counsel when he entered guilty pleas without this advice. However, Padilla was not decided until after petitioner’s case completed appellate review. In that respect, petitioner now seeks the retroactive application of the Padilla decision to collaterally attack his convictions. Subject to certain exceptions, when a new rule of criminal law is announced, that rule does not apply to cases that have become final. Teague v. Lane, 489 U.S. 288, 109 S.Ct. 1060, 103 L.Ed.2d 334 (1989) (plurality opinion); Griffith v. Kentucky, 479 U.S. 314, 107 S.Ct. 708, 93 L.Ed.2d 649 (1987); Loving v. United States (Loving II), 64 M.J. 132 (C.A.A.F.2006). To assess the retroactivity of a constitutional rule, this court must determine (1) whether petitioner’s conviction is final, (2) whether the rule is actually “new,” and (3) if the rule is new, whether an exception to nonretroaetivity applies. Beard v. Banks, 542 U.S. 406, 411, 124 S.Ct. 2504, 159 L.Ed.2d 494 (2004). In this case, petitioner’s convictions and sentence are final because there is a final judgement as to the legality of the proceedings under Article 71(c)(1)(A), UCMJ. See Loving II, 64 M.J. at 136-37. Therefore, the Padilla decision is not applicable to petitioner’s case unless it is not a new rule or it falls within one of two exceptions. Whether Padilla created a new rule is a matter of first impression for this court. To determine whether Padilla created a new rule, we must “ask whether the Constitution, as interpreted by the precedent then existing, compels the rule.” Beard, 542 U.S. at 411, 124 S.Ct. 2504 (citing Saffle v. Parks, 494 U.S. 484, 488, 110 S.Ct. 1257, 108 L.Ed.2d 415 (1990)). Four federal circuit courts have addressed this issue. In United States v. Orocio, 645 F.3d 630, 638-40 (3d Cir.2011), the United States Court of Appeals for the Third Circuit determined that Padilla was not a new rule because it simply applied the existing ineffective assistance of counsel framework developed in Strickland: “Padilla followed from the clearly established principles of the guarantee of effective assistance of counsel.” However, the United States Courts of Appeals for the Fifth, Seventh, and Tenth Circuits reached the opposite conclusion. In United States v. Chang Hong, 671 F.3d 1147, 1156 (10th Cir.2011), for example, the Tenth Circuit specifically disagreed with Orocio, stating “Padilla extended the Sixth Amendment right to effective counsel and applied it to an aspect of a plea bargain previously untouched by Strickland.” And in Chaidez v. United States, 655 F.3d 684, 689 (7th Cir.2011), the Seventh Circuit disagreed with Orocio, holding that the outcome in Padilla “was not dictated by precedent” and therefore constitutes a new rule. In support of this conclusion, the Chaidez Court pointed to the disagreement on the Supreme Court in the Padilla decision itself, and the Supreme Court’s suggestion that its prece dent “does not control the question before us,” Padilla, 130 S.Ct. at 1485 n. 12 (discussing Hill v. Lockhart, 474 U.S. 52, 106 S.Ct. 366, 88 L.Ed.2d 203 (1985)). Chaidez, 655 F.3d at 689. The Supreme Court recently-granted certiorari to address this issue. Chaidez v. United States, — U.S. —, 132 S.Ct. 2101, 182 L.Ed.2d 867 (2012) (grant of certiorari). We agree with the Fifth, Seventh, and Tenth Circuits that Padilla created a new rule. As the Supreme Court itself noted, many different federal and state courts that have addressed the issue prior to Padilla held that the “failure of defense counsel to advise the defendant of possible deportation consequences is not cognizable as a claim for ineffective assistance of counsel.” Padilla, 130 S.Ct. at 1481 & n. 9 (quoting Commonwealth v. Padilla, 253 S.W.3d 482, 483 (Ky. 2008)) (collecting eases). The same is true of military jurisprudence. Prior to Padilla, military case-precedent would not compel a finding of deficient performance in these circumstances. Our superior court explicitly stated in Denedo I, 66 M.J. at 129, that “[a]n attorney’s failure to advise an accused of potential deportation consequences of a guilty plea does not constitute deficient performance under Strickland.” See also United States v. Berumen, 24 M.J. 737, 742 (A.C.M.R.1987). In light of this precedent, it is clear Padilla created a new rule that would now compel a finding of deficient performance. Finally, the new rule announced in Padilla does not fall into either of the two exceptions to nonretroactivity. A new constitutional rule “should not be applied retroactively to convictions on collateral review that have become final,” unless the new rule is a “substantive” new rule, or a “watershed” rule of criminal procedure. Loving II, 64 M.J. at 136, 138-140. The Padilla decision falls into neither of these categories. A substantive rule places “certain kinds of primary, private individual conduct beyond the power of the criminal law-making authority to proscribe.” Teague, 489 U.S. at 311, 109 S.Ct. 1060 (quoting Mackey v. United States, 401 U.S. 667, 692, 91 S.Ct. 1160, 28 L.Ed.2d 404 (1971)). For example, “[a] decision that modifies the elements of an offense is normally substantive rather than procedural.” Schriro v. Summerlin, 542 U.S. 348, 354, 124 S.Ct. 2519, 159 L.Ed.2d 442 (2004). The Padilla decision did not place petitioner’s crimes beyond the power of a court-martial to punish; therefore, it did not create a “substantive” new rule. A “watershed” procedural rule is one that calls into question the very accuracy of the conviction itself&emdash;it is a procedure “without which the likelihood of an accurate conviction is seriously diminished.” Teague, 489 U.S. at 313, 109 S.Ct. 1060. Padilla’s holding does not fit this category either because it concerns advice to be rendered in anticipation of a guilty plea, not a procedure through which the reliability of the guilty plea itself is to be ensured. IV Consequently, when considering the instant petition we will not apply the rule announced in Padilla, and as discussed above, petitioner’s claim of deficient performance does not find support in the law prior to Padilla. In this respect, it is important to note that petitioner has not alleged that he asked CPT JR about any immigration consequences or that these were petitioner’s primary concern. Accordingly, we conclude petitioner cannot establish deficient performance in this case. See Denedo I, 66 M.J. at 129.
4291316-31205	OMNIBUS ORDER GRANTING BRECKENRIDGE’S MOTION FOR JUDGMENT ON THE PLEADINGS AND NOVO NORDISK’S MOTION TO DISMISS K. MICHAEL MOORE, CHIEF UNITED STATES DISTRICT JUDGE This cause is before the Court on Defendant Breckenridge Pharmaceutical, Inc.’s (“Breckenridge”) Motion for Judgment on the Pleadings (ECF No. 63) and Defendant Novo Nordisk Inc.’s (“Novo Nor-disk”) Motion to Dismiss (ECF No. 41).. Upon consideration of the motions, pertinent portions of the record, and being otherwise fully advised in the premises-, the Court enters the following order. I. BACKGROUND This is an action by Plaintiff Maggie Tsavaris against several pharmaceutical companies, including Defendants Novo Nordisk and Breckenridge, for designing, manufacturing, and distributing Hormone Therapy Replacement (“HRT”) drugs that Plaintiff alleges caused her to develop breast cancer. Am. Comp. ¶ 1 (EOF No. 30). Specifically, Plaintiff is suing Novo Nordisk as the brand name manufacturer, distributor, and' seller of the HRT drug Aetivella.- Id. at ¶¶ Í, 5-6. Plaintiff is suing Breckenridge as the manufacturer, distributor, and seller of the generic version of Aetivella, estradioi/norethindrone acetate (l,0mg/0.5mg). Id. at ¶¶ 1, 5, 8. Plaintiff is suing both. Defendants for strict products liability based on defective design (Count II), negligence (Count VI), and negligent misrepresentation (Count VIII). And Plaintiff is suing Novo Nordisk individually for strict products liability based on a failure to warn (Count IV). Plaintiff is also suing Pfizer, Inc. and Wyeth LLC (the “Wyeth Defendants”) as the manufacturers of the HRT drug Prempro for strict products liability based on defective design and failure to warn (Counts I and III), negligence (Count V), and negligent misrepresentation (Count VII). As relief for her injuries, Plaintiff seeks compensatory and punitive damages, attorney’s fees and costs, and a recall of Prempro and Activel-la. Id. at ¶ 72. While Plaintiff was going through menopause, she experienced severe hot flashes and night sweats. Id. at ¶ 14. Plaintiffs physician, Dr. Ellen Schwartzbard, prescribed Plaintiff a combination of HRT drugs to alleviate ’her symptoms. Id. at ¶ 14. On January-21, 2005, Dr; Schwartzbard gave Plaintiff a prescription for the HRT drug Prempro (0.45mg/1.5mg). Id. at ¶ 18. As previously mentioned,'Prempro is manufactured and -distributed by the Wyeth Defendants. Id. at ¶ 3. On or before Janu-' ary 21, 2005, 'Plaintiff informed Dr. Schwartzbard that her mother had developed breast cancer at age 79 or 80. Id. at ¶ 19. Dr; Schwartzbard informed Plaintiff that her mother’s age at the time of her breast cancer was too advanced to be considered a factor as to any family history of breast cancer. Id. ■ On March 28, 2005, Plaintiff was asked by one of the partners in Dr. Schwartz-bard’s practice to discontinue Prempro because he believed that Plaintiffs ovaries were producing hormones. Id. at ¶20. Plaintiff discontinued-taking Prempro at that time, but at a follow-up visit six weeks later, probably began taking Prempro again because on- November 3, 2005, Dr. Schwartzbard wrote during an office visit that Plaintiff “stopped taking Prempro 4 months, ago ... and notices changes in her breasts.” Id. That would mean that Plaintiff stopped taking Prempro around July 3, 2005. Id. Dr. Schwartzbard also noted that, during this office visit, she discussed “[r]isks and benefits of both pill and HRT ... including heart attack, stroke, and breast cancer,” Id. According to the Amended Complaint, Dr. Schwartzbard “always advised” Plaintiff “that the studies showing breast cancer risks included an entirely different group of older woman [sic] and that ■ the risks of breast cancer were wery remote and insignificant compared to the quality of- life that the HRT drugs could provide to [Plaintiff].” Id. Plaintiff ceased taking Prempro around July 2005 and did not resume taking the drug again. ‘ From July 2005 to August 2008, Plaintiff did not take any HRT drugs. Id. at ¶22. On September 17, 2008, and continuing through December 31, 2009, Plaintiff was prescribed Activella (1.0mg/0.5mg). Id. at ¶ 23. As previously mentioned, the brand name version of Activella is manufactured and distributed by Novo Nordisk. Id. at ¶¶ 1, 6-7. While Plaintiff was prescribed Activella, she never took the brand name version of the drug. Id. at ¶ 23. Instead, the pharmacy provided Plaintiff with the generic version of Activella — estradiol/nor-ethindrone acetate (l.Omg/0'.5mg). Id. Breckenridge manufactured the generic version of Activella taken by Plaintiff. Id. at 8. Again, when Dr. Schwartzbard- prescribed Plaintiff Activella, she advised her “that the studies showing breast cancer risks included a different group;,of,women and that the risks of breast cancer were very remote and insignificant compared to the quality of life that the HRT drugs could provide to [Plaintiff].” Id. at ¶23. From December 2009 to February 2010, Plaintiff did not take any HRT drugs. Id. at ¶ 25, In March 2010, Plaintiff was again prescribed Activella (1.0mg/0,5mg) and was again given Breckenridge’s generic version of Activella, estradiol/norethin-drone acetate (1.0mg/0.5mg). Id. Plaintiff continued to take Breckenridge’s generic from December 2010 through May 2013. Id. On January 31,2012, Plaintiffs' prescription for Activella was reduced from (1.0mg/0.5mg) strength tablets to one (0.5mg/0.1mg) strength tablet once daily, and Plaintiff began to take Breckenridge’s generic version of Activella, estradiol/nor-ethindrone acetate (0.5mg/0.1mg). Id. at ¶ 26. On May 15, 2013, • Plaintiff was diagnosed with breast cancer and was advised by the diagnosing radiologist to immediately cease taking any HRT drugs, which she did. Id. at ¶ 27. Pathology results from tests conducted on or sometime after May 21, 2013, showed that Plaintiffs, type of breast cancer was invasive ductal carcinoma and was both estrogen and progesterone receptor positive. Id. at ¶28. This is commonly referred to as “hormone receptor positive breast cancer.” Id. The reports also showed negative for HER2 (a gene mutation that is not inherited) .and negative for BRCA1 and BRCA2 (genes that are inherited). Id. Hormone receptor positive breast cancer requires hormones to fuel its growth. Id. at ¶29. Plaintiff was hormone deficient prior to taking Prempro and Activella, as evidenced by her hormone deficient symptoms, including hot flashes and night sweats. Id. at ¶¶ 30-31. Plaintiff claims that she did not have the endogenous hormones to fuel the growth of hormone receptor positive breast cancer prior to taking Prempro and Activella. Id., at ¶30. Furthermore, had she not ingested exogenous hormones via the HRT drugs, she would not have had the hormones to fuel the growth of hormone receptor positive breast cancer, and she would not have developed hormone receptor positive breast cancer. Id. at ¶ 31. Plaintiff filed the instant case on May-14, 2015 claiming that Defendants’ HRT drugs caused her breast cancer and that Defendants knew or should have known of the risk of breast cancer of their HRT drugs. Breckenridge moves for judgement on the pleadings while Novo Nordisk moves to dismiss. The Court will address each motion separately. II. BRECKENRIDGE’S MOTION FOR JUDGMENT ON THE PLEADINGS Breckenridge is moving for judgment on the pleadings arguing that Plaintiffs claims for strict products liability, negligence, and negligent misrepresentation are preempted by federal law and further fail to meet the applicable pleading standard. Specifically, Breckenridge argues that “Plaintiff fails to identify any action that could have been taken by Breckenridge to cure the alleged defect in the generic version of Activella, or to cure the allegedly defective warnings or misrepresentations made to the prescriber, given that federal law prohibits Breckenridge from making changes to either the chemical composition of the generic version of Activella or its labeling.” Mot. for J. on the Pleadings (“Mot. for J,”), at 4 (emphasis in original) (ECF No. 63). Plaintiff responds that federal law does not preempt her claims because they are not failure to warn claims. Resp. to Mot. for J., at 3 (ECF No. 65). Plaintiff further focuses on the actions that Breckenridge could have taken “prior to FDA approval” to design a safer drug. Id. at 3-4. A. Legal Standard Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed — but early enough not to delay trial — a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the pleadings is appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law.” Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir.2001). When the defendant is the movant, “[a] motion for judgment on the pleadings is governed by the same standard as a motion to dismiss for failure to state a claim on which relief may be granted.” Black v. Kerzner Int’l Holdings Ltd., 958 F.Supp.2d 1347, 1349 (S.D.Fla.2013). As a result, all material facts alleged in the non-moving party’s pleading are accepted as true and must be viewed in the light most favorable to the non-moving party. Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th Cir.2014). “If a comparison of the averments in the competing pleadings reveals a material dispute of fact, judgment on the pleadings must be denied.” Id. B. Legal Background Before turning to the merits of Breckenridge’s Motion, the Court will give a brief background of the relevant federal pharmaceutical regulations and how these regulations have impacted claims against generic drug manufacturers. i. Federal Pharmaceutical Regulations Federal law heavily regulates the pharmaceutical industry. “Under the Federal Food, Drug, and Cosmetic Act (FDCA), ch. 675, 52 Stat. 1040, as amended, 21 U.S.C. § 301 et seq., drug manufacturers must gain approval from the United States Food and Drug Administration (FDA) before marketing any drug in interstate commerce.” Mutual Pharm. Co. v. Bartlett, — U.S. -, 133 S.Ct. 2466, 2470, 186 L.Ed.2d 607 (2013) (citing 21 U.S.C. § 355(a)). In order to gain FDA approval for a new brand name drug, a manufactur er must prove that the new drug “is safe and effective and that the proposed label is accurate and adequate.” See Pliva v. Mensing, 564 U.S. 604, 131 S.Ct. 2567, 2574, 180 L.Ed.2d 580 (2011) (citing 21 U.S.C. §§ 355(b)(1), (d); Wyeth v. Levine, 555 U.S. 555, 567, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009)). Meeting these requirements involves “costly and lengthy clinical testing.” Id. (citing 21 U.S.C. §§ 355(b)(1)(A), (d); D. Beers, Generic and Innovator Drugs: A Guide to FDA Approval Requirements § 2.02[A] (7th ed. 2008)). For a period of time, all manufacturers had to complete the same approval process, regardless of whether they were the manufacturer of an entirely new pharmaceutical or merely a new, generic version of an existing drug. See Weeks v. Wyeth, Inc., No. 1:10-CV-602-WKW, 120 F.Supp.3d. 1278, 1283-84, 2015 WL 4635176, at 6 (M.D.Ala. Aug. 3, 2015) (citing Mensing, 131 S.Ct. at 2574). This onerous approval process did not lénd itself to a thriving generic pharmaceutical industry. Id. Thus, ill 1984 Congress enacted the Drug Price Competition and Patent Term Restoration Act, commonly known as the Hatch-Waxman Amendments, which drastically altered the approval process for new géneric pharmaceuticals. Id. (citing 21 U.S.C. § 355(j); Mensing, 131 S.Ct. at 2574). The Hatch-Waxman Amendments imposed different obligations on the manufacturers of brand name drugs and the manufacturers of generic drugs seeking federal approval for new pharmaceuticals. Now, generic drug manufacturers may be approved without the same level of clinical testing required for approval of a new brand name drug, provided they show that their drug is identical to an already approved brand name drug in several key respects. Bartlett, 133 S.Ct. at 2471. First, the proposed generic drug must be chemically equivalent to the approved brand name drug. Id. (citing 21 U.S.C. §§ 355(j)(2)(A)(ii) and (iii)). Second, the proposed generic drug must be “bioequiva-lent” to an approved brand name drug. Id. (citing 21 U.S.C. § 355(j)(2)(A)(iv)). Third, the generic manufacturer must show that “the labeling proposed for the new drug is .the same as. the labeling -approved for the approved brand-name drug.” Id. (citing 21 U.S.C. § 355(j)(2)(A)(v)) (internal brackets omitted). The impact of this last requirement is that brand name manufacturers seeking approval for a new drug are still responsible for the accuracy and adequacy of their label. Mensing, 131 S.Ct. at 2574 (citing 21 U.S.C. §§ 355(b)(1), (d); Levine, 555 U.S. at 570-71, 129 S.Ct. 1187). However, generic manufacturers seeking approval for a new generic drug are responsible only for ensuring that their label is the same as the brand name drug’s label. Id. (citing 21 U.S.C. §§ 355(j)(2)(A)(v), (j)(4)(G); 21 CFR §§ 314.94(a)(8), 314.127(a)(7)). Importantly, generic manufacturers are prohibited from making any unilateral changes to a drug’s label. Bartlett, 133 S.Ct. at 2471. Once any drug is approved, whether generic or brand name, the manufacturer is prohibited from making any major changes to the formulation of the drug that is provided in the approved application. Id. (citing 21 C.F.R. § 314.70(b)(2)(i)). The Hatch-Waxman Amendments allow manufacturers to develop generic drugs inexpensively, without duplicating the clinical trials already performed on the equivalent brand name drug. Mensing, at 131 S.Ct. at 2574. This-presumably allows generic drugs to be1 sold at a lower price point to more people. ii. Preemption While the Hatch-Waxman Amendments have undoubtedly benefitted the general population, they have had- the effect of preempting 'certain claims- against generic drug manufacturers. In Pliva v. Mensing, 564 U.S. 604, 131 S.Ct. 2567, 180 L.Ed.2d 580 (2011), the Supreme Court addressed whether a state failure to warn claim against a’ generic manufacturer . was preempted based on these federal pharmaceutical regulations. The plaintiffs alleged that long-term use of Pliva’s generic drug, metoclopramide, had caused them to develop tardive dyskinesia, a severe neurological disorder. 131 S.Ct. at 2572-73. As a result, the plaintiffs alleged that Pliva was liable under state tort law for failing to provide adequate warning labels. Id. In response, the generic manufacturer argued that the plaintiffs state tort claims were preempted because federal’ statutes and FDA regulations required them to use the same safety and efficacy labeling as their brand name counterparts. Id. at 2573. Thus, it was impossible for them to comply with both federal law and any-state tort law duty that required them to use' a different label. Id. After identifying the relevant state law duties and the federal labeling requirements applicable -to the generic manufacturers, the Court determined that it was, impossible under federal law for the generic manufacturers to do what state law required of them... Id. at 2577-78. Thus, the Court held that federal law preempted the plaintiffs state failure.to warn:claim. Id. A couple of years later, the Court addressed whether federal law preempted New Hampshire’s design defect cause of action in Mutual Pharmaceutical Co. v. Bartlett, — U.S. ——, 133 S.Ct. 2466, 186 L.Ed.2d 607 (2013). New Hampshire law imposed a duty on drug manufacturers to ensure that the drugs they marketed were not unreasonably dangerous. 133 S.Ct. at 2474. A drug’s safety was evaluated by reference to both its chemical properties and the adequacy of its warnings. Id. at 2470. The Court determined that Mutual Pharmaceutical,' as a generic manufacturer, was unable to change the drug’s composition to make it safer because, as a matter of federal law1, a generic drug must be the chemical equivalent and bioequiva-lent of the brand name drug. Id Because -Mutual Pharmaceutical could not change the drug’s composition, the Court determined that New Hampshire’s design defect claim effectively required Mutual Pharmaceutical to change the drug’s labeling to provide stronger warnings. Id. However, the Supreme Court had already held that failure to warn claims against generic manufacturers were preempted in Mens-ing. Id. Thus, because “state law imposed a duty on Mutual [Pharmaceutical] not to comply with federal law,” the Supreme Court determined that New Hampshire’s defective design, cause of action was preempted. Id at 2470, 2477. In Guarino v. Wyeth, 719 F.3d 1245 (11th Cir.2013), the Eleventh Circuit had the opportunity to apply the Supreme Court’s decision in Mensing. In. Guarino, the plaintiff appealed the grant of summary judgment in favor of Teva Pharmaceuticals, the manufacturer of the generic drug metoclopramide, on her claims of negligence, strict liability, breach of warranty, misrepresentation and fraud, and negligence per se. 719 F.3d at 1247. Plaintiff “primarily argue[d]” on appeal that her negligence claim against Teva Pharmaceuticals was not preempted insofar as it alleged a “failure to communicate” a label change to medical providers. Id. at 1247, 1249. The Eleventh Circuit found that each of Guarino’s claims against Teva Pharma-céuticals were premised upon ah “allegedly inadequate warning,” and so they were all preempted by federal law. Id. Specifically, the Eleventh Circuit stated as follows: Guarino’s attempt-to elude Mensing by ■clothing her allegations as “failure-to-communicate” claims rather- than failure-to-warn- claims does not alter our analysis. No matter-the garb in which - she attehipts to present them, Guarino’s claims are at bottom allegations regarding Teva’s failure to warn her of the dangers of long-term metoclopramide use, and they therefore cannot escape Mensing’s grasp. Id. With this background in mind, the Court turns to Breckenridge’s Motion for Judgment on the Pleadings. C. Discussion Federal law preempts Plaintiffs claims against Breckenridge for strict products liability, negligence, and negligent misrepresentation because they are premised upon failure to warn and defective design claims. Accordingly, Breckenridge’s Motion for Judgment on the Pleadings is granted. i. Count II: Strict Products Liability— Defective Design PlaintifPs argues that Breckenridge is liable for defective design because its generic was “not reasonably safe” and contained “unreasonably dangerous design defects” that “far exceeded any utility or benefits of the1 drug.” Am. Compl. at ¶¶ 148-49. As previously mentioned, in Bartlett, the Supreme-Court held that federal law preempted a cause of action against a generic-drug manufacturer for defective design where the, defective design claim required- that a generic manufacturer either redesign the drug or change the drug’s warnings. 133 S.Ct. at 2470.- Since federal law - preempts state laws imposing a duty to change a drug’s design upon generic drug -manufacturers, Plaintiff’s defective design claim fails. Plaintiff attempts' to circumvent preemption by focusing on the steps that Breckenridge could have taken prior to FDA approval. Specifically, Plaintiff argues that “in contrast to the facts of the Mensing and Bartlett cases,” here Breckenridge could have exercised reasonable care in “the process leading up to placing a drag on the- market.” Resp. to Mot. for J., at 7 (emphasis in the original). Plaintiff argues that Breckenridge “can establish neither impossibility of redesign prior, to FDA approval and marketing, nor chemical impossibility of redesign.” Id (emphasis in the original omitted). However, Plaintiffs argument that Breckenridge could have conducted itself differently prior to FDA approval ignores the nature of a generic drug. Breckenridge’s Reply, at 3 (ECF No. 66). A generic drug must be the chemical equivalent and bioequivalent of its brand name counterpart. Bartlett, 133 S.Ct. at 2471. If Breckenridge altered the design of Activella, it would be designing a new drug and Breckenridge would go through an entirely different process of approval, subject to an entirely different set of regulations. Breckenridge’s Reply, at 3-4. To find that Plaintiffs defective design claim is not preempted because Breckenridge could have designed an entirely new drug, instead of manufacturing the generic version of Activella, would render Bartlett meaningless. It would also undercut Congress’ purpose in. enacting the Hatch-Waxman Amendments, which was to develop the generic drug market. See Mensing, 131 S.Ct. at 2582. Additionally, Plaintiffs reliance upon Trahan v. Sandoz, Inc. No. 3:13-cv-350-j-34MCR, 2015 WL 2365502 (M.D.Fla. Mar. 26, 2015), is misguided. Trahan focused on the container that was used for the drug known as methotrexate. Sandoz, the defendant in Trahan, manufactured a generic version of methotrexate and packaged the product in glass vials. Id. at 1. Plaintiffs claim was premised on a defect with the glass vials, which led to small pieces of glass being mixed with- the drug and administered to the plaintiff in her intravenous injections. Id. Sandoz filed a motion to dismiss contending that the design and packaging of the generic methotrexate must be .identical to the brand name and Sandoz could not change the packaging to be safer without FDA approval. Id. at 2. The plaintiff in Trahan “concede[d] that Sandoz [could not] legally, alter the chemical composition of methotrexate, but main-tainted] that her claims [were] premised not on the design of the .drug itself, but on Sandoz’s decision to use ‘substandard glass vials’ to package the methotrexate.” Id. at 5. The court focused on the issue of whether generic drug manufacturers are required “to use exactly the same container for their generic drugs as is used to package the brand-name drug.” Id. There is not a packaging problem at issue in this case and so Trahan is easily distinguishable. The issue herd is the composition of the drug itself, and in Trahan the plaintiff conceded that the generic manufacturer could íiot alter the composition of its drug. See id. Because it would be a violation of federal law for Breckenridge, as a generic manufacturer, to change the. composition of its drug to'be safer, Plaintiffs defective design claim is preempted. ii Count IV: Negligence Plaintiff’s negligence claim alleges that Breckenridge owed a duty of care to Plaintiff, which it breached when it failed to “properly conduct adequate pre-clinical testing, failed to properly and safely design, manufacture, produce, discover latent hazards, study, research, and/or distribute [its],HRT drugs,” and because it “knew the significant risks of breast cancer-of [its] HRT drugs ... and ... [it] kept it quiet so that [its] drug sales in [sic] would not suffer.” Am. Compl. at ¶¶ 184-85; see also Resp. to Mot. for J., at 8. This breach caused Plaintiff to suffer breast cancer. Id. at ¶ 188. Plaintiffs allegations regarding the breach element of her negligence claim are premised on Breekenridge’s failure to warn of the risks associated with its drug and the drug’s defective design. As a result, Plaintiffs negligence claim is preempted by federal law. To present a viable state tort negligence claim that falls outside the scope of federal preemption, Plaintiff must allege that Breckenridge: (1) breached its duty to exercise reasonable care and (2) could have taken actions in line with its federal law obligations that would have also allowed it to discharge its duty to exercise reasonable care. See Bell v. Wyeth, Inc., No. 2:10-CV-973-WKW, 117 F.Supp.3d 1355, 1364-65, 2015 WL 4633601, at 8 (M.D.Ala. Aug. 3, 2015). Breaking Plaintiffs negligence claim down, it is clear that there is no action that Breckenridge- could have taken to discharge its duty under state negligence law without violating federal law. First, Plaintiff alleges that Breckenridge breached its duty to exercise reasonable care because it “knew the significant risks of breast cancer of [its] HRT drugs ... and ... [it] kept it quiet so that [its] drug sales in [sic] would not suffer.” See Am. Compl. at ¶ 185. .This statement is clearly premised on the notion that Breckenridge was negligent because it failed to warn of the risks associated with ingestion of its generic drug. As the Court already discussed, and as the Supreme Court established in Mensing and the Eleventh Circuit found in Guarnió, claims premised on a generic manufacturer’s-failure to warn are preempted by federal law. Plaintiff next alleges that Breckenridge breached its duty to exercise reasonable care when it failed to “properly conduct adequate pre-clinical testing, failed to properly and safely design, manufacture, produce, discover' latent hazards, study, research, and/or distribute [its] HRT drugs.” Am. Compl. at ¶ 184. Plaintiffs allegation that Breckenridge.. failed to “properly and safely design, manufacture, produce ,.. and/or distribute their HRT drugs” is. clearly premised on the notion that Breckenridge breached its duty of reasonable care.because it failed to design a reasonably safe drug. As the Court already discussed, and as the Supreme Court established in Bartlett, defective design claims against a generic manufacturer are preempted to the extent that they impose a duty upon the generic manufacturer to redesign a generic drug. The remainder of Plaintiffs negligence claim, that Breckenridge breached its duty of reasonable care when- it failed to “properly conduct adequate pre-clinical testing, failed to properly and safely discover latent hazards, study, [and] research ... their HRT drugs,” also fails to elude preemption. Am. Compl. at ¶ 184. While these allegations focus on the actions that Breckenridge. should have taken to discover the alleged hazards associated- with ingestion of its drug, it is unclear what action Breckenridge could have taken had it discovered these hazards in light of federal regulations. As this Court has already established, Breckenridge was precluded from strengthening its label-and redesigning its generic drug. Accordingly, preemption extends to these allegations as well. In any event, the duty to test is' a subpart of a manufacturer’s duty to design a product with reasonable care, and is thus subsumed in a Plaintiffs claims for defective design and failure to warn. See Trahan v. Sandoz, 2015 WL 2365502, at 7 (citing Adams v. G.D. Searle & Co., 576 So.2d 728, 730-31 (Fla.Ct.App.1991). The duty to test was discussed in Trahan, a case cited favorably by. Plaintiff. See.Resp. to Mot. for J., at 4, 9-12. In Trahan, the plaintiff contended that the inadequate testing of the vials demonstrated negligence because Sandoz, the generic manufacturer, should have detected the defective condition of the glass vials and used a different container. 2015 WL 2365502, at *7. The Middle District found that the plaintiffs contention that the manufacturer failed to adequately test or inspect the drug was a subset of her negligent design and manufacturing claims. Id. In' Trahan, the Middle District had already determined that the plaintiffs defective design and manufacturing claims' were not preempted; thus, the' court allowed the plaintiffs inadequate testing allegation to go forward. Id. Here,-the Court has already concluded that Plaintiffs defective design claims against Breckenridge, as a generic manufacturer, are,, preempted. Thus, it follows.that Plaintiffs allegation that Breckenridge breached its duty of care when it failed to test, study, research, and discover latent hazards is similarly preempted. . . ¡ in. Count V: Negligent Misrepresentation - Federal law similarly preempts Plaintiffs negligent misrepresentation claim. Plaintiff alleges that Breckenridge “participated and .passively cooperated in the dissemination of misrepresentations and/or concealment, knowing -that, they were material misrepresentations on which physicians and consumers, including [Plaintiff], would rely and, as such, fore-seeably be injured.” Am. Compl. at ¶ 219. These misrepresentations failed to communicate the risk of breast cancer associated with Breckenridge’s 'drug. Id. at ¶¶ 215, 228. Plaintiff alleges that, were it not for these misrepresentations, she would “never have taken Activella and/or its generic and, as such, [would] not have developed breast cancer.” Id. at ¶¶ 216-29. Plaintiff is pleading a failure to warn claim under the guise of a negligent misrepresentation claim. “No matter the garb” Plaintiff presents her claim in, though, it is at bottom an allegation that Breckenridge failed-to warn of the dangers associated with its generic drug. See Guarino, 719 F.3d at 1249. Plaintiff attempts to ground her claim in a “state law duty not to deceive.” But however similar to the failure to communicate claim- that -the Supreme Court rejected in Bartlett, this state law duty -not to deceive centers around the allegation that Breckenridge had- certain information about the increased risk of breast cancer associated with ingestion of its drug and failed to warn consumers and medical practitioners about that risk. See Resp. to Mot. for J., at 14. Plaintiff also attempts once again to focus on what Breckenridge could have, or should have, done before it received FDA approval to make its drug reasonably safé for use by consumers. Id. at 17. The Court has already addressed and rejected this argument. Accordingly, Breckenridge’s Motion for Judgment on the Pleadings is granted. III. NOVO NORDISK’S MOTION TO DISMISS Novo Nordisk’s Motion to Dismiss explores the issue of brand name manufacturer liability. It is the other side of the coin to Plaintiffs suit against Breckenridge, Unfortunately for Plaintiff,- her claims against Novo-Nordisk fare no better than her claims against Breckenridge. Since Plaintiff never took a HRT drug manufactured or sold by Novo Nordisk, the Court finds that Novo Nordisk is not liable to Plaintiff. Accordingly, Novo Nor-disk’s Motion to Dismiss will be granted. A. Legal Standard A motion tQ dismiss for failure to state a claim merely tests the sufficiency of the complaint; it does not decide the merits of the case. Milburn v. United States, 734 F.2d 762, 765 (11th Cir.1984). On a motion to dismiss, the Court must accept the factual allegations as true and construe the complaint in the light most favorable to the plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir.1988). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state- a claim for relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the' complaint has alleged-but it has not ‘show[n]’-‘that the pleader is entitled to relief.’” Id. at 679, 129 S.Ct. 1937.
3532683-6670	OPINION OF THE COURT COKER, Judge; Appellant was convicted, contrary to his plea, of stealing $41.00 by trick and of possessing 153 grams of marijuana. His adjudged sentence to a bad-conduct discharge, confinement at hard labor for four months, and forfeiture of $367.00 pay per month for four months was approved. He alleges as error that the search warrant, under which the marijuana was found and seized, was defective in failing to specify the appellant as a suspect and that he was prejudiced by a conflict of interest by his trial defense counsel who represented the co-actor Endresen at an earlier courtmartial. We disagree. In paragraph one of the warrant, a Private (E-2) Endresen was named as the suspect and his residence, room 121 of a barracks, was the designated place to be searched. The reason given to support the search authorization was a signal from a confidential informant inside the room that a drug transaction with Endresen had been completed and that additional marijuana was present in the room. Further, it recited that the appellant, a roommate of Endresen, was expecting a delivery of 100 grams of marijuana. The warrant then named both Endresen and the appellant as the likely perpetrators of the offenses. The affidavit attached to the warrant clearly sets out that the appellant was involved in the negotiations for the purchase and was to receive a large portion of Endresen’s supply. An inadequate description in the body of a search warrant may be cured by considering all the information given to the authorizing official. United States v. Hartsook, 15 U.S.C.M.A. 291, 35 C.M.R. 263 (1965). Based on the search warrant and supporting affidavit, it is clear that the magistrate authorized the search of all of room 121, specifically including that area of the room under the control of the appellant. Judicial notice has been taken of the record in the case of United States v. Endresen, SPCM 17199, pursuant to motion by the appellant. Endresen was tried by special court-martial, on 13 January 1982, for possession of 211 grams of marijuana and sale of 112 grams of marijuana to a confidential informant. The evidence was seized under authority of the search warrant at issue in the present case. He was defended by Captain B. Captain B’s response to the staff judge advocate review of the Endresen trial was submitted between 4 and 8 February 1982, and was a waiver of any comment. Appellant was tried on 24 January and 1 February 1982. The appellant also was defended by Captain B, who was still actively representing Endresen in post-trial proceedings. Captain B responded to the staff judge advocate review of the appellant’s trial on 24 March 1982, without comments. Different military judges sat in the two cases. Each judge asked Captain B, “Have you acted in any manner inconsistent with your duties as defense counsel?” In each case he replied, “No sir, I have not.” In each case the judge’s inquiry under Article 38(b), Uniform Code of Military Justice, 10 U.S.C. § 838(b), determined that each accused elected to be represented by Captain B. There is no evidence or indication in appellant’s record of trial that the military judge knew or could have known that Captain B had represented Endresen at the earlier trial, or had an attorney-client relationship with him at the time of the appellant’s trial. It is well-established that multiple representation of co-accused is not per se a conflict of interest. Holloway v. Arkansas, 435 U.S. 475, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978). Further, there is no affirmative duty on the trial judge to inquire into the propriety of multiple representation unless he knows or reasonably should know that a particular conflict exists. Cuyler v. Sullivan, 446 U.S. 335, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980). The United States Supreme Court, in its supervisory capacity, promulgated Fed.R.Crim.P. 44(c) to address this issue. That rule provides: “Joint representation. Whenever two or more defendants have been jointly charged pursuant to Rule 8(b) or have been joined for trial pursuant to Rule 13, and are represented by the same retained or assigned counsel or by retained or assigned counsel who are associated in the practice of law, the court shall promptly inquire with respect to such joint representation and shall personally advise each defendant of his right to the effective assistance of counsel, including separate representation. Unless it appears that there is good cause to believe no conflict of interest is likely to arise, the court shall take such measures as may be appropriate to protect each defendant’s right to counsel.” In United States v. Breese, 11 M.J. 17 (CMA 1981), the Court of Military Appeals established a similar rule for courtsmartial, and specifically determined, “it is far wiser to follow the path of Fed.R.Crim.P. 44(c).” Breese 11 M.J. at 22. The path of the federal rule is one trod by “two or more defendants jointly charged ... or joined for trial.” This was the lead given by the Supreme Court and the one to be followed by courts-martial. Breese, 11 M.J. at 23. The Court enunciated the rule as a rebut-table presumption that a conflict of interest does exist in multiple representation unless the military judge has conducted a suitable inquiry into the possible conflict. Breese, 11 M.J. at 23. The appellant was neither jointly charged nor tried jointly or in common with Endresen. The misconduct charged to appellant was unrelated to the misconduct of Endresen. The only common factor in the two cases was the single search warrant that was the authorization to search the room they shared. This is not a case of multiple representation within the meaning of Rule 44(c) or Breese. Even if this Court assumes that the Breese presumption is more encompassing than Rule 44(c), see, United States v. Jeancoq, 10 M.J. 713 (ACMR), pet. denied, 11 M.J. 345 (CMA 1981), we find no error under the circumstances of this case. The duty of the trial judge to inquire into a potential conflict is triggered only if the trial judge knows or should know of the conflict. Breese, 11 M.J. at 22 n. 13. In this case, the appearance of multiple representation was not known to the military judge. There were no objections, statements, evidence or actions, that could have alerted him to the situation. To the contrary, the response of counsel to the judge’s general inquiry was sufficient to establish in the judge’s mind, the absence of any potential or particular conflict. There was, under these circumstances, no duty on the military judge to inquire as to possible conflict by the trial defense counsel and the presumptive rule does not apply.
11589055-13265	THOMAS, Circuit Judge: This appeal presents the question of whether an employer may refuse to bargain with certified representatives of its employees because some of the voting employees were undocumented aliens. We hold that an employer may not do so, and grant the National Labor Relations Board’s petition for enforcement of its cease and desist order. I John Kolkka is the sole proprietor of a sauna and furniture manufacturing business known as Kolkka Tables and Finnish-Ameri can Saunas (“Kolkka”). He employs approximately fifty persons in his factory. In May 1996, the Carpenters Union Local 2236 (“the Union”) filed a petition requesting the right to hold an election among Kolkka’s employees. Shortly after receipt of the petition, Kolkka suspended several employees on the suspicion that they were undocumented alien workers, but notified the National Labor Relations Board (“NLRB”) that the employees would be granted a short period to demonstrate proper documentation. The Union filed an unfair labor practice charge with the NLRB, which is not at issue in this appeal, alleging that Kolkka was using the threat of deportation to discourage support for the Union. The employees submitted additional documentation, which Kolkka accepted, and they remained employees of the company. Thereupon, Kolkka and the Union negotiated the question of which employees would comprise the election voting class. An accord was reached, and the stipulated election agreement specified the voting class as: All full-time and regular part-time production and maintenance employees employed by the Employer at its facilities located at 2384 Bay Road and 841 Kaynyne Avenue, Redwood City, California including welders and foreman (Octavio Barajas) and plant clerical Alicia Williamson; excluding all office clerical employees, guards and supervisors as defined in the Act. Pursuant to the agreement, a representation election by secret ballot was conducted, with the Union prevailing. Following the election, Kolkka timely filed objections to the election, arguing that six employees were ineligible to vote because they were undocumented aliens. The NLRB Regional Director recommended that Kolkka’s objections be overruled. Kolkka filed exceptions, but the NLRB adopted the Regional Director’s findings and recommendations, and ordered him to certify the Union as the exclusive collective bargaining representative. Following certification, the Union requested Kolkka to recognize it as the exclusive bargaining representative and to commence collective bargaining. Kolkka refused to bargain, still contending that ineligible workers had voted in the eléction. The Union filed an unfair labor practice charge against Kolkka. The Regional Director issued a complaint on behalf of the General Counsel to the NLRB alleging that Kolkka had refused to bargain with the Union in violation of 29 U.S.C. § 158(a)(5) and (1) (1998). Kolkka responded by admitting its refusal to bargain, but contesting the certification of the Union. The NLRB issued an order transferring the proceedings to itself and requesting Kolkka to show cause why the General Counsel’s motion for summary judgment should not be granted. Kolkka requested an extension of time to respond, alleging among other matters that new evidence indicated that the Union had threatened employees with physical harm or deportation if they did not vote for the Union. The NLRB afforded Kolkka five days to demonstrate that the evidence was newly discovered and previously unavailable. Although Kolkka submitted further affidavits, none of them specifically addressed this issue. Accordingly, , the NLRB refused to consider the new evidence and issued a Decision and Order granting summary judgment to the General Counsel on the unfair labor practice charge. The NLRB then petitioned for enforcement of the final order, a petition over which we have jurisdiction. 29 U.S.C. § 160(e); Eads Transfer v. NLRB, 989 F.2d 373, 374 (9th Cir.1993). II We review decisions and orders of the NLRB under the substantial evidence standard, and defer to the NLRB’s reasonable interpretation and application of the National Labor Relations Act (“NLRA”). NLRB v. Iron Workers of the State of Cal., 124 F.3d 1094, 1098 (9th Cir.1997). The NLRB’s statutory interpretation of its governing statute is entitled to particular deference where, as here, the NLRB is interpreting a term in the NLRA that establishes its statutory jurisdiction. Saipan Hotel Corp. v. NLRB, 114 F.3d 994, 996-97 (9th Cir.1997). In interpreting how the NLRA is affected by other statutes, the NLRB must account for the goals of the other statutes in ordering its remedy, and a reviewing court must uphold the NLRB’s interpretation if reasonable. NLRB v. Lee Hotel Corp., 13 F.3d 1347, 1351 (9th Cir.1994). Because Kolkka has admitted its refusal to bargain, we must grant the NRLB’s enforcement petition unless Kolkka can prevail in its challenge to the validity of the election. 29 U.S.C. § 158(a)(5) and (1); Napili Shores Condominium v. NLRB, 939 F.2d 717, 718 (9th Cir.1991). Kolkka contends that undocumented alien workers cannot be considered employees within the meaning of the NLRA, and that their participation in the election rendered it invalid. The Supreme Court has already considered and rejected this argument, expressly determining that undocumented alien workers are “employees” within the meaning of the NLRA. See Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 891, 104 S.Ct. 2803, 81 L.Ed.2d 732 (1984). However, Kolkka claims that the rational underpinnings of Sure-Tan were altered by passage of the Immigration Reform and Control Act of 1986 (“IRCA”), which rendered unlawful the employment of undocumented alien workers. 8 U.S.C. § 1324a (1998). The NLRB declined to adopt Kolkka’s theory, holding that IRCA did not alter the NLRA definition of “employee” for the purposes of determining who was eligible to vote in the election. According to the NLRB, the relevant inquiry is not whether a particular individual may have been legally subject to termination on the date of the election, but whether, at the time of their participation in the election, he or she was in fact an employee as defined in the NLRA The NLRB contends that if an employer has not terminated an employee prior to the election in order to comply with IRCA, that employer cannot attempt to invalidate the election by challenging employees’ status after the election occurs. We find the NLRB’s interpretation and reconciliation of the two statutes reasonable. Eligibility to vote in a union organizing election “depends on whether an employee is sufficiently concerned with the terms and conditions of employment in a unit to warrant his participation in the selection of a collective bargaining agent.” Shoreline Enterprises of America, Inc. v. NLRB, 262 F.2d 933, 944 (5th Cir.1959). We have expressly held that persons employed in a bargaining unit during the eligibility period and on the date of the election are eligible to vote. NLRB v. S.R.D.C., Inc., 45 F.3d 328, 331 (9th Cir.1995). This is known as the “date certain test,” which was explicitly adopted in S.R.D.C. to address the question of whether employees subject to termination shortly after the election were to be considered employees for the purposes of union election participation. Id. Under the date certain test, an employee may be fully aware that his or her employment will be short-lived, but, as long as no definite termination date is known and the employee was employed on the eligibility and election dates, he or she will be eligible to vote. Id. at 332. Kolkka had an established policy of employing workers with questionable documentation. None of the election participants had been given a date certain as to termination. Consequently, their participation in the election was valid, even if their status as employees may have been subject to challenge under IRCA. Furthermore, Kolkka’s contention that the IRCA flatly prohibits undocumented workers from being considered as “employees” under the NLRA is at odds with the plain language of the statute. The NLRA’s definition of “employee” is expansive, but quite specific as to its exceptions: The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act, as amended from time to time, or by any other person who is not an employer as herein defined. 29 U.S.C. § 152(3) (1998). Thus, the NLRA does not exclude undocumented aliens as employees, and courts have so construed the statute’s reach. See, e.g., Sure-Tan, 467 U.S. at 891, 104 S.Ct. 2803; NLRB v. Apollo Tire Co., 604 F.2d 1180, 1182-83 (9th Cir.1979). The IRCA, by its terms, does not alter this. It did not purport to amend the NLRA or any other labor act. Indeed, the IRCA’s legislative history indicates this was a deliberate choice. The House Judiciary Committee Report on the IRCA specifically states that the IRCA was “not intended to limit in any way the scope of the term ‘employee’ ” under the NLRA, or the “rights and protections stated in Sections 7 and 8 [of that Act].” H.R. REP. NO. 99-682(1) 99th Cong., 2d Sess. at 58, reprinted in 1986 U.S.C.C.A.N. 5649, 5662. The principles of statutory construction also militate against Kolkka’s interpretation. Given that Congress did not chose not to modify the NLRA when it passed the IRCA, Kolkka can only argue repeal by implication, a heavily disfavored construction. See Kee Leasing Co. v. McGa-han (In re Glacier Bay), 944 F.2d 577, 581 (9th Cir.1991). There are two categories of repeals by implication: (1) cases of irreconcilable conflict and (2) cases in which the later act covers the whole subject of the earlier one. See Radzanower v. Touche Ross & Co., 426 U.S. 148, 154, 96 S.Ct. 1989, 48 L.Ed.2d 540 (1976). The latter category has no application to this case because Congressional efforts at immigration reform plainly did not cover the entire subject of national labor relations, nor was the IRCA “clearly intended as a substitute” for the NLRA Id. Similarly, the IRCA does not satisfy the preconditions of the first category because the statutes are not in irreconcilable conflict. In order to find irreconcilable conflict, the new statute must be clearly repugnant in word or purpose to the old statute. Kee Leasing, 944 F.2d at 581 (citations and quotations omitted). Even when two statutes are found to be in conflict, “[r]epeal is to be regarded as implied only if necessary to make the [later enacted law] work, and even then, only to the minimum extent necessary.” Id. (citations and quotations omitted). We agree with the NLRB that there is no conflict between the statutes as they are applied to this case. Indeed, were we to adopt Kolkka’s theory, an employer would be able to avoid its obligations under both statutes. An employer would be rewarded for violating the IRCA through the hiring and continued employment of unauthorized aliens because their participation in any union election would defeat that election, even if it was otherwise valid under the NLRA Employers with undocumented alien employees could manipulate election results either post hoc, by discretionarily modifying the composition of the voting unit, or prior to the election, by using the threat of deportation to discourage pro-union support. To the extent that employers will presumably seek to avoid the dilemma confronted by Kolkka, the Sure-Tan interpretation of the NLRA buttresses rather than conflicts with the purpose of the IRCA. Kolkka has failed to satisfy the requirements for an implied statutory repeal with respect to the narrow issue presented in this case. For all these reasons, we find thé NLRB statutory interpretation eminently reasonable as applied in this case. Although at least one other circuit has considered the degree to which the remedies for retaliatory discharge as authorized by the NLRA are still applicable to undocumented aliens after the IRCA, see NLRB v. A.P.R.A. Fuel Oil Buyers Group, Inc., 134 F.3d 50, 56 (2d Cir.1997), the NLRB’s argument here is much more limited in scope. The NLRB simply argues that if an employer has not discharged its responsibilities under the IRCA prior to a union election, it may not attempt to disqualify its employees from voting even if subsequent inquiry shows them to be subject to termination as unauthorized aliens. This result is consistent with the manner in which other categories of terminable employees are treated for union election purposes, and is a reasonable reconciliation of the two statutes at issue. Ill
4203135-11614	ORDER AND JUDGMENT TIMOTHY M. TYMKOVICH, Circuit Judge. Stuart Harwood pleaded guilty to the offenses of conspiracy to possess with in tent to distribute and to distribute methamphetamine, and to being a felon in possession of ammunition. At sentencing, Harwood moved for a mitigating-role adjustment under the United States Sentencing Guidelines (USSG) and a discretionary downward variance. The district court declined to grant either a mitigating-role adjustment or a downward variance, instead sentencing Harwood in the middle of the applicable guidelines range. Harwood appeals his sentence on two grounds. First, he claims the district court erred in declining to apply a mitigating-role adjustment. Second, he claims his sentence was substantively unreasonable under § 3553(a). Exercising our jurisdiction under 28 U.S.C. § 1291, we AFFIRM the decision of the district court. I. Background Harwood was charged in connection with a federal investigation into a methamphetamine distribution conspiracy that ran from January 2000 through May 2010. Although Harwood was acquainted with several of his co-conspirators for many years, he did not become directly involved until March 2010. While he was involved with the conspiracy, Harwood bought methamphetamine from his co-conspirators and redistributed it. He also provided transportation to and from drug deals for Steven Bernal, one of the leaders of the conspiracy. In addition, Harwood twice unsuccessfully attempted to broker a new source of supply for the conspiracy. Finally, Har-wood advised Bernal regarding the unlawful procurement and resale of a firearm. Harwood pleaded guilty pursuant to a plea agreement to two counts: conspiracy to possess with intent to distribute and to distribute methamphetamine, and to being a felon in possession of a firearm. At sentencing, Harwood moved for a mitigating-role adjustment under USSG § 3B1.2, and a downward variance under 18 U.S.C. § 3553(a). The district court did hot rule on these requests immediately, instead opting to take testimony from the probation officer who prepared Harwood’s presentencing report. The officer explained her opinion that Harwood’s contributions to the conspiracy, particularly his provision of transportation to one of the conspiracy’s leaders, made Harwood more than a minor or minimal participant, and thus ineligible for a mitigating-role adjustment. After hearing this testimony, the district court denied Harwood’s motions and sentenced him to 94 months imprisonment, in the middle of the applicable guidelines range of 84 to 105 months. II. Discussion Harwood challenges his sentence on two grounds. First, he claims the district court erred by failing to apply a mitigating-role adjustment under the Guidelines. Second, he claims his sentence was substantively unreasonable. A. Mitigating-Role Adjustment In considering whether the district court erred in its calculation of the applicable guidelines range, we review the district court’s factual findings for clear error. United States v. Kristl, 437 F.3d 1050, 1054 (10th Cir.2006). A defendant must prove by a preponderance of the evidence that he is entitled to a mitigating-role adjustment. The Guidelines call for a 2- level sentencing decrease for a “minor participant,” and a 4-level decrease for a “minimal participant.” USSG § 3B1.2. Whether a defendant qualifies as a minor participant “is based on the totality of the circumstances and involves a determination that is heavily dependent upon the facts of the particular case.” USSG § 3B1.2, cmt. n. 3(C). The minor-participant adjustment is available to “a defendant ... who is less culpable than most other participants [in the offense], but whose role could not be described as minimal.” § 3B1.2, cmt. n. 5. The minimal-participant adjustment, in turn: applies to a defendant ... who plays a minimal role in concerted activity. It is intended to cover defendants who are plainly among the least culpable of those involved in the conduct of a group. Under this provision, the defendant’s lack of knowledge or understanding of the scope and structure of the enterprise and of the activities of others is indicative of a role as minimal participant. § 3B1.2, cmt. n. 4. Harwood claims he “lacked any knowledge or understanding about the nature and scope of Bernal’s conspiracy and played only a short, tangential and minor role,” and the district court’s finding to the contrary was clear error. Aplt. Reply Br. at 4. The court considered, and rejected, Har-wood’s argument that he was a minor participant: The Court, having heard the testimony of [probation] and also being mindful of the ... tape recordings of conversations between Mr. Bernal and Mr. Har-wood — all of that taken together, it is ... the view of the Court that a role in the adjustment [sic] is not appropriate ... in this case. The defense ... has not offered any evidence that would meet its burden of proving that there was some justification for a sentencing reduction; but while this defendant’s role was a matter of a few months, while he was in it, he was in up to his hips. To give him a “role in the offense” adjustment is to ignore the facts before the Court. The Court declines to give ... a “role in the offense” adjustment here. R., Vol. 3, at 129. Based on the record, we do not think the district court’s finding that Harwood was not a minor participant was clearly erroneous. First, the evidence shows Harwood provided transportation for Bernal to drug deals on multiple occasions when Bernal did not have access to transportation of his own. The court could reasonably conclude based on that fact that Harwood, during the time he was involved in the conspiracy, “served an important function.” United States v. Ayers, 84 F.3d 382, 384 (10th Cir.1996); see also United States v. Martinez, 512 F.3d 1268, 1276 n. 3 (10th Cir.2008) (“[A] defendant does not deserve an adjustment based solely on his status as a drug courier.”). In addition, Harwood and Bernal discussed Bernal’s supply problems at length, and Harwood attempted to broker two new supply deals for Bernal, though these attempts were unsuccessful. Harwood also advised Bernal regarding the purchase and resale of a firearm. The district court reasonably could find that, in the face of this evidence, Harwood’s claim that he “lacked any knowledge or understanding about the nature and scope of Mr. Bernal’s conspiracy,” Aplt. Reply Br. at 4, was not credible. While reasonable minds might differ, the district court’s conclusion that Harwood failed to show he played a minor role in the conspiracy was not clearly erroneous. B. Substantive Unreasonableness We review a claim of substantive unreasonableness for abuse of discretion. United States v. Lewis, 594 F.3d 1270, 1277 (10th Cir.2010), cert. denied, — U.S. -, 130 S.Ct. 3441, 177 L.Ed.2d 347 (2010). “A district court abuses its discretion when it renders a judgment that is arbitrary, capricious, whimsical, or manifestly unreasonable.” Id. (internal quotation marks omitted). A sentence “within the properly calculated guidelines range ... is presumed reasonable.” Id. “The defendant may rebut the presumption, however, by demonstrating that the sentence is unreasonable when viewed against the other factors delineated in § 3553(a).” Id. (internal quotation marks omitted). Section 3553(a) “lists the factors a sentencing court must consider when imposing a sentence.” Id. Harwood’s argument focuses on one of these factors: “the need for the sentence imposed ... to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense.” 18 U.S.C. § 3553(a)(2)(A). Harwood claims the district court did not consider the just-punishment aspect of sentencing, instead focusing on Harwood’s criminal history. He argues a just sentence would be significantly shorter, given his role in the conspiracy, his drug addiction, and the short period of time in which he participated in the conspiracy. The record shows the district court considered the § 3553(a) factors. After listening to Harwood’s argument for a downward variance, the court found no variance was warranted: In declining to exercise my discretion to sentence outside the advisory guideline range, the Court has considered, most notably, the nature of this offense and the criminal history and characteristics of this defendant which are substantial. Even if the Court doesn’t count the criminal history points for the burglary and criminal entry in Paragraph 49 which I have not counted, we have a situation where this defendant has not received the message that the state court judge wanted him to receive in that case. He was given a number of opportunities in that case; and while no criminal history points are considered for purposes of a guideline application here, it’s worth noting that the defendant, while on probation, absconded from supervision and was revoked in July of 1999 by the state court judge in that case, reinstated to probation but absconded yet again. The second revocation occurred in September of 2000 at which time he was sentenced to a term of 35 to 85 months of imprisonment which was suspended so that he could serve a split sentence of six months in jail followed by another two-year term of probation. He was placed in Community Alternatives upon his release from jail as a condition of his probation which he completed in August of 2001. His final revocation occurred in September of 2002 after he used methamphetamine on a number of occasions. He was sentenced to serve ... six months in jail. The case was discharged upon the completion of that term. So we have ... strong evidence that this defendant cannot conform his conduct because of the severity of his addiction; and, of course, he poses a risk to society. And, of course, then we have the case that we heard before my colleague, Judge Johnson, and for which he was still on supervised release at the time of this offense. In that case, he was in possession of a firearm. Again he was placed at Casper Reentry for a final portion of his custody on May 9th and was released from custody on July 2008, but he was arrested on this offense, the instant offense on May 18, 2010. During the history of that case, he served a sentence of 15 months imprisonment followed by three years of supervised release. He was arrested on May 18, 2010, pursuant to petition for revocation of supervised release and a warrant, of course, because of this instant offense. Since he has that prior conviction in '07 for being a felon in possession of a firearm, we know he has a certain fondness for weapons, and that reared its head again when he, for all practical purposes, became a consultant for Mr. Bernal in evaluating the value of a gun. So this history points to the Court its obligation to protect the community from Mr. Harwood’s further criminal behavior, and the Court needs to sentence the defendant in a way that recognizes that obligation and hopefully sentence him in a way that deters him from future such criminal activity and sends an important message to the community that this kind of conduct cannot be tolerated in the District of Wyoming. For those reasons, the Court declines to exercise its discretion to a sentence outside the otherwise applicable guideline range. The Court believes that the guideline range sentence is sufficient but not greater than necessary to meet the purposes of sentencing established by Congress under 3553(a), Title 18, and the Court’s decision is that he will be sentenced within that range. R., Vol. 3 at 134-35.
57360-15078	McKAY, Circuit Judge. We are asked to decide whether the district court properly granted summary judgment on the issue of whether plaintiff, Eda-leen Vinyard, had a property interest in her continued employment with a municipal hospital. I. Background Mrs. Vinyard was hired as the hospital’s Director of Volunteer Services in 1972. She served in that capacity until 1978, when Robert J. King, the hospital’s administrator, fired her for allegedly violating his policy concerning the confidentiality of personnel communications. Mrs. Vinyard has consistently denied that allegation. Both parties stipulate, however, that plaintiff was given no hearing prior to being fired. Record, vol. 2, at 201. At the time she was hired, there was no formal employees’ manual in effect. However, in 1976, Mrs. Vinyard was given a copy of the hospital’s Employee Handbook (“handbook”) which provided information concerning the policies and benefits applicable to hospital employees. Record, vol. 2, at 282. Mrs. Vinyard filed this suit under 42 U.S.C. § 1983 against Mr. King and the members of the hospital’s board of directors, in their official and individual capacities. She sought, inter alia, reinstatement, compensatory damages, punitive damages against Mr. King, costs and attorney’s fees. She alleged that her termination was state action depriving her of a property interest in her continued employment without due process of the law, in violation of the fourteenth amendment. U.S. Const. amend. XIV, § 1. The district court in Vinyard I invoked the Pullman abstention doctrine. We reversed and remanded for the district court to decide whether the facts surrounding Mrs. Vinyard’s employment gave rise to a property interest under Oklahoma law. On remand, defendant filed a motion for summary judgment. Mrs. Vinyard appeals the district court’s grant of defendants’ motion for summary judgment, holding that under Oklahoma law, she does not have a property interest in her continued employment. She claims that there are genuine issues of material fact surrounding her employment contract with the hospital, precluding an award of summary judgment. Fed.R.Civ.P. 56(c). As we must do, we have considered all factual inferences in the light most favorable to the existence of issues of material fact, and in the light most favorable to the plaintiff, Mrs. Vinyard — the party opposing the summary judgment motion. Exnicious v. United States, 563 F.2d 418, 423 (10th Cir.1977). We reverse the decision of the district court on the ground that as a matter of Oklahoma law, Mrs. Vinyard has a constitutionally protected property interest in her employment with the hospital. We remand for the district court to determine the appropriate award of damages, costs and attorney’s fees. II. Section 1983 Claim When bringing a section 1983 action, a public employee must show that she possesses a property or liberty interest in her employment in order to trigger the due process protections afforded by the fourteenth amendment. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). In the case before us, Mrs. Vinyard advances two theories in an attempt to support the sufficiency of her property interest claim. First, despite the fact that she had no written employment contract, Mrs. Vinyard alleges that there were special circumstances and considerations giving rise to an implied employment contract with the hospital. Mutually explicit understandings can create a property interest in continued employment by means of an implied contract. Bishop v. Wood, 426 U.S. 341, 344 & n. 6, 96 S.Ct. 2074, 2077 & n. 6, 48 L.Ed.2d 684 (1975) (citing with approval Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, 2699, 33 L.Ed.2d 570 (1972)). If we thought that plaintiff’s property interest existed by means of an implied annual contract with her employer, we would remand for a factual determination of whether the facts and special circumstances alleged by plaintiff do indeed give rise to such a contract. However, the existence and sufficiency of Mrs. Vinyard’s property interest is governed by the terms set forth in the hospital’s handbook. Mrs. Vinyard’s second theory is that a property interest in her continued employment was created when the hospital issued its employee handbook in 1976. Record, vol. 2, at 211-82. She argues that the handbook creates a property interest because it provides that permanent employees, such as herself, could only be discharged for cause. See Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974). Defendants would like us to believe, however, that the hospital was not restricted to dismissing its employees solely for cause. They argue that classification as a “permanent” employee does not give rise to a contract other than one for an indefinite period of time — terminable at will. The district court, citing to Edwards v. Kentucky Utilities Co., 286 Ky. 341, 150 S.W.2d 916 (1941), and Garza v. United Child Care, Inc., 88 N.M. 30, 536 P.2d 1086 (App.1975), cases cited by the Oklahoma Supreme Court in Singh v. Cities Service Oil Co., 554 P.2d 1367, 1369 n. 3 (Okl.1976), concluded that under Oklahoma law the parties’ employment relationship was terminable-at-will and that the handbook did not restrict the hospital to discharge its permanent employees only for cause. Vinyard v. King, No. C-79-185-W, slip op. at 4-5 (W.D.Okla. January 27, 1982). We disagree. Both the district court’s decision and defendants’ argument place unnecessary reliance on the significance of whether Mrs. Vinyard had an at-will or definite duration employment contract. They ignore the importance of the employee handbook — the pivotal point in Mrs. Vinyard’s section 1983 claim — which is determinative of a property interest under Oklahoma law. See Langdon v. Saga Corp., 569 P.2d 524, 526-28 (Okl.Ct.App.1976). Whether Mrs. Vinyard has a property interest under Oklahoma law sufficient to trigger the protections of the fourteenth amendment is not necessarily determined by what type of contract she was employed under. Rather her property interest is determined by whether the terms of employment created by contract, federal statute, city charter, or an employee manual “create a sufficient expectancy of continued employment to constitute a property interest, which must be afforded constitutionally guaranteed due process.” Hall v. O’Keefe, 617 P.2d 196, 200 (Okl.1980). Therefore, we turn to Oklahoma law, Bishop, 426 U.S. at 344, 96 S.Ct. at 2077, to determine whether Mrs. Vinyard had a “legitimate claim of entitlement” to her job rather than a mere “unilateral expectation” of continuing in her position. Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). III. Existence of Property Interest In Oklahoma the provisions of an employee handbook can constitute a contract between the employer and employee and define the employer-employee relationship for as long as those provisions are in effect and the employee provides consideration for the benefits provided by the handbook. The consideration can be quite small and can even consist of the employee continuing to work and foregoing the option of quitting. Langdon v. Saga Corp., 569 P.2d 524, 526-28 (Okl.App.1976). In Langdon, the employee handbook provided for severance and vacation pay upon termination. In holding that those provisions constituted part of the employment contract, the court held that “the [personnel [mjanual ... became a . .. contract which defined the employer-employee relationship during the period the policy was in effect and the employee performed.” Langdon, 569 P.2d at 528. See also Smith v. Kerrville Bus Co., 709 F.2d 914, 919-20 (5th Cir.1983) (reasons for discharge enumerated in employee handbook restricted employer to discharge only for cause). The Oklahoma Supreme Court has since recognized that “the terms of employment established with an employer ... may create a sufficient expectancy of continued employment to constitute a property interest, which must be afforded constitutionally guaranteed due process.” Hall v. O’Keefe, 617 P.2d 196, 200 (Okl. 1980). Here both parties stipulate that there is no written employment contract. The only writing evidencing an agreement is the employee handbook, signed by both Mrs. Vinyard and the hospital’s personnel assistant. The handbook was designed “to acquaint [the employee] with the policies and benefits which apply to ... employee[s]”. Record, vol. 2, at 211. It specifically states that a permanent employee may not be discharged without cause. The fact that the handbook does not provide for review procedures is no bar to our holding that under these circumstances we believe the Oklahoma Supreme Court would find a property interest in continued employment protected by the fourteenth amendment. See Perry v. Sindermann, 408 U.S. 593, 601-03, 92 S.Ct. 2694, 2699-2700, 33 L.Ed.2d 570 (1972); Poolaw v. City of Anadarko, 660 F.2d 459 (10th Cir.1981). As a public employee, Mrs. Vinyard retained the right, re gardless of its omission from the handbook, to seek review of the hospital’s policies and to seek redress for the violation of her constitutional rights. We hold that termination by the hospital, without a hearing to determine whether cause existed, was a violation of section 1983. Since it is not disputed that no procedural process was provided in this case, we do not need to discuss the question of what processes would satisfy procedural due process in a case like this. We reverse the decision of the district court and hold, as a matter of law, Mrs. Vinyard had a property interest in her continued employment with the hospital. We remand for a determination of damages. IV. Damages, Costs and Attorney’s Fees A. Damages Having held that the hospital’s termination of Mrs. Vinyard, without a hearing, was in violation of her fourteenth amendment rights, we turn next to the question of damages against the hospital for a section 1983 violation. In her complaint Mrs. Vin-yard requested compensatory damages in addition to reinstatement. She also seeks punitive damages in the amount of $75,000 against the defendant, Mr. King. Local governing bodies are liable for constitutional deprivations when the improper action stems from “decision[s] officially adopted and promulgated by that body’s officers.” Monell v. Department of Social Services of New York, 436 U.S. 658, 690, 98 S.Ct. 2018, 2035, 56 L.Ed.2d 611 (1978); Miller v. City of Mission, 705 F.2d 368 (10th Cir.1983). As a municipal hospital, the hospital is liable under section 1983 if it “was in a position of responsibility, knew or should have known of the misconduct, and yet failed to act to prevent future harm.” McClelland v. Facteau, 610 F.2d 693, 697 (10th Cir.1979). Personal participation is not the only predicate for liability under section 1983. Anyone who under col- or of state law, subjects, or causes to be subjected, any citizen to a constitutional deprivation will be liable. Here the hospital is liable for its failure to provide a pretermination hearing to determine if cause was present before Mrs. Vinyard’s discharge. Since this case is before us after a grant of summary judgment, we remand to the district court to compute compensatory damages and to consider her request for reinstatement. See Keyer v. Civil Service Commission of New York, 397 F.Supp. 1362, 1370 (E.D.N.Y.1975); Vega v. Civil Service Commission of New York, 385 F.Supp. 1376 (S.D.N.Y.1974); Lyman v. Swartley, 385 F.Supp. 661 (D.Idaho 1974). B. Punitive Damages Mrs. Vinyard seeks punitive damages in the amount of $75,000.00 against defendant Mr. King for knowingly, willfully and wantonly discharging her from her employment and requests a jury trial on this issue. Punitive damages may be awarded in a section 1983 action to deter or punish violations of constitutional rights. Miller v. City of Mission, 705 F.2d 368 (10th Cir.1983). Although punitive damages will not lie against a municipal organization itself, McKee v. Heggy, 703 F.2d 479 (10th Cir.1983), they will lie against a municipal official, based on his personal financial resources, if such official conduct was prompted by an “evil motive or intent, or when it [the conduct] involves reckless or callous indifference to the federally protected rights of others.” Smith v. Wade, — U.S. —, 103 S.Ct. 1625, 1640, 75 L.Ed.2d 632 (1983). We remand for a determination of whether Mr. King’s actions rose to the required level. C. Costs and Attorney’s Fees The Civil Rights Attorney’s Fees Awards Act of 1976 provides that in federal civil rights actions “the court, in its discretion, may allow the prevailing party other than the United States, a reasonable attorney’s fee as part of the costs,” 42 U.S.C. § 1988 (Supp. V 1981), and as such applies to an action brought pursuant to section 1983. As a “prevailing party”, Mrs. Vinyard will be entitled to recover under section 1988. On remand we direct the district court to Hensley v. Eckerhart,— U.S. —, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (prevailing party’s section 1988 fee award must be calculated in relation to the degree of success obtained) for an appropriate determination of attorney’s fees, including attorney’s fees for the successful prosecution of this appeal. . Section 1983 provides in part as follows: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. 42 U.S.C. § 1983 (Supp. V 1981). Local governing bodies such as municipalities, can be sued directly under § 1983 when the alleged unconstitutional action reflects officially adopted policies. Monell v. Dep’t of Social Servs. of New York, 436 U.S. 658, 690, 98 S.Ct. 2018, 2035-2036, 56 L.Ed.2d 611 (1978). Mr. King and the board of directors of the hospital, which is owned and operated by the municipal ity of Clinton, Oklahoma, are local government officials who, when sued in their official capacities, are “persons” for purposes of § 1983. Id. at 690 n. 55, 98 S.Ct. at 2035 n. 55. . Mrs. Vinyard initially sought recovery for the deprivation of a liberty interest as well. However, once the district court granted defendants’ motion for summary judgment on the property interest issue, Mrs. Vinyard moved to dismiss with prejudice the remaining issues concerning her liberty interest. Record, vol. 2, at 394. . Railroad Comm’n of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941); see generally, C. Wright, Law of Federal Courts 218-36 (3rd ed. 1976); Wechsler, Federal Jurisdiction and the Revision of the Judicial Code, 13 L. & Contemp.Prob. 216, 230 (1948). . Vinyard v. King, 655 F.2d 1016 (10th Cir. 1981).
7849215-23308	MEMORANDUM HUYETT, District Judge. Pursuant to 42 U.S.C. § 1988, Planned Parenthood of Southeastern Pennsylvania and other abortion providers (“Plaintiffs”) petition for attorneys’ fees and costs associated with services rendered in this Court. For the reasons set forth below the petition is GRANTED WITH CERTAIN MODIFICATIONS. I. BACKGROUND This action involves a challenge by Plaintiffs to the constitutionality of certain provisions of Pennsylvania’s Abortion Control Act (“Act”), 18 Pa. Cons.Stat. §§ 3201-3220 (1990). This Court enjoined virtually all challenged provisions. Planned Parenthood of Southeastern Pennsylvania v. Casey, 744 F.Supp. 1323 (E.D.Pa.1990). Applying the strict scrutiny standard of review, this Court found unconstitutional the provisions relating to informed consent (§§ 3205, 3208), spousal notification (§ 3209), public disclosure of certain reports (§§ 3207(b), 3214(f)), certain reporting requirements (§ 3214(a), (h)), and the definition of medical emergency (§ 3203). The Court found unconstitutional the provision for parental consent for minors (§ 3206) under the undue burden standard of review. The Commonwealth of Pennsylvania (“Defendants” or “Commonwealth”) appealed. Applying the undue burden standard, the Third Circuit Court of Appeals affirmed the uneonstitutionality of the spousal notice provision but held the other provisions constitutional. Planned Parenthood v. Casey, 947 F.2d 682 (3d Cir.1991). The Supreme Court affirmed in part and reversed in part the decision of the Third Circuit Court of Appeals. Applying the undue burden standard, the Supreme Court affirmed the uneonstitutionality of the spousal notification provision. Planned Parenthood v. Casey, — U.S.-, 112 S.Ct. 2791, 120 L.Ed.2d 674 (1992). It also invalidated the reporting requirement for the spousal notice provision (§ 3214(a)(12)). It affirmed the constitutionality of all other challenged sections and remanded the case to the Court of Appeals for proceedings consistent with the opinion, including consideration of sever-ability of the spousal notice provision from the constitutional provisions of the Act. On remand, the Court of Appeals found the spousal notice provisions severable and remanded the case to the District Court. Planned Parenthood v. Casey, 978 F.2d 74 (3d Cir.1992). The determination of attorneys’ fees under 42 U.S.C. § 1988 involves several steps. First, the Court must decide if the petitioner is a prevailing party. If the petitioner is a prevailing party, the Court must then determine a reasonable fee. Second, the reasonable fee is obtained by calculating a lodestar. Third, the lodestar may be reduced if it is unreasonable in light of the “results obtained” or enhanced in cases of “exceptional success.” Hensley v. Eckerharb, 461 U.S. 424, 433-37, 103 S.Ct. 1933, 1939-41, 76 L.Ed.2d 40 (1983). Plaintiffs request $526,429.30 in fees and $22,567.34 in costs. Upon thorough review of Plaintiffs’ petition for attorneys’ fees, the Commonwealth’s response, and Plaintiffs’ reply memorandum, the Court awards Plaintiffs $201,735.00 in attorneys’ fees and $20,-236.33 in costs, for a total of $221,971.33. II. Calculating Attorney’s Fees Excluding the Fee Petition A. Prevailing Party Status Under 42 U.S.C. § 1988, courts may award reasonable attorneys’ fees to prevailing parties. Hensley, 461 U.S. at 429, 103 S.Ct. at 1937. “ ‘Plaintiffs may be considered prevailing parties if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.’ ” Id. at 433, 103 S.Ct. at 1939 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-279 (1st Cir.1978)). The Supreme Court elaborated upon that definition and stated that a plaintiff must obtain at least some relief on the merits. Farrar v. Hobby, — U.S. -, -, 113 S.Ct. 566, 573, 121 L.Ed.2d 494 (1992); Hewitt v. Helms, 482 U.S. 755, 760, 107 S.Ct. 2672, 2675-76,- 96 L.Ed.2d 654 (1987). There must be a resolution of the dispute which changes the legal relationship between the parties. Hewitt, 482 U.S. at 760-61, 107 S.Ct. at 2675-76; Rhodes v. Stewart, 488 U.S. 1, 3-4, 109 S.Ct. 202, 203-04, 102 L.Ed.2d 1 (1988). This change occurs when a plaintiff obtains a judgment, consent decree, or settlement against the defendant. Farrar, — U.S. at -, 113 S.Ct. at 574. It may also occur if the lawsuit is a catalyst that produces “voluntary action by the defendant that affords the plaintiff all or some of the relief he sought through a judgment — e.g., a monetary settlement or a change in conduct that redresses the plaintiffs grievances.” Hewitt, 482 U.S. at 760-61, 107 S.Ct. at 2676; Baumgartner v. Harrisburg Hous. Auth., 21 F.3d 541, 544 (3d Cir.1994). Plaintiffs assert that they succeeded on four issues: the constitutionality of the spousal notice provision (§ 3209), the reporting requirement of section 3214(a)(12), the scope of the definition of medical emergency (§ 3203), and the reaffirmation of the essential aspects of Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973). Application Interim Attorneys’ Fees at 4. Plaintiffs are prevailing parties with respect to §§ 3209 and 3214(a)(12), and Defendants do not challenge their status on these issues. Although Plaintiffs must prevail on only one claim to obtain prevailing party status, the Court considers Plaintiffs’ status on the other claims because it is relevant to determining the reduction to Plaintiffs’ request because of limited success. To be a prevailing party, the plaintiff must “ ‘succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.’ ” Hensley, 461 U.S. at 433, 103 S.Ct. at 1939 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)). In other words, “a plaintiff ‘prevails’ when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.” Farrar v. Hobby, — U.S. -, -, 113 S.Ct. 566, 573, 121 L.Ed.2d 494 (1992). “[A] favorable judicial statement of law in the course of litigation that results in judgment against the plaintiff does not suffice to render [the plaintiff] a prevailing party.” Hewitt v. Helms, 482 U.S. 755, 763, 107 S.Ct. 2672, 2677, 96 L.Ed.2d 654 (1987). In this Court, Plaintiffs challenged the Act’s definition of “medical emergency” as unduly narrow and vague. Plaintiffs claimed it did not include three life-threatening conditions: preeclampsia, inevitable abortion, and prematurely ruptured membranes. The Court granted an injunction to prevent the application of the narrow definition. The Court of Appeals read the statutory definition more broadly and reversed this Court, finding that the definition encompassed the three medical conditions Plaintiffs addressed. Plaintiffs claim prevailing party status on this issue, arguing that the Court of Appeals’ broad construction clarified the definition of medical emergency in a manner favorable to Plaintiffs. Corrected Mem.Law Supp.Pl.Appellees’ Application for Attorneys’ Fees [hereinafter “Pls.’ Corrected Application”] at 12. Plaintiffs also argue that they directly benefitted from the Court of Appeals’ holding because the broad definition prevents prosecutions by Defendants when abortions are performed because of preeclampsia, inevitable abortion, or prematurely ruptured membranes. Id. at 11-12. Plaintiffs misinterpret the judicial effect of the Court of Appeals decision. The Court found Plaintiffs’ narrow interpretation “unduly restrictive.” Casey, 947 F.2d at 701. The Court of Appeals did not grant Plaintiffs relief on the merits of this claim. Rather, it accepted Defendants’ interpretation of the definition. Just because the court offered a favorable judicial statement of law, Plaintiffs are not prevailing parties on this issue. Plaintiffs also claim prevailing party status because the Supreme Court affirmed the essential holding of Roe. Plaintiffs assert that the validity of Roe “became a ‘significant issue’ ” in the proceeding, and that therefore, the affirmance of the essential holding of Roe was a benefit to Plaintiffs and the public as a whole. Pis.’ Corrected Application at 8. This argument is misplaced. At issue in this case was the constitutionality of certain provisions of Pennsylvania’s Abortion Control Act. Casey, — U.S. at-, 112 S.Ct. at 2803. Although the validity of Roe was an important legal issue, the Supreme Court’s affirmation of Roe cannot be said to have given Plaintiffs an enforceable judgment against the defendant for whom fees are sought. See Farrar, — U.S. at-, 113 S.Ct. at 573. Plaintiffs did not seek an affirmation of Roe in their complaint. As a result, the Court finds that while Plaintiffs prevailed on this issue, this issue was not a claim on which they could be called “prevailing parties.” Plaintiffs are only prevailing parties with respect to the unconstitutionality of the spousal notice provision (§ 3209) and the spousal notification reporting requirement. B. Reasonableness of Plaintiffs’ Fee Request After determining that Plaintiffs are prevailing parties, the Court must determine a reasonable fee. The Court first calculates a lodestar figure by multiplying the number of hours reasonably expended by a reasonable hourly rate. Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. The party seeking fees bears the burden of proving that the fee request is reasonable by submitting evidence to support the hours worked and the rates charged. Hensley, 461 U.S. at 433, 103 S.Ct. at 1939; Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir.1990). The opposing party has the burden to challenge the reasonableness of the fee requested with specificity sufficient to give the fee applicant notice. Id.; Bell v. United Princeton Properties, Inc., 884 F.2d 713, 715 (3d Cir.1989). Once objections are raised, the Court has great discretion to adjust the fee in light of these objections. Rode, 892 F.2d at 1183; Bell, 884 F.2d at 721. Plaintiffs seek compensation for the services of the Center for Reproductive Law and Policy (“CRLP”), the Women’s Law Project (“WLP”), Pepper, Hamilton & Scheetz (“PHS”), Professor Seth Kreimer (“Kreimer”), and the Planned Parenthood Federation of America (“PPFA”) in the district court and preparing the fee application. In support of the application, Plaintiffs have submitted contemporaneous time records kept by each attorney, for a total of 3,574.50 hours. Application for Interim Attorneys Fees at 5. Plaintiffs claim 3,514.00 hours for services their lawyers rendered before this Court and 60.50 hours to prepare the present fee petition. The Court calculates the lode star separately for the hours spent on the fee petition. 1. Reasonable Hours The first step in calculating a reasonable fee is to determine the number of hours reasonably expended on the litigation. Excessive, redundant, or otherwise unnecessary hours are not “reasonably expended” and should be excluded. Hensley, 461 U.S. at 434; Rode, 892 F.2d at 1183. Defendants raise two types of challenges to Plaintiffs’ requested hours. It argues that some hours are improperly charged to the Commonwealth and others are duplicative, excessive, and otherwise unnecessary. The Court addresses these challenges in turn. Defendants challenge four types of charges as improperly charged to the Commonwealth. Defendants argue that hours spent on the fee petition, researching the admissibility of newspaper articles, “warning labels” research, and travel related to researching proposed legislation are improper charges. Plaintiffs have agreed to withdraw their claims with respect to the 33.75 hours Maria M. Pabon billed for on warning labels research and the 10.25 hours Thomas Zemaitis spent on travel related to proposed legislation and the Court deducts these hours accordingly. In addition, the Court deducts 2 hours from the time records of Jodi Marcus spent on warning labels research, for a total reduction of 46 hours. Defendants’ other objections to improper entries must be rejected. Defendants argue that time spent preparing the fee petition and the time spent researching the admissibility of newspaper articles are not admissible. Defs.’ Br. at 12-13. Newspaper articles are only hearsay if offered in evidence to prove the truth of the matter asserted. Fed.R.Evid. 801(c). Accordingly, the time spent researching this issue is compensable. Defendants also argue that the hours devoted to the fee petition are not compensable. On the contrary, the hours devoted to preparing and litigating the fee petition are compensable and are subject to the Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), fee reduction analysis. Institutionalized Juveniles v. Secretary of the Public Welfare, 758 F.2d 897, 924-25 (3d Cir.1985). Accordingly, the hours spent on the fee petition are compensable. Next, Defendants attack various hours as duplicative, excessive, and otherwise unnecessary. The Court finds persuasive the reasoning in New York State Ass’n for Retarded Children v. Carey, 711 F.2d 1136, 1146 (2d Cir.1983), which states that in cases with a number of collaborating lawyers, the district court assesses claims of overstaffing and overresearching in light of the “scope and complexity of the particular litigation.” Based on Plaintiffs’ submissions, Defendants attempted to calculate how many hours Plaintiffs spent on tasks such as discovery, strategy conferences, and trial preparation. Defendants argue that the total charges for these tasks were excessive and that various individual charges were excessive and that the total hours should be reduced by 30%. For example, Defendants calculated that Plaintiffs’ attorneys spent 1,134 hours on pre-trial submissions, trial preparation and trial, and post-trial briefs. Defendants challenge these hours as excessive, in light of the fact that trial counsel were Zemaitis and Kathyrn Kolbert, two experienced litigation attorneys. Considering that one quarter of these hours were spent on the trial and oral argument itself, and the case contained several complex factual and legal issues, the Court finds that these hours were not excessive. Defendants also- challenge the 30 hours Kolbert, Ellen Goetz, and Marcus billed to attend a Pennsylvania Coalition Against Domestic Violence meeting. Careful inspection of the fee petition shows that the attorneys attended the meeting to find potential witnesses. These hours are reasonable and are not reduced. Defendants further challenge the number of attorneys attending oral argument. In light of the scope and complexity of the case, it was reasonable for Plaintiffs to bring more than two attorneys to oral argument and the fees requested are not unreasonable. The Court has carefully reviewed all of Defendants’ objections, and the time entries of each attorney, law clerk, and paralegal. The Court also considered the fact that the issues in this case were more complex than a standard contract or personal injury case. In addition, the hours spent on matters before this Court extended over two years and it was reasonable for many attorneys to work on this case. The Court finds that the remaining hours are not excessive, duplicative, or otherwise unnecessary. 2. Reasonable Hourly Rates Plaintiffs propose hourly rates between $60 for a law clerk and $250 for Roger K. Evans. To determine a reasonable hourly rate, market rates in the relevant community should be considered. Blum v. Stenson, 465 U.S. 886, 895 (1984); Gulfstream III Assocs. v. Gulfstream Aerospace Corp., 995 F.2d 414, 422 (3d Cir.1993). Plaintiffs offer as evidence of reasonableness Philadelphia’s Community Legal Services, Inc. Fee Schedule (“CLS Fee Schedule”), which has been cited with approval by the Third Circuit Task Force on Court Awarded Attorney Fees, Report of the Third Circuit Task Force on Court Awarded Attorney Fees, 108 F.R.D. 237, 260 n. 70 (1985), and in the Eastern District of Pennsylvania, Rainey v. Philadelphia Hous. Auth., 832 F.Supp. 127, 129 (E.D.Pa.1993). Defendants do not challenge these rates. Comparing Plaintiffs’ proposed rates to those in the CLS Fee Schedule, the Court finds they fall within the range of rates of attorneys of similar skill and experience in Philadelphia. While Plaintiffs seek a ’ $125 per hour for attorney Goetz, a rate that is $5.00 higher per hour than the CLS Fee Schedule, the Court finds that $125 per hour is reasonable in light of her experience and considering that the remainder of the rates are within the ranges the CLS Fee Schedule suggests. Thus, multiplying the reasonable hourly rates by the reasonable number of hours, yields a lodestar of $487,042.50 for services rendered for this Court. III. Adjustments to the Lodestar A. Reduction For Limited Success After calculating the reasonable lodestar, the Court has discretion to make certain adjustments to the lodestar. Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 1939-40, 76 L.Ed.2d 40 (1983). The first adjustment is to consider whether the lodestar should be adjusted downward because it is not reasonable in light of the results obtained. Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir.1990). The second adjustment is to determine whether an upward adjustment of the fee is appropriate, whether it be based on delay in payment, extraordinary quality in representation, or a contingency multiplier. Id. at 1184. Because Plaintiffs failed to prevail on all of their claims for relief, the Court first determines whether the claims on which Plaintiffs failed were unrelated to the claims on which they succeeded. Next the Court determines whether Plaintiffs achieved a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award. Hensley, 461 U.S. at 434, 103 S.Ct. at 1939-40. Consideration of “results obtained” involves two issues. “First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?” Hensley, 461 U.S. at 434, 103 S.Ct. at 1939-40. See also Lerman v. Joyce Int’l, Inc., 10 F.3d 106, 114 (3d Cir.1993) (applying Hensley, 461 U.S. at 434, 103 S.Ct. at 1939-40). With respect to the first issue, Hensley explains that related claims involve a “common core of facts” or related legal theories. 461 U.S. at 435, 103 S.Ct. at 1940. In these situations, “[m]uch of counsel’s time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis.” Id. Distinctly different claims are based on different facts and legal theories and should be treated as if they were raised in separate lawsuits. Id. at 434-35, 103 S.Ct. at 1939-40. In cases where the plaintiffs achieve only limited success, “[t]he district court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for limited success.” Hensley, 461 U.S. at 436-37, 103 S.Ct. at 1941. Plaintiffs challenged various provisions of the Act as violative of the Due Process Clause of the Fourteenth Amendment: (1) the definition of medical emergency (§ 3203), (2) informed consent (§§ 3205, 3208), (3) parental consent (§ 3206), (4) spousal notification (§ 3209), (5) public disclosure provisions (§§ 3207(b), 3214(D), and (6) certain reporting provisions (§ 3214(a), (h)). While some of the issues are factually distinguishable, they involve similar legal theories, and thus are related. As a result, the action should not be viewed as a series of discrete claims. The hours spent pursuing the unsuccessful claims should not be excluded because they are related to the successful claims. Plaintiffs argue that they succeeded on the spousal notice provision, the definition of medical emergency, and the essential holding of Roe v. Wade. As explained previously, Plaintiffs are prevailing parties only on the spousal notice claim and reporting provision. Although Plaintiffs prevailed on the issue of the validity of Roe v. Wade, this issue cannot be considered a claim as discussed previously. While Plaintiffs failed on the remainder of their challenges to the statute, these challenges were related to the successful claims. Each claim challenged the same statute and all claims raised the claim of violation of the Fourteenth Amendment. As a result, the hours spent on the challenges to the definition of medical emergency and other provisions of the statute are not subtracted from the lodestar fee because they are related to the spousal notice provision. The second issue to be considered for “results obtained” is the relationship between the hours reasonably expended and the degree of success achieved in prevailing claims. Plaintiffs obtained an injunction on the spousal notice provision and the reporting requirement for the spousal notice provision, as well as the validity of Roe. Acknowledging their limited success, Plaintiffs propose a 30% reduction of the lodestar. Defendants propose a more drastic 90% cut. In calculating an appropriate percentage reduction, the Court has carefully reviewed the time records submitted by each attorney, law clerk, and paralegal. Additionally, the Court considers the fact that much of the legal services rendered and arguments made would have been necessary even if the spousal notice provision were the only claim litigated. For example, Plaintiffs would have addressed the standard of review for constitutional challenges to abortion regulations, stare decisis, and deference to the District Court’s findings even though they challenged only the husband notice provision. Considering all factors, this Court finds that 60% is an appropriate reduction for limited success to each attorney’s claim. The adjusted lodestar is $194,817.00. B. Positive Multiplier for Quality of Representation Plaintiffs request a 50% upward adjustment of the lodestar to account for the extraordinary performance of counsel. Ordinarily, the lodestar is presumed to be reasonable compensation. Pennsylvania v. Delaware Valley Citizens’ Council, 478 U.S. 564, 565 (1986). However, in exceptional cases, a quality enhancement is justified if the fee applicant offers evidence that “the quality of service rendered was superior to that one reasonably should expect in light of the hourly rates charged and that the success was ‘exceptional.’ ” Blum v. Stenson, 465 U.S. 886, 899, 104 S.Ct. 1541, 1549, 79 L.Ed.2d 891 (1983). See also Hensley, 461 U.S. at 435, 103 S.Ct. at 1940; Rode v. Dellarciprete, 892 F.2d 1177, 1184 (3d Cir.1990). Plaintiffs were represented by superior counsel, and Casey was one of the more visible and closely-watched court cases in recent history. However, this does not defeat the fact that Plaintiffs prevailed on only one legal claim. Additionally, over the course of these proceedings, five attorneys billed at a rate of $200 or more per hour. In light of these rates and the experience level they reflect, the quality of representation does not exceed expectations. Accordingly, no multiplier will be awarded for extraordinary performance of counsel. IV. Time Spent on Fee Petition
4276782-8174	MEMORANDUM OPINION AND ORDER JEFFREY COLE, United States Magistrate Judge. The plaintiff has moved to strike all thirteen of Chase Bank’s affirmative defenses. Chase has withdrawn its first affirmative defense. The twelve remaining are: 2. Plaintiffs claims against Chase fail because there was no “unauthorized use” as that term is used and defined in 15 U.S.C. § 1602(o); 12 C.F.R. § 226.12(b)(1) n. 22, and other applicable law. 3. Plaintiffs claims against Chase fail because plaintiff knew or should have known of the charges posted to his account because he gave the credit card numbers to certain online merchants and authorized them to post charges to his account. 4. Plaintiffs claims against Chase fail because Chase neither knew nor should have known of any alleged wrongdoing of any other persons which may have caused any purported damages to plaintiff and which was out of Chase’s control. 5. Plaintiffs claims against Chase fail because he failed to allege any cognizable damages resulting from Chase’s alleged acts or omissions. 6. Plaintiffs damages, if any, were caused by his own actions, inaction or negligence, and/or the negligence of others. 7. Plaintiffs damages, if any, were not directly or proximately caused by Chase, but were the product of persons other than Chase. 8. Plaintiffs damages, if any, are limited by his comparative and/or contributory negligence. 9. Plaintiffs claims against Chase are barred to the extent that plaintiff failed to comply with the requirements, terms and conditions of the Card Member Agreement. 10. Plaintiff failed to mitigate his damages. 11. Plaintiffs damages, if any, are barred to the extent of any loss caused by his failure to revoke the authorization he gave to certain online merchants with whom he allegedly ceased doing business. 12. Chase relies on any applicable defenses or counterclaims in the Truth in Lending Act. 13. Chase complied with the requirements of all applicable contracts, statutes and regulations. As to the second, third, and fifth affirmative defenses, plaintiff argues that they are nothing more than naked denials of one of the elements of his claim under the Truth In Lending Act (TILA). As to the fourth affirmative defense, the plaintiff argues that Chase’s lack of knowledge of any alleged wrongdoing is irrelevant. And, finally, the plaintiff contends that all the affirmative defenses should be stricken as “bare bones, eonelusory allegations.” Pursuant to Rule 12(f), the court can strike “any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Delta Consulting Group, Inc. v. R. Randle Constr., Inc., 554 F.3d 1133, 1141 (7th Cir.2009). “Affirmative defenses will be stricken ‘only when they are insufficient on the face of the pleadings.’” Williams v. Jader Fuel Co., 944 F.2d 1388, 1400 (7th Cir.1991). Being expressly subject to the “General Rules of Pleading” under Rule 8 of the Federal Rules of Civil Procedure, asserted “defenses” “[i]n responding to a pleading,” must be stated “in short and plain terms____” Rule 8(b)(1)(A). Affirmative defenses “must affirmatively state any avoidance or affirmative defense,” including any of the 19 defenses listed in Rule 8(c)(1). An affirmative defense is one that admits the allegations in the complaint, but avoids liability, in whole or in part, by new allegations of excuse, justification or other negating matters. White v. De La Osa, 2011 WL 1559826, 2 (S.D.Fla.2011). An attack on a plaintiffs prima facie claim is a “negative defense,” rather than an affirmative defense, which must plead “matter that is not within the claimant’s prima facie case.” 2A Moore’s Federal Practice ¶ 8.27[1] (2d Ed. 1992). See also Fort Howard Paper Co. v. Standard Havens, Inc., 901 F.2d 1373, 1377 (7th Cir. 1990) (affirmative defenses do not controvert proof of the claim to which they are addressed). Bare legal conclusions are never sufficient, Heller Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1295 (7th Cir.1989), and district courts have considerable discretion under Rule 12(f) to strike claimed defenses that do not give fair notice and merely clutter the pleadings. See Delta Consulting Group, Inc., 554 F.3d at 1141-42; State Farm Fire & Cas. Co., 2011 WL 133014,1. There are two potential questions raised by the plaintiffs motion. First, whether Bell Atlantic v. Twombly, 550 U.S. 544, 562-63, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), which retired the Gibson v. Conley test of sufficiency, and Ashcroft v. Iqbal, — U.S.-, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), are to be applied to affirmative defenses as well as to claims for relief under Rule 8(a)(2). The second is whether the exceedingly sketchy and eonelusory allegations in Chase’s affirmative defenses pass muster under pre-Iqbal eases. Today, a plaintiffs “factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Put differently, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, — U.S.-,-, 129 S.Ct. 1937, 1949,173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570,127 S.Ct. 1955). Although Twombly and Iqbal dealt with the detail required in the allegations of a complaint, courts in this and many other districts have extended Twombly’s heightened pleading standard to affirmative defenses. See e.g., State Farm Fire & Cas. Co. v. Electrolux Home Products, Inc., 2011 WL 133014, 1-2 (N.D.Ill.2011) (St. Eve, J.); Kimbrew v. Advocate Health and Hospitals Corp., 2010 WL 5135908, 1 (N.D.Ill.2010) (Hibbler, J.); On Command Video Corp. v. Roti, 2010 WL 1752350, 4 (N.D.Ill.2010) (Gettleman, J.); Bank of Montreal v. SK Foods, LLC, 2009 WL 3824668, 3 (N.D.Ill. 2009) (Gottschall, J.); Sanders v. Continental Collection Agency, Ltd., 2011 WL 1706911 (D.Colo.2011); White, 2011 WL 1559826, 2. Compare Wilbert Funeral Services, Inc. v. Custom Services Unlimited, LLC, 2010 WL 4627663, 2 (N.D.Ill.2010) (Feinerman, J.) (calling it an “open question,” but deciding that affirmative defense did not meet preTwombly requirements). Contra Leon v. Jacobson Transp. Co., Inc., 2010 WL 4810600, 1 (N.D.Ill.2010) (Marovich, J.) (finding Twombly and Iqbal inapplicable); Schlief v. Nu-Source, Inc., 2011 WL 1560672, 9 (D.Minn.2011) (same); Falley v. Friends University, — F.Supp.2d -, 2011 WL 1429956 (D.Kan.2011) (same) (collecting cases on both sides of the issue); Tyco Fire Products LP v. Victaulic Co., 777 F.Supp.2d 893, 895-96 2011 WL 1399847, 1 (E.D.Pa.2011) (collecting cases on both sides of the issue). As in Wilbert Funeral Services, Inc., supra, it is unnecessary to decide the question of the applicability of Twombly and Iqbal to affirmative defenses. Even before Iqbal and Twombly, the required short and plain statement of the “claim showing that the plaintiff is entitled to relief’ under Rule 8(a)(2) had to “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic, 550 U.S. at 555, 127 S.Ct. 1955 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The same was true of affirmative defenses under Rule 8(b)(1)(A). In the instant case, Chase’s affirmative defenses are inadequately pled under pre-Twombly case law since, with perhaps the exception in the second defense, they do not give fair notice of what is being alleged. Viewed separately, as Chase has set them out, the defenses are nothing more than statements that do not provide fair notice to the plaintiff. Rule 12(f) provides the mechanism for remedying such deficiencies. Indeed, Chase essentially concedes that its drafting might have been more precise. Nonetheless, it argues that it has sufficiently “alleged, in a series of defenses, that the charges [at issue] were not ‘unauthorized’ but were instead the product of an authorized consumer-merchant relationship____” (Chase’s Response to Motion to Strike, at 4-5). Chase goes on to explain that it is claiming that the plaintiff gave his credit card number to merchant that he authorized to post charges to his account.
11191482-13069	OPINION ALAN E. NORRIS, Circuit Judge. Milton W. Keeney, debtor in this bankruptcy action, appeals from the order of the bankruptcy court denying his petition for discharge in bankruptcy. The denial was based upon the court’s finding that he had concealed property interests and made a false oath. We affirm the order. I. In 1971, Appellee, Mary Jean Smith, obtained a judgment against Keeney for injuries she sustained in a car accident. Smith has been unable to collect on this judgment. In 1982, a tract of real property was purchased in the names of Keeney’s parents, Winfred and Ruth Keeney. They mortgaged this property to Mutual Federal Savings and Loan (“Mutual Federal”). Keeney and his then-wife, Barbara Kee-ney, lived on the property for about a year, and paid his parents no rent. Keeney or his business entity, K-Bar Trailer Manufacturing (“K-Bar”), made all of the mortgage payments for the property. In 1985 Keeney executed a note for $89,960 to Mutual Federal secured by a new mortgage from Keeney’s parents on this property, as well as all of K-Bar’s inventory, fixtures and equipment. Keeney or K-Bar made all the payments on this note and mortgage. This property was eventually transferred by his parents for the sum of $15,000, which was paid to Mutual Federal. Keeney placed the winning bid for a second piece of real estate in 1983, which was purchased in his parents’ names for the sum of $61,700. Of that sum, $52,000 was borrowed from Mutual Federal. Kee-ney or K-Bar paid $9255 down for this property from K-Bar’s checking account, and thereafter Keeney paid $52,455 from K-Bar’s checking account for the balance due on the purchase price. Keeney and his wife moved onto this property at about the time it was conveyed to his parents and lived there until the time of their separation in 1994 or 1995. Keeney continues to live there. Keeney or K-Bar paid for improvements on this property and made all mortgage payments. Keeney does not pay rent to his parents for his use of the property. Glen Gadberry, Assistant Vice President at Alliance Bank, formerly Mutual Federal, testified that the only remaining records relating to the above property mortgages were in Keeney’s name, rather than his parents’, although many of the records had been destroyed. Keeney filed for bankruptcy in 1996. Smith filed a complaint with the bankruptcy court seeking to bar Keeney’s discharge in bankruptcy, alleging that the real estate conveyances were made in an effort to conceal property actually belonging to Keeney. The bankruptcy court denied Keeney discharge in bankruptcy under 11 U.S.C. § 727(a)(2)(A), finding that he had continuously concealed his beneficial interest in the above described property: The record in this case indicates that the debtor had property titled in his parents’ names while retaining a beneficial interest in it, so as to invoke the continuous concealment doctrine. While his parents had legal title to two different tracts of real estate, the defendant made his home on both at various times. He has stated that he made all the mortgage payments on them, and a down payment on one. In examining the defendant’s intent, the Court notes that these transfers took place while a judgment was pending against him in favor of the plaintiff. The defendant listed none of these property interests on his schedules when he filed his bankruptcy case. Smith v. Keeney (In re Keeney), 221 B.R. 401, 403 (Bankr.E.D.Ky.1998). The court further found that Keeney had violated 11 U.S.C. § 727(a)(4)(A) by making a false oath when he omitted the property from his bankruptcy schedules. Id. at 404. The district court affirmed the decision of the bankruptcy court. It also relied upon the continuing concealment doctrine to conclude that Keeney had concealed property in violation of 11 U.S.C. § 727(a)(2)(A). The court noted that Kee-ney produced only self-serving affidavits from himself and his parents stating that he had no interest in the property, and that no explanation was given for placing property that Keeney purchased and used into his parents’ names. The district court also concluded that Keeney had made a false oath in violation of 11 U.S.C. § 727(a)(4)(A) by failing to disclose his interests in the property to the bankruptcy court. II. Keeney appeals the denial of discharge in bankruptcy to this court, arguing that application of the continuous concealment doctrine to bar his discharge was improper. This court reviews the bankruptcy court’s findings of fact for clear error, and the district court’s conclusions of law de novo. See Wesbanco Bank Barnesville v. Rafoth (In re Baker & Getty Fin. Servs., Inc.), 106 F.3d 1255, 1259 (6th Cir.), cert. denied, 522 U.S. 816, 118 S.Ct. 65, 139 L.Ed.2d 27 (1997). The elements of a violation of 11 U.S.C. § 727 must be proven by a preponderance of the evidence to merit denial of discharge. See Barclays/American Bus. Credit, Inc. v. Adams (In re Adams), 31 F.3d 389, 394 (6th Cir.1994), cert. denied, 513 U.S. 1111, 115 S.Ct. 903, 130 L.Ed.2d 786 (1995). The Bankruptcy Code should be construed liberally in favor of the debtor. See Gillickson v. Brown (In re Brown), 108 F.3d 1290, 1292 (10th Cir.1997). A. Keeney first argues that the bankruptcy and district courts erred in applying the continuing concealment doctrine to find that he had violated section 727(a)(2)(A). That section specifies that: (a) The court shall grant the debtor discharge, unless— (2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has ... concealed, or has permitted to be ... concealed— (A) property of the debtor, within one year before the date of the filing of the petition!.] 11 U.S.C. § 727(a)(2)(A) (1993). This section encompasses two elements: 1) a disposition of property, such as concealment, and 2) “a subjective intent on the debtor’s part to hinder, delay or defraud a creditor through the act disposing of the property.” Hughes v. Lawson (In re Lawson), 122 F.3d 1237, 1240 (9th Cir.1997). The bankruptcy and district courts determined that Keeney had concealed his beneficial interest in the two properties by placing them in his parents’ names, with the requisite intent to defraud. Keeney argues on appeal that he had nothing to conceal because he has no interest in the property. A beneficial interest of ownership in the property can be inferred, however, from Keeney’s payment for and use of the properties, including his rent-free residence on each and payment of all mortgage obligations. As noted by the district court, no explanation was provided as to why the properties were titled in the parents’ names. Courts have found that a debtor retained a beneficial interest in property under similar circumstances. See, e.g., Hughes, 122 F.3d 1237; Thibodeaux v. Olivier (In re Olivier), 819 F.2d 550 (5th Cir.1987). Under the facts of this case, the bankruptcy court did not commit clear error in its determination that Keeney held a beneficial interest in the properties. The requisite intent to hinder, delay, or defraud was also permissibly inferred by the bankruptcy court in this case. See In re Snyder, 152 F.3d 596, 601 (7th Cir.1998) (citation omitted) (a debtor’s intent “ ‘may be inferred from the circumstances surrounding his objectionable conduct’ ”). Keeney next argues that even if he holds a beneficial interest in the subject properties, this court should not recognize the continuous concealment doctrine to bring the violation within the requirements of section 727(a)(2)(A). That statute specifies that both elements (the act of concealment and requisite intent) must occur within a year before the bankruptcy petition is filed. 11 U.S.C. § 727(a)(2)(A) (1993). The bankruptcy and district courts relied upon a continuing concealment to bring the transfers of property in this case, all performed over one year before filing, within the statute. “Under the ‘continuing concealment’ doctrine, a transfer made and recorded more than one year prior to filing may serve as evidence of the requisite act of concealment where the debtor retains a secret benefit of ownership in the transferred property within the year prior to filing.” Hughes, 122 F.3d at 1240; see also Rosen v. Bezner, 996 F.2d 1527, 1531 (3d Cir.1993) (describing the doctrine by stating that “a concealment will be found to exist during the year before bankruptcy even if the initial act of concealment took place before this one year period as long as the debtor allowed the property to remain concealed into the critical year”). In Hughes, the Court of Appeals for the Ninth Circuit found a continuing concealment where a debtor retained an interest in her house after transferring it to her mother, because the debtor had lived in the house and subordinated her mother’s deed of trust in order to obtain a loan. Id. at 1241. In Friedell v. Kauffman (In re Kauffman), 675 F.2d 127, 128 (7th Cir.1981) (per curiam), the court concluded that a debtor held a beneficial interest in a house where the debtor lived in the house, made mortgage, tax, and escrow payments, and used the house as collateral for loans. Thibodeaux, 819 F.2d 550, presents a situation similar to that here. Olivier was involved in a car accident that injured Thibodeaux. After the accident, Olivier transferred title in his home to his mother for, in effect, no consideration. The Olivi-ers continued to live in the house and be responsible for all costs associated with it. Thibodeaux obtained a judgment against Olivier, but was unable to collect. Six years later, Olivier filed for bankruptcy. The Court of Appeals for the Fifth Circuit affirmed the denial of discharge under section 727(a)(2)(A). The court noted that the intent element could be inferred from Olivier’s continued use of the transferred property. Id. at 553. The court then affirmed the use of the doctrine of continuing concealment in that case: [T]he Oliviers’ motivation, their continuing occupancy of the house rent-free, their prompt return of all the “purchase money,” and their acts of ownership such as insuring and maintaining the property taken together amply support the conclusion that notwithstanding the purportedly complete transfer they retained a significant beneficial interest in the property and have “continue[d] to use the property as [their] own.”.... ... Here the purported transfer by appellants occurred more than a year before bankruptcy, but appellants continued the concealment of their secretly retained interest in the property. The courts below relied on the well-settled doctrine that in this character of situation the concealment of an interest in an asset that continues, with the requisite intent, into the year before bankruptcy constitutes a form of concealment which occurs within the year before bankruptcy and, therefore, that such concealment is within the reach of section 727(a)(2)(A). Id. at 554-55; see also Friedell, 675 F.2d at 128 (“A concealment ... need not be literally concealed. The transfer of title with attendant circumstances indicating that the bankrupt continues to use the property as his own is sufficient to constitute a concealment.”). Keeney points out that this court has never been presented with a case concerning continuing concealment, and urges us not to adopt the doctrine. Alternatively, he cites Rosen, supra, to support his argument that the doctrine’s application is not proper in this case. In Rosen, however, the Court of Appeals for the Third Circuit reversed the bankruptcy court’s denial of discharge because there was a material issue of fact on the intent element, so that the case was not proper for summary judgment disposition. Rosen, 996 F.2d at 1532. Application of the continuing concealment doctrine is proper under the facts of this case, and we join those having adopted the doctrine. Keeney also notes that under Kentucky law, Smith cannot recover the subject property because the statute of limitations has run. See Ky.Rev.Stat. Ann. §§ 413.120, 413.130 (Banks-Baldwin 1998). He argues that even if a violation of section 727(a)(2)(A) can otherwise be shown, that fact is irrelevant because Smith is too late to reach the property. This argument fails. “[Cjoncealment or transfer under § 727(a)(2) may occur even if no creditors are harmed by it. ‘Proof of harm is not a required element of a cause of action under Section 727.’ ” Peterson v. Scott (In re Scott), 172 F.3d 959, 968 (7th Cir.1999) (citation omitted). B. In addition to relying upon a violation of section 727(a)(2)(A), the bankruptcy and district courts also based the denial of discharge on Keeney’s making of a false oath when he omitted his beneficial interest in the properties from his benefit schedules filed with the bankruptcy court, in violation of section 727(a)(4)(A). (a) The court shall grant the debtor a discharge, unless— (4) the debtor knowingly and fraudulently, in or in connection with the case— (A) made a false oath or account[.] 11 U.S.C. § 727(a)(4)(A) (1993).
4161531-21843	McCOLLOCH, District Judge. A fateful Sunday afternoon in the summer of 1936, Evelyn Bruñe, a young unmarried woman, accepted the invitation of McDonald to drive around Mt. Hood Loop, one of the scenic highways of Western Oregon. The events occurring on the drive are responsible for Miss Bruñe and McDonald’s being defendants in this proceeding. Plaintiff is the insurer of McDonald’s car, which was wrecked during the course of the drive, with serious injuries to Miss Bruñe. Bruñe is suing McDonald in the State courts under the Oregon “guest statute”, and plaintiff claims collusion between the parties, as well as a false statement by McDonald, regarding the cause of the accident, and non-co-operation in the defense of the Bruñe suit. Plaintiff asks a declaratory judgment of non-liability on this account. Defendants demanded a jury, but, upon plaintiff’s objection, the case was tried without calling a jury, and a prior memorandum opinion was filed holding against plaintiff on the charges of collusion and conspiracy, and dismissing the bill of complaint as to the other matters. Plaintiff now suggests that the court should retain jurisdiction and proceed to find on the issues of false statement and non-cooperation, whereas, defendants renew their demand that a jury be called to try these issues, because of their legal nature. The Facts. McDonald made some claims at the trial, and previously to plaintiff’s attorney, that he was an unusually good drinking man. According to his own testimony, he neglected to go to bed the night before taking the trip with Miss Bruñe. Sunday morning he resumed drinking on a pint of Monogram whiskey, and finished the pint about 10 o’clock at night, as he and Miss Bruñe were about five miles from their destination. Miss Bruñe asserted at the trial that, while at McDonald’s request she put the bottle to her lips several times during the trip, she actually did not drink. Due to drowsiness or intoxication, McDonald lost control of his car, which catapulted into a ravine, with the result' that Miss Bruñe was seriously, almost fatally, injured. McDonald’s injuries were minor. Now, Miss Bruñe has sued her admirer under the Oregon “guest statute” for $25,000 general damages, and this proceeding is to restrain McDonald and Bruñe (in addition to the declaratory relief asked for) from taking steps to collect any judgment that Bruñe might obtain against McDonald. Defendant McDonald’s default has been entered in the state court, but no judgment as yet taken. These are the circumstances that followed the accident and led to the bringing of the present proceeding: After the accident McDonald called on plaintiff’s agent, who had written the insurance on his car, advised him of the accident and gave him a statement as to how it occurred. McDonald falsely stated that he had been crowded off the road by another car. Later, after having consulted an attorney, McDonald acknowledged that his first statement as to the cause of the accident was false. As to the drinking, he stated: “Shortly after we started out we each had a drink of whiskey out of the bottle. Miss Bruñe did not have more than three or four drinks altogether. * * * Miss Bruñe protested against my drinking. * * * I did continue to drink until the bottle was empty. * * * Miss Bruñe did not at any time protest about the manner in which I was operating the car.” Much of the later difficulty between McDonald and plaintiff’s attorney as to the form of answer in the Bruñe case was as to the part Miss Bruñe took in the drinking and whether she protested McDonald’s manner of driving. In due course the Bruñe action was commenced and thereupon plaintiff’s adjuster turned the file of the case over to John F. Reilly, plaintiff’s regular attorney in the City of Portland, Oregon, and Mr. Reilly prepared an answer based on the file. Dispute Over Answer. McDonald declined to verify the answer because, he said, it cast unwarranted aspersions on Miss Brune’s character. Mr. Reilly prepared another answer. This McDonald also declined to sign, this time on the advice of an attorney. A third answer was prepared, but McDonald did not return to Reilly’s office to sign this, whereupon Mr. Reilly broke off negotiations and, in behalf of the company, declared a breach of the co-operation clauses of the policy. He also based forfeiture of the policy on McDonald’s initial false statement as to the cause-of the accident. The policy conditions appear in the margin. But one further fact seems necessary to be set forth: Having taken the position that McDonald had breached the conditions of the policy, Mr. Reilly, with characteristic aggressiveness, then assumed the offensive and applied to the state court, where the Bruñe action was pending, for the right to intervene in that proceeding. The lower court allowed the intervention, but on appeal to the Supreme Court of the State, it was held that the Oregon intervention statute did not contemplate intervention in this type of case. Thereupon, the present proceeding followed. As stated before, plaintiff resisted defendants’ demand for a jury trial, on the ground that the proceeding was equitable in nature, and that a jury, if granted, could only serve in an advisory capacity. After hearing argument on the point, I heard the testimony, without calling a jury. At the conclusion of the testimony, I suggested to counsel that I would appreciate briefs on the defendants’ right to a jury trial, and I believe that the respective positions of the parties at that stage of the case can best be shown by excerpts from the briefs : Plaintiff stated its position thus: “The statute (Federal Declaratory Judgment Act) itself recognizes the right to make a declaratory judgment either in an action at law or in a suit in equity and does not determine the character of proceeding in which such declaration shall be made. The character of the proceeding is determined by facts other than the declaratory judgment statute, but gives the right to make the declaratory judgment or decree, whatever the nature of the proceeding. Therefore, it is essential to determine whether or not the facts stated in the complaint bring the cause within the equity jurisdiction or the law side of the court. “The essence of the complaint is to declare the policy cancelled or forfeited. Cancellation of instruments is primarily an equitable proceeding as distinguished from a legal proceeding. * * " (Italics added.) Quoting from defendant Brune’s brief: “The matters set forth in the bill of complaint point to a breach of the two provisions last set forth. (The provisions referred to were the policy conditions requiring an immediate true statement of the cause of accident, and co-operation in the defense of any action brought as a result of an accident). Prior to the enactment of the Declaratory Judgment statute, the normal procedure was for the injured party, upon failure of an insurance company to pay a judgment in his favor against the assured, to bring an action upon the policy against the insurer. In view of the fact that the injured party stands in the shoes of the assured, the insurance company has the right to plead the breach of any covenants contained in its contract of insurance .with the assured. The action to recover on the policy is essentially an action at law, and the defenses arising under alleged breaches of various covenants in the contract are essentially legal defenses. There is therein nothing that would warrant a court in shifting the matter to the equity side of the court. They are good and valid defenses at law. That such has been the manner in which these defenses are contemplated is well borne out by the two most prominent Oregon cases on the subject, to-wit: Allegretto v. Oregon Automobile Insurance Co., 140 Or. 538, 13 P.2d 647, and Z. J. Riggs v. New Jersey Fidelity & Plate Glass Co. of Newark, New Jersey, 126 Or. 404, 270 P. 479. That being the case, therefore, it would seem that complainant’s memorandum does not accurately divine the nature of this proceeding. The mere„ fact of denominating it a bill in equity, and the mere fact of its initiating the proceeding rather than waiting to defend upon a suit on the policy does not change the nature of the matters they set up. The facts stated in the complaint certainly bring the cause within the law side of the court irregardless of what the complainant chooses to call its proceeding.” (Italics added.) After consideration I filed the following memorandum, which set forth my views of the case, as it had been denominated and presented by.the parties: “Memorandum. “Plaintiff characterizes this case as one for cancellation of a written instrument, and attention is called that cancellation is a recognized equitable doctrine. “Obviously, more than declaratory relief is sought. In addition to a declaration of non-liability to defendants, plaintiff prays that defendants be temporarily restrained and later permanently enjoined from bringing any proceeding on the insurance policy which might lead to a judgment against plaintiff. This is something less than cancellation of the entire policy, but in disposing of the case I will treat it as characterized by plaintiff as a suit in equity- to cancel the policy, at least as to any liability growing out of the Me-Donald-Brune accident. “I think it is accurate to say that the usual equity suit for cancellation is grounded on fraud, accident or mistake; moreover, that the usual case for cancellation of an insurance policy on the ground of fraud, is based on fraud perpetrated in connection with procuring the insurance. “No case has been brought to my attention of a suit for cancellation of an insurance policy for breach of conditions subsequent, which I take this case to be. Passing that, however, I will treat the case as properly brought in equity, because of the allegations of conspiracy to defraud the plaintiff through reducing a fictitious claim to judgment, and as to these allegations I find on the facts for the defendants. The plaintiff has not, in my opinion, maintained the burden of proof that the defendants are conspiring to defraud plaintiff. Both defendants took the witness stand and denied collusion to defraud the plaintiff, and I am unwilling to believe that they perjured themselves, in the absence of more direct showing to the contrary. “With the fraud charges out of the case, what issues remain for disposition? The straight issue that defendant McDonald made false statements and declined to co-operate with plaintiff, thus breaching policy conditions. These issues are, in my opinion, not matters of equitable cognizance. On the contrary, they are legal defenses which can be asserted by plaintiff in any case which McDonald or Bruñe may bring against plaintiff. “Summing up, then, I find against plaintiff on the charges of fraud and conspiracy, and because, as it seems to me, these are the only matters in the case which properly call for equitable consideration, the case should be dismissed as to the other matters for want of equity. “Findings, Conclusions and Decree may be prepared in accordance herewith.” To the expressions therein contained, plaintiff’s counsel, with his usual forcefulness, took strenuous exception. He asked for a rehearing and filed a letter memorandum stating: “It occurs to me that the conclusion that the complaint be dismissed for want of equity does not follow from the decision of the Court deciding the equity on the merits against us. It has always been my opinion since the adoption of Equity Rule 23 (28 U.S.C.A. following section 723), that unless the equitable allegations were merely colorable and not sustained by any proof that it was the function of the Court to decide all questions on the merits even though the equitable grounds on the merits were decided contra. There are a great many decisions of the courts to this effect. It seems to me likewise that Equity Rule 22 and Section 274a of the Judicial Code (28 U.S.C.A. § 397) have a bearing on the question and that the Court should either decide all questions on the merits or in any event perhaps transfer the same to the law side of the court. * * ” (Italics added.) Plaintiff’s Final Position. Then followed a series of briefs and counter-briefs, and from plaintiff’s later briefs I deduce that its position' now is that a jury trial was not demandable of right, even had the allegations of fraud and collusion not appeared in the bill. Quoting again: “The court, it seems to us, has erred in the assumption that because the allegations of fraud and collusion were held not sustained that there is no other equitable right in the bill to sustain the equitable jurisdiction. We submit that under the decisions of the courts under the declaratory judgment act the mere allegation tltat a policy has been issued and was in effect at the time of the accident, that a controversy exists in zvhich claim is made under the policy and denial by the insurer of any obligation under the policy and a request that the rights and obligations of the parties under the policy be declared is a sufficient equity to sustain the equitable jurisdiction of the court and that all allegations as to fraud or collusion in the bill may be treated as surplusage and the equitable jimsdiction sustained in case there are sufficient allegations to bring the bill within the minimum requirements as above stated.” (Italics added.) Alternatively, plaintiff urges that even though I treat the issues of false statement and non-co-operation as legal questions, I should now make findings on these issues as law matters without calling a jury. First. The Seventh Amendment to the Federal Constitution, U.S.C.A.Const. Amend. 7, guarantees a jury trial as to all matters legal in their nature, and I am unable to subscribe to plaintiff’s view, even though it appears to be supported by some authority, that proceedings under the Declaratory Judgment Act involving legal propositions are excepted from the Amendment. In normal course, should Bruñe obtain a judgment against McDonald, and either Bruñe or McDonald proceed on the judgment against plaintiff, defendant would plead breach of the conditions of its policy, and these would be legal defenses, triable by a jury under the guaranties of the Oregon State Constitution (if tried in the Oregon courts) and under the Seventh Amendment (if tried in this Court). In this proceeding, plaintiff is merely seeking to have an adjudication in its favor on these legal defenses in advance of being summoned as a defendant. The defendants having demanded a jury trial at the outset must now be granted one as to these defenses. It would be a strange situation if a litigant’s constitutional guaranties, good when the litigant was plaintiff, were not good as to the identical issues when the litigant was a defendant. The proposition seems too plain for argument, and, because it is so plain, furnishes, in my opinion, the reason why the question of the right to jury trial has not been more fully discussed in the many cases arising of late under the various Declaratory Judgment Acts. Associated Indemnity Corporation v. Manning, 9 Cir., 92 F.2d 168, involving issues similar to the present case, is a late case in this Circuit. It was denominated as an equity proceeding and tried in the lower court without a jury, but, in my judgment, it is not an authority that the defendants were not entitled to a jury on the issues presented, had they demanded one. Second. In the prior memorandum opinion I passed on the only matters which seemed to me to be equitable in their nature, and I suggested that as to the legal matters (non-co-operation and making a false statement) plaintiff could have its day in court, if and when it was sued, following any judgment that might be obtained by Bruñe against McDonald. Professor Borchard, the American authority on declaratory proceedings, in an able paper before the Section of Insurance Law at the last meeting of the American Bar Association, grouped the cases dealing with situations similar to the one at bar, and criticized the disposition of certain Federal courts to decline to award a determination in insurance cases, where litigation was already pending in the state courts. I recognize the injustice that may be done to plaintiff if it is denied the right to assert and have determined now the legal defenses which it claims to have to any action on the policy. A default judgment is imminent in the state court, and plaintiff is entitled to have its liabilities towards the parties, if any, determined now. The case is different, it seems to me, from one where a judgment had already been obtained against an assured, and either the assured or one claiming a third party right under the judgment had begun a state court action against the insurer. In such a case acceptance of declaratory jurisdiction covering identical issues under litigation by the same parties in a State court might involve serious questions of policy. Cf. Carpenter v. Edmonson, 5 Cir., 92 F.2d 895, per Hutcheson, J. Third. I am further persuaded to accept plaintiff’s view, that it is entitled to trial and declaratory judgment in this court on the legal issues, by the provision in the new Rules of Civil Procedure, 28 U.S.C.A. following section 723c, which have gone into effect since the earlier memorandum in this case, to the effect that the existence of another adequate remedy shall not preclude a judgment for declaratory relief in cases where it is appropriate. It will be the aim of this court to lend its influence towards carrying- out the broad remedial purposes which inspired the new Rules of Civil Procedure. I recognize also that the Federal Declaratory Judgment Act is a much needed reform of an antiquated procedure that stood far too long in need of reform, and it shall be my purpose to give fullest effect to the Act, to the end that disputes involving justiciable questions may be met and dealt with at the threshold, and that it shall no longer be necessary for one unjustly assailed to await the day and time for litigation of his adversary’s choosing. It seems strange indeed that this country, progressive in so many ways, should have deferred so long making it possible for one threatened in his personal or property rights to take the initiative in obtaining judicial vindication. However, it is not to be forgotten that trial by jury of matters legal in their nature is guaranteed by written constitutions, State and Federal, in this country, while such is not the case in Great Britain, from which the declaratory judgment acts of this country were copied. In this particular hour of challenge to Democratic institutions abroad and of little faith by many in our own country in the forms and processes of Democracy, American courts should not hesitate to re-declare their faith in the jury system. As we contemplate the brutalities of despotic power arbitrarily exercised in other lands, we can well say with Blackstone, that the right to jury trial is the glory of our law, as the great Commentator felt it to be the glory of the English law. In any comment that may have been made herein regarding the defenses of non-co-operation and alleged false statement, it is to be understood that I am not pre-judging these issues in any way. They are for determination by the jury, hereafter to be called, under proper instructions. An order in accordance herewith will be entered. Sec. 55-1209, Oregon Laws 1930: “No person transported by the owner or operator of a motor vehicle as his guest without payment for such transportation shall have a cause of action for damages against such owner or operator for injury, death or loss, in case of accident, unless such accident shall have been intentional on the part of said owner or operator or caused by Ms gross negligence or intoxication or bis reckless disregard of the rights of others.” The Oregon statute permitting a judgment creditor in a tort action to sue the judgment debtor’s insurer is Section 46-143, Oregon Code 1930. At the trial McDonald sought to justify the first statement on the ground that Miss Brune’s recovery was then doubtful and he was fearful of being charged with manslaughter. “Accidents, Claims and Suits: “(B) Upon learning of an accident involving bodily injuries or death, or damage to property of others, the Assured shall give prompt written notice thereof with all the information obtained at the time to the Los Angeles office of the Company or to one of its duly authorized agents. The Assured shall give like notice with full particulars of any claim made on account of such accident. If suit is brought against the Assured to enforce such claim the Assured shall promptly forward to the Los Angeles office of the Company every summons or other process that may be served upon the assured. “Co-operation of Assured: “(C) The Assured shall not voluntarily assume any liability, nor incur any expense, other than for immediate medical or surgical relief, nor settle any claim except at the Assured’s own cost. The Assured, whenever requested by the Company, and at the Company’s expense, shall aid in securing information and evidence and the attendance of witnesses, and shall, upon notice from the Company, personally attend the trial of any issue arising out of any such legal proceeding and shall cooperate with the Company (except in a pecuniary way) in all other matters which the Company deems necessary in the defense of any suit, or in the prosecution of any appeal. The Assured may, at the Assured’s own cost, have the Assured’s attorneys participate in the defense of any suit or in the prosecution of any appeal.” Brune v. McDonald, 158 Or. 364, 75 P.2d 10. Oregon intervention statute— Section 1-315, Oregon Code 1930.
9042512-22183	WALKER, Circuit Judge: Plaintiff Patricia A. Yerdon, an employee of a local union, sued the local and other defendants for alleged sexual discrimination and retaliation for having complained of the discrimination. Yerdon now appeals from a decision and order entered in the United States District Court for the Northern District of New York (Frederick J. Scullin, Jr., District Judge) that granted summary judgment in favor of the defendants and dismissed Yerdon’s claims under Title VII of the Civil Rights Act, §§ 701 to 718, codified at 42 U.S.C. §§ 2000e to 2000e-17; the Labor Management Reporting and Disclosure Act, 29 U.S.C. §§ 411(a)(2), 412; and the Labor Management Relations Act, 29 U.S.C. § 185. BACKGROUND From 1984 until 1993, Yerdon was employed as a secretary for Local 1149 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, AFL-CIO (“Local 1149”). When she was hired as a secretary, Yerdon was required to become a member of the union. In October 1989, the plaintiffs supporters on Local 1149’s Executive Board were unseated. Yerdon alleges that after new officers were seated, certain members of the Executive Board “began a campaign of sexual harassment directed at her.” In October 1990, Yerdon filed union charges against members of the Executive Board, aEeging sexual harassment and later amended her complaint to include an allegation concerning the reduction of a pay raise allegedly motivated by a retaliatory animus. In April 1991, the Executive Board voted to reduce the pay raise that Yerdon had received two months earlier to an increase of twenty-five cents per hour, fifty cents lower than her original raise. In 1992, the New York Teamsters Joint Council No. 18 (“Joint Council”) found that the individual defendants had sexually harassed Yerdon and also had retaliated against her. The Joint Council ordered the individual defendants to cease and desist their discriminatory behavior and to eliminate the pay cut imposed on the plaintiff. Yerdon v. Teamsters Local 1149, 886 F.Supp. 226, 229 (N.D.N.Y.1995). The General Executive Board of the International Union, exercising de novo review, sustained the Joint Council's decision. Although Yerdon admits that eventually her full seventy-five cent raise was restored, she claims that certain members of the Executive Board continued to sexually harass her. On December 10, 1992, Yerdon filed new union charges against Local 1149, which have not yet been acted upon. Shortly after filing these charges, Yerdon went on medical leave, claiming to be suffering from emotional distress caused by the alleged sexual harassment. Because Yerdon was indefinitely unavailable for work, Local 1149 terminated her employment in February 1993. Her union membership, which was contingent on her remaining employed by Local 1149, was also terminated soon thereafter. On April 13,1993, Yerdon filed claims with the Equal Employment Opportunity Commission (“EEOC”) charging sexual discrimination. On May 17, 1993, defendant Robert Henry, one of the newly seated board members, filed internal union charges against Yerdon and Yerdon’s former boss claiming that Yerdon was overpaid. On March 31, 1994, Yerdon filed the initial federal complaint in this action. On June 15, 1994, the defendants moved to dismiss the complaint. On October 1, 1994, Yerdon’s health insurance through the Local 1149 Health Fund was terminated. On November 18,1994, while the motion to dismiss the complaint was pending, Yerdon filed an amended complaint in which she alleged that Local 1149 and the individual defendants, in their capacity as a “labor organization,” sexually harassed her in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-2; retaliated against her in violation of Title VII, because she complained of discrimination; violated her rights as a union member under the Labor Management Reporting and Disclosure Act (“LMRDA”), 29 U.S.C. § 411(a)(2), by reducing her pay, by altering her benefits and certain terms and conditions of her employment, and by continuing a course of harassment; violated the LMRDA, 29 U.S.C. § 412, by retaliating against her in filing allegedly baseless internal union charges against her; and violated Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, by breaching Local 1149’s by-laws and the Union’s International Constitution, both of which prohibit sexual discrimination. On May 12, 1995, the district court granted summary judgment to the defendants on the plaintiffs amended complaint. This appeal followed. DISCUSSION The district court disposed of Yer-don’s claims by summary judgment. It is well-settled that in ruling on a motion for summary judgment, [a] judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the [non-movant] on the evidence presented. The mere existence of a scintilla of evidence in support of the [non-movant’s] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Furthermore, a district judge must view the evidence in the light most favorable to the non-moving party and must draw all inferences in favor of that party. See Buttry v. General Signal Corp., 68 F.3d 1488, 1492 (2d Cir.1995). When reviewing the grant of a summary judgment motion, we must determine whether “there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. I. Section 703(c)(1) of Title VII The principal issue on this appeal, which is of first impression in this circuit, is one of law: whether a labor union with fewer than fifteen employees, when sued in its capacity as an employer, is subject to any of the anti-discrimination provisions of Title VII of the 1964 Civil Rights Act. Section 703(a) of Title VII makes it an unlawful employment practice for an employer to engage in employment discrimination based on race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2(a). The term “employer” is defined as a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person, but such term does not include ... a bona fide private membership club (other than a labor organization) which is exempt from taxation under section 501(c) of Title 26.... 42 U.S.C. § 2000e(b). The district court determined that because Yerdon sued Local 1149 in its capacity as an employer, and not as a labor union, she must establish that Local 1149 meets the statutory definition of “employer.” Yerdon v. Teamsters Local 1149, 886 F.Supp. at 231. Because it is undisputed that Local 1149 did not have the requisite number of employees during the relevant period to satisfy the statutory definition, the district court concluded that Local 1149 was not an employer for purposes of Title VII. We agree with the district court that as long as Local 1149 had fewer than fifteen employees, it could not be subject to the prohibitions against employer discrimination set out in § 703(a), 42 U.S.C. § 2000e-2(a). Under Title VII, a union may fall within the definitions of both “employer” and “labor organization.” Local 1149 in fact concedes that it is a labor organization under the statutory definition. The bar against discrimination contained in § 703(e) is specifically applicable to “labor organizations.” This section states, in pertinent part: It shall be an unlawful employment practice for a labor organization— (1) to exclude or to expel from its membership, or otherwise to discriminate against, any individual because of his race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2(c). Unlike the definition of “employer,” incorporated in § 703(a), the definition of “labor organization,” found at § 701(d) and incorporated in § 703(c), does not categorically condition its applicability on the number of union members or employees. As long as a labor organization “maintains or operates a hiring hall or hiring office which procures employees for an employer or procures for employees opportunities to work for an employer,” 42 U.S.C. § 2000e(e), it is deemed to be a “labor organization engaged in an industry affecting commerce,” 42 U.S.C. § 20006(d). Yerdon maintains that Local 1149 may be held liable for its discriminatory treatment of her as an employee under § 703(c). Local 1149 contends that § 703(c)(1) applies only to its actions as a labor organization and that its liability as an employer is governed by § 703(a). The EEOC, as amicus curiae, takes the view that a labor union is covered by Title VII when acting in its capacity as an employer even if it does not meet the definition of “employer” under Title VII. The EEOC grounds this view in the broad language of § 703(c)(l)’s prohibition against sex discrimination: “[I]t shall be an unlawful employment practice for a labor organization ... to exclude or to expel from its membership, or otherwise discriminate against, any individual because of ... [her] sex.” 42 U.S.C. § 2000e-2(c)(l). Such an interpretation, the EEOC argues, is not inconsistent with the congressional policy that animated the statutory exclusion of small employers from the definition of “employer,” ie., allowing small family-run businesses to be operated by friends and relatives of the owners without the administrative burdens of complying with Title VII. See S. 2515, 92d Cong., 2d Sess., 118 Cong. Rec. 2386-90, 2409-10 (1972). The EEOC maintains that because labor organizations are already subject to a wide array of regulatory and reporting requirements, subjecting them to liability under § 703(c)(1) would not be inconsistent with the intention of Congress. The EEOC is the agency charged by Congress with the interpretation, administration, and enforcement of Title VII. Unlike many other federal agencies, however, the EEOC does not have the power to promulgate rules or regulations with respect to Title VII. See General Elec. Co. v. Gilbert, 429 U.S. 125, 141, 97 S.Ct. 401, 410-11, 50 L.Ed.2d 343 (1976) (citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 431, 95 S.Ct. 2362, 2378, 45 L.Ed.2d 280 (1975)). Thus, the weight accorded a particular EEOC guideline or interpretation with respect to Title VII depends upon the “thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to' persuade, if lacking power to control.” Id. at 142, 97 S.Ct. at 411; see Meritor Savings Bank v. Vinson, 477 U.S. 57, 65, 106 S.Ct. 2399, 2404-05, 91 L.Ed.2d 49 (1986) (although not controlling upon the courts, EEOC guidelines “do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance”) (citation omitted). Ultimately, EEOC statements of policy “should always be considered, but they should not be regarded as conclusive unless reason and statutory interpretation support their conclusion.” Guardians Ass’n v. Civil Serv. Comm’n, 630 F.2d 79, 91 (2d Cir.1980). We conclude that, in the present case, the EEOC’s interpretation of § 703(c)(1) should be given little weight. At the outset, we find the language of the statute to be unambiguous in the context of the statute in its entirety. Accordingly, deference is not warranted. Cf. EEOC v. Commercial Office Prods. Co., 486 U.S. 107, 115, 108 S.Ct. 1666, 1671, 100 L.Ed.2d 96 (1988) (“EEOC’s interpretation of ambiguous language need only be reasonable to be entitled to deference.”). Moreover, to hold otherwise would contravene the plain language of the statute. See EEOC v. Arabian Am. Oil, Co., 499 U.S. 244, 257-258, 111 S.Ct. 1227, 1235-36, 113 L.Ed.2d 274 (1991) (applying Gilbert standard, the Court held that particular EEOC interpretation should not be given deference in part because it contradicted statute’s plain language). Because “the meaning of statutory language, plain or not, depends on context,” King v. St. Vincent’s Hosp., 502 U.S. 215, 221, 112 S.Ct. 570, 116 L.Ed.2d 578 (1991), the interpretation of a statute requires consideration of the language of the relevant provision in conjunction with the entire statute, see Stafford v. Briggs, 444 U.S. 527, 535, 100 S.Ct. 774, 780, 63 L.Ed.2d 1 (1980) (citing Brown v. Duchesne, 60 U.S. (19 How.) 183, 194, 15 L.Ed. 595 (1856)). Where an examination of the statute as a whole demonstrates that a party’s interpretation would lead to “absurd or futile results ... plainly at variance with the policy of the legislation as a whole,” that interpretation should be rejected. Commercial Office Prods., 486 U.S. at 120, 108 S.Ct. at 1674 (internal quotations omitted). We believe Yerdon’s interpretation to be inconsistent with the statute as a whole. As the primary liability provision of Title VII, § 703 distinguishes among three primary participants in the employment process— “employers,” “employment agencies,” and “labor organizations,” in subsections (a), (b), and (c), respectively. That the assignment of liability is a function of the role of the particular participant at issue undermines the strength of Yerdon’s interpretation. Furthermore, nothing in the statute’s text or legislative history gives any indication that the definition of employer contained in § 701(b) does not apply to a labor organization when it is sued as a result of its conduct as an employer. Indeed, that the definition of “employer” specifically includes labor organizations, 42 U.S.C. § 2000e(b), suggests that labor unions are to be treated no differently than other employers. If § 703(c)(1) were read to extend to a labor organization’s activities as an employer, the result would be incongruous with congressional intent: an employer with fewer than fifteen employees that, fortuitously, is also a labor union, would be liable notwithstanding that it is excluded from the statutory definition of “employer.” This result cannot be squared with the structure of § 703 as a whole, and we find that § 703(c)’s mandate that a labor organization may not “otherwise discriminate” applies only to a labor union in its role as a labor union and not as an employer. We join the company of our sister circuits who have addressed this issue in comparable contexts. In an analogous ease in the Ninth Circuit, an employee brought suit against her former union employer for age discrimination under the Age Discrimination in Employment Act (“ADEA”). Herman v. United Bhd. of Carpenters, 60 F.3d 1375 (9th Cir. 1995). The employee and the EEOC argued that the union was liable under § 4(c)(1) of the ADEA, which makes it unlawful for a union “to exclude or to expel from its membership, or otherwise to discriminate against, any individual because of his age.” 29 U.S.C. § 623(c)(1). The Ninth Circuit held that, despite the EEOC’s view, “when a union is being sued, in its capacity as an employer, it must meet the statutory definition of ‘employer’ rather than some other statutory provision.” Herman, 60 F.3d at 1384-85; see also Childs v. Local 18, Int’l Bhd. of Elec. Workers, 719 F.2d 1379, 1382-83 (9th Cir.1983) (assuming that labor organization must meet statutory definition of employer to be held liable for discrimination against employee under Title VII). Similarly, in Greenlees v. Eidenmuller Enters., Inc., 32 F.3d 197 (5th Cir.1994), a former employee of an employment agency brought a suit against the agency under § 703(b), 42 U.S.C. § 2000e-2(b), claiming that it was an “employment agency.” The Fifth Circuit rejected the EEOC’s position on the grounds that the language of the statute was unambiguous, obviating the necessity for deference to the EEOC’s interpretation, and that, in any event, the EEOC is due less deference than other agencies. Id. at 200; see also Chavero v. Local 241, 787 F.2d 1154, 1155 n. 1 (7th Cir.1986) (per cu-riam) (where “plaintiff attempts to hold the union liable in its employer capacity, it must fall under that definition ... just as any other employer”). Because we agree that a labor organization with fewer than fifteen employees cannot be sued as an employer for discrimination under Title VII of the 1964 Civil Rights Act, we affirm the grant of summary judgment in favor of the defendants on Yerdon’s claim under § 703(c)(1). II. Retaliation under Title VII Yerdon’s second cause of action alleges that Local 1149 and defendant Henry, a new board member, retaliated against Yer-don for filing a complaint with the EEOC. Section 704 of Title VII makes it unlawful for a labor organization to discriminate against a member for opposing an unlawful employment practice or for making a charge, testifying, assisting, or participating in an investigation, proceeding, or hearing under Title VII. 42 U.S.C. § 2000e-3(a). To make out a claim of retaliation under § 704, “a plaintiff must show participation in protected activity known to the defendant, an employment action disadvantaging the person engaged in the protected activity, and a causal connection between the protected activity and the adverse employment action.” Johnson v. Palma, 931 F.2d 203, 207 (2d Cir.1991); see Manoharan v. Columbia Univ. College of Physicians & Surgeons, 842 F.2d 590, 593 (2d Cir.1988). To satisfy the Johnson test, Yerdon must demonstrate the existence of a union action by which she was disadvantaged as well as a causal connection between that action and the protected activity. Because the Sling of sexual discrimination charges is unquestionably a protected activity, see Meritor Sav. Bank FSB v. Vinson, 477 U.S. 57, 63-64, 106 S.Ct. 2399, 2403-04, 91 L.Ed.2d 49 (1986), we consider whether the alleged union actions are sufficiently “disadvantaging” to Yerdon to constitute a prima facie case under § 704. Yerdon alleges that two union actions were taken in retaliation against her for filing sexual discrimination charges against Local 1149 in April 1993: first, the filing of internal union charges against her by Local 1149’s secretary-treasurer; second, the sudden cancellation of her health benefits. The district court concluded that the filing of internal union charges against Yerdon did not constitute retaliation because the charges had not yet been adjudicated and that, if the charges were ultimately dismissed, Yerdon would not have suffered any adverse effect from them. We agree. “An adverse action is one that affects the terms, privileges, duration, or conditions of employment.” Johnson v. Frank, 828 F.Supp. 1143, 1153 (S.D.N.Y.1993) (internal quotation omitted). Although Yerdon claims that Local 1149 has delayed the adjudication of the charges for more than two years, she has presented no evidence to dispute Local 1149’s claim that it was she who requested the delay. The district court rejected Yerdon’s retaliation claim based on the termination of her medical benefits on the ground that this allegation was not pleaded in her amended complaint. Citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962) (leave to amend should be allowed except when there has been undue delay, bad faith, a dilatory motive, repeated failure to cure deficiencies, undue prejudice to the defendant or the amendment would be futile), the district court noted that it had “already provided plaintiff an opportunity to amend her complaint” and declined to extend another opportunity. Yerdon, 886 F.Supp. at 232 n. 4. The plaintiff asks that we remand this matter so that she may have the opportunity to further amend her complaint to incorporate the allegations concerning the termination of health care coverage. We review the decision not to allow an amendment for abuse of discretion. Azurite Corp. v. Amster & Co., 52 F.3d 15, 19 (2d Cir.1995). Where it appears that granting leave to amend is unlikely to be productive, it is not an abuse of discretion to deny leave to amend. See Foman, 371 U.S. at 182, 83 S.Ct. at 230. Under the present circumstances, we are not persuaded that the district court abused its discretion in denying leave to amend. First, it does not appear from the record that the plaintiff formally requested leave to amend her complaint for a second time with the submission of a proposed second amended complaint. Rather, Yerdon apparently referenced the alleged loss of health benefits in her response to the defendants’ motion. Second, the defendants maintain that Blue Cross/Blue Shield, Local 1149’s health benefits provider, was responsible for the loss of Yerdon’s health benefits and that Local 1149 in fact intervened on her behalf to persuade Blue Cross/Blue Shield to reinstate her coverage. Yerdon has offered no evidence to dispute this claim. In her affidavit in opposition to the defendants’ motion, Yerdon simply states that in October 1994, when she was scheduled to be admitted to the hospital, she was informed that her coverage had been cancelled effective October 1, 1994. Third, this action was commenced on March 31, 1994; the defendants moved to dismiss the complaint on June 15, 1994; the plaintiff filed an amended complaint with the permission of the district court on November 18, 1994; and the defendants filed a motion to dismiss the plaintiffs amended complaint, or alternatively for summary judgment, on January 13, 1995. Yer-don’s sole justification for the belated request to amend her amended complaint is that she “did not learn of the true nature of the Fund’s actions until after the amended complaint was filed.” However, Yerdon became aware of the termination of her health benefits in October 1994 yet failed to allege in her subsequently filed amended complaint that the termination was taken in retaliation. In light of these facts, we conclude that the district court did not abuse its discretion in denying Yerdon leave to amend further. III. Remaining Claims
913943-23633	SMITH, Circuit Judge: This is a petition for review of orders issued by. the Interstate Commerce Commission (“ICC”) granting Maseony Transport and Ferry Service, Inc. (“Maseony”) a conditional certificate of public convenience and necessity, pursuant to 49 U.S.C. § 909(c). Petitioners Cross-Sound Ferry Services, Inc. (“Cross-Sound”), successor-in-interest to New London Freight Service, Inc. (“NLFL”), the Bridgeport and Port Jefferson Steamboat Co. (“B&PJ”), the Incorporated Village of Greenport (“VG”), and the Shelter Island and Greenport Ferry Co. (“SI&G”) oppose the ICC’s grant of the certificate to Maseony. This court has jurisdiction over the petition pursuant to 28 U.S.C. §§ 2321(a) and 2342. Petitioners argue here that the grant of operating rights was invalid for three principal reasons: (1) The ICC acted arbitrarily and capriciously in permitting Maseony to offer addi tional evidence after the close of the record, while forbidding the admission of additional evidence offered by the petitioners. (2) The ICC did not act in conformity with the requirements of the National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq. (3) The ICC erred in finding that Mascony was “fit, willing, and able properly to perform” the requested service. We have examined the extensive record in this case, and find that the ICC acted properly and within the scope of its discretion in granting Mascony a certificate of public convenience and necessity which was limited to a three-year term. Accordingly, we deny the-petition. History and Facts of the Case Because the petitioners’ argument turns, in large measure, on claimed procedural irregularities in the ICC proceedings, it is necessary to recount the procedural history of this case in some detail. The Mascony Transport and Ferry Service, Inc. filed an application with the ICC on May 29, 1973, seeking authority: to engage in operation, in interstate or foreign commerce, as a common carrier by water in the transportation of general commodities and passengers by self-propelled vessels, between the ports of New London, Conn., and Greenport, Long Island, N. Y. . . . This application was opposed by NLFL (and later by its successor in interest, Cross-Sound, which was substituted as a party in these proceedings on November 19, 1976) and B&PJ, and by intervenors below, SI&G and the East End Supply Co. Also intervening were the Connecticut Department of Transportation, the New York Department of Transportation, and the Planning Board of the Village of Greenport. Oral hearings were held before Administrative Law Judge David H. Allard during the period from October, 1973 to February, 1974. By order issued March 26, 1974, the record in these proceedings was closed as of March 19, 1974, with briefs to be submitted some two months later. On June 19, 1974, the ALJ denied Mascony’s application because of “operational considerations: safety at New London and environmental at Greenport.” Mascony filed exceptions to the decision, and petitioned the ICC to reopen the record for receipt of additional evidence. On October 22, 1975, the ICC’s Appellate Division 1 ordered the reopening of the record to accept a limited amount of evidence from Mascony, and directed that an environmental impact study be conducted pursuant to the requirements of the National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq. Cross-Sound, successor in interest to NLFL, and B&PJ then petitioned for reconsideration of the October 22 order, and sought to reopen the record for receipt of evidence bearing on “changed circumstances” in their provision of transport services. The ICC issued a draft environmental impact statement (“EIS”) on February 3, 1976, and solicited comments from all interested parties. Comments were subsequently filed by many of the principals in this case. A final EIS, which reflected the consideration of all comments received by the ICC, was issued in June, 1976. On November 19, 1976, Appellate Division 1, reversing the Administrative Law Judge’s decision on June 19, 1974, granted Mascony a three-year certificate of convenience and necessity. Commissioner Murphy dissented from this order. The order further denied petitioners’ request for reconsideration of the October 22 order, and denied their request to reopen the proceedings for further hearings. The Appellate Division reasoned that petitioners had not been denied an opportunity to rebut any evidence tendered by Mascony after the close of oral hearings, and that, because of the already protracted nature of the proceedings, it was within its discretion to preclude the introduction of evidence of changed circumstances. On December 20, 1976, the petitioners moved for reconsideration of the Appellate Division’s November 19 order. The Appellate Division denied this request, but later reopened the proceedings for the receipt of verified statements and verified replies relating to Mascony’s terminal sites at Greenport, N.Y. and New London, Conn. These statements were subsequently filed. Mascony’s “rebuttal verified statement” was rejected by the Commission. In June, 1977, the National Railroad Passenger Corp. (Amtrak) filed a petition to intervene in this matter. This request was denied on the ground that issues sought to be raised by Amtrak had already been adequately considered in connection with the Commission’s EIS. On June 16, 1977, Appellate Division 1 affirmed its earlier decision granting Mascony a conditional operating certificate. Petitioners again requested a reconsideration of the Appellate Division’s decision, and the U.S. Department of Transportation (“DOT”) petitioned for leave to intervene. The Appellate Division denied these petitions. In September, 1977, the Commission denied requests by Cross-Sound and Amtrak for a finding that the proceeding presented an issue of “general transportation importance,” and denied a request for a stay of its order pending appeal. This court, too, denied petitioners’ request for such a stay. This petition followed. The Nature of the Proposed Service Mascony seeks authorization to operate a commercial ferry service between New London, Conn, and Greenport, N.Y. In March, 1973, it purchased the SS New Jersey, a vessel with a licensed capacity of 100 cars and 800 passengers, and contracted to acquire other vessels from the Delaware River and Bay Authority. The corporation has yet to procure safety and operating licenses from a variety of federal, state and local government agencies. In addition, it is unclear at this time whether Mascony will be able to procure suitable docking sites in New London and Greenport. Much of the testimony in this case concerns the practical feasibility of adopting alternative docking facilities. Opposition to Mascony’s planned ferry service is based primarily on the desire by Cross-Sound, which operates ferries between New London, Conn, and Orient Point, N.Y., and B&PJ, which operates ferries between Bridgeport, Conn, and Port Jefferson, N.Y., to minimize commercial competition. In addition, the Village of Greenport, SI&G, Amtrak, and DOT oppose the operation of the new ferry for a variety of environmental and safety reasons. Discussion It is necessary at the outset for us to address briefly the scope of review which is appropriate in a case of this type. The Administrative Procedure Act, 5 U.S.C. § 706, provides that: The reviewing court shall— (2) hold unlawful and set aside agency action, findings, and conclusions found to be— (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law . [or] (E) unsupported by substantial evidence . The standard of review here is narrow. Once it has been determined that decisions are supported by substantial evidence, [a] reviewing court must “consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empow ered to substitute its judgment for that of the agency.” Citizens to Preserve Overton Park v. Volpe [401 U.S. 402] at 416 [91 S.Ct. 814 at 824, 28 L.Ed.2d 136] [(1971)]. The agency must articulate a “rational connection between the facts found and the choice made.” Burlington Truck Lines v. United States, 371 U.S. 156, 168 [83 S.Ct. 239, 246, 9 L.Ed.2d 207] (1962). . . . [W]e will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned. Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 595 [65 S.Ct. 829, 836, 89 L.Ed. 1206] (1945). [Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285-86, 95 S.Ct. 438, 442, 42 L.Ed.2d 447 (1974)]. The test here is primarily one of rationality. If the Commission based its order on substantial relevant evidence, fairly ascertained, and if it has made no clear error of judgment, this court is not authorized to overturn that order. A. Petitioners argue that the ICC was unfairly selective in its admission of evidence after the close of the record in these proceedings. They assert that evidence favorable to Mascony was received, while evidence offered by the petitioners was systematically rejected. This, they contend, was arbitrary, capricious, an abuse of discretion, and represented a denial of due process of law. In effect, two different, but related, claims are being urged here. In the first, petitioners imply that their inability to submit additional evidence precluded them from rebutting claims advanced by Mascony in evidence which was accepted by the Commission. This inability to offer rebuttal evidence was, it is asserted, fundamentally unfair and a denial of due process rights. In the second claim, petitioners imply that they should have been permitted to introduce evidence as to “changed circumstances,” and that the failure to permit updating of the record with respect to their enhanced ability to perform constituted an abuse of discretion. An examination of the record in these proceedings shows that the first claim is without merit. Following the conclusion of full hearings, which are recorded in over 2500 pages of testimony and exhibits, Mas-cony was permitted to introduce additional evidence on two occasions, by means of ICC orders dated October 22, 1975 and April 8, 1977 [App. at 249 and 356]. In addition, the Commission authorized the preparation of an environmental impact statement, as required by law. The evidence accepted by order of October 22, 1975 was later rejected except insofar as it pertained to environmental matters subject to rebuttal by the petitioners. See 353 ICC Reports 60 at 63 (November 3, 1976) [App. at 324]. Evidence accepted by order of April 8, 1977 was subject to rebuttal by verified replies tendered on May 17-19, 1977 [App. at 359, 361-366], See 5 U.S.C. § 556(d). Comments were invited in response to the draft EIS filed on February 3, 1976, and all comments received were incorporated in the final EIS. Thus there is no truth to the contention that petitioners were not able to respond to additional evidence tendered to the Commission after the close of hearings in this case. With respect to petitioners’ claim that they should have been permitted to prove “changed circumstances,” we believe that the situation is governed by ICC v. Jersey City, 322 U.S. 503, 514-15, 64 S.Ct. 1129, 1134, 88 L.Ed. 1420 (1944), in which Mr. Justice Jackson indicated: It has been almost a rule of necessity that rehearings were not matters of right, but were pleas to discretion. And likewise it has been considered that the discretion to be invoked was that of the body making the order, and not that of a reviewing body. These sentiments have recently been reiterated in Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., supra, 419 U.S. at 294-96, 95 S.Ct. 438, a case very similar in substance to the one at bar. Bowman indicates that, as a general matter, administrative agencies have broad discretion with respect to the updating of evidence, but also notes that evidence of improved service following notice of a hearing on the matter is particularly suspect. See Bowman, supra, 419 U.S. at 286-89, 95 S.Ct. 438. This provides further support for the Commission’s refusal to open the record for receipt of evidence as to Cross-Sound’s recently improved ferry service. Finally, it is perfectly legitimate for the Commission to distinguish issues of need from issues of ability and fitness. Evidence of improved service offered by Cross-Sound goes primarily to the issue of need; evidence of environmental hazard and ability to operate safely offered by Mascony goes to the issue of fitness. The ICC does not abuse its discretion in closing the record as to need, while reconsidering matters of fitness. No unfairness is present in this instance, and the practice represents a rational approach to complex decision-making. Nothing in Delta Airlines, Inc. v. CAB, 182 U.S.App.D.C. 295, 561 F.2d 293 (1977), cert. denied sub nom. National Airlines, Inc. v. CAB, -, U.S. -, 98 S.Ct. 889, 54 L.Ed.2d 796 (1978), a case which requires fairness in the updating of agency proceedings, contradicts this conclusion. B. Petitioners argue further that the grant of operating rights to Mascony was invalid because the ICC failed to satisfy the procedural requirements of the National Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C. § 4321 et seq. They argue that regulations adopted by the ICC pursuant to the statute require that final environmental impact statements be submitted to the public at least 15 days prior to required oral hearings on those statements, 49 C.F.R. § 1108.16(b), and that at such hearings, any party must be permitted to offer evidence and cross-examine witnesses with regard to environmental issues, 49 C.F.R. § 1108.17(b). In the instant case, it is averred, no public hearing was held either before or after the issuance of the final EIS. Thus petitioners allege that they were denied an opportunity to subject the EIS to the “scrutiny of cross-examination and confrontation,” in contravention of federal law. We cannot agree with the petitioners’ conclusions. NEPA requires that in the case of “major Federal actions significantly affecting the quality of the human environment” federal agencies must prepare “a detailed statement by the responsible official on — (i) the environmental impact of the proposed action . . . 42 U.S.C. § 4332(2)(C). An EIS is required only in the case of major federal actions significantly affecting the quality of the human environment. The identification of such actions is the responsibility of the relevant federal agency “to be carried out against the background of its own particular operations. The words ‘major’ and ‘significantly’ are intended to imply thresholds of importance and impact that must be met before a statement is required.” 40 C.F.R. § 1500.6 (advisory regulations of the Council on Environmental Quality). In Hanly v. Kleindienst, 471 F.2d 823 (2d Cir. 1972), cert. denied, 412 U.S. 908, 93 S.Ct. 2290, 36 L.Ed.2d 974 (1973), this court indicated that an agency’s threshold determination that an EIS is or is not required should ordinarily be based on consideration of two factors: “(1) the extent to which the action will cause adverse environmental effects in excess of those created by existing uses in the area affected by it, and (2) the absolute quantitative adverse environmental effects of the action itself, including that cumulative harm that results from its contribution to existing adverse conditions or uses in the affected area.” 471 F.2d at 830-31. Furthermore, before such a threshold determination is made, an agency must give public notice of the proposed federal action, and an opportunity to submit relevant data “which might bear upon the agency’s threshold decision.” A hearing is not ordinarily required in this instance, although it may often be advisable. Hav ing fulfilled these procedural requirements, an agency’s determination that an impact statement is not required will be overturned by a reviewing court only if it is arbitrary, capricious, or an abuse of discretion. In the instant case, petitioners were, at all relevant times, on notice with regard to the proposed certification of Mascony. The Commission, after issuing its draft EIS, solicited comments from all interested parties. It appended all comments received to the final EIS, and addressed each of the contentions put forward by commenting parties. In its decision of November 3, 1976, 353 ICC Reports 60, the Commission carefully considered the environmental impact of the proposed action, both in relation to present conditions and in light of “absolute quantitative adverse environmental effects.” The Commission concluded that “this decision is not a major Federal action significantly affecting the quality of the human environment.” It is conceded that the Commission’s conclusion can reasonably be disputed. Indeed, it is questioned in a dissenting opinion by Commissioner Murphy. The proposed action comes within the “gray area,” in which the statutory term “significant” (and subsequent glosses on the term) are insufficiently concrete to provide a clear and absolute standard of decision. Still, it cannot be said that the Commission failed to consider relevant data, or that its decision was arbitrary, capricious, or represented an abuse of discretion. Accordingly, this court must abide by the Commission’s determination, which was reached after consideration of all relevant material and in accordance with procedural requirements. Since the proposed action is outside the terms of the Environmental Protection Act, no EIS is required, and a fortiori, petitioners have no legal right to a hearing on the environmental issues. C. Finally, petitioners aver that the ICC erred in finding that Mascony met the statutory requirements that it be “fit, willing, and able properly to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service . is or will be required by the present or future public convenience and necessity . . . .” 49 U.S.C. § 909(c). They indicate that Mascony has no clear legal right to any terminal site in Greenport, and that this lack of “operational feasibility” is sufficient to preclude licensure under the “able properly to perform” standard. Petitioners further allege that safety problems at the proposed Connecticut terminus are of sufficient magnitude to render Mascony unfit. The terms “convenience and necessity” and “fit, willing, and able” are defined neither in the Interstate Commerce Act nor in the Commission’s regulations. The Commission is given broad discretion in characterizing these qualities, and in determining which candidates for certificates meet the statutory requirements. ICC v. Parker, 326 U.S. 60, 65, 65 S.Ct. 1490, 89 L.Ed. 2051 (1945) (railroad). Given the nature of the judgments involved, this process necessitates a case-by-case determination. While we do not hazard a definition of the operative statutory terms, we can say that they implicate the public need for enhanced transportation facilities and the general feasibility of proposals for future operation, as weighed against any negative impact which might be caused by the implementation of such a proposal. Bowman, supra, 419 U.S. at 292-94, 95 S.Ct. 438. The grant of a certificate is clearly not an indication that the Commission approves of all aspects of a particular plan, nor does it imply that a carrier is prepared to begin service at once. The existence of the safety and accessibility problems in the proposed sites, and the necessity of satisfying other regulatory bodies in these regards have been recognized and weighed by the Commission in its grant of the license and the time limitation it has imposed on the license. The certificate of public convenience and necessity is intended to be a necessary, but not a sufficient condition of operation. As such, it contemplates the simultaneous operation of other controls which are not primarily concerned with commercial utility. Thus the fact that safety problems continue to exist at Mascony’s Connecticut terminus, which must be resolved to the satisfaction of other regulatory bodies, and the fact that Mascony had not yet been able to obtain a docking site on Long Island free from possible restrictions are not, in themselves, sufficient to require a withdrawal of Mascony’s certificate of public convenience. In the words of the Supreme Court: If the Commission has “drawn out and crystallized [the] competing interests [and] attempted to judge them with as much delicacy as the prospective nature of the inquiry permits,” we can require no more. [Citations omitted.] [Bowman Transportation, Inc. v. Akansas-Best Freight System, Inc., supra, 419 U.S at 293-94, 95 S.Ct. at 446] In the instant case, the Commission did consider all factors relevant to the grant of the requested certificate. We cannot say that its decision was arbitrary, capricious, or an abuse of discretion, or that it was unsupported by substantial evidence. We, therefore, deny the petition for review. . 49 U.S.C. § 909(c) provides: Subject to section 910 of this title, upon application as provided in this section the Commission shall issue a certificate to any qualified applicant therefor, authorizing the whole or any part of the operations covered by the application, if the Commission finds that the applicant is fit, willing, and able properly to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied. . The National Railroad Passenger Corporation (Amtrak) and the Department of Transportation sought unsuccessfully to intervene in the proceedings below. By orders dated September 27 and October 5, 1977, this court granted Amtrak’s motion for leave to intervene. . In submitting its brief, Mascony appended some evidentiary material characterized as appendices. NLFL moved to strike this material, or alternatively to reopen the record for receipt of additional evidence. The motion was dismissed as moot following Judge Allard’s denial of the application. . It might be noted parenthetically that even if the proposed action in this case had been construed as a “major Federal action,” it is still highly likely that the ICC would have acted in conformity with the requirements of NEPA. There is no procedural requirement under the Act or its implementing regulations that public hearings be held in every case. See 42 U.S.C. § 4321 et seq.; 40 C.F.R. §§ 1500.7(d), 1500.9(d), 1500.10; 49 C.F.R. §§ 1108.15, 1108.16(b), 1108.17(a). NEPA requires only that an EIS “accompany [a] proposal through the existing agency review process.” [Emphasis added.] 42 U.S.C. § 4332(2)(C). Unless hearings are required by statute or as a matter of due process, they are discretionary with the federal agency. See 5 U.S.C. § 554. In the case of grants of certificates of public convenience by the ICC, neither statute nor Commission regulations requires an oral hearing. 49 U.S.C. § 909(c); 49 C.F.R. §§ 1100.247(e)(1), (3). It follows that NEPA does not itself require hearings in this context.
6474734-10742	MEMORANDUM OPINION DAVID P. McDONALD, Bankruptcy Judge. INTRODUCTION Fredrich J. Cruse, Trustee, and William E. Alberty, creditor, each filed a Motion To Dismiss the Debtors’ Chapter 12 bankruptcy petition. The Movants assert that the Debtors are not “family farmers” as defined under 11 U.S.C. § 101(17). A hearing was held on September 20, 1988 and all post-trial briefs were filed by October 3, 1988. JURISDICTION This Court has jurisdiction over the parties and subject matter of this proceeding pursuant to 28 U.S.C. §§ 1334,151, and 157 and Local Rule 29 of the United States District Court for the Eastern District of Missouri. This is a “core proceeding” pursuant to 28 U.S.C. § 157(b)(2)(A), which the Court may hear and determine. FINDINGS OF FACT The facts in this case are generally not in dispute. Tracy Hettinger lived most of his life on the farm in question which was owned by his father, Eldon K. Hettinger. From childhood he actively assisted his father with the family farming operation. Prior to his father’s death on December 5, 1985, Tracy had farmed the land while his father was in ill health. Upon Eldon’s death, Tracy and his sister, Connie J. Delaney, each inherited an undivided one-half interest in the farm. Connie conveyed her interest to Tracy for $1.00. In 1985, Tracy Hettinger farmed the land himself. In 1986, he rented the farm to a neighbor, Jerry Schultz. The Debtors claim they intended to farm the land themselves in 1987, but failed to give timely written notice to vacate pursuant to Mo.Ann.Stat. § 441.050 (Vernon 1986); and thus, Jerry Schultz was able to retain the premises. The Debtors did plant a crop in 1988 on their land. The Debtors’ 1987 income consisted of: Farm rent received from Schultz $6,800.00 Byron Fowler paid Tracy hourly wages to perform farm labor on Fowler’s farm ' $7,491.73 Connie J. Delaney was employed in non-farming work for LaBelle Manor Care $ 614.72 Tracy testified that the farm rent proceeds and a portion of his hourly labor income were paid to creditors Production Credit Association and Federal Land Bank. It is the position of the Trustee and creditor, William E. Alberty, that neither the 1987 farm rent nor the labor income is farm income and, therefore, the Debtors fail to meet the definition of “family farmer”. Hettinger conceded that he received cash rent from Schultz in 1987. The Debtors did not contribute any funds to grow and harvest the crops, nor were they to share in the profits or loss. It was a no-risk rental agreement. In the same year, Tracy Hettinger performed various farm labor work on Byron Fowler’s farm. Fowler paid Tracy an hourly wage which varied depending on the nature of the work and the hours required. CONCLUSION OF LAW Section 101(17)(A) of the Bankruptcy Code defines “family farmer” as an: “(A) individual or individual and spouse engaged in a farming operation whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose aggregate non-contingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse unless such debt arises out of a farming operation), on the date the case is filed, arise out of a farming operation owned or operated by such individual or such individual and spouse, and such individual or such individual and spouse receive from such farming operation more than 50 percent of such individual’s or such individual and spouse’s gross income for the taxable year preceding the taxable year in which the case concerning such individual or such individual and spouse was filed;” (Emphasis Added) Section 101(20) of the Bankruptcy Code defines “farming operation” as: “(20) ‘farming operation’ includes farming, tillage of the soil, dairy farming, ranching, production or raising of crops, poultry, or livestock and production of poultry or livestock products in an unmanufactured state;” The Movants rely on Matter of Armstrong, 812 F.2d 1024 (7th Cir.1987) for the proposition that a cash rent agreement is not a risk-laden venture in the nature of farming. Therefore, the Court held such a venture cannot be considered part of Armstrong’s personal farming operations. The Armstrong Court concluded that such an arrangement is simply a landlord-tenant relationship. Although this mechanical method of analysis is simple, predictable and appealing, it fails to take into consideration the intent of Congress in the area of farming legislation and the nature of the farming industry today. The Armstrong dissent addressed these problems by first agreeing with the majority opinion in holding that the sale of farm machinery can, depending on the circumstances, meet the definition of “farming operation”. The majority held: “Implicit in this definition [of farming operation] is the inclusion of general activities inherent in farming and, we believe, the means (or in this case the equipment) necessary to perpetuate the farming operation the definition speaks of. When a farmer sells some of his machinery in an effort to scale down his operation (say from 200-100 acres) and save the farm, the money received is inescapable from the 50% of the farming operation dissolved. We believe this to be a pragmatic viewpoint. A contrary result would reap illogical results which we are confident Congress had no desire to create. Farmers in financial trouble could harvest their crop on a given year, decide to scale down their operation, sell machinery and be considered non-farmers under § 101(17) even though they had no significant outside employment.” The Armstrong dissent agreed with the majority reasoning that since the sale of equipment was integral to his farming operation, then the sale proceeds were deemed “farm income”. The dissent concluded: “It seems to me entirely possible that the land rentals are for the same reason equally ‘farm income’.... If Armstrong was forced temporarily to rent this land for the same reason he was forced to sell his machinery — presumably to salvage what he could of his financially troubled farm — then the lease proceeds may be seen as income inherently tied to the uncertainties of farming and thus derived from a farming operation. Similarly, if Armstrong can show a firm purpose to farm this acreage again in the near future, the rental income could qualify as an integral part of his farming operation. On the other hand, if the facts suggest that Armstrong has disposed of the land, cut his losses and abandoned the land as part of his own farming operation, then Armstrong looks like an owner only of land, not of a farming operation. In any event, the consequences of Armstrong’s financial distress in farming should not lead mechanically to the conclusion that he is no longer a ‘farmer’.” Having considered the entire Armstrong opinion, I reject the majority application of a mechanical test to determine what conduct constitutes a farming operation. Each case must be judged on the totality of the circumstances. See In re Paul, 83 B.R. 709 (Bankr.D.N.D.1988); In re Easton, 79 B.R. 836 (Bankr.N.D.Iowa 1987); and In re Rott, 73 B.R. 366 (Bankr. N.D.1987). To conclude automatically that all cash rent agreements produce non-farm income not only ignores the intent of Congress, but also the accepted business practices of the farming community. It is clear that the one common thread in all farming legislation is the desire to save the family farmer. The definitions of “family farmer” and “farming operation” are to prevent those individuals who are obviously non-farmers from receiving the benefits of farming legislation. The investor who owns farm land but has limited farm background, minimal participation in farming, and fails to show any future intent to farm should not receive the benefits from farming legislation. In contrast, Tracy Hettinger should receive those benefits if he can demonstrate that he has an active farming history; and his conduct reveals an intent to salvage his farm for future use. Obviously, when a farm debtor sells off his equipment and livestock, elects not to plant a crop, and rents his land on a cash basis, there is a strong presumption that the individual is liquidating and is no longer a farmer pursuant to 11 U.S.C. § 101(17) and (20). However, if the debtor can provide clear and convincing evidence that his conduct is based on sound business judgment that in order to save the farming business, it is necessary in the present and immediate future to take such drastic steps, then he has met his burden of proving that he, in fact, is a “family farmer” conducting a “farming operation”. In the instant case, Tracy Hettinger has met his burden. He was raised on this farm and assisted his father in the farming business. When his father died, he continued to farm the land until 1986 when he rented the land on a cash basis to Jerry Schultz. Tracy testified that he intended to farm the land himself in 1987 but had failed to give the required notice to Schultz and, therefore, Schultz continued to farm the land in 1987. In 1988, Tracy regained the land and planted a crop. Under these circumstances, the $6,800.00 cash rent should be considered as farm income even though there was no risk to the Hettingers. The Movants further argue the $7,491.73 in wages Tracy received from Byron Fowler cannot be considered farm income, because it consisted of hourly wages earned on someone else’s farms where there was no risk to the Debtor. He was to be paid regardless of the success or failure of the crop. The deciding factor is not whether he was performing traditional farm labor; nor the fact he worked on someone else’s farm. That is not important. If he had chosen to drive to town and accept hourly wages, the result would be the same. The question is how does the Debtor intend to utilize these wages. If the evidence indicates the Debtor has liquidated his farm holdings and does not intend to use his hourly wages for an ongoing farming operation, then he is not a family farmer. In the case of In re LaFond, 791 F.2d 623 (8th Cir.1986), the debtors moved for lien avoidance in regard to the bank’s non-possessory, nonpurchase money interest in certain large items of farm equipment. The bank argued that LaFond’s farm equipment could not be considered implements or tools of the trade because they were not engaged in the trade of farming under section 522(f). To be so engaged, the debtors must meet the definition of farmer set forth in 11 U.S.C. § 101(17). If the definition were applied, then the La-Fonds could not be considered farmers because their primary family income came from Mr. LaFond’s part-time job as a policeman. The Eighth Circuit agreed with the view of the bankruptcy court when it held that:
9110914-27249	OPINION BARZILAY, District Judge. I. INTRODUCTION Plaintiff PAM S.p.A. (“PAM”) filed a USCIT R. 56.2 Motion for Judgment Upon an Agency Record, challenging certain aspects of the Department of Commerce’s (“Commerce” or “Department”) determinations in the antidumping administrative review that it conducted concerning PAM. See Notice of Final Results of Antidumping Duty Administrative Review, Partial Rescission of Antidumping Duty Administrative Review and Revocation of Anti-dumping Duty Order in Part: Certain Pasta From Italy, 67 Fed.Reg. 300 (Jan. 3, 2002) (“Final Results”). This Court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c). II. BACKGROUND On July 24, 1996, Commerce published in the Federal Register an antidumping duty order on certain pasta from Italy. See Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Certain Pasta From Italy, 61 Fed.Reg. 38,547 (July 24, 1996). On July 20, 2000, Commerce published in the Federal Register notice of the “Opportunity to Request an Administrative Review” of this order for the period covering United States sales between July 1, 1999 and June 30, 2000. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 65 Fed.Reg. 45,035 (July 20, 2000). Borden, Inc. and New World Pasta requested an administrative review on September 6, 2000 and that same day, Commerce initiated the administrative review of the antidumping duty order on pasta from Italy. See Initiation of Anti-dumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 65 Fed.Reg. 53,980 (Sept. 6, 2000). On September 13, 2000, Commerce sent its questionnaire to PAM and the other respondents. PAM submitted its responses to sections A through C of the questionnaire by November 15, 2000. Commerce sent PAM a supplemental questionnaire requesting information about pasta cuts and their production on December 14, 2000. PAM submitted its section D responses pursuant to the Department’s instructions by January 16, 2001. See Def-Int’s App. Ex. 3. On February 21, 2001, Commerce sent PAM another supplemental questionnaire seeking information concerning, among other things, a new production line at its D’Apuzzo facility. In its section D response, PAM claimed a startup adjustment pursuant to 19 U.S.C. § 1677b(f)(l)(C) (1999), related to the installation of a “new production line” in its existing D’Apuzzo facility and stated that it had “remodeled an existing facility by addition of new machinery.” Id. at 22. The Department’s questionnaire also requested that PAM “explain how the production levels were limited by technical factors associated with the initial phase of commercial production.” Id. at 23. PAM responded that the question “does not apply” because its new line did not begin to operate during the period of review (“POR”). Id. On June 28, 2001, Commerce preliminarily determined that PAM sold the subject merchandise at less than normal value (“NV”) with a dumping margin of 4.48 percent and denied PAM’s requested startup adjustment. See Notice of Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review and Intent To Revoke Antidumping Duty Order in Part: Certain Pasta From Italy, 66 Fed.Reg. 34,414 (June 28, 2001) (“Preliminary Results”). In its supplemental questionnaire to PAM, Commerce noted that PAM had “failed to provide all the information requested in the original questionnaire regarding these startup costs.” Def.-Int’s App. Ex. 4 at 1. PAM responded it had added “new machinery” in the form of a “new long cut production line,” which required periodic closures of the plant. Id. at 2. PAM maintained that “production levels were limited because the new line was not yet ready to produce pasta and the existing lines could not produce pasta because the installation of the new line made it impossible for the old line to operate.” Id. at 4. Commerce denied the request in the Preliminary Results, determining that PAM did not meet the criteria for a startup adjustment pursuant to 19 U.S.C. § 1677b(f)(1)(C)(ii). Preliminary Results at 34,419. Specifically, Commerce concluded that the new line did not constitute a “new production facility” or a “new product” that required substantial additional investment, and the new line did not constitute a “substantial retooling” of its existing facility. Commerce determined the addition of a new production line within an already existing facility was a “mere improvement,” which, as the Uruguay Round Agreements Act, Statement of Administrative Action (“SAA”) states, does not qualify for a startup adjustment. On August 7, 2001, Commerce received PAM’s administrative case brief. In a December 5, 2001 letter, PAM supplemented its brief with a request that Commerce combine shape categories 5 (short cuts), 6 (specialty short cuts), and 7 (soupettes), asserting that Commerce acknowledged that it erred with respect to this issue in the judicial review of the third administrative review. See Final Results at 300 n. 2. In the Final Results, Commerce declined to combine shape categories, explaining that Commerce’s remand request in the prior judicial review, which PAM claimed to be a “clear and unequivocal” admission of error, was simply a request for an opportunity to “review the record with regard to shape categories.” Id. at 300. On January 3, 2002, Commerce published the final results of the administrative review, again denying the startup adjustment and determining PAM’s dumping margin to be 4.10 percent. Id. at 302. Commerce rejected PAM’s request that its margin be calculated by comparing the weighted average of normal values to entire invoices and, instead, followed the standard methodology of comparing the weighted average of normal values to individual transactions. See Issues and Decision Memorandum for the Fourth Anti-dumping Duty Administrative Review; Final Results of Review (Jan. 3, 2001) (“Issues and Decision Memo”) at 12 (citing 19 C.F.R. § 351.414(c)(2)). Commerce also declined to permit PAM’s non-dumped sales to be used to offset the dumping margins on sales that had been dumped. Id. On February 28, 2002, PAM filed a complaint with this court, alleging that the Department’s determination was unsupported by substantial evidence on the record and was otherwise not in accordance with law. See 19 U.S.C. § 1516a(B)(1)(B)(i). On October 7, 2002, PAM moved for Judgment upon an Agency Record pursuant to USCIT R. 56.2. III. DISCUSSION PAM challenges four separate issues in this ease: first, whether Commerce’s denial of a startup adjustment for PAM’s new production line is supported by substantial evidence and is in accordance with law; second, whether the Department’s calculation of PAM’s dumping margin using the average-to-transaction method is in accordance with law; third, whether the Department erred by “zeroing” negative margins on individual transactions when calculating PAM’s dumping margin; and fourth, whether the Department erred in its classification of certain pasta shapes. This court must evaluate whether the findings in question are supported by substantial evidence on the record and are otherwise in accordance with law. See § 1516a(b)(1)(B)(i). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. of New York v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938); Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). A. COMMERCE’S DETERMINATION TO DENY A STARTUP ADJUSTMENT FOR PAM’S NEW PRODUCTION LINE IS SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS OTHERWISE IN ACCORDANCE WITH LAW. PAM claimed a startup adjustment for its new pasta production line at its D’Apuz-zo facility equal to the amount of the fixed overhead attributed to the period of time during which the D’Apuzzo facility was closed for the installation of the production line. In the Final Results, Commerce denied PAM’s request for a startup adjustment, finding that the statutory criteria had not been satisfied. To qualify for a startup adjustment, a producer must satisfy two requirements under the statute. In particular, Commerce will make an adjustment for startup costs when: I) a producer is using new production facilities or producing a new product that requires substantial additional investment, and II) production levels are limited by technical factors associated with the initial phase of commercial production. 19 U.S.C. § 1677b(f)(1)(C)(ii) (1999). The statute does not define “new product” and “new production facility.” See Pohang Iron and Steel Co. v. United States, 23 CIT 778, 782 (1999). However, the Department looks to the SAA for the interpretation of these terms. “ ‘New production facilities’ include! ] the substantially complete retooling of an existing plant. Substantially complete retooling involves the replacement of nearly all production machinery or the equivalent rebuilding of existing machinery. A ‘new product’ is one requiring substantial additional investment.” SAA at 836. Consistent with the SAA’s requirements, Commerce determined that the addition of a pasta production line to an already existing facility is a “mere improvement,” and not a “new facility” or “substantially complete retooling.” See Preliminary Results at 34,419. “Mere improvements to existing products or ongoing improvements to existing facilities will not qualify for a startup adjustment.” SAA at 836. On the other hand, PAM contends that the addition of a new production line does not constitute a “mere improvement,” but rather constitutes a “substantial improvement tantamount to the opening of a new factory.” Pl.’s Br. at 6. In support, PAM argues that because “mere” is not assigned a statutory definition, a dictionary must be consulted to ascertain its plain meaning. However, the Supreme Court has consistently held, and this Court has followed its lead as it must, that when the statute is ambiguous on an issue, the court will uphold Commerce’s reasonable interpretations of the statute. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778. Commerce limits the definition of a new production facility to include only those involving substantially complete retooling whereas PAM contends that a substantial investment alone will qualify as a “new production facility.” Commerce’s interpretation, consistent with the SAA, is clearly reasonable. PAM’s interpretation would make any substantial investment tantamount to a “new production facility” and essentially render that phrase in § 1677b(f)(1)(C)(ii)(I) superfluous. Such an interpretation is contrary to the intent of the statute. To support its claim for a startup adjustment, PAM cites its financial data as evidence of a “substantial improvement.” PAM reiterates that the increase in its production capabilities, [[ ]] times that of the old line, is “substantial and significant.” Pl.’s Reply at 4. In addition, PAM allegedly increased total production capacity by nearly [[ ]]%, more than [[ ]] the value of the old plant. PI. ’s Br. at 7. Even if these assertions are assumed to be true, such statistics are not a basis for a startup adjustment pursuant to the statute. That PAM greatly expanded capacity or incurred significant costs in establishing the new line does not affect its eligibility for a startup adjustment “without a showing that the sizeable investment was geared toward the production of a new product or a new production facility.” Pohang, 23 CIT at 783. PAM must show that the new pasta line constitutes a “new production facility” under § 1677b(f)(1)(C)(ii). A foreign producer may qualify for a startup adjustment if its investment was “geared toward” a new production facility. In the initial investigation, the Department sent PAM two questionnaires intended to clarify how PAM qualified for a startup adjustment. Because the first reply was not clear, the Department sent PAM a supplemental questionnaire. Based on these responses, the Department made a determination that PAM did not meet the statutory requirements for the adjustment. PAM argues that it has made a “substantial improvement to a production facility” and has created a “new production line,” but it has not shown that the improvement was “geared toward” the establishment of a “new production facility” amounting to a complete retooling or a replacement of nearly all existing machinery. Cf Certain Cold-Rolled, and Corrosion-Resistant Carbon Steel Flat Products From Korea: Final Results of Antidumping Administrative Reviews, 63 Fed.Reg. 13,170, 13,200 (Mar. 18, 1998) (disallowing a startup adjustment because the foreign producer failed to demonstrate that the production line in question constituted a “new facility” or manufactured a “new product”). Therefore, PAM failed to meet the statutory requirements. Plaintiff failed to show that it established a new production facility or made a substantial investment geared towards a new production facility. It was reasonable for Commerce to conclude that PAM’s addition of machinery to its existing facility did not qualify for a startup adjustment within the meaning of § 1677b(f)(1)(C)(ii)(I). Therefore, the court affirms Commerce’s denial of PAM’s requested startup adjustment. B. THE DEPARTMENT PROPERLY CALCULATED PAM’S MARGIN OF DUMPING USING THE AVERAGE-TO-TRANSACTION METHOD. PAM challenges the Department’s use of the average-to-transaction method in this case. The average-to-transaction method is described as “a comparison of the weighted average of the normal values to the export prices (or constructed export prices) of individual transactions for comparable merchandise.” 19 C.F.R. § 351.414(b)(3) (2000). PAM primarily argues that the Department ignored the plain language of the statute when it failed to calculate antidumping duties on an “entry by entry” basis pursuant to 19 U.S.C. § 1675(a)(2)(A). PI. ’s Br. at 9. In addition, PAM argues that Commerce should have offset positive and negative dumping margins on an invoice by invoice basis, resulting in a lower calculation of its dumping margin. Section 1675(a)(2)(A) is a general provision concerning the calculation of the anti-dumping duty margin in administrative reviews. PAM relies on the language which states that “[f]or the purpose of paragraph (1)(B), the administering authority shall determine — (i) the normal value and export price (or constructed export price) of each entry of the subject merchandise, and (ii) the dumping margin for each such entry.” § 1675(a)(2)(A). Because the provision contains the word “entry,” PAM argues that this provision dictates the method employed by Commerce. Commerce counters that the statute permits the employment of its methodology in this case and it is necessary to read 19 U.S.C. § 1675(a)(2) within the context of the other sections of the statute and in conjunction with 19 C.F.R. § 351.414 in order to comprehend the full meaning of the statute. See Def.’s Br. at 14; see also Marcel Watch Co. v. United States, 16 CIT 474, 477, 795 F.Supp. 1199, 1202 (1992) (“It is fundamental that a section of a statute should not be read in isolation from the context of the whole Act, and in fulfilling [its] responsibility in interpreting legislation, [the court] must not be guided by a single sentence or member of a sentence, but [should] look to the provisions of the whole law, and to its object and policy”) (internal quotes and citation omitted). The statute expressly states that in a review, “when comparing export prices (or constructed export prices) of individual transactions,” the Department will use “the calendar month of the individual ex port sale” as a base. § 1677f-1(d)(2) (emphasis added). Moreover, this Court has repeatedly upheld the Department’s use of the “average-to-transaction” method in administrative reviews. See Ad Hoc Comm, of S. Calif. Producers of Gray Portland Cement v. United States, 19 CIT 1398, 914 F.Supp. 535 (1995); NSK Ltd. v. United States, 17 CIT 590, 825 F.Supp. 315 (1993); Am. Silicon Technologies v. United States, 23 CIT 237, 240-41 (1999). PAM argues that in prior cases where the use of “sales” as opposed to “entries” was endorsed in dumping margin calculations, the calculation used the “constructed export price” (“CEP”) as opposed to “export price” (“EP”). See, e.g., NSK Ltd. v. United States, 825 F.Supp. 315, 17 CIT 590 (1993). This argument, however, was properly rejected by this Court in American Silicon: The problem with plaintiffs’ argument is that if the Court were to require an entries-based methodology based upon the “plain language” of § 1675(a)(2)(A), Commerce would subsequently be required to utilize an entries-based approach not only for EP transactions, but also CEP transactions. Under a plain language reading of § 1675(a)(2)(A), the term “entry” appears to apply equally and without distinction to both CEP and EP transactions. Any ruling by this Court as to the meaning of the term “entry,” as set forth in § 1675(a)(2)(A), would, therefore, also apply equally and without distinction to both CEP and EP margin calculations. The parties agree that it is oftentimes impossible for Commerce to tie sales to entries for CEP transactions. If Commerce were required to limit its § 1675(a)(2)(A) margin analysis solely to entries made during the POR,' Commerce would then be presented with two options, either attempt to perform the impossible or cease calculating dumping margins for CEP transactions. Either result would significantly impede Commerce’s ability to effectively enforce the antidumping law and could not have been intended by Congress. Therefore, the Court finds that once § 1675(a)(2)(A) is read in the context of the antidumping law as a whole, it becomes apparent that Commerce is not limited to entries made during the period of review when calculating dumping margins. - American Silicon, 23 CIT at 240. In addition, PAM’s reliance on the term “entry” in the statute is ill-founded because there is a specific regulation which enumerates the methods Commerce may employ in determining the antidumping duty margin, namely § 351.414. “In a[n administrative] review, the [Department] normally will use the average-to-transaction method” in calculating the antidump-ing duty margin. § 351.414(c)(2). Further, the SAA describes the average-to-transaction method as “the preferred methodology in reviews.” SAA at 843. Since it is an administrative review (as opposed to an initial investigation) that is under review here, Commerce was within its discretion to employ the average-to-transaction method in this case. The use of the average-to-transaction method in administrative reviews is in conformity with the statute, the SAA, and the Department’s regulations. Therefore, the court sustains the use of the method in PAM’s case. C. THE DEPARTMENT DID NOT ERR IN USING “ZEROING” WHEN CALCULATING PAM’S DUMPING MARGIN. PAM challenges Commerce’s methodology for calculating its weighted average dumping margin, a practice referred to as “zeroing.” In zeroing, Commerce calculates the dumping margin by assigning a zero value to all sales where the U.S. price exceeds NV, thus effectively excluding all non-dumped sales or sales with “negative” margins. At the same time, Commerce includes the value of dumped sales in the dumping margin, which are therefore referred to as sales with a “positive” margin. Commerce next determines the percentage of the weighted average dumping margin “by dividing the aggregate dumping mar-' gins determined for a specific exporter or producer by the aggregate export prices and constructed export prices of such exporter or producer.” 19 U.S.C. § 1677(35)(B). Thus, while the sales with negative margins are excluded in the numerator of this formula, they are nevertheless taken into account in the denominator. Here, PAM’s main argument is that if positive margins were “offset” with negative margins, the result would have been a lower overall dumping margin. See Pl.’s Br. at 11. PAM asserts that the Department should calculate a “net” dumping margin, rather than disregarding negative margins or non-dumped sales — a methodology that would produce a more accurate result. Commerce’s zeroing methodology in its calculation of dumping margins is grounded in long-standing practice. See, e.g., Timken Co. v. United States, 26 CIT-, 240 F.Supp.2d 1228 (2002); Bowe Passat Reinigungs-Und Waschereitechnik Gmbh v. United States, 20 CIT 558, 570, 926 F.Supp. 1138, 1149-50 (1996); Serampore Indus. Pvt. Ltd. v. United States, 11 CIT 866, 873-74, 675 F.Supp. 1354, 1360 (1987). Commerce justifies its position by arguing that if Congress intended that negative margins be offset by positive margins, “the statute would require Commerce to calculate a ‘net’ dumping margin, rather than ‘aggregate’ individual ‘dumping margins.’” Def’s Br. at 21. Commerce explains that the statutory basis for its zeroing methodology is found in § 1677(35)(A) and (B), and when taken together, direct Commerce to aggregate all individual dumping margins and to divide this amount by the value of all sales. The statute defines the dumping margin as “the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise.” § 1677(35)(A) (emphasis added). On the other hand, a “ “weighted average dumping margin’ is the percentage determined by dividing the aggregate dumping margins determined for a specific exporter or producer by the aggregate export prices and constructed export prices of such exporter or producer.” § 1677(35)(B). Commerce interprets thése provisions to permit the inclusion of only positive margins in the calculation of the aggregate dumping margin. Def.’s Br. at 20. “Where normal value fails to exceed the export price or constructed export price,” Commerce assigns no dumping margin because there is “no dumping.” Id.; see also 19 U.S.C. § 1677(34) (defining “dumping” as “the sale or likely sale of goods at less than fair value”). In determining whether Commerce’s interpretation and application of the anti-dumping statute are in accordance with law, the applicable standard of review is prescribed by Chevron. The first step is to investigate as a matter of law “whether Congress’s purpose and intent on the question at issue is judicially ascertainable.” Timex V.I., Inc. v. United States, 157 F.3d 879, 881 (Fed.Cir.1998) (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778). If the Court determines that the statute is silent or ambiguous with respect to the issue, the Court proceeds to the second step. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778. This is essentially an inquiry into the reasonableness of the Department’s decisions, and, accordingly, the Court sustains Commerce’s reasonable interpretations of the statute. See Fujitsu General Ltd. v. United States, 88 F.3d 1034, 1038 (Fed.Cir.1996). “In determining whether Commerce’s interpretation is reasonable, the Court considers, among other factors, the express terms of the provisions at issue, the objectives of those provisions[,] and the objectives of the anti-dumping scheme as a whole.” Mitsubishi Heavy Indus., Inc. v. United States, 22 CIT 541, 545, 15 F.Supp.2d 807, 813 (1998). “The statute is silent on the question of zeroing negative dumping margins.” Bowe Passat, 20 CIT at 572, 926 F.Supp. at 1150. This gap or ambiguity in the statute requires the application of the Chevron step-two analysis and compels this court to inquire whether Commerce’s methodology of zeroing- in calculating dumping margins is a reasonable interpretation of the statute. The underlying purpose for the practice of zeroing is articulated in Serampore Industries. The Serampore Court found that Commerce, in applying a zeroing methodology, had interpreted the statute “in such a way as to prevent a foreign producer from masking its dumping with more profitable sales.” 11 CIT at 874, 675 F.Supp. at 1360-61. By offsetting positive and negative margins into a net margin, foreign producers could undermine U.S. law by strategically dumping merchandise in the United States. For instance, companies could purposefully dump but escape antidumping duties by setting the prices of their other sales to a level such that they offset the margin, thus averaging out the margins to a level of no dumping. Def.’s Br. at 21 n. 8. Section 1677(35)(A) of the statute states that dumping occurs when NV exceeds the export price and does not refer to a “net” margin. An “aggregate dumping margin” is therefore reasonably interpreted to refer to the sum of margins of only the dumped sales. In addition, section 1677(35)(B) specifies that the aggregate dumping margin is divided by “aggregate export prices,” including the prices of all sales. Accordingly, Commerce’s exercise of including only dumped sales in the aggregate while including all sales in the division does conform to the statute and cannot be pronounced an unreasonable interpretation of the statute. PAM next argues that because the World Trade Organization (“WTO”) Appellate Body has ruled against the EC’s practice of zeroing, Commerce’s zeroing methodology is inconsistent with the United States’ international obligations. Pl’s Br. at 11. In European Communities— Antidumping Duties on Imports of Cotton-Type Bed Linen from India, WT/ DS141/AB/R (Mar. 1, 2001) {“BedLinen”), the WTO Appellate Body ruled that the zeroing methodology employed by the EC was inconsistent with the Article 2.4.2 of the WTO Anti-Dumping (“AD”) Agreement because it did not take into account the entirety of prices of those export transactions where negative margins were found, resulting in inflated calculations of dumping margins. Commerce counters that the WTO decision does not affect the Department’s zeroing methodology because that case involved a dispute between India and the EC and did not comment on U.S. practice. Def.’s Br. at 22. Although the exact mathematical method of the EC zeroing is not available, the fundamental practice of zeroing, as summarized in the WTO decision, is similar to the U.S. practice. The fact that the U.S. submitted third party briefs to the WTO litigation in support of the EC’s zeroing methodology also lends credence to the argument that the two practices are comparable. Despite these similarities, Bed Linen is not a basis for striking the Department’s zeroing methodology. See Corns Staal BV v. United States, 27 CIT -, -, 259 F.Supp.2d 1258, 1263 (2003). WTO panel and appellate decisions are non-binding on third parties and do not serve as precedent before this Court. See, e.g., Hyundai Elec. Co. v. United States, 23 CIT 302, 311, 53 F.Supp.2d 1334, 1343 (1999); SAA at 1032 (“Reports issued by panels or the Appellate Body under the [WTO Dispute Settlement Understanding] have no binding effect under the law of the United States.”); see also Corns, slip op. 03-25 at 18 (observing that WTO decisions have no stare decisis effect in the zeroing issue also being litigated here) (citation omitted). However, the reasoning of such decisions may help to inform the court’s decision. Hyundai, 23 CIT at 311, 53 F.Supp.2d at 1343.
3892554-4777	YOUHANS, District Judge. Plaintiffs in error were sued on two notes, both dated December 6, 1907, each for $1,800, payable to the order of Robert Burgess & Son, the first 14 months, and the second 2 years, after date, with interest at the rate of 8 per cent, per annum. The notes were signed by E. E. Hill, '0. P. Adams, Allen Berry, Hosier Bros., W. H. Walker, J. F. Wormuth, H. Theo. Vashius, and John Richardson. They were assigned to defendants in error before maturity, and at the time of the assignment bore the indorsement hereinafter referred to. The notes were given for the purchase price of a stallion. All of the signers were sued except Hill and Walker. The answer sets up two defenses: ‘ (1) That at the time of the purchase it was verbally agreed “that each of the purchasers should be responsible only for his proportionate share or interest in the horse so purchased,” and that when any of the nine signers should pay’the sum of $400 he should be released and discharged from all liability thereon; and that, prior to the assignment, the defendants were advised of this agreement. (2) Failure of consideration. There was no testimony tending to sustain the second defense, and it will not be further considered. As a part of the first .defense, the answer sets out the notes with the indorsements thereon. The indorsement appearing on each note and relied upon by plaintiffs in error as evidence that the indebtedness represented by the notes is several, and not joint, is as follows: “Rec’d from E. E. Hill two hundred dollars on within note in full payment of his one share.” The reply of defendants in error disclaims knowledge of the making of the verbal agreement, and denies that they were advised of it at the time of the assignment of the notes. With regard to the indorsement, the reply states that: “The plaintiffs admit that each of said notes bears the indorsements as alleged, but plaintiffs are informed and believe, and upon such information and belief allege, that none of said indorsements nor were any of them on either of said notes, made by Robert Burgess & Son, the payees, or by either of them, but that all and each of said indorsements were made by an agent of the payees, and that in making any indorsements on either or on both of said notes as and for in any manner, a release and discharge of or as a payment in full by any of the makers of or any maker of said notes or either of them, said agent was acting wholly beyond and in excess of and without; his authority.” The plaintiffs in error before trial filed a motion to dismiss the “action” on the ground that the court had no jurisdiction of the amount involved in said cause; the pleadings showing, according to their contention, that the liability, if any, was several, and not joint, and that no one was liable for more than four hundred dollars of the principal sum. This motion was overruled. The case was submitted' to the court, sitting as a jury, upon the pleadings and testimony, and judgment was rendered for defendants in error. The specifications of error were that the court erred: (1) In overruling the motion to dismiss made before trial. (2) In holding the evidence sufficient to entitle plaintiffs to judgment. (3) In overruling motion to dismiss at the close of the evidence. The first motion to dismiss was, in fact, a demurrer to the comolaint and reply. Haug v. Great Northern Ry., 102 Fed. 74, 42 C. C. A. 167. In considering that motion the pleadings alone are involved. The note on its face was a joint obligation. The alleged verbal agreement was denied in the answer. The argument to sustain the first assignment of error is based on the indorsement and the statute of the state of Colorado modifying the common-law rule as to the effect of a release of a joint debtor. By that statute a release of one or more joint debtors is held to be a payment on the indebtedness of the full proportionate share of such debtor, or debtors, and further that none of the remaining debtors shall be liable for more than his proportionate share of the indebtedness. The reply alleged that the agent who made the indorsement had no authority to make it. That raised a question of fact. The first motion to dismiss was, therefore, properly overruled. The second specification of error goes to the sufficiency of the evidence to sustain the judgment. There were no objections to evidence, and therefore no exceptions to rulings thereon. Neither was there any request for findings of fact, either general or special. The only finding made by the court was as follows: “And the court, after Rearing the evidence produced and hearing the arguments of counsel, finds the issues here joined In favor of the plaintiffs and doth assess their damages at the sum of $3,786.55.”
1747800-24857	CLARK, Circuit Judge: In this case, which is making its second appearance before this court, the Equal Employment Opportunity Commission (EEOC) appeals from a district court order awarding Jill Crozier $6,100 in back pay, approving prejudgment interest at the rate of six percent, and denying other women back pay as a contempt sanction. Guardian Pools, Inc. (Guardian), the defendant below, cross-appeals the determination that Crozier is entitled to back pay for a period of 26V2 months. We vacate the decision below and remand the case for further proceedings consistent with this opinion. FACTS In April, 1979, the EEOC filed a complaint against Guardian under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. (1982), after Jill Crozier was refused the job of pool service attendant during October, 1974. A male applicant was subsequently asked to apply for the position that Crozier had been told was filled. The EEOC alleged that Guardian intentionally discriminated against women in its recruitment, hiring, training, and assignment policies and practices, in violation of § 703(a) of Title VII, 42 U.S.C. § 2000e-2(a). Record, Vol. I, Tab 1. The complaint also alleged that Guardian had advertised job openings for men only, in violation of § 704(b), 42 U.S.C. § 2000e-3(b). The EEOC sought (1) a permanent injunction to prevent Guardian from continuing its discriminatory employment policies and practices; (2) an order to eradicate the effects of discrimination by affirmative action; and (3) an order to compensate those persons, including Crozier, affected by Guardian’s unlawful employment practices with back pay, plus interest. Crozier subsequently found employment with a typesetting company. She quit in January, 1975 and went to New Jersey for approximately six weeks. In August, 1975, she enrolled full time in Broward Community College’s Fine Arts program. During college, she worked part-time in a grocery store, averaging 30 to 35 per week. After graduation in 1977, she worked as an unpaid apprentice to her jewelry instructor for nine months. Subsequently, she worked as a meat wrapper, at a desk job with a sunglasses manufacturer, and in jobs relating to jewelry design and sales. Since 1978, she has worked as an independent jewelry contractor. On January 11, 1980, the EEOC filed an amended complaint, alleging a class action against Guardian on behalf of all female applicants denied employment during the prior two years, and on behalf of women who are or will be in the future deterred from seeking employment with Guardian. Record, Vol. I, Tab 27. On April 22, 1981, the district court entered a partial final judgment order against Guardian for its discriminatory treatment of women and refusal to hire Crozier. The district court enjoined Guardian from violating Title VII by refusing to hire women or by advertising positions for a specified sex. The district court also ordered Guardian to actively recruit women and to decrease the ratio of male to female employees to 2:1. Until the ratio was obtained, Guardian was directed to hire two women for every three vacancies. The order also set forth the minimal procedures Guardian was to use in reviewing employment applications, and the reporting procedures Guardian was to use to keep the EEOC informed of its progress. In addition, the district court ordered Guardian to publicize notices that advise women who could establish to the satisfaction of the court that they had applied for or that they had been deterred from seeking employment with Guardian after October 18, 1972 that they may be entitled to an award of back pay or other relief. The district court retained jurisdiction to enforce the provisions of its order for a period of two years. On July 24, 1981, the district court entered another partial final judgment order, which corrected clerical mistakes contained in the previous one. The order was affirmed by this court without opinion on December 12, 1982. Between August, 1981 and January, 1983, the EEOC filed three motions for a show cause order and contempt judgment against Guardian on the ground that it refused to comply with the hiring and reporting requirements imposed by the district court. After the EEOC filed its fourth motion on August 31, 1983, the district court referred the matter to a magistrate, who conducted hearings during September and October, 1983. By order filed October 18, 1983, the magistrate found Guardian in contempt for withholding payroll records from the EEOC, misstating the number and ratio of women hired between April, 1981 and October, 1982, misstating the number of people employed as pool service attendants, and failing to hire women in the numbers or ratio required by the district court’s order of April 22, 1981. Guardian did not seek review of this order. The parties reconvened in November, 1983 to determine the question of sanctions. The parties announced virtual agreement and, at the magistrate’s suggestion, executed an agreed order on sanctions. The magistrate apparently modified the agreement only slightly by ordering Guardian to pay the EEOC a compensatory payment of $1,200 for costs. The “Agreed Order on Sanctions” provided that Guardian would file a weekly report of its hiring practices, and report any applicant hired. Record, Vol. Ill, Tab 120, Exh. A. If the report did not reflect the required ratios, Guardian was to be fined $250 per week. Id. If no report was filed, the fine would $500 per week. Id. The magistrate stated that because “further hearings are to be scheduled on money-damages owed to third persons, I choose not to recommend a large compensatory payment.” Record, Vol. II, Tab 114 at 114. The transcript of the hearing on sanctions confirms that the parties agreed to litigate the question of back pay as a contempt sanction at a later date. Exh. 6S at 2. The district court issued a contempt judgment on December 29, 1983, which found Guardian in contempt from April, 1981 until October, 1983, and implemented the sanctions proposed by the magistrate. Pursuant to the district court’s partial final judgment, which found that Crozier and others were entitled to a reasonable award of back pay, the magistrate conducted hearings on January 31, and February 1, 1984. At the hearings, Crozier testified that had she been hired by Guardian in mid-October, 1974, she probably would not have returned to school on a full-time basis. Exh. 5S at 33. However, Guardian claimed that the cutoff date should be either when she left for New Jersey, or when she enrolled in college full-time. Exh. 7S at 33. The magistrate issued its order and recom mendation on February 14,1984, finding (1) a probable employment period of 2672 months, i.e., from mid-October, 1974 until December 31, 1976; and (2) that had Crozier worked at Guardian during this time, she would have received $6,100 more than she reasonably earned elsewhere. The magistrate did not provide any clue as to how he arrived at the $6,100 figure. The magistrate then added six percent simple interest to the award, as of January 1, 1977, making the total amount $8,708, excluding post-judgment interest. The magistrate declined to award compensation to the class of approximately 26 female applicants not hired during the period of contempt because it found that these claims had not been adequately litigated. The magistrate permitted the EEOC to pursue administrative action on behalf of these women without prejudice. On December 3, 1984, the district court ordered the magistrate to reconsider Crozier’s back pay award because he had failed to specify the basis for his recommendation. The district court accepted the magistrate’s recommendation that the interest rate be six percent. The district court relied on 28 U.S.C. § 1961 to determine the rate of post-judgment interest, which prior to its amendment provided that the interest rate be determined by reference to state law. The district court reasoned that Florida’s interest rate governing judgments entered on or prior to October 1, 1981, was six percent, and that the judgment in this case had been entered during April, 1981. Upon reconsideration, the magistrate again determined that 2672 months was the time Crozier would have worked at Guardian. The magistrate also found that Crozier did not remove herself from the job market when she traveled to New Jersey for four to six weeks, and that she did exercise reasonable self-help to mitigate her losses. However, the magistrate again failed to provide a explanation of the $6,100 back pay award, or the December 31, 1976 cutoff date. On March 18, 1986, the district court found that the magistrate’s supplemental order provided “sufficient specificity.” The district court affirmed the magistrate’s recommendation regarding Crozier, denied the class claim for sanctions without prejudice to the institution of presumptive administrative proceedings, and terminated the reporting requirements that had been imposed on Guardian by the magistrate on December 28, 1983. Although Guardian failed to achieve the required quota and ratios, the court denied the class relief because there was no showing of actual prejudice. Final judgment implementing the order was filed on June 10, 1986. Both the EEOC and Guardian appeal to this court for relief from the final judgment. DISCUSSION On appeal, the EEOC argues that (1) the $6,100 back pay award fails to make Crozier “whole;” (2) the amount of prejudgment interest should be determined by the IRS prime rates; and (3) an award of back pay for those women not hired by Guardian, in contempt of the district court’s order, does not require proof of actual discrimination. On cross-appeal, Guardian argues that Crozier’s back pay award should be based on a shorter period of time because she removed herself from the labor market (1) when she left her typesetting job due to dissatisfaction; (2) when she went to New Jersey; and (3) when she enrolled in a full-time course of study. We consider each argument of the EEOC separately. We address Guardian’s cross-appeal under our discussion of Crozier’s back pay award. I. Back Pay Award In awarding damages under Title VII, the district court must attempt to place the injured party in the position he or she would have enjoyed absent discrimination. Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975); Walters v. City of Atlanta, 803 F.2d 1135, 1145 (11th Cir.1986). However, a person is required to mitigate damages by being reasonably diligent in seeking employment substantially equivalent to the position she was denied. Smith v. American Service Co. of Atlanta, Inc., 796 F.2d 1430, 1431 (11th Cir.1986). We review a back pay award under the abuse of discretion standard. Cox v. American Cast Iron Pipe Co., 784 F.2d 1546, 1562 (11th Cir.), cert. denied, — U.S. -, 107 S.Ct. 274, 93 L.Ed.2d 250 (1986). However, the district court’s discretion must be “guided by sound legal principles.” Albemarle, 422 U.S. at 416, 95 S.Ct. at 2371. Congress vested “ ‘discretionary’ powers in the courts ... not to limit appellate review of trial courts, or to invite inconsistency and caprice, but rather to make possible the 'fashionpng] [of] the most complete relief possible.’” Id. 422 U.S. at 421, 95 S.Ct. at 2373. A. Period of Back Pay [1] The district court adopted the magistrate’s determination that the period of back pay for Crozier should be 26V2 months. The trigger date is obviously on or about October 18, 1974, when Crozier would have become employed by Guardian, absent discrimination. Although the magistrate did not specify why he chose the cutoff date of December 31,1983, this date coincides with Crozier’s graduation from the Fine Arts Program at Broward Community College. It is reasonable to infer that upon graduation, Crozier would have left her job as a pool service attendant and obtained a position in her chosen profession. Thus, the district court did not abuse its discretion in basing the back pay award on a time period of 26V2 months. We reject Guardian’s argument that the period should be reduced because Crozier left her next position after a short period of time. Title VII requires reasonable diligence in locating employment and mitigating damages; it does not require that a person remain employed despite dissatisfaction. We also decline to reduce the period by the number of weeks Crozier spent in New Jersey. The magistrate credited her testimony that had she obtained the position she sought at Guardian, she would not have gone to New Jersey. Finally, we reject Guardian’s contention that full-time enrollment at Broward removed Crozier from the labor market. Although certain full-time study programs might preclude full-time employment, see, e.g., Miller v. Marsh, 766 F.2d 490, 492 (11th Cir.1985), this one did not. Although she was a full-time student, Crozier worked 30-35 hours per week in a grocery store. Exh. 4S at 10, 14. Like the plaintiff in Smith, 796 F.2d at 1432, who tried to secure employment prior to beginning school and worked part-time while she attended school full-time, Crozier is entitled to back pay during the time she was enrolled at Broward. We conclude that the 26V2-month period is appropriate, and affirm this part of the district court’s decision. B. Calculation of Back Pay Although the district court requested the magistrate to clarify how he arrived at the figure of $6,100, he failed to do so. Nevertheless, the district court adopted the magistrate’s recommendation with respect to the back pay award. It is clear that this amount does not make Crozier “whole” within the intent of Title VII. Were the basis for calculating a reasonable award less clear, we might be inclined to remand this case to the district court for more explicit findings. However, the magistrate and the district court have each had two occasions to calculate the amount. At this juncture, we are obliged to exercise our discretion to fashion the most complete relief possible. Albemarle, 422 U.S. at 421, 95 S.Ct. at 2373. The evidence shows that a pool service attendant earned an average of $200 per week during 1974 and 1975, and $210 per week during 1976., Exh. 7S at 49-53; Plaintiff’s Exh. 20. Based on these figures, Guardian would have paid Crozier $23,320. However, during the interim, Crozier earned $4,740. The difference be tween these figures is $18,580. Thus, Crazier is entitled to a back pay award of $18,580. II. Interest Rate In Smith, 796 F.2d at 1432-33, this court reserved ruling on whether the decision to award prejudgment interest in a Title VII back pay case lies within the discretion of the district court. In this case, the district court adopted the magistrate’s recommendation to award prejudgment and post-judgment interest. Thus, we need only consider whether the district court followed the law in determining the proper interest rates. We review, as a matter of law, the district court’s determination that a six percent rate of prejudgment interest governs Crozier’s back pay award. First, we assess the district court’s conclusion that judgment in this case was entered on April 22, 1981. Although the district court indeed entered an order for partial final judgment on that date, Crazier did not receive a certain sum damage award until the district court entered final judgment on June 9, 1986. See Record, Vol. 4, Tab 284. Second, we consider which interest rate should govern an award of prejudgment interest in a Title VII case. As this court has done on other occasions, we turn to the National Labor Relations Act (NLRA) for guidance. See, e.g., Smith, 796 F.2d at 1432; Brown v. A.J. Gerrard Manufacturing Co., 715 F.2d 1549 (11th Cir.1983) (en banc) (per curiam). Brown determined that Congress intended to model Title VII remedies on those afforded by the NLRA. Smith, 796 F.2d at 1432. We note that there has been a consistent practice under the NLRA to award interest on back pay awards. See, e.g., Winn-Dixie Stores, Inc. v. NLRB, 413 F.2d 1008, 1010 (5th Cir.1969). In 1977, the National Labor Relations Board (NLRB) adopted the IRS prime rates and rejected the traditional flat six percent interest rate. Florida Steel Corp., 231 NLRB No. 117, 96 L.R.R.M. 1070, enforcement denied on other grounds, sub nom. NLRB v. Florida Steel Corp., 586 F.2d 436, 451 (5th Cir.1978). The NLRB adopted the prime rate because the flat percentage rate did not reflect economic reality. Id. Other district courts within this circuit have been persuaded by the NLRB’s policy changes and have used the IRS prime rates to calculate the amount of prejudgment interest on back pay awards in Title VII cases. See, e.g., Walters v. City of Atlanta, 610 F.Supp. 715 (N.D.Ga.1985), aff'd in part, rev’d in part, 803 F.2d 1135 (11th Cir.1986); Davis v. Construction Materials, A Division of Ancar Enterprises, Inc., 558 F.Supp. 697, 699 (N.D.Ala.1983). We find this approach to be the correct one. In the interest of uniformity, we vacate the district court’s decision with respect to the rate of prejudgment interest. We direct the district court to calculate an award of interest based on the IRS prime rates that prevailed between 1977 and 1986. Third, we address which post-judgment interest rate should apply to the back pay award. The district court’s decision to use six percent is erroneous because the district court relied upon the unamended version of § 1961, which provided that the interest rate be determined by state law. Section 1961 was amended, effective October 1, 1982, to provide that the post-judgment interest rate be determined by the IRS prime rates, compounded annually. Thus, the correct rate of post-judgment interest on a judgment entered June 9, 1986 depends upon the IRS prime rates. We vacate the district court’s decision to use six percent and direct it to calculate a more appropriate rate of post-judgment interest. III. Back Pay Award As Contempt Sanction Section 706(i), 42 U.S.C. § 2000e-5(i), authorizes the EEOC to commence proceedings to compel compliance with court orders. As one contempt sanction for Guardian’s noncompliance, the EEOC sought compensatory relief for the female applicants who would have been hired by Guardian if it had obeyed the district court’s order of April 22, 1981. The EEOC contends that 26 out of 159 women who applied for the pool service attendant position between April 22, 1981 and December 31,1982 would have been hired had Guardian complied with the order. Based on the salaries of the men hired instead, the EEOC’s expert estimated that the 26 women would have earned $93,695, including prejudgment interest. The EEOC requested that this amount be put into a fund for pro rata distribution to the 159 female applicants. Contempt hearings were conducted by the magistrate during September and October of 1983. Exh. 5S, 6S, and 7S. The magistrate recommended that Guardian be found in contempt for, inter alia, failing to have female pool service attendants in the number and ratio required by prior court order. Record, Vol. 2, Tab 113. The parties discussed sanctions before the magistrate, apparently on November 15, 1983. See Record, Vol. 2, Tab 114. By report filed November 23, 1983, the magistrate recommended that Guardian pay the EEOC a compensatory payment of $1,200 for costs, and that the agreed order on sanctions (Exhibit A) be modified as proposed in Exhibit B. The magistrate deferred consideration of “money-damages owed to third persons” until another hearing. Record, Vol. 2, Tab 114 ¶¶ 4 & 5. By order filed December 29, 1983, the district court entered a contempt judgment against Guardian for the period from April, 1981 until October, 1983 on the basis of the magistrate’s report and recommendation. Record, Vol. 3, Tab 120. The district court ordered Guardian to (1) pay the EEOC the recommended $1,200; (2) file weekly reports of all pool service attendants employed during the previous week; (3) pay a $250 fine for each week not in compliance with required 2:1 ratio; (4) pay a $500 fine for each report not filed; (5) file with the court a document indicating the accurate ratio of men to women employed from April, 1981 until October, 1983; (6) pay a $100 fine for each day such report is late; (7) submit to the EEOC written hiring and interviewing procedures for approval; (8) notify the EEOC regarding the name and sex of each person hired; (9) submit all applications, including notes reflecting a decision to hire a male; (10) for each male hired, submit reasons for not hiring any females; (11) inform each male hired or transferred into the pool service position that his job status is temporary for 30 days; and (12) submit complete and accurate payroll records on a weekly basis. With the agreement of the court, the parties deferred consideration of awarding back pay as a sanction until the hearing on Crozier’s back pay award. See Exh. 6S at 2 (hearing before the magistrate; date unavailable); Record, Vol. 2, Tab 113 Mi 4 and 5 (Magistrate’s Report and Recommendation filed November 23, 1983); Exh. 7S at 2-20 (hearing before the magistrate; date unavailable). After the hearings, the magistrate declined to recommend an award because he believed that the rights of the female applicants had not yet been adequately litigated. Record, Vol. 3, Tab 140. The magistrate did state that the contempt citation against Guardian for failure to hire female pool service attendants in the required number and ratio created a rebut-table presumption that those women should have been hired. The district court declined to order an award of back pay to the class because no member had actually established discrimination. Record, Vol. 4, Tab 269. The district court cited one case, Ferguson v. Veteran’s Admin., 723 F.2d 871 (11th Cir.), cert. denied, 469 U.S. 1072, 105 S.Ct. 563, 83 L.Ed.2d 504 (1984), for the proposition that absent a showing of discrimination, there is no cause of action under Title VII for an employer’s failure to meet a court imposed quota. However, this interpretation of Ferguson does not apply to the instant case. Ferguson involved a plaintiff who sought relief under Title VII because her employer allegedly failed to follow its own affirmative action plan by not training and promoting her to a librarian position. Ferguson did not involve contempt of a court order. Thus, Ferguson does not control this case, which involves imposition of a contempt sanction for disobeying a court order based on a finding of discrimination and issued under, and in compliance with, Title VII. The EEOC argues that compensatory relief does not depend upon a finding of discrimination, but instead flows properly from a contempt judgment, relying primarily upon Local 28 of Sheet Metal Workers’ International Assoc, v. EEOC, — U.S. -, 106 S.Ct. 3019, 92 L.Ed.2d 344 (1986) and Title VII policy. The EEOC does not dispute that a compensatory award still depends upon “actual loss.” Guardian responds that the district court exercised its sound discretion in refusing to award back pay to the class as part of the contempt proceeding. Guardian claims that violation of an affirmative action quota, absent a finding of actual discrimination, is insufficient to establish liability or relief under Title VII. Guardian also seeks support for its position in Local 28. In a footnote, the Supreme Court stated that the district court properly limited make whole relief, including back pay, to the actual victims of discrimination. 106 S.Ct. at 3049 n. 44. However, Guardian ignores that the district court awarded back pay in the initial proceeding, and not as a contempt sanction. Id. at 3027 n. 7. Guardian also contends that the availability of contempt damages to a third-party class is foreclosed by Northside Realty Associates v. United States, 605 F.2d 1348 (5th Cir.1979). In Northside, the former Fifth Circuit declined to award compensatory damages to nonparty victims in a civil contempt proceeding. However, the female applicants not hired by Guardian between 1981 and 1983 are members of the class on whose behalf the EEOC proceeded during the initial stages of this case. See Record, Vol. 1, Tab 27 (Amended Complaint If 7(b)). Thus, the Northside court’s hesitation to explore issues incident to the underlying proceeding does not extend to the instant case because the women are not nonparty victims. We review the district court’s order denying the availability of back pay as a contempt remedy as a matter of law, and not for an abuse of discretion. We find that a variety of contempt sanctions may be imposed, including an award of back pay, but believe it appropriate to permit the district court to decide what, if any, sanction is justified for Guardian’s failure to achieve the mandated quota and ratio. Our reasons follow.
10510320-5283	MERRITT, Chief Judge. Defendant Ellen Buckner appeals her sentence imposed under the United States Sentencing Guidelines (1991), following her guilty plea to a charge of bank fraud under 18 U.S.C. § 1344. The Sentencing Guidelines require a determination of the amount of loss to the victims before a sentence may be imposed. The district court made no such finding, and we therefore vacate the sentence and remand the case for resentencing. I. Buckner discovered that by using the names and social security numbers of various family members and of customers at her place of employment, she could obtain loans otherwise unavailable to her. She ultimately collected over $202,000 for the purpose, among others, of putting her five children through college. She made regular payments on each of the obligations, and was apprehended only after one of the people whose name she had appropriated tried to refinance a mortgage on her home and discovered a series of unauthorized loans in her name. When confronted by investigators, Buckner agreed to cooperate, but continued to conduct fraudulent activities during April and May. She pled guilty to bank fraud in violation of 18 U.S.C. § 1344 in June, and was sentenced October 16, 1992 to 24 months’ imprisonment and five years’ probation, based on a Sentencing Guideline offense level score of 12 and a criminal history score of II. II. At issue here is the meaning of the word “loss” in U.S.S.G. § 2Fl.l(b)(l), which adds to the base offense level for Fraud and Deceit of 6 in the following manner: “(1) If the loss exceeded $2000, increase the offense level as follows ... (I) More than $200,000— add 8.” Defendant contends that “loss” should be interpreted as actual loss, not gross receipts. When counsel for defendant tried to address this at the sentencing hearing, the district court stated: “The question of amount really doesn’t interest me, the amount repaid. And I would advise you that that is not a controverted matter that will be taken into consideration in the matter of sentencing.” J.A. at 47-48. The district court accepted the presentence report’s eight-point offense level enhancement corresponding to a loss of more than $200,000. Defendant objected to the presentenee report, claiming that she had repaid approximately $127,000 on the loans, which amount should be subtracted from the losses of the financial institutions. The Probation Officer’s Response stated that “each [bank] representative was advised by the Probation Officer to report only the actual dollar loss ... excluding interest, penalties or other administrative charges_ [T]he representatives of the financial institutions submitted a total loss of $172,621.31.” United States v. Chichy, 1 F.3d 1501 (6th Cir., 1993), raises the same question we now have before us. There a panel of this court construed Application Note 7 of U.S.S.G. § 2F1.1, as amended November 1, 1991. That note provides in relevant part: (b) Fraudulent Loan Application and Contract Procurement Cases In fraudulent loan application cases and contract procurement cases where the defendant’s capabilities are fraudulently rep resented, the loss is the actual loss to the victim (or if the loss has not yet come about, the expected loss). For example, if a defendant fraudulently obtains a loan by misrepresenting the value of his assets, the loss is the amount of the loan not repaid at the time the offense is discovered, reduced by the amount the lending institution has recovered, or can expect to recover, from any assets pledged to secure the loan. The court in Chichy was reviewing the sentences of two defendants convicted of defrauding the Federal Housing Administration through the use of false income and employment documentation. The court held that “[defendants’] base offense levels should have been increased based on the actual or expected loss to HUD-FHA ($70,000-$120,000), and should not have been increased based on the total mortgage proceeds of all the loans.... ” Chichy, 1 F.3d at 1508. We conclude that “defendant’s capabilities” as used in the Application Note means ability to pay. A financial institution’s determination of this ability to pay is based on the identity of the borrower as well as on the stated value of any collateral. Application Note 7 is thus applicable to this case, and the example it cites is instructive: the victim’s “loss” means actual loss, “the amount of the loan not repaid at the time the offense is discovered.” Since the district court explicitly refused to consider the amount of any repayment made by defendant prior to the discovery of the fraud, the required finding of actual loss was not made, and a remand is necessary. See also United States v. Khan, 969 F.2d 218, 220 (6th Cir.1992) (“offense level may not be increased on the basis of an estimated fraud loss when no actual loss is possible”). Defendant also contends that the sentence violated the ex post facto Clause of the Constitution because some of her fraudulent loans were obtained prior to November 1, 1989, when the Fraud provisions were amended (prior to that, the offense level was increased only 7 points for a loss of $200,000 to $500,000). Since our decision to remand the case for resentencing does not settle this issue, we address it now.
7637003-8989	PER CURIAM: Appellants Connie S. Lewis, Patsy E. Lewis, and Marion Francis Richey pled guilty to charges arising from a long-standing food stamp fraud scheme. The Lewises’ two sons, Jason and Carson, also pled guilty; they do not appeal. Following a sentencing hearing, the district court sentenced the five defendants to make restitution to the Department of Agriculture, among other penalties. Connie Lewis and his wife, Patsy Lewis, were each required to make restitution in the amount of $4,005,399, jointly and severally hable with the other co-defendants. Richey was ordered to make restitution in the amount of $414,947, jointly and severally liable with the other co-defendants. Connie Lewis, Patsy Lewis and Richey appeal the district court’s determination of the amount of restitution, alleging various errors. Having reviewed the briefs and the record, we conclude that the district court did not err, and we therefore affirm. I The Lewis family conducted its illegal operations at two family-run meat markets, Lewis Meat Market in Alexandria, Louisiana, and Lewis Meat and Slaughter in Pollock, Louisiana. The Alexandria store began accepting food stamps in 1988; the Pollock store accepted stamps beginning in 1992. In the spring of 1995, Richey, Connie Lewis’ cousin, became involved with the Alexandria store with the intent of taking over the business when Lewis “retired.” In June 1995, Richey applied for authorization to accept food stamps in the name of CENLA Meats. The application was denied, but Richey continued to work at the Alexandria store and to participate in the food stamp fraud conspiracy- The scheme was simple. Rather than supplying food to food stamp recipients, the Lewises would illegally purchase food stamp coupons in exchange for cash at a substantial discount to the face value of the coupons. The defendants would then redeem the coupons for their full face value, falsely certifying that they properly accepted the coupons in exchange for equivalent amounts of eligible food items. During the relevant period, the two stores redeemed a total of $4,216,209 in food stamp coupons. Of this total, $436,786 was redeemed between June 1995 and October 1995, the period during which Richey was an active participant in the conspiracy. The coupons redeemed during this period were redeemed by the Pollock store, because the Alexandria store was no longer authorized to accept food stamps. The evidence indicated that the defendants had purchased many of these coupons in Alexandria, and then illegally transferred them to the Pollock store. In order to calculate the amount of restitution required by the Victim and Witness Protection Act (the ‘VWPA”), 18 U.S.C. §§ 3663 and 3664, the district court deducted five percent from the full face value of coupons redeemed during the period over which each defendant participated in the conspiracy. The five percent represented the most generous estimate suggested of the portion of redemptions that represented legitimate exchanges for food. II The Lewises argue that the district court should have calculated the required restitution from the face value less the amount they actually paid in cash to food stamp recipients. The Lewises insist that the VWPA “requires that [they] be given credit for the value of the part of the property that was returned to the owner at the time of the illegal transaction.” Connie S. Lewis Br. at 9-10. The Lewises cite various cases in which defendants’ restitution was reduced by the amount of property or value that was returned to the victim of the crime. The Lewises paid , approximately 78% of the coupons’ face value in cash to food stamp recipients. On this basis, they argue that more than $3 million was “returned.” The Lewises cite 18 U.S.C. § 3663(b)(1), arguing that this limits the amount of restitution the court may permissibly order to approximately $800,000. Under 18 U.S.C. § 3663(b)(1)(A), the court may order the defendant to “return the property to the owner or someone designated by the owner.” If the property cannot feasibly be returned, the defendant shall make restitution in an amount equivalent to the value of the property, “less the value (as of the date the property is returned) of any part of the property that is returned.” 18 U.S.C. § S663(b)(l)(B)(ii). This provision does not help .the Lewises, because they mistake the nature of the “property” at issue. The VWPA permits the court to order a defendant to make restitution to “any victim.” The Lewises illegally obtained “property” in two steps of their criminal scheme: they illegally obtained food stamps coupons from indigent individuals, and they illegally obtained cash redemptions from the United States Department of Agriculture. Whether criminally complieit food stamp recipients could be considered “victim owners” for restitution under the VWPA is unclear, but they are not the victim to whom the district court ordered restitution. The victim here is the Department of Agriculture, and the illegal cash payments that the Lew-ises made to food stamp recipients do not constitute a “return” of the cash redemption they fraudulently obtained from the Department. The amount of “profit” the Lewises made from their illegal scheme is irrelevant to the amount of restitution that is owed. The Lewises illegally obtained in excess of $4 million from the Department of Agriculture, and the Department has suffered a real loss in that amount. The purpose of the food stamp program is to provide nutritional food, not cash, to needy families. The defendants have thwarted that purpose'. While the defendants’ expenses in conducting their illegal operation undoubtedly reduced the profit they gained, those expenses did not alleviate the loss to the Department of Agriculture. The Lewises’ argument is without merit, and we conclude that the district court properly ordered restitution in the full face amount of the coupons illegally redeemed. Ill Marion Richey argues that the district court improperly “extrapolated” information for the Alexandria store between 1988 and August 1993 to determine the amount illegally redeemed during the months in 1995 when he was . a member of the conspiracy, Richey further argues that the 5% credit for legitimate sales was too small because the evidence “would indicate that more than five percent of the food stamp transactions would be for legitimate sales of meat.” Richey Br. at 7-8. Under 18 U.S.C. § 3664(d), the government bears the burden of proving the amount of restitution owed by a preponderance of the evidence, and the district court is to resolve disputes as to the proper amount of restitution. Without deciding that such an “extrapolation” would be improper in the absence of more definite evidence, we observe that Richey mistakes the method of calculation employed by the district court. At the sentencing hearing, Special Agent Gerald Burkhalter testified concerning the facts revealed by the Department of Agriculture’s investigation of the illegal scheme. Burkhalter testified to the dollar amount of food stamp coupons that the Lewis family redeemed in each month of the conspiracy. Burkhalter stated that between June 1995 and October 1995 the Lewis operation, through the Pollock store, redeemed a total of $436,786. Rec. 4, 24-25. No extrapolation of data from earlier periods was performed. As an active and knowing member of the conspiracy, Richey is responsible for this, entire amount,- without regard to whether the stamps in question were illegally purchased at the Pollock store or at the Alexandria store where he worked. Richey’s second challenge to the $415,947 restitution award is an assertion that the government failed to prove that only five percent of the sales were legitimate. This argument is without merit. The government’s financial analysis indicated that between two and three percent of food stamp coupon redemptions represented legitimate sales. Jason Lewis agreed that this figure was correct to the best of his knowledge. Carson Lewis testified that he believed the figure was three to four percent. Rec. 4, 32. The presentence report accepted a figure of 2.5 percent, and then generously doubled it to five percent to account for possible error. The district court adopted this figure. The court was required to resolve the factual dispute by a preponderance of the evidence. The defendants presented no evidence that a figure higher than five percent was appropriate. When asked whether two to five percent would be a fair accounting” Richey himself did not deny that it was, but simply suggested that they were trying to “braid up” the meat business with more sales. Rec. 4, 44. Neither Richey nor any other defendant offered evidence that more than five percent of the food stamp redemptions, represented legitimate sales. The district court did not clearly err in determining that the government had shown by a preponderance of the evidence that five percent was the appropriate figure.
5728732-14864	MEMORANDUM AND ORDER HUYETT, District Judge. Plaintiff Arthur Wells filed this complaint charging General Electric (GE) with practicing racial discrimination in its employment practices with respect to black management level employees in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. In plaintiff’s motion for class designation, he proposes that he represent a class consisting of: (1) all blacks without technical degrees who have been employed by GE since February 10, 1975 in exempt positions; and (2) all blacks who would have been employed in such positions during the same period but for GE’s racially discriminatory employment practices. For the reasons that follow we will deny the motion. Following four years in the armed services, Wells, a black male, attended college and eventually secured a Masters Degree from Case Western Reserve University. In March, 1966, after teaching in the Cleveland, Ohio public schools and serving in various capacities at the Human Engineering Institute in Cleveland, Wells was hired by the Lamp Division of GE in Euclid, Ohio as an Employee Relations Specialist. The next year plaintiff moved to the Lamp Division facility in Cleveland, Ohio to take advantage of a promotion to Human Relations Specialist. In July, 1970, Wells was promoted again and relocated to Columbia, Maryland in GE’s Relations and Utilities Operation, Kitchen Appliance Division. Finally, in May, 1972, plaintiff moved to the Switchgear and Distribution Transformer Division at the GE plant in Philadelphia, Pennsylvania (Philadelphia Works). Plaintiff alleges that his agreement to move from the Maryland facility was conditioned upon the promise of management at the Philadelphia Works to promote him to the position of Union Relations Negotiator or Manager of Personnel Practices within a year of his transfer. From May, 1972 until the filing of this suit, plaintiff was employed at the Philadelphia Works in the position of Manager, Equal Opportunity/Minority Relations, Systems and Training. In February, 1974 and March, 1975, plaintiff requested to be moved to another position in the Philadelphia Works. On both occasions, plaintiff’s supervisors at the Philadelphia Works refused the requests and filled the positions that plaintiff sought with other people. In August, 1975, plaintiff filed charges with the EEOC naming the Philadelphia Works as respondent and listing GE Corporate Headquarters in Fairfield, Connecticut under the category of “others who have discriminated against you.” Plaintiff charged that women and minorities were discriminated against in the hiring, training and promotion for positions in the exempt category. Subsequently, plaintiff was issued a right to sue letter dated April 26, 1976 and this suit was commenced in accordance with the Title VII time limitations on June 24, 1976. Defendant GE is an international company engaged in manufacturing and marketing over 200,000 products with total annual sales exceeding 13 billion dollars. GE is organized into nine operating groups each of which is broken down into a number of divisions. The eight domestic groups encompass more than 2,500 plants, locations and offices in 600 towns and cities. The Switchgear and Distribution Transformer Division is one of the seven divisions making up the Industrial and Power Group. The Switchgear and Distribution Transformer Division maintains 4 plants in Puerto Rico as well as single plants in Burlington, Iowa; Hickory, North Carolina; Shreveport, Louisiana; Pittsfield, Massachusetts; and Philadelphia, Pennsylvania. The Philadelphia location is the Philadelphia Works at which plaintiff was employed at the time this suit was initiated. Defendant employs approximately 3,700 persons at the Philadelphia Works. In addition to the 300,000 persons GE employs in its domestic operations, defendant also has 75,000 employees in its facilities outside the United States. Defendant has 77,000 exempt employees, but it is difficult to estimate exactly what portion of this group does not possess technical degrees. Local managers at the 600 GE plants, facilities and locations retain the responsibility for making decisions with respect to the employment of exempt personnel at their respective facilities. Local managers fill more than 95% of their exempt positions without any approval from corporate headquarters. While individual managers may seek information about qualified candidates from other GE divisions and facilities, the decisions about promotion, hiring, and the like, rest in the local manager’s discretion. Salary for most exempt employees is also a decision vested in the local managers. The Board of Directors of GE does establish a general exempt employee compensation plan providing 28 levels of compensation with a range of salaries fixed for each level. The local managers are entrusted with the responsibility of implementing this system for 95% of defendant’s exempt positions. Specifically, for all exempt positions below level 19, local managers have the responsibility for assigning a compensation level to each exempt position at their facility and for deciding the specific salary which should be paid each year to each exempt employee. It is against this factual backdrop that we must consider plaintiff’s motion for class certification. It is well settled that a plaintiff has the burden of proving that the requisites of Fed.R.Civ.P. 23 have been met. See Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239, 246 (3d Cir.), cert, denied, 421 U.S. 1011, 95 S.Ct. 2415, 44 L.Ed.2d 679 (1975); Davis v. Romney, 490 F.2d 1360, 1366 (3d Cir. 1974). Further, as recently noted by the Court of Appeals for the Sixth Circuit: Despite the fact that Title VII actions are often described as “inherently class suits” and that the requirements of Rule 23 “must be read liberally in the context of suits brought under Title VII and Section 1981,” the plaintiff in such an action, in order to establish the right to proceed as class representative, “must [like any other plaintiff] establish that the action meets the requirements of Rule 23(a);” employee discrimination suits do not represent exemptions from the terms of such Rule. Nance v. Union Carbide Corp., 540 F.2d 718, 722-23 (6th Cir. 1976), cert, denied, 431 U.S. 953, 97 S.Ct. 2672, 53 L.Ed.2d 269 (1977), (footnotes omitted), quoting Rodriguez v. East Motor Freight, 505 F.2d 40, 50 (5th Cir. 1974), vacated and remanded, 431 U.S. 395, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977); see, e. g., Doninger v. Pacific Northwest Bell, Inc., 564 F.2d 1304, 1312 (9th Cir. 1977). The four requirements listed in Rule 23(a) are: (1) numerosity; (2) common questions of fact and law; (3) typicality; and (4) adequacy of representation. Since the injunctive relief sought by plaintiff falls within Rule 23(b)(2), plaintiff must also show that defendant “acted or refused to act on grounds generally applicable to the class.” Plaintiff contends that, notwithstanding the scope and diversity of defendant’s operations, his allegations of discrimination against the exempt employees who do not possess technical degrees fulfill the Rule 23 requirements. While conceding that actual individual employment decisions regarding exempt employees are not made by Corporate Headquarters, the plaintiff asserts that Corporate Headquarters has formulated a centralized policy which guides the careers of its exempt employees without technical degrees. This policy is manifested in guidelines and directives flowing from Corporate Headquarters. It is this centralized policy and the individual policies themselves which plaintiff contends support class certification. In support of these contentions and in addition to the more than 20 claims contained in his complaint challenging all conditions of employment, plaintiff cites a number of different policies which defendant allegedly applies on a centralized basis including: (1) promoting from within GE; (2) requiring persons to move to take advantage of promotions; (3) establishing minimum qualifications for exempt jobs, which are not applied uniformly in the exempt category by plant managers; (4) establishing intra-company courses which must be taken for promotional opportunities; (5) maintaining centralized computer files on all exempt employees; (6) monitoring careers of black employees; and (7) setting a general salary structure. Our evaluation of plaintiff’s contentions is guided by Chief Judge Lord’s recent analysis of Rule 23 in Hannigan v. Aydin Corp., 76 F.R.D. 502 (E.D.Pa.1977). In addressing the typicality requirement of Rule 23, Judge Lord emphasized the need for a nexus between plaintiff’s claims and those of the persons he seeks to represent. Id. at 508; see Bachman v. Collier, 73 F.R.D. 300, 305 (D.C.D.C.1976). In applying this requirement to a motion for certification of a company-wide class, he noted: Those cases which have permitted a nation-wide or geographically diverse class have involved: (1) employees who perform similar functions, Wetzel v. Liberty Mutual Insurance Co., [508 F.2d 239] supra ; (2) employees working under a master or single contract, Alaniz v. California Processors, Inc., 73 F.R.D. 269 (N.D.Cal. 1976); Sagus v. Yellow Freight System, Inc., 58 F.R.D. 54 (N.D.Ga.1972); (3) employees who have suffered the same disability, Gilbert v. General Electric Co., 59 F.R.D. 267 (E.D.Va.1973). 76 F.R.D. at 510. The claims of plaintiff do not fall within any of these categories. First, it is clear that the exempt employees without technical degrees are not working under a master contract. Indeed, the affidavits of Donald L. Sorenson, Manager of Relations Operation of the Switchgear and Transformer Division, and David J. Dillon, Staff Member of Corporate Employee Relations Operations, suggest that a number of different collective bargaining agreements govern the working conditions of some exempt employees. Further, plaintiff has not cited any contractual policy which is applied uniformly to class members. Second, plaintiff cannot argue that all the members of the proposed class perform similar functions. The class that plaintiff seeks to represent bears no resemblance to the company-wide class in Wetzel v. Liberty Mutual Insurance Co., supra. In Wetzel, the plaintiffs represented a class of all female technical employees in Liberty Mutual’s claims department. Within the claims department, only two types of jobs were available: (1) claims representative and (2) claims adjuster. On the other hand, the class sought by Wells is composed of all exempt employees who do not possess technical degrees. This class includes persons serving in the following capacities: mail room supervisors, plant safety specialists, supervisors, foremen, financial planners, purchasing agents, lawyers, plant managers, pilots and radio and television announcers. The differences within the class are illustrated not only by the variety of occupations included within the class, but also by the fact that defendant has established 28 levels of exempt employees. The diversity within the exempt group of employees bears upon several of the Rule 23 requirements. Courts have been reluctant to certify classes composed of employees who do not stand in a similar status to their employer. See Gibson v. Local 40, Supercargoes & Checkers of Internad Longshoremen’s & Warehousemen’s Union, 543 F.2d 1259 (9th Cir. 1976) (“casual” clerks not permitted to represent permanent clerks); Peterson v. Albert M. Bender Co., Inc., 75 F.R.D. 661 (N.D.Cal.1977) (underwriter not permitted to represent secretaries, clerks and other clerical personnel); Harriss v. Pan American World Airways, Inc., 74 F.R.D. 24, 55 (N.D. Cal.1977) (“workforce compromises numerous different occupations, including, among others, office and clerical workers, sales persons, technicians, professional painters and other craftsmen and operators, truck drivers, warehouse employees, and supervisors and managers”). Such a variety of occupations can present commonality and typicality problems since it is not clear that the policies highlighted by plaintiff apply with equal force to each segment of the class. For example, the intra-company educational programs may impact very heavily upon the plaintiff who is a career manager but have no effect whatsoever on a company lawyer. Furthermore, such a broad class raises adequacy of representation problems. This factor is particularly important in light of the res judicata impact of class action litigation. See Gibson v. Local 40, Supercargoes & Checkers, supra at 1265; Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122, 1126 (Godbold, J., concurring); Droughn v. FMC Corp., 74 F.R.D. 639, 643 (E.D.Pa.1977). The mere scope of the undertaking in representing such a diverse class has given some courts pause; as noted by the court in Harriss v. Pan American World Airways, supra: [A] claim by a small local group of plaintiffs to represent all racial minority employees of a large nation-wide firm should raise a serious doubt in the court’s mind, regardless of whether all of the other requirements of the rule are met, as to their ability adequately to present a case on behalf of such a large and diverse class. 74 F.R.D. at 43. Also, the likelihood that the particular practices cited by plaintiff could impact differently on varying segments of the class presents a serious problem at trial. The Harriss court recognized the danger resulting from this problem: [Bjecause of the crucial importance of statistics in Title VII cases, the dimensions of the class may well affect the merits of the case. An employee of a large employer may be able to make an effective statistical case based upon one operational unit but may find the statistics to be hopelessly diluted when applied to a larger segment of the work force. A claim possibly valid as to a limited class may be lost in an attempt to prosecute it on behalf of a broad class. Id. at 44. Cf. Hauck v. Xerox Corp., 78 F.R.D. 375 at 379 (E.D.Pa., 1978). In sum, the variety of occupations and salary levels within the exempt class illustrates that the class members proposed by plaintiff do not all perform similar functions for GE. Simply because the class may be identified by a label such as exempt employees without technical degrees does not mean that all the class members bear the same employment relationship to defendant. The failure of the class to perform similar functions not only highlights the typicality problem identified by Judge Lord, but also illustrates the commonality and representation difficulties present in this case. These problems are not present where the class is affected by a central policy uniformly applicable to all class members. See Hauck v. Xerox Corp., supra at 378; Droughn v. FMC Corp., supra, 74 F.R.D. at 642.
29350-4559	PER CURIAM: This is a collection action by the appellant, United States of America (the “government”), to recover from the appel-lee, S.S. (Joe) Burford, Inc. (“Burford”), a West Virginia mining corporation, delinquent reclamation fees and prejudgment interest on those fees pursuant to section 402 of the Surface Mining Control and Reclamation Act of 1977 (the “Act”), 30 U.S.C. § 1201 et seq. The district court granted summary judgment in favor of the government for reclamation fees but refused to award the prejudgment interest imposed by the applicable regulation. The government appeals, arguing that the refusal to award prejudgment interest constitutes reversible error under the facts of this case. We agree and remand to the district court. I. The Surface Mining Control and Reclamation Act, 30 U.S.C. § 1201 et seq., was enacted by the 95th Congress and signed into law on August 3, 1977. The purpose of the Act is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Id. at § 1202(a). In furtherance of this objective, the Act establishes an Abandoned Mine Reclamation Fund administered by the Secretary of the Interior and funded by reclamation fees imposed on coal mining operators. 30 U.S.C. § 1231. Monies accumulated in the fund are earmarked for several projects, including the “reclamation and restoration of land and water resources adversely affected by past coal mining ...” Id. at § 1231(c)(1). The reclamation fees are calculated on a per-ton of coal produced basis, 30 U.S.C. § 1232(a), and these fees “shall be paid no later than thirty days after the end of each calendar quarter ...” Id. at § 1232(b). The Secretary of the Interior has been given broad authority to promulgate rules and regulations required to implement and administer the provisions of the Act. 30 U.S.C. § 1242(a). One of these regulations, at issue here, is 30 C.F.R. § 870.15(d). That regulation provides: The reclamation fee payment for each calendar quarter shall be paid no later than 30 calendar days after the end of the calendar quarter. Delinquent payments are subject to interest at the rate of 1 percent per month, or any part thereof, on any amount due ... [Interest shall begin in [sic] accrue on the 31st day following the end of the calendar quarter and will run until the date of payment, or until judgment is rendered by a court of competent jurisdiction in an action to compel payment of debts. The purpose of the regulation is to provide “a financial inducement for operators to comply with the statutory requirement to make timely payments of reclamation fees.” 43 Fed.Reg. 7305 (Feb. 21, 1978). The procedure for fee collection has been amended numerous times, but the requirement of interest on late payments has always been included. This regulation, in its various forms, has never been challenged in the courts. II Burford is a West Virginia corporation which conducts surface coal mining operations in Randolph County, West Virginia. In 1982, the government filed a collection action against Burford, alleging a failure to pay the appropriate reclamation fees required by 30 U.S.C. § 1232(b). The government’s complaint requested the reclamation fees plus prejudgment interest at the rate prescribed in 30 C.F.R. § 870.15(d). At the time the suit was instituted, the accumulated interest amounted to approximately one-half the fees due. In 1984, the government moved for, and the district court granted, summary judgment on the uncontested grounds that Bur-ford was a coal operator during the specified calendar quarters, that it produced and sold coal, and that the reclamation fees due had not been paid. The district court’s judgment did not, however, award the government the prejudgment interest due pursuant to 30 C.F.R. § 870.15(d). Instead, recovery was limited to reclamation fees and “post judgment statutory interest calculated as is provided for in 28 U.S.C. § 1961 ...” The government immediately filed a motion to amend the judgment to include the prejudgment interest. Two days later, the district court denied the motion and held: 30 U.S.C. § 1232(e) provides that “Any portion of the reclamation fee not properly or promptly paid pursuant to this section shall be recoverable, with statutory interest, from coal mine operators, in any court of competent jurisdiction [sic] any action at law to compel payment of debts.” (Emphasis added by court). 28 U.S.C. § 1961 makes no provision for prejudgment interest. This appeal followed. III.
12411438-8144	SUMMARY ORDER Plaintiff-Appellant Elizabeth W. (“W”) appeals from the final judgment of the United States District Court for the Southern District of New York, entered on September 15, 2016, granting summary judgment to Defendants-Appellees Empire HealthChoice Assurance, Inc. and Bank Leumi USA Plan 16 (collectively, “Empire”), on W’s claim to medical benefits pursuant to a health benefits plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. We assume the parties’ familiarity with the facts and record of prior proceedings, which we reference only as necessary to explain our decision. A. Background W was undergoing medical treatment for anorexia nervosa as a beneficiary of an ERISA plan that is fully insured through a group insurance policy (“Policy”) issued by Empire. After unsuccessful outpatient treatment, W was admitted to Oliver Pyatt Center (“Oliver Pyatt”) for a partial hospitalization program (“PHP”) on May 5, 2014. Empire initially approved coverage under the Policy and thereafter continued to approve eight additional pre-certifica-tions submitted for continued PHP treatment. After 59 days, however, a doctor employed by Empire’s third-party utilization manager, Anthem UM, concluded that PHP treatment for W was no longer medically necessary. Empire thus ceased its coverage of W’s PHP treatment at Oliver Pyatt beginning on July 3, 2014. W appeal ed the denial of coverage through Empire’s review process, but three additional third-party doctors upheld the denial. W then brought suit in the district court against Empire for wrongful denial of benefits pursuant to ERISA, 29 U.S.C. § 1182. B. Standard of Review In this ERISA action, we review the district court’s grant of summary judgment based on the administrative record de novo. Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 82 (2d Cir. 2009). Summary judgment may be granted if “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Id. If there are no disputed material facts, “our task is to determine whether the district court correctly applied the law.” Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995) (citation omitted). We agree with the district court that Empire’s denial of benefits is properly reviewed pursuant to the deferential arbitrary and capricious standard of review. The default standard of review for a plan administrator’s underlying benefits determination is de novo. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111-12, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). But if “written [ERISA] plan documents confer upon a plan administrator the discretionary authority to determine eligibility, we will not disturb the administrator’s ultimate conclusion unless it is ‘arbitrary and capricious.’ ” Hobson, 574 F.3d at 82 (quoting Pagan, 52 F.3d at 441). The district coui’t correctly noted that “magic words such as ‘discretion’ and ‘deference’” are not necessary to confer discretionary authority. Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 251 (2d Cir. 1999) (citation omitted). The plan documents here provide Empire with broad discretionary authority by reserving to it “all ... powers necessary or appropriate” including the “power to construe this Contract, to determine all questions arising under this Contract, and to make and establish (and thereafter change) rules and regulations and procedures with respect to this Contract.” J.A. 430-31; see also Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 622-23 (2d Cir. 2008) (citing power to “adopt reasonable policies, procedures, rules, and interpretations” as language that clearly confers discretionary authority); Jordan v. Ret. Comm. of Rensselaer Polytechnic Inst., 46 F.3d 1264, 1269-71 (2d Cir. 1995) (citing “power to construe” and “to determine all questions” as language that clearly confers discretionary authority); Lidoshore v. Health Fund 917, 994 F.Supp. 229, 232-33 (S.D.N.Y. 1998) (applying arbitrary and capricious standard to identical language). W contends that “the only relevant Policy provision in this case is the definition of medical necessity.” PL-Appellant Br. 30. But this Policy provision confirms Empire’s discretionary authority by defining “medical necessity” as care that is medically necessary based on “our [Empire’s] criteria, and in our [Empire’s] judgment.” J.A. 393; see Krauss, 517 F.3d at 622 (listing ability to make benefits determinations “in our judgment” as an example of “clear language” conferring discretion). C. Empire’s Decision Based on the record here, we also agree with the district court’s determination that summary judgment was appropriate under the arbitrary and capricious standard of review. Because we agree that this standard applies, Empire’s decision to deny benefits must be upheld unless Empire acted “without reason, unsupported by substantial evidence or erroneously] as a matter of law.” Kinstler, 181 F.3d at 249 (citation omitted). The record does not support such a conclusion. Empire had full discretion under the Policy to determine if a treatment was medically necessary “according to our [Empire’s] criteria, and in our [Empire’s] judgment.” J.A. 393. Empire’s criteria for medical necessity included evaluating the “most appropriate ... level of service” for W, “consistent with the symptoms or diagnosis and treatment of [W’s] condition.” Id. Four third-party doctors evaluated W’s medical records and provided explanations that were consistent with application of Empire’s medical necessity criteria: Each doctor denied coverage because W’s “symptoms or diagnosis” improved and recommended that W should be “treated with less intensive outpatient treatment” since PHP was no longer the “most appropriate ... level of service.” J.A. 70, 75,106-07, 349, 393. Empire’s decision to deny further coverage was also supported by substantial evidence. W presented Empire’s reviewers with multiple pieces of evidence in favor of continuing PHP treatment. Although some of the evidence in favor of continued treatment conflicts with Empire’s ultimate conclusion, “if the administrator has cited ‘substantial evidence’ in support of its conclusion, the mere fact of conflicting evidence does not render the administrator’s conclusion arbitrary and capricious.” Roganti v. Metro. Life Ins. Co., 786 F.3d 201, 212 (2d Cir. 2015) (citation omitted). Empire’s third-party doctors acknowledged the conflicting evidence, but also noted significant progress made by W. (Indeed, after receiving 59 days of PHP treatment, W admits that “she made consistent progress, ... [s]he was committed to improving, and had improved while at Oliver Pyatt, ... was ‘more open’ and progressing in her treatment goals[,] ... she was attending programming, and her family was participating in her treatment.” PL-Appellant Br. 35, 37.) Each of Empire’s third-party doctors also noted W’s steady weight gain, general compliance with treatment, and adherence to her meal plan. J.A. 70, 75, 106, 348-49. After weighing the conflicting evidence, there was enough “evidence that a reasonable mind might accept as adequate to support” Empire’s decision to deny coverage for further PHP treatment. Durakovic v. Bldg. Serv. 32 BJ Pension Fund, 609 F.3d 133, 141 (2d Cir. 2010) (defining “substantial evidence” as “such evidence that a reasonable mind might accept as adequate to support the conclusion reached by the administrator and requiring] more than a scintilla but less than a preponderance” (citation omitted)). And though we might not have arrived at the same conclusion, “we are not free to substitute our own judgment for that of [Empire’s] as if we were considering the issue of eligibility anew.” Hobson, 574 F.3d at 83-84. Empire’s third-party doctors did not act arbitrarily in determining that W’s demonstrated progress after 59 days of treatment indicated that PHP was no longer medically necessary as the “most appropriate ... level of service” and that W “[could] be treated with less intensive outpatient treatment.” J.A. 70, 75, 106, 348-19, 393. D. Conflict of Interest
10539609-18089	E. GRADY JOLLY, Circuit Judge: Houston T. Penn is before this court for the second time, complaining that the district court’s imposition of sanctions against him without notice and an opportunity to be heard violates due process rights guaranteed to him by the fourteenth amendment, and that the district court abused its discretion in finding him in violation of Rule 11 and in imposing the sanctions. For the reasons discussed below, we affirm. I Penn, who is an Assistant Attorney General employed by the Louisiana Department of Justice, represented the defendants, the Louisiana Department of Public Safety and Corrections, C. Paul Phelps (former Secretary of the Department), and D.R. Guillory (former Warden of Wade Correctional Center) in a lawsuit filed by Assistant Warden Robert Henderson, an employee of the Louisiana Department of Public Safety and Corrections. After a trial on the merits, the district court en tered judgment for the defendants, Mr. Penn’s clients, and no appeal was taken. The judgment on the merits is final and the merits are not relevant to the issue presently before this court. What is relevant is what occurred before the trial of the case. On October 27, 1988, approximately one month prior to the scheduled trial, Penn filed a motion for change of venue and a motion in limine or, alternatively, motion for summary judgment asserting several grounds for relief. Shortly thereafter, the district court received a letter from plaintiffs counsel advising that he had had difficulty in contacting Penn to prepare the pretrial order. On October 28, 1988, the district court warned counsel that: This court expects all parties to work amicably toward the completion of an appropriate pretrial order which will assist the ultimate resolution of the case. The failure of any party to proceed in good faith or obey this court’s standing instructions will result in sanctions under Fed.R.Civ.P. 16(f). On November 1, 1988, Penn filed a motion for a continuance, contending that counsel for the plaintiff had failed to provide defense counsel with a copy of his witness and exhibit lists in a timely manner. The lists were ultimately received by Penn prior to the deadline for filing the pretrial order. On November 2, 1988, the magistrate denied the motion for continuance and noted several deficiencies in Penn’s proposed insert to the pretrial order. In conclusion, the magistrate stated: “Counsel are warned that any dilatory tactics will result in sanctions.” On November 2, 1988, Penn filed a “Motion to Recusal [sic] of the Trial Judge.” According to the memorandum in support of the motion, the defendants sought recu-sal pursuant to 28 U.S.C. § 455. The motion asserted two reasons for recusal: (1) “opposing counsel related that the judge presiding over this case (Judge Stagg) has known the opposing counsel since he was a kid and that the judge presiding over this case was friends [sic] of opposing counsel and opposing counsel’s father”; and that (2) the judge had already ruled adversely upon the credibility of one of the defendants in a prior matter. On November 8, 1988, the district court denied the motion for recusal and the motion for change of venue. After addressing those motions, the court stated: The motion for recusal and for change of venue have not been well founded, either in fact or law. Apparently, counsel for defendants has used these motions, as well as the motion for a continuance, for dilatory purposes. Counsel for defendants is warned that this court will scrutinize future motions for compliance with Fed.R.Civ.P. 11. Penn was undeterred. On November 17, 1988, Penn filed a motion for reconsideration of the district court’s order denying the motion for recusal, which added nothing new to his previous motion. Attached to the motion was an affidavit by Penn attesting that the contents of the motion to recuse and the motion for reconsideration were true and accurate to the best of his knowledge and belief. The district court construed the motion for reconsideration as a new motion for disqualification under 28 U.S.C. § 144. The court noted that, under § 144, actual bias must be sufficiently alleged. After observing that Penn had failed to conduct a reasonable inquiry into the lav/, and that Penn either had not read the relevant cases or, having read them, had chosen to ignore their authority, the court ruled that the affidavit filed by Penn was legally insufficient under § 144. Finally, the court stated: Concurrently with the filing of this Memorandum Ruling, the court is placing under seal another ruling which imposes sanctions upon Mr. Penn pursuant to Fed.R.Civ.P. 11. The court will release the sealed ruling when the trial is complete. The ruling is placed under seal so as not to detract from defense counsel’s effort to prepare for trial. Following the completion of the trial, the court’s memorandum ruling finding a violation of Rule 11 and imposing sanctions on Penn was unsealed. Referring specifically to the motion for change of venue, motion for summary judgment, motion for continuance, motion for recusal, and motion for reconsideration filed by Penn, and noting that its three warnings had been ignored by Penn, the court found that those filings had been made by Penn “for the dual purpose of trying to delay the proceedings and harass the opposing party. In addition, most of the recent filings have not been submitted after a reasonable inquiry into the factual basis and law.” With respect to the motion for reconsideration, the court stated: [T]he court is convinced that these motions, as well as the presently pending motion for reconsideration, were designed solely for dilatory purposes. The current motion asserting an argument under 28 U.S.C. § 144 fails to cite a single authority in support of the relief requested. Even the most minimal inquiry into the law governing motions under §§ 144 and 455 would have revealed that the asserted bias or impartiality must result from an extrajudicial source. Moreover, even a reading of the clear language of § 144 demonstrates that it applies to “parties” instead of coun-sel_ Mr. Penn’s allegations as to the basis for the alleged impartiality were not made on personal knowledge, but rather hearsay. Mr. Penn conducted no further inquiry into the factual basis. Had such an inquiry been conducted, Mr. Penn would have discovered the lack of factual merit. The true reason for the filing of these motions became apparent at the pretrial conference. It was at that time that Mr. Penn’s state of unpreparedness for trial became evident. This court is left with no other conclusion but that the recent filings of Mr. Penn, including the current motion for reconsideration, were designed solely to delay the November 28 trial date. The court concluded that Penn had violated all three of the affirmative duties placed upon him by Rule 11, and imposed sanctions of $250 upon Penn, individually. The court further ordered Penn to read and brief the facts and law of the cases cited in its rulings on Penn's time during nights and holidays or days off and to deliver a “letter-perfect brief” to the judge’s chambers by February 3, 1989. Penn appealed to this court, assigning two bases of error: (1) lack of notice and an opportunity to be heard before sanctions were imposed resulting in violation of the due process rights guaranteed to him by the Fourteenth Amendment to the United States Constitution; and (2) an abuse of discretion by the district court in finding him in violation of Rule 11 and in imposing the sanctions. Because Penn did not argue to the district court either of the issues presented for review, this court remanded the case to the district court so that the district court could consider the issues. Henderson v. Louisiana, No. 88-4959, slip op. (5th Cir.1989). On remand, Penn filed a motion to reconsider sanctions and a supporting memorandum. In the motion to reconsider, Penn asked for “a contradictory hearing” and requested that the sanctions be set aside. In his memorandum, Penn stated that the issue before the court was “the matter of the appropriateness of the imposition of sanctions on one of the counsel for the defendants for him [sic] having filed a Motion to Recuse the Trial Judge.” On November 21, 1989, the district court notified Penn that the motion to reconsider sanctions had been assigned to the court’s next regular motion date, February 14, 1990. The notice further stated that “the court’s regular practice is to rule on the basis of the written briefs only.” Penn made no response to the court’s notice. He did not request a hearing or oral argument, and he did not object to the court’s stated intention to rule on the basis of the briefs. On January 22, 1990, the district court entered a memorandum ruling denying Penn’s request to vacate the order imposing sanctions. For the reasons stated in its prior ruling, the court found that Penn’s contention that the motion for recusal was not frivolous was without merit. The court also noted that Penn had failed to address the court’s finding that he filed the motions at issue for the purpose of delaying the trial. The court concluded: In this case, the record speaks for itself. Mr. Penn tried every avenue possible to delay resolution of this matter. The poorly-written briefs were submitted without making a reasonable investigation into the facts and law. This court had no discretion to ignore such activities. Rule 11 sanctions were required. ... The sanctions imposed were carefully tailored to Mr. Penn’s situation .... In sum, this court’s decision to impose sanctions was not made lightly. Rather, sanctions were imposed only after reviewing repeated filings by Mr. Penn in violation of Rule 11. Penn again appeals the district court’s ruling. II A The due process clause is not mentioned in either the motion to reconsider or in the memorandum filed by Penn in the district court after remand from this court, but Penn did make the following statements in the memorandum: This Motion was also denied by this (District) Court without a hearing and in the same ruling this Court without prior specific notice of the charges and without giving Assistant Attorney General Penn an opportunity to respond or to defend himself found that Assistant Attorney General Penn violated Rule 11 ... and imposed sanctions against him personally.... The Rule 11 action was brought through the District Court’s own initiative and Assistant Attorney General Penn was not given notice of the specific charges and was not afforded any opportunity to respond or defend himself prior to the finding of a Rule 11 violation and imposition of sanctions. The statements quoted above are inadequate and inept attempts to raise properly a due process argument. Although it is true that this court ordinarily will not consider issues not properly before the trial court, we will do so in this case for two reasons: (1) the issue can be resolved as a matter of law; and (2) a refusal to consider the issue would not advance the interests of justice or judicial economy. Rule 11 provides that, “[i]f a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanc-tion_” (emphasis added). Penn contends that, “[a]s a minimal [sic], due process requirements [sic ] the procedure used to find a Rule 11 violation and to impose sanctions should include at least adequate and timely notice of the specific charges and opportunity to address the charges in writing or orally before a relatively neutral arbitrator, who would thereafter render written reasons for the judgment.” Penn complains that the district judge cannot be considered a “neutral arbitrator,” and that he had no opportunity to present evidence on any factual issues. According to Penn, “fundamental fairness” requires that, when a trial judge invokes Rule 11 sanctions on its own initiative, the trial judge must inform the attorney “in writing of the particular conduct which the Trial Judge suspects to be in violation of Rule 11.” In Veillon v. Exploration Services, Inc., 876 F.2d 1197 (5th Cir.1989), this court discussed due process requirements in the context of Rule 11 sanctions: Due process requires notice and an opportunity to be heard before any governmental deprivation of a property interest. “Due process requires that the attorney ... has fair notice of the possible imposition of Rule 11 sanctions and of the reasons for their imposition.” “Notice may be in the form of a personal conversation, an informal telephone call, a letter, or a timely Rule 11 motion.” Notice may also come from the court. As for the quantum of notice required, the Eleventh Circuit has stated, If an attorney is said to have submitted a complaint without any basis in fact, Rule 11 alone should constitute sufficient notice of the attorney’s responsibilities since the rule explicitly requires the attorney to certify that a complaint is well grounded in fact. On the other hand, questions of whether an attorney made a good faith argument under the law or whether an attorney interposed a pleading, motion, or other paper for an improper purpose are more ambiguous and may require more specific notice of the reasons for contemplating sanctions.... ... “The accused must be given an opportunity to respond, orally or in writing as may be appropriate, to the invocation of Rule 11 and to justify his or her actions.” 876 F.2d at 1201-02 (citations omitted) (quoting Donaldson v. Clark, 819 F.2d 1551, 1559-60 (11th Cir.1987)). In making the determination of what process is due in a Rule 11 case, “the timing and content of the notice and the nature of the hearing will depend upon an evaluation of all the circumstances and an appropriate accommodation of the competing interests involved.” Donaldson, 819 F.2d at 1558. In addition to the imputed notice Rule 11 itself imparts, the district court and the magistrate warned Penn three times that sanctions would be imposed if his dilatory tactics continued. Furthermore, when the court denied Penn’s first motion for recusal, it informed him that it considered his arguments to be without basis in fact or law. Penn was specifically given notice in the November 8, 1988 order that future motions may result in Rule 11 sanctions; yet Penn persisted in flogging the same mule. We therefore conclude that Penn had ample notice of the possible imposition of Rule 11 sanctions and of the reasons for their imposition. The district court’s memorandum ruling of November 22, 1988, which imposed the sanctions at issue, thoroughly sets forth its reasons for the sanctions. Penn has had an ample opportunity to respond and to attempt to justify his actions. Following remand from this court, he once again filed his motion for reconsideration of sanctions. Penn was advised by the court that it would decide the matter based upon the briefs. Penn did not object, did not request a hearing, and did not request leave to supplement the brief that he had already filed. “Rule 11 does not require that a hearing separate from trial or other pretrial hearings be held on Rule 11 charges before sanctions can be im-posed_” Donaldson, 819 F.2d at 1560 & n. 12. An evidentiary hearing was unnecessary here. There are no issues of fact, only conclusions to be drawn from undisputed facts. The district judge’s participation in the proceedings and the record itself provided the judge with sufficient knowledge of the relevant facts with respect to Penn’s dilatory tactics. Penn acknowledged as much, in his motion for reconsideration of sanctions filed in the district court, and in his brief filed in this court: [A] careful review of the case record in this matter reveals that there was no actual (or attempted) delay in the adjudication [sic ] of this case that can be contributed [sic ] directly to defendants’ counsel. The record reflects both a clear and concise factual basic [sic] for counsel’s various motions and requests as well as the legal (procedural and substantive) basis which support defendants’ concerns and contentions. It is apparent from the record itself that Penn’s motion for recusal and the motion for reconsideration of the denial of that motion have no basis in law and that Penn failed to conduct even the minimum amount of research that would have been necessary for him to be aware of that fact. Penn’s arguments regarding the lack of an impartial decisionmaker have no merit as a matter of law, given the lack of any factual basis to support his argument. Penn contends, without any further elaboration, that, “[gjiven the background giving raise [sic] to this appeal, appellant submits that the District Court Judge cannot be considered a neutral arbitrator.” Apparently Penn’s due process argument rests upon the same factual allegations that formed the basis for his misguided motion for recusal. As a matter of law, those unsupported allegations are insufficient to support his due process claim. We therefore conclude that the procedures used by the district court for finding that Penn violated Rule 11 and for imposition of sanctions do not offend due process. B Penn argues, in the alternative, that the district court abused its discretion in finding a Rule 11 violation and imposing sanctions. Penn’s argument is primarily confined to the appropriateness of sanctions for his having filed a motion for recusal; he also briefly contends that the record reveals that he made no attempt to delay the adjudication of this case and that he had a “clear and concise” factual and legal basis for the motions. Rule 11 imposes three duties on counsel: (1) counsel must make a reasonable inquiry into the factual basis of any pleading, motion, or other paper; (2) counsel must make a reasonable inquiry into the law; and (3) counsel must not sign a pleading, motion, or other paper intended to delay proceedings, harass another party, or increase the cost of litigation.
222919-14022	HAYS, Circuit Judge: These are appeals from judgments of conviction entered in the United States District Court for the Southern District of New York after a jury trial. The five appellants were each convicted of conspiracy to import, possess with the intent to distribute and distribute approximately one-eighth of a ton of heroin, and of the substantive offense of possession with intent to distribute approximately one and one-half kilograms of heroin, in violation of 21 U.S.C. §§ 812, 841, 846 and 963. Appellants Barrera and Bornsztejn were each sentenced to consecutive terms of imprisonment of 15 years on the conspiracy count and 10 years on the substantive count, fines of $50,000 and special parole terms of 3 years. Enriquez was sentenced to imprisonment for 6 years on the conspiracy count and 6 years on the substantive count, the terms to run consecutively, as well as a special parole term of 3 years, while Pinto was sentenced to consecutive terms of 15 years for the conspiracy count and 10 years on the substantive count plus a special parole term of 3 years. Appellant DeLuca made a motion before trial under 18 U.S.C. § 4244 to have himself declared mentally incompetent to stand trial, which motion was denied (as were motions to suppress certain evidence) . After standing trial and having been found guilty, DeLuca was provisionally sentenced under the provisions of 18 U.S.C. § 4208(b) and was committed to the Bureau of Prisons for a psychiatric study. He has not yet been re-sentenced. We affirm the convictions of all the appellants. I. The Factual Background This case involves an international conspiracy to import heroin into the United States from Europe — a conspiracy which government agents followed almost from its inception in Europe to its consummation on the streets of New York City. Not only was the European portion of the conspiracy known to the United States Bureau of Narcotics and Dangerous Drugs as well as to both the French and Belgian police authorities, but the individual who had been recruited by the European drug shippers to carry the drugs to New York was — unfortunately for the plotters — a government undercover agent. Under the plan the European shippers were to fill three military footlockers with 120 kilos of pure heroin. The courier, who had military connections, was to transport the footlockers by military plane to Washington, D. C. where he was to rent a car of a certain description, put the footlockers inside the car and drive it to New York City. The plan called for the courier to abandon the car early on the morning of May 16, 1972 in the vicinity of Bloomingdale’s department store on the east side of Manhattan where the buyers were to pick up the car. The payment for the narcotics was to be wired by a co-conspirator from his bank account in New York to an account in Switzerland. The evidence established that appellants Barrera, Enriquez and DeLuca were the buyers; that appellant Bornsztejn was to wire the money from his New York account to one he held in Switzerland; and that appellant Pinto was to oversee the transfer in New York as a representative of the European shippers. The undercover agent left Belgium for Washington, D. C. on May 14, 1972 ostensibly acting as courier for the plotters. Before his departure he emptied the three footlockers which had been filled with pure heroin and left all but three small bags of the drugs with Belgian and French police authorities in Brussels. Upon arriving in Washington, he packed one of the three remaining bags into each of the three footlockers which were otherwise filled with packages of non-narcotic substances resembling the heroin the courier was supposed to be carrying. The courier then rented a car of the exact description that the European shippers had requested, placed the footlockers in the car and set out for New York City. What followed on the morning of May 16 in the vicinity of Bloomingdale’s was surveilled by numerous government agents who were on the scene. It was also recorded on film in movies and still photographs. Agents of the Bureau of Narcotics and Dangerous Drugs had been alerted to the location of the rendezvous spot by the undercover agent. At 6:30 A.M. appellants Bornsztejn and Pinto appeared in the neighborhood of Bloomingdale’s department store and proceeded to walk about for a half hour without apparent direction but never leaving a narrowly circumscribed area, and conversing continuously with each other. The surveilling agents who were at first unaware of their involvement in the transaction soon noticed the intense interest Pinto and Bornsztejn showed in the area where the agent-courier had been instructed to leave the heroin laden car. During this same period appellants Barrera and Enriquez arrived in the area in the latter’s car and parked on a side street in the vicinity of Bloomingdale’s. Barrera left the car and proceeded to walk toward the store while Enriquez remained behind in the car. At approximately 7 A.M., Bornsztejn and Pinto separated. At seven o’clock the agent arrived in the car, parked it in front of the store, hid the keys under the dashboard, left the ear and entered a subway, as he had been directed to do by the European shippers of the heroin. Pinto spotted the car first and pointed it out to Bornsztejn who then left Pinto and approached Barrera, with whom he shook hands. Bornsztejn and Barrera walked toward the car and upon reaching it Bornsztejn turned around and walked back in the direction from which he had come while Barrera entered the car, took the keys from their hidden location and drove off. Barrera drove the car with the heroin in it up the side street in which Enri-quez was parked, made a hand motion to him, and then continued driving. Enri-quez followed him. After reaching what apparently was a predetermined spot, a spot which Barrera could have reached without driving on the side street on which Enriquez had been parked, the two cars stopped and parked. Enriquez and Barrera went into a nearby coffee shop where they were joined by appellant DeLuea who was handed something by Barrera. DeLuea then left the coffee shop and drove off in the car containing the drugs. Shortly thereafter, Barrera and Enriquez also left the coffee shop and drove around the east side of New York until they were arrested at 8:15 A.M. Meanwhile, Pinto and Bornsztejn left the area of Bloomingdale’s and drove first to the hotel where Bornsztejn was staying and then to the hotel where Pinto was staying. They then returned to the area where the transfer had taken place, circled it for about 15 minutes and finally parked their car in front of the same coffee shop where Barrera, Enriquez and DeLuea had met. They got out of their car and walked around for awhile, then reentered their car and drove about apparently aimlessly, until they too were arrested at about 9 A.M. In the meantime appellant DeLuea drove the car containing the footlockers from Manhattan over a bridge spanning the East River to a garage in the borough of Queens. On the way to the garage, DeLuea stopped his car and pulled over to the side of the road to allow traffic behind him (including two surveilling cars) to pass. He was arrested at about 8:15 A.M. while in the process of unloading footlockers. Several post-arrest statements were taken from the various appellants who attempted to explain their unusual be havior on that May morning. None of the explanations are credible when considered in light of the uncontradicted evidence of the actions of the appellants. Indeed, the statement by Enriquez — the appellant whose case might be considered the closest regarding sufficiency of the evidence concerning his knowledge of the ultimate goal of the conspiracy— was most incriminating. On the afternoon that he was arrested, Enriquez told an Assistant United States Attorney that he had driven to New York City that morning leaving his home at 6:20 A.M. He said that he had parked his car in a garage, had breakfast with Barrera and then had gone back to the garage when he had left his ear and retrieved it at 8:15 A.M. When he was asked about his actions between 6:20 and 8:15 he said, “I know what I did and I will accept the consequences but I don’t want to get anybody, else in trouble.” He also denied knowing appellant DeLuca (although the two were seen with Barrera in the coffee shop) and he stated that although he knew “something was up” from talking with Barrera, he knew nothing about the heroin and “if the guy who owns the stuff, Barrera, tells the truth I can get out of this case.” Evidence discovered after the arrest of the appellants pointed to the close-knit nature of the conspiracy. Barrera’s business telephone number was found in Bornsztejn’s possession at the time of the latter’s arrest as was the latter’s passport showing that he had entered the country on May 4, 1972. On April 16, 1972, Bornsztejn opened an account at a New York bank which was used to transfer money to another account in his name in a Swiss bank. Finally, found in possession of Pinto, who was known throughout as Ben Sadoun, was a French passport with his photograph but showing it was issued on May 8, 1972 in the name of Jean Claude Pinto and showing éntry into the United States on May 10, 1972. II. The Sufficiency of the Evidence The Conspiracy Count The single thread running through the arguments of all of the appellants in this case is their claim that there was insufficient evidence presented at trial to convict them of the violations charged by the government. We reject these contentions as being without merit. The appellants’ association in a wide-ranging conspiracy to import heroin into the United States is clear beyond any doubt. Their actions, recorded on film, were in exact accord with the plan as explained to the undercover agent who acted as courier for the illicit shipment. Appellants ask us to believe that it was merely an extraordinary coincidence that these appellants appeared at the specific spot at the exact time arranged by the European shippers. We are not so credulous. While it is more evident that the appellants other than Enriquez knew that they were playing parts in the implementation of a scheme to import, possess or sell the single shipment of narcotics, Enriquez’ unusual actions on the morning of May 16, his inability to account for his movements between 6:20 and 8:15, his conduct at the rendezvous spot' as well as at the coffee shop, provide adequate support for his conviction. To buttress that conclusion, we need only note his connection with Barrera who obviously was a key link in the conspiracy, his denial of knowing DeLuca although he had been seen with him and Barrera at the coffee shop on the morning of the transfer, and a statement he made after his arrest that he knew what he was doing and would take the consequences. When the record is considered as a whole, there was ample'evidence to sustain the conspiracy convictions of all of the appellants. III. Other Contentions In addition to their claims as to the insufficiency of the evidence appellants present a number of contentions, upon which they hope to win reversal of their convictions. We find all of these to be without merit and some to border on the frivolous. We will consider briefly only the most serious. A. Hearsay Testimony The appellants argue that the trial court erred in admitting against them certain statements made by one of the European shippers to the undercover agent who testified as to the statements at trial. We cannot agree. There was sufficient independent evidence of defendants’ individual participation in the conspiracy to warrant the admission of the hearsay declarations of a coconspirator made in furtherance of the conspiracy and during its course. See United States v. Calabro, 449 F.2d 885, 889 (2d Cir. 1971), cert, denied, 404 U.S. 1047, 92 S.Ct. 728, 30 L.Ed.2d 735 (1972). Not only was there independent proof of the agent’s receipt of the narcotics in Europe and his transporting them to New York, but the evidence clearly showed the shippers’ instructions to deliver the heroin at Bloomingdale’s, the simultaneous travel to the United States from France by Bornsztejn and Pinto and the presence and incriminating participation of the appellants in the receipt of the heroin. B. Entrapment, Overreaching Due Process Appellants claim in effect that without the active participation of the undercover agent the criminal conspiracy never would have occurred. Thus they argue that they were entrapped as a matter of law. We reject this contention. The appellants were clearly predisposed to commit the crimes they have been convicted of committing. Even prior to the recent Supreme Court pronouncement on entrapment, See United States v. Russell, 411 U.S. 423, 93 S.Ct. 1637, 36 L.Ed.2d 366 (1973), the deci-sional law would not support the appellants’ claims in this case. See United States v. Ortega, 471 F.2d 1350 (2d Cir. 1972), cert, denied, 411 U.S. 948, 93 S. Ct. 1924, 36 L.Ed.2d 409 (1973). C. Post-Arrest Statements Appellants Bornsztejn and Barrera contend that certain post-arrest statements made by them on the afternoon of May 16 were improperly admitted into evidence. However, in the light of the trial judge’s finding, after a hearing, that Miranda warnings were given the appellants — a finding amply supported by the evidence — we conclude that the statements at issue were properly admitted at trial. Bornsztejn, Barrera and Enriquez also argue that their statements were obtained during a period of unnecessary delay in violation of 18 U. S.C. § 3501. This argument, raised for the first time on appeal, is without merit. The delay was slightly in excess of six hours and there is no showing that it was for any purpose other than the legitimate one of routine processing. See United States v. Marrero, 450 F.2d 373 (2d Cir.1971), cert, denied, 405 U. S. 933, 92 S.Ct. 991, 30 L.Ed.2d 808 (1972). D. DeLuca’s insanity Defense
1796056-4978	ROBB, Associate Justice. Appeal from a deeree in the Supreme Court of the District dismissing, after hearing, plaintiff’s bill (filed May 11, 1929), praying that premises No. 218 Indiana Avenue N.W. (lot 14, in Smith So Marr’s subdivision of square south of square 572) be impressed with a trust for her benefit in the sum of $6,500, less $1,127.57. The material facts found by the court below are substantially as follows: On May 10, 1927, plaintiff, being the owner of the premises in question, entered into a contract of sale with the defendant Francis A. Crawford through a Mr. Lewis as Crawford’s agent. Under the terms of the contract, the purchase price of the property was to be $500 cash and a deferred purchase-money trust in the sum of $6,500 as a second trust secured on the property. In closing the transaction, Crawford delivered to plaintiff in a sealed envelope a note secured by a second trust on lot 34, square 2692, fraudulently representing that the note was secured on the property sold, i. e., 218 Indiana avenue, as agreed. Plaintiff signed all necessary papers, “and at the time she signed the same she noted that there was a difference between the lot and square on the said papers and did nothing to change the same.” The property on which the note was secured was incumbered by a first deed of trust in excess of its value, and was shortly thereafter sold at auction under the first trust. A day or two after signing the papers, plaintiff had actual knowledge that the second trust given to her was not on her premises at 218 Indiana avenue. Thereupon plaintiff retained counsel and authorized institution of necessary proceedings to protect her rights; but no proceedings were filed until November 21, 1927, when a bill in equity was filed to rescind the contract and cancel the deed. (What happened under that suit does not appear.) Meanwhile, on July 13, 1927, Arthur L. Murray (to whom evidently the property had been deeded) conveyed the premises by deed of trust to Samuel A. Drury and James P. Nicholson, as trustees, to secure the loan of $4,000. At the time the trustees accepted the deed, they had no notice, either actual or construe^ tive, of any outstanding claims or equities of the plaintiff. Before the trust was executed and the loan made, the question of title was referred to the District Title Company for examination. Thereafter, on the 27th of March, 1928, because of default in payment by Murray, the trustees sold the property at public auction to Charles F. Ruppert for $5,850. Pri- or to the sale Nicholson, trustee, saw plaintiff in possession of the premises. The deed, at Ruppert’s direction, was made to his wife, Annie C. Ruppert. At the time of the sale, Ruppert did not have notice, either actual or constructive, of any outstanding equitable claims of the plaintiff.. Plaintiff was in actual, open, visible possession of the premises from November 16, 1920, until the latter part of 1928. The court below found that the trustees, Drury and Nicholson, by virtue of the deed of trust from Murray, took legal title to the premises, 218 Indiana avenue, as bona fide purchasers for value; that Ruppert, by purchasing from Drury and Nicholson, took the property free from equitable claims or demands of the plaintiff. The court'directed the payment to plaintiff of $1,127.57, the amount over and above expenses of the sale under the first trust on the premises in question. Counsel for plaintiff in their brief acknowledge' the receipt of that amount. A decree pro confesso was taken as to the defendants Crawford and Murray. The question in this appeal is whether the mere possession of premises, 218 Indiana avenue, by plaintiff, after she had made a conveyance of the property, constituted constructive notice to subsequent incumbrancers and purchasers acting in good faith. It is the general rule that actual, visible, and unequivocal possession of real estate inconsistent with the record title and under an apparent claim of ownership is notice to purchasers of whatever interest the person actually in possession has in the fee, whether such interest be legal or equitable in its nature, and of all the facts which the prospective purchaser might have learned by due inquiry. Chillemi v. Pennsylvania Rubber Co., 58 App. D. C. 394, 31 F.(2d) 638; Kirby v. Tallmadge, 160 U. S. 379, 16 S. Ct. 349, 40 L. Ed. 463. An exception to the general rule is recognized where a vendor remains for a time in possession after giving a fee-simple deed, with covenants, which he permits to be recorded. The object of the general rule is to protect one in possession from acts, of others who do riot derive their title from him; not to protect, him against his own acts, and especially against his own deed. Bloomer v. Henderson, 8 Mich. 395, 77 Am. Dec. 453; Van Keuren v. Central R. Co., 38 N. J. Law, 165; Strong v. Efficiency Apt. Corp., 159 Tenn. 337, 17 S.W.(2d) 1, 19 S.W.(2d) 273; Wicklein v. Kidd, 149 Md. 412, 131 A. 780.
3817583-6106	ORDER TERRENCE W. BOYLE, District Judge. This matter is before the Court on defendant’s motions to dismiss count eleven due to duplicity [DE 120], to dismiss for double jeopardy violation [DE 121], and to sever [DE 122], Defendant’s motion to dismiss count eleven due to duplicity is DENIED, the motion to dismiss for double jeopardy violation is DENIED, and the motion to sever is DENIED. BACKGROUND On July 2, 2012, defendant was charged with five counts of a twelve-count indictment. Those charges included: conspiracy to knowingly and intentionally distribute cocaine base (crack), distribution of cocaine base and aiding and abetting others in the distribution of cocaine base, and being a felon in possession of a firearm. Additionally, defendant was charged in count eleven of the indictment, which read: On or about April 3, 2012, in the Eastern District of North Carolina, the defendants, CEDRIC QUENTIN GREENE, also known as “Ced,” and ERIC DION LATHAM, also known as “E,” did knowingly use and carry a firearm during and in relation to a drug trafficking crime for which they may be prosecuted in a court of the United States, as charged in Count Nine of this Indictment, and did possess said firearm in furtherance of said crime, and did aid and abet each other in so doing, in violation of Title 18, United States Code, Section 924(c)(1)(A) and Title 18, United States Code, Section 2. [DE 1] On October 4, 2012, defendant filed the instant motions with this Court. Defendant seeks to dismiss two of the counts charged against him and seeks to have his trial severed from the trials of his co-defendants to prevent prejudice. I. DEFENDANT’S MOTION TO DISMISS FOR DOUBLE JEOPARDY VIOLATION IS DENIED. “A conspiracy is a distinct crime from the overt acts that support it.” United States v. Ambers, 85 F.3d 173 (4th Cir.1996). Accordingly, the Supreme Court has held that the prosecution of a defendant for conspiracy where the overt acts alleged by the government also constitute separately charged substantive offenses does not offend the constitutional prohibition against double jeopardy. See United States v. Felix, 503 U.S. 378, 390-92, 112 S.Ct. 1377, 118 L.Ed.2d 25 (1992). Here, the defendant claims that double jeopardy bars the government from prosecuting the defendant for conspiracy while also prosecuting him for substantive offenses that resulted from that conspiracy. This simultaneous prosecution was condoned by the Supreme Court in Felix. As such, the defendant’s motion to dismiss for double jeopardy violation must be denied. II. DEFENDANT’S MOTION TO SEVER IS DENIED. Federal Rule of Criminal Procedure Rule 8(b) states that joinder of defendants is permissible “if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses.” It is presumed that defendants who are indicted together will also be tried together. United States v. Shealey, 641 F.3d 627, 632 (4th Cir.2011) (citing Zafiro v. United States, 506 U.S. 534, 537, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993)). Severance is only warranted when “there is a serious risk that a joint trial would compromise a specific trial right of on or the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.” Zafiro, 506 U.S. 534, 539, 113 S.Ct. 933. The Zafiro court also noted that severance may be appropriate where co-defendants will be presenting “mutually antagonistic” defenses. Id. at 537, 113 S.Ct. 933. Severance will not be granted where the defendant merely asserts that a separate trial would offer a better chance of his acquittal. United States v. Reavis, 48 F.3d 763, 767 (4th Cir.1995). Here, defendant argues that his trial should be severed from the trials of his co-defendants because the jury will not be able to decipher the extent of his relationship with his co-defendants. In every trial of more than one defendant the jury may be asked to determine the nature and extent of the relationships between the co-defendants. Sometimes this inquiry may be challenging, but in and of itself it rarely creates the type of serious risk contemplated by the Supreme Court in Zafiro. Here, the defendant fails to point to a specific piece of evidence or defense theory that would lead to such a serious risk or mutual antagonism. Moreover, defendant failed to cite any case law supporting his motion to sever. Because no serious risk of prejudice is created by the joinder of defendants’ trials in this matter, defendant’s motion to sever is denied. III. DEFENDANT’S MOTION TO DISMISS COUNT ELEVEN DUE TO DUPLICITY IS DENIED. “ ‘Duplicity’ is the joining or two or more distinct and separate offenses in a single count.” 1 Wright, Federal Practice and Procedure § 142 (2d ed. 1982). Duplicity is avoided because it does not allow the jury to convict on one offense and acquit on another offense charged in the same count. Id. Duplicity turns on whether a single offense or separate offenses and, therefore, is largely a question of statutory interpretation. Id. Here, the defendant was charged with a violation of 18 U.S.C. § 924(e)(1)(A). Section 924(e)(1)(A) states: Except to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law, any person who, during and in relation to any crime of violence or drug trafficking crime (including a crime of violence or drug trafficking crime that provides for an enhanced punishment if committed by the use of a deadly or dangerous weapon or device) for which the person may be prosecuted in a court of the United States, uses or carries a firearm, or who, in furtherance of any such crime, possesses a firearm, shall, in addition to the punishment provided for such crime of violence or drug trafficking crime — (i) be sentenced to a term of imprisonment of not less than 5 years; (ii) if the firearm is brandished, be sentenced to a term of imprisonment of not less than 7 years; and (iii) if the firearm is discharged, be sentenced to a term of imprisonment of not less than 10 years.
1055557-8236	MEMORANDUM Christopher Castillo appeals his jury conviction for possession of two firearms by a felon in violation of 18 U.S.C. § 922(g)(1). Castillo contends that the District Court erred in denying his motion to suppress the firearms because law enforcement officers conducted an unlawful search of the rifle case containing one of the firearms and the officers’ discovery of the other firearm was the fruit of that unlawful search. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. Because the parties are familiar with the factual and procedural history of this case, we mention only those facts necessary to explain our decision. We review a district court’s denial of a motion to suppress evidence de novo. United States v. Stokes, 292 F.3d 964, 966 (9th Cir.2002); United States v. Murillo, 255 F.3d 1169, 1174 (9th Cir.2001), cert. denied, — U.S.-, 122 S.Ct. 1342, 152 L.Ed.2d 245 (2002). The district court’s factual findings underpinning its denial of a motion to suppress are reviewed for clear error. United States v. Gill, 280 F.3d 923, 928 (9th Cir.2002); Murillo, 255 F.3d at 1174. As a general rule, a warrantless search or seizure carried out in a private residence is considered presumptively unreasonable. Welsh v. Wisconsin, 466 U.S. 740, 748-49,104 S.Ct. 2091, 80 L.Ed.2d 732 (1984). However, a warrantless search may be conducted in exigent circumstances, which are defined as: those that would cause a reasonable person to believe that entry ... was necessary to prevent physical harm to the officers or other persons, the destruction of relevant evidence, the escape of the suspect, or some other consequence improperly frustrating legitimate law enforcement efforts. United States v. Furrow, 229 F.3d 805, 812 (9th Cir.2000) (internal quotations omitted), overruled on other grounds by United States v. Johnson, 256 F.3d 895 (9th Cir. 2001); Murdock v. Stout, 54 F.3d 1437, 1441 (9th Cir.1995). The officers’ initial entry into the apartment and search of the apartment, including the closet, for a victim or suspect were lawful under the emergency exception to the warrant requirement because the officers had received a burglary call, and upon arriving at the apartment, observed signs of a burglary. See United States v. Cervantes, 219 F.3d 882, 888 (9th Cir.2000) (allowing warrantless search under emergency circumstances if emergency requires immediate need for police assistance, search not primarily motivated by intent to arrest and seize evidence, and there is reasonable basis to associate the emergency with the area or place to be searched), cert, denied 532 U.S. 912, 121 S.Ct. 1242, 149 L.Ed.2d 150 (2001). While the mere presence of a firearm does not create an exigent circumstance, United States v. Gooch, 6 F.3d 673, 680 (9th Cir.1993), courts have found that the police have the right to secure firearms that are unattended and pose a risk that the public will find the weapon. See, e.g., New York v. Quarles, 467 U.S. 649, 656-58, 104 S.Ct. 2626, 81 L.Ed.2d 550 (1984) (holding that officer’s questions about where suspect had discarded gun were exception to Miranda requirement because public safety required officers to retrieve gun and not leave it where members of public could find it); Cady v. Dombrowski, 413 U.S. 433, 447-48, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973) (finding police officer’s opening of car’s trunk without warrant did not violate Fourth Amendment because officer reasonably believed trunk contained gun, trunk was vulnerable to intrusion by vandals, and public might be endangered if intruder removed gun); United States v. Webb, 83 F.3d 913, 917 (7th Cir.1996) (deciding that exigent circumstances allowed officer to retrieve shotgun from car trunk with keys still in the lock because gun could have been easily retrieved and officer feared gun’s safety mechanisms might not have been activated, allowing gun to accidentally discharge); United States v. Ware, 914 F.2d 997,1000-01 (7th Cir.1990) (exigent circumstances permitted officer to search car for gun because it was either in car or had been discarded by defendant, and as such, might fall into untrained or malicious hands); United States v. Feldman, 788 F.2d 544, 553 (9th Cir.1986) (finding that inventory search of car done in violation of police policies lawful because officer reasonably suspected that car contained gun and search was reasonable to ensure the immediate protection of the public’s safety). Here, the rifle case was clearly designed to hold a rifle. The officers discovered the rifle case while conducting an investigation into a possibly ongoing burglary, and the crime scene had not yet been secured. Cf. Gooch, 6 F.3d at 679-80 (defendant arrested and crime scene secured when defendant’s tent was searched for firearm). The broken window prevented the officers from securing the apartment. Thus, the search of the rifle case was reasonable under the exigent circumstances exception to the warrant requirement for the protection of the public’s safety. We are mindful that in many of the above cited cases the suspected locations of the firearms were in vehicles, and the Supreme Court in Cady specifically differentiated between searching a vehicle for a firearm and a house for a firearm. See Cady, 413 U.S. at 442, 447-448, 93 S.Ct. 2523 (noting distinction between motor vehicles and dwelling places when finding warrantless search of trunk to obtain gun permissible). However, this case does not present the situation of the officers having searched the apartment specifically for weapons, which they feared the public would find in the open apartment. See Gooch, 6 F.3d at 680 (finding search without warrant of arrested defendant’s tent in which officers believed there was a firearm not justified by need to protect public because officers could have prevented children from entering tent until warrant was obtained). Rather, the officers were lawfully present in the apartment searching for persons. Only the search of the rifle case involved the need to protect the public from unattended weapons. See Arkansas v. Sanders, 442 U.S. 753, 764 n. 13, 99 S.Ct. 2586, 61 L.Ed.2d 235 (1979) (stating that not all containers found during a search deserve full Fourth Amendment protection because “some containers (for example a kit of burglar tools or a gun ease) by their very nature cannot support any reasonable expectation of privacy because their contents can be inferred from their outward appearance”), overruled on other grounds by California v. Acevedo, 500 U.S. 565, 111 S.Ct. 1982, 114 L.Ed.2d 619 (1991); United States v. Huffhines, 967 F.2d 314, 319 n. 5 (9th Cir.1992) (recognizing Sanders has been overruled, but finding Acevedo does not change the principle stated in Sanders “that there is no reasonable expectation of privacy in a container that discloses its contents”). Castillo offers other alternatives that the officers could have taken if they believed the rifle case contained a firearm and feared for public safety. However, possible alternative courses of action for the officers does not make the search of the rifle case illegal. See Cady, 413 U.S. at 447, 93 S.Ct. 2523 (“The fact that the protection of the public might, in the abstract, have been accomplished by ‘less intrusive’ means does not, by itself, render the search unreasonable.”) Castillo also incorrectly relies on United States v. Hoffman, 607 F.2d 280 (9th Cir. 1979), in which a police officer retrieved a sawed-off shotgun from a trailer without a warrant after a fireman responding to a fire in the trailer had discovered the sawed-off shotgun. Id. at 282. There, we found that no emergency justified the police officer’s entry into the trailer, and the search violated the Fourth Amendment. Id. at 283-85. Hoffman does not assist Castillo because the officer in Hoffman entered the trailer to seize evidence. Id. at 283-84. In this case, the officers opened the rifle case to protect the public from an unattended firearm. Further, unlike Hoffman where the trailer was secured and the fireman had already determined that the shotgun was unloaded, see id. at 282-83, in this case there was a danger that the public would have access to a potentially loaded firearm.
974866-8033	GIBSON, Chief Judge. Lushrie Jardan and Harold Hudson were indicted on two counts of distribution of heroin in violation of 21 U.S.C. § 841(a)(1) and 18 U.S.C. § 2. Count I alleged that Jardan and Hudson unlawfully distributed approximately one gram of heroin on May 3, 1975. Count II charged Jardan and Hudson with an unlawful distribution of approximately 3.3 grams of heroin on May 13, 1975. Hudson and Jardan were tried jointly before a jury on both counts. Hudson was acquitted on Count I and convicted on Count II. He received a sentence of nine years, with a consecutive six-year special parole term. Jardan was convicted on each count and was sentenced to a total of eighteen years, coupled with a six-year special parole term. Both defendants appealed. The narcotics transactions took place in Kansas City, Missouri, at the apartment of Anderson Jackson, a Government informant. Jackson, as the principal Government witness, established the events underlying the crimes charged in the indictment. Hudson and Jardan admitted their presence at Jackson’s apartment, but denied participating in the crimes charged. Over defendants’ objections, Jackson also testified of criminal activity by defendants during April, 1975, for which they had not been indicted. This evidence of other criminal conduct was admitted by the trial court under Fed.R.Ev. 404(b) on the basis that it was relevant to the issues of lack of intent, motive, scheme or plan. Evidence of other crimes or criminal conduct is generally inadmissible unless relevant to establish: (1) motive, (2) intent, (3) the absence of mistake or accident, (4) a common scheme or plan embracing the commission of two or more crimes so related to each other that proof of one tends to establish the other, and (5) identity of the person charged with the commission of the crime on trial. United States v. Cochran, 475 F.2d 1080, 1082 (8th Cir.), cert. denied, 414 U.S. 833, 94 S.Ct. 173, 38 L.Ed.2d 68 (1973); accord, United States v. Conley, 523 F.2d 650, 653 (8th Cir. 1975), cert. denied, 424 U.S. 920, 94 S.Ct. 1125, 47 L.Ed.2d 327 (1976); United States v. Lewis, 423 F.2d 457, 459 (8th Cir.), cert. denied, 400 U.S. 905, 91 S.Ct. 146, 27 L.Ed.2d 142 (1970). Evidence of other crimes or criminal conduct may not be ad mitted absent a foundation which shows that there is an issue on which this evidence may be received and to which it is relevant, that the evidence is clear and convincing and that its probative worth outweighs its probable prejudicial impact. United States v. demons, 503 F.2d 486, 489 (8th Cir. 1974). The other criminal conduct must also “involve an offense similar in kind and reasonably close in time to the charge at trial.” United States v. demons, supra at 489; accord, United States v. McMillian, 535 F.2d 1035, 1038 (8th Cir. 1976). The admission of evidence of other criminal conduct pursuant to these standards is a matter left to the discretion of the trial court and once such evidence has been admitted, reversal will be mandated only when it is clear that the standards have not been followed. United States v. Thompson, 503 F.2d 1096, 1098 (8th Cir. 1974); accord, United States v. Conley, supra at 654. The trial court deemed the issues of lack of intent, motive, scheme or plan to be involved in this case. If the evidence of criminal conduct bore on any one of these issues and was otherwise relevant and admissible under United States v. Clemons, supra at 489, its admission was proper. Defendants take the somewhat ingenuous position that their assertion of defenses of general denial in this prosecution under § 841(a)(1) removed all issues from the case on which evidence of prior criminal conduct could be admitted under Fed.R.Ev. 404(b). They argue in particular that intent was not at issue here. To the contrary, however, in a prosecution under § 841(a)(1) the Government is required to prove that a distribution of heroin is intentional. United States v. Conley, supra at 654. Moreover, the Government is entitled to anticipate the obvious defense of lack of intent. United States v. Conley, supra at 654. Jackson’s testimony on defendants’ prior criminal conduct was relevant to the issue of intent. In a prosecution under § 841(a)(1), evidence of prior distributions of heroin may be probative of a defendant’s knowledge and intent to possess on the date charged. Johnson v. United States, 506 F.2d 640, 644 (8th Cir. 1974), cert. denied, 420 U.S. 978, 95 S.Ct. 1404, 43 L.Ed.2d 659 (1975). The conduct of which Jackson testified was similar in kind and very close in time to the charge at trial. Moreover, this evidence was clear and convincing and its probative value outweighed its probable prejudicial impact. On the record before us, we hold that this evidence of prior criminal conduct was admissible to show that defendants intentionally distributed heroin in violation of § 841(a)(1). Defendants contend that the District Court erred in not granting their motions for separate trials. The initial joinder of defendants was proper under Fed.R.Crim.P. 8(b). The record does not support a finding that severance of defendants was mandated prior to trial or that their rights to a fair trial were prejudiced by the joint trial. “[T]he granting of a severance is within the discretion of the trial judge. * * * The burden of demonstrating prejudice is a difficult one, and the ruling of the trial judge will rarely be disturbed on review.” Williams v. United States, 416 F.2d 1064, 1070 (8th Cir. 1969); see Golliher v. United States, 362 F.2d 594, 603 (8th Cir. 1966). The defendants’ attempted characterization of their general denial defenses as “irreconcilable” does not merit a severance. Their defensive postures were actually harmonious, as both denied participation in the offenses and neither attempted to implicate the other. The trial court did not abuse its discretion in declining to grant separate trials for Hudson and Jardan. Hudson contends that the joinder of Counts I and II prejudiced his right to a fair trial. The joinder of counts against Hudson was clearly proper under Fed.R. Crim.P. 8(a). Hudson argues, however, that he consistently expressed a desire to take the stand and testify with regard to only Count I, of which he was acquitted, and that joinder coerced him into testifying as to Count II in order to avoid a prejudicial inference by the jury from his silence on the crime charged in Count II. The District Court declined to sever counts on this basis either prior to or at trial, where Hudson took the stand and denied participation in the offenses charged in both counts. Hudson contends that this refusal to sever constituted error under Cross v. United States, 118 U.S.App.D.C. 324, 335 F.2d 987 (1964), which recognized the potential for prejudice where a defendant wishes to testify as to only one of multiple counts. Subsequent emendation of Cross v. United States, supra, has resulted in a standard that calls for severance of counts only when a defendant has made a “convincing showing that he has both important testimony to give concerning one count and strong need to refrain from testifying on the other.” Baker v. United States, 131 U.S.App.D.C. 7, 26, 401 F.2d 958, 977 (1968), aff’d after remand, 139 U.S.App.D.C. 126, 430 F.2d 499 (1970), cert. denied, 400 U.S. 965, 91 S.Ct. 367, 27 L.Ed.2d 384 (1970); accord, Blunt v. United States, 131 U.S.App.D.C. 306, 404 F.2d 1283, 1289 (1968), cert. denied, 394 U.S. 909, 89 S.Ct. 1021, 22 L.Ed.2d 221 (1969). In making such a showing, it is essential that the defendant present enough information — regarding the nature of the testimony he wishes to give on one count and his reasons for not wishing to testify on the other — to satisfy the court that the claim of prejudice is genuine and to enable it intelligently to weigh the considerations of “economy and expedition in judicial administration” against the defendant’s interest in having a free choice with respect to testifying. Baker v. United States, supra at 977.
466427-9125	GOODRICH, Circuit Judge. This appeal from the Board of Tax Appeals involves income taxes for the years 1933, 1934, and 1935. There are two issues presented which are dealt with separately in this opinion. I. The first issue involves income tax for the three years mentioned and turns upon facts and circumstances surrounding a trust which was set up by a trust deed executed May 31, 1932 by Purdon Smith Whiteley, wife of the taxpayer, with the husband as beneficiary. Respondent relies upon § 166 of the Revenue Acts of 1932 and 1934, 26 U.S.C.A. Int.Rev.Acts, pages 543, 727, adding for good measure § 22(a) and § 167(a) (3), 26 U.S.C.A. Int.Rev.Acts, pages 487, 543, 669, 727. The taxpayer is a Pennsylvanian. Prior to and during the years with which we are concerned he maintained a marginal stock account in which the debit balances in 1931 and 1932 ran between $200,000 and $300,-000. Mrs. Whiteley had loaned to her husband shares of preferred stock owned by her to protect his account and had, also, loaned him cash which he had used to pay bank loans secured to protect his brokerage account. December, 1931, and May, 1932 were critical periods in the taxpayer’s financial affairs. In December Mrs. Whiteley, with the taxpayer’s consent, consulted her father, Mr. C. Elmer Smith, a Director of the Western National Bank of York, Pennsylvania, concerning the problem. After conference with Mr. Smith and Mr. George T. Livingstone, the president of the bank, the taxpayer placed himself in their hands with regard to fiscal matters. After December, 1931 Messrs. Smith and Livingstone took care of the wife’s financial transactions for the taxpayer and she followed their directions. The trust out of which this litigation arises was set up on May 31, 1932. Upon Mr. Livingstone’s recommendation insurance policies to the amount of $200,000 were taleen out on the taxpayer’s life with the wife as beneficiary. A note for $200,000 was prepared by Messrs. Smith and Livingstone and, at their direction, the taxpayer’s wife requested her husband to sign it. This note was payable to Mrs. Whiteley and her husband signed it as requested. The note was under seal. The findings of fact indicate a normal domestic situation where both husband and wife are each anxious to give all possible assistance to the other in a situation where the family welfare is involved. It is found that he (Mr. Whiteley) “would have signed a note for a larger amount if his wife had requested him to sign it. She (Mrs. Whiteley) would have given him everything she had to help him out of his financial difficulties.” The trust consists of (1) corporate bonds of a par value of $126,000 which were in the wife’s hands on May 31, 1932 and which had been turned over to her by her husband upon receipt by him of them from his father’s estate one week earlier; (2) the note of the taxpayer for $200,000; and (3) life insurance policies mentioned above to the amount of $200,000. The income of the trust, after payment of expenses including the premiums upon the policies of insurance, was payable to the taxpayer for life with the provision for advancement of amounts of the principal sum to the tax payer upon the consent of the wife if living or, if deceased, the trustee. The Commissioner has taxed to the taxpayer all the original income of the trust for the years 1933, 1934 and 1935 on the ground that the corpus of the trust was owned by him prior to its creation, that he received all the benefits from the control and distribution of the principal. The taxpayer contends that this trust was just what it had appeared upon its face to be, a trust set up by his wife out of property which she owned and that he is liable only for such part of the income from it as he actually received, upon which he has already paid his income tax. The Board of Tax Appeals concluded that the real object of the trust was to carry insurance on the petitioner’s life and upheld the respondent’s contention that the taxpayer was taxable upon the entire income of the trust. Obviously, §§166 and 167 of the statute are not controlling if the taxpayer’s wife is regarded as grantor of the trust. Equally obviously, if the property belonged to the taxpayer he must lose this case. It seems to us that the critical point in the case turns on questions of fact and that the rules of law are pretty clear. Examination of the record and consideration of the family situation disclosed by the circumstances which led up to the formation of this trust does not convince us that the Board’s conclusion was not supported by substantial evidence. We do not, therefore, interfere with it. II. Trusts for Minor Children. The second issue between the taxpayer and the Commissioner relates to the income of four trusts set up by the taxpayer in 1935 for his minor children. The terms are identical in each, and the trusts are irrevocable. The trustee is the First National Bank of York, Pennsylvania. The terms of the trust instrument provide that the trustee is to pay the income to the donor, if and when so ordered by the donor, during the minority of the child to be used solely for the support, maintenance, education and enjoyment of the child. If not called for, the income is to be reinvested. During the calendar year 1935, the income of the trust funds was $5878.00. Of this only $450 was paid the donor and this, with some other funds belonging to the children, was invested in securities in their respective names. None of the income from the trusts was used in 1935 for maintenance of the beneficiaries. A divided Board of Tax Appeals upheld the contention of the Commissioner that this income was taxable to the donor of the trust. Section 167 of the applicable statute provides: “(a) Where any part of the income of a trust — • “(1) is, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition , of such part of the income may be, held or accumulated for future distribution to the grantor; or “(2) may, in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income, be distributed to the grantor; or “(3) is, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income may be, applied to the payment of premiums upon policies of insurance on the life of the grantor (except policies of insurance irrevocably payable for the purposes and in the manner specified in section 23 (n), relating to the so-called ‘charitable contribution’ deduction) ; then such part of the income of the trust shall be included in computing the net income of the grantor. “(b) As used in this section, the term ‘in the discretion of the grantor* means ‘in the discretion of the grantor, either alone or in conjunction with any person not having a substantial adverse interest in the disposition of the part of the income in question.’ ” We have then the question of the tax-ability to the donor of a trust of trust income which he could have called for to apply to the support of his minpr child, but which in fact was not so applied. Had the income gone in payment of the paternal obligation for support it would have been taxable to the parent settlor. Helvering v. Stokes, 296 U.S. 551, 56 S.Ct. 308, 80 L.Ed. 389; Helvering v. Schweitzer, 296 U.S. 551, 56 S.Ct. 304, 80 L.Ed. 389; Helvering v. Coxey, 297 U.S. 694, 56 S.Ct. 498, 80 L.Ed. 986. Is the test of taxability to the settlor under § 167 whether the income could so have gone or whether in fact it did? If the discretion to apply is in the trustee, an opinion of the general counsel for the Bureau of Internal Revenue, concludes that only so much of the income as is actually applied is taxable to the grantor. And this opinion has been adopted in one federal decision. Hudson v. Jones, D.C.W.D.Okl.1938, 22 F.Supp. 938. The Commissioner suggests a distinction between the discretion to apply lodged in Ihe trustee as there and in the donor as here; or, in the alternative, to disregard both memorandum and decision. The Board of Tax Appeals was not only divided in this case, but lias, seeming*] y, gone both ways on the question. Cf. J. S. Pyeatt v. Com’r, 39 B.T.A. 774 with Tiernan v. Commissioner, 37 B.T.A. 1048 (Appeal to C.C.A. 3rd dismissed without opinion, June 12, 1939). The Pyeatt holding has been criticized by a learned writer as virtually amounting “to a complete disregard of the trust entity because it is a family trust.” Professor Ma-gill points out that in the Stokes case, cited above, the record indicates that the income taxed to the father was only that actually used for the children, not the total net income of the trust. He believes that the actual use of the income for support of wife or minor child is the foundation for taxation to the settlor. The questions presented are interesting and not without difficulty. But wc do not find it necessary to make an attempt to settle them, for the indicated outcome of the case seems very clear under another section of the statute.
1185465-15240	COFFIN, Chief Judge. In this appeal, now being considered en banc, we determine whether a state, consistent with the establishment clause, may provide that premises shall not be licensed for the sale of liquor if a nearby church— defined as “a church or synagogue building dedicated to divine worship” — or school objects. Appellee is a restaurant located in the Harvard Square area, a well-known business and entertainment center in Cambridge, Massachusetts. The Holy Cross Armenian Catholic Parish is located adjacent to appellee. In 1977, appellee, pursuant to a purchase agreement, applied to the Cambridge License Commission (CLC) for approval of an alcoholic beverage license. In Harvard Square and within 500 feet of the Holy Cross Church there are at least 26 premises licensed to sell liquor. Nonetheless Holy Cross objected to appellee’s application. The CLC voted to deny the application, citing only Holy Cross’s objection and noting that the church “is within 10 feet of the proposed location.” Appellee appealed this denial to the Massachusetts Alcoholic Beverages Control Commission (ABCC). After hearing, the ABCC upheld the CLC’s action “on the grounds that the governing board of the church objected ... under the provisions of Chapter 138, Section 16C, and this represents an absolute veto. [The ABCC] find[s] that the church’s objection under Section 16C was the only basis on which the transfer was denied.” We state the text of section 16C in the margin. In late 1977, appellee brought suit in federal district court against the CLC and the members of the CLC and the ABCC in their official capacities. Appellee sought relief on four theories: that section 16C “on its face and as applied” violated the equal protection and due process guarantees, the establishment clause of the First Amendment, and the Sherman Act. The appellants moved both that the court abstain and that it dismiss the complaint for failure to state a claim. After a voluntary continuance of the suit pending decision by the Massachusetts Supreme Judicial Court in Arno v. Alcoholic Beverages Control Commission, 377 Mass. 83, 384 N.E.2d 1223 (1979), a case that ultimately upheld section 16C against due process and establishment clause challenges, the district court denied the appellants’ motion to dismiss. The litigants then stipulated to facts and moved for summary judgment on all counts except the “question of whether or not the church in fact exercised its power under ... § 16A in an arbitrary or otherwise discriminatory manner” (emphasis added). The district court first ruled that the state’s powers under the Twenty-first Amendment, which prohibits the importation of liquor into states in violation of their laws, cannot displace other constitutional guarantees. It then held that section 16C is a delegation of legislative power violating due process, as well as a law respecting an establishment of religion violating the First Amendment. It rejected appellee’s equal protection arguments, but held that the state’s actions were not immune from antitrust review under the doctrine of Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1942). The court consequently declared section 16C void in violation of the First and Fourteenth Amendments. Grendel’s Den, Inc. v. Goodwin, 495 F.Supp. 761 (D.Mass.1980). It certified this judgment, together with its denial of the appellants’ motion to dismiss under Parker v. Brown, pursuant to 28 U.S.C. § 1292. We consented to hear the appeal. The original panel in this case, in a split opinion, reversed the district court’s due process and establishment of religion judgments, but upheld its antitrust analysis. Grendel’s Den, Inc. v. Goodwin, Nos. 80-1653 & 80-1654 662 F.2d 88 (1st Cir. 1981). Appellees petitioned for rehearing, which we denied, and for rehearing en banc, which we granted. We now conclude that the statute offends the establishment clause of the First Amendment. We do not reach the due process or antitrust claims. As the Supreme Court has often announced, a statute does not offend the establishment clause so long as it has a secular purpose, its principal or primary effect neither advances nor inhibits religion, and it does not foster an excessive government entanglement with religion. E. g., Committee for Public Education v. Regan, 444 U.S. 646, 653, 100 S.Ct. 840, 846, 63 L.Ed.2d 94 (1980). Appellees do not contend that section 16C has other than a secular purpose. We thus pass to the second step of deciding whether section 16C has an effect respecting the advancement of religion that can be described as “principal” or “primary”. A literal reading, without references to cases, of “principal” and “primary” might suggest that the question is whether the chief or dominant effect of section 16C’s impact is the promotion of religion as opposed to some secular effect. We are instructed, however, that we need not attempt any such “metaphysical” “ultimate judgment”. Committee for Public Education v. Nyquist, 413 U.S. 756, 783 n.39, 93 S.Ct. 2955, 2971, 37 L.Ed.2d 948 (1973). Rather the relevant question is whether the law “has the direct and immediate effect of advancing religion” as contrasted with “only a remote and incidental effect advantageous to religious institutions.” Id. (emphasis added). See also Meek v. Pittenger, 421 U.S. 349, 364-65, 95 S.Ct. 1753, 1762-63, 44 L.Ed.2d 217 (1975); Sloan v. Lemon, 413 U.S. 825, 832, 93 S.Ct. 2982, 2987, 37 L.Ed.2d 939 (1973). There is no doubt that section 16C has some effect in advancing religion in that it confers upon churches a valued benefit or power. Looking to the substance of the law in question, see, e. g., Sloan v. Lemon, 413 U.S. at 832, 93 S.Ct. at 2987, section 16C permits Massachusetts churches to determine conclusively whether new premises in their area will be allowed to sell1 alcoholic beverages. See Baser v. Spaulding, 7 Mass. App. 268, 269, 386 N.E.2d 1306, 1307 (1979). It is true — whether or not one contemplates that a church and its neighbors may bargain over the sale of such an indulgence— that this grant of specialized political power is not direct state fiscal aid to religion. Precedents show, however, that the establishment clause’s strictures are not confined to the context of cash supports to religion. The extent of the benefit at issue, moreover, is substantial. This benefit is the grant of a veto power over liquor sales in roughly one million square feet (the area of a circle of 500 feet radius from a church’s property lines) of what may be a city’s most commercially valuable sites. The statute simply requires that the church “object[ ]”. Leaving aside the considerable due process issues of the lack of standards and the absence of any requirement of reasoned decision, we note that the law vests every church with a power to give or deny to an establishment a privilege, the absence of which may threaten the viability of the enterprise and the presence of which may substantially enhance its profitability. Looking at this non-generalized grant to churches of a right of absolute discretion to confer or withhold an important commercial privilege in a teeming business and entertainment area in addition to their non-widely shared right to be free from the noise and disturbance attending nearby liquor sales, we are unable to say that this grant has only a “remote and incidental effect advantageous to religious institutions.” Nyquist, 413 U.S. at 784 n.30, 93 S.Ct. 2965. The effect would perhaps be more striking if the churches’ veto power were to extend to any place of business within 500 feet, but, we think, no more offensive to the establishment clause. The singling out of the liquor-selling segment of the business and entertainment community is not de minimis. We need not however, rely solely on these factors since section 16C contains a further and highly pertinent feature. The law distributes benefits on an explicitly religious basis. We are of course aware that, if possible, statutes are to be construed to avoid constitutional defects. But no reasonable reading by us of “church”, when expressly defined as “a church or synagogue building dedicated to divine worship”, can transform section 16C into a religiously neutral law. We face here a state law. Massachusetts’ highest court recently read this law in a First Amendment context and found no special content or limitation apart from the ordinary meaning of the words employed. Arno v. Alcoholic Beverages Control Commission, 377 Mass. 83, 90-93, 384 N.E.2d 1223, 1228-29 (1979). See also Samel v. City of Pittsfield Licensing Board, 377 Mass. 908, 384 N.E.2d 1230 (1979). We consequently are forced to the conclusion that section 16C’s language at the very least distinguishes between religious and nonreligious groups by granting significant rights to the former that it withholds from the latter. Although laws containing explicit religious discrimination apparently have been too rare to appear for constitutional review in the Supreme Court, there are many cases that lay down reliable guidelines. The landmark decision in Everson v. Board of Education recited that states “cannot exclude individual Catholics, Lutherans, Mohammedans, Baptists, Jews, Methodists, Non-believers, Presbyterians, or members of any other faith, because of their faith, or lack of it, from receiving the benefits of public welfare legislation.” 330 U.S. 1, 16, 67 S.Ct. 504, 511, 91 L.Ed. 711 (1947) (emphasis in original). A few months ago the court reiterated this language. Thomas v. Review Board, 450 U.S. 707, 716, 101 S.Ct. 1425,1431, 67 L.Ed.2d 624 (1981). The Everson court also made clear that states may not “pass laws which aid one religion, aid all religions, or prefer one religion over another.” 330 U.S. at 15, 67 S.Ct. at 511. This direction also has been quoted frequently when First Amendment fundamentals are reviewed. E. g., Board of Education v. Allen, 392 U.S. 236, 243, 88 S.Ct. 1923, 1926, 20 L.Ed.2d 1060 (1968); Abington School District v. Schempp, 374 U.S. 203, 216, 83 S.Ct. 1560, 1568, 10 L.Ed.2d 844 (1963); Torcaso v. Watkins, 367 U.S. 488, 493, 495, 81 S.Ct. 1680, 1683, 1684, 6 L.Ed.2d 982 (1961); McGowan v. Maryland, 366 U.S. 420, 443, 81 S.Ct. 1101, 1114, 6 L.Ed.2d 393 (1961); McCollum v. Board of Education, 333 U.S. 203, 210-12, 68 S.Ct. 461, 464-65, 92 L.Ed. 649 (1948). See also Roemer v. Board of Public Works, 426 U.S. 736, 746, 96 S.Ct. 2337, 2344, 49 L.Ed.2d 179 (1976); Walz v. Tax Commission, 397 U.S. at 695, 90 S.Ct. 1409, 25 L.Ed.2d 697 (opinion of Harlan, J). Zorach v. Clauson, 343 U.S. 306, 314, 72 S.Ct. 679, 684, 96 L.Ed. 954 (1952). The lesson that inescapably emerges from this consistent judicial tradition is that legislation conditioning the receipt of any significant benefit, power, or privilege on the commitment of the members of the recipient group or institution to a religious faith is inherently a “law respecting an establishment of religion”. Section 16C extends its benefits beyond churches to schools, which are defined as “elementary or secondary school[s], public or private, giving not less than the minimum instruction and training required by [state law] to children of compulsory school age.” This does not dilute its forbidden religious classification. The legislation defines in some detail the additional group to which it extends benefits — schools—and this definition cannot encompass all who are otherwise similarly situated to churches in all respects except dedication to “divine worship”. We therefore conclude that section 16C has a “primary” or “principal” effect of advancing religion. Consequently the district court’s holding that section 16C is unconstitutional is affirmed. . “§ 16C. Licenses for premises near churches or schools Premises, except those of an innholder and except such parts of buildings as are located ten or more floors above street level, located within a radius of five hundred feet of a church or school shall not be licensed for the sale of alcoholic beverages if the governing body of such church or school files written objection thereto, but this provision shall not apply to the transfer of a license from premises located within said distance to other premises located therein, if it is transferred to a location not less remote from the nearest church or school than its former location. The term governing body as used in the preceding sentence shall mean the school committee, in the case of a public school. In this section a church shall mean a church or synagogue building dedicated to divine worship and in regular use for that purpose, but not a chapel occupying a minor portion of a building primarily devoted to other uses, and a school shall mean an elementary or secondary school, public or private, giving not less than the minimum instruction and training required by chapter seventy-one to children of compulsory school age. This section shall not apply to an extension of licensed premises provided said extension does not exceed fifty feet.” . The complaint asserted federal jurisdiction under 15 U.S.C. § 15 and 28 U.S.C. §§ 1331 & 1343. . Indeed, the Court has gone so far as to say that statutes will not survive this scrutiny should there be the “mere possibility” that state assistance “might ‘in part have the effect of advancing religion.’ ” Committee for Public Education v. Nyquist, 413 U.S. 756, 784 n.39, 93 S.Ct. 2955, 2971, 37 L.Ed.2d 948 (1973) (emphasis in original) (quoting Tilton v. Richardson, 403 U.S. 672, 683, 91 S.Ct. 2091, 2098, 29 L.Ed.2d 790 (1971)). . E. g., Epperson v. Arkansas, 393 U.S. 97, 106, 89 S.Ct. 266, 271, 21 L.Ed.2d 228 (1968) (“anti-evolution” statute) (“the First Amendment does not permit the state to require that teaching and learning must be tailored to the principles or prohibitions of any religious sect or dogma”); School District of Abington v. Schempp, 374 U.S. 203, 83 S.Ct. 1560, 10 L.Ed.2d 844 (1963) (school Bible readings); En-gle v. Vitale, 370 U.S. 421, 431, 82 S.Ct. 1261, 1267, 8 L.Ed.2d 601 (1962) (official school pray ers) (proscribing governmental “power" and “prestige” as well as “financial support” in favor of religion). . It is no more satisfactory to say that churches can be relied upon not to violate some public trust inherent in this standardless grant of authority than it would have been to say in Lemon v. Kurtzman that churches can be trusted not to spend public monies for secular courses. See 403 U.S. 602, 618-19, 91 S.Ct. 2105, 2113-14, 29 L.Ed.2d 745 (1971). . The district court and the parties abstained from prosecuting the instant action for two years in anticipation of the decision in Arno. Since there can be no reasonable uncertainty about the meaning of the relevant language in section 16C after the Arno decision, there is no justification for the further abstention that appellants urge. See, e. g., Druker v. Sullivan, 458 F.2d 1272, 1274 (1st Cir. 1972). . Since our conclusion does not demand it, we refrain from deciding whether section 16C’s use of the work “divine” inescapably means that this law also discriminates between religions. But see Torcaso v. Watkins, 367 U.S. 488, 495 & n.11, 81 S.Ct. 1680, 1684, 6 L.Ed.2d 982 (1961).
6517964-19472	MEMORANDUM OPINION JERRY A. BROWN, Bankruptcy Judge. This matter came before the Court on the complaint for discharge of taxes filed by Clarence George Koehl (“C.G. Koehl”) and Corinne Dale Koehl (“Corinne Koehl”). The United States of America, through the Tax Division of the U.S. Department of Justice, objects to the discharge pursuant to 11 U.S.C. § 523(a)(1)(C), alleging that the debtors willfully attempted to evade or defeat the income taxes they owed. A trial on the merits was held *’on May 26, 1993. After reviewing the pleadings, the evidence at trial, and the arguments of counsel, the Court makes the following determinations. FINDINGS OF FACT A. Tax Problems 1. The debtors’ income tax returns for the years 1978 through 1983 were prepared by Mi\ Jay West, CPA, (‘West”) who thoroughly reviewed the debtors’ books. 2. The Internal Revenue Service (“IRS”) audited the debtors’ income tax returns for the years 1978 through 1983. (PI. 6, Pretrial Order, Uncontested Material Fact # 1). 3.The debtors were aware of the audit by 1985. (PI. 6, Uncontested Material Fact #2). 4.At the conclusion of the audit, by letter dated May 26, 1989, the IRS proposed to assess the debtors for tax deficiencies in the following amounts: 1978 $317,950.97 1979 371,131.88 1980 141,172.00 1981 90,489.64 1982 111,329.00 1983 115,037.00 Negligence and delinquency penalties were also proposed to be assessed. No fraud penalties were proposed to be assessed. (PI. 6, Uncontested Material Fact #3). 5. West, who originally prepared the returns, did not agree with the proposed assessment by the IRS. West testified that the IRS used the bank deposit method of calculating taxes, did not take into consideration inter-company transactions, did not account for all transfers, and did not correctly account for loans from outside banks. He advised the debtors that the assessment was a “joke” and “unrealistic”, and informed the debtors it would “be in their best interest to fight”. Although he was unsure exactly when he received the “30-day letter” from the IRS, dated September 28, 1988, he did not think it would have been before October 3, 1988. 6. By petition filed on August 28, 1989, the debtors petitioned the United States Tax Court for a redetermination of the proposed deficiency. (PI. 6, Uncontested Material Fact #4). 7.The debtors eventually agreed to the assessments as proposed. By stipulated decision entered on October 16, 1991, the Tax Court found the debtors liable for the taxes set forth above in Finding of Fact # 4, in the following amounts: 1978 $317,950.97 1979 371,131.88 1980 141,172.00 1981 90,489.64 1982 111,329.00 1983 115,037.00 (PI. 6, Uncontested Material Fact # 5). The Tax Court decision also found the debtors liable for negligence and delinquency penalties on these amounts. (Id.) 8. The taxes and penalties, together with then-accrued interest, were assessed on November 25, 1991. The taxes and penalties are not now assessable. (PL 6, Uncontested Material Fact #6). B. Other Financial Problems 9. In addition to the income tax debt, the debtors were experiencing other severe financial problems during 1988. These financial difficulties included a substantial loss of money from a salvage operation in Mexico; declining enrollment and decreased revenue from the Moler Beauty College, a business operated by Corinne Koehl through a company called Corinne Koehl Inc.; and declining revenues from a construction company owned by C.G. Koehl, such that the company was basically out .of business. The decline in the debtors’ businesses had been going on since approximately the mid-1980’s, due to the oil bust in the area. As a result of these problems, several mortgage loans owed by the debtors were in arrears, and real estate taxes were unpaid. The debtors were in a dire financial condition and needed to raise money. C. The Trusts 10. The debtors established two trusts, called the C.G. Koehl Trust (Ex. 4) and the Corin Koehl Trust (Ex. 7) , by separate instruments dated October 3, 1988. The debtors are the settlors of both of the trusts. The beneficiaries of both trusts are the debtors’ four children: Dale J. Koehl, Timothy D. Koehl, Robert G. Koehl (“Robert Koehl”), and Jonette Franks Koehl. (PI. 6, Uncontested Material Fact #7). 11. Robert Koehl, a son of the debtors, testified that the trusts were established as part of the estate planning recommended by R. Travis Douglas, the debtors’ attorney (“Douglas”). He stated that the trusts were established because of C.G. Koehl’s concern that he would soon pass away. The debtors were both at advanced ages and C.G. Koehl’s health was failing. 12. Douglas testified that C.G. Koehl was concerned about the expenses of probating wills, and wanted his children to avoid having to face this expense. (Ex. 26, Deposition of R. Travis Douglas). 13. When the trusts were established, the stock of C.G. Koehl, Inc. was placed into the C.G. Koehl Trust, and the stock of Corinne Koehl, Inc. was placed into the Corin Koehl Trust. In this way, C.G. Koehl’s construction business was in a trust bearing his name, and Corinne Koehl’s beauty college business (though named Moler Beauty College) was in a trust bearing her name. 14. West testified that in October, 1988, C.G. Koehl, Inc. was worth nothing or was insolvent. The company may have had some small operations, but nothing significant, and was basically not operating. The company had few assets, mostly real estate, on which the mortgages either equalled or exceeded the value of the real estate. 15. West testified that the value of the stock of Corinne Koehl, Inc. on the date of transfer was $12,000. This value was obtained from the value of the stock on the income tax returns of Corinne Koehl, Inc. 16. The Louisiana Land Trust was also established on October 3, 1988, by the debtors’ four children. (Ex. 15). The debtors’ children were the beneficiaries and the set-tlors of the Louisiana Land Trust. (PI. 6, Uncontested Material Fact #8). 17. Robert Koehl testified that the Louisiana Land Trust was established by the debtors’ children to acquire the property of the debtors. He stated that there was no market for the property, and the children wanted to keep intact the property owned by the debtors. Property taxes were owed on the properties, and the mortgage payments were consistently late and in arrears. The debtors needed to sell assets to raise money to pay the creditors. Thus, the transfer of the property to the Louisiana Land Trust benefitted both the debtors and their children. 18. Douglas testified consistently as did Robert Koehl that the purpose of setting up the Louisiana Land Trust was to buy and hold the family property in a format that would operate in a manner similar to a partnership, but would be in the form of a trust. (Ex. 26, pp. 27-29). In this manner, the property would remain in the family, and would go to all of the children, while at the same time, could be used to raise money for the debtors. (Id.) 19. By separate acts of sale also dated October 8,1988, the debtors transferred certain real properties to the Louisiana Land Trust, as follows: Transferor(s) Property Location Purchase Price Clarence Koehl Chef Menteur, Lot 34 $15,000.00 Both debtors Lots on Rosa Ave. 45,000.00 Both debtors Williams Blvd. 25,000.00 Corinne Koehl Chef Menteur, Lot 87 8,000.00 (Ex. 8, 9, 10, and 14) (PI. 6, Uncontested Material Fact # 9). The sale documents indicate that one-half of the price was payable at the closing, and one-half would be due on October 1,1989. (Ex. 8, 9, 10, and 14). The debtors also sold other properties to the Louisiana Land Trust at that time, including properties located at Country Club Estates, Florida Ave., and Kentucky Ave. 20.Robert Koehl testified that the Louisiana Land Trust paid the one-half of the price due at the closing within one or two months of the closing. Cheeks introduced into evidence indicate these amounts were paid on various dates in December, 1988. (Ex. 25-1 — 25-11). 21.Although the transfers of the four pieces of property itemized in Finding of Fact # 19 took place on October 3, 1988, the acts of sale were not recorded until the following dates: Chef Menteur deed (lot 34) October 22, 1991 Rosa Ave. deed October 18, 1991 Williams Blvd. deed October 18, 1991 Chef Menteur deed (lot 87) October 18, 1991 (PI. 6, Uncontested Material Fact # 10). 22.Douglas, the attorney who prepared the trust instruments and the acts of sale, testified that the acts of sale were not recorded contemporaneously with the sale because he “dropped the ball”. (Ex. 26, p. 19). He stated that he forgot to order it done, and “it fell through the crack”. (Id.) He further testified that the matter was discovered in the fall of 1991 when Robert Koehl was trying to sell or transfer one of the properties. (Ex. 26, p. 20). D. The Life of Georgia Judgment 23. On September 2,1988, Life Insurance Company of Georgia (“Life of Georgia”) obtained a default judgment in the case entitled “Life Insurance Company of Georgia v. Lilly, Inc. and C.G. Koehl, Individually ”, Eastern District of Louisiana, No. 88-1037(L)(4), against Lilly, Inc. and C.G. Koehl, individually, in the principal amount of $1,932,076.21 with interest and costs (the “Life of Georgia judgment”). (Ex. 16). The judgment was recorded on September 12, 1988 in Jefferson Parish and in Orleans Parish. (PI. 6, Uncontested Material Fact # 19). 24. Robert Koehl testified that at the time the debtors sold the properties to the Louisiana Land Trust, the family did not know about the Life of Georgia judgment, and did not know that it had been recorded. Although C.G. Koehl had hired a lawyer to represent him in the suit by Life of Georgia, the lawyer apparently did not notify the Koehls of a hearing. Thus, a default judgment was entered without any knowledge thereof by the Koehls. 25. Robert Koehl testified that when he learned of recordation of the judgment, he entered into negotiations with the representatives of Life of Georgia to settle the judgment and to obtain a release of the judgment lien. In connection therewith, Life of Georgia obtained appraisals of properties owned by the debtors. The appraisals were made by a qualified M.A.I. appraiser but were only “drive-by” appraisals. The appraiser was instructed to estimate the fair market value of the properties as of August 15, 1990. The properties appraised and the amounts of the appraisals are as follows: 4817 Taft Drive, Metairie $250,000.00 3716-17 Saratoga, Metairie 125,000.00 Rosa Ave. lots 45,000.00 Van Trump Street, Gretna 5,000.00 Florida Avenue, Kenner 35,000.00 Kentucky Avenue, Kenner 20,000.00 7200 Washington Ave., New Orleans 60,000.00 Venetian Isles lot, New Orleans 15,000.00 (PL 6, Uneontested Material Fact # 20). Life of Georgia also prepared a list of the status of the properties that the judgment hen encumbered. (Ex. 22). 26. Life of Georgia released its judgment for a payment of $300,000.00. The compromise agreement relating to this transaction was executed on November 11,1990, and the transaction was closed on December 14,1990. (PI. 6, Uneontested Material Fact #21). 27. Seventy-five thousand dollars of the amount paid to Life of Georgia was obtained by the sale of a residence on Sharon Drive by the debtors and Robert Koehl and his wife, Kathy Tujague Koehl, to another of the debtors’ sons, Dale Koehl and his wife. (Ex. 6 and 21). One hundred thousand dollars was obtained from a settlement that Lilly Inc. received in a separate lawsuit with PPG Industries (the “PPG settlement”). The remaining amount was paid by Robert Koehl. Because the Life of Georgia judgment encumbered the property purchased by the Louisiana Land Trust, and the existence of the judgment was unknown at the time of the purchase, the remaining one-half of the purchase price owed by the debtors’ children to the debtors for the property in the Louisiana Land Trust was not paid. E. Moler Beauty College 28. By the middle or late 1960’s, the debt- or Corinne Koehl had acquired one hundred percent ownership of Moler Beauty College, Inc. (PI. 6, Uneontested Material Fact #11). 29. Robert Koehl began working for Moler Beauty College approximately twenty-six years ago when he was still in high school. His involvement in running Moler Beauty College increased over the years. He stated that in 1988 Moler Beauty College experienced a substantial decline in student enrollment. 30. In 1988, Corinne Koehl transferred ownership of Moler Beauty College to Robert Koehl by selling him the stock of Corinne Koehl, Inc. for approximately $1,000. (PL 6, Uneontested Material Fact # 12). 31. By instrument dated February 17, 1989, the debtors transferred property at Gayoso and Canal Streets to Moler Beauty College, Inc. (Ex. 11). (Pl. 6, Uneontested Material Fact # 13). The sale was for a cash payment of $216,000, subject to a mortgage in the amount of $372,743.00, for a total amount of $588,743.00. (Ex. 11). Robert Koehl testified that the property had been appraised at $335,000. F. First National Bank of Jefferson 32. At the time the settlement was entered into with Life of Georgia, Robert Koehl approached the First National Bank of Jefferson (“FNJ”) as part of the workout of the debtors’ financial difficulties, and offered to purchase the properties owned by the debtors on which FNJ held mortgages. Robert Koehl testified that, according to the appraisals, the properties had no equity, and/or were operating with negative cash flow, and the properties were at a negative value when the outstanding property taxes were included. He stated that because C.G. Koehl had nothing left after the Life of Georgia settlement, FNJ felt more comfortable with his taking over the loans. His applications to take over the loans were approved by FNJ in January or February, 1991. He stated that the actual transfers did not take place until six months later, due to delay on FNJ’s part. 33. The parties stipulated to the testimony of Bob Tusca (“Tusca”), an employee of FNJ. Tusca testified that Robert Koehl applied to the FNJ in the latter part of 1990 to have certain properties owned by C.G. Koehl, Inc. transferred to himself. FNJ was in favor of the transfer because the son was in a better financial position than the father, and the loans to C.G. Koehl, Inc. had been paid late consistently since 1987. As a result, Robert Koehl’s applications were approved by the FNJ. Tusca further testified that Exhibit 27 shows the loan amounts owed to FNJ as of 10/3/88 and as of 10/18/91, and the values of the properties concerned. 34. As part of the workout with FNJ, the debtors transferred a house on Edenborn Avenue to Robert Koehl on August 14, 1991 for $385,000.00. (Ex. 17). Outstanding property taxes were owed at the time of the sale. (Ex. 17-1). This house was later sold on July 13, 1992, to Sandra Peterson and Gary Young for $285,000. (Ex. 23). 35. As part of the workout, the debtors also transferred property located at 59 West-bank Expressway to Robert Koehl on August 14, 1991 for a sale price of $390,747.00. (Ex. 20). Robert Koehl testified that the property had a loan value of $210,000 to $215,000, and the approximate value of the property was 215,000 to $220,000. An appraisal requested by FNJ indicated the market value was $215,000.00 as of May 15,1991. (Ex. 23-1). 36. Robert Koehl also acquired five warehouses on St. George St. on August 14, 1991 as part of the workout with FNJ. This transaction was completed in two separate sale documents, one with a sale price of $282,691.00, and one for $271,733.00, for a total amount of $554,424.00. (Ex. 18 & 19). Outstanding property taxes were owed on the properties at the time of the sale. (Ex. 18-1, 18-2, 18-3, 19-1, 19-2). Robert Koehl testified that the total indebtedness on the properties was approximately $560,000. An appraisal done for the FNJ valued the properties at $541,500 (Ex. 24). Robert Koehl obtained three appraisals from the New Orleans Aviation Board which listed a fair market value for the properties of $484,000.00. 37. As part of the transaction with FNJ, the debtors transferred a vacant lot in La-Place, in St. John the Baptist Parish to the C.G. Koehl Trust for $7,125.00, subject to the mortgage. (Ex. 5). 38. Based upon the testimony of Robert Koehl, Bob Tusca, and a review of the applicable exhibits, including Exhibit 27, the Court finds that the properties transferred from C.G. Koehl, Inc. to Robert Koehl as part of the workout with the FNJ were for a fair value. 39. Neither the Koehls nor their CPA, believed that the federal taxes were due and owing. The debtors believed the tax returns were correctly prepared. Mr. West did not agree with the bank deposit method used by the IRS to make the assessments against the debtors. Mr. West advised the debtors to protest the taxes. The debtors did protest the proposed assessments. The Court finds there is no credible evidence of knowledge of falsity of the returns. 40.The Court further finds that the testimony of Robert Koehl, C.G. Koehl, Jay West, and R. Travis Douglas is credible. LEGAL ANALYSIS AND CONCLUSIONS The debtors seek a discharge of their federal income taxes for the years 1978 through 1983. The United States objects to the discharge under 11 U.S.C. § 523(a)(1)(C). Section 523(a)(1)(C) provides: A discharge under ... this title does not discharge a debtor from any debt— (1) for a tax or a customs duty— (C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax. ' Section 523(a)(1)(C) provides two alternative grounds for which a tax liability may be declared nondischargeable, i.e., (1) when the debtor filed a fraudulent return; or (2) when the debtor willfully attempted in any manner to evade or defeat such tax. In re Lilley, 152 B.R. 715 (Bankr.E.D.Pa.1993); In re Hopkins, 133 B.R. 102, 105-106 (Bankr.N.D.Ohio 1991). In the present case, the debtors believed that the returns were prepared correctly, based upon the advice of their accountant, Jay West. The United States has not produced any evidence which suggests that the returns were fraudulently filed, and does not assert such an argument in its post-trial memorandum. Instead, the United States seeks to except the taxes from discharge on the second ground, i.e. that the debtors willfully attempted to evade or defeat the taxes. An exception to discharge under Section 523(a) must be proved by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). The burden of proving that the debt- or’s tax liabilities are nondischargeable is on the United States. In re Lilley, 152 B.R. at 720; In re Fernandez, 112 B.R. 888 (Bankr.N.D.Ohio 1990); In re Kirk, 98 B.R. 51 (Bankr.M.D.Fla.1989). The meaning of Section 523(a)(1)(C) has been subject to differing interpretations. The case of In re Gathwright, 102 B.R. 211 (Bankr.D.Ore.1989), held that Section 523(a)(1)(C) does not include willful attempts to evade or defeat “payment” as a basis for nondischargeability. Although the reasoning used in Gathwright was initially followed by some bankruptcy courts, at least two of these decisions were reversed by higher courts. See Toti v. United States, 141 B.R. 126 (Bankr.E.D.Mich.1992), reversed, United States v. Toti, 149 B.R. 829 (E.D.Mich.1993); Peterson v. Commissioner, 132 B.R. 68 (Bankr.D.Wyo.1991), reversed, In re Peterson, 152 B.R. 329 (D.Wyo.1993).
6106417-6168	MEMORANDUM OPINION JOHN T. LANEY, III, Bankruptcy Judge. Before the court is a Motion to Reconsider the court’s order of February 13, 1990, granting a lien avoidance motion filed by the Debtor pursuant to § 522(f) of the Bankruptcy Code. Bennett Supply Company, Inc. (hereinafter “Creditor”) obtained a judgment against Ulysses Robinson in the Superior Court of Lee County, Georgia, on August 29, 1988. On May 10, 1989, Mr. Robinson filed a Chapter 7 bankruptcy. His schedules listed the Creditor as unsecured. The case was closed on September 28, 1989 after a discharge was entered on the same date. The holder of a first mortgage on real estate owned by the Debtor thereafter began a foreclosure proceeding. The Creditor herein purchased the promissory note and security deed of the mortgage holder and the Debtor paid off that obligation to the Creditor. The judgment lien remains unpaid. In his brief, the Debtor’s attorney stated that he first learned of the judgment lien of the Creditor herein and also judgment liens of other creditors when the foreclosure proceeding was instituted. Thereafter he filed a motion to reopen the case in order to add omitted creditors. He gave no notice to the Creditor and made no mention of an intent to file a lien avoidance motion as to this Creditor. No opposition having been made to the Debtor’s motion to reopen his case, the court entered an order allowing the reopening on January 8, 1990. On January 23, 1990, the Debtor filed a motion to avoid the Creditor’s judicial lien and served with it a notice requiring that any answer be served on or before February 8, 1990, and be filed with the Clerk’s Office within three days after service. The Creditor’s response was served on February 8, 1990, and was mailed to the Clerk’s Office on that date, but was not received and filed in the Clerk’s Office until February 13, 1990. February 11, 1990, was a Sunday and therefore the answer could have been filed on February 12, 1990, and been timely filed. Creditor’s attorney directed that his secretary called the Clerk’s Office on February 12, 1990 to confirm that the answer had been received and filed. She made the call to the Clerk’s Office, but the Clerk’s Office advised her that they would have to check the file and call her back and they did not do so until the next day. The court entered an order granting Debtor’s motion on February 13, 1990, pri- or to receipt of the answer of the Creditor. That order stated that the “fixing of the judicial lien in favor of the Creditor be, and the same is hereby, cancelled.” On February 16, 1990, the Creditor served a motion to set aside default judgment pursuant to Bankruptcy Rule 9024. The court held a hearing and received evidence on May 1, 1990. Movant and Respondent have subsequently filed briefs. After consideration of the evidence, oral argument, and briefs, the court issues this Memorandum Opinion. The court in Turner Broadcasting System, Inc. v. Sanyo Elec., Inc., 33 B.R. 996, 1001 (N.D.Ga.) aff'd, 742 F.2d 1465 (11th Cir.1983) listed four factors which should be considered in determining whether a default should be set aside pursuant to Rule 60(b) of the Federal Rules of Civil Procedure: (1) Whether the defaulting party has presented a plausible excuse explaining the reasons for the default. (2) Whether the defaulting party acted promptly to vacate the default. (3) Whether the defaulting party asserts a meritorious defense. (4) Whether the nondefaulting party will be prejudiced by setting aside the default. In examining the first factor of the Turner court, this court determines that the Creditor has presented a plausible excuse for the default. Creditor’s objection was served on the Debtor on February 8, 1990, and mailed to the bankruptcy court from Albany on the same date. Creditor’s attorney’s secretary did attempt to verify that its objection had been filed by telephoning the Clerk’s Office on February 12, 1990 (the last day for timely filing of an objection). Creditor’s attorney did not learn that its objection was not filed until February 13, 1990. In considering the next factor as to whether the defaulting party acted promptly to vacate the default, the Creditor’s attorney prepared and served its motion to set aside default judgment on February 16, 1990. This court believes the Creditor has satisfied the second factor of the Turner court. As to the consideration of the next factor of whether the defaulting party asserts a meritorious defense, this court is persuaded by the Creditor’s argument. The Creditor cites § 522(f)(1) of the Bankruptcy Code as the appropriate code section for avoidance of judicial liens. Section 522(f)(1) provides: (f) Notwithstanding any waiver of exemptions, the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is— (1) a judicial lien; or.... 11 U.S.C.A. § 522(f)(1) (West 1979). At the hearing on May 1, 1990, the Creditor’s witness H.D. Evert testified that the Debtor’s home, land, septic tank and well would have a fair market value of $65,-428.56 as of the date of the Debtor’s filing of his bankruptcy petition. The Debtor testified that the first mortgage was $32,-000 and there were no other mortgages on the property. This would leave the Debtor with $33,428.56 in equity. This equity would exceed the Debtor’s claim of exemption of $3,000 as shown on his bankruptcy petition. The last factor of the Turner court to be considered is whether the nondefaulting party would be prejudiced by setting aside the default. The court notes that in the instant case the Debtor’s attorney acknowledged receipt of the Creditor’s objection on February 9, 1990, prior to the entry of the default judgment. In addition, the Debtor was served with the motion to set aside the default judgment on February 16, 1990, three days after the entry of default. This court is satisfied that under the facts of the instant case, the Debtor will not be prejudiced by allowing the court to consider the merits of the instant case.
3667843-7485	MARTIN, Circuit Judge. This litigation stems from the liquidation of The Commercial Bank and Trust Company of Akron, Ohio, in which the appellant, City of Akron, had deposited public funds, which, pursuant to the statutes of Ohio and the city ordinances, were protected by certain depository bonds executed and delivered by seven surety companies, including the appellee, Fidelity and Casualty Company of New York. The bank deposits of the City had been further protected by collateral security, consisting of real estate mortgages and municipal bonds. Upon the failure of the Bank, the City of Akron sued the appellee and five of the other surety companies upon their respective bonds. The action brought by the City against the Fidelity and Casualty Company of New York was settled by agreement in writing, dated May 9, 1934; and similar settlement contracts were executed between the City and each of the other surety companies except the Independence Indemnity Company, which was then insolvent and in process of liquidation. These settlement agreements provided that the total deposits of the City in the defunct bank, amounting to $247,500, would be reduced to $122,529.95 by applying, to that end, an agreed value of the collateral held by the City and the face amount of the bond of the insolvent Independence Indemnity Company. These reducing items aggregated $124,970.05. The surety companies, including the appellee, paid to the City their proper proportionate parts of the agreed sum of $122,529.95. The surety companies respectively waived all interest in the collateral security, except in any value remaining after the City had been made whole. It was provided that the City should receive all dividends from the liquidation of the bank and of the defunct Independence Indemnity Company, until the amount of the obligation of the latter on its bond to the City had been paid in full. Thereafter,. all additional dividends from such sources should be the sole property of the sureties, to be distributed in appropriate proportion. The settlement agreement between appellant and appellee contained this proviso: “ * * * these presents shall be construed to be and operate as an assignment of the Obligee’s entire right, title and interest in and to its entire deposit with said The Commercial Bank & Trust Company and its rights to dividends from said The Independence Indemnity Company as of and after the happening of the contingency aforesaid, to the several sureties in the proportions stated.” In the instant action brought by the Fidelity and Casualty Company of New York against the City of Akron, the District Court awarded judgment against the City in the sum of $5,328.98, for breach of its contract of May 9, 1934, with the appellee surety company. The decree was based in part upon a finding of fact, supported by evidence, that, without the consent of the surety, the City had compromised its deposit claim of $250,176.14 for a certificate of deposit in the amount of $150,611. The Court found, further, that the effect of this compromise reduced the City’s claim against the bank to the extent of $99,973.92. The Court calculated that, had the compromise not been made, dividends of 31.2% would have been paid to the surety companies, and that the resultant loss to the appellee was $5,328.98. The Court construed the contract of May 9, 1934, between the litigants, as meaning that only the deposit liability of the surety companies was reduced to $122,-529.95, and that the entire deposit claim of the City against the bank had been assigned to the surety companies as of the date of the contract; and that the compromise of its entire deposit claim by the City with the bank’s liquidator was a breach of its contract with the surety companies, wrongfully depriving them of their right to receive liquidating dividends on the City’s entire deposit. Whether the effect of the contract of May 9, 1934, was, as contended by the appellee, an assignment to the sureties of the City’s entire deposit claim of $247,-500, or, as argued by the appellant, an assignment of only $122,529.95, is immaterial; inasmuch as neither the City nor the surety companies, as its assignees, could receive dividends from the bank in liquidation, except to the extent which the compromise agreement between the City and the bank’s liquidator provides. This is true for the reason that, under controlling Ohio law, the City’s entire claim against the general assets of the insolvent bank must be reduced by the amount realized by the City from the collateral which it held. The sureties could, of course, be allowed no greater claim. The Supreme Court of Ohio, in State National Bank v. Esterly, 69 Ohio St. 24, 68 N.E. 582, held that “where the property of an insolvent debtor, by order of court, is placed in the hands of a receiver to be administered upon for the payment of the insolvent’s debts, a creditor who holds col-laterals taken to secure his claim, and upon which he has realized before a dividend is declared, is entitled to a dividend on only so much of his debt as remains after deducting the proceeds of the collaterals; and this sum may be ascertained at the time the dividend is declared, although the claim had formerly been proven and allowed for the full amount.” It was deemed inequitable to allow a dividend to a secured creditor on the basis of his entire claim unreduced by collected collaterals, inasmuch as the share of unsecured creditors of the insolvent debtor would be correspondingly diminished. The Ohio Supreme Court took cognizance of Merrill v. National Bank of Jacksonville, 173 U.S. 131, 19 S. Ct. 360, 43 L.Ed. 640, and Chemical National Bank v. Armstrong, 6 Cir., 59 F. 372, 28 L.R.A. 231, cited by appellee, but did not follow the principles pronounced in these Federal decisions. From decisions of the inferior courts of Ohio, it is clear that in a state bank liquidation a secured depositor is required to deduct the value of his collateral before his claim can be allowed against the fund for general creditors. In re Liquidation of Peoples Bank, 1936, 23 O.L.A. 535; Oakwood v. Fulton, 1933, 14 O.L.A. 685. In the last cited case, the principle of State National Bank v. Esterly, 69 Ohio St. 24, 68 N.E. 582, supra, was applied, with a declaration in the first syllabus that a legal principle promulgated and announced by the Supreme Court of Ohio is binding on all inferior courts in the state, even though it may be contrary to the rule announced by the United States Supreme Court. The Esterly case was also recognized as authority by the Court of Appeals of Hamilton County, Ohio, in Western Bank & Trust Company v. Ragland, 1933, 47 Ohio App. 270, 191 N.E. 814. The comprehensive opinion of Judge Matthews, in Octograph Engraving Co. et al. v. Ragland, Assignee of John B. Swift, Dec. 7, 1932, 30 Ohio N.P.,N.S., 101, is valuable in the context for its analysis of the Ohio rule, its treatment of the Esterly case as prevailing law in Ohio, and its distinction of Assets Realization Co. v. American Bonding Co. of Baltimore, 88 Ohio St. 216, 102 N.E. 719, Ann.Cas.1915A, 1194. The peculiar facts of the Assets Realization Company case, the narration of which would unduly lengthen this opinion without contributing to its rationale, obviously distinguish it from the case at bar. Moreover, this later decision of the Supreme Court of Ohio does not becloud the light cast by the Esterly case, in revelation of appropriate Ohio law.
10519294-15659	WINTER, Circuit Judge: This is an appeal from Judge Nevas’s issuance of a preliminary injunction prohibiting the Secretary of the Navy from discharging Lieutenant Paul Raymond Gui-tard. Because Guitard failed to exhaust his administrative remedies, we reverse. BACKGROUND Guitard is a Lieutenant, Junior Grade, in the Nurse Corps of the United States Naval Reserve. He is currently on active duty in the Supply Department of the Naval Hospital, Philadelphia, Pennsylvania. In November 1985, Guitard refused to submit to a random drug test, on the ground that the test violated his constitutional rights. He was fined and given a letter of admonition for failure to follow the order. In March 1986, the Navy conducted a drug-testing sweep of Guitard’s unit. On this occasion, Guitard provided the urine sample as requested and tested positive for marijuana use. A court-martial followed, and Guitard was convicted of violating 10 U.S.C. § 912a (1988), which prohibits “wrongful use[], possesspon], manufacture[ ], distributpon], [or] importation]” of a controlled substance. His discharge was ordered. However, this ruling was overturned by the Navy and Marine Corps Court of Military Review on the ground that the Navy failed to provide an expert witness for Guitard. The Navy elected not to retry Guitard before a court-martial but instead convened a three-officer Board of Inquiry pursuant to 10 U.S.C. § 1181 et seq. (1988). The Board of Inquiry unanimously found Gui-tard guilty of military misconduct by refusing to follow a lawful order to submit to a drug test and by using marijuana. The Board of Inquiry also relied upon fitness reports that evaluated his performance from March 1986 through August 1986 as “marginal.” The Board of Inquiry recommended that Guitard be separated from the Navy with an Other Than Honorable discharge. The Secretary of the Navy approved the discharge solely on the basis of the drug-related misconduct, to take effect on April 19, 1990. On April 18, Guitard filed the present action, alleging a host of claims. Among them were that the administrative procedures leading to his discharge were “illegal,” that he was denied due process when the Navy labelled him a “drug user” without a trial, that he had inadequate representation at the Board of Inquiry, that he was denied compulsory process to produce favorable witnesses, that as a white male he was racially and sexually discriminated against, and that he was “harassed” and “unfairly treated” by his commanding officers. On April 27, 1990, the district court issued a temporary restraining order and referred the request for a preliminary injunction to a magistrate judge. The magistrate judge recommended that Guitard’s request for injunctive relief be denied on the ground that Guitard failed to show the necessary “likelihood of success on the merits” or “sufficiently serious questions going to the merits to make them a fair ground for litigation.” See Sperry International Trade, Inc. v. Government of Israel, 670 F.2d 8, 12 (2d Cir.1982) (reciting two formulations of second prong of preliminary injunction test). This ruling, the magistrate judge explained, was not based on Guitard’s failure to exhaust administrative remedies because “the plaintiff’s underlying claims are so devoid of merit it seems better that they be addressed.” The magistrate judge characterized as “outlandish” Guitard’s attempts to explain his positive drug test, specifically his claim that it may have resulted from his having eaten cookies or brownies of an “unknown origin” the weekend before the urinalysis. Guitard filed several objections to the magistrate judge’s report. These included the following claims: (i) that the magistrate judge ignored the numerous “procedural irregularities” in the Board of Inquiry proceedings; and (ii) that the urinalysis test upon which his discharge was based was not a regular sweep but was instead timed to ensnare him. The district court was persuaded, holding that “Guitard has raised issues concerning the propriety of the procedures by which he was discharged which need to be resolved so that the record can be completed before this court can make its de novo review.” Accordingly, Judge Nevas ordered the Navy “to conduct the necessary and appropriate hearings to determine the two issues which Guitard has raised.” The Navy appointed a judge advocate to conduct a hearing on Guitard’s allegations. Guitard was given the opportunity to provide additional evidence, and Navy personnel familiar with the drug testing program were interviewed. Additionally, the hearing officer reviewed the evidence collected in the prior administrative proceedings against Guitard. The Navy submitted a twelve-page report to the district court addressing Guitard’s specific contentions and including the results of its hearing and further investigations. It found that Gui-tard’s allegations of being “singled out” for drug testing were unsupported by the evidence and that his discharge proceedings were consistent with regulations and the law. The report scheduled Guitard’s discharge for July 31, 1991. Guitard moved for another restraining order, which the district judge granted on July 23, 1991. At a subsequent hearing, the district judge issued a preliminary injunction from the bench, stating his dissatisfaction with the Navy’s response. [I]n the Court’s view, the report is not complete at this time because of the Navy’s failure or refusal to follow my ... order of last November, in which I asked that a hearing be conducted on the two issues referred to in that ruling. Therefore, it would seem that a preliminary injunction is the only way the status quo can be preserved until the Navy complies with my order to conduct a hearing_before a duly authorized of ficer wherein the plaintiff is afforded the opportunity to be represented by counsel.... to be conducted in good faith, and without any command influence, and with proper findings to follow. The district court found that Guitard would suffer “irreparable harm” if the discharge were allowed to take effect, and that there were “sufficiently serious questions going to the merits.” The Navy appealed. DISCUSSION Because Guitard failed to exhaust his administrative remedies, the district court should not have intervened in the proceedings between Guitard and the Navy. Under the exhaustion rule, a party may not seek federal judicial review of an adverse administrative determination until the party has first sought all possible relief within the agency itself. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463-64, 82 L.Ed. 638 (1938). In Schlesinger v. Councilman, 420 U.S. 738, 95 S.Ct. 1300, 43 L.Ed.2d 591 (1975), the Supreme Court stated: [The exhaustion rule] is based on the need to allow agencies to develop the facts, to apply the law in which they are peculiarly expert, and to correct their own errors. The rule ensures that whatever judicial review is available will be informed and narrowed by the agencies’ own decisions. It also avoids duplicative proceedings, and often the agency’s ultimate decision will obviate the need for judicial intervention. 420 U.S. at 756-57, 95 S.Ct. at 1312 (citations omitted). In Schlesinger, the Court noted the particular importance of administrative exhaustion in circumstances implicating military discipline. Schlesinger involved a petition for a writ of habeas corpus by a military prisoner subject to pending court-martial proceedings. The Court stated, “The military is ‘a specialized society separate from civilian society’ with ‘laws and traditions of its own [developed] during its long history.’ ” Schlesinger, 420 U.S. at 757, 95 S.Ct. at 1313 (quoting Parker v. Levy, 417 U.S. 733, 743, 94 S.Ct. 2547, 2555, 41 L.Ed.2d 439 (1974)). The Court also emphasized that the crucial role of the armed forces in preserving national security requires that “the military must insist upon a respect for duty and a discipline without counterpart in civilian life.” Id. The Court concluded that because Congress provided the military with its own legal code, “it must be assumed that the military court system will vindicate servicemen’s constitutional rights.” Id. 420 U.S. at 758, 95 S.Ct. at 1313; Middendorf v. Henry, 425 U.S. 25, 29 n. 6, 96 S.Ct. 1281, 1285 n. 16, 47 L.Ed.2d 556 (1976); Parisi v. Davidson, 405 U.S. 34, 37, 92 S.Ct. 815, 817-18, 31 L.Ed.2d 17 (1972); McKart v. United States, 395 U.S. 185, 194-95, 89 S.Ct. 1657, 1662-63, 23 L.Ed.2d 194 (1969). Finally, “judges are not given the task of running the [military].” Orloff v. Willoughby, 345 U.S. 83, 93, 73 S.Ct. 534, 540, 97 L.Ed. 842 (1953). The imperatives concerning military discipline require the strict application of the exhaustion doctrine in discharge cases. In Michaelson v. Herren, 242 F.2d 693 (2d Cir.1957), we applied the exhaustion rule in a factual context strikingly similar to the instant case. In Michaelson, an Army sergeant sought a preliminary injunction barring the Army from giving him an Undesirable Discharge. We held that his failure to bring his case first to an Army “Board of Review,” an appeal board within the Army, established by Congress, see 10 U.S.C. § 1553 (1988), barred his action for an injunction. We stated that the district court “could not properly assume to exercise [ ] jurisdiction until the plaintiff had exhausted the review processes which the statute provided for the military establishment.” Michaelson, 242 F.2d at 696; see also Guerra v. Scruggs, 942 F.2d 270, 275-77 (4th Cir.1991) (exhaustion required for serviceman seeking injunctive relief prohibiting his discharge for drug use); Cargill v. Marsh, 902 F.2d 1006, 1007-08 (D.C.Cir.1990) (exhaustion required for plaintiff seeking reassignment within the Army); Muhammad v. Secretary of the Army, 770 F.2d 1494, 1495 (9th Cir.1985) (exhaustion required when Army member brought civil rights and Eighth Amendment claims after his discharge for failure to include prior convictions on enlistment forms); Von Hoffburg v. Alexander, 615 F.2d 633, 637 (5th Cir.1980) (exhaustion required when enlisted woman sought declaratory and in-junctive relief after she was honorably discharged from Army for homosexual tendencies); Bowman v. Wilson, 672 F.2d 1145, 1156-57 (3d Cir.1982) (exhaustion required before consideration of Army officer’s ha-beas petition). Guitard relies upon Diederich v. Department of the Army, 878 F.2d 646 (2d Cir.1989), in which the exhaustion doctrine was not applied. That was an action by a former army officer alleging claims under the Privacy Act. See 5 U.S.C. § 552a(g)(l)(D) (1988). However, because the Privacy Act explicitly provides for expedited review procedures that would be impeded by an exhaustion requirement, Diederich’s holding is limited to Privacy Act claims. See Diederich, 878 F.2d at 647. Nor does Guitard’s action fall into one of the established exceptions to the exhaustion rule. Exhaustion of administrative remedies may not be required when: (1) available remedies provide no “genuine opportunity for adequate relief”; (2) irreparable injury may occur without immediate judicial relief; (3) administrative appeal would be “futile”; and (4) in certain instances a plaintiff has raised a “substantial constitutional question.” See Von Hoffburg, 615 F.2d at 638, and cases cited therein. Guitard claims that his administrative remedies are inadequate because neither of the two intraservice boards still open to him, the Board for the Correction of Naval Records (“the Corrections Board”), and the Naval Discharge Review Board (“the Discharge Review Board”), guarantee a full-blown adversarial hearing or have the unilateral power to reinstate him without the approval of the Secretary of the Navy. Even so, his argument has no merit. Guitard’s claims regarding both the manner in which the drug testing of his unit was conducted and the alleged procedural irregularities in the Navy’s administrative review process are entirely within the competence of the Corrections Board. This Board, composed of civilians appointed by the Secretary, is empowered by statute to “correct any military record ... when [the Secretary] considers it necessary to correct an error or remove an injustice.” 10 U.S.C. § 1552(a) (1988). When the Corrections Board determines that either an error or injustice has occurred, it may make a recommendation to the Secretary of the Navy. 32 C.F.R. § 723.2 (1991). Claims of “constitutional, statutory and/or regulatory violations” are within its purview. 32 C.F.R. § 723.3(e)(5) (1991). After receiving the Corrections Board’s recommendations, the Secretary may direct “appropriate” corrective action, which includes reinstatement. See Knehans v. Alexander, 566 F.2d 312, 315 (D.C.Cir.1977), cert, denied, 435 U.S. 995, 98 S.Ct. 1646, 56 L.Ed.2d 83 (1978) (Army Corrections Board considered adequate source of relief for officer who sought reinstatement and backpay after discharge); 32 C.F.R. § 723.7 (1991); see also Chappell v. Wallace, 462 U.S. 296, 303, 103 S.Ct. 2362, 2367, 76 L.Ed.2d 586 (1982) (discussing broad powers of Corrections Board). Although Guitard is correct that the Corrections Board is not required by regulation to grant a hearing in every case, it has the discretion to do so. See 32 C.F.R. §§ 723.3(e), 723.4(a) (1991). There was, therefore, a possibility of obtaining full relief from the Corrections Board. See, e.g., Knehans, 566 F.2d at 315 and cases cited therein. Unlike the Corrections Board, the Discharge Review Board does not have the power to recommend reinstatement. However, the inability to grant full relief does not dispose of the exhaustion requirement so long as the tribunal in question had the power to grant some pertinent relief. See Williams v. Wilson, 762 F.2d 357, 360 n. 6 (4th Cir.1985). The Discharge Review Board has the statutory authority to “change a discharge or dismissal, or issue a new discharge, to reflect its findings.” 10 U.S.C. § 1553(b) (1988). Its function is to correct any “injustice or inequity in the discharge issued.” 32 C.F.R. § 724.203(b) (1991). The evidence reviewed by the Board includes an aggrieved person’s military records and other information presented in person or by affidavit. 32 C.F.R. § 724.202(a)(3) (1991). Moreover, all discharges other than those resulting from a general court-martial fall within the Discharge Review Board’s jurisdiction. It could have changed Guitard’s discharge from “Other Than Honorable” to fully honorable if it was so convinced after reviewing the evidence. Thus, Guitard should have sought redress before the Discharge Review Board. Nor do the threatened injuries to Guitard justify dispensing with the exhaustion requirement. In Sampson v. Murray, 415 U.S. 61, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974), the Supreme Court held that the injuries that generally attend a discharge from employment — loss of reputation, loss of income and difficulty in finding other employment — do not constitute the irreparable harm necessary to obtain a preliminary injunction. Id. at 89-92, 94 S.Ct. at 952-54. This reasoning applies with as much or greater force in the case of a military discharge. See Guerra v. Scruggs, 942 F.2d 270, 274-75 (4th Cir.1991); Hartikka v. United States, 754 F.2d 1516, 1518 (9th Cir.1985); Chilcott v. Orr, 747 F.2d 29, 34 (1st Cir.1984). Nor has Guitard shown either that administrative review would be futile for reasons other than the lack of merits of his case or that a substantial constitutional issue is involved. His claims thus do not fall within any of the recognized exceptions to the exhaustion doctrine.
269597-10035	MANTON, Circuit Judge. This suit is for infringement of patent No. -1,715,325, issued May 28, 1927, on an application filed March 18,1927. The patent related to a spreading apparatus for distributing stone chips or other loose materials over road surfaces. The defense of invalidity was sustained below, and it is'the principal question argued on this appeal. Claims 1, 2, 3, and 8 axe relied upon. Claims 5 and 6 were disclaimed by formal disclaimer filed August 9, 1933. It is conceded by appellant that the invalidity of the four claims now relied upon depends upon whether the inventor disclosed the essential subject-matter in his original application for a patent February 6, 1923. The application of March 18, 1927, is claimed to be a continuation, in part, of that application. Of the claims relied upon, claim 1 provides for a spreading apparatus for roadways comprising in combination (a) a motor-driven truck having a body arranged to tilt to discharge at the rear of the truck; (b) a material spreading unit separate from said truck comprising a spreading device for lateral distribution, of a road-surfacing material; (c) a hopper arranged to discharge into said spreading device; and (d) a wheel for said device and means for attaching said unit to a part of said truck other than said body, whereby material is fed to said hopper in any discharging position of said body. Claim 2 is for a spreading apparatus, for the same work, comprising in combination (a), (b), and (c) of claim 1, (d) a wheel for the spreading device and hopper, (e) power means actuated by the wheel for operating the spreading device, and (f) means for attaching the unit to a part of the truck so that material might be fed into the hopper in any discharging position of the body. Claim 3 differs from claims 1 and 2 in that the hopper is to have a length substantially equal to the width of the truck, and, in support of the hopper and spreading device, there was included a wheel and means actuated by said wheel for actuating said spreading device. Claims 1, 2, and 3 make no reference to backward movement of the truck. Claim 8 differs from these claims in that it describes the operation of the spreading apparatus when the spreader is propelled in advance of the truck. This operation is not referred to in the inventor’s first application, and this fact the lower court held precluded the inventor from claiming it. The inventive thought of the patent is said to reside in providing a spreading unit for distributing stone chips, sand, gravel, and other loose materials over a roadbed with a motortruck of usual construction, having a tiltable body so as to receive and laterally spread over the roadway the material as discharged from the truck directly into the spreading unit, the spreading unit having a spreading device actuated by the movement of the spreading unit. The spreading unit is quickly attachable to and detachable from the trucks and provided with its own wheel to drive its mechanism when propelled over the road by the truck. It is claimed that a single spreading unit may be successfully attached to and moved with each truck as its material is being discharged into the spreading unit, thus receiving the contents of successive trucks, and thus permitting the trucks to go back and forth to the source of material; each truck being detained in the place of work only long enough to deliver its load to the spreading unit and over the roadbed. As a result, this combination is said to have produced a new and highly useful result. The claim is further made that the inventor’s self-supporting and equally detachable spreading unit may be attached to a propelling vehicle and pushed backwards by and with the vehicle if a nonswiveling connection is used. When thus moved, it spreads the material on the roadbed before the wheels of the vehicle and the wheels of the spreading unit reach that roadbed, making it possible to treat tarred roads without gumming the wheels of the propelling vehicle and spreader, or tearing up the moist material and thereby impairing the work done. It is admitted that the spreading unit- and motortruck with tiltable body were old, but appellant says that the combination of the two used as the patent teaches brings about this new and useful result. Unless the application for the patent can be considered as a continuation of the abandoned patent filed by the inventor in 1923, the patent sued on is invalid because of prior public use. A spreader of the model offered in evidence, by the appellant, was used in Baltimore in 1923. It was bought by the appellant from the Do-It-All Spreader Company. The inventor, in 1923, turned over to the Do-It-All Spreader Company the manufacturing and selling rights. The appellant’s president said that the only machine he made or saw was the original device that he constructed in 1923. He had nothing to do with preparing the drawings or specifications for the patent. In May, 1926, the Do-It-All Spreader Company sold its rights to the appellant. Appellant’s president stated appellant bought four or five spreaders between 1923 and 1926 from the Do-It-All Spreader Company and that the first spreader purchased was used in 19-28 for three years and that appellant had two or three in 1924. The witness identified the device so used as being-in all respeets identical with the appellant’s model No. 13 with minor exceptions. The use of this spreader more than two years prior to the filing of the application for the patent in suit will void such patent because of its public use. Egbert v. Lippmann, 104 U. S. 333, 26 L. Ed. 755; Standard Automatic Machine Co. v. Karl Keifer Mach. Co. (C. C. A.) 18 F.(2d) 331. But the appellant urges that the inventor’s prior application, of which the present is a continuation, disclosed a tilting truck and spreading combination and therefore the filing date reverts to February 6, 1923, when the earlier application was filed. But comparing the specifications, drawings, and claims of the patent allowed with the abandoned application, it is apparent that there is no mechanism common to both applications except a tractor’s wheel for revolving the spreader cone so as to distribute the material laterally. Also there was no disclosure in the specifications of the abandoned application which would warrant the making of the claims in issue. Since there is no disclosure in the specification, there was no basis for such claims. The application for the patent in suit eannot, therefore, be treated as a continuation of the earlier application. The drawings are of no avail because there is an absence of a description of the alleged invention. The inventor says his invention was directed to the spreader per se; not to the combination of a motor-driven truck having a body arranged to tilt so as to discharge at the rear of the truck or means of supporting the spreader in an upswung position against the truck or adjustable attaching means to take care of different sized trucks. The file wrapper of the abandoned application reads: “The essential element of the invention is a circular distributor 10 made preferably of thin material pressed into shape to provide under current channels and ribs 10a and 10b radially disposed and arranged in a circumferential series, the channels constituting troughs in which the material is received to be distributed over a road surface by the rotation of the distributor. Rotation of the distributor as well, as support of the latter is had by means of a ground wheel or roller 11 journaled on a shaft 12 spanning the lower ends of the side bars of the truck 13 which is adapted for attachment as a trailer to a wagon or truck carrying the material to be spread, the rear end of said wagon or truck being indicated at 14.” The essential element of the invention was there pointed out to be the circular distributor provided with channels constituting troughs in which the material is received to be spread over the road by the rotation of the distributor. The spreader is of a type different from that disclosed in the application of the patent in suit. There is clear indication that there was no disclosure of a motor-driven truck having a body arranged to tilt to discharge at the rear of the truck. An amendment filed October 17, 1928, stated that “the body 14 of the wagon being in a position over the hopper 20 to deliver the material into the hopper.” This is persuasive that no tiltable truck was contemplated. In his abandoned application, the inventor canceled all pending claims, which were all directed to the spreader per se, in view of the prior art cited. And, at the time the application became abandoned, the claim was directed to the spreading device per se provided with “hooks and spring actuated latches elos- . ing the throats of said hooks in combination with a rod for disposition in spanning relation to the side rails of a wagon.” Comparing the abandoned application with the testimony now offered, it is clear to us that there is an entire absence of any description whatever of a motor-driven truck having a body arranged to tilt to discharge the materials from the rear of the truck. Nor does it contain any statement of invention which sufficiently indicates the idea of a raised truck body discharging material into a hopper while the spreader is moving in advance, nor of the truck as the truck is moved rearwardly under its motor power to thereby push the spreading device over the tarred road in advance of the truck. To support the claim of disclosure in the abandoned application, it must appear that there was a complete disclosure. General Electric Co. v. Continental Fibre Co., 256 F. 660, 664 (C. C. A. 2). There it was said: “ * * * The doctrine of continuity 'broadly depends upon whether the substituted application is for the same invention as that disclosed in the original application.’ c- :> jkg qUer£es jn tNis case * *' are these: Could the claims in suit have been properly issued on the original specification.”
1221880-12474	BATCHELDER, Circuit Judge. Appellant Frank Kevin Fischer appeals the district court’s grant of summary judgment to United Parcel Service (“UPS”) on his claims under Michigan’s Elliob-Larsen Civil Rights Act (“ELCRA”) for race discrimination and retaliation, and the judgment entered by the district court in favor of UPS following a jury trial on his sole surviving claim of racial harassment. Because the district court properly rejected Appellant’s contentions at the summary judgment phase, and we find no merit to Fischer’s claim of error in the instruction to the jury on his racial harassment claim, we AFFIRM the judgment of the district court. I. BACKGROUND Frank Kevin Fischer (“Fischer”), who is African-American, became an employee of UPS in 1985, rising through the ranks until, in 1997, he was promoted to National Account Manager (“NAM”), a position he still held with UPS as of the commencement of this litigation. NAMs are responsible for developing and maintaining business accounts assigned to them by their superiors at UPS. Fischer’s chief account while a NAM was the Ford Motor Compa ny (“Ford”) small package account. He serviced this account until December, 1999, when he was transferred to four other accounts. Fischer claims that his transfer from the Ford account was due to racial animus on the part of his supervisor, James Riley. However, it is undisputed that prior to his removal from the account, Fischer’s relationship with Ford’s primary account manager, Jerry Campbell, had become strained. This tension was due in part to Fischer’s insistence that Campbell was not dealing with UPS in accordance with certain contracts between Ford and UPS. It was also due to Campbell’s having discovered that he was the subject of a embarrassing investigation by Ford, triggered by Fischer’s telling management officials of UPS that Campbell had an unethical relationship with FedEx that suggested why Campbell was directing to FedEx shipping business that Fischer believed should have gone to UPS. Although Fischer admits that he was the source of this story, he vigorously denies that he told anyone at UPS that he had actual evidence of Campbell’s alleged relationship with FedEx. It is undisputed that because of these allegations, Ford initiated an investigation of Campbell; that Campbell asked that Fischer be removed from the Ford account; that other Ford representatives expressed to UPS their belief that Fischer had claimed to have actual evidence of Campbell’s alleged misconduct, and their anger at Fischer; and that UPS made a concerted, but ultimately unsuccessful, attempt to determine whether Fischer had in fact said that there was hard evidence of Campbell’s alleged misconduct. Finally, it is undisputed that UPS was concerned about its continued relationship with Ford, and that Fischer was not disciplined as a result of this incident, but was removed from the Ford account and transferred to other accounts without loss of title, salary or benefits and without imposition of additional duties. Although it was primarily his transfer from the Ford account that precipitated this lawsuit, Fischer also complains generally of his treatment from June, 1997, when he became a NAM, to December, 1999, when he was removed from the Ford account. Specifically, Fischer points to several incidents that he claims constituted race discrimination, retaliation, and harassment. First, Fischer describes an exchange at an initial meeting with his new supervisor, James Riley: I described myself to Mr. Riley as a nontraditional student. Mr. Riley asked me what that meant and I said it means I’m a student who didn’t get-obtain my degree the first time I went to college and that I was going back to complete it. At that time, Mr. Riley smiled and said, oh, I thought that you meant you were a black guy who didn’t play basketball for your school. The parties disagree about whether this exchange was in “a spirit of good-natured jest.” Next, Fischer complains that following his promotion to NAM, when he was asked to relocate to Detroit to better service the Ford account, Riley attempted to dissuade him from building a house in the Detroit area. Fischer suggests that Riley’s insistence he not build a house was motivated by racism. He admits, however, that the UPS District Controller for Metro Detroit, an African-American woman, expressed opposition to his plan to build a house during the relocation process, and that he did in fact build the house. Fischer cites two other incidents as demonstrating racial animus: in one, Riley asked Fischer, after a meeting with an African-American client, if he had acted “homey” enough; in the other, Riley asked a third person to criticize Fischer’s wearing to work on a “casual Friday” a purple golf shirt emblazoned with the logo “100 Black Men of America.” He also complains of two generally discriminatory or harassing aspects of his relationship with superiors at UPS: an alleged lack of “support” for his strategies as a NAM, and allegedly unrealistic performance quotas that he was expected to meet. Lastly, at trial, Fischer made general allegations about the use of racial slurs at UPS, but pointed to no specific instances in support of those allegations. Fischer filed this action in state court under ELCRA, Mich. Comp. Laws § 37.2101 et seq., alleging racial discrimination at the hands of his superiors at United Parcel Service (“UPS”), a racially hostile work environment (so styled by the complaint, but referred to throughout the proceedings, including in the jury verdict, as “racial harassment”) due to the actions of his immediate supervisor, and retaliation as a result of his complaining about the racial discrimination and hostile work environment at UPS. The district court granted summary judgment without written opinion or statement of reasons with respect to the race discrimination and retaliation claims, but denied it with respect to the harassment claim. The racial harassment claim proceeded to jury trial, the jury found for UPS, and the court entered judgment on December 14, 2001. Fischer’s timely appeal followed. II. DISCUSSION We do not condone the district court’s failure to provide any record of its reasoning in granting summary judgment to UPS on these claims. However, because we review de novo a district court’s order granting summary judgment, and we must apply the same standard that the district court is required to apply, Williams v. Mehra, 186 F.3d 685, 689 (6th Cir.1999) (en banc), we may review the order before us, even in the absence of any record of the district court’s reasoning. Summary judgment is proper if “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(c). We must view the evidence, all facts, and any inferences that may be drawn from the facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). To withstand summary judgment, the non-moving party must show sufficient evidence to create a genuine issue of material fact. Klepper v. First Am. Bank, 916 F.2d 337, 342 (6th Cir.1990). A mere scintilla of evidence is insufficient; “there must be evidence on which the jury could reasonably find for the [non-movant].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Entry of summary judgment is appropriate “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In reviewing the grant of summary judgment, this court will consider only those facts in evidence at the time the district court granted summary judgment. See Catrett v. Johns-Manville Sales Corp., 826 F.2d 33, 39 (D.C.Cir.1987). Thus, for the purposes of our review, we have been careful to distinguish between facts established prior to trial and those established at trial. A. Racial discrimination. The purpose of ELCRA is to prohibit discrimination against persons in a protected class and generally to inhibit the use of stereotypes, biases, or prejudices in the workplace. See Zanni v. Medaphis Physician Serv. Corp., 240 Mich.App. 472, 612 N.W.2d 845, 848 (2000). Specifically, ELCRA prohibits an employer from: Fail[ing] or refusing] to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege or employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status. Mich. Comp. Laws § 37.2202(l)(a). An ELCRA plaintiff, such as Fischer, who lacks direct evidence of discrimination may establish a prima facie case using the same circumstantial evidence scheme used to prove a federal civil rights claim. See Tinker v. Sears, Roebuck & Co., 127 F.3d 519, 522 (6th Cir.1997). To establish his prima facie case under ELCRA, Fischer needs to show that he is (1) a member of a protected class; (2) he suffered an adverse employment action; (3) he was qualified for the position; and (4) was replaced by a person outside the protected class. Cicero v. Borg-Wamer Automotive, Inc., 280 F.3d 579, 584 (6th Cir.2002). In all essential respects, this test tracks that of the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). The parties agree that Fischer meets three of the four requirements. That is, Fischer is a member of a protected class, was replaced by a Caucasian, and was qualified for the position. But to establish that he suffered an actionable adverse employment action, Fischer must show that there was a “materially adverse” change with respect to his employment. Kocsis v. Multi-Care Mgmt., Inc., 97 F.3d 876, 885 (6th Cir.1996). “[Rjeassignments without salary or work hour changes do not ordinarily constitute adverse employment decisions.” Id. We offered a list of objective factors in Kocsis with which to judge whether an employee has suffered an adverse employment action: (1) significantly changed responsibilities; (2) decreased salary; (3) less distinguished title; and (4) material loss of benefits. Kocsis, 97 F.3d at 886. And Michigan courts elaborate what constitutes an adverse employment action: it (1) must be “materially adverse in that it is more than mere inconvenience or an alteration of job responsibilities, and (2) must have an objective basis for demonstrating that the change is adverse, rather than the mere subjective impressions of the plaintiff.” Meyer v. City of Center Line, 242 Mich.App. 560, 619 N.W.2d 182, 188 (2000) (internal quotations omitted). Fischer satisfies neither test. He has shown no objective evidence that the Ford account was better than the four new accounts to which he was transferred. His job responsibilities have not changed; only the accounts for which he is responsible have changed. He suffered no decrease in salary or benefits, and he maintained the same title. Fischer’s complaint that he was “banished to the four smaller accounts” does not establish an adverse employment action. A change in the accounts is merely a change in form, not a change in responsibilities. Even viewing the evidence in the light most favorable to Fischer, we find no more than “a mere scintilla” on which he can rely to support his assertion that his transfer from the Ford account to four other accounts was adverse. Further, our de novo review of the record persuades us that he has presented no more than a scintilla of evidence that he suffered any other adverse action “with respect to employment, compensation, or a term, condition, or privilege or employment.” Mich. Comp. Laws § 37.2202(1)(a). Whatever the district court’s reasoning, summary judgment in favor of UPS on this count is proper. B. Retaliation. Michigan’s ELCRA provides that it is unlawful to: Retaliate or discriminate against a person because the person has opposed a violation of this act, or because the person has made a charge, filed a complaint, testified, assisted, or participated in an investigation, proceeding, or hearing under this act.
3538929-27909	ORDER ON PENDING MOTIONS' COUGHENOUR, District Judge. Plaintiff challenges portions of the Omnibus Budget Reconciliation Act of 1981 which provides a new mechanism for the collection of delinquent child support payments. Under the Act, tax refunds owed to parents having delinquent child support obligations are instead transferred to the states to reimburse the states for expenditures they made to support the affected children under the Aid to Families with Dependent Children (“AFDC”) program. Plaintiff challenges these provisions to the extent they authorize the transfer of tax refunds created by her earnings. FACTS Plaintiff is a married woman who lives in the State of Washington. Her husband is indebted to the State of Washington for his failure to make required child support payments to the children of his prior marriage. In February of 1982, plaintiff and her husband filed a joint 1981 Federal income tax return. All the income reported was from plaintiff's wages and unemployment benefits. Plaintiff and her husband were to receive a tax refund of $1,408, consisting of excess withheld wages and an earned income credit. Plaintiff did not, however, receive her expected refund. The Internal Revenue Service (“I.R.S.”) withheld payment of the refund so that the refund could be offset against the amount owed Washington State because of her husband’s nonpayment of child support. After unsuccessfully trying to obtain her refund from the local office of the I.R.S. and the Washington State Department of Social and Health Services, Office of Support Enforcement (“DSHS”), plaintiff instituted the present action on April 19, 1982. On April 22, the I.R.S. confirmed the information plaintiff received from the local office that all or part of her refund was being withheld to satisfy a past-due support obligation. On June 28, the I.R.S. sent plaintiff “legal notice” that her claim for refund was partially disallowed. Presumably pursuant to Washington community property law, all of the overpayment of tax resulting from the income of plaintiff’s husband and one-half of the overpayment resulting from plaintiff’s income was to be retained and transferred to the State of Washington for the payment of plaintiff’s husband’s support obligation. Defendants later clarified their position, and only claimed one-half of the total community property overpayment. ISSUES PRESENTED Plaintiff objects to the retention of half of the tax refund resulting from her earnings and unemployment compensation. She has filed a motion for class certification and for summary judgment. Defendants have filed a motion to dismiss and a motion for summary judgment. The central issues raised by these motions are: (1) whether plaintiff’s suit should be characterized as one involving the collection or assessment of taxes and therefore subject to the legal impediments to suit applicable to tax actions; (2) whether plaintiff’s husband has a property interest in his wife’s earnings for the purposes of collection of his separate debt of child support; and (3) whether the procedures employed satisfy due process. These inquiries require an examination of the statutory scheme and the relationship between State property law and the collection of Federal taxes. THE STATUTORY SCHEME The collection of past-due support payments is a matter of private, State and Federal concern. While Congress believed that the basic responsibility for the collection of child support rested with the States, Congress did envision a more active Federal ■role. See S.Rep. No. 93-156, 93rd Cong., 2nd Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 8133, 8150 (hereinafter referred to as “Senate Report”). Two schemes have been enacted for the Federal collection of child support. Under the first and older system, the States are authorized to use the Federal income tax collection mechanism itself for collecting support payments. Senate Report at 8153. Upon request of a State with an approved State plan, the Secretary of the Department of Health, Education and Welfare is authorized to certify the amount of any child support obligation assigned to that State to the Secretary of the Treasury. 42 U.S.C. § 652(b). Parents, as a condition of eligibility for welfare, are required to assign their rights to support payments to the State and to cooperate with the State in the securing of support payments from the obligated parent. Senate Report at 8152. The support obligation becomes a debt owed by the obligated parent to the State. Id. at 8153. Upon receiving certification from the Secretary of Health, Education and Welfare of the amount owed to the State by the obligated parent, the Secretary of the Treasury is required to assess and collect that amount “in the same manner, with the same powers, and (except as provided in this section) subject to the same limitations as if such amount were a tax....” 26 U.S.C. § 6305(a). This collection mechanism was intended to be available only in cases in which the State could establish to the satisfaction of H.E.W. that it had made diligent efforts to collect the payments through other processes but without success. Senate Report at 8153. This method is hereafter referred to as the “assessment” collection method. The second Federal method of collection is the one presently under challenge. Upon receiving notice from a State child support agency that an individual owes past-due support which has been assigned to the State as a condition of AFDC eligibility, the Secretary of the Treasury is required to determine whether any amounts as refunds of Federal taxes paid are payable to that individual. If any refunds are owed, he is authorized to withhold from such refunds an amount equal to the past-due support. That money is to-be paid directly to the State agency, together with notice of the taxpayer’s current address. See Omnibus Budget Reconciliation Act of 1981, Pub.L. 97-35, 95 Stat. 357, S.Rep. No. 97-139, 97th Cong., 1st Sess., reprinted in 1981 U.S.Code Cong. & Ad.News 396, 1347 (hereinafter referred to as “Committee Report”). See also 42 U.S.C. § 664 and 26 U.S.C. § 6402. Thus, unlike the prior system, these provisions authorize the interception and transfer of funds already in the possession of the Government. ■ This method is hereafter referred to as the “transfer” collection method. THE CHARACTERIZATION QUESTION The characterization of the plaintiff’s claim is hotly contested by the parties. Defendants contend that this is a tax refund suit while plaintiff claims this is merely a collection case. The determination of the nature of the plaintiff’s claim has a direct impact on the issues of subject matter jurisdiction, sovereign immunity, injunctive and declaratory relief and the propriety of the maintenance of a class action. Tax cases in the Federal courts are subject to strict procedural requirements. Suit cannot be begun for the recovery of any tax until six months have expired from the filing of the claim for refund, unless the Secretary of the Treasury disallows the claim within that time. 26 U.S.C. § 6532. See Davis v. Commissioner, 78-1 U.S.T.C. ¶ 9355 (D.S.C.1978). The six-month requirement may even be applicable if the Secretary subsequently denies the claim after plaintiff had begun suit. See Anderson v. I.R.S. District Director, 79-2 U.S.T.C. ¶ 9519 (E.D.Wis.1979). Another result in tax cases is that the United States and its officers have not consented to be sued for tax refund actions unless the procedural requirements have been satisfied. See 5 U.S.C. § 702 (sovereign immunity is not waived if another statute expressly forbids the relief sought). Moreover, except in extremely limited situations, injunctive and declaratory relief are unavailable in the tax context. 26 U.S.C. § 7421(a) prohibits the bringing of suit for the purpose of restraining the assessment or collection of any tax. The Anti-Injunction Act has been given wide reading by the courts. See Bob Jones University v. Simon, 416 U.S. 725, 94 S.Ct. 2038, 40 L.Ed.2d 496 (1974); Zimmer v. Connett, 640 F.2d 208 (9th Cir.1981). The Declaratory Judgment Act contains a similar exception for suits with respect to Federal taxes. 28 U.S.C. § 2201. Finally, the above jurisdictional and procedural limitations, as well as the general nature of tax cases, would make class certification very problematic. A support obligation is significantly different from a tax obligation. See Senate Report at 8153 (“support obligations are not a tax”). Defendants argue, however, that as plaintiff is seeking a return of her tax refund, she is subject to the procedural limitations of a tax refund suit. Moreover, the jurisdictional limitations of 26 U.S.C. § 6305(b) are allegedly applicable to plaintiff’s claim. 26 U.S.C. § 6305(b) attempts to preclude the courts of the United States from retaining jurisdiction to review or restrain the Secretary of the Treasury from assessing or collecting amounts under the “assessment” collection method. Although § 6305 makes no reference to the “transfer” collection method under challenge in the present action, defendants rely on language found in the House Conference Report that indicates the second collection method “amplified” prior law. See Committee Report at 604. Finally, the Secretary of the Treasury’s own regulations provide that the past-due support under the “transfer” collection method is to be collected by offset “as if it were a liability for tax imposed by the Internal Revenue Code.” Temp.Reg. § 304.6402-l(a)(l). The Court must reject the defendants’ contentions. First, there is nothing to suggest that the jurisdictional limitations of § 6305(b) are applicable to § 6402. The Treasury Regulations make clear that “[cjollection by offset under section 6402(c) of this section is a collection procedure separate from the collection procedures provided by section 6305.” A similar argument was rejected by the district court in Nelson v. Regan, No. N 82-173 (D.Conn., June 15, 1982) (order denying motion to dismiss). Second, the Court cannot agree with defendants that Congress intended that the assessment and collection of past-due support obligations be subject to the procedural limitations of a tax refund suit. Plaintiff is not seeking a tax refund in anything but a purely technical sense. The Internal Revenue Service has calculated the refund owing and that amount is not disputed. Unlike the “assessment” collection method, the Secretary of the Treasury under the “transfer” collection method does no more than retain and then pass on funds to the appropriate State agency. The Secretary does not determine the amount of past-due support owing nor collect any additional funds to satisfy the obligation. In other words, this is not a case where suit would interfere with the assessment and collection activities of the I.R.S. since those activities have already been completed. In fact, the Secretary of the Treasury refers individuals with questions about the transfer to the local State agency. The Court must conclude that the procedural and jurisdictional limitations of tax refund actions are inapplicable to plaintiff’s suit. If Congress wanted these limitations to be applicable to the “transfer” collection method, they would have more clearly demonstrated their intent. See 26 U.S.C. § 6305. The defendants’ motion to dismiss is therefore DENIED. The Court finds that this is not a tax refund suit, that the Anti-Injunction Act and the similar limitations in the Declaratory Judgment Act are inapplicable to the present action, that sovereign immunity is waived under 5 U.S.C. § -702, and that subject matter jurisdiction is found in 28 U.S.C. § 1331(a). The Court also finds that certification of plaintiff’s proposed class is appropriate. The class consists of all residents of the State of Washington (1) who have filed joint Federal income tax returns for 1981; (2) whose spouses owe money to the State of Washington for child support; and (3) who were entitled to a refund of taxes withheld, not exclusively from their spouses’ earnings, or to an earned income credit, all or part of which has been withheld by the Internal Revenue Service under the authority of 26 U.S.C. § 6402 or 42 U.S.C. § 664. The requirements of Fed.R.Civ.P. 23(a) have been met. There are thousands of potential class members, there are common questions of law and fact, the claims of plaintiff are typical of the class, and plaintiff and her counsel will fairly and adequately protect the interests of the class. Moreover, as plaintiff is not seeking anything but injunctive and declaratory relief and as defendants have employed their collection method uniformly throughout the class, final class-wide injunctive or declaratory relief is appropriate. Therefore, plaintiff’s proposed class is certified pursuant to Fed.R.Civ.P. 23(b)(2). Having dealt with defendants’ procedural objections, the Court must reach the merits of plaintiff’s suit. EARNED INCOME CREDITS Plaintiff’s first claim concerns the language of the applicable statutes. 42 U.S.C. § 664 authorizes the Secretary of the Treasury to withhold “refunds of Federal taxes paid” and transfer these funds to the appropriate State agency to satisfy the debtor’s support obligation. 26 U.S.C. § 6402(c) provides that the amount of any “overpayment to be refunded to the person making the overpayment” shall be reduced by the amount of past-due support. Plaintiff contends that earned income credits are not refunds of Federal tax and are therefore outside of the scope of the statutes. Allowing the Secretary to reach earned income credits would allegedly frustrate the Congressional purpose of benefiting poor children and giving their parents an incentive to work. Finally, plaintiff contends that the term “overpayment” in § 6402(c) should be given its common sense meaning and that since earned income credits can be paid even if no Federal income tax is owed, the credits must have been excluded from the statutes. Common sense is not, however, a useful guidepost in dealings with the Internal Revenue Code. Words with well-accepted meanings are often adapted by the Code into terms of very specific interpretation. “Overpayment” is a term of art. 26 U.S.C. § 6401(b) provides, in part, that if there are amounts allowable as credits under the earned income credit provisions in excess of Federal income taxes paid, then “the amount of such excess shall be considered an overpayment.” It is perfectly consistent that Congress would consider the payment of past-due child support more important than the protection of an earned income credit. The Court finds that earned income credits are within the purview of the statutes and are subject to retention and transfer. VAN DYKE AND THE WASHINGTON PROPERTY LAW The impetus for the present lawsuit was the Washington Supreme Court’s holding in Van Dyke v. Thompson, 95 Wash.2d 726, 630 P.2d 420 (1981). Plaintiff’s husband in Van Dyke owed the State of Washington for past-due child support for children from a prior marriage. He was unemployed and had no assets. Defendant Secretary of the Department of Social and Health Services served notice on plaintiff’s employer to withhold and deliver to DSHS 25 percent of plaintiff’s wages to satisfy her husband’s obligation. Plaintiff filed suit seeking injunctive and declaratory relief. The Washington Supreme Court held that despite the fact that plaintiff’s earnings were community property, they could not be used to satisfy the husband’s separate debt. The court’s prior holding in Fisch v. Marler, 1 Wash.2d 698, 97 P.2d 147 (1939), that only the earnings of the obligated spouse were subject to garnishment for past child support obligations was reaffirmed. Plaintiff contends that just as DSHS could not reach the non-obligated spouse’s earnings in Van Dyke, so, too, should the tax refund generated by plaintiff’s earnings be protected from transfer by the Internal Revenue Service. Defendants assert that Van Dyke is inapplicable. They argue that Van Dyke is limited to the collection of separate debts under State law. They claim the proper analysis is that State law only determines whether the obligated spouse has a property interest in the overpayment created by the earnings of the nonobligated spouse. This determination being made in the affirmative, Federal collection law, not subject to the holding of Van Dyke, provides that the husband’s half interest in the tax refund is reachable. The parties do not dispute that the source of property law is Washington law. Under Washington law, however, the nature of the husband’s interest in the earnings of the plaintiff is in some dispute. RCW § 26.16.030 provides that all property not acquired or owned as prescribed in RCW §§ 26.16.010 and .020 which is acquired after marriage by either husband or wife or both is community property. Separate property is limited to property owned by one of the spouses at the time of marriage or thereafter acquired by gift, devise or inheritance, and the rents, issues and profits thereof. RCW §§ 26.16.010 and .020. There is a presumption that all property obtained during marriage is community property. See Yesler v. Hochstettler, 4 Wash. 349, 30 P. 398 (1892). Under these statutes, plaintiff’s husband would have a property interest in the tax refund since that refund would be community property. The problem arises with the application of RCW § 26.16.200. The statute provides that: Neither husband or wife is liable for the debts or liabilities of the other incurred before marriage, nor for the separate debts of each other, nor is the rent or income of the separate property of either liable for the separate debts of the other: Provided, That the earnings and accumulations of the husband shall be available to the legal process of creditors for the satisfaction of debts incurred by him pri- or to marriage, and the earnings and accumulations of the wife shall be available to the legal process of creditors for the satisfaction of debts incurred by her prior to marriage. For the purpose of this section neither the husband nor the wife shall be construed to have any interest in the earnings of the other: Provided Further, That no separate debt may be the basis of a claim against the earnings and accumulations of either a husband or wife unless the same is reduced to judgment within three years of the marriage of the parties. The Washington legislature added the two provisos in 1969. Prior to 1969, and except in limited cases, Washington followed the marital bankruptcy rule. Immediately upon a debtor’s marriage, a creditor lost the ability to enforce his claim against the new marital community. Watters v. Doud, 92 Wash.2d 317, 322, 596 P.2d 280 (1979). The 1969 amendment with the addition of the provisos was meant “to alleviate the harsh effects of the previous law” and give the creditor three years in which to get payment of the debt or reduce the debt to judgment. Id. See Note, 45 Wash.L.Rev. 191 (1970). It seems clear that the amendment’s purpose was to make more of the community assets available for separate creditors. See Cross, The Community Property Law In Washington, 49 Wash.L.Rev. 729, 829-30 (1974). What is not clear is the impact of the characterization of the property. In other words, what effect is to be given to the phrase “[no] interest in the earnings of the other”? Defendants contend that the nature of the tax refund is governed by RCW §§ 26.16.010-030 and that the refund is, therefore, community property. Plaintiff seems to argue that while the tax refund may be community property for most purposes, for purposes of collection of a separate debt, the property is not community property. Van Dyke did not address the characterization issue. Van Dyke is a collection case. It held that the earnings of a noncustodial, nonobligated spouse are not subject to the antenuptial obligation of child support. That Van Dyke did not address the issue is not surprising. In terms of State law, there would be no difference between a limitation of property subject to creditors and a determination that an individual did not have a property interest in a particular asset. Either determination would prohibit the creditor subject to State law from reaching the asset. The distinction, however, becomes critical when Federal law comes into play. The distinction was made in United States v. Overman, 424 F.2d 1142 (9th Cir.1970). The issue in Overman was whether the United States could levy on community property to satisfy the separate tax obligation of one of the spouses. Defendants had argued that based on the pre-amended RCW § 26.16.200, the community property was immune from the husband’s premarital debt. The Ninth Circuit held, however, that in order for the Government to reach the community property it was only necessary that the obligated spouse have a property interest in the asset. The court went on to hold that even if RCW § 26.16.200 created a limitation on the extent of ownership rights of the obligated spouse, it was of “no moment.” If the taxpayer had a property interest in a particular asset, the Government could reach it. Furthermore, the Government could cause the involuntary conversion of the entire asset, although they were limited to retaining the half interest in the asset of the obligated spouse. This comports with the defendants’ actions in the present case where half of the tax refund is retained. The Court finds that the analysis of Overman controls the characterization issue. Admittedly, the language of the first proviso in RCW § 26.16.200 is troublesome. Also, Overman specifically did not address the statutory amendments. See Overman, 424 F.2d at 1145, n. 2. Still, it is undisputed that the tax refund is community property. The creditor limitation is not a matter of substantive property law but only serves to insulate property from the reach of creditors. Exempt status of property under State law need not bind the Federal collector. See United States v. Mitchell, 403 U.S. 190, 91 S.Ct. 1763, 29 L.Ed.2d 406 (1971); Broday v. United States, 455 F.2d 1097 (5th Cir.1972). The Court cannot accept plaintiff’s assertion of “limited status” property: community property for all purposes except for payment of separate debts. Even assuming that RCW § 26.16.200 and Van Dyke need not bar defendants from retaining the tax refund, the question remains whether the Washington statute nonetheless precludes retention and transfer in light of Congressional intent. In other words, did Congress intend that property exemptions applicable to Washington State parties (such as Thompson in Van Dyke) be inapplicable to Federal parties? 26 U.S.C. § 6402(c) provides that the amount of any overpayment to be refunded to the person making the overpayment is to be reduced by the amount of any past-due support owed by that person. Thus, two determinations must be made. First, is there a person who is owed an overpayment? Second, does that person owe past-due support? If so, then the Secretary of the Treasury is directed to reduce the amount of overpayment owed to that individual by the amount of the past-due support. In our case, it is conceded that plaintiff’s husband owes past-due support. Moreover, just as plaintiff’s husband would be liable for Federal income taxes generated by plaintiff’s community earnings, so, too, would he be entitled to the overpayment created by those community earnings. See Bagur v. Commissioner, 603 F.2d 491 (5th Cir.1979); Simmons v. Cullen, 197 F.Supp. 179 (S.D.Cal.1961). Cf. United States v. Merrill, 211 F.2d 297 (9th Cir.1954). Plaintiff’s husband would be owed the overpayment in the same manner as plaintiff. Therefore, retention of the husband’s property interest in the overpayment generated by plaintiff’s earnings is authorized under the literal language of the statute. Moreover, given the strong Federal policy favoring the collection of past-due support and the intent of Congress in the enactment of the “transfer” collection method to develop a collection method as an alternative to those already available to the States, the Court concludes that Congress did intend that Federal law prevail as to the method of reaching the plaintiff’s husband’s interest in the overpayment. DUE PROCESS Plaintiff’s final objection concerns the due process clause of the Fifth Amendment. Plaintiff contends that she is entitled to notice and an opportunity to be heard in regard to the transfer of the overpayment. Plaintiff emphasizes that she is not a judgment debtor and has not participated in any hearing procedure to determine the existence or the amount of any child support obligation. In order to evaluate plaintiff’s due process challenge, the particular procedures employed by defendants must be examined. There are seven steps to this process. First, a determination must be made that an individual owes child support. See 42 U.S.C. § 664(c). This determination is made by State court or administrative order and is presumably a process in which the obligated spouse has participated. Second, after the obligated spouse has failed to make the child support payments, the State agency notifies the Secretary of the Treasury that the individual has not paid and that a particular amount is past due. 42 U.S.C. § 664(a). Third, the Secretary of the Treasury determines whether any overpayment is due the named individual. Fourth, if there is any overpayment due, the Secretary is authorized to retain an amount equal to the past-due support and to transfer that amount to the State agency. 42 U.S.C. § 664(a). Fifth, the Secretary is to notify the person making the overpayment that “so much of the overpayment as was necessary to satisfy his obligation for past-due support has been paid to the State.” 26 U.S.C. § 6402(e). Sixth, if an additional claim is made to the Internal Revenue Service that the amount withheld is in error, the Service will calculate the obligated spouse’s interest in the overpayment and will refund the rest. Seventh, if the parties object to the recalculation, they are informed that they may file suit in the appropriate Federal court. Two notices have been sent to plaintiff. The first informed her that her overpayment had been paid to the State of Washington to fully or partially satisfy a prior support obligation. The notice directed questions about the obligation to the Department of Social and Health Services in Olympia, Washington. The notice did not indicate that only half of the overpayment created by community earnings would be retained. Instead, it stated that if no other Federal taxes were owed, a refund check for any remaining balance would be issued. The second notice was sent during the pendency of the present action. It stated that pursuant to Washington community property law, half of the claim for refund was allowed. If plaintiff contested the amount, she could bring suit in the appropriate Federal District Court or the Court of Claims. There can be little doubt that plaintiff has a property interest in the overpayment. Defendants concede that they may retain only half of the overpayment generated by community earnings. Nonetheless, they retain the full overpayment until an additional claim for refund is made. Placing the onus on the taxpayer to file a claim for a refund is allegedly necessary because “it is impossible for the Internal Revenue Service to make a prior determination of the proper allocation.” As the determination simply consists of calculating the community interest in the overpayment and dividing by two, the Court strongly questions the impossibility of a prior conclusion. Even assuming the impossibility of such a result, there is no reason for the notice sent to plaintiff and her class not informing the nónobligáted spouses that only half of the community property overpayment would be retained.
3877373-17887	ORDER SCOTT O. WRIGHT, Chief Judge. Pending before the Court are cross-motions for summary judgment. For the reasons set forth below, defendants’ motion for summary judgment as to Counts I and II will be sustained, plaintiffs’ motion for summary judgment as to Counts I and II will be overruled, and both parties’ motions for summary judgment as to Count III will be overruled. I. Regulatory Background This case arises under Title IV-E of the Social Security Act, the foster care and adoption assistance component of the Aid to Families with Dependent Children (AFDC) program. See 42 U.S.C. § 670 et seq. Title IV-E is a cooperative state-federal program which enables each State to provide foster care and adoption assistance for children who would otherwise be eligible for assistance under the State’s AFDC plan or under the Supplemental Security Income (SSI) program. In order to participate in the Title IV-E program, a state must submit a plan to the Secretary of Health and Human Services which sets forth how the State proposes to administer the program. The State of Missouri, through its Department of Social Services, has participated in the Title IV-E program continuously since its inception. Because the various state-federal categorical assistance programs are interrelated in terms of staff time and administrative expenses, each State is required to allocate a proportion of its commonly incurred expenses to each program. This process is known as the “allocation of costs.” Under regulations promulgated by the Secretary, a State is required to submit a proposed Cost Allocation Plan (CAP) and all subsequent proposed CAP amendments to the federal agency’s Division of Cost Allocation (DCA). 45 C.F.R. §§ 95.505-.507. The Director of the DCA is required to notify the State within 60 days whether its proposed CAP or CAP amendment is approved or disapproved, or whether the DCA needs additional time or information to evaluate the proposed CAP or CAP amendment. 45 C.F.R. § 95.511. If a State is dissatisfied with the DCA’s disposition of a proposed CAP or CAP amendment, it is entitled to two rounds of administrative review. If the State remains dissatisfied after exhausting its administrative remedies, it may obtain judicial review of the agency’s final decision. II. Factual Background The following facts are not in dispute. Plaintiffs herein are the State of Missouri, the Missouri Department of Social Services, and the Director of that State agency. Defendants are the Secretary of the United States Department of Health and Human Services and various lower officials in that federal agency. The dispute between the parties involves a proposed CAP amendment submitted by plaintiffs. The State agency submitted its proposed CAP amendment on September 25, 1984. Although there was some oral communication between the State agency and federal agency over the next two months, the federal agency did not make a written response to the proposed CAP amendment until December 20, 1984. In its December 20 letter, the federal agency indicated that it needed additional information to evaluate the proposed CAP amendment. The federal agency also stated that its failure to comply with 45 C.F.R. § 95.511 did not constitute “deemed approval” of the proposed CAP amendment, but that the State could, as it said it would, begin filing claims for federal reimbursement under the proposed CAP amendment pursuant to 45 C.F.R. § 95.517. The correspondence between the parties shows that negotiations concerning plaintiffs’ proposed plan amendment continued over the next several months. On February 4, 1985, Victoria Therien, Director of the Federal Receipts and Reporting Section of the Missouri Department of Social Services, wrote a letter to the federal agency which stated that plaintiffs were submitting their claim for federal reimbursement for the quarter ending December 31, 1984, “as permitted under 45 C.F.R. 95.517 in accordance with the [September 25, 1984] amendment and later revisions, which have not, as of this date, been approved or disapproved.” Although the State submitted its claim for federal financial participation (FFP) based on its proposed plan amendment, the DCA never approved payment thereunder. Instead, on May 29, 1985, the DCA finally communicated its formal disapproval of the proposed plan amendment to the State. On July 2, 1985, the State responded to the federal agency’s formal disapproval letter and asked the Regional Director of the Department of Health and Human Services for reconsideration of its proposed plan amendment. On reconsideration, the Regional Director concurred with the decision of the DCA. The State then filed a notice of appeal with the Grant Appeals Board (GAB) of the Department of HHS. The disposition of that administrative appeal does not appear in the record. Meanwhile, on November 26, 1985, the State filed the instant lawsuit. In Counts I and II, the State is claiming that the DCA’s failure to act promptly on its September 24, 1984 proposed plan amendment foreclosed the federal agency from later disapproving it. In Count I, plaintiffs assert that defendants’ failure to give the State written notification within 60 days of the submission of its proposed plan amendment, as required by 45 C.F.R. § 95.5111, constituted “deemed approval” of the proposed plan amendment. In Count II, plaintiffs claim that defendants’ failure to promptly process the proposed plan amendment estopped them from later disapproving it. For relief under Counts I and II, plaintiffs ask this Court to declare that defendants’ delay caused the State’s proposed plan amendment to be approved by operation of law. Count III does not directly involve the September 25, 1984 proposed plan amendment. Instead, in Count III, plaintiffs claim that the federal agency has refused to process claims for federal reimbursement dating back to fiscal year 1980. The total amount of the State’s claims which allegedly have been neither paid, deferred, nor disallowed is $6,482,729.00. For relief under Count III, plaintiffs ask this Court to declare that defendants’ refusal to process these claims is without justification and to order defendants to process these claims. III. Discussion A. Count I In Count I, plaintiffs are essentially asking the Court to put a gloss on 45 C.F.R. § 95.511 whereby the federal agency’s failure to provide the State with written notification within 60 days constitutes “deemed approval” of the State’s proposed plan amendment. The undisputed facts are that the State filed its proposed plan amendment on September 25, 1984, and that the Director of the DCA did not respond in writing thereto until December 20, 1984. Thus, if plaintiffs’ “deemed approval” theory is correct, plaintiffs would be entitled to summary judgment by reason of the federal agency’s 86-day delay. Defendants resist Count I on two grounds. First, defendants contend that the instant action is premature because plaintiffs have not exhausted their administrative remedies. Second, defendants argue that, even if the matter is ripe for judicial review, plaintiff’s “deemed approval” theory should not be adopted by the Court because it is contrary to the Secretary’s construction of 45 C.F.R. § 95.511. The Court does not agree with defendants’ exhaustion argument. The issue posed by Count I is a very narrow one: whether technical noncompliance with § 95.511 by the Director of the DCA constitutes “deemed approval” of the State’s proposed plan amendment. The federal agency has previously announced and has consistently maintained that it does not subscribe to plaintiffs’ “deemed approval” theory; consequently, there is no need to await exhaustion of administrative reme dies to ascertain the Secretary’s position on this issue. The Court also notes that the issue raised by Count I is primarily a legal one; there is no need to await completion of administrative review to develop the record herein. Accordingly, the Court holds that exhaustion of administrative remedies is not required as a precondition to the Court’s consideration of Count I. Turning to the merits, the Court holds that Count I fails to state a cause of action. Three observations support this result. First, § 95.511 does not expressly provide, nor does it implicitly suggest, that “deemed approval” is an appropriate sanction for the federal agency’s failure to give the State written notification within 60 days. It bears emphasis that the 60-day deadline is not just a time limit for approval or disapproval of a proposed plan amendment. By its terms, § 95.511 only requires written notification of: (1) approval or disapproval; or (2) the need for modification of the proposed plan amendment; or (3) the need for additional information to evaluate the proposed plan amendment. Since the regulation leaves these options open to the DCA, the Court cannot say that the DCA’s failure to respond in writing within 60 days constitutes “deemed approval” of the proposed plan amendment. Second the Court is reluctant to adopt plaintiffs’ “deemed approval” construction of § 95.511 where the Secretary has never advanced nor approved such an interpretation. It is well-settled that the Secretary’s interpretation of his regulations is entitled to substantial deference. See, e.g., Medical Center of Independence v. Harris, 628 F.2d 1113, 1117 (8th Cir. 1980). Here, there are no circumstances present which militate in favor of deviating from this general rule. Accordingly, the Court will not create a common law remedy for noncompliance with § 95.511 where such a ruling would conflict with the Secretary’s interpretation of his own regulations. Third, and most important, the Court notes that the State was not totally without a remedy during and after the 60-day period. 45 C.F.R. § 95.517 expressly allows a State to collect federal reimbursement under a proposed plan amendment from the date of submission. It is true that, under § 95.517, the State will only receive FFP to the extent the proposed plan amendment is ultimately approved. Nevertheless, under the regulatory scheme, it is apparent that § 95.517 is the vehicle by which a State may protect itself from federal agency delay. Indeed, plaintiffs used § 95.517 with respect to their proposed plan amendment: in a letter dated February 4,1985 — well after the proposed plan amendment would have been “deemed approved” under plaintiffs’ theory — Victoria Therien of the State agency informed the federal agency that it was submitting its claim for FFP under the September 25, 1984 proposed plan amendment “as permitted under 45 C.F.R. § 95.-517.” The Court is not unsympathetic to the situation of the State agency. Inordinate delay by the federal agency makes it extremely difficult for the State to plan and execute its categorial assistance programs. Still, there is no legal authority underlying plaintiffs’ “deemed approved” theory. Again, it bears emphasis that § 95.511 does not set a 60-day time limit for approval or disapproval. Although the federal agency’s failure to give the State written notice within 60 days can only add more delay to the administrative review process, such a situation does not call for as extreme a remedy as “deemed approval.” B. Count II Count II is, in essence, a common law variation on Count I. Whereas Count I claimed that noncompliance with § 95.511 results in “deemed approval” of a proposed plan amendment, Count II seeks the same result on the basis of equitable estoppel. Again, defendants have raised the exhaustion defense. That defense is inapplicable with respect to Count II for the same reasons it was inapplicable to Count I. Turning to the merits, the Court holds that Count II fails to state a cause of action. When asserted against a non-governmental defendant, an equitable estoppel claim requires proof of two essential elements: (1) a representation of material fact by the defendant; and (2) reasonable reliance on such representation by the plaintiff. When an estoppel claim is asserted against a governmental defendant, even more is required. The general rule is that equitable estoppel is not applicable to the federal government absent proof of some “affirmative misconduct” by the government. Heckler v. Community Health Services of Crawford, 467 U.S. 51, 104 S.Ct. 2218, 2224, 81 L.Ed.2d 42 (1984); Immigration & Naturalization Service v. Miranda, 459 U.S. 14, 103 S.Ct. 281, 282-83, 74 L.Ed.2d 12 (1982): Green v. United States Dept. of Labor, 775 F.2d 964, 969-70 (8th Cir.1985). Here, the Court finds that neither of the elements of ordinary equitable estoppel is present, much less the special showing of “affirmative misconduct” required to state an estoppel claim against the government. First, there is no indication that the federal agency made any representation to the State that its proposed plan amendment would be approved; to the contrary, the State’s basic complaint is that the federal agency failed to give any indication, one way or the other, concerning the proposed plan amendment. Second, even if the DCA’s inaction can be characterized as a “representation,” there is no indication that plaintiffs “reasonably relied” thereon. Indeed, in the February 4, 1985 letter from Victoria Therien to the federal agency, the State acknowledged that it was relying on § 95.517 in submitting its claim for the quarter ending December 31, 1984. By its terms, § 95.517 provides that reimbursement on the basis of a proposed plan amendment will be allowed only to the extent such plan amendment is finally approved. Moreover, Ms. Therien’s letter expressly noted that its proposed plan amendment had not yet been approved or disapproved. In view of these admissions, it is apparent that there was no reasonable reliance by plaintiffs on any representation by defendants. Third, even if an estoppel claim would lie against an ordinary defendant under the circumstances of the instant case, there is no evidence of any “affirmative misconduct” by defendants which could render the federal government liable under an estoppel theory. As noted above, the sole claim of wrongdoing is that the DCA failed to take prompt action on the State’s proposed plan amendment. Such inaction falls far short of the “affirmative misconduct” requirement. Accordingly, Count II must be dismissed. C. Count III Count III is both factually and analytically distinct from Counts I and II. Count III involves a claim that the federal agency has wrongfully refused to process the State’s claims for FFP dating from 1980 to 1985. Defendants’ sole ground for summary judgment is the “exhaustion of administrative remedies” defense. That defense has no application here, for plaintiffs’ claim is that defendants have wrongfully withheld agency action. In other words, plaintiffs’ complaint is that defendants will not allow the State to exhaust its administrative remedies. Under such circumstances, the exhaustion defense is inapplicable. The Court will need to conduct a hearing concerning plaintiffs’ motion for a preliminary injunction in the near future. The focal issues will be whether the federal agency has failed to process the State’s claims for FFP and whether there is any justification for such inaction. IV. Conclusion In accordance with the foregoing, it is hereby ORDERED that defendants’ motion to dismiss is sustained in part and overruled in part. Counts I and II are dismissed with prejudice. Count III is not dismissed. It is further ORDERED that plaintiffs’ motion for summary judgment is overruled. It is further ORDERED that the parties shall complete all discovery concerning Count III by April 21, 1986. It is further ORDERED that a hearing on plaintiffs’ motion for a preliminary injunction concerning Count III is set to commence at 9:00 A.M. on April 28, 1986, at the United States Courthouse, Kansas City, Missouri. It is further ORDERED that the parties shall file the following materials by April 21, 1986: (1) Proposed findings of fact and conclusions of law; (2) Exhibit lists and witness lists; and (3) Trial briefs. . Plaintiffs’ "motion for summary judgment" is expressly denominated as such. Defendants’ motion, in contrast, is denominated a "motion to dismiss." Because defendants’ motion is accompanied by exhibits and affidavits, however, the Court has treated it as a motion for summary judgment. See Fed.R.Civ.P. 12(b). . The December 20, 1984 letter from Merle Schmidt, Director of the Division of Cost Allocation, to the State agency was apparently prompted by a letter from the State agency to Mr. Schmidt dated December 12, 1984. In its December 12 letter, the State noted that the federal agency had not responded to the proposed CAP amendment within the 60 days allotted by 45 C.F.R. § 95.511 and informed the federal agency that, as a result of its noncompliance with § 95.511, the proposed CAP amendment was “deemed approved." Accordingly, the State agency indicated that, pursuant to 45 C.F.R. § 95.517, it would immediately begin claiming federal financial participation under its September 25 plan amendment. . In relevant part, that regulation provides: "[I]f a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA. However, where a State has claimed costs based on a proposed plan or plan amendment the State, if necessary, shall retroactively adjust its claims in accordance with the plan or amendment as subsequently approved by the Director, DCA." 45 C.F.R. § 95.517. . The "deemed approval” effect of noncompliance with § 95.511 is not expressly set forth in the regulation, nor is it an interpretation of the regulation acknowledged by the Secretary; instead, the "deemed approval” construction is purely a gloss on the regulation advanced by the plaintiffs.
5702318-11825	OPINION OF THE COURT CREAN, Senior Judge: The appellant was found guilty, in accordance with his pleas, by a military judge sitting as a general court-martial, of possession of marijuana, possession of marijuana with intent to distribute, use of marijuana, and violation of a general regulation by importing marijuana into Germany, in violation of Articles 112a and 92, Uniform Code of Military Justice, 10 U.S.C. §§ 912a, and 892 (1982 and Supp. Y 1987) [hereinafter UCMJ], He was sentenced to a bad-conduct discharge, confinement for five years, forfeiture of all pay and allowances, and reduction to Private El. The military judge recommended that confinement in excess of three years be suspended. In accordance with a pretrial agreement, the convening authority approved a sentence of a bad-conduct discharge, confinement for four years, forfeiture of all pay and allowances, and reduction to Private El. The appellant asserts, either through counsel or personally pursuant to United States v. Grostefon, 12 M.J. 431 (C.M.A. 1982), a number of errors concerning his motion for dismissal for lack of speedy trial: namely, the military judge ruled incorrectly in denying his request for dismissal of the charges for lack of a speedy trial; secondly, the military judge erred in not advising him that his pleas of guilty waived his right to assert his speedy trial issue on appeal; or thirdly, his trial defense counsel was ineffective for not advising him that his pleas of guilty would waive the speedy trial issue on appeal. The appellant also avers that the military judge erred in not determining his desires when the trial defense counsel argued for a punitive discharge, and that his court-martial lacked jurisdiction because of the improper appointment of the military judge. We disagree on all issues and affirm. The facts are simply a classic ease of drug trafficking in Europe by American soldiers. The appellant, accompanied by other soldiers, crossed the German border into the Netherlands and went to a bar in Amsterdam. The soldiers, including the appellant, purchased some marijuana, smoked some (use of marijuana offense), and returned across the border into Germany with the remainder (possession with intent to distribute and violation of the regulation). The soldiers were stopped and searched by German border police and the marijuana was found in the car. The appellant was apprehended by the German police on 21 May 1991 and placed in a U.S. military police detention cell in Holland overnight and released to his unit on 22 May 1991. The appellant was restricted by his unit, under varying conditions, from 22 May 1991 to 30 August 1991. Charges were preferred on 12 August 1991 and the appellant was arraigned on 22 October 1991. The actual trial of appellant was conducted on 8 and 14 November 1991. I. Speedy Trial At trial, the appellant moved that the charges be dismissed for lack of a speedy trial. The military judge, after presentation of evidence and argument by counsel, denied the motion. The appellant then pleaded guilty to the charges and specifications. Change 5, Manual for Courts-Martial, United States, 1984, which became effective on 6 July 1991, significantly changed the waiver provision for speedy trial motions. The change provided that a plea of guilty that results in a finding of guilty waives any speedy trial issues as to that offense. Rule for Courts-Martial [hereinafter R.C.M.] 707(e). The accused, however, may enter a “conditional plea” reserving his appellate rights to a speedy trial pretrial motion. R.C.M. 910(a)(2). The affidavit of the trial defense counsel, Captain (CPT) E, in response to the assertion of ineffective assistance of counsel raised by the appellant and pursuant to United States v. Burdine, 29 M.J. 834 (A.C.M.R.1989), is very enlightening on the discussion and relationship between the trial defense counsel and the appellant, as well as the legal thought process of the trial defense counsel in regard to the speedy trial motion. The appellant requested CPT E as his attorney and CPT E was assigned as the trial defense counsel for the appellant on 26 July 1991. The appellant and CPT E had a number of discussions before and after the charges were preferred on 12 August 1991, and the appellant’s arraignment on 22 October 1991. The appellant understood that the evidence against him was overwhelming, particularly his detailed multi-page confession. As part of their discussions, the appellant and CPT E talked about the appellant’s restriction and his right to a speedy trial. The appellant was under some form of restriction for 101 days, from 22 May 1991 to 30 August 1991, when all restraint was lifted by the unit commander. The trial defense counsel pointed out there was never any doubt that a speedy trial motion would be made and that the appellant would plead guilty with a sentence limitation agreement with the convening authority- The trial defense counsel’s affidavit stated: I had recently tried a contested case where I challenged Change 5 to Rule for Court-Martial 707(b)(3)(B), as reflected in the analysis to said change, based on what I perceived to be an incorrect interpretation of the United States v. Gray case by the drafters of the changes to the analysis. Specifically, I challenged the interpretation that was being taught by the JAG school to judges and court personnel alike — that post-preferral release of an accused froirn pre-trial restriction started the speedy trial clock over on the date of preferral. I informed SGT Cornelius of my position on this change. I informed him that we had standing to assert that the interpretation of this case was contrary to precedent. Furthermore, we referred to the change wherein it stated that the evil to be avoided was continuous pre-trial restraint. We discussed his options and I informed him that we would be able to assert his speedy trial motion prior to entry of his plea, and this would serve to frame the issue and preserve it for appeal. We did not discuss conditional pleas. In fact, it remains my opinion to date that a conditional plea was not necessary-in this case. I understand the defense interpretation of Change 5 to RCM 707(e) as being ease dispositive. However, I proffer that there is little support for an executive order overturning years of precedent set out by our appellate courts wherein it has been specifically decided that when an accused raises an issue prior to entry of plea [sic], that he preserves that issue for appellate review thereafter. ... I did not discuss a conditional plea with SGT Cornelius as I felt that RCM 707(e) did not apply in cases where individuals asserted their rights prior to entry of plea. It is my belief based on over three years of experience in trying courts-martial and attending numerous courses offered by the JAG school and Headquarters Trial Defense Services that if an issue is raised, it cannot thereafter be waived. Finally, it is my belief that RCM 707(e) is attempting to send a message to counsel that they had better raise the issue at first instance, because it will no longer be heard de novo on appeal. [emphasis in original]. In effect, CPT E determined that she need not discuss with her client nor negotiate a conditional plea, as the motion for speedy trial was preserved because Change 5 could not affect the old law. Unfortunately, CPT E was wrong and Change 5 did change the procedures. UCMJ art. 36, 10 U.S.C. § 836. See United States v. Merritt, 1 C.M.R. 56 (C.M.A.1951) (The Court of Military Appeals held, in one of its first cases, that the President was delegated by Congress the right to set procedure in military courts). The President may make changes that are significantly different from case law. He did so when he initially promulgated R.C.M. 707. United States v. Leonard, 21 M.J. 67, 70 (C.M.A.1985). Accordingly, CPT E provided incorrect advice to her client when she informed him that his speedy trial motion would be preserved for appellate review even though he had entered pleas of guilty. Pursuant to R.C.M. 707(e), his pleas of guilty waived his appellate issue of speedy trial. We first must determine if the misadvice by counsel means that her performance was ineffective. The standard for measuring claims of ineffectiveness of counsel is set forth in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). This standard has been adopted for courts-martial. United States v. Scott, 24 M.J. 186 (C.M.A.1987). Under Strickland, the appellant must first show that his defense counsel’s performance was deficient, and second, the deficient performance prejudiced the defense so as to deprive the appellant of a fair trial. “The reasonableness of counsel’s performance is to be evaluated from counsel’s perspective at the time of the alleged error and in light of all the circumstances.” Scott, 24 M.J. at 188. A reviewing court will not second guess a counsel’s action unless there was no realistic or tactical basis for it. United States v. Rivas, 3 M.J. 282 (C.M.A.1977). The inadequacy must be a serious incompetency that falls measurably below the performance ordinarily expected of fallible lawyers. United States v. DiCupe, 21 M.J. 440, 442 (C.M.A.1986) (citing United States v. DeCoster, 624 F.2d 196, 208 (D.C.Cir.1979) (en banc)). The first prong to determine ineffective counsel is that counsel’s performance was deficient. As noted above, CPT E provided her client incorrect legal advice. Notwithstanding CPT E’s personal view, R.C.M. 707 after Change 5 did provide an accused and his counsel a means of preserving a' speedy trial motion, but still having the benefits of pleas of guilty, that is, the conditional plea. Captain E neither advised her client of this provision nor attempted to negotiate such a plea. No matter what a lawyer’s view of the law, the lawyer still has an obligation to fully advise a client on all aspects of the law and make the best deal for the client. We hold that CPT E’s performance was deficient because she had a means of preserving the speedy trial motion but neither advised her client of that means nor attempted to avail herself of that means. The second prong requires that the appellant was prejudiced by the ineffective performance of counsel. The appellant would only be prejudiced if his speedy trial issue that was waived by his pleas of guilty would have resulted in some relief by this Court. The military judge determined that the appellant was released from restraint for a significant period of time and that the speedy trial clock started from the preferral of charges. R.C.M. 707(b)(3)(B). He found that there was one day of pretrial confinement from 21 to 22 May 1991; 16 days of restriction in lieu of arrest from 22 May to 7 June 1991; and 84 days of conditions on liberty from 8 June to 30 August 1991; and the time from preferral of charges to arraignment (12 August 1991 until 22 October 1991) was 71 days. He further found that the government was responsible for only the time from the preferral to the arraignment because of a release from restraint on 7 June 1991. R.C.M. 707(b)(3)(B). We hold that the military judge was correct in denying the appellant’s request for dismissal for lack of speedy trial because the break in restriction on 7 June 1991 stopped the speedy trial clock so that the government was accountable only from the preferral of charges until arraignment, 12 August 1991 to 22 October 1991, a total of seventy-one days. Accordingly, we hold that the appellant was not prejudiced by the waiver of his right to assert a speedy trial motion on appeal because he would not have prevailed on appeal since the military judge ruled correctly. Therefore, his counsel was not ineffective in misadvising him on the waiver of the speedy trial issue.
4030210-18643	MEMORANDUM OPINION Denying the Plaintiffs’ Motion for Partial Summary Judgment RICARDO M. URBINA, District Judge. I. INTRODUCTION This action is before the court on the plaintiffs’ motion for partial summary-judgment. The plaintiffs, two farm workers’ unions and eight individual farm workers, contend that the defendant, Department of Labor (“DOL”) violated the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 et seq., when it promulgated the most recent adverse effect wage rate (“AEWR”) provisions of the H-2A foreign agricultural-worker program. The court denies the plaintiffs’ motion for partial summary judgment because the plaintiffs have failed to demonstrate that the DOL’s actions were arbitrary, capricious, an abuse of discretion or not in accordance with any law. The court also orders further briefing on the status of the plaintiffs’ claims addressed in this motion. II. FACTUAL & PROCEDURAL BACKGROUND A. Statutory Framework Under the Immigration and Nationality Act (“INA”), foreign workers hired to perform temporary agricultural work in the United States can be granted H-2A non-immigrant status, through a program that extends temporary visas to nonimmigrant foreign workers who “hav[e] a residence in a foreign country which [they] ha[ve] no intention of abandoning [and] who [are] coming [ ] to the United States to perform agricultural labor or services ... of a temporary or seasonal nature.” 8 U.S.C. § 1101(a)(15)(H)(n)(a). Congress delegated the certification of H-2A petitions to the Secretary of Labor. Id. § 1188. Agricultural employers may bring foreign H-2A workers into the United States to perform agricultural labor for a period of up to ten months, id. § 1101(a)(15)(H)(ii)(a), but must certify that there are insufficient U.S. workers “who are able, willing, and qualified” to perform the work for which the foreign workers are being recruited to perform, id. § 1188(a)(1)(A), and that the employment of H-2A workers “will not adversely affect the wages and working conditions of workers in the United States similarly employed,” id. § 1188(a)(1)(B). An employer who wishes to hire H-2A workers must submit an application to the DOL specifying, among other information, the description of the work to be performed, the number of workers to be hired and the dates for which the H-2A workers will be hired to work. 20 C.F.R. § 655.101. To ensure that the wages of U.S. workers will not be adversely affected by H-2A workers, the DOL utilizes AEWRs, 54 Fed. Reg. 28,037 (July 5, 1989), which, until 2009, were calculated using the Department of Agriculture’s Farm Labor Survey (“FLS”), id. at 28,040. On February 13, 2008, the DOL proposed changes to the rules governing the H-2A program. Defs.’ Opp’n at 2; see also 73 Fed. Reg. 8,538 (Feb. 13, 2008). The DOL invited comments on alternative methods of calculating AEWRs and ultimately chose to change the methodology to use data garnered by the Bureau of Labor Statistics’s Occupational Employment Survey (“OES”) rather than the FLS data. 73 Fed, Reg. at 8,550. The DOL also established a four-level system for the calculating AEWRs based on the skill level of the particular job. Id. at 77,176-77. The DOL noted that the new four-level system would “add further precision to the AEWRs.” Id. On December 18, 2008, the DOL issued a final rule (“the December 2008 Rule”) revising the H-2A program. See 73 Fed. Reg. 77,110 (Dec. 18, 2008). The AEWR methodology and the changes thereto were addressed in detail in the preamble to the December 2008 Rule. Id. at 77,170-76. B. The Parties Plaintiffs United Farm Workers and Pineros y Campesinos Unidos del Noroeste (“PCUN”) are farm workers’ unions that advocate for and promote the employment rights of farm workers. Compl. ¶ 4-5. The individual plaintiffs comprise two distinct groups of farm workers: U.S. citizens and non-citizens who hold H-2A visas. Id. ¶¶ 6-14. The defendants are the DOL and the Department of Homeland Security and their respective Secretaries. Intervenor, North Carolina Growers’ Association, Inc. (“NCGA”) “is a non-profit association whose sole purpose is to process H-2A applications and related paperwork for its members, provide assistance to its members in complying with the H-2A program, and to serve as a political advocate, where needed, for its members’ interests.” NCGA Mot. to Intervene at 3. NCGA has “more than 700 member farmers who employ approximately 6,500 H-2A workers per year.” Id. C. Procedural History On January 12, 2009, the plaintiffs filed a complaint in this court along with a motion for a temporary restraining order and preliminary injunction to enjoin the implementation of the December 2008 Rule. See generally Compl.; Pis.’ Mot. for Prelim. Inj. The court denied the plaintiffs’ motion for a temporary restraining order and preliminary injunction, concluding that the plaintiffs had failed to demonstrate irreparable harm. See generally Mem. Op., 593 F.Supp.2d 166 (D.D.C.2009). On May 29, 2009, the DOL announced that it was suspending the December 2008 Rule, to potentially reconsider a number of provisions, including the changes to the AEWR methodology. 74 Fed. Reg. 25,-972-73 (May 29, 2009). The DOL explained that it had “encountered a number of operational challenges which ... prevented] the full, effective and efficient implementation of the [December 2008 Rule].” Id.; see also Pis.’ Mot. at 3. The suspension was scheduled to go into effect on June 29, 2009, but the District Court for the Middle District of North Carolina preliminarily enjoined the DOL from implementing the suspension. See N.C. Growers’ Ass’n v. Solis, 644 F.Supp.2d, 664 (M.D.N.C.2009). On June 21, 2009, the plaintiffs filed this motion for partial summary judgment on their claim challenging the DOL’s use of the OES data to calculate the AEWR and the implementation of the four-level system. See generally Pis.’ Mot. The plaintiffs allege that the DOL’s use of the OES data to set the AEWR and utilization of the four-level system violates the INA and the APA. See generally id. As the motion is now fully briefed, the court turns to the applicable legal standard and the parties’ arguments. III. ANALYSIS A. Legal Standard for Judicial Review of Agency Actions The APA entitles “a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action ... to judicial review thereof.” 5 U.S.C. § 702. Under the APA, a reviewing court must set aside an agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. § 706; Tourus Records, Inc. v. Drug Enforcement Admin., 259 F.3d 731, 736 (D.C.Cir.2001). In making this inquiry, the reviewing court “must consider whether the [agency’s] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Marsh v. Or. Natural Res. Council, 490 U.S. 360, 378, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989) (internal quotations omitted). At a minimum, the agency must have considered relevant data and articulated an explanation establishing a “rational connection between the facts found and the choice made.” Bowen v. Am. Hosp. Ass’n, 476 U.S. 610, 626, 106 S.Ct. 2101, 90 L.Ed.2d 584 (1986); Tourus Records, 259 F.3d at 736. An agency action usually is arbitrary or capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Veh. Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983); see also County of L.A. v. Shalala, 192 F.3d 1005, 1021 (D.C.Cir.1999) (noting that “[w]here the agency has failed to provide a reasoned explanation, or where the record belies the agency’s conclusion, [the court] must undo its action”). As the Supreme Court has explained, however, “the scope of review under the ‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that of the agency.” Motor Veh. Mfrs. Ass’n, 463 U.S. at 43, 103 S.Ct. 2856. Rather, the agency action under review is “entitled to a presumption of regularity.” Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). B. The Court Denies the Plaintiffs’ Motion for Partial Summary Judgment The plaintiffs contend that the DOL violated the APA when it chose to rely on the OES instead of the FLS data in calculating the AEWR. See Pis.’ Mot. at 14-21. The plaintiffs allege that by adopting the OES as a basis for the AEWR calculation, the DOL contravened “Congress’ requirement that H-2A applications be certified only upon a finding of no adverse effect on ‘similarly employed’ U.S. workers.” Id. at 13. The plaintiffs also allege that the DOL failed to consider valid alternatives or provide a logical explanation for its decision. Id. at 13-14. The defendants retort that the preamble to the December 2008 Rule clearly explains why the DOL believed that the OES data was superior under the circumstances and explained its rejection of alternative methods. Defs.’ Opp’n at 6. The defendants argue that the DOL is entitled to deference in its decision making. Id. at 6-8. In determining whether an agency proffers a permissible interpretation of a statute it administers, the court employs the two-step Chevron analysis. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The court “must first exhaust the traditional tools of statutory construction to determine whether Congress has spoken to the precise question at issue.” Natural Res. Def. Council, Inc. v. Browner, 57 F.3d 1122, 1125 (D.C.Cir.1995). If, after applying accepted canons of construction, the court determines that Congress has spoken to the precise issue, “then the case can be disposed of under the first prong of Chevron.” Halverson v. Slater, 129 F.3d 180, 184 (D.C.Cir.1997). If the court determines that the statute is silent or ambiguous with regard to the issue, however, the second prong of Chevron directs the court to defer to a permissible agency construction of the statute. Id. As an initial matter, both parties agree that the December 2008 Rule resulted from the DOL’s interpretation of the INA, bringing this case within the ambit of Chevron. See Pis.’ Mot at 13; Defs.’ Opp’n at 7. The parties disagree, however, on exactly which two words in the statute are at issue. The plaintiffs contend that the defendants impermissibly interpreted the phrase “similarly employed,” see generally Pis.’ Mot.; Pis.’ Reply, while the defendants focus their opposition on defending their interpretation of the phrase “adversely affect,” see generally Defs.’ Opp’n. This Circuit has already determined that “Congress did not ... define adverse effect and left it in the [DOL’s] discretion how to ensure that the importation of farmworkers met the statutory requirements.” Am. Fed’n of Labor & Cong. of Indus. Orgs. v. Dole, 923 F.2d 182, 184 (D.C.Cir.1991). Moreover, although the plaintiffs state that the phrase “similarly employed” has a precise statutory meaning leaving no room for ambiguity, see Pis.’ Reply at 4, they cite no authority for this definition, see generally id., nor is the court aware of any such definition in either the statute or the applicable case law. Thus, regardless of which phrase is at issue, Congress has not offered a definition sufficient to end the court’s analysis at this point. The court, accordingly, moves to the second step of the Chevron analysis. To satisfy the second prong of Chevron, the DOL was required to “examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’ ” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43, 103 S.Ct. 2856 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962)). In the preamble to the December 2008 Rule, the DOL stated specifically that its research led it to conclude that the AEWRs should be based on local wage conditions. See 73 Fed. Reg. at 77,171 (noting that “there is reason to believe that in some geographic areas and for some occupations, current AEWRs are set artificially low”); id. at 77,172 (explaining that “[b]ecause the [FLS] survey that is currently used is an average wage rate that is set across the board, typically multistate regions, the actual wages of individual labor markets within the [FLS] regions are necessarily in some instances above, and in some instances below, the [FLS] average”); id. (stating that the DOL “continues to believe that precise tailoring of H-2A wages to local labor market conditions is the most critical factor in preventing an adverse effect on the wages of U.S. workers”). The DOL then provided a precise explanation of why the OES is superior to the FLS for the purpose of furthering these objectives. See id. at 77,173 (concluding that “AEWRs derived from OES survey data will be more reflective of actual market wages than FLS data, and thus will best protect the wages and working conditions of U.S. workers from adverse effects”); id. (explaining that the FLS “aggregation of a widely diverse national agricultural landscape into just 15 regions (and 3 standalone states) results in extremely broad generalizations that fail to account for specific market conditions at the local level”); id. (outlining the “problems for functional program administration” connected with use of FLS data, including a lack of “refined wage data by occupations or geographic locale,” the fact that the FLS data is not based on hourly wage rates and the fact that the DOL has “no direct control over [the] design and implementation” of the FLS survey). Based on the DOL’s lengthy and reasoned analysis, the court determines that the DOL “has offered an explanation that is reasonable and consistent with the regulation’s language and history,” thus supporting the DOL’s objectives. Trinity Broad. of Fla., Inc. v. Fed. Commc’ns Comm’n, 211 F.3d 618, 627 (D.C.Cir.2000). Turning to the plaintiffs’ contention that the DOL failed to consider alternative methods for calculating the AEWR, see Pis.’ Mot. at 21, the court notes that an agency’s failure to consider alternatives or to provide an explanation for rejecting those alternatives can render its ultimate decision arbitrary and capricious, see Int’l Ladies’ Garment Workers’ Union v. Donovan, 722 F.2d 795, 815 (D.C.Cir.1983). The record indicates, however, that the DOL did consider alternatives to the OES and, in fact, explained in detail why it rejected continued use of the FLS data. Defs.’ Opp’n at 14; see also 73 Fed. Reg. at 77,173 (prefacing a lengthy discussion of the shortcomings of the FLS data by explaining that “the [DOL] has concluded that in light of the current prevalence of undocumented workers in the agricultural labor market, AEWRs derived from OES survey data will be more reflective of actual market wages than [AEWRs derived from] FLS data”). Furthermore, the DOL responded to several alternative methodologies suggested during the commenting period. See, e.g., 73 Fed. Reg. at 77,172; id. at 77,174. It is clear that the DOL not only considered alternatives, but explained why it rejected the relevant ones. See id. at 77,173-77. Lastly, the plaintiffs argue that the four-level structure of the new wage system is arbitrary and capricious because it will artificially depress farmworkers’ wages. Pis.’ Mot. at 22. The crux of this argument is the plaintiffs’ contention that the DOL did not consider that “unlike skilled guestworkers, who fill occupations that require a spectrum of skills, experience, and responsibility, the vast majority of H-2A workers perform crop work, which is largely homogeneous.” Id. at 24. The defendants respond that the four-level system is also utilized in conjunction with the H-2B program, which “involves low skilled jobs similar to those at issue in the H-2A program.” Defs.’ Opp’n at 30; see also 8 U.S.C. § 1101(a)(5)(H)(ii)(b). As they do with respect to the DOL’s use of OES data, the plaintiffs claim that the DOL’s use of the four-level system does not further the agency’s objectives. See Pis.’ Mot. at 26-29. The defendants maintain that the DOL did articulate its basis for implementing the four-level system, including how the system furthers the DOL’s objectives. Defs.’ Opp’n at 28; see also 73 Fed. Reg. at 77,176-77. Initially, the DOL explained that it believed it was mandated by Congress to use a tiered system because it chose to use the OES data. See id. at 77,176 (noting that, based on § 212(p)(4) of the INA, the DOL believed that it was required to “supply wages at the four separate skill levels”). The DOL has since abandoned that position; however, the defendants still maintain that the choice to utilize a four-level system was not arbitrary and capricious and state that the DOL considered all relevant factors when making the initial decision to use such a system. Defs.’ Opp’n at 29. For instance, the DOL explained its familiarity with a four-level wage system and its understanding that because the four levels are “tied to skills and experience,” the tiered system would “add further precision to the AEWRs, thus serving the [DOL’s] ... objectives.” 73 Fed. Reg. at 77,173. Responding to a commenter who disagreed with the implementation of a tiered system, the DOL stated that “[u]sing a single average wage rate for all jobs performed within a particular occupational category ignores the fact that certain jobs require higher levels of experience and skill, and may adversely affect U.S. workers who are capable of performing such jobs.” Id. It went on to note that the “skill level precision [of the four-level system] complements the geographic and occupational specificity of the OES wage estimates” and to observe that “if the [DOL] failed to set higher [AEWRs for] jobs requiring greater skills and experience, U.S. workers capable of performing such jobs might find their ‘true market’ wages undercut by employers’ ability to fill the jobs with H-2A workers making merely average wages.” Id. It is thus clear to the court that the DOL did consider whether and how skill disparities would affect the AEWRs.
6553720-12754	MEMORANDUM & ORDER JOHN J. GALGAY, Bankruptcy Judge. The question presently before this Court is whether the real estate brokerage commissions payable to the Silverstein Agency (“Silverstein”), under the terms of its brokerage agreement dated September 21, 1973, (“Brokerage Agreement”), with Food Fair, Inc. (“Food Fair”) should be deemed a general unsecured claim or an expense in administration. For reasons to be set forth below, this Court finds that the claim of Silverstein for brokerage commissions is a general unsecured claim, and the Court holds that Silverstein may file a general claim in these proceedings. A summary of the leases and contractual arrangements underlying the controversy between Food Fair and Silverstein is essential to an understanding of the present decision by this Court. Food Fair, as tenant, and the Sixth Fair-land, Inc., (“Fairland”), as landlord, entered into a lease agreement dated May 25, 1964, (“Overlease”) under which Food Fair rented the supermarket building located at Long Hill and Drozdyk Road, Groton, Connecticut known as Store No. 312. Under the express terms Article 2(2) of the Overlease, Food Fair was given the right to make a written offer for the purchase of the land with the supermarket building (“Premises”). Subsequently, Food Fair entered into a sublease agreement dated September 10, 1973, (“Sublease”) with New England Variety Distributors, Inc. (“Subtenant”) under which the subtenant rented Store No. 312. Paragraph 49 of the Sublease contains a purchase option provision similar to the purchase option in the Overlease. The Sublease provision obligated Food Fair to exercise the purchaser option in the Overlease upon written demand by the Subtenant and to resell the Premises to the Subtenant at the same purchase price. On September 21, 1973, eleven days after entering into the Sublease, Food Fair submitted the Brokerage Agreement, a letter agreement, to Silverstein. Silverstein signed and returned the Brokerage Agreement on September 25, 1973. Under the express terms of the Brokerage Agreement, Food Fair is obligated to pay Silverstein, quarterly during the primary lease term, five percent of the minimum rent collected from the Subtenant. Additionally, in the event that the Subtenant successfully exercises the purchase option in the Sublease, Food Fair is obligated to pay Silverstein five percent of the purchase price. It should be noted that the Brokerage Agreement does not impose any affirmative duties on Silverstein and that Food Fair and Silverstein are the only parties to the agreement, not Fairland or the Subtenant. Moreover, the Brokerage Agreement does not incorporate the express terms of the Sublease either by reference or otherwise. In addition, neither Food Fair nor Silver-stein allege that the Sublease incorporates the terms of the Brokerage Agreement. Accordingly, the Brokerage Agreement stands as a distinct, separate agreement from the Sublease. On October 2, 1978, five years after the signing of the Brokerage Agreement, Food Fair filed a petition for an arrangement under Chapter XI, Section 322 of the Bankruptcy Act and Bankruptcy Rule 11-6, and it continued in the management and operation of its business and properties as debtor in possession. The principals of the Subtenant operating under the name Seven Hundred Long Hill Road Associates (“700 Associates”) subsequently gave notice of their intention to exercise the purchase option in the Sublease. By application dated February 17, 1981, Food Fair brought a motion before this Court for an order approving the sale of the Premises to 700 Associates and the real estate sales contract between Fairland and 700 Associates. Additionally, Food Fair sought an order rejecting and disaffirming its Brokerage Agreement with Silverstein and authorizing Silverstein to file any and all claims arising from the agreement as a general unsecured claim. Silverstein objected that Food Fair has paid commissions in the amount of $18,-000.00 on rentals that accrued after the filing of the Chapter XI petition and has thus assumed performance of the Brokerage Agreement. Furthermore, Silverstein argues that the Brokerage Agreement and purchase option in the Sublease are “inextricably intertwined” and thus Food Fair “implicitly assumed the entire transaction” or “package” when it continued the Sublease and collected rents from the Subtenant. Silverstein also objects that Food Fair’s equitable position is unfavorable and urges this Court not to allow Food Fair to confirm the Sublease and “reap the benefit of the Subleasee’s [sic] exercise of the option to purchase” and at the same time reject the Brokerage Agreement and be discharged of its obligations under such agreement. It is the position of Food Fair that the Brokerage Agreement is not an executory contract that can be assumed or rejected in bankruptcy, as it had been fully performed on one side prior to the date of the Chapter XI petition. Food Fair argues that Silver-stein’s right to be paid a percentage of the purchase price for the Premises was earned prior to the date of the petition, but Food Fair’s obligation to pay was deferred until the purchase option had actually been exercised. In sum, Food Fair contends that any claim Silverstein asserts for brokerage commissions is a general unsecured claim since it arose at the time the two parties entered into the Brokerage Agreement long before the commencement of this Chapter XI proceeding. By order filed on March 3, 1981, this Court approved the sale of the Premises to 700 Associates and the real estate sales contract between Fairland and 700 Associates “without prejudice to any and all claims of Silverstein Agency arising out of the Brokerage Agreement dated September 12, 1973.” I In order to resolve the instant controversy concerning the status of Silverstein’s claim for brokerage commissions, this Court must initially determine whether the Brokerage Agreement between Silverstein and Food Fair is an “executory contract” within the meaning of the Bankruptcy Act. If the Court deemed the Brokerage Agreement was an “executory contract,” Food Fair would have the choice of assuming or rejecting the agreement depending on which option benefitted the estate. In addition, if Food Fair had assumed the contract, as Silverstein argues, the brokerage commissions payable after the petition date would be expenses of administration entitled to a first priority under section 64(a)(1) of the Bankruptcy Act. Conversely, if the Court deemed the Brokerage Agreement was not an “executory contract,” Silver-stein would simply have a claim in these proceedings for breach of contract. The term “executory contract” in its general legal usage describes a contract that is not fully performed; however, in the bankruptcy context, the term has a more limited meaning. For the purposes of the Bankruptcy Act, the courts have adopted Professor Countryman’s definition of an “executo-ry contract” as: A contract under which the obligations of both the bankrupt and the other party to the contract are so far unperformed that the failure of of either to complete performance would constitute a material breach excusing the performance of the other, (emphasis added) V. Countryman, Executory Contracts in Bankruptcy: Part I, 57 Minn. L. Rev. 439, 460 (1973), see also Jenson v. Continental Finance Corp., 591 F.2d 477, 481 (8th Cir. 1979), citing, Northwest Airlines, Inc. v. Klinger, 563 F.2d 916 (8th Cir. 1977); In re Lake Minnewaska Mountain Houses, Inc., 11 B.R. 455 (Bkrtcy. S.D.N.Y. 1981) (J. Schwartzberg); V. Countryman, Executory Contracts in Bankruptcy: Part II, 58 Minn. L. Rev. 749 (1974). An “executory contract” so defined does not encompass the situation where a nonbankrupt party to a contract has rendered full performance of its obligations but where a bankrupt party has performed only partially or not at all. It would run contrary to the fundamental policies underlying the Bankruptcy Act to extend the statutory option, conferred upon the trustee and debtor in possession, to reject or assume executory contracts to situations where the debtor has already received the contractual benefits and where the sole effect of assuming the contract would be to prefer one general creditor over others whose contracts have not been assumed. V. Countryman, Executory Contracts in Bankruptcy: Part I, 57 Minn. L. Rev. 439, 450-52 (1973); Jenson v. Continental Financial Corp., 591 F.2d 477, 481 (8th Cir. 1979); 4A Collier on Bankruptcy ¶ 70.43[2] (14th ed. 1976). Assumption of such a contract would convert the breach of contract claim of the nonbankrupt party into an expense of administration without providing any further benefit to the estate. As previously discussed, the Brokerage Agreement between Food Fair and Silverstein is a distinct, separate agreement from the Sublease between Food Fair and the Subtenant. Neither party to the instant proceeding has alleged that the Sublease expressly incorporates the terms of the Brokerage Agreement or that Silver-stein was a party to the Sublease. Although the exercise of the purchase options in the Sublease and Overlease changed the time and manner of Food Fair's payment obligation under the Brokerage Agreement, this fact standing alone does not convert the Brokerage Agreement into an executory contract. It merely shows that the underlying transactions and events are interrelated. The Brokerage Agreement was entered into shortly after the signing of the Sublease and provided an alternate method of payment in the event the Subtenant exer cised the purchase option in the Sublease. The fact that the Brokerage Agreement imposes no affirmative duties on Silverstein yet sets forth the exact terms of Food Fair’s payment obligations leads this Court to conclude that Silverstein had fully performed its contractual obligations when it found a subtenant for the Premises. As the Brokerage Agreement was fully performed on one side prior to bankruptcy, it is not an “executory contract” as the term has been defined for purposes of the Bankruptcy Act. Consequently, the claim of Silverstein for brokerage commissions is a general claim for breach of contract, not an expense of administration. The conclusions of this Court are supported by two cases cited by Food Fair: In re Godwin Bevers Co., Inc., 575 F.2d 805 (10th Cir. 1978) and In re Fahys, 18 F.Supp. 529 (S.D.N.Y. 1987). In Fahys, the Court could not address the central issue of whether the 'trustee or debtor had title to the commissions on insurance policies until it had determined whether the commissions were earned before or after the petition. The policies had been placed by the debtor prior to bankruptcy, but the commissions were payable to the bankrupt on premiums received by the insurance company. The Court found that the commissions “were not ‘to be earned in the future.’ They had been earned prior to bankruptcy, although not payable until later and then only on a contingency.” In re Godwin Bevers Co., Inc. involved the claim of a real estate broker for commissions. The Court found that the broker had fully performed its contractual obligations, providing listing services for the debt- or, prior to the date of petition even though the sales of some of the properties were not completed until after the bankruptcy proceeding had commenced. The Court held that the broker’s claim for commissions was a general unsecured claim and stated that the trustee’s implicit acceptance of the benefits of the contract did not transform the nonbankrupt party’s contractual claim into an expense of administration. Accordingly, this Court finds that, notwithstanding the fact that the real estate commissions were payable to Silverstein after the date Food Fair filed its petition, the commissions were earned prior to Food Fair’s bankruptcy. Thus, Silverstein’s claim is a general unsecured claim for breach of contract, not an expense of administration. II Silverstein contends that In re W.T. Grant Co., 4 B.C.D. 503 (Bankr. S.D.N.Y. 1978) (J. Galgay), aff’d, 474 F.Supp. 788 (S.D.N.Y. 1979), aff’d, 620 F.2d 319 (2d Cir.) cert. denied, 446 U.S. 983, 100 S.Ct. 2963, 64 L.Ed.2d 839 (1980) compels this Court to find that the brokerage commissions on the purchase price for the Premises are an expense of administration. Silverstein argues that the decision in W.T. Grant was based on the fact that the debtor had received and accepted benefits under the executory contracts of its employees during the post-petition period. Additionally, Silverstein contends that the court “did not give weight to the element that the severance pay claim had, in large measure, accrued prior to the date of the filing of the Chapter XI petition.”
6517080-10277	FINDINGS OF FACT, CONCLUSIONS OF LAW AND MEMORANDUM OPINION ALEXANDER L. PASKAY, Chief Judge. THIS IS A Chapter 7 liquidation case. The matters under consideration are two separate assaults on the right to complete relief sought by Mr. and Mrs. Gill (Debtors) in this Chapter 7 case. One is mounted by Barnett Bank of Naples (Barnett) and the other by Island Bank of Collier County (Island Bank). Barnett seeks a determination in its Complaint that the debt in the amount of $19,-070.89 shall be declared to be non-dis-chargeable based on § 523(a)(6) of the Bankruptcy Code. Particularly, it is Barnett’s contention that Mr. Gill willfully and maliciously injured the property of Barnett by converting Barnett’s collateral. The collateral was pledged by Mr. Gill to secure a loan granted by Barnett to High Tide, Inc., d/b/a/ Marco Rent-All, a corporation in which Mr. Gill was the principal, 50% shareholder with his wife, and its President. The claim of Island Bank is also based on § 523(a)(6), claiming an unauthorized disposition of its collateral by Mr. Gill. In addition, Island Bank also challenges the Debtors’ right to a general bankruptcy discharge based on § 727(a)(4) and 727(a)(5) of the Bankruptcy Code, respectively. In support of its claim, Island Bank contends that the Debtors committed a false oath in bankruptcy based on § 727(a)(5), and the Debtors failed to explain satisfactorily the loss of their assets to meet their liabilities pursuant to § 727(a)(4). Before considering the merits of the respective claims of the two Banks, it should be pointed out that this record is totally devoid of any evidence which would warrant granting the relief sought against Mrs. Gill. Therefore, this Court is satisfied that it is proper to dismiss both complaints as they relate to the claims against her. Thus, the balance of the discussion will be limited to the claims asserted against Mr. Gill, hereinafter referred to as the Debtor. It should be noted that if the record justifies the conclusion set forth by Island Bank, that the Debtor is not entitled to a general discharge, it would not be necessary to consider the claims of non-dis-chargeability asserted by both Banks. For this reason Island Bank’s Objection to the Discharge of the Debtor will be considered first. Objection to Discharge by Island Bank § 727(a)(4) & (5) At the time relevant to the matter under consideration, the Debtor and his wife were the sole shareholders of Go-Go, Inc., a/k/a Collier RentAll, (Go-Go), a Florida Corporation. The Debtor was the President of Go-Go and in sole charge of its affairs. Sometime prior to April 3, 1990, the Debtor approached Island Bank and applied for a loan for Go-Go. The application was approved and Island Bank loaned Go-Go $65,-097.50. As part of this transaction, the Debtor executed a Promissory Note in favor of Island Bank as President of Go-Go. This note was to mature on or before June 22, 1990. To secure this loan, Mr. and Mrs. Gill pledged a Certificate of Deposit (CD) in the amount of $85,694.69. In addition, Mr. Gill executed a guarantee in favor of Island Bank to provide further security to Island. On June 22, 1990, the Bank agreed to roll over the loan for an additional 92 days. The renewal was documented by execution of a new note in the principal amount of $80,097.50 which was also secured by the same CD. This was also a time note and was to mature on September 22, 1990. On December 5, 1990, the note was renewed again with the execution of a new note in the principal amount of $80,000.00. This note was to mature on December 5, 1993, but unlike the previous notes, this note required, for the first time, monthly installment payments of $1,102.00 until maturity. This note, in addition to the CD pledged previously, was also secured by equipment and fixtures owned by Go-Go. All the notes discussed earlier were personally guaranteed by separate guarantees executed by the Debtor. Apparently, in June, 1991, for reasons not explained, Island Bank released the CD. This left the equipment and fixtures owned by Go-Go as the only collateral securing the outstanding obligation of Go-Go. Go-Go defaulted on its obligation to make monthly payments on the last note. To further complicate the matter, the Debtor was a principal stockholder and officer of a Florida Corporation known as High Tide, Inc., a/k/a Marco RentAll (High Tide). On May 7, 1991, the Debtor approached Island Bank and sought a loan in the amount of $20,000.00 on behalf of High Tide. The application was granted and Island Bank loaned High Tide $20,000.00., The Promissory Note was signed by the Debtor as President of High Tide. This note was to mature on November 7, 1991, and required only monthly interest payments until maturity. The note was not secured by any collateral. On November 7, 1991, this note was renewed by the execution of a new note by the Debtor, again as President of High Tide, in the principal amount of $20,064.32. The note was also unsecured and, like the previous note, required only monthly interest payments until maturity. This note was to mature on May 7, 1992. Both the first and the second High Tide notes were personally guaranteed by the Debtor by separate guarantees executed by him on May 7, 1991. High Tide, just like Go-Go, defaulted on the note. When Go-Go defaulted on its last note, Island Bank attempted to recover its collateral, the fixtures and equipment of Go-Go. Not able to locate its collateral, Island Bank sought the assistance of the Sheriffs Office of Collier County and requested an investigation to determine the whereabouts of its collateral. The detective in charge of the investigation contacted the Debtor who informed the detective that the collateral of Go-Go was stored at the business premises of High Tide and that Island Bank was free to repossess its collateral. The day after his visit with the Debtor, the detective visited the premises of High Tide and inspected certain inventory items which were identified by the Debtor’s wife as Go-Go’s collateral. The detective compared the inventory identified by Mrs. Gill with a list of Go-Go collateral furnished to him by Island Bank and found that the inventory which was on the premises matched most of the equipment listed on the schedule of the collateral given to the detective by Island Bank. The equipment was ostensibly displayed to be rented to the public and appeared to be in satisfactory condition. Having concluded that no violation occurred, the Sheriff’s Office considered the matter closed. Although it is not clear from the record, it appears that subsequently the Debtor entered into a contract to sell all of the assets of High Tide to one Jeffrey Becker for $100,000.00. In contemplation of the proposed sale, the Debtor furnished Becker with a list of the assets to be included in the sale. Mr. Becker approached Island Bank and applied for a loan to finance the purchase. He submitted to Island Bank the list of the assets which were to be included in the purchase. The list furnished to Island Bank appeared to include the very same equipment which was pledged to Island Bank as security for the loan granted to Go-Go. When informed of this fact, Becker became alarmed and decided to conduct an inventory check of the assets offered for sale. When he compared the serial numbers of the equipment actually located on the premises of High Tide with the list of Go-Go equipment pledged as collateral to Island Bank, he discovered that a substantial amount of the equipment which he was to purchase was in fact the equipment pledged as collateral for Go-Go to Island Bank. In light of this unexpected turn of events, Becker notified the Debtor on August 3, 1992 that he was unwilling to proceed and go through with the sale. On the morning of the following day, Becker’s son drove by the premises of High Tide and observed that substantially all of the equipment stored outside the building the previous day was no longer there. In search of its collateral, Island Bank applied for and obtained a Writ of Replevin on August 4, 1992, and delivered the Writ to the Sheriff with directions to find its collateral and levy on the same. In addition, Island Bank requested the Sheriffs Department to reopen the investigation. The detective placed in charge of the investigation contacted the Debtor again who informed the detective that unfortunately, 90% of the equipment securing Island Bank’s loan had either been sold or junked because rental equipment wears out quickly and has to be junked and replaced frequently. The Sheriff was unable to affect a levy since Island Bank collateral could no longer be located. When confronted, the Debtor informed Island Bank that the remaining collateral was in a storage facility and the Bank was free to proceed to repossess what was left. Island Bank declined to repossess the equipment found in the storage facility because the serial numbers on the equipment did not match any of the serial numbers of the equipment listed on the original inventory of the collateral. On May 20, 1992, the Debtors filed their Petition under Chapter 7 of the Bankruptcy Code. In their Schedule of Assets, the Debtors failed to disclose their ownership of the stock in Go-Go or that the Debtor was an officer of Go-Go. Basically these are the relevant facts established at the final evidentiary hearing which, according to Island Bank, would warrant the denial of the Debtor’s discharge based on either § 727(a)(4) or § 727(a)(5), respectively. The first claim of Island Bank that the Debtor is not entitled to a general discharge is based on § 727(a)(4) which provides as follows: Section 727(a)(4) (a) The court shall grant the debtor a discharge, unless— (4) the debtor knowingly and fraudulently, or in connection with the case— (A) made a false oath or account; (B) presented or used a false claim; In the alternative Island Bank asserts that the Debtor is not entitled to a discharge based on § 727(a)(5). Section 727(a)(5) provides ... (a) The court shall grant the debtor a discharge, unless— (5) the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor’s liabilities;
463108-19486	MILLER, Associate Justice. Appellant was accused in the Juvenile Court of the District of Columbia— in accordance with the provisions of the Act of June 18, 1912 — of being the father of an illegitimate child. Following a trial by jury he was found guilty. We allowed an appeal. One of the assignments of error challenged the refusal of the trial court to grant a one-day continuance, in order that appellant’s counsel could prepare and submit an affidavit in support of his motion for a new trial. The motion for a continuance was made on the day which had been theretofore set for argument of the motion for a new trial. Counsel stated orally that the affidavit which he proposed to submit “would give an entirely different slant on the case.” Although a motion for a continuance is submitted to the sound discretion of the court and its ruling thereon should not be disturbed in the absence of abuse of that discretion; nevertheless, in the interest of justice and upon a stipulation of counsel representing both parties, this court remanded the case to the trial court for the purpose of hearing again the motion for a new trial. The trial judge was instructed that, in the event the motion should be again denied, a supplemental record should be filed in this court, in order that the case might then be disposed of, on the other assignments of error. The trial judge proceeded as directed; upon the rehearing the motion for a new trial was again denied; judgment was entered against appellant and a supplemental record has been filed in this court. This record fails to reveal any abuse of discretion or reason to disturb the decision of the trial court. On cross-examination at the original trial, the complaining witness was asked by appellant whether she “had been arrested and tried for larceny in the Juvenile Court on or about July, 1939.” The court, upon objection of the government, refused to allow the question. This — contrary to appellant’s contention — was eminently correct. The District of Columbia Code provides that no person shall be incompetent to testify, by reason of his having been convicted of crime, but that such fact may be given in evidence to affect his credit as a witness. However, to constitute a conviction within the meaning of this provision, there must be either a plea or verdict of guilty and, in addition, judgment and sentence pronounced by the court. Accordingly, a witness may not be asked if he'has been indicted for a crime, or even if he has been tried and convicted, if the conviction was later set aside and a new trial granted. It follows that the question asked, pertaining to arrest and trial and not to conviction, was clearly improper in any event, and therefore was correctly refused. In the present case, the reason for refusal was even more imperative. The Juvenile Court has no jurisdiction to hear and determine an accusation of larceny except when the offense is charged to have been committed by a person under eighteen years of age. It may waive its jurisdiction in such a case if the child is sixteen years of age or older; in which event the other court which then takes- jurisdiction will proceed in the regular manner of a criminal court. But if the child is under sixteen, or if the Juvenile Court retains jurisdiction of a child sixteen or over, it must proceed, not to a determination of guilt or innocence, but to “an adjudication upon the status” of the child. Its procedure in making that adjudication is non-criminal in character. Consequently, such an adjudication of the Juvenile Court concerning a child — whether he may be voluntarily delinquent o-r merely the unfortunate victim of others - — is in no sense the counterpart of a conviction in a criminal court; and none of the implications of conviction should result therefrom. With these and other considerations in mind, Congress expressly specified that “No adjudication upon the status of any child in the jurisdiction of the court shall operate to impose any of the civil disabilities ordinarily imposed by conviction, nor shall any child be deemed a criminal by reason of such adjudication, nor shall such adjudication be deemed a conviction of a crime, * * and, further, that “The disposition of a child or any evidence given in the court shall not be admissible as evidence against the child in any case or proceeding in any other court, * * .” Similar statutes have been enacted in many of the states. Their enactment is founded upon strong social policy, and their aim is amnesty and oblivion for the transgressions of youthful offenders. The fundamental philosophy of the juvenile court laws is that a delinquent child is to be considered and treated not as a criminal but as a person requiring care, education and protection. He is not thought of as “a bad man who should be punished, but as an erring or sick child who needs help.” Thus, the primary function of juvenile courts, properly considered, is not conviction or punishment for crime, but crime prevention and delinquency rehabilitation. It would be a serious breach of public faith, therefore, to permit these informal and presumably beneficent procedures to become the basis for criminal records, which could be used to harass a person throughout his life. There is no more reason for permitting their use for such a purpose, than there would be to pry into school records or to compile family and community recollections concerning youthful indiscretions of persons who were fortunate enough to avoid the juvenile court. As the language of the statute expressly forbids the interpretation that the disposition of a' child in a juvenile court proceeding constitutes conviction of a crime, and as nothing short of conviction of crime is sufficient to warrant the inquiry which appellant was forbidden to make, his contention is, completely devoid of merit. It is next contended that the court erred in excluding from evidence the statement of a witness, called on behalf of appellant, to the effect that the witness had had sexual intercourse with the mother of the child on many occasions prior to July, 1937. The statement was clearly irrelevant. In a proceeding of this nature, the sole issue is the paternity of the illegitimate child, and the chastity of the mother is immaterial. “Lewd conduct of the complainant is no defense, unless it tends to show that another than defendant is, or may be, the father of the child.” Hence, evidence that the mother had intercourse with another man at a period of time which, in the course of nature, could not result in the conception complained of, is not relevant to the inquiry and is, therefore, inadmissible. In the present case the child was born on September 16, 1938. The excluded testimony related to acts committed more than fourteen months before. Obviously, the child could not have been begotten by such intercourse and, therefore, the court properly excluded the evidence. On this appeal, appellant contends that evidence of sexual intercourse with another man prior to the period of conception was admissible for the purpose of impeaching the testimony of the mother. It is not necessary to decide this question, because it was not. offered for that purpose at the trial. If the appellant wished to urge its admissibility for impeachment purposes the trial court should have been given an opportunity to pass on that question. This opportunity not having been offered, and the evidence having been excluded solely on the ground of immateriality, the issue should not be permitted to be raised for the first time on appeal. The court properly refused to permit a witness to state “whether the child resembled someone he knew other than the defendant.” Whether the child may have resembled someone the witness knew was immaterial, unless that person was one with whom the child’s mother may have had illicit relations at approximately the time of conception. It was incumbent upon appellant, therefore, to limit his interrogatory accordingly. This he did not do. Moreover, the question was inadmissible for another reason. In Fillipone v. United States, w.e held that even when a child is exhibited to the jury for the purpose of establishing resemblance to the putative father, the fact of resemblance can have no evidentiary value unless there appear in the child physical characteristics peculiar to the father and unless the resemblance is so striking as to leave no reasonable doubt as to its existence. There is even more reason for imposing such a limitation upon the opinion of a witness concerning resemblance of the child to a third person who, is not before the court. Consequently, even assuming the admissibility of the evidence, if a proper question had been asked or if a proffer of proof had been made, its exclusion in the present case was not error. Error is next predicated upon the refusal of the court to grant appellant’s prayers for instructions to the jury. It is contended that by not considering each prayer individually and ruling thereon, the court denied appellant an opportunity to except to the rulings, and precluded him from using the prayers in his argument to the jury. On this point, the record shows that when the prayers were offered, “the court informed the counsel for the defendant, that she would include everything in her instruction, and at the conclusion if the counsel was not satisfied, his prayers would be considered. At the conclusion of the instruction, the counsel for the defendant said he was satisfied with the instruction, * The charge of the court does not appear in the record. Moreover, the prayers requested have not been included therein. Under the circumstances, and par ticularly in view of appellant’s expression of satisfaction with the charge as given, the contention is wholly without merit. It will be presumed that the prayers requested were embodied in the charge as given. It is axiomatic that it is not error to refuse requested instructions, even though they may be correct statements of the law, if the subject matter has been properly covered by the charge given. It is also contended that the court erred in refusing to direct a verdict in appellant’s favor at the close of the government’s case. But we need not decide the question for, by introducing evidence in his own behalf, after the refusal of the motion, appellant waived his exception to the ruling. We have considered carefully all appellant’s assignments and find that he suffered from no prejudicial error in respect of any of them. Affirmed. 37 Stat. 134, D.C.Code (1929) tit. 18, §§ 281-288; 52 Stat. 597, D.C.Code (Supp.V, 1939) tit. 18, § 256 (c). 52 Stat. 603-604, D.C.Code (Supp.V, 1939) tit. 18, § 283. Isaacs v. United States, 159 U.S. 487, 489, 16 S.Ct. 51, 40 L.Ed. 229; Goodyear Service, Inc. v. Pretzfelder, 65 App.D.C. 389, 84 F.2d 242; Avery v. Alabama, 308 U.S. 444, 446, 60 S.Ct. 321, 84 L.Ed. 377. D.C.Code (1929) tit. 9, § 12. Crawford v. United States, 59 App.D.C. 356, 41 F.2d 979. Chebithes v. Price, 59 App.D.C. 212, 37 F.2d 1008. See Coulston v. United States, 10 Cir., 51 F.2d 178, 182, holding that a question of whether the witness has been accused or arrested for crime may not be used to impeach, “for the sufficient reason that it calls for hearsay evidence, and because accusation carries no implication of guilt.” Thompson v. United States, 30 App.D.C. 352, 359, 360, 12 Ann.Cas. 1004. See Sanford v. United States, 69 App.D.C. 44, 46, 98 F.2d 325, 327, and cases there cited. See also, Clawans v. District of Columbia, 61 App.D.C. 298, 62 F.2d 383. See 2 Wigmore, Evidence, 2d Ed. 1923, § 982; Notes, 6 A.L.R. 1608; 25 A.L.R. 339; 103 A.L.R. 350. D.C.Code (Supp.V, 1939) tit. 18, § 256. D.C.Code (Supp.V, 1939) tit. 18, § 263. D.C.Code (Supp.V, 1939) tit. 18, § 264. D.C.Code (Supp.V, 1939) tit. 18, §§ 257, 264; People v. Lewis, 260 N.Y. 171, 183 N.E. 353, 86 A.L.R. 1001, certiorari denied, 289 U.S. 709, 53 S.Ct. 786, 77 L.Ed. 1464; Ex parte Newkosky, 94 N.J.L. 314, 116 A. 716; Ex parte Januszewski, C.C.S.D.Ohio, 196 F. 123, 129; Ex parte Daedler, 194 Cal. 320, 228 P. 467; Wissenberg v. Bradley, 209 Iowa 813, 229 N.W. 205, and authorities there cited. See Rule v. Geddes, 23 App.D.C. 31, 48, 50; Note, 67 A.L.R. 1082; Warner and Cabot, Changes in the Administration of Criminal Justice During the Past Fifty Years, 50 Harv.L.Rev. 583, 611; 1 Wharton, Criminal Law, 12th Ed. 1932, § 370; How Far Can Court Procedure be Socialized Without Impairing Individual Rights?, Children’s Bureau Pub. No. 97 (U. S. Dep’t Labor 1922) 55-69; Van Waters, The Socialization of Juvenile Court Procedure, 13 J. Crim. L. & Crim. (1922) 61; H. H. Lou, Juvenile Courts in the United States (1927) 129: “Formal criminal procedure is inconsistent with the theory underlying the juvenile-court legislation, which treats the child not as a criminal but as a delinquent, ‘misdirected and misguided and needing aid, encouragement, help, and assistance,’ as it has been expressed in many statutes. It is important that all means should be taken to prevent the child and his parents from forming the conception that the child is being tried for a crime. The primary function of the judge is not to prove that the child is or is not guilty of an offense but to get from the child the truth, to weigh the, results of the social, physical, and mental findings, to determine what the needs of the child are, and then to decide upon the treatment.” Hall, Juvenile Courts, 5 Encyc. Brit., 14th Ed. 1932, 477: “Bad surroundings, evil companions, undesirable parents, mental and physical deficiencies and various psychological causes are responsible for most juvenile delinquency.” See In re Turner, 94 Kan. 115, 121, 122, 145 P. 871, 873, Ann.Cas.1916E, 1022; Commonwealth v. Fisher, 213 Pa. 48, 62 A. 198, 5 Ann.Cas. 92; Ex parte Sharp, 15 Idaho 120, 96 P. 563, 18 L.R.A.,N.S., 886; Cinque v. Boyd, 99 Conn. 70, 83, 121 A. 678, 683. See generally, Young, Social Treatment in Probation and Delinquency (1937) cc. X, XI. Cf. People v. De Fehr, 81 Cal.App. 562, 254 P. 588; Huff v. O’Bryant, decided April 28, 1941, — App.D.C. —, 121 F.2d 890. Section 14, Juvenile Act of June 1, 1938, 52 Stat. 599, 600, D.C.Code (Supp. Y, 1939) tit. 18, § 264. These are listed in 1 Wigmore, Evidence, 2d Ed. 1923, § 196, n. 3. Kozler v. New York Tel. Co., 93 N.J.L. 279, 108 A. 375. Flexner & Baldwin, Juvenile Courts and Probation (1914) 6: “ * * * emphasis is laid, not on the act done by the child, but on the social facts and circumstances that are really the inducing causes of the child’s appearance in court.” See In re Turner, 94 Kan. 115, 145 P. 871; State ex rel. Miller v. Bryant, 94 Neb. 754, 144 N.W. 804; Ex parte Sharp, 15 Idaho 120, 96 P. 563, 18 L.R.A.,N.S., 886; State ex rel. Raddue v. Superior Court, 108 Wash. 619, 180 P. 875; Ex parte Januszewski, C.C.S.D. Ohio, 196 F. 123. Warner and Cabot, Changes in the Administration of Criminal Justice During the Past Fifty Years, 50 Harv.L. Rev. 583, 611. See People v. Lewis, 260 N.Y. 171, 183 N.E. 353, 86 A.L.R. 1001, certiorari denied, 289 U.S. 709, 53 S.Ct. 786, 77 L.Ed. 1464. Wissenberg v. Bradley, 209 Iowa 813, 229 N.W. 205; Nicholl v. Koster, 157 Cal. 416, 419, 108 P. 302, 303; Cinque v. Boyd, 99 Conn. 70, 81 et seq., 121 A. 678, 682 et seq.; Wisconsin Industrial School v. Clark County, 103 Wis. 651, 664, 605, 79 N.W. 422, 427: “There is no restraint upon the natural liberty of children contemplated by such a law, —none whatever; but rather the placing of them under the natural restraint, so far as practicable, that should be, but is not, exercised by parental authority. It is the mere conferring upon them that protection to which, under the circumstances, they are entitled as a matter of right. It is for their welfare and that of the community at large. The design is not punishment, nor the restraint imprisonment, any more than is the wholesome restraint which a parent exercises over his child. The severity in either case must necessarily be tempered to meet the necessities of the particular situation. There is no probability, in the proper administration of the law, of the child’s liberty being unduly invaded. Every statute which is designed to give protection, care and training to children, as a needed substitute for parental authority and performance of parental duty, is but a recognition of the duty of the state, as the legitimate guardian and protector of children where other guardianship fails.” Facts About Juvenile Delinquency, Children’s Bureau Pub. No. 215 (U. S. Dep’t Labor 1932) 30: “As stated in the White House Conference report on ‘The Delinquent Child,’ ‘Their primary function hinges on the fact that they are not looking outwardly at the act but, scrutinizing it as a symptom, are looking forward to what the child is to become.’ The question for the court is not one of leniency or mercy; it is one of ascertaining what is needed and acting accordingly with scrupulous justice. The court is concerned to understand why the particular child is delinquent, and, on the basis of this understanding, to attempt intelligent treatment for proper adjustment toward responsible future living.” See Mack, The Juvenile Court, 23 Harv.L.Rev. 104, 107. Wissenberg v. Bradley, 209 Iowa 813, 817, 229 N.W. 205, 207. See Kozler v. New York Tel. Co., 93 N.J.L. 279, 281, 108 A. 375, 376: “We see no reason why the Legislature may not enact that it is against public policy to hold over a young person in terrorem, perhaps for life, a conviction for some youthful transgression.” Mack, The Juvenile Court, 23 Harv. L.Rev. 104, 107: “Why is it not just and proper t-o treat these juvenile offenders, as we deal with the neglected children, as a wise and merciful father handles his own child whose errors are not discovered by the authorities?” See note 15 supra. See 1 Wharton, Criminal Law, 12th Ed. 1982, §§ 369, 371; Van Waters, The Socialization of Juvenile Court Procedure, 13 J.Crim.L. & Crim. (1922) 61, 67: “Twenty-six states have safeguarding provisions against using evidence gained in the Juvenile Court against the child in other proceedings.”; citing a Summary of Juvenile Court Legislation in the United States, Children’s Bureau Pub. No. 70 (U. S. Dep’t Labor 1920) 41. Cf. People v. Superior Court, 104 Cal.App. 276, 285 P. 871. State v. Cotter, 167 Minn. 263, 265, 209 N.W. 4: “ * * * the fact of unchastity is confessed by the complaint she makes, and her reputation has no tendency to prove that the accused is not the father of the child. The object of the proceedings is to obtain support and parental responsibility for an illegitimate child. Obviously it is wholly immaterial whether the mother was chaste or unchaste. The benefit to be obtained is for the child and perhaps for the public, and the statute was never intended to protect only the children of women of previously chaste character.” See Rudulph v. State, 16 Ga.App. 353, 85 S.E. 365; Nimmo v. Sims, 178 Ark. 1052, 13 S.W.2d 304. State v. Lavin, 80 Iowa 555, 562, 46 N.W. 553, 555; 1 Wigmore, Evidence, 2d Ed. 1923, § 133. United States v. Collins, 25 Fed.Cas. page 544, No. 14,835, 1 Cranch C.C. 592; Royer v. State, 21 Ala.App. 381, 108 So. 652, 653; Mensing v. Croter, 209 Cal. 318, 287 P. 336; Dixon v. State, 88 Okl. 172, 212 P. 600; State v. Ferguson, 157 Wash. 19, 288 P. 239; State v. Patton, 102 Mont. 51, 55 P.2d 1290, 104 A.L.R. 76; 1 Wigmore, Evidence, 2d Ed. 1923, § 133; Note 104 A.L.R. 84.
5733458-11825	RILEY, Circuit Judge. Defendant Miguel Suarez-Perez (Suarez-Perez) was charged with one count of possession with intent to distribute 500 grams or more of a methamphetamine mixture, in violation of 21 U.S.C. § 841(a)(1) and (b)(1). Approximately eleven months after his arraignment, Sua-re&-Perez filed a motion to dismiss alleging Speedy Trial Act violations. The district court denied his motion. Thereafter, Suarez-Perez conditionally pled guilty, and the district court sentenced Suarez-Perez to 120 months’ imprisonment. Suarez-Perez appeals the district court’s denial of his Speedy Trial Act motion to dismiss. For the reasons stated below, we reverse the district court’s denial of the motion to dismiss, vacate Suarez-Perez’s sentence, and remand the case to the district court for dismissal of Suarez-Perez’s indictment. On remand, the district court must determine, taking into account the factors specified in 18 U.S.C. § 3162(a)(2), whether the dismissal should be with or without prejudice. I. BACKGROUND On January 28, 2004, in Omaha, Nebraska, a Douglas County deputy sheriff stopped a car driven by Suarez-Perez for a traffic violation. After conducting a routine check of Suarez-Perez’s driver’s license and registration, the deputy sheriff asked for and received permission to search Suarez-Perez’s vehicle. While conducting the search, the deputy sheriff discovered methamphetamine and arrested Suarez-Perez. Suarez-Perez was charged with possession of methamphetamine with intent to distribute. The following is a chronology of the relevant district court docket entries leading to Suarez-Perez’s sentencing, together with an accounting of Suarez-Perez’s speedy trial clock: Date_Action_Speedy Trial Days June 9,2004 Arraignment held; pretrial order entered set- 0 ting motions deadline for June 29,2004, and setting trial for August 2, 2004. Speedy trial _clock began to run on June 10. 2004._ July 6, 2004 District court reset trial for August 3, 2004. June 10- 26 _July 5_ July 15, 2004 District court reset trial for August 10, 2004. July 7- 8 _July 14_ August 6, 2004 Suarez-Perez, citing newly discovered evidence, July 16- 21 _filed a motion to continued. _August 5_ August 9, 2004 District court granted motion to continue and 0 excluded time from August 6, 2004 to Septem-_ber 13, 2004 from sneedv trial clock._ August 17, 2004 Suarez-Perez filed motion to suppress. After 0 evidentiary hearing and receipt of transcript, matter was fully submitted to the court on _November 7. 2004._ December 7, 2004 Magistrate judge filed Report and Recommen- 0 dation (R & R) denying motion to suppress. No _objections filed._ January 18, 2005 District court judge adopted R & R. Speedy January 7- 11 trial clock restarted January 7, 2005 — 30 days January 17 after R & R was filed (18 U.S.C. § 3161(h)(l)(J)). January 20,2005 District court entered nunc pro tunc order January 19 1 amending order of August 9, 2004, changing time period excluded from speedy trial clock to June 29, 2004 through September 13, 2004 (rather than August 6, 2004 through September _13, 2004)._ February 3,2005 Defense counsel moved to withdraw. January 21- 13 _February 2_ February 10, 2005 Evidentiary hearing held; motion to withdraw 0 granted. District court tolled speedy trial clock _from February 10, 2005 to March 3, 2005._ March 8, 2005 New counsel appointed on February 15, 2005. March 4- 4 _District court reset trial for March 29, 2005. March 7_ March 10, 2005 Change of plea hearing set for March 25, 2005. March 9 1 District court tolled speedy trial clock from _March 10, 2005 to March 25, 2005._ Days Elapsed on Speedy Trial Clock: 85 Suarez-Perez filed several pretrial motions, including motions to continue, to cancel the plea hearing, to request a new change of plea hearing, and on May 7, 2005, to dismiss based on Speedy Trial Act violations. The district court denied Suarez-Perez’s motion to dismiss. On March 8, 2006, reserving the right to appeal the district court’s denial of his Speedy Trial Act motion to dismiss, Suarez-Perez conditionally pled guilty to possession with intent to distribute methamphetamine and was sentenced to 120 months’ imprisonment. This appeal followed. II. DISCUSSION Suarez-Perez argues, inter alia, the district court erred in denying his motion to dismiss, because the January 20, 2005, nunc pro tunc order violated the Speedy Trial Act. We agree. In the context of the Speedy Trial Act, we review the district court’s findings of fact for clear error and its legal conclusions de novo. United States v. Titlbach, 339 F.3d 692, 698 (8th Cir.2003) (quotation marks and citation omitted). Under the Speedy Trial Act, a defendant must be brought to trial within 70 days of his indictment or first appearance, whichever is later. Id.; see 18 U.S.C. § 3161(c)(1). However, the Act permits the district court to exclude delays when it finds “the ends of justice ... outweigh the best interest of the public and the defendant in a speedy trial.” 18 U.S.C. § 3161(h)(8)(A). If a defendant is not brought to trial within the time limit required by 18 U.S.C. § 3161(c) as extended by the excludable delays of § 3161(h), the information or indictment shall be dismissed on motion of the defendant. Id. § 3162(a)(2). The government asserts the magistrate judge entered the January 20, 2005, nunc pro tunc order to correct an error in his August 9, 2004, order granting Suarez-Perez’s motion to continue. The government contends the original order incorrectly tolled the speedy trial clock from August 6, 2004 (the date Suarez-Perez filed the motion to continue) to September 13, 2004, when instead the speedy trial clock should have been tolled from June 29, 2004 to September 13, 2004. The government provides no legal or factual basis for retroactively tolling the speedy trial clock 38 days before Suarez-Perez filed his motion to continue the trial. The function of a nunc pro tunc order is to correct clerical or ministerial errors, including typographical errors, or to reduce an oral or written opinion to judgment; the function is not to make substantive changes affecting a party’s rights. See Transamerica Ins. Co. v. South, 975 F.2d 321, 325-26 (7th Cir.1992). The Latin phrase nunc pro tunc, which means now for then, “is merely descriptive of the inherent power of the court to make its records speak the truth — to record that which was actually done, but omitted to be recorded. It is no warrant for the entry of an order to record that which was omitted to be done.” W.F. Sebel Co. v. Hessee, 214 F.2d 459, 462 (10th Cir.1954); see also Mellon v. St. Louis Union Trust Co., 240 F. 359 (8th Cir.1917) (citing Hickman v. Fort Scott, 141 U.S. 415, 418, 12 S.Ct. 9, 35 L.Ed. 775 (1891)). In other words, using a nunc pro tunc order “[a] judge may correct a clerical error at any time.... But he may not rewrite history.” United States v. Daniels, 902 F.2d 1238, 1240 (7th Cir.1990). The January 20, 2005 order is not cloaked in language correcting a clerical error; its effect is to rewrite history and substantially change Suarez-Perez’s Speedy Trial Act rights. To toll the speedy trial clock for the ends of justice, the district court’s ruling and the record clearly must reflect adequate grounds for the tolling. See Zedner v. United States, — U.S. -, 126 S.Ct. 1976, 1989-90, 164 L.Ed.2d 749 (2006) (concluding “if a judge fails to make the requisite findings regarding the need for an ends-of-justice continuance, the delay resulting from the continuance must be counted, and if as a result the trial does not begin on time, the indictment ... must be dismissed”). The district court’s justifications to begin tolling the speedy trial clock on June 29, 2004, rather than on August 6, 2004, are indeterminate, because nothing occurred during that period to toll the speedy trial clock. The district court’s July 6, 2004, order expressly noted: “This case is currently pending on the docket of [the district court judge]. No substantive motions were filed and time is running under the Speedy Trial Act.” Only two additional entries appear on the docket after this order and before August 6, 2004:(1) a standard order dated July 14, 2004, setting the rules for trial; and (2) an order dated July 15, 2004, moving the trial from August 3, 2004 to August 10, 2004. Neither entry affected the speedy trial clock. The nunc pro tunc order states it was necessary to exclude the period of time from June 29, 2004 to September 13, 2004, because “[Suarez-Perez’s] counsel required additional time to adequately prepare the case.” However, (1) this rationale does not correct a clerical error; (2) nothing was pending on June 29, 2004; and (3) the record does not show Suarez-Perez’s counsel requested additional time to prepare for trial. At the time, Suarez-Perez did not know about the new evidence that eventually prompted the filings of his motions to continue and suppress. The January 20, 2005, nunc pro tunc order fails to declare the requisite findings to support an ends of justice continuance, and no factual basis exists to exclude the thirty-eight day period of June 29, 2004 to August 6, 2004, from the speedy trial clock. Absent exceptional circumstances, the district court should not enter an “ends of justice” continuance after the period sought to be excluded begins to run. See United States v. Brenna, 878 F.2d 117, 122 (3d Cir.1989) (per curiam) (holding an ends of justice continuance “cannot be entered nunc pro tunc .... The order continuing the case must be entered before the days to be excluded”). The Speedy Trial Act does not provide for retroactive continuances. See United States v. Janik, 723 F.2d 537, 545 (7th Cir.1983) (holding a “continuance itself must be granted before the period sought to be excluded begins to run. Since the Act does not provide for retroactive continuances a judge could not grant an ‘ends of justice’ continuance nunc pro tunc ...” (internal quotation and citation omitted)). In Suarez-Perez’s case, the purpose of the district court’s nunc pro tunc order undermines the strict limits of the Speedy Trial Act. Over 70 days elapsed on Suarez-Perez’s speedy trial clock. Therefore, the case must be remanded for dismissal of the indictment. Zedner, — U.S. at -, 126 S.Ct. at 1990. III. CONCLUSION For the reasons stated, we reverse the district court’s order denying Suarez-Perez’s Speedy Trial Act motion to dismiss and vacate Suarez-Perez’s sentence. The case is remanded to the district court for a dismissal of Suarez-Perez’s indictment. On remand, it is for the district court, in the first instance, to determine whether dismissal should be with or without prejudice, taking into account the factors specified in § 3162(a)(2). See 18 U.S.C. § 3161(d)(1); United States v. Giambrone, 920 F.2d 176, 179-80 (2d Cir.1990); see also 18 U.S.C. § 3288; Zedner, — U.S. at -, 126 S.Ct. at 1984-85, 1990. . We note the Seventh Circuit, in United States v. Montoya, 827 F.2d 143, 153 (7th Cir.1987), stated a sua sponte routine scheduling order setting a deadline for filing pretrial motions results in excludable time under the Speedy Trial Act. However, other circuits like the Eleventh, in United States v. Williams, 197 F.3d 1091, 1095 n. 7 (11th Cir.1999), the Sixth, in United States v. Moran, 998 F.2d 1368, 1370-71 (6th Cir.1993), and the Ninth, in United States v. Hoslett, 998 F.2d 648, 656 (9th Cir.1993), have refused to follow Montoya, instead holding a sua sponte routine scheduling order setting a deadline for filing pretrial motions does not result in excludable time. Because the parties and the district court did not raise this issue and have assumed the district court's routine order setting a deadline for filing pretrial motions does not result in excludable time, we will not address this issue.
1052027-11681	EDWARD C. PRADO, Circuit Judge: A jury convicted David Gonzalez of drug offenses. Gonzalez claims that the trial judge abused his discretion in denying his request for a jury instruction that a Government agent cannot be a co-conspirator. Gonzalez also contends he was entitled to an entrapment instruction, raises a sufficiency of the evidence claim, and argues his sentence is in violation of the Sixth Amendment. For the reasons that follow, we AFFIRM Gonzalez’s jury conviction and sentence. I. Background This case involves a Bureau of Immigration Customs Enforcement (“BICE”) operation to apprehend persons trafficking in narcotics. BICE Special Agent James Hearne approached Bruce Hawley Jager and asked him to cooperate in the operation. Jager had previously pled to drug charges, including possession with intent to distribute 600 kilos of cocaine, and was allowed to remain on bond to work for the Government in order to facilitate other arrests. The facts of this case are disputed. The parties agree that in late 2001 or early 2002 Jager befriended David Gonzalez. According to the Government, Jager reported to Hearne that he had heard Gonzalez was involved in narcotics. Hearne asked Jager to talk to Gonzalez and see if Gonzalez would sell Jager drugs. Gonzalez denies that he was involved in narcotics. According to Gonzalez, from January 2002 to March 2002, Jager repeatedly asked Gonzalez to sell him drugs, and Gonzalez continuously rejected these offers, insisting that he had no knowledge of the drug business. However, the Government claims that when Jager approached Gonzalez in January or February 2002, Gonzalez said he needed to make a telephone call and agreed to meet Jager later that day. The Government contends that Gonzalez needed to call a man named “Lionel.” Jager and Gonzalez did not make a deal that day. In March 2002, Jager again began talking with Gonzalez about buying drugs. According to Gonzalez, on March 2, Jager tricked Gonzalez into loaning him money to bet on a game of pool. Jager lost that game of pool and Gonzalez lost $900. Gonzalez contends that Jager approached him and told him he was sorry about losing his money. Gonzalez asserts that Jager told him he need not worry, as long as Gonzalez was able to find some crack cocaine. The Government’s account is that Jager and Gonzalez met at a billiards hall on March 12 and were monitored by Billy Jones, a Harris County Sheriff’s Officer. Jager did not wear a microphone during the meeting. The Government asserts that because Jager sensed that Gonzalez was uncomfortable during the meeting, he suggested that they strip in the bathroom so that Gonzalez could see there was no microphone. At this meeting Gonzalez gave Jager a price for four ounces of crack cocaine. Jager could not commit to the price at that time. After this meeting with Jager, Gonzalez went home where Officer Jones observed Lionel Fitzgerald visit Gonzalez. On March 25, Jager called Gonzalez and asked him if he was ready to make the exchange. They set up a meeting the following day. Although the timing is unclear, according to Jager, at one point during the operation Gonzalez returned from a conversation with Fitzgerald with a price for drugs written on a napkin. Jager wore a recording device to the March 25 meeting, and an agent had given Jager money to purchase the cocaine. The deal went forward as planned. During the meeting, Gonzalez made statements indicating he was familiar with the process of cooking cocaine. According to Gonzalez, after the first sale of crack cocaine, he considered the matter closed but continued to meet with Jager on a casual basis at local pool halls. The following day, Jager again called Gonzalez and told him the buyers liked the crack cocaine. He told Gonzalez he wanted to make another deal, which the Government contends eventually took place on April 30, 2002, when officers arrested Gonzalez. However Gonzalez recounts the events immediately leading to his arrest differently. He argues that on April 30, Jager invited Gonzalez to lunch. Gonzalez brought special pool tournament t-shirts to the meeting to show Jager. Once in Jag-er’s vehicle, officers arrested Gonzalez. The agents found four cookies of crack cocaine in Jager’s car and a small amount of powder cocaine on Gonzalez. Gonzalez contends that Jager brought the cocaine with him to the April 30 meeting. The Government states that agents searched Jager and his vehicle prior to the April 30 meeting and that there were no drugs in Jager’s car at that time. II. Procedural History A jury convicted Gonzalez of conspiring to possess with intent to distribute 50 or more grams of cocaine, possessing with intent to distribute 50 or more grams of crack cocaine, possessing with intent to distribute five or more grams of crack cocaine, and aiding and abetting the distribution of crack cocaine. The district court sentenced him to 240 months in prison, followed by 10 years supervised release. Gonzalez filed a timely notice of appeal. III. Discussion A. Sears Jury Instruction Request Gonzalez claims the trial judge abused his discretion in denying his request for a jury instruction that a Government agent cannot be a co-conspirator. We review a district court’s refusal to provide a requested jury instruction for abuse of discretion. United States v. McClatchy, 249 F.3d 348, 356 (5th Cir. 2001); United States v. Morales, 272 F.3d 284, 289 (5th Cir.2001). We will reverse only if the requested instruction “(1) was a substantially correct statement of the law, (2) was not substantially covered in the charge as a whole, and (3) concerned an important point in the trial such that the failure to instruct the jury on the issue seriously impaired the defendant’s ability to present a given defense.” McClatchy, 249 F.3d at 356 (internal quotations omitted). The trial judge, in rejecting Gonzalez’s request, explained that he had found, as a matter of law, that the possibility of a “true” conspiracy existed, and because there was some evidence of third-party involvement — evidence that a person other than the defendant and the Government informant was involved in the illegal activity — no additional instruction was warranted. Thus, the court concluded that the only question for the jury was whether or not the conduct of the parties constituted a conspiracy. Gonzalez’s requested instruction that a Government agent cannot be a co-conspirator was a substantially correct statement of the law, see United States v. Goff, 847 F.2d 149, 173 (5th Cir.1988)(“A government agent or informer cannot be a co-conspirator.”), and was not substantially covered in the charge as a whole. The issue then is whether the requested instruction concerned an important point in the trial such that the failure to instruct the jury seriously impaired the defendant’s ability to effectively present a defense. A defendant may be entitled to a cautionary instruction even if there is sufficient evidence that the defendant conspired with a non-Government agent. In Sears v. United States, the defendant, a county sheriff, agreed to offer protection to Davis, a Government agent who was operating an illegal whiskey business. The Government presented weak evidence that persons other than Sears and Davis were involved in the illegal whiskey business. This Court stated: Although the evidence was sufficient to support the conspiracy charged, it was not the province of the jury to convict Sears merely upon finding that he had accepted money from [the Government agent] and furnished protection. This would establish only that Sears had combined with [the Government agent,] Davis, and it takes two to conspire[;] there can be no indictable conspiracy with a government informer who secretly intends to frustrate the conspiracy.... In view of the posture of the evidence and the charge actually given by the court, the jury may well have believed that it could convict Sears simply by believing that he agreed with Davis and accepted bribes from him. Consequently, the court should have given a cautionary instruction to the effect that even if the jury believed Sears had done these things, it could convict only if it further believed that he did so with knowledge that [some other persons] were also involved in the illegal enterprise. Sears, 343 F.2d at 142 (emphasis added). Thus, a jury instruction that a Government agent cannot be a co-conspirator (“Sears instruction”) is appropriate when there is some foundation in the evidence to support the defendant’s theory that he only “conspired” with a Government agent, and “the jury could have followed [its] instructions and convicted the defendant of conspiracy even if it concluded that [the defendant] had conspired only with the government agent.” United States v. Escobar de Bright, 742 F.2d 1196, 1201 (9th Cir.1984). In Gonzalez’s case, there is no foundation in the evidence to support a Sears instruction; both Gonzalez’s and the Government’s version of the facts support the conclusion that Gonzalez acted with a “true” co-conspirator. The Government presented evidence that Gonzalez received the cocaine from Fitzgerald. The Government informant observed Gonzalez negotiating a price for the cocaine with Fitzgerald, and Jager identified Fitzgerald in a photo spread as the man who provided Gonzalez with the drugs. Although Gonzalez contends that he did not conspire with Fitzgerald, he admitted to having a drug supplier. Gonzalez discussed obtaining the cocaine from a third party in a taped conversation. At trial, Gonzalez also testified that he obtained crack cocaine from a man named “T” whom he knew from the pool hall. In addition, after his arrest, Gonzalez told agents that his source of crack cocaine was a man named “Lionel” [Fitzgerald]. Therefore, the trial judge did not abuse his discretion in denying Gonzalez’s request for a Sears instruction. See United States v. Nelson-Rodnguez, 319 F.3d 12, 39 (1st Cir.2003)(“[The legal point] that a conspiracy conviction is not possible if the defendant conspired only with government agents ... is inapplicable to the case against [the defendant]. When there are at least two “true” conspirators, the involvement of a government agent or informant does not defeat the true conspirators’ culpability.”). The trial court’s refusal to instruct the jury on this issue did not impair Gonzalez’s ability to present his defense. B. Entrapment Instruction We review a district court’s refusal to provide a requested jury instruction on the issue of entrapment de novo. United States v. Gutierrez, 343 F.3d 415, 419 (5th Cir.2003). “[T]o be entitled to an entrapment instruction, a defendant bears the burden of presenting evidence of (1) his lack of predisposition to commit the offense and (2) some governmental involvement and inducement more substantial than simply providing an opportunity or facilities to commit the offense.” Id. Gonzalez has the burden of providing a basis for reasonable doubt on the ultimate issue of whether criminal intent originated with the government. United States v. Bradfield, 113 F.3d 515, 521 (5th Cir.1997). The evidence at trial did not raise a reasonable doubt regarding entrapment. While Gonzalez’s testimony suggested he was persistently harassed into discussing drugs with the confidential informant, the informant’s testimony, which was corroborated by the testimony of agents involved in the case, indicated that Gonzalez showed an interest in dealing drugs. Gonzalez also had a previous drug offense and had knowledge of the details of drug-trafficking. The district court did not err by rejecting the entrapment instruction. C. Other Claims
3767447-19388	ORDER JAMES G. MIXON, Bankruptcy Judge. Before the Court are three matters: An objection to the claim of creditor Terry L. Mock filed by Kurt Darren Andrews, the Debtor in this case; an objection to confirmation of plan filed by Mock; and a Motion for Judgment on the Pleadings filed by Mock. The identical issue raised by each pleading is whether Mock’s claim is entitled to priority treatment. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B) & (L), and the Court has jurisdiction to enter a final judgment in this case. FACTS On April 27, 2009, the Debtor filed a voluntary petition for relief under the provisions of Chapter 13 of the United States Bankruptcy Code. The Debtor filed a plan of reorganization on April 28, 2009, and an amended plan of reorganization on July 14, 2009. The amended plan asserted that there were no priority creditors to be paid through the plan and proposed a pro rata distribution to unsecured creditors and a monthly plan payment of $320.00 to the Chapter 13 Trustee for a period of sixty months. On August 10, 2009, Mock, the attorney who represented the Debtor’s former wife in divorce proceedings prior to the bankruptcy filing, filed an objection to confirmation. Her objection was that the plan failed to propose to pay in full a debt to her for attorney’s fees despite the fact that the debt entitled her to a priority claim purshant to Section 507(a)(l)(A)-(B) of the Bankruptcy Code. On July 16, 2009, the Debtor filed an objection to Mock’s claim of $4500.00 on the grounds that the claim was owed by the Debtor to Mock for attorney fees and not to Deborah Ann Andrews, the Debtor’s former wife. Therefore, the Debtor argued, Mock’s claim does not qualify as a domestic support obligation entitled to priority under Section 507(a)(1)(A). A hearing on the two objections was held on December 8, 2009, in Texarkana, Arkansas, and the Debtor appeared in person and through his counsel, Tony L. Yo-cum. Mock and her client, Mrs. Andrews, failed to appear. On the day before the hearing date, Mock filed the Motion for Judgment on the Pleadings, in which she stated that she would be unable to attend the hearing in Texarkana because of prior obligations. The motion arrived too late to be considered at the December 8 hearing. At the December 8 hearing, the Court received into evidence the testimony of the Debtor and two exhibits. Plaintiffs Ex- Mbit 1 is a copy of Mock’s proof of claim, attached to which was a certified copy of the order (“divorce decree”) of the Circuit Court of Lauderdale County (“circuit court”) filed January 25, 2008, regarding the divorce proceedings of the Debtor and Mrs. Andrews. Plaintiffs Exhibit 2 is a copy of an order of the circuit court filed on December 2, 2009, that purports to clarify the January 25, 2008 order. At the first hearing, the Debtor testified that he was formerly married to Deborah Ann Andrews and that he was divorced from her in Alabama on January 25, 2008. He stated that the divorce decree gives Mock, his former wife’s attorney, a judgment for attorney’s fees in the sum of $50oo.oo. The divorce decree included in Plaintiffs Exhibit 1 grants the parties a divorce, divides property, allocates debt, determines child custody, and grants child support and alimony to Mrs. Andrews. The circuit court made the following finding: “The Husband has been the primary provider for the family during the marriage. The Wife has limited education or work experience. It will be necessary for the Husband to provide spousal support for the Wife.” (Plaintiffs Exhibit 1 at 2.) The court also made a finding that “[t]he Husband has the ability to earn income of approximately $100,000 to $120,000 annually. The Mother has the ability to earn income of approximately $17,000 annually.” (Plaintiffs Exhibit 1 at 3.) At the conclusion of the order, the following paragraph deals with attorney fees: “14. ATTORNEY FEES: The Husband shall pay $5000 as attorney fees on behalf of the Wife. This award shall constitute a judgment for which execution shall issue.” (Plaintiffs Ex. 1 at 7.) In the subsequent clarification order, the circuit court specifically characterized the attorney fee award as a support obligation: the Decree of January 24, 2008, is clarified to provide that the attorney’s fees awarded in this Court’s Decree were awarded to be paid on behalf of the Wife as a consequence of the attorney’s efforts in establishing an award to the Wife for her support and maintenance as well as the support and maintenance of the minor children. That due to the parties’ disparate income status as found and indicated by this Court’s findings, it would not be possible for the Wife to satisfy the reasonable attorney’s fees incurred during the litigation of this matter and that it would be necessary for the Husband to pay the same on the Wife’s behalf. That the Court intended for said award to be in the nature of support for the Wife due to her inability to pay the same. Plaintiffs Exhibit 2. The Debtor testified that the clarification order was issued without a prior hearing and without notice to the Debtor. (Tr. at 8, December 8, 2009.) After the hearing on December 8, the matter was taken under advisement. Thereafter, a hearing was scheduled on March 2, 2010, on Mock’s Motion for Judgment on the Pleadings, at which time further argument ensued on the issue of whether the claim was for a domestic support obligation entitled to priority status in the Chapter 13 plan. Present were counsel for the Debtor and Mock, who appeared pro se. The Court again took the matter under advisement. ARGUMENT The Debtor objects to the priority claim of Mock on the basis that the attorney fee obligation is not support “owed to or recoverable by” a payee listed in the statute, and thus is not a domestic support obligation entitled to priority treatment. Mock argues that the Alabama circuit court awarded her a judgment for attorney’s fees for the sum of $5000.00, that the award was intended to be in the nature of support, and that her claim should therefore be treated as a priority claim. She cites the Pre-BAPCPA case of Holliday v. Kline (In re Kline), 65 F.3d 749 (8th Cir.1995) as authority that an award for attorney’s fees payable to an attorney is nondischargeable in a Chapter 7 case pursuant to Section 523(a)(5) of the Bankruptcy Code if the award was intended as support. She also objected to the plan and schedules on two other grounds, but she did not support either with evidence during the course of these proceedings. DISCUSSION Claims that are domestic support obligations are accorded special treatment under the Chapter 13 provisions of the Bankruptcy Code. First, they are excepted from discharge. See 11 U.S.C. § 1328(a)(2)(2006) (domestic support obligations that are nondischargeable under 523(a)(5) are also excepted from Chapter 13 discharge). Also, the Bankruptcy Code accords first priority to “allowed unsecured claims for domestic support obligations that, as of the date of the filing of the petition ... are owed to or recoverable by a spouse, former spouse, or child of the debtor ...” 11 U.S.C. § 507(a)(1)(A) (2006). A Chapter 13 plan is required to “provide for the full payment, in deferred cash payments, of all claims entitled to priority under section 507 ...” 11 U.S.C. § 1322(a)(2) (2006). Thus, a domestic support obligation is excepted from discharge and if it is an allowed, unsecured claim, it is entitled to first priority and must be paid in full by a Chapter 13 plan. Under current law, a domestic support obligation is defined as a debt that accrues before, on or after the date of the order for relief. To qualify as a domestic support obligation, the debt must satisfy four requirements: [the debt must be] (A) owed to or recoverable by— (i) a spouse, former spouse, or child of the debtor or such child’s parent, legal guardian, or responsible relative; or (ii) a governmental unit ... (B) in the nature of alimony, maintenance, or support ... of such spouse, former spouse, or child of the debtor or such child’s parent, without regard to whether such debt is expressly so designated: (C) established ... by reason of ... (i) a separation agreement, divorce decree, or property settlement agreement; (ii) an order of a court of record ... (D) not assigned to a nongovernmental entity, unless ... assigned voluntarily ... for the purpose of collecting the debt. 11 U.S.C. § 101(14A) (2006). The parties do not dispute that Mock’s claim meets requirements (C) and (D) of the statute. However, the Debtor contends that Mock’s claim does not satisfy the first element of Section 101(14A) because the identity of the payee is Mock and not one of the individuals named in the statute. Additionally, by testifying that the clarification order was obtained without notice to him, the Debtor impliedly disputes that the debt is in the nature of support since the clarification order tends to establish requirement (B) of the statute. The definition of a domestic support obligation was added to the Code by BAPCPA in 2005. Prior to 2005, the Eighth Circuit had held that if an award of attorneys fees was in the nature of support, the debt was nondisehargeable even though the obligee was the attorney of the spouse, ex-spouse or child of the debtor and not one of the three payees expressly named in the statute. In re Kline, 65 F.3d at 751. Accord, Williams v. Kemp (In re Kemp), 232 F.3d 652 (8th Cir.2000) (affirming the lower courts’ rulings that debts owed to debtor’s child’s mother for birth expenses, necessities and child support were nondisehargeable even though child’s mother was not a payee named in the statute). Pre-BAPCPA, the rule in these exception to discharge cases was equally applicable to the issue of whether a claim was entitled to priority in a chapter 13 case because identical language was used to describe both the nondisehargeable debt under section 523(a)(5) and the claim entitled to priority under 507(a)(7). Beaupied v. Chang (In re Chang), 163 F.3d 1138, 1142 (9th Cir.1998)(recognizing that application of section 507(a)(7) should be coincidental with application of section 523(a)(5) because of identical language in the two statutes). Prior Sections 523(a)(5) and 507(a)(7) focused on any “debt to a spouse, former spouse, or child of the debtor ...” Post-BAPCPA, the two statutes have been amended to incorporate the definition of a domestic support obligation, which in turn describes debts “owed to or recoverable by ... a spouse, former spouse, or child of the debtor or such child’s parent, legal guardian, or responsible relative or ... a governmental unit...” 11 U.S.C. § 101(14A) (2006) (underlined wording added by BAPCPA). Bankruptcy courts in the Eighth Circuit have ruled that the BAPCPA amendment does not substantively change the statute and, therefore, does not supercede the holding in Kline or other Eighth Circuit precedent. Kelly v. Burnes (In re Burnes), 405 B.R. 654, 659 (Bankr.W.D.Mo.2009)(relying on Kline post-BAPCPA because no substantive difference between 1988 Code “to a spouse, former spouse, or child” and BAPCPA’s “owed to or recoverable by ... a spouse, former spouse, or child.”); Nab v. Manard-Hester (In re Manard-Hester), AP No. 08-8062, 2009 WL 2501142, at 3 (Bankr.D.Neb. Aug. 12, 2009) (determining that BAPCPA did not change the Eighth Circuit rule in Kline that attorney’s fees in a domestic relations case awarded directly to the attorney can be excepted from discharge); In re Tinnell, No. BK 09-80160, 2009 WL 1664581, at 2 (Bankr.D.Neb. June 12, 2009) (stating that pre-BAPCPA case law supports a finding that debts payable to third parties may be support obligations under the post-BAPCPA provisions) (citing Williams v. Williams (In re Williams), 703 F.2d 1055, 1057 (8th Cir.1983)), aff'd, 2009 WL 4827445 (D.Neb. Dec. 10, 2009). Accord In re Poole, 383 B.R. 308, 313 (Bankr.D.S.C.2007)(observ-ing that similarity of language in pre-BAPCPA Section 523(a)(5) and post-BAPCPA Section 101(14A) makes case law applicable to Section 523(a)(5) helpful in interpreting Section 101(14A)). In line with those recent cases that continue to rely on Kline, this Court rejects any argument that BAPCPA’s additional wording weakens the dispositive impact of Kline on the instant case. The partial phrases “owed to or recoverable by” clarify but do not alter the type of debt previously characterized as nondischargeable and entitled to priority under pre-BAPC-PA law. Furthermore, the fact that BAPCPA does not add attorneys to the expanded list of specific payees does not overrule Kline. Attorneys were not mentioned as payees in the pre-BAPCPA statute under which Kline was decided, but the Eighth Circuit ruled that a fee owed to an attorney could nevertheless be a non-dischargeable support debt. For these reasons, this Court will follow the rule established by Kline as binding precedent. But see Tucker v. Oliver, 423 B.R. 378, 381 (W.D.Okla.2010) (asserting that section 101(14A) adds additional groups of persons as payees and is reformatted as four separate requirements, suggesting Congress’ conscious decision to focus on the precise debts within the scope of the provision); Shaver v. Forgette (In re Forgette), 379 B.R. 623, 625-26 (Bankr.W.D.Va.2007)(holding that vehicle debt imposed on debtor by divorce court was debt owed to or recoverable by financing bank, not ex-wife, so not a domestic support obligation); Loe, Warren, Rosenfield, Katcher, Hibbs & Windsor v. Brooks (In re Brooks), 371 B.R. 761, 765 (Bankr.N.D.Tex.2007)(refusing to except attorney’s fees from discharge for many reasons, including that reference to debts “recoverable by” under section 101(14A) “is intended to further the ability of ‘a governmental unit’ ... to pursue ‘a domestic support obligation,’ not to broaden the category of entities capable of asserting debts owed to them are nondischargeable”). In Kline, the court reviewed both a question of fact and a question of law. The question of fact was whether an attorney fee awarded in a domestic relations case was intended as support. The question of law was whether, as in the instant case, an award of attorney fees in the nature of support is dischargeable in bankruptcy if payable directly to the attorney. The court determined that the state court considered the disparity in the financial resources of the parties in ordering the debtor to pay the spouse’s attorney fees. This fact proved the award was in the nature of support. The court also reasoned that if the debt were deemed dischargeable, the former wife would be liable in quantum meruit for the legal services rendered. To find a support debt was dischargeable based solely on the fact that it was owed to the attorney would ignore the state court’s intention that the debtor, and not the former spouse, pay the debt as part of his obligation to support the former spouse. For that reason, the court reversed the district court and affirmed the bankruptcy court’s ruling that the award of attorney fees, which was in the nature of support, was nondischargeable even though payable to the former spouse’s attorney. The logic of Kline has been analyzed in a subsequent bankruptcy court decision, Simon, Schindler & Sandberg v. Gentilini (In re Gentilini), 365 B.R. 251 (Bankr.S.D.Fla.2007). In Gentilini, the court reasoned that the Kline court equated the attorney’s right to payment from the debt- or with the former spouse’s right to payment from the debtor, provided that if the debtor were allowed to discharge the debt, the former spouse would be liable for the debt to the third party. In re Gentilini, 365 B.R. at 255. The court described the substance-over-form doctrine in Kline as “an exception to the plain meaning of the statute to ensure that former spouses who obtained a benefit when their now debtor ex-spouse was ordered to pay their attorneys fees will not lose that benefit by having to pay the fees themselves if the debtor’s obligation is discharged.” Id. The court concluded that the statute’s requirement that the obligation be owed to a named entity can be satisfied, as in Kline, “when the obligation is payable directly to a third party, typically a professional who provided services to benefit the wife or child, but only if the former spouse is also obligated for the fees.” Id. at 256. For variations on the point of view that debts may qualify as support even if owed to parties other than payees named in the statute, see the following post-BAPCPA decisions: In re Johnson, 397 B.R. 289, 296 (Bankr.M.D.N.C.2008)(stating that debtor’s obligation to pay bank on second deed of trust obligation was nondischargeable debt owed to former spouse because if debtor failed to pay and former spouse paid, former spouse could then recover payment amount from debtor under hold harmless agreement); In re Poole, 383 B.R. at 313 (stating in dicta that debts owed to third parties that are in the nature of support may still be domestic support obligations if enforceable and recoverable by the spouse; however, the debt at issue was a property settlement obligation and not support debt). See also Kassicieh v. Battisti (In re Kassicieh), 425 B.R. 467, 476-77 (Bankr.S.D.Ohio 2010)(recognizing that several post-BAPCPA decisions have continued to hold that “in analyzing the dischargeability of debts payable to a third party, it is the nature of the debt, rather than the identity of the creditor, that controls”)(citing Levin v. Greco, 415 B.R. 663, 666-67 (N.D.Ill.2009)). In the instant ease, the Court determines that under the rule established in Kline, the first requirement of Section 101(14A) is satisfied. The divorce decree ordered the Debtor to pay Mrs. Andrews’ attorney fees. (Pl.’s Ex. 1 at 7.) The circuit court’s clarification order of December 2, 2009 further described the attorney’s fee award as payment for legal services provided by Mock on behalf of Mrs. Andrews. (Pl.’s Ex. 2.) Since there is no evidence to the contrary, the Court infers from these two statements that Mrs. Andrews is liable for $5000 for legal services and is responsible for payment unless the Debtor pays the fees. The Debtor does not argue and has introduced no evidence to show that Mrs. Andrews does not remain liable for the debt to Mock. See, for example, In re Gentilini, 365 B.R. at 259 (finding that statute of limitations had run and ex-wife was no longer liable on obligation to her divorce attorneys such that the debtor’s obligation to pay the ex-wife’s attorneys was not within discharge exception for support debt). Accordingly, as in Kline, Mrs. Andrews remains liable for payment to Mock if the Debtor does not pay the debt to Mock. Because of Mrs. Andrews’ remaining liability to Mock, the Debtor’s obligation to Mock may be deemed a debt owed directly to Mrs. Andrews, and as a former spouse, she is a payee named in the statute. The second requirement in the statute is that the obligation be in the nature of alimony, maintenance, or support. Whether the debt is a nondischargeable support obligation is a question of federal bankruptcy law, not state law. Tatge v. Tatge (In re Tatge), 212 B.R. 604, 608 (8th Cir. BAP 1997)(citing Williams v. Williams (In re Williams), 703 F.2d 1055, 1056 (8th Cir.1983) (quoting H.R.REP. NO. 95-595, at 364 (1977), U.S.Code Cong. & Admin.News 1978, pp. 5963, 6319-20)).
961294-8984	LEWIS, Circuit Judge. This is an appeal from an order directing Wright, receiver, to withhold from appellant $5,000 out of payments amounting to $10,000 which had come or was about to come into the hands of said receiver and arising from sales of certain shares of stock in the Sunray Oil Corporation. The facts on which the order was made are complicated. Those that seem to be material are as follows: On May 20, 1930, Reinhart & Donovan Company gave an oil and gas lease. Qn February 24, 1931, James S. Twyford and Solon W. Smith, composing the partnership Twyford & Smith, and A. D. Hudspeth claimed an undivided one-fourth interest in the lease. On that day they entered into a contract with Sunray Oil Company, a corporation, by which they agreed to sell to it and Sunray Company agreed to purchase said undivided one-fourth interest in said lease or leasehold estate, the sellers agreeing to warrant and defend title thereto subject to certain indebtedness set forth in said contract. Sunray Company on its part agreed to pay Twyford & Smith and Hudspeth therefor $25,000 in monthly payments represented by five notes and to deliver to them 15,000 shares of the capital stock of Sunray Oil Corporation, described as the parent company of Sunray Oil Company. The Sunray Oil Company further agreed that it would cause Sunray Oil Corporation to contract for the disposition of said 15,000 shares in accordance with a separate contract “of even date herewith, and until said Sunray Oil Corporation shall perform said agreement, second parties (evidently meaning Twyford & Smith and Hudspeth, named as first parties) shall have a vendor’s lien upon the property herein agreed to be sold to Sunray, to secure the performance thereof.” On the same day, February 24, 1931, Sunray Oil Corporation entered into a contract with Twyford, Smith and Hudspeth in which ■ the other contract with Sunray Company was referred to and the Sunray Corporation agreed to sell and dispose of the 15,000 shares of the capital stock of Sunray Oil Corporation at the rate of 500 shares per month at a price of $5 per share for the account of Twyford, Smith and Hudspeth, “or in event of its failure to dispose of same at such price in such minimum quantities to purchase and pay for same 'itself at such price, the first allotment to be sold or payment to be made 30 days from date of this contract.” It was further agreed that the certificates for the 15,000 shares would be placed in a named bank in escrow. By their terms each contract was made binding on the heirs, personal representatives and assigns of each of the parties. A few months after the execution of said contracts Sunray Oil Company and Sunray Oil Corporation, the first an Oklahoma corporation and the other a Delaware corporation, were placed in receivership in the court below, and appellee was appointed and qualified as receiver. Just before the receivership came on Hudspeth sold his interest in the contract of February 24, 1931, with Sunray Oil Corporation to appellant, Stone for $20,000, and as evidence thereof executed and delivered to Stone this instrument : “Know All Men By These Presents: “That Whereas, the undersigned, A. D. Hudspeth, is the owner of an undivided one-half interest, in a certain contract and the moneys flowing therefrom, dated the 24th day of February, 1931, by and between Sunray Oil Corporation, party of the first part, and A. D. Hudspeth, and Twyford & Smith, parties of the second part, copy of which is hereto attached and made a part hereof; “Now, Therefore, In consideration of the payment to me of Twenty Thousand Dollars ($20,000.00), the receipt of which is hereby acknowledged, I do hereby sell, assign, transfer and set over unto Paul B. Stone, of Oklahoma City, Oklahoma, all of my. right, title, equity and interest in and to the said contract, which I hereby certify to be an undivided one-half interest therein, and I hereby authorize and direct the First National Bank and Trust Company, the escrow named in said contract, to pay to said Paul B. Stone any and all proceeds arising or flowing therefrom, according to my interest therein, and do hereby covenant and warrant to and with the said Paul Stone, that I have good right and lawful authority to sell and transfer the same, and that same is free and clear of all liens and adverse claims. “Witness my hand at Oklahoma City, Oklahoma, this 19th day of October, 1931. “A. D. Hudspeth. “Witnesses to Signature: “J. H.. Everest, “Inez F. Eubanks. “We hereby certify that the interest of the said A. D. Hudspeth in the contract referred to in the above assignment, is an undivided one-half interest. Hudspeth has no interest in paragraph four (4) of contract. No warranties are hereby intended. “Twyford & Smith, “By Solon W. Smith.” Thereafter as the 15,000 shares of stock were being disposed of in accordance with said contract with the Sunray Oil Corporation the receipts therefrom were paid half and half by the receiver under order of the court to Twyford & Smith and Hudspeth until some time in July, 1932, when the receiver by petition informed the court that Western Paving Company was claiming a prior right of payment to it of $10,000 out of proceeds from the undivided one-fourth interest in the lease so sold under an assignment to it by Hudspeth; that said assignment, ante-dating the sale to Sunray Oil Company, was given to it by Hudspeth July 3, 1930, and was placed of record with the county clerk on November 29, 1930. The receiver served copy of his petition on Twyford & Smith, Hudspeth, and appellant Stone. The adverse claim of Western Paving Company was then submitted to the court, all the interested parties' were represented at the hearing, and the order appealed from was entered. Before Stone purchased from Hudspeth and paid $20,000 for the assignment to him of all of Hudspeth’s interest in the contract with the Sunray Corporation, his attorney saw and examined the two contracts of February 24, 1931, but testified that he did not know or hear of the assignment to Western Paving Company. Stone himself made some inquiries but learned nothing about the Western Paving Company claim. The order appealed from was made on a finding that “consideration for the purchase of said property having failed to the extent of the said assignment to the Western Paving Company, and the said assignment to the Western Paving Company being a lien or charge against said lease prior to the purchase thereof by the Sunray Oil Company and prior to the sale by Hudspeth to Stone,” that Stone’s interest was subject thereto; “and that the Sunray Oil Company should deduct from the interest of the said Paul B. Stone, and from the payments to be made to Paul B. Stone the sum of $5,000.” Twyford & Smith conceded their liability and that $5,000 should be deducted as against them and applied on the Western Paving Company claim. They and Hudspeth had warranted good title to the one-fourth interest sold to Sunray Company. Stone resisted. It is contended that the assignment to Western Paving Company transferred an interest in real estate, which brought it under the recording statutes of Oklahoma, thus imputing notice to Stone. Okl. Stat. 1931, §§ 9672, 9689. We do not so construe the assignment from Hudspeth to Western Paving Company. It does not purport to convey an interest in real estate and cannot be so applied. It reads thus: “A. D. Hudspeth, party of the first part, and the Western Paving Company, a corporation, party of the second part, hereby contract and agree as follows, to-wit: “Whereas, first party is the lessee in a certain oil and gas lease executed on the 20th day of May, 1930, by the Reinhart & Donovan Company, a corporation, covering the following “Blocks 3, 4 and 5 East Grand Avenue Addition to Oklahoma City, and “Whereas, first party or assigns, intends to drill an oil well on Block 3 or Block 4 or the street between said Blocks in said addition, “Now, Therefore, for a good and valuable, consideration, the receipt of which is hereby acknowledged, the said first party docs hereby set over and assign unto second party the sum of $10,000 to be paid to second party out of the production of seven-eighths of the oil from said leasehold interest. Provided, however, that the same shall not be paid and shall not be due until and after first party, or assigns, has been repaid out of the sale of oil produced from said well the actual cost of drilling and equipping said well into the tanks, as shown by certified statements of the cost of same, to be furnished by first party to second party, and, “Provided further that said payment is to be paid only out of one-sixteenth the proceeds of the sale of oil produced from the seven-eighths working interest in the well after the cost of same has first been returned to first party or assigns herein provided. “In Witness Whereof, said first party has executed this instrument this 3rd day of July, 1930. “A. D. Hudspeth, First Party.”
6474176-16716	MEMORANDUM OPINION JOHN H. ALLEN, Bankruptcy Judge. This matter is before the Court on the Defendant’s Motion to Dismiss. A hearing was held on this motion on May 10, 1988, and the matter was taken under advisement. After a careful review of the law relating to this motion, the Court makes the following determination: BACKGROUND On September 17, 1987, Harriet E. Styler, Trustee (“Trustee”) of the Estate of Bruce Wilson Hatch dba Financial Development Associates (“Debtor”) filed a Complaint to Avoid Fraudulent Transfer pursuant to 11 U.S.C. Section 548. The Summons and Notice of Pre-trial Conference was served on the defendant, Tall Oaks, Inc. (“Defendant”) by certified mail on February 19, 1988. Defendant filed its Motion to Dismiss on April 7, 1988, on the ground that service of the Summons and Complaint was not made upon it within 120 days after the filing of the Complaint as required by Bankruptcy Rule 7004(a), which incorporates Rule 4(j) of the Federal Rules of Civil Procedure. The Trustee, through her attorney, filed a Response to the Motion to Dismiss arguing that good cause exists for failure to serve the Summons and Complaint upon defendant within 120 days after the filing of the Complaint based upon the nature and complexity of the bankruptcy case. The Response, signed by the attorney, states on page two as follows: 4. At the time the undersigned was appointed attorney for the plaintiff, there remained approximately 16 months within which to commence actions to recover preferences or fraudulent conveyances under 11 U.S.C. Section 546(a)(1), the Trustee having been appointed on September 18, 1987. 5. While preliminary work to determine the recipients of apparent preferential payments had been undertaken prior to my appointment and subsequently delivered over to me, the information was summary in form, documentary evidence in possession of the Trustee being limited. Further on Page 3 10. I filed all complaints upon the basis of summary information, not always with the ability to document the claims. 11. Subsequent to the filing of the Complaint, I attempted to determine which adversary proceedings could be proved by the evidence available to me so as to justify their prosecution. 14. I was aware of the bar date for the filing of the adversary proceeding, and for the service of process, and believed that I had complied with those dates notwithstanding my reluctance to pursue matters as to which I had great concern owing to lack of documentary evidence. The attorney further contends that documents needed to bolster the summary assumptions contained in the Complaint were difficult to locate and recover as they were in the possession of the Salt Lake County Attorney and County Sheriffs Office. Therefore, the Court is asked to determine that these difficulties, which resulted in the delayed service, constitute good cause within the meaning of Rule 4(j) of the Federal Rules of Civil Procedure. The attorney for the Trustee expresses concern that if the Complaint is dismissed, the effect would be a dismissal with prejudice since the statutory time bar of 11 U.S.C. Section 546(a)(1) would preclude the refiling of the Complaint. DISCUSSION Rule 4(j) of the Federal Rules of Civil Procedure provides: If a service of the Summons and Complaint is not made upon a defendant within 120 days after filing of the Complaint and the party on whose behalf such service was required cannot show good cause why such service was not made within that period the action shall be dismissed as to that defendant without prejudice upon the Court’s own initiative with notice to such party or upon motion. Service on defendant was not made within the 120 day period prescribed by Rule 4®. The rule mandates dismissal unless the party responsible for the service can “show good cause” why service was not made as required. Norlock v. City of Gar land, 768 F.2d 654, 657 (5th Cir.1985); Wei v. State of Hawaii, 768 F.2d 370, 372 (9th Cir.1985). What constitutes “good cause” under this statute is not spelled out in the legislative history. 128 Cong.Rec. H. 9852 n. 25 (daily ed. Dec. 15, 1982).. However, some guidelines have emerged as Courts have wrestled with the standard. As stated by the Fifth Circuit in Winters v. Teledyne Movible Offshore, Inc., 776 F.2d 1304, 1306 (5th Cir.1985) good cause “would appear to require at least as much as would be required to show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance of the rules usually does not suffice ... and some reasonable basis for non-compliance within the time specified is normally required.” In attempting to excuse the non-compliance with Rule 4(j), Trustee’s attorney does not claim inadvertence, mistake, or ignorance, which are the most cited reasons for such non-compliance, See Geller v. Newell, 602 F.Supp. 501, 501 (S.D.N.Y.1984) (Plaintiff was confused about requirements for service of process); Davidson v. Keenan, 740 F.2d 129, 132 (2d Cir.1984) (oversight of counsel); U.S. v. Kenner General Contractors, Inc., 764 F.2d 707, 711 (9th Cir. 1985) (Plaintiffs efforts at service were half-hearted at best); Davis-Wilson v. Hilton Hotels Corp., 106 F.R.D. 505, 509 (E.D.La.1985) (Plaintiff had settlement hopes and defendant subsequently served.); Ruley v. Nelson, 106 F.R.D. 514, 518 (D.Nev. 1985) (Counsel was ignorant of 4(j) and desired to learn more about case); Coleman v. Greyhound Lines, Inc., 100 F.R.D. 476, 477 (N.D.Ill.1984) (New lawyer did not discover original lawyer’s failure to serve.). The courts who were presented the above argument rejected them as not meeting the “good cause” standard. However, other reasons have been advanced by parties in an effort to justify “good cause”. See Shuster v. Conley, 107 F.R.D. 755, 757 (Plaintiffs were unable to effectuate service by mail, defendant had moved without leaving a forwarding address); Excalibur Oil, Inc. v. Gable, 105 F.R.D. 543, 544 (N.D.Ill.1985) (After suit was filed, plaintiffs learned defendants had filed a Chapter 11 proceeding); Wei, 763 F.2d at 374 (Plaintiff desired to amend complaint before effecting service); Norlock, 768 F.2d at 656 (Service by mail was not perfected and no subsequent personal service was attempted); Winters, 776 F.2d at 1304 (Identical suit filed in state court then removed to United States District Court and plaintiff did not want to incur additional costs of service since timely service had occurred in the state court action); Redding v. Essex Crane Rental Corp., 752 F.2d 1077, 1078 (5th Cir.1985). (Service delayed to further settlement chances for state compensation claim.) The courts presented with these reasons also rejected them as failing to meet the burden for showing good cause. Additionally, Courts were not more sympathetic when the effect of the dismissal would time-bar the plaintiffs from any further action because a statute had run after the filing of the complaint. “It is not our function to create exceptions to the rule where cases in which dismissal without prejudice may work prejudice in fact....” Norlock, 768 F.2d at 658; Redding, 752 F.2d 1077; Winters, 776 F.2d 1304; Wei, 763 F.2d 370. According to the Response to Motion to Dismiss, the determination to delay the service of Summons and Complaint was made by the Trustee’s attorney. Nevertheless, the settled law is that parties are bound by the action of their attorneys. Wei, 763 F.2d 370; Coleman v. Greyhound Lines, Inc., 100 F.R.D. at 476. The Trustee’s attorney filed the Complaint, then took no steps to serve defendant. Instead, he attempted in various ways to locate documents to verify the transactions which would support the fraudulent transfer that constituted the basis for the Complaint. The explanation advanced for the justification of failure to act in this case is unpersuasive. The Court believes that “good cause” does not exist for the failure of service within the relevant time period. The Court also believes that the plain lan guage of 4(j) leaves no alternative but to dismiss. It is true that such a result is very harsh in the instant case. The trustee will have no opportunity to refile the complaint. The statutory time period has now run and cannot be revived. However, the Court has a deeper concern. This concern has developed from the response filed by the Trustee. BANKRUPTCY RULE 9011 Bankruptcy Rule 9011 is virtually identical to Rule 11 of the Federal Rules of Civil Procedure. Rule 11 was fashioned to discourage frivolous pleadings and suits filed merely to cause delay and requires sanctions against attorneys who violate this rule. Adamson v. Bowen, 855 F.2d 668, 672 (10th Cir.1988). In comparison to Rule 11, Bankruptcy Rule 9011 contains only minor modifications which tailor the rule specifically to bankruptcy cases. As stated recently by the First Circuit, “Inasmuch as the two are couched in the same terms and have a common ideology, we believe Rule 11 jurisprudence is largely transferable to Rule 9011 cases, and we approach the matter from that prospective.” In re D.C. Sullivan Co., Inc., 843 F.2d 596, 598 (1st Cir.1988). Thus, cases interpreting Rule 11 are equally applicable to Bankruptcy Rule 9011. Matter of King, 83 B.R. 843 (Bkrtcy.M.D.Ga.1988). Under Bankruptcy Rule 9011, the signature of an attorney on a filing is a certificate by the attorney that the document is well-founded and is not filed for an improper purpose. This rule provides in pertinent part: The signature of an attorney or party constitutes a certificate that the attorney or party has read the document; that to the best of the attorney’s or party’s knowledge, information, and belief formed after reasonable inquiry, is well-grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass, to cause delay, or to increase the cost of litigation. If there is a violation of this rule, the Court is directed to impose sanctions on the attorney, the client or both. These sanctions may include an order to pay the reasonable expenses of the other parties involved, including attorney’s fees. In re Arkansas Communities, Inc., 827 F.2d 1219 (8th Cir.1987). However, the rule is not limited to fees and costs, it simply states that the “Court shall impose ... an appropriate sanction”. As stated above, when it is unclear who is responsible, sanctions may be imposed against the attorney and the party represented. In the Matter of King, 83 B.R. 843 (Bkrtcy.M.D.Ga.1988); In re U.S. Truck Co., 71 B.R. 99 (Bkrtcy.E.D.Mi.1987). In analyzing its responsibility under Bankruptcy Rule 9011, this Court is particularly impressed with the mandatory language contained within this rule. The rule is clearly framed as a directive by the use of the imperative “shall”. Eastway Construction Corp. v. City of New York, 762 F.2d 243, 254 n. 7 (2nd Cir.1985), cert. denied, — U.S. -, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987). The signer’s conduct is to be judged as of the time the pleading is signed. Oliveri v. Thompson, 803 F.2d 1265, 1274 (2nd Cir. 1986) cert. denied, County of Suffolk v. Graseck, 480 U.S. 918, 107 S.Ct. 1373, 94 L.Ed.2d 689 (U.S.1987). The standard which courts have imposed is objective rather than subjective good faith. Thomas v. Capital Sec. Services, Inc., 836 F.2d 866, 873 (5th Cir.1988). Eastway Construction Corp., 762 F.2d at 254. This objective standard is one of reasonableness. Would a reasonable attorney so situated file such a document? Adamson, 855 F.2d at 673; Muthig v. Brant Point Nantucket, Inc., 838 F.2d 600, 604-05 (1st Cir.1988); Mason & Dixon Lines, Inc. v. First Nat’l Bank, 86 B.R. 476, (M.D.N.C.1988); In Re Akridge, 71 B.R. 151 (Bkrtcy.S.D.Cal.1987). The subjective intent of the signing attorney is irrelevant to the question of sanctions. Sullivan, 843 F.2d at 599; Zaldivar v. City of Los Angeles, 780 F.2d 823, 829 (9th Cir.1986). The reasonable inquiry required by the rule includes facts as well as law. In Matter of American Reserve Corp., 840 F.2d 487, (7th Cir.1988), the court was concerned with the costs incident to filing proofs of claim. In analyzing these costs, the court especially noted that it was necessary for a claimant to have “... done substantial investigation to identify and shape the claim. Even though there is no fee to file claims in bankruptcy, the opportunity costs of time needed to investigate and decide whether to file may be substantial especially because Bankruptcy Rule 9011(a) (a parallel to Fed.R.Civ.Proc. 11) requires every claimant to investigate the facts and do necessary legal research before filing.” (emphasis added) In In re Grantham Bros., 68 B.R. 642 (Bkrtcy.D.Ariz.1986), aff'd 84 B.R. 172, the debtor’s newly appointed counsel filed a complaint challenging the trustee’s sale of a ranch. The suit named the trustee and the purchaser. Had the attorney made a reasonable inquiry, the court held, he would have discovered that the opportunity to object to the sale had not only passed, but that the debtors had withdrawn their objections to the sale. The filing of the complaint, therefore, was without legal basis or factual foundation. The First Circuit was equally concerned when it was presented with a claim of intentional infliction of emotional distress. In order to prevail, the plaintiffs, under Massachusetts law, would have to prove that the defendant had engaged in conduct which was “extreme and outrageous”, “beyond all possible bounds of decency” and “utterly intolerable in a civilized community.” However, evidence before the Court established that the facts were exactly opposite from those required to sustain the claim. During testimony, the plaintiffs described the behavior of the defendant in glowing and complimentary terms. The Court pointed out that “reasonable inquiry” by the plaintiffs counsel would have been sufficient to ascertain the true facts. This assertion of invalid claims resulted in an “appropriate and lawful” award of Rule 11 sanctions against the attorney. Muthig, 838 F.2d 600. The cases reviewed by the Court indicate that while attorneys file pleadings that are unfounded in fact or law, they seldom do so out of complete ignorance. There is usually an underlying motive. The situations that occur which give rise to the imposition of Bankruptcy Rule 9011 sanctions illustrate this dual thrust. For example, in Mason & Dixon, 86 B.R. 476, the bankruptcy court had imposed sanctions when the debtor waited until after confirmation of the reorganization plan to raise objection to a lender’s filing of a proof of claim. In affirming the decision of the bankruptcy court, the district court pointed out that the delay was unwarranted considering the relationships between the parties was not complicated or “deserving of unusual treatment.” After an examination of the circumstances and the law, the district court agreed that the bankruptcy court had been entirely justified in the imposition of sanctions pursuant to Bankruptcy Rule 9011 since the decision by the debtor to file the adversary proceeding was not “objectively reasonable” and was, in fact, filed for the purpose of harassment and delay. Bankruptcy Rule 9011 mandates that a filing cannot have an improper purpose, such as harassment or delay. In In re Guiltinan, 58 B.R. 542 (Bkrtcy.S.D.Ca. 1986) a complaint objecting to discharge was filed. The plaintiff’s attorney acknowledged that the purpose of the suit was to obtain the debtor’s cooperation in providing information in connection with the plaintiffs civil suit pending in district court. The court ruled the filing of a complaint in bankruptcy court to compel discovery in another court had an improper purpose — harassment of the debtor. Although well grounded in fact, the suit alleged none of the grounds for denial of discharge under Section 727(a). Bankruptcy Rule 9011 provides if a court is faced with a violation of the rule the court “upon motion or upon its own initiative shall impose ... an appropriate sanction.” (emphasis added) There is no discretion on the application of sanctions and an attorney’s good faith cannot protect him from these sanctions. Robinson v. National Cash Register Co., 808 F.2d 1119 (5th Cir.1987). Under emerging case law, courts strictly adhere to the mandate of this rule. Thus, sanctions, if appropriate, are to be imposed even if there has been a voluntary dismissal of a case. Muthig, 838 F.2d at 604. Once a violation is established, the only discretion left for the court is the appropriate sanction to be imposed under the particular facts of the cases. Thomas, 836 F.2d 866. CONCLUSION
53821-30367	OPINION AND ORDER HEWITT, Judge. This matter comes before the court on Defendant’s Motion for Summary Judgment. Plaintiffs, Cane Tennessee, Inc. (“Cane”) and Colten, Inc. (“Colten”) own property in Bledsoe County, Tennessee. In their Complaint, plaintiffs assert a right to just compensation for a taking of their mineral interests and other property as a result of the government’s refusal to grant mining permits to Cane’s lessee, Eastern Minerals International, Inc. (“Eastern Minerals”) and Colten’s lessee, Van Burén Minerals Corporation (“Van Burén”). In its Motion for Summary Judgment, defendant raises three issues. First, defendant argues that plaintiffs’ actions in prosecuting their claims warrant dismissal of their claims under laches. Second, defendant asserts that, because plaintiffs themselves never applied for a permit to mine, they cannot complain of any governmental action taken against them. Third, defendant asserts that plaintiffs’ claims must fail because they are contractual in nature and do not involve property interests compensable under the takings clause of the Fifth Amendment. For the following reasons, defendant’s motion is GRANTED as to Colten and DENIED as to Cane. I. Background The following statement of facts and issues' regarding the present case is taken from Defendant’s Proposed Findings of Uncontroverted Fact and Plaintiffs’ Statement of Genuine Issues, as well as the decision in Eastern Minerals Int’l, Inc. v. United States, 168 F.3d 1322, 1998 WL 658275 (Fed.Cir.1998) (affirming the Court of Federal Claims’ decision on February 21,1997, denying Cane and Colten’s motion to intervene in a case brought by Eastern Minerals and VanBuren arising out of the same facts and circumstances). Cane and Colten are incorporated in the state of Delaware and owned by the same individual. Both companies bought the mineral interests at issue in this litigation from the Wyatt family. Cane purchased its property in February, 1979; Colten purchased its property in October, 1979. Under the terms of both purchases the Wyatts retained a 3.5% royalty interest in any coal to be mined. In February, 1979, Eastern Minerals, a corporation wholly owned by Milton Bernos, acquired a leasehold in the mineral interests owned by Cane. The lease granted Eastern the exclusive right to mine coal on the property. The lease provided for an initial term of twelve years-and granted Eastern Minerals the unilateral right to extend the lease for up to four additional ten-year periods. In order to extend the lease, Eastern Minerals was required to provide notice to Cane 180 days prior to the expiration of the term. Eastern Minerals never exercised its right to extend. The Eastern Minerals lease expired in February, 1991. In October, 1979, Van Burén, also owned by Milton Bernos, acquired a leasehold in the mineral interests owned by Colten on terms substantially identical to the Cane lease to Eastern Minerals. Van Burén never provided notice to extend its lease. The Van Burén lease expired in October, 1991. By the terms of both lease agreements, the tenants (Eastern Minerals and VanBuren) were required to pay as rent the greater of a minimum rent or 3.5% of revenues. In 1977 Congress enacted the Surface Mining Control and Reclamation Act, 30 U.S.C. §§ 1201-1328 (1988) (“SMCRA”), which required permits as a precondition to mining. In 1980 and 1981, Eastern Minerals obtained such permits and invested about $3,800,000 in the mining project. Due to a change in governmental policy, Eastern Minerals’ application to renew its mining permit was denied in 1982. Eastern continued unsuccessfully to pursue a permit between 1982 and 1994. The United States Department of Interior, Office of Surface Mining (“OSM”), continuously delayed the application until it rendered a final decision on the merits of Eastern Minerals’ permit application in 1994. As noted above, Eastern Minerals’ lease expired in February, 1991. In October, 1994, Eastern Minerals notified Cane of its intent to sue the United States to recover for the loss of its property rights and invited Cane to join the suit. Exhibits to Memorandum in Support of Defendant’s Motion for Summary Judgment (“Defendant’s Exhibits”), Vol. II at 256. On November 7, 1994, Cane replied to Eastern Minerals stating that “Cane Company Limited is not interested in joing [sic] with your suit against the Government.” Id. at 257. On December 29, 1994, Eastern Minerals, Van Buren, Milton Bernos, and the Wyatts filed suit in this court (the “Eastern Minerals case”). Eastern Minerals Int’l, Inc. v. United States, No. 94-1098 L (Fed.Cl. filed Dec. 29, 1994). On April 30, 1996, Cane and Colten filed a complaint in the present action. On October 2, 1996, the court issued an opinion in the Eastern Minerals case concluding that the government was liable to Eastern Minerals and to the Wyatts for a taking. Eastern Minerals Int’l, Inc. v. United States, 36 Fed. Cl. 541 (1996) (“Eastern I”). On November 25, 1997, the court awarded damages. Eastern Minerals Int’l, Inc. v. United States, 39 Fed.Cl. 621 (1997) (“Eastern II ”). On October 10, 1996, eight days after the Eastern I decision on liability, Cane and Colten moved to consolidate this case with the Eastern Minerals case. The court denied Cane and Colten’s consolidation motion on November 20,1996. Following the denial of their Motion .to Consolidate, Cane and Colten moved to intervene in the Eastern Minerals case on November 20, 1996, alleging the government was liable to Cane and Colten for a taking. Cane and Colten based their motion for intervention upon the discovery of a transcription error in the lease between Cane and Eastern Minerals and asserted that Cane needed to protect its interests. The lease stated that the “Landlord” (Cane) was responsible for paying the 3.5% royalty to the Wyatts; but Cane asserted that the lease should read that the “Tenant” (Eastern) was - responsible for the payments. On January 22, 1997, Eastern Minerals filed Plaintiffs’ Admission and Joint Motion to Supplement the Record in which Eastern Minerals made an admission that placed the responsibility for payment of the Wyatts’ royalty on itself. The motion further stated that the admission was binding on plaintiffs in the Eastern Minerals case only. Cane and Colten’s Motion to Intervene in the Eastern Minerals case was denied by order of the court on February 21, 1997. The government filed its Motion for Summary Judgment (“Defendant’s Motion”) in this matter on June 20, 1997. Plaintiffs filed their Memorandum in Opposition to Defendant’s Motion for Summary Judgment (“Plaintiffs’ Opposition”) on July 28, 1997. The government filed a reply memorandum (“Defendant’s Reply”) on August 4, 1997. Oral argument was held on March 25, 1998 (“Trans.”) and plaintiffs filed a Supplemental Memorandum in Opposition to Defendant’s Motion for Summary Judgment (“Plaintiffs’ Supp.”) on April 16, 1999. Defendant also filed a supplemental memorandum (“Defendant’s Supp.”) on April 30, 1999, and additional oral argument was heard on June 14, 1999 (“Supp. Trans.”). II. Discussion Summary judgment is appropriate when there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. See RCFC 56(c). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Jay v. Secretary of Health and Human Servs., 998 F.2d 979, 982 (Fed.Cir.1993). A fact is material if it might significantly affect the outcome of the suit under governing law. See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The party moving for summary judgment bears the initial burden of demonstrating the absence of any genuine issues of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party demonstrates an absence of a genuine issue of material fact, the burden then shifts to the non-moving party to show that a genuine issue exists. See Sweats Fashions, Inc. v. Pannill Knitting Co., 833 F.2d 1560, 1563 (Fed.Cir.1987). Alternatively, if the moving party can show there is an absence of evidence to support the non-moving party’s case, the burden shifts to the non-moving party to proffer such evidence. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The court must resolve any doubts about factual issues in favor of the party opposing summary judgment, Litton Indus. Prods., Inc. v. Solid State Sys. Corp., 755 F.2d 158, 163 (Fed.Cir.1985), to whom the benefits of all favorable inferences and presumptions run. See H.F. Allen Orchards v. United States, 749 F.2d 1571, 1574 (Fed.Cir.1984), cert. denied, 474 U.S. 818, 106 S.Ct. 64, 88 L.Ed.2d 52 (1985). The fact that this is “a takings case does not affect the availability of summary judgment when appropriate to the circumstances.” Avenal v. United States, 100 F.3d 933, 936 (Fed.Cir.1996). The Fifth Amendment provides that “private property” shall not “be taken for public use, without just compensation.” U.S. Const, amend. V. A constitutional taking can be found in the absence of a physical invasion when a government act denies the owner all “economically viable use of his land.” Agins v. City of Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980). There is no bright line test in determining whether a government action results in a taking. See Whitney Benefits, Inc. v. United States, 18 Cl.Ct. 394, 399 (1989), aff'd, 926 F.2d 1169 (Fed.Cir.1991). When the nature of the government action does not constitute a physical taking of property but, rather, limits the use a property owner may make of his property, the classic analytical tool for assessing whether a taking has occurred is the three-part test developed by the Supreme Court in Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). See Eastern Enters, v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 2135, 141 L.Ed.2d 451 (1998); Avenal, 100 F.3d at 937-38. The test provides for consideration of the character of the governmental action, the economic impact on the claimant, and the extent to which the governmental action has interfered with distinct investment-backed expectations. See Penn Central, 438 U.S. at 124, 98 S.Ct. 2646; Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 212, 106 S.Ct. 1018, 89 L.Ed.2d 166 (1986); Avenal, 100 F.3d at 938. However, before a court may apply Penn Central’s three-part test, the court must determine whether a plaintiffs interest is a compensa ble property interest within the meaning of the Fifth Amendment. See M & J Coal Co. v. United States, 47 F.3d 1148, 1153-54 (Fed.Cir.1995); Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1580 (Fed.Cir.1993); Avenal v. United States, 33 Fed.Cl. 778, 784-85 (1995), aff'd, 100 F.3d 933 (1996). A. Colten’s Interest The government asserts that Colten’s claims should be denied because Colten did not submit a permit to mine. Defendant’s Motion at 28. The court agrees. Because the SMCRA requires a permit to mine, a taking claim does not arise until after a permit has been sought and subsequently denied. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 126-27, 106 S.Ct. 455, 88 L.Ed.2d 419 (1985); Southern Pacific v. City of Los Angeles, 922 F.2d 498, 504 (9th Cir.1990); Conant v. United States, 12 Cl.Ct. 689, 691 (1987). In order to satisfy this administrative requirement, either Van Burén or Colten needed to submit an application to mine under the SMCRA. Colten never submitted an application for a permit to mine. Defendant’s Exhibits, Vol. 1, at 78. Based upon the terms of its contract with Van Burén, Colten did not have the right to apply for a mining permit. Defendant’s Exhibits, Vol. II at 181. Section 2(a)(i) of Colten’s lease conveys to Van Burén “all mining rights and privileges owned by Landlord appurtenant to the Leased Minerals, and incident to ownership thereof.” Id. Plaintiffs admit that Van Burén never filed an application for a permit to mine. Supp. Trans, at 18. Because Colten fails to satisfy this threshold requirement, the court determines that Colten’s claim is not ripe. B. Cane’s Interest Although the parties agree that Cane held a property interest which was affected by the government’s action under the SMCRA, they disagree about whether that property interest was compensable for Fifth Amendment purposes. Defendant asserts that the affected interest is purely contractual in nature and that frustration of contractual expectations does not entitle Cane to a remedy under the takings clause of the Fifth Amendment. At most, argues defendant, Cane is entitled to incidental or consequential damages under its contract with Eastern Minerals. Defendant’s Motion at 31. Plaintiff contends that “Cane and Colten are seeking just compensation as property owners whose mineral estates have been taken.” Plaintiffs’ Opposition at 37 (emphasis added). Plaintiff also asserts that defendant’s framing of the issue fails to address Tennessee law that “specifies the incidents of ownership of the minerals and negates any claim that Cane had mere ‘contractual expectations.’ ” Plaintiffs’ Supp. at 4. 1. Did Cane Have a Compensable Property Interest? The court must first determine whether plaintiff possessed a compensable property interest. See M & J Coal Co. v. United States, 47 F.3d 1148, 1153-54 (Fed. Cir.1995); Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1580 (Fed.Cir.1993); Avenal, 33 Fed.Cl. at 784-85. Plaintiff asserts and defendant agrees that plaintiffs interest as a lessor of the land was a property interest. Defendant’s Motion at 2; Defendant’s Reply at 2; Defendant’s Supp.Memo at 5-6. However, the parties dispute the nature of the property interest. Plaintiff asserts that its interest was a royalty interest, and therefore, an ownership interest in the minerals under Tennessee law. Plaintiffs’ Supp. at 5-7. Defendant contends that plaintiffs interest, as evidenced by the terms of the contract between Eastern Minerals and Cane, was merely a contractual right to receive rent. Defendant’s Reply at 17. In Phillips v. Washington Legal Foundation, 524 U.S. 156, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998), the Supreme Court stated that “[b]ecause the Constitution protects rather than creates property interests, the existence of a property interest is determined by reference to ‘existing rules or understandings that stem from an independent source such as state law.’” Phillips, 524 U.S. at 164, 118 S.Ct. 1925 (quoting Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)). Under Tennessee law, the lease establishes the respective rights and duties of Cane and Eastern Minerals, as landlord and tenant. See Cain Partnership, Ltd. v. Pioneer Inv. Servs., Co., 914 S.W.2d 452, 455 (Tenn.1996). In order to determine the type of property interest at issue, it is first necessary to look to Cane’s lease agreement with Eastern Minerals. See Phillips, 524 U.S. at 164, 118 S.Ct. 1925; United States v. Causby, 328 U.S. 256, 266, 66 S.Ct. 1062, 90 L.Ed. 1206 (1946). Of particular importance to a determination of whether Cane had a property interest in the minerals is the distinction made by the Tennessee courts between leases of mining property and absolute sales of minerals. Carl Clear Coal Corp. v. Huddleston, 850 S.W.2d 140, 145 (Tenn.Ct.App.1992); Weatherly v. American Agric. Chem. Co., 16 Tenn. App. 613, 65 S.W.2d 592, 596 (1933). An absolute sale severs thé title to the realty, while a lease does not. See Weatherly, 65 S.W.2d at 596. A severance of title can create a royalty interest in the seller. Tennessee law views the royalty interest as a corporeal property interest. See J.M. Huber Corp. v. Square Enters. Inc., 645 S.W.2d 410, 412 (Tenn.App.1982). The fact that the agreement between Cane and Eastern Minerals is styled as a “lease” is not determinative of the issue. See Weatherly, 65 S.W.2d at 596 (discussing other factors aside from the parties’ designation of the instrument as a lease). The court must look to the intent of the parties to the lease as shown by the entire transaction. See id. at 597 (citing Knoxville, C.G. & L.R. Co. v. Beeler, 90 Tenn. 548, 18 S.W. 391, 392 (1891)). For instance, the conveyance of a mining right which allows the tenant to extract “every particle of the mineral” does not automatically render an agreement a sale. Weatherly, 65 S.W.2d at 596 (citing Chandler v. French, 73 W.Va. 658, 81 S.E. 825, 827 (1914)). The particular nature of the business of the tenant may also be indicative of the parties’ intent. See Carl Clear Coal, 850 S.W.2d at 145 (citing Crown Enters., Inc. v. Woods, 557 S.W.2d 491, 493 (Tenn.1977)), which held that, because the taxpayer’s sole purpose was to acquire coal for resale, its leases were sales contracts for tax purposes). The length of the lease term may also be instructive. See Weatherly, 65 S.W.2d at 599. The provisions of the lease agreement between plaintiff and Eastern Minerals contain some elements that indicate plaintiffs and Eastern Minerals’ intent to sell the minerals and other elements that indicate that a lease was intended. In particular, the conveyance of the minerals themselves, in addition to all mining rights and privileges under section 2(a) indicates that the parties to the contract intended a sale of the minerals, while the limitation of the lease to a specific term of years under section 4 may evidence an intent to form a lease. Defendant’s Exhibits, Vol. II at 115; 9-10. Although the proper resolution of the issue is far from crystal clear, several aspects of the parties’ agreement lead the court to conclude that, under Tennessee law, the lease should be interpreted as a sale of the minerals. The conveyance in the lease is not limited merely to mining rights. Lease section 2(a) conveys “all coal and other minerals located in the Land,” as well as “all mining rights and privileges.” Defendant’s Exhibits, Vol. II at 115-16 (emphasis added). See generally Carl Clear Coal, 850 S.W.2d at 145-146 (discussing the relationship shared by parties to a mining lease). Furthermore, Cane’s business activities were limited to “[investments in mining property.” Defendant’s Exhibits, Vol. I at 70-71 (plaintiffs response to defendant’s interrogatory asking plaintiff to identify “[a]ll types of business activity undertaken”). See generally Carl Clear Coal, 850 S.W.2d at 145 (stating that the determination whether a lease can be construed as a lease or a contract for sale depends upon the particular nature of the business of relevant party). A royalty interest is more obviously a type of “[i]nvestmen[t] in mining property” than is a contract to receive rent. While the lease contained a definite term of years (albeit a long term), another lease provision, section 8(a) states that “[t]enant shall ... prosecute mining operations until all of the minable and merchantable coal ... in the Land has been mined and removed____” Defendant’s Exhibit, Vol. II at 126. Section 8(a) casts all mining responsibility on Eastern Minerals, as would be consistent with ownership. Because the court determines that plaintiff actually sold the minerals to its “tenant,” Eastern Minerals, it might appear that plaintiff no longer possessed a compensable property interest in the subject minerals. However, under Tennessee law, the court must look to the financial terms in the lease to determine the effect Eastern Minerals’ obligation to pay “rent” under section 5 had on Cane’s interest in the minerals. See generally Carl Clear Coal, 850 S.W.2d at 146-47 (citing Logan Coal & Timber Ass’n v. Helvering, 122 F.2d 848 (3rd Cir.1941) (examining mineral leases in the context of a federal tax statute)). Plaintiff cites several cases which explain the common law principles embraced by the Tennessee courts relating to the property interest of the landlord under a mineral “lease.” Plaintiffs Supp. at 5. Plaintiff asserts that “Tennessee case law and industry practice illustrate [that] a minimum rent provision in a mineral lease is supplementary to a royalty and is itself a royalty.” Id. at 6. We now examine the authorities for this point. In Weatherly, the Tennessee Court of Appeals stated that “[i]t is usual for mining leases ... in reserving a royalty to the lessor, to contain a provision for the payment to the lessor of a sum variously known as a ‘minimum royalty’ or a ‘dead’ or ‘sleeping’ rent, that is, to fix a minimum amount to be mined or a minimum royalty to be paid in any event within certain fixed periods---The exact obligation and rights of the lessee under such a provision depend upon the terms of the particular lease and supplemental agreements.” Weatherly, 65 S.W.2d at 598-99. Tennessee courts have also stated that the rent paid on a mineral estate is called royalty. See J.M. Huber Corp. v. Square Enters. Inc., 645 S.W.2d at 412 (citing H. Williams, R. Maxwell and C. Meyers, Oil and Gas, 540-45 (1979)). Under Tennessee law, “the right to receive royalty is corporeal and constitutes an interest in the underlying mineral estate.” Huber, 645 S.W.2d at 413. “[T]he conveyance of the rent, profits or income from land is equivalent to a conveyance of the land itself.” Id. (citing Mays v. Beech, 114 Tenn. 544, 86 S.W. 713 (1905); Johnson v. Johnson, 92 Tenn. 559, 23 S.W. 114 (1893); Davis v. Williams, 85 Tenn. 646, 4 S.W. 8 (1887)). Cane did not lose all of its ownership interest when it leased the minerals to Eastern Minerals. Tennessee law provides that Cane’s so-called rent constituted a type of corporeal property interest — a royalty interest. The court finds that, as a royalty, Cane’s property interest is a compensable interest for Fifth Amendment takings purposes. The court must now examine whether that interest was taken. 2. Was a Compensable Property Interest Taken? The parties dispute whether plaintiffs property was “taken.” Defendant asserts that “[a]s a matter of law ... defendant’s lawful actions directed at a third party— Eastern Minerals — simply could not have taken plaintiffs’ contractual expectations to receive rents under the Cane and Colten leases.” Defendant’s Motion at 31. In other words, defendant contends that actions taken by the government in denying a permit to Eastern Minerals had a mere incidental impact on Cane, and therefore are non-compensable under the Fifth Amendment. Plaintiff states that “the government has not simply upset a contractual arrangement between Cane and Colten and Eastern and Van Burén, respectively, it has taken the right to mine the coal itself.” Plaintiffs Opposition at 37. In its First Amended Complaint, Cane claims relief under three counts. The first alleges, among other things, that “[b]y engaging in excessive and unreasonable delays and employing procedural tactics which deprived Eastern of the use and enjoyment of its leasehold interest, thus extinguishing [plaintiffs] royalty interests, the United States has effected a taking of [plaintiffs] royalty interests for which [plaintiff] must be paid just compensation.” Complaint at 22. The second, count states that “[b]y preventing mining of [plaintiffs] properties, the United States has effected a taking of [plaintiffs] mineral estates____” Id. at 23. Plaintiffs third count addresses improvements made on the property for the purpose of supporting mining operations. The third count asserts that “[o]wnership of the property improvements is vested in Cane as a matter of Tennessee law” and “[b]y preventing the mining of the Cane property, the United States has effected a taking of the property improvements built and constructed to support mining, for which Cane must be paid just compensation.” Id. at 24-25. In order to recover under the Fifth Amendment in this court, a plaintiff must demonstrate that the government took his property interest without justly compensating him. See Murray v. United States, 817 F.2d 1580, 1583 (Fed.Cir.1987). In Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), the Supreme Court has put forth a three-part test the Federal Circuit applies to evaluate whether regulatory actions constitute a taking. See Avenal v. United States, 100 F.3d 933, 936 (Fed.Cir.1996). The Penn Central test provides for consideration of the character of the governmental action, the economic impact on the claimant, and the extent to which the governmental action has interfered with distinct investment-backed expectations. See Penn Central, 438 U.S. at 124, 98 S.Ct. 2646. See also Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 212, 106 S.Ct. 1018, 89 L.Ed.2d 166 (1986); Avenal, 100 F.3d at 938. In neither their pleadings nor at oral argument in this matter did the parties address all three prongs of the Penn Central test. The parties focused instead on whether or not the government’s actions had more than an “incidental impact” on plaintiffs interest. It would be inappropriate for the court to apply the Penn Central test at this point. The court will, however, consider the government’s assertion that the government’s actions had no more than an incidental impact on plaintiff’s interest. In support of its contention that plaintiffs interest in the property was merely incidentally impacted, defendant cites Omnia Commercial Co. v. United States, 261 U.S. 502, 43 S.Ct. 437, 67 L.Ed. 773 (1923) and 767 Third Avenue Associates v. United States, 48 F.3d 1575 (Fed.Cir.1995). Omnia was a buyer of steel under a very favorable contract. Before any steel was delivered to Omnia, the United States government requisitioned the selling company’s steel plate and ordered the selling company not to comply with its contract with Omnia. Omnia, 261 U.S. at 507, 43 S.Ct. 437. Omnia brought a suit alleging that “by the orders of the government the performance of the contract by the steel company had been rendered unlawful and impossible; that the effect was to take for the public use appellant’s right of priority to the steel plate expected to be produced by the steel company and thereby appropriate for public use appellant’s property in the contract.” Id. at 507-08, 43 S.Ct. 437. The Supreme Court determined that under the circumstances of the requisition the government dealt only with the steel company, and that its actions were lawful. Id. at 511, 43 S.Ct. 437. The contract was ended because it was impossible for the steel company to deliver its product to Omnia. Id. Essentially, the Supreme Court found the government’s actions to be a lawful exercise of power. The government did not intend to— and did not — take Omnia’s property interest. See id. In 767 Third Avenue Associates, Sage Realty Corp. entered into leases with organiza tions from the Socialist Federal Republic of Yugoslavia (“SFRY”). 767 Third Ave. Assoc., 48 F.3d at 1576. Shortly after the leases were extended, war erupted in the SFRY and the United States formally acknowledged that the SFRY ceased to exist. Id. at 1577. Subsequently, President Bush issued an Executive Order which “blocked” the properties of SFRY organizations in the United States, including the properties leased from Sage. Id. (citing Exec. Order No. 12,808, 57 Fed.Reg. 23,299 (1992)). Treasury agents inspected the premises and posted notices denying access for a short period of time. 767 Third Ave. Assoc., 48 F.3d at 1577-78. Sage brought a suit alleging a taking of its property interests. The Federal Circuit determined that the government did not take Sage’s property interest when it blocked the SFRY’s properties. Id. at 1582. The SFRY had a continuing obligation to pay rent. Id. Furthermore, the government was not liable to Sage for a per se taking of the property. The court stated that Sage was allowed access to the building the one' time it made such a request. Id. at 1583. In addition, since the SFRY organizations had terminated their leases, Sage could have requested to make other uses of the offices. Id. at 1584. In section II.B.l of this opinion, the court determined that plaintiffs interest in the subject minerals was a royalty interest and, therefore, a “real property interest in the mineral estate.” See J.M. Huber Corp., 645 S.W.2d at 413. See also Eastern Minerals, 36 Fed.Cl. at 549. The government’s reliance on Omnia and 767 Third Avenue Associates is misplaced. The courts in those cases focused on the effect of the government’s action on the parties’ unperformed contractual obligations. The rule that “no interest is taken when a contract expectation is merely frustrated by a regulation directed toward a different party or property interest” does not apply to Cane’s claim. 767 Third Ave. Assoc., 48 F.3d at 1582. When the government denied the mining permit to Eastern Minerals, it denied a permit with respect to the property in which Cane holds a royalty interest, itself a compensable property interest. We do not now decide that the government’s action constituted a taking under the three-part Penn Central test. We do, however, decide that the possibility is not foreclosed under the authority of either Omnia or 767 Third Avenue Associates. 3. Laches Under the statute of limitations of this court, a claim for just compensation must be instituted within six years from the alleged date of taking. See 28 U.S.C. § 2501 (1994); Aaron v. United States, 160 Ct.Cl. 295, 298, 311 F.2d 798 (1963). Although defendant does not challenge the court’s jurisdiction in this matter under the statute of limitations, defendant does assert laches as an affirmative defense to plaintiffs takings claim. Defendant contends that it has suffered and will continue to incur both economic and evidentiary harms as a result of Cane’s delay in filing suit. Defendant’s Motion at 20-21. Furthermore, defendant alleges that “plaintiffs have attempted to take advantage of the judicial system by delaying their lawsuit until after defendant has exposed its entire case in related litigation.” Id. at 22. Plaintiff asserts that laches does not bar its actions because it brought suit within the statute of limitations. Plaintiffs Opposition at 26. Plaintiff also states that it, rather than the government, has suffered prejudice by the government’s failure to give plaintiff notice of the Eastern Minerals suit. Id. at 25-26, 31.
5679951-8380	OPINION SWEET, District Judge. Defendants, the City of New York and the fifty-two individually named members of the New York City Police Department (“NYPD”) (referred to collectively as the “Defendants”), have objected to Magistrate Judge Michael H. Dolinger’s August 29, 2006 Memorandum & Order, Kunstler v. City of New York, 04CIV1145(RWS)(MHD), 2006 WL 2516625 (S.D.N.Y. Aug. 29, 2006) (the “August 29 Order”), pursuant to Rule 72(a), Fed.R.Civ.P. The August 29 Order denied Defendants’ motion for additional discovery on the alleged emotional and physical damages of some of the fifty-two plaintiffs (the “Plaintiffs”) and for an order compelling independent medical examinations (“IMEs”) of some of the plaintiffs. In addition, the Defendants have moved for an order, pursuant to Rule 37(c)(1), Fed.R.Civ.P., precluding the Plaintiffs from proffering any evidence at trial as to any of their physical or emotional injuries. Having reviewed the August 29 Order and considered the Defendants’ objections, the objections are overruled, the August 29 Or der is affirmed in its entirety, and the Defendants’ Rule 87(e)(1) motion is denied. Prior Proceedings This action was initiated by the filing of a complaint on February 11, 2004, on behalf of the Plaintiffs alleging false arrest, malicious prosecution, and, in certain instances, excessive force arising out of arrests made in the course of a demonstration on April 7, 2003. Discovery proceeded and the August 29 Order ruled upon the discovery disputes then presented. The objections to the August 29 Order and the Rule 37 motion were heard and marked fully submitted on October 18, 2006. Discussion 1. The Defendants’ Objections to the August 29 Order Are Overruled Under Rule 72(a), Fed.R.Civ.P., a district court judge reviewing objections to a magistrate judge’s order “shall consider such objections and shall modify or set aside any portion of the magistrate judge’s order found to be clearly erroneous or contrary to law.” Fed.R.Civ.P. 72(a). The August 29 Order is a comprehensive, careful review of the issues presented and the relevant authorities. It dealt with the Defendants’ requests for: (1) medical treatment records; (2) independent medical examinations (“IMEs”); (3) compliance with Interrogatory 4; and (4) mental health treatment records and deposition testimony about such treatment, the waiver of the privilege associated with such records, and the application of Rule 26(c), Fed.R.Civ.P., to such records. The analysis required consideration of the particular requests and particular plaintiffs involved. a. Medical Treatment Records Judge Dolinger concluded that the Plaintiffs have represented that all records of physical injuries have been produced and that the Defendants have not contradicted this representation. b. Independent Medical Examinations (IMEs) Judge Dolinger noted that the Defendants seek physical examinations of Ms. Brown, Ms. Andrews, and Mr. Posteraro. Since all three of these plaintiffs testified that their injuries were healed within a period of one week to four months, Judge Dolinger concluded that good cause under Rule 35(a), Fed.R.Civ.P., had not been established for ordering these IMEs. As to the mental health examinations of the five plaintiffs sought by the Defendants, Judge Dolinger noted that two of the plaintiffs had received treatment years before the incident and there is no evidence that they are claiming any ongoing, serious psychological maladies. A third plaintiff who was undergoing treatment at the time of the incident waived her privilege, as did a fourth plaintiff. Judge Dolinger concluded that the fifth plaintiff, who invoked her privilege as to treatment but testified as to her emotional injuries, did not claim to be suffering from significant psychological injury. Therefore, Judge Dolinger concluded that good cause for ordering these IMEs also had not been established. See also infra. c. Interrogatory 4 Interrogatory 4 requested identification of all physical and emotional injuries and a description of all treatment received, including the date(s) of such treatment, exact nature of the treatment, name(s) of any medications prescribed and the individuals or other providers who rendered the treatment. According to Judge Dolinger, the information sought is presumptively excluded by Local Civil Rule 33.3, with the exception of Defendants’ request for the identification of medical providers. Judge Dolinger ordered the Plaintiffs to identify any pertinent healthcare providers within seven days of the August 29 Order. d. Mental Health Records and Depositions Judge Dolinger reviewed the implications and issues surrounding Jaffee v. Redmond, 518 U.S. 1, 116 S.Ct. 1923, 135 L.Ed.2d 337 (1996), and the privilege existing between patient and psychotherapist, including the issue of waiver. Judge Dolinger observed a distinction between a serious psychological injury and an emotional injury that a well-adjusted person could be expected to suffer in like circumstances, a so called “garden variety” distress claim. Judge Dolinger concluded that there was no general at-issue waiver and that, with the possible exception of Ms. Heinz, the Plaintiffs’ claims were all of the “garden variety” from which waiver would not arise. As to Ms. Heinz, Judge Dolinger concluded her testimony amounted to nothing more than an expression of anger. He also noted that the Plaintiffs have represented that they will not present any mental health experts at trial. In addition, Judge Dolinger concluded that striking the balance required under Rule 26(c), Fed.R.Civ.P., the Defendants had not established the justification for turning over sensitive psychological information. Judge Dolinger’s nuanced and careful analysis of the requirements for waiver, particularly after the psychotherapist privilege enunciated in Jaffee, represents the appropriate view of the issue and the authorities. The reasoning and the determination of fairness set forth in Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D.Wash.1975), as cited by Judge Dolinger and the Court of Appeals for the Second Circuit in United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir.1991), is compelling. The Defendants have cited Hershey-Wilson v. City of New York, 05 Civ. 7026(KMK)(JCF), 2006 WL 2714709 (S.D.N.Y. Sept. 20, 2006), another demonstration case arising from a different demonstration, as supporting a waiver of the psychotherapist privilege by the assertion of emotional distress. Even the Hershey-Wilson court, however, indirectly acknowledged that “ ‘the courts have not developed a consistent approach to whether and when waiver is properly inferred’ where a plaintiff has asserted so-called ‘garden variety’ emotional distress.” (Defs.’ Reply Mem. 13 (quoting Hershey-Wilson, 2006 WL 2714709, at *1 (quoting Greenberg v. Smolka, No. 03 Civ. 8572, 2006 WL 1116521 (S.D.N.Y. Apr. 27, 2006))).) Although the Hershey-Wilson court declined to reconsider its decision based on the subsequent, contrary determination reached in Greenberg, the decision in Hershey-Wilson is no more controlling than that in Greenberg. See, e.g., Ruhlmann v. Ulster County Dep’t of Soc. Servs., 194 F.R.D. 445, 450 (N.D.N.Y.2000) (holding that “a party does not put his or her emotional condition in issue by merely seeking incidental, ‘garden variety,’ emotional distress damages”). In summary, the Defendants’ principal contention is that the emotional injuries claimed by the Plaintiffs are not “garden variety,” citing cases where examination and records have been compelled or the claim of injury was such as to constitute a waiver of the psychotherapist privilege. Judge Doling-er considered the authorities and struck the correct balance, a balance which will be maintained at trial. No expert testimony will be permitted to be offered at trial as to any emotional damage suffered by a plaintiff, and claims of emotional distress will be limited in time. 2. The Defendants’ Rule 37 Motion Is Denied Federal Rule of Civil Procedure 37(c)(1) provides that: [a] party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1), or to amend a response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at trial, at a hearing, or on a motion any witness or information not so disclosed.
11442154-24187	MEMORANDUM AND ORDER TRAGER, District Judge. Plaintiff Walter Clarke brings this products liability action against defendant LR Systems and Lasits Rohline Service, Inc. (“LR Systems”) for injuries he suffered in an industrial accident on August 13, 1996. Clarke originally brought suit in the Supreme Court of Kings County against LR Systems and Dayton Electric Manu-faeturing Company. The complaint charged these defendants with negligence and strict products liability, and breach of implied and express warranty. The case was removed to federal court based on diversity, and Clarke’s employer, Favorite Plastics, Inc., was joined as a third-party defendant. Dayton and- Favorite Plastics were subsequently voluntarily dismissed. LR Systems moved for summary judgment on December 19, 2001. Background Clarke is a 74-year-old man who was born in Barbados, attended school through the seventh grade, and moved to the United States in 1972. Clarke Dep. at 8, 12. He began working at Favorite Plastics soon after arriving in the United States. Id. at 16-17. At first, Clarke worked as a “helper” to the operator of a plastic grinding machine, called a grinder or granulator. Id. at 19. About 20 years ago, Clarke became the operator of a granulator. Id. at 19, 23. For about a month, Clarke received training on the grinder from the operator he was replacing. Id. at 25. At the time of the accident, Clarke worked on an “SG Granulator 300” produced by LR Systems in 1989 and subsequently sold to Favorite Plastics. Def. Affirmation ¶¶ 7, 8. This grinder was similar to the one Clarke had previously used, and was used by Clarke for several years prior to the accident. Clarke Dep. at 26. The machine on which Clarke was injured takes plastic strips or pieces and grinds them into plastic granules. Def. Affirmation ¶ 12. The plastic is first placed into a hopper at the front end of the machine. The plastic is then fed by a powered roll feeder from the hopper into a cutting chamber, where a set of rotating knives move past a set of stationary knives. Report of Plaintiffs Expert Neal Growney (“Growney Report”) ¶ 5.1. Access to the cutting chamber is through a door on the front of the machine, below the hopper. To access the door, a bolt on the hopper must first be removed, and the hopper moved away on hinge. Clarke Dep. at 194. This access door has an electric interlock, meaning that opening it cuts off power to the motor. Growney Report ¶ 5.9. A screen behind the door, fastened by six bolts, must also be removed to get access to the cutting chamber. Clarke Dep. at 195. Access is necessary to clear jams and to periodically service or replace the knives. Growney Report ¶ 5.8. The access door had two warning stickers. One stated: “Sharp knife. Use extreme caution in knife area even though power to the machine is locked off.” Clarke Dep. at 55. The second stated: “Warning: Disconnect the power servicing to prevent accidental start-up.” Id. The rotating knives are powered by a 15 horsepower motor located at the back of the machine. Growney Report ¶ 5.2. The power is transmitted to the rotating knives by a belt drive. Id. This drive consists of a grooved pulley on the motor, a grooved pulley on the shaft of the rotating knives, and a set of five V-belts that connect the two pulleys. Id.; Clarke Dep. at 131, 143. The point at which the V-belt contacts the pulley forms an “in-running nip point.” Growney Report ¶ 5.3. A nip point is where two surfaces come into contact, creating a point where an object can become caught or be pinched off. Id. A nip point is “in-running” when one or both of the surfaces are moving, and thus can draw an object in contact with one of the surfaces into the nip point. Id. The photographs show that the motor and belt drive are enclosed on the sides by a yellow metal housing, several feet long and several feet wide, and perhaps a foot taller at the end closer to the hopper and cutting chamber. The top of the yellow housing is covered by a removable rectangular blue metal cover that is fastened by four bolts and several latches, and appears to have two handles. Clarke Dep. at 155. The cover allows access to the motor and belt drive for service and periodic replacement of the belts. Id. at 38, 305. The belts occasionally became slack and needed to be replaced, and broke about every six months. Id. at 49, 272. When this occurred, the mechanic also needed to remove the yellow metal housing. Unlike the cutting chamber access door, the blue metal cover was not interlocked. However, the grinder had a second interlock on the hopper. Growney Report ¶ 5.9. In addition, LR Systems designed the SG-300’s controls with three interlock switches — a third interlock could be used on a sound deadening blower box. Id. ¶ 5.10. Favorite Plastics’ grinder did not have a sound deadening box, and thus it was not equipped with the third interlock. Id. ¶ 5.11. A warning sticker on the side of the yellow housing at the end near the hopper and cutting chamber stated: “Danger. Rotating parts — do not operate with guards removed.” Def. Affirmation Ex. H. The blue cover had two warning stickers on the end near the hopper and cutting chamber. One stated: “Caution. Lock hopper in open position before knife change or cleanout to prevent accidental hopper closing.” Def. Affirmation Ex. G. The second stated: “Danger. Keep hands away — pinch point.” Id. During Clarke’s time as a machine operator, the grinder often stopped operating due to' jams in the cutting chamber. These jams could happen as often as two to three times a week, or as infrequently as once a month. Clarke Dep. at 77, 79, 313. The operating manual designates a method for clearing jams through the interlocked door on the front of the machine. Def. Affirmation ¶¶ 11, 18 & Ex. E. The operator or mechanic should first electrically disconnect the grinder. Def. Affirmation Ex. E. Next, the hopper in the front of the machine is to be opened, and the feed chutes removed. Id. Excess material is then to be removed from the cutting chamber. Id. If material is jammed between the knives, the rotor can be turned manually by spanner wrenches after the guard is removed. Id. After the jam is cleared, the operator or mechanic is to close and lock the hopper before restarting the machine. Id. Favorite Plastics employed several mechanics and electricians to service machines such as the grinder by changing its V-belts, sharpening or replacing its knives, and replacing burned-out fuses. Clarke testified during his deposition that a mechanic at Favorite Plastics showed him to clear a jam this way within a year or two of when he became the grinder operator, and that when the mechanics were busy, they told Clarke to clear the jam himself. Clarke Dep. at 30,193-97, 260, 267. Clarke also testified there was a second way to clear a jam. Id. at 32, 33. Clarke stated that rather than “take down the whole machine” by going through the access door, a jam could be cleared — presumably more quickly — by pushing and pulling the V-belts back and forth, which would loosen the jammed material in the cutting chamber. Id. at 32, 35, 85-88. In order to reach the V-belts, the blue cover over the motor and belt drive had to be removed. Clarke said he never removed the blue cover himself, but that a mechanic would do it. Id. at 292. Clarke stated that he taught himself to clear a jam this way, but that he also saw at least one mechanic use this method. Id. at 97-98. If the jam were heavy, Clarke would clear it through the front access door, but if it was slighter, he would push on the belts. Id. at 299. According to Clarke, the mechanics occasionally removed the blue cover to change the V-belts and to clear jams by pushing and pulling on them. Approximately a year before the accident, a mechanic removed the blue cover from the grinder and did not re-attach it. Id. at 39, 89, 96. This was the first time the blue cover was left off for an extended period of time. Id. at 40, 43. The cover was left next to the grinder. Id. at 96. The yellow housing was on the grinder at the time of the accident. Id. at 111. With the cover off, it was easier for Clarke to clear jams, and he would first try to do so by pushing and pulling on the V-belts before clearing the jam via the cutting chamber access door. Id. at 97. Clarke also testified that he was aware that it was dangerous to put his hand on a V-belt without first turning off the power. Id. at 225. Specifically, he stated: “If I don’t turn off the power, it’s dangerous to put your hand on the belt. You can’t put your hand — The belt — the belt — The pulley and the belt is spinning very fast.” Id. Clarke also twice answered affirmatively when asked during his deposition if he knew that he could hurt himself if he put his hand on the belts without first turning off the machine. Id. at 125-26, 225-26. On August 13, 1996, the day of the accident, Clarke turned on the grinder at the beginning of his normal 6:00 a.m.-2 p.m. shift. Id. at 104. At about 6:45 a.m., Clarke noticed that the grinder had stopped working. Id. at 101, 106-07. Clarke claims that he turned off the machine and went to try to clear the jam by pushing and pulling on the V-belts. Id. at 105, 107, 109, 113, 237, 287. Clarke testified that he went to the side of the grinder close to the V-belts, reached around the yellow housing, and put his palm on a V-belt with his fingers outstretched near the motor. Id. at 116-17, 137, 145. Clarke claims that he did not grasp the V-belt with his fingers. Id. at 116. He also testified that he could see the V-belts, but could not tell if they were moving. Id. at 114-15, 238-39, 280. Clarke stated that he tried to push the V-belt with his palm, but that his hand was quickly pulled into the blades of the grinder. Id. at 116-17, 119, 133,141 — 42. Some of Clarke’s testimony is contradicted by his own expert, Growney. First, Growney concluded that the grinder was powered when the accident occurred, and that Clarke was “mistaken” when he said he turned it off. Growney Dep. at 102. Second, Growney testified .that Clarke either grasped the V-belt or had his fingers draped around it without actually grasping it. Id. at 80. Third, Growney concluded that Clarke’s hand was pulled into one of the in-running nip points, not the blades of the grinder. Growney Report ¶ 3.0; Growney Dep. at 79. In any case, Clarke was injured when his right hand was pulled into the machine. Clarke lost the top part of his thumb, and injured the top parts of his third, fourth, and fifth fingers. Clarke Dep. at 324. Clarke is right-handed, he still experiences numbness and in the fingers, and he has difficulty writing, eating, and grasping small objects. Id. at 332-34. At the time of the accident, Clarke was paid $400 per week. Id. at 357. Following the accident, Clarke received workers’ compensation benefits until his claim was settled for a lump sum. Id. at 355. The lump sum settlement was between $30,000 and $36,000, with $6,00 going to his attorney. Id. at 355-56. Clarke now receives Social Security retirement benefits and a pension from his union, but he never applied for Social Security disability benefits. Id. at 16, 359. Clarke filed his complaint in the Supreme Court of Kings County on August 4, 1999 and it was removed to federal court on September 1, 1999. Def. Affirmation Ex. A. During the course of this litigation, Clarke retained an expert, Growney, to testify on the adequacy of the warnings and the alleged design defect of the grinder. Growney produced a report that is examined in detail below. Discussion “A manufacturer who places a defective product on the market that causes injury may be liable for the ensuing injuries. A product may be defective when it contains a manufacturing flaw, is defectively designed or is not accompanied by adequate warnings for the use of the product.” Liriano v. Hobart Corp., 92 N.Y.2d 232, 237, 677 N.Y.S.2d 764, 766, 700 N.E.2d 303 (1998) (citation omitted). Clarke alleges that LR Systems is liable for two reasons. First, he claims that the warning stickers on the grinder failed to adequately warn that users should not try to clear jams by grasping and pulling on 'the V-belts, and that the granulator should not be operated with the blue cover removed. PL Mem. at 9. Second, Clarke alleges that the absence of an electric interlock on the blue cover that would prevent the machine from operating with this cover removed constitutes a design defect. (1) Failure To Warn A manufacturer has a duty to warn against: (1) latent dangers resulting from foreseeable uses of it product about which it knew or should have known; and (2) dangers of reasonably foreseeable unintended uses of a product. See Liriano, 92 N.Y.2d at 237, 677 N.Y.S.2d at 766, 700 N.E.2d 303. A defendant is hable if the plaintiff can establish that the duty to warm was breached and that the failure to warn was a substantial or proximate cause of the injury. See Burke v. Spartanics, Ltd., 252 F.3d 131, 139 (2d Cir.2001) (quotation omitted); Howard v. Poseidon Pools, Inc., 72 N.Y.2d 972, 974, 534 N.Y.S.2d 360, 361, 530 N.E.2d 1280 (1988); Codling v. Paglia, 32 N.Y.2d 330, 342, 345 N.Y.S.2d 461, 469-470, 298 N.E.2d 622 (1973); Cramer v. Toledo Scale Co., 158 A.D.2d 966, 966, 551 N.Y.S.2d 718, 719 (4th Dep’t 1990). Plaintiff argues correctly that whether warnings were adequate to deter potential misuse and whether the failure to warn was a substantial cause of the injury is ordinarily a question for the jury. See Howard, 72 N.Y.2d at 974, 534 N.Y.S.2d at 361, 530 N.E.2d 1280; Johnson v. Johnson Chem., 183 A.D.2d 64, 69, 588 N.Y.S.2d 607, 609 (2d Dep’t 1992). However, a court may dismiss a failure to warn claim as a matter of law if: (1) the defendant had no duty to warn because the hazard was patently dangerous or posed an open and obvious risk, see Burke, 252 F.3d at 137; Liriano, 92 N.Y.2d at 241, 677 N.Y.S.2d at 769, 700 N.E.2d 303; or (2) the plaintiff cannot prove causation because “the injured party was fully aware of the hazard through general knowledge, observation or common sense, or participated in the removal of a safety device whose purpose is obvious.” Liriano, 92 N.Y.2d at 241, 677 N.Y.S.2d at 769, 700 N.E.2d 303; see also Burke, 252 F.3d at 137 (no causation when plaintiff was actually aware of the danger of placing his hand in the cutting plane of a metal shearing machine); Howard, 72 N.Y.2d at 974-75, 534 N.Y.S.2d at 361, 530 N.E.2d 1280 (no causation when plaintiff with general knowledge of pools and common sense dove into shallow end and was injured); Schiller v. National Presto Indus., 225 A.D.2d 1053, 1054, 639 N.Y.S.2d 217, 218 (4th Dep’t 1996) (no causation when plaintiff was actually aware of the danger of a hot frying pan). LR Systems argues that it is not liable because the danger was open and obvious, and because Clarke was fully aware of the hazard. As to Clarke’s actual awareness, he acknowledged several times in his deposition that he knew it was dangerous to put his hand on the V-belt without first turning off the power. Clarke contends that this awareness is not sufficient to grant summary judgment because even though he was aware of the danger that his hand could be injured by the blades, he was not necessarily aware of the “particular danger” that his fingers could be injured by the in-running nip point. PL Mem. at 9. However, this proposed distinction is irrelevant. Clarke unquestionably was aware that putting his hand on a V-belt could result in significant injury — it does not matter whether this harm would be from the blades or the nip point. In fact, Clarke’s testimony does not distinguish between the two potential hazards. Rather, his statement that it is dangerous to put your hand on a V-belt with the power on because “[t]he pulley and the belt is spinning very fast [sic]” implies that he was aware that the belt drive itself could cause an injury. As Clarke was actually aware of the danger, it is not necessary to determine whether danger was sufficiently open and obvious to permit summary judgment. In regard to the open and obvious danger exception, “when a warning would have added nothing to the user’s appreciation of the danger, no duty to warn exists as no benefit would be gained by requiring a warning.” Liriano, 92 N.Y.2d at 242, 677 N.Y.S.2d at 769, 700 N.E.2d 303. Otherwise, “the list of foolish practices warned against would be so long, it would fill a volume,” and would trivialize and undermine the purpose of the rule. Id. (quotation omitted). However, this exception is difficult to administer and fact-specific, and thus “whether a danger is open and obvious is most often a jury question.” See id. Accordingly, defendant’s motion for summary judgment is granted regarding Clarke’s failure to warn claim. (2) Design Defect “A defectively designed product is one which, at the time it leaves the seller’s hands, is in a condition not reasonably contemplated by the ultimate consumer and is unreasonably dangerous for its intended use; that is one whose utility does not outweigh the danger inherent in its introduction into the stream of commerce.” Scarangella v. Thomas Built Buses, Inc., 93 N.Y.2d 655, 659, 695 N.Y.S.2d 520, 522, 717 N.E.2d 679 (1999) (quotations omitted). Under New York law, in a strict liability claim for defective design, a plain-' tiff must show: (1) the product as designed posed a substantial likelihood of harm; (2) it was feasible to design the product in a safer manner; and (3) the defective design was a substantial factor in causing the plaintiffs injury. See Voss v. Black & Decker Mfg. Co., 59 N.Y.2d 102, 107, 463 N.Y.S.2d 398, 401-02, 450 N.E.2d 204 (1983); Pahuta v. Massey-Ferguson, Inc., 170 F.3d 125 (2d Cir.1999). “This standard demands an inquiry into such factors as: (1) the product’s utility to public as a whole; (2) its utility to the individual user; (3) the likelihood that the product will cause injury; (4) the availability of a safer design; (5) the possibility of designing and manufacturing the product so that it is safer but remains functional and reasonably priced; (6) the degree of awareness of the product’s potential danger that can reasonably be attributed to the injured user; and (7) the manufacturer’s ability to spread the cost of any safety-related design changes.” Denny v. Ford Motor Co., 87 N.Y.2d 248, 257, 639 N.Y.S.2d 250, 255, 662 N.E.2d 730 (1995) (citing Voss, 59 N.Y.2d at 109, 463 N.Y.S.2d 398, 450 N.E.2d 204). In a negligence claim, a plaintiff must show: (1) the manufacturer owed the plaintiff a duty to exercise reasonable care; (2) a breach of that duty that results in a defective product; (3) the defect was the proximate cause of the plaintiffs injury; and (4) loss or damage. See Becker v. Schwartz, 46 N.Y.2d 401, 410, 413 N.Y.S.2d 895, 899, 386 N.E.2d 807 (1978); McCarthy v. Olin Corp., 119 F.3d 148, 156 (2d Cir.1997). Breach of warranty claims are distinct from strict products liability and negligence causes of action, but there is a “high degree of overlap” between them and “[a]s a practical matter, the distinction between the defect concepts in tort law and in implied warranty theory may have little or no effect in most cases.” Denny, 87 N.Y.2d at 256, 262, 639 N.Y.S.2d at 254, 258, 662 N.E.2d 730. In a breach of implied warranty action, a plaintiff must demonstrate that the product was not fit for the purpose for which it was intended. See Codling, 32 N.Y.2d at 338, 345 N.Y.S.2d at 465, 298 N.E.2d 622; see also Schimmenti v. Ply Gem Indus., 156 A.D.2d 658, 659, 549 N.Y.S.2d 152, 154 (2d Dep’t 1989). In a breach of express warranty action, a plaintiff must show that there was an affirmation of fact or promise by the seller, the natural tendency of which was to induce the buyer to purchase the product, and that the warranty was relied on. See id. (quoting Friedman v. Medtronic, Inc., 42 A.D.2d 185, 190, 345 N.Y.S.2d 637, 643 (2d Dep’t 1973)). Rather than address the legal elements of Clarke’s claims, the defendant attacks the admissibility of evidence from Clarke’s expert Growney. Defendants argue that if Growney’s testimony and report are excluded, the jury would have to speculate about issues of proper design, and Clarke will be unable to prove the elements of any design defect claim. Def. Mem. at 12. Therefore, defendant argues, they are entitled to summary judgment. As a result, the briefs from both parties only address whether the expert testimony is admissible. At the outset, it should be noted that the premise of defendant’s argument is not entirely sound. At least in regard to the causation element of a defective design claim, courts in several cases have held that an expert is not necessary. See Jarvis v. Ford Motor Co., 283 F.3d 33, 47 (2d Cir.2002); Faryniarz v. Nike, Inc., 2002 WL 530997, at *2 (S.D.N.Y. April 8, 2002). Under the Federal Rules of Evidence, the trial court must evaluate evidence for admissibility before considering that evidence in deciding a motion for summary judgment. See Fed.R.Evid. 104(a). The proponent of the testimony has the burden to prove by a preponderance of the evidence that the evidence is admissible. See Bourjaily v. United States, 483 U.S. 171, 175, 107 S.Ct. 2775, 2779, 97 L.Ed.2d 144 (1987). If the expert testimony is excluded, the court must make the summary judgment determination on the remainder of the record. See Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir.1997). Under Federal Rule of Evidence 702, the trial court acts as a gatekeeper with respect to expert testimony. See Fed. R.Evid. 702; Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141, 119 S.Ct. 1167, 1171, 143 L.Ed.2d 238 (1999). Specifically, Rule 702 provides: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. Fed.R.Evid. 702. The goal of the court’s gatekeeping task is to insure that the expert’s testimony “both rests on a reliable foundation and is relevant to the task at hand.” Daubert v. Metrell Dow Pharm., Inc., 509 U.S. 579, 597, 113 S.Ct. 2786, 2799, 125 L.Ed.2d 469 (1993). This gatek-eeping function applies not only to scienti fic expert testimony, but also to technical and other specialized knowledge such as engineering. See Kumho Tire, 526 U.S. at 141, 147-48, 119 S.Ct. at 1171, 1174. In assessing the reliability of a proffered expert’s testimony, the court’s inquiry under Daubert focuses not on the substance of the expert’s conclusions, but on the principles and methodology used to generate the conclusions. See id. at 595, 113 S.Ct. at 2797. To help with this inquiry, Daubert laid out four non-exclusive factors the court may consider: (1) whether the expert’s technique or theory can be or has been tested; (2) whether it has been subjected to peer review; (3) the known or potential rate of error of the technique or theory when applied; and (4) the existence and maintenance of standards and controls, that is, whether the technique or theory is generally accepted by the scientific community to which it belongs. See id. at 593-94, 113 S.Ct. at 2796-97. However, this test of reliability is “flexible,” meaning a court “may consider one or more” of the Daubert factors, but that the list “neither necessarily nor exclusively applies to all experts or in every case.” Kumho Tire, 526 U.S. at 141, 119 S.Ct. at 1171 (emphasis in original). Regarding the testimony of an engineering expert, the Supreme Court added that in certain cases, “it will be appropriate for the trial judge to ask, for example, how often an engineering expert’s experience-based methodology has produced erroneous results, or whether such a method is generally accepted in the relevant engineering community.” Id. at 151, 119 S.Ct. at 1176.
3672212-4818	MEMORANDUM OPINION MOTLEY, Chief Judge. Plaintiff Ohio Reinsurance Corporation (Ohio Re) has sued defendants British National Insurance Company Limited and British National Life Insurance Society Limited seeking reformation of a contract for reinsurance (the contract) as well as a judgment declaring the rights of the parties under that contract. Federal jurisdiction in this suit is based on diversity of citizenship, 28 U.S.C. § 1332(a)(2). This case is properly in the Southern District of New York both because defendants are doing business in New York, 28 U.S.C. § 1391(c), and because an alien may be sued in any district, 28 U.S.C. § 1391(d). In 1973, Ohio Re contracted with Bellefonte Insurance Company (Bellefonte) to reinsure just over nine percent of a portfolio of insurance underwritten for Bellefonte in the United Kingdom. The percentage of reinsurance for which Ohio Re is responsible under the contract declined with the passage of time, reaching one percent in January 1978. The contract is governed by English law. Ohio Re has brought this suit contending that Ohio Re had an understanding with Bellefonte which is not found in the contract. Specifically, Ohio Re contends that no more than five percent of the total insurance portfolio was to consist of casualty insurance. Because the portion of casualty insurance did exceed five percent, Ohio Re maintains that it had to spend more than anticipated on reimbursing claimants. Ohio Re seeks an accounting of and compensation for this alleged overpayment. Defendants, the successors in interest to Bellefonte, have moved to stay the case pending arbitration. Defendants invoke Paragraph XVII of the contract which provides for arbitration “[ijn the event of any dispute at any time arising out of or in any way connected with or relating to the Agreement.” See Affidavit of James D. Zirin, Exhibit A. This arbitration clause also states that “neither party shall have any right of action against the other,” until an arbitral award has been made. Discussion The Federal Arbitration Act, 9 U.S.C. § 3, provides that federal courts shall stay an action “upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement.” Courts have read this language liberally. The Supreme Court has explained that “doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). Similarly, the Second Circuit has spoken of the basic proposition that “arbitration agreements are favored in the law and are to be broadly construed.” Coudert v. Paine Webber Jackson & Curtis, 705 F.2d 78, 81 (2d Cir.1983). The arbitration clause contained in the contract, noted above, is quite broad on its face. Given the liberality accorded arbitration clauses, it seems clear that this dispute falls within the ambit of the clause. Ohio Re argues that the arbitration clause in this case does not apply because reformation would produce an agreement different in substance from the contract. The court finds this distinction inapposite in light of the broad construction given arbitration clauses. This particular arbitration clause applies to disputes “arising out of or in any way connected with or relating to this Agreement.” As such, it appears that the parties intended the clause to cover this sort of dispute. See Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk Gmbh, 585 F.2d 39, 44 (3d Cir.1978). Ohio Re further argues that since the contract is to be governed by English law, the arbitrator would be without power to reform the contract. The basis for this argument is an affidavit from English counsel. The court need not involve itself in a discussion of English law. As indicated above, the Federal Arbitration Act governs the scope of arbitration in the federal courts. See Southland Corporation v. Keating, — U.S. —, 104 S.Ct. 852, 858-59, 79 L.Ed.2d 1 (1984). In this vein, the court notes decisions in which courts have recognized an arbitrator’s power to reform a contract. See American Home Assurance Co. v. American Fidelity & Casualty Co., 356 F.2d 690 (2d Cir.1966); Aeronaves de Mexico, S.A. v. Triangle Aviation Services, 389 F.Supp. 1388 (S.D.N.Y.1974), aff'd, 515 F.2d 504 (2d Cir.1975). In addition, “a limitation on the arbitrator’s power is not a reason for bypassing arbitration where the claim is made upon the contract itself and is within the scope of the arbitration clause.” Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857 (9th Cir.), cert. denied, 444 U.S. 827, 100 S.Ct. 51, 62 L.Ed.2d 34 (1979). Therefore, the question of whether an English arbitrator could reform the contract is not relevant to this motion.
3721315-13857	CHEN, Circuit Judge. This case turns on the interpretation of the phrase “competitive basis” in the Workforce Investment Act (“WIA”). See 29 U.S.C. § 2887(a)(2)(A). Res-Care, Inc. (“Res-Care”) appeals the decision of the United States Court of Federal Claims (“Claims Court”) interpreting the statute as permitting the United States Department of Labor (“DOL”) to select a contractor for the Blue Ridge Job Corps Center (“Blue Ridge”) program through a set-aside for small businesses. For the reasons set forth below, we affirm. BACKGROUND Under WIA, DOL administers a national Job Corps program that provides education, training, and support services to help at-risk youth obtain employment. 29 U.S.C. §§ 2881, 2884. There are 125 Job Corps Centers (“JCCs”) across the nation, including Blue Ridge in Marion, Virginia, which Res-Care has operated since 1998. In December 2011, DOL published a Sources Sought Notice for a Request for Information (the “Request”) seeking information from potential bidders on an upcoming procurement for the operation of Blue Ridge. At the time, Res-Care was operating Blue Ridge under a contract that expired on March 31, 2013. ■ The Request invited “[a]ll interested parties” to submit a response but specifically encouraged firms that qualify as small businesses to respond with a “capabilities statement” that demonstrated their ability to operate the facility successfully. In response to the Request, one large business and four small businesses submitted capabilities statements. Res-Care, a large business, did not respond to the Request. Based on the responses, a DOL contracting officer found the large business and two of the four small businesses capable of operating Blue Ridge. In her review, the contracting officer considered twelve relevant areas of experience and the financial resources of each business. She specifically found that both small businesses were capable under “all of the capability areas identified in the [Request].” J.A. 3063. In particular, she found that, based on the responses from the two capable small businesses, DOL would likely receive bids (1) from at least two responsible small businesses and (2) at fair market prices. Because both of these requirements of Federal Acquisition Regulation (“FAR”), 48 C.F.R. § 19.502-2(b) (the so-called “Rule of Two”), had been met, the contracting officer recommended conducting the Blue Ridge contract selection as a small business set-aside. DOL subsequently issued a presolicitation notice indicating that the next Blue Ridge contract, with a value of $25 million, would be solicited as a “100% Set-Aside for Small Business” for the two-year base period beginning April 1, 2013, with three unilateral option years. On April 18, 2012, Res-Care filed its bid protest with the Claims Court alleging, inter alia, that DOL violated WIA by setting aside, the Blue Ridge contract for small businesses. Section 2887 of WIA describes how entities are selected for managing JCCs. 29 U.S.C. § 2887(a)(2)(A). It provides that DOL shall select entities “on a competitive basis,” but enumerates certain exceptions set forth in 41 U.S.C. § 3304(a)-(c) of the Competition in Contracting Act (“CICA”). Id. The exceptions in § 3304(a)-(c) describe instances in which the government may award a contract on a noncompetitive basis. Res-Care argued that setting aside the Blue Ridge contract for small businesses violated the “competitive basis” provision in § 2887. Before the Claims Court, Res-Care sought to supplement the administrative record with a declaration of its Executive Vice-President of Operations, Richard Myers (the “first Myers declaration”), and with a report entitled “Analysis of Small Business Contracting in Job Corps” (the “Rell & Doran Report”). Based on assorted criteria, the report concluded that large businesses outperform small businesses in administering JCCs. The Claims Court denied Res-Care’s request to supplement the administrative record with the Rell & Do-ran Report but admitted the first MyerS declaration for the sole purpose of evaluating whether Res-Care was entitled to in-junctive relief. Res-Care, Inc. v. United States, No. 12-251 C, slip. op. at 1 (Fed.Cl. July 11, 2012). On the parties’ cross-motions for judgment on the administrative record, the Claims Court denied Res-Care’s motion and granted the government’s motion, dismissing the case. The court determined that the phrase “competitive basis” in WIA did not mean “full and open competition,” reasoning that the ordinary meaning of the phrase simply requires two or more potential bidders- to seek the contract award. Res-Care, Inc. v. United States, 107 Fed.Cl. 136, 141-42 (2012). On that basis, the court concluded that WIA did not preclude small business set-asides in which two- or more small businesses compete for a JCC contract. Id. The court also found that the contracting officer did not violate the Rule of .Two in setting aside Blue Ridge for small businesses., Id. at 142. Res-Care now-appeals to this court, reiterating its contention that WIA does not permit small business set-asides. We have jurisdiction under 28 U.S.C. § 1295(a)(3). DISCUSSION I We review the grant of a motion for judgment on the administrative record without deference. Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed.Cir.2005). The first question before this court is one of pure statutory interpretation: whether WIA’s “competitive basis” language permit's small business set-asides. Because the underlying issue is a question of statutory interpretation, it is also subject to review without deference. Mudge v. United States, 308 F.3d 1220, 1224 (Fed.Cir.2002). The relevant language of § 2887 states: Except as provided in subsections (a) to (c) of section 330Jp of Title J/.1, the Secre tary shall select on a competitive basis an entity to operate a Job Corps center and entities to provide activities described in this subchapter to the Jobs Corps center. 29 U.S.C. § 2887(a)(2)(A) (emphasis added). When interpreting a statute, we begin our analysis with the language of the statute itself. Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1320 (Fed.Cir.2003). “If the statutory language is plain and unambiguous, then it controls-,- and we may not look to the agency regulation for further guidance.” Id. (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778). The meaning of the language is determined in the pertinent overall statutory context. U.S. Nat’l Bank of Or. v. Indep. Ins. Agents, 508 U.S. 439, 455, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993). To interpret the term “competitive basis,” we presume that the term has its ordinary and established meaning. See Info. Tech, 316 F.3d at 1320. As WIA does not define “competitive basis,” we may refer to dictionary definitions to determine the ordinary meaning of an undefined statutory term. Id. “Competitive” is defined as “characterized by, arising from, or designated to exhibit rivalry among two or more equally matched individuals or forces especially for a particular goal, position or reward,” and as “involving, or determined by competition.” See Res-Care, 107 Fed.Cl. at 141 (quoting Webster’s II New Riverside Univ. Diet. 290 (1984)). “Competition” means a “rivalry between two or more businesses striving for the same customers or market.” Id. Neither definition mandates an unencumbered contest open to the entire realm of all possible bidders. Authorized selection criteria may circumscribe the range of permitted rivals. Here, Congress clearly viewed the use of set-asides for small businesses as “competitive” as indicated by the CICA. See 41 U.S.C. § 3303(b) (providing that “competitive procedures” shall be used for small business set-asides); 41 U.S.C. § 152(4) (defining “competitive procedures” to include competition limited to further Small Business Act). A selection process confined to multiple small businesses bidding to operate a JCC thus satisfies the statutory “competitive basis” requirement. Res-Care argues for an alternate construction of this language. In Res-Care’s view, WIA must be read in conjunction with CICA, which requires “full and open competition” in the government procurement process, “[ejxeept as provided in sections 3303, 3304(a), and 3305” of Title 41. See 41 U.S.C. § 3301(a)(1). Those three exceptions contemplate (1) a small business set-aside exception to CICA’s “full and open competition” requirement (§ 3303(b)), (2) examples where the government may use- “noncompetitive procedures” (§ 3304), and (3) simplified procedures for small purchases (§ 3305). Because WIA’s § 2887 incorporates only one “exception” from CICA (§ 3304) and no others, such as § 3303(b)’s authorization of small business set-asides, Res-Care argues that the plain meaning of WIA dictates that § 3304 is the only exception allowed by the statute. Under that interpretation, DOL would lack the flexibility and discretion to use small business set-asides in administering WIA and instead must always hold full, open, and unfettered competition among all possible competitors— except in the very special cases when § 3304 applies. WIA’s plain language, however, requires rejection of Res-Care’s argument. In § 2887, Congress did not borrow the “full and open competition” phrase from CICA. Instead, § 2887 simply states that selection of a JCC contractor shall occur “on a competitive basis.” A cardinal doctrine of statutory interpretation is the presumption that Congress’s “use of different terms within related statutes generally implies that different meanings were intended.” 2A Norman Singer, Statutes and Statutory Construction § 46.06 (7th ed.2007); see, e.g., Daw Indus., Inc. v. United States, 714 F.2d 1140, 1143 (Fed.Cir.1983) (“The congressional choice of words has a further and more significant consequence.... Congress’ choice of the different term suggests an intentional difference in meaning.”). Here, we must presume that Congress understood the difference between expressions of a particularized form of competition, ie., “full and open,” versus the broader notion represented by “competitive basis.” Had Congress intended JCC contractors to be selected solely by “full and open competition,” it knew how to use those words and could have done so. It did not. Res-Care contends that the Claims Court’s — and our — interpretation of WIA permits all of CICA’s exception provisions to apply to WIA and, thus, renders superfluous § 2887’s reference to § 3304 from CICA. That argument again conflates WIA’s and CICA’s different structures and language. While it is true that § 2887 refers to one provision in CICA, there is no reason to read any other provision of CICA into § 2887 in the way Res-Care advocates. By its terms, § 2887 is straightforward: selections shall be made on a “competitive basis,” except in the special situations where the “noncompetitive procedures” set forth in § 3304 of CICÁ apply. The reference to § 3304 is not mere surplusage. It demonstrates Congress’s intent to ensure DOL had the flexibility to use a noncompetitive selection process in certain defined situations. Without the § 3304 reference, DOL’s selections under WIA would always have to be performed through some form of competition. With this understanding, it becomes apparent that § 2887’s reference to § 3304 is not at all superfluous. The legislative history offers no support for Res-Care’s position. As an initial matter, we note that if the plain language of the statute is unambiguous, then that is controlling. Indian Harbor Ins. Co. v. United States, 704 F.3d 949, 950 (Fed.Cir.2013). To overcome the plain meaning of a statute, a, party must show that the legislative history demonstrates an “extraordinary showing of contrary intentions.” Garcia v. United States, 469 U.S. 70, 75, 105 S.Ct. 479, 83 L.Ed.2d 472 (1984) (cautioning that resort to legislative history to interpret an unambiguous statute should only occur in “rare and exceptional circumstances”). The legislative history of WIA contains no discussion of any specialized meaning of “competitive basis,” and Res-Care points to nothing in the history demanding or even implying as much. We find nothing in the legislative history that suggests any intent to bar the widespread, established government practice of small business set-asides for this particular category of government contracts. We- therefore conclude that the Claims Court properly construed § 2887(a)(2)(A) to provide DOL the flexibility to use small business set-asides for selecting JCC operators. II Res-Care also argues that the DOL contracting officer violated the Rule of Two when setting aside Blue Ridge, and thus the Claims Court erred in granting judg-mént to the government. When reviewing a contracting officer’s decision in a pre-award bid protest, the Claims Court applies the standards established by the Administrative Procedure Act to decide whether the agency’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” See 5 U.S.C. § 706; see also Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057 (Fed.Cir.2000). On appeal of the Claims Court’s judgment on the administrative record, we reapply the deferential “arbitrary or capricious” standard to the agency’s decision. Advanced Data, 216 F.3d at 1057. This standard requires us to sustain DOL’s set-aside if it evinces rational reasoning and consideration of relevant factors. See id. at 1057-58. Before setting aside a contract for small business participation under the Rule of Two, the Federal Acquisition Regulations require that a contracting officer shall determine that a reasonable expectation exists that “at least two responsible small business concerns” will submit offers and that an “award will be made at fair market prices.” 48 C.F.R. § 19.502-2(b).
3522393-14990	DAVIS, Circuit Judge. LeRoy H. Ellis appeals from a judgment of the United States Claims Court denying his application for attorney’s fees and costs pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412 (Supp. V 1981). That court declined to award attorney’s fees and costs to appellant because, in its view, the government’s litigation position was “substantially justified.” We affirm in part and reverse in part. I Appellant’s application for attorney’s fees and costs follows upon his long-pending effort to recover his hazardous duty retirement annuity in the Court of Claims. The detailed facts are reported in previous opinions of that court. Ellis v. United States, 610 F.2d 760 (Ct.Cl.1979) (Ellis I); Ellis v. United States, 657 F.2d 1178 (Ct.Cl.1981) (Ellis II). For our purposes, a brief summary of the litigation will suffice. For over twenty years, Ellis served as a civilian fire chief at the Great Lakes Naval Training Center in Illinois. In October 1975, he retired and claimed his hazardous duty retirement annuity in accordance with 5 U.S.C. § 8336(c)(1) (Supp. V 1981). The Navy accepted his retirement under this “firefighter” statute and Ellis entered the private work-force. However, the then Civil Service Commission later denied (in March 1976) entitlement to that annuity on the grounds that he was not a “firefighter” within the meaning of the statute, but a “supervisor.” Consequently, Ellis returned to duty at Great Lakes in April 1976, and in 1978 filed suit in the Court of Claims to recover the claimed annuity. On cross-motions for summary judgment, the court held that Ellis fit the statutory description of “firefighter” and thus was entitled to hazardous duty annuity payments. Ellis I, supra, 610 F.2d at 764-65. The court then remanded the case to the Trial Division for calculation of the annuity judgment. On remand, the trial judge recommended that appellant had, constructively, the status of a reemployed annuitant from the time of his return to duty in 1976 to his second retirement in 1980. By 5 U.S.C. § 8344, if he had been an actual reemployed annuitant, an amount equal to his annuity would have been deducted from the active duty salary and returned to the Retirement and Disability Fund so that, in effect, the reemployed annuitant netted only the active duty salary and got no benefit from the annuity. Accordingly, the trial judge allowed nothing for the annuity during that period, ceasing the annuity recovery as of the date of return to duty. Appellant filed exceptions to this recommended decision. The Court of Claims held that 5 U.S.C. § 8344 was literally inapplicable and should not be applied constructively. It was literally inapplicable because he was not in fact receiving the annuity, the only case § 8344 covered. Therefore, the entire amount of unpaid annuity that accrued while appellant was reemployed was to be added to his recovery without offset for any of his active duty pay. Ellis II, supra. Following his successful challenge to the trial judge’s calculation of damages, appellant applied for attorney’s fees and costs under the EAJA on November 18, 1981, seeking these expenses for both the liability and the damages phases of the proceedings. This application, filed while the Court of Claims was still in existence, was transferred by statute on October 1, 1982, to the Claims Court. That court ruled in November 1982 that the government’s position in both phases was substantially justified and accordingly denied the application. Ellis v. United States, 1 Cl.Ct. 6, 11, 550 F.Supp. 674, 680 (1982). II The Equal Access to Justice Act provides, in relevant part, that a prevailing party shall recover fees and other expenses in any civil action against the United States from “any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified. ...” 28 U.S.C. § 2412(d)(1)(A) (Supp. V 1981). “Fees and other expenses” include reasonable attorney’s fees. Id. § 2412(d)(2)(A). As the Claims Court correctly noted, the EAJA applies to this case, as it was pending in the Court of Claims on that statute’s effective date. See Kay Manufacturing Co. v. United States, 699 F.2d 1376, 1378 (Fed.Cir.1983); Knights of the Ku Klux Klan v. East Baton Rouge, 679 F.2d 64, 67-68 (5th Cir.1982); Photo Data, Inc. v. Sawyer, 533 F.Supp. 348, 351 (D.D.C. 1982). Appellee urges initially that no attorney’s fees can be awarded in this case because the Claims Court, said not to be a “court of the United States,” is without jurisdiction to award fees under the EAJA. That argument misses the mark. Properly formulated, the real question here is whether the Claims Court and this court have jurisdiction to determine the propriety of a fee award in a so-called “transition” matter, begun before the Court of Claims, carried over by statute to the Claims Court, and then decided by the latter after October 1, 1982. See Aleut Tribe v. United States, 702 F.2d 1015, 1018 (Fed.Cir.1983). Neither party now disputes the fact that the Court of Claims properly assumed jurisdiction of the merits of Ellis’ claim for his hazardous duty retirement annuity. As we point out infra, the Court of Claims also had power to award fees under the EAJA. When the Federal Courts Improvement Act of 1982 (Pub.L. No. 97-164, 96 Stat. 25) became effective on October 1, 1982, it designated the new Claims Court to be the forum for the resolution of a class of cases then pending in the Court of Claims. Section 403(d) of the Improvement Act provides that “[a]ny matter pending before a commissioner of the United States Court of Claims on the effective date of this Act . .. shall be determined by the United States Claims Court” (emphasis added). Unlike § 403(a) of the Act, see infra note 5, § 403(d) is not merely a transfer provision requiring an independent basis for jurisdiction. Cf. Aleut Tribe, supra, 702 F.2d at 1018. The plain language of § 403(d) requires the Claims Court to determine, or issue final decisions, on matters such as the present fee application that were pending in the Court of Claims on September 30, 1982. The legislative history noted simply that § 403 “provides for the orderly disposition of cases pending on the effective date of the bill.” S.Rep. No. 275, 97th Cong., 2d Sess. 32 (1981), U.S.Code Cong. & Admin. News 1982, pp. 11, 42. Nothing in the Improvement Act or in its legislative history suggests that appellant would be divested of the opportunity to pursue an award of fees and costs because of the transfer provisions contained in the Act. On the contrary, Congress intended, at least with respect to matters pending undecided before the Court of Claims on September 30, 1982, to transfer such matters to the Claims Court — which then would have all the authority the predecessor court had to issue final decisions. There is no doubt that both the Court of Claims and this court could and can award fees under the EAJA. For the Court of Claims, see 28 U.S.C. § 2412(d)(1)(A) (Supp. V 1981); id. § 1920 (1976 & Supp. V 1981); id. § 451 (1976 & Supp. V 1981). On several occasions, that court considered the merits of EAJA awards. Estate of Berg v. United States, 687 F.2d 377, 383 (Ct.Cl. 1982); Papson v. United States, No. 602-SOT, slip op. at 2-3 (Ct.Cl. June 18, 1982) (order). This court is likewise indisputably empowered by statute to award fees under the EAJA and costs (see 28 U.S.C. §§ 451, 1920, 2412(a), (d) (1976 & Supp. V 1981)) and it has reviewed the merits of EAJA awards assessed against the United States by the Claims Court in other transition cases similar to this dispute. See Kay Manufacturing, supra, 699 F.2d at 1377; Gava v. United States, 699 F.2d 1367, 1368 (Fed. Cir.1983). We hold, therefore, that both the Claims Court and this court possess jurisdiction to determine whether an EAJA award is proper in fee applications transferred from the Court of Claims to the Claims Court by § 403(d) of the Improvement Act, and decided by the Claims Court on or after October 1, 1982. Aleut Tribe, supra, is not to the contrary. Appellant in that case attempted to pursue an interlocutory appeal from the Claims Court to this court, though it failed to comply with any of the necessary prerequisites to establish our jurisdiction over such an appeal. Instead, the Tribe contended that § 403(a) of the Improvement Act provided us with a new basis of jurisdiction to review interlocutory orders of the Claims Court. We rejected this interpretation of § 403(a) because Congress did not intend, in enacting that section, to confer a new right of interlocutory appeal upon appellants who neglect to seek proper certification. See supra note 5. Thus we held in Aleut Tribe that § 403(a) did not provide us with jurisdiction to hear the appeal. See Aleut Tribe, supra, 702 F.2d at 1021. Here, in contrast, the Claims Court was required by the terms of § 403(d) to determine the merits of the fee application after the effective date of the Improvement Act. That court issued a final decision on the merits which is now properly appealable under the jurisdictional provisions of the Act. See § 127(a) of the Improvement Act (to be codified at 28 U.S.C. § 1295(a)(3). In short, Aleut Tribe does not preclude our jurisdiction over final decisions of the Claims Court, whether or not that court received the case for determination under § 403(d). Aleut merely denied interlocutory appellate review until the necessary prerequisites for that type of appeal are satisfied. See Aleut Tribe, supra, 702 F.2d at 1019-21; see also supra note 5. In this case, appellant requests review of the Claims Court’s final decision on the fee application and our appellate jurisdiction is not in doubt. Ill We come to the question of whether the position of the United States in this dispute was substantially justified, as the trial court said. The United States bears the burden of proving substantial justification. See Knights of the Ku Klux Klan v. East Baton Rouge, 679 F.2d 64, 68 (5th Cir.1982); Photo Data, Inc. v. Sawyer, 533 F.Supp. 348, 351 (D.D.C.1982); H.R.Rep. No. 96-1418, 96th Cong., 2d Sess. 10-11, reprinted in 1980 U.S.Code Cong. & Ad. News 4953, 4984, 4989. This court will not re-examine the government’s position in the administrative proceedings concerning appellant’s annuity; rather, we look to the government’s stance in the suit in the Court of Claims. Broad Avenue Laundry and Tailoring v. United States, 693 F.2d 1387, 1390-91 (Fed.Cir.1982); see Gava v. United States, 699 F.2d 1367, 1370 (Fed.Cir.1983); Alspach v. District Director, 527 F.Supp. 225, 228-29 (D.Md.1981). The test for determining whether the government’s position was substantially justified is one of reasonableness. If the government can demonstrate a reasonable basis for litigating the dispute — both in law and in fact — no EAJA award can be made. Goldhaber v. Foley, 698 F.2d 193, 196 (3d Cir.1983); Broad Avenue, supra, 693 F.2d at 1391; East Baton Rouge, supra, 679 F.2d at 68; H.R.Rep. No. 96-1418, supra, at 10, 1980 U.S.Code Cong. & Ad.News at 4989. Moreover, because the EAJA’s primary purpose is to eliminate legal expense as a barrier to challenges of unreasonable governmental action, it is proper for us to assess attorney’s fees and costs against the government for a separate phase or portion of the litigation in which its position lacks substantial justification — even though the government may have adopted wholly reasonable positions in other facets of the case. See Goldhaber, supra, 698 F.2d at 196-97; cf. Electronic Modules Corp. v. United States, 702 F.2d 218, 219-20 (Fed.Cir.1983). In the light of these guidelines, we think that the trial judge erred in denying counsel fees to appellant for the liability phase of this litigation. In Ellis I, supra, the Court of Claims repeatedly characterized appellee’s denial of hazardous duty annuity benefits to appellant as “arbitrary and capricious.” 610 F.2d at 764, 765. The uncontested evidence presented to the court in Ellis I detailed appellant’s performance of perilous firefighting tasks upon literally hundreds of occasions: Ellis fought more than 500 working fires during his time at Great Lakes, more than anyone else. He was the only firefighter required to live on base so that he could attend all fires and he suffered numerous fire-related injuries. For example, he suffered back injuries that necessitated a 90-day leave of absence and ultimately helped lead to his decision to retire. He broke his arm at one fire, his ankle at another. One back injury eventually required surgery. These are not the kinds of injuries suffered by one who is a (sic) primarily a supervisor — they are injuries resulting from the kinds of risks taken by firefighters. Ellis I, supra, 610 F.2d at 764 (footnote omitted). Though the administrative record was not so explicit in showing Ellis’ actual firefighting activities, a very substantial case on that point was made before the Civil Service Commission. Despite this overwhelming factual record depicting the frequency of Ellis’ firefighting activities, the government attempted to avoid liability in Ellis I by continuing to argue that the regulatory definition of “firefighter” excluded appellant solely because his position description emphasized his supervisory duties. The Court of Claims roundly rejected this interpretation of the regulation as legally incompatible with the statute, and a “mockery of Congressional intent.” Id. at 765. Given this analysis of the government’s position in the liability phase of the litigation, we cannot say that the government’s case had a reasonable basis in law and fact with respect to liability. Appellee has not shown why it was reasonable to continue to contest liability in the Court of Claims when confronted with both an administrative record and uncontroverted factual affidavits in court depicting the nature and extent of appellant’s actual firefighting functions. Appellee could have elected to concede the liability issue, but instead persevered in a fruitless effort to divest appellant of his entitlement to a hazardous duty annuity. This is precisely the type of unreasonable governmental action which the EAJA is designed to prevent. Private parties with limited resources, such as appellant, would be deterred from challenging such litigation conduct without the incentive of an award of fees under the EAJA in appropriate cases. See Goldhaber, supra, 698 F.2d at 195; H.R.Rep. No. 96-1418, supra, at 9, 1980 U.S.Code Cong. & Ad. News at 4988. The mere fact that the Civil Service Commission originally denied appellant his annuity does not transform the government’s court stance into one of substantial justification. Broad Avenue, supra, 693 F.2d at 1392; Gava, supra, 699 F.2d at 1370. Appellant is entitled to attorney’s fees and costs for that portion of the litigation which established his entitlement to the hazardous duty annuity.
268504-23100	REINHARDT, Circuit Judge: This case requires us to construe the federal statute governing the offense of accessory after the fact; in doing so, we contrast its provisions with those contained in conspiracy and aiding and abetting statutes. See 18 U.S.C. §§ 2(a), 3, & 371. We must decide in particular whether the crime of being an accessory after the fact to a felon in possession of a firearm requires that the defendant have knowledge not only that the person who committed the primary offense (“the offender”) possessed a gun (which may ordinarily be perfectly legal), but also that he was a felon (which renders the possession illegal under federal law). 18 U.S.C. §_ 922(g)(1). Because the accessory after the fact statute specifically requires that the defendant have acted with knowledge that “an offense against the United States has been committed,” we conclude that the government must prove beyond a reasonable doubt -that the accessory was aware that the offender had engaged in conduct that satisfies the essential elements of the primary federal offense. To put it more precisely,' the accessory must know that the offender had engaged in the conduct that constitutes the federal offense— though not necessarily that such conduct constitutes a federal offense. Therefore, in the ease before us; the government was required to prove that the defendant knew not only that the offender possessed a firearm, but also that he had previously been convicted of a felony. Background The facts are generally undisputed. On the night of September 9, 1995, Lyndon Lloyd Graves accompanied his friend Shawn Prince to a,party at an apartment on Treasure Island Naval Base in San Francisco, California. Upon their arrival, Prince entered the apartment and immediately began yelling at his girlfriend, trying to convince her to go home with him. During the argument, Prince brandished a gun. Although Graves attempted to persuade his friend to leave the party, he was unsuccessful in his efforts, and went outside to wait in his truck. Soon thereafter, naval security officers arrived, handcuffed Prince, and placed him in the backseat of a police cruiser. The security officers searched Prince, but did not find the gun that he had used. While the officers were busy taking witness statements, Graves got out of his truck and, aided by a remarkable display of law enforcement negligence, opened the door of the cruiser and helped Prince escape. According to a neighbor who observed the events, Prince and Graves ran down the street into a nearby cul-de-sac, where Graves threw a rag-like object into a trash can. Based on the neighbor’s report, naval security officers located the trash can and retrieved a Smith and Wesson .357 magnum revolver. At some point the same night, Prince and Graves returned to the apartment and were arrested. Both were taken to the naval security station.house and each received citations for carrying a loaded weapon in a public place, drawing and exhibiting a weapon in a rude or threatening manner, and possession of a deadly weapon. Because Prince used an alias, the security officers did not discover that he had a prior felony conviction. Both men were immediately released from custody. Once Prince’s status as a felon came to light, however, he was charged with being a felon' in possession of a firearm. Several weeks after Prince was indicted, and after he had failed to surrender pursuant to notice of the issuance of a federal arrest warrant, an FBI agent observed Graves driving a car with Prince in the passenger seat. The agent activated his lights and siren, and after a slow, mile-long chase, Graves pulled over. Graves and Prince were both taken into custody. In a superseding indictment, Graves was charged with being an accessory after the fact to Prince in connection with the felon in possession offense, in violation of 18 U.S.C. § 3, and with aiding and abetting Prince’s escape, in violation of 18 U.S.C. §§ 2 & 751. Graves and Prince were tried jointly. At the close of the government’s case, Graves moved for judgment of acquittal as to the accessory after the fact count. Graves contended that there was insufficient evidence to support a conviction on this count because the government had “not introduced one shred of evidence that Mr. Graves knew that Shawn Prince was a convicted felon.” The district court denied Graves’s motion. Likewise, although Graves requested an instruction that would have required the jury to find that he knew that Prince “had committed the crime of felon in possession of a firearm,” the district court accepted instead the government’s proposed instruction, which only required the jury to find that Graves knew that Prince “had committed the crime of unlawful possession of a firearm.” After several hours of deliberation, the jury delivered a note posing the question: “[Mjust we find that Graves knew that Prince had a prior felony conviction ... ?” The district court responded: “No.” Graves was convicted on both counts, and sentenced to a 27-month term of imprisonment, to be followed by a two-year term of supervised release. He appeals only the conviction on the accessory after the fact count. Discussion The principal issue Graves raises on appeal concerns the knowledge requirement under the federal accessory after the fact statute. Graves contends that the statute requires the government to prove that he had knowledge with respect to the essential elements’ of Prince’s crime in order to show that he acted to aid Prince “knowing that an offense against the United States has been committed.” Accordingly, argues Graves, in order to convict him of being an accessory with respect to Prince’s crime of felon in possession, the government was required to prove that he knew that: 1) Prince had possessed a weapon, and 2) Prince had previously been convicted of a felony. The government asserts initially that it was sufficient to show that Graves knew that Prince had possessed the gun and alternatively that it was sufficient to show that he knew Prince had possessed the gun “unlawfully.” For several reasons, we are persuaded that Graves’s reading of the statute is correct, and that, because the prosecution presented no evidence to suggest that Graves knew of Prince’s prior felony conviction, there was insufficient evidence to support his conviction. I. As with any question of statutory construction, we look first to the statute itself. It provides in relevant part: Whoever, knowing that an offense against the United States has been committed, receives, relieves, comforts or assists the offender in order to hinder or prevent his apprehension, trial or punishment, is an accessory after the fact. 18 U.S.C. § 3 (emphasis added). Because it is clear that the statute contains a knowledge requirement, the question is what, precisely, the defendant must know in order to “know[ ] that an offense against the United States has been' committed.” Obviously, the defendant must know at least some facts regarding the offender and the primary offense. Only when he has knowledge of the offense can he be guilty of comforting or assisting the offender in order to hinder his apprehension or trial. In this case, there is no dispute that the government had to prove that Graves knew that Prince possessed a gun. The government contends, however, that Graves was required to know nothing more. Its basic position is that knowledge of Prince’s felon status was unnecessary. Alternatively, the government argues, the only additional fact of which Graves was required to be aware was that Prince’s possession of the gun was “unlawful” — that is, contrary to some municipal, state, or federal regulation or statute. Graves replies that under the accessory after the fact statute, he not only must have known that the possession was unlawful, but he also must have been aware of facts that made the possession a violation of federal law — and specifically, in this case, because the primary offense is felon in possession of a firearm, that Prince had been previously convicted of a crime that constitutes a felony. The government argues in essence that the accessory after the fact statute does not require that the accessory have independent knowledge of the elements of the “offense against the United States.” Rather, the government maintains, the knowledge requirement for an accessory is simply derivative of the mens rea requirement for the offender to whom the accessory has provided comfort or assistance. According to- the government, because a person charged with being a felon in possession of a firearm is not required to know of his own felon status, an accessory who comforts or assists that person following his commission of the crime need not know that fact either. See United States v. Miller, 105 F.3d 552, 555 (9th Cir.), cert. denied, — U.S. -, 118 S.Ct. 186, 139 L.Ed.2d 125 (1997) (“We agree with the decisions from other circuits that the § 924(a) knowledge requirement applies [for a person charged with being a felon in possession] only to the possession element of § 922(g)(1), not to the interstate nexus or to felon status.”). That seems to us to be an odd concept, because the offender may understandably be presumed to have knowledge that he has previously been convicted of a felony, while there is no reason to presume that an individual comforting or assisting the offender after he has committed an unrelated offense, perhaps years afterwards, would know of the earlier conviction. More forcefully, the government maintains that the law governing accessories after the fact should be the same as the law governing aiders, abettors, and conspirators; and, because aiders, abettors, and conspirators do not need to be aware of the principal’s status as a felon, accessories do not need to be aware that the offender had previously been convicted of a felony. See United States v. Canon, 993 F.2d 1439, 1442 (9th Cir.1993) (holding that an aider and abettor to the crime of felon in possession of a firearm does not need to be aware of the principal’s status as a felon). The government asserts that the only difference between the offenses of conspiracy or aiding and abetting, and the offense of accessory after the fact is the timing of the commission of the “facilitating” offense in rela tion to the underlying or primary offense. In other words, the government says, the only difference is that one occurs before or simultaneously with the principal offense and the other occurs afterwards. The government is plainly in error: its argument fails to recognize 1) the clear differences in language between the statute governing the offense of accessory after the fact and the statutes governing aiding and abetting and conspiracy, and 2) the fundamental distinctions in the nature of the two types of crimes. A. Although the government urges us not to impose a knowledge requirement on accessories that differs from the knowledge requirement for aiders and abettors or conspirators, we cannot ignore the obvious differences in the statutes both with respect to language and the very nature of the offenses. As to the first, the accessory after the fact statute contains an express knowledge requirement that is independent of and separate from the knowledge requirement for the primary offense. By contrast, the statutes governing conspiracy and aiding and abetting impose no knowledge requirement apart from the mens rea requirement for the underlying offense. Compare 18 U.S.C. § 3 [accessory after the fact] (“Whoever, knowing that an offense against the United States has been committed, receives, relieves, comforts, or assists the offender in order to hinder or prevent his apprehension, trial or punishment, is an accessory after the fact.”) (emphasis added), with 18 U.S.C. § 2(a) [aider and abettor] (“Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.”), and 18 U.S.C. § 371 [conspiracy] (making it an offense for “two or more persons [to] conspire either to commit any offense against the United States, or to defraud the United States”). United States v. Feola, 420 U.S. 671, 95 S.Ct. 1255, 43 L.Ed.2d 541 (1975), illustrates the significance of this distinction. In Feola, the Supreme Court determined that the federal conspiracy statute imposed no greater knowledge requirement on the conspirator than the knowledge requirement for the principal. In arriving at its conclusion, the Court relied first and foremost on the fact that “there is nothing on the face of the conspiracy statute that would seem to require that those agreeing to the assault have a greater degree of knowledge” than one convicted under the substantive statute. Id. at 687, 95 S.Ct. at 1265. Given the lack of statutory support to the contrary, and the dearth of case law suggesting otherwise, the Court determined that there was no basis for imposing a different degree of knowledge on the conspirator. As with the federal conspiracy statute, the federal statute governing aiders and abettors contains no knowledge requirement on the part of aiders and abettors independent of or in addition to that required in the underlying statute for the principal, and in fact treats the aider and abettor, like the conspirator, as a principal in all respects. Accordingly, for purposes of establishing knowledge, no distinction is drawn between the principal actors, the conspirators, and the aiders and abettors. By contrast, the accessory statute specifically requires that an accessory know that an offense against the United States has been committed, and thus imposes a knowledge requirement that is independent of and in addition to that required to establish guilt on the part of the offender who committed the primary offense. Indeed, as we have previously recognized, a defendant who is accused of being an accessory after the fact must be shown to have had actual knowledge of each element of the underlying offense. See United States v. Burnette, 698 F.2d 1038, 1052 (9th Cir.1983). In Burnette, we upheld the conviction of an accessory after the fact on the ground that “the jury was clearly instructed that [the defendant] must have had actual knowledge of each element of [the armed bank robbery statute], including knowledge of the use of a gun, in order to be guilty as an accessory after the fact to armed bank robbery.” B. Equally important, there is a critical difference between the nature of the crime of being an accessory after the fact and the nature of the crime of being either an aider and abettor or a conspirator. One who acts as an accessory after the fact does not participate in the commission of the primary offense. Instead, an accessory is one who provides assistance to the offender by helping him to avoid apprehension or prosecution after he has already committed an offense. Accordingly, an accessory does not incur liability as a principal. See United States v. Innie, 7 F.3d 840, 851 (9th Cir.1993) (underscoring the' fact that “an accessory after the fact is not liable as a principal”). For this reason, the offense of accessory after the fact is considered a far less serious offense than the primary offense, and the accessory, who has not played a role in the actual commission of an offense, is considered far less culpable than one who has participated in the commission of the offense. In fact, the accessory after the fact statute specifically limits the punishment for that offense to no more than half of the punishment prescribed for the primary offense. 18 U.S.C. § 3; see also U.S.S.G. § 2X3.1 (establishing the offense level for the crime of accessory after the fact). The contrary is true with respect to both the conspiracy and aiding and abetting offenses, which derive their elements solely from the underlying offense, impose liability on the conspirator and aider and abettor as though they were principals, and provide for the same punishment for conspirators and aiders and abettors as for principals. Further, while it makes sense to impose the same mens rea requirements on conspirators and aiders and abettors as on the principal actors because they are all participating in the commission of the same offense, such logic is not applicable to an accessory after the fact, who is committing a completely different crime that occurs following the commission of the primary offense. The crime of accessory commences after the primary crime has been committed and it consists of “receiv[ing], relievfing], eomfort[ing] or assist[ing] the offender in order to hinder or prevent his apprehension, trial or punishment.” 18 U.S.C. § 3. When considering the accessory after the fact statute, we simply cannot rely on the law that has developed around either aiding and abetting or conspiracy. Instead, we must construe that statute on its own, in light of general principles of statutory construction and, more 'important, in light of its particular language. A natural reading of the language — “knowing that an offense against the United States has been committed” — inevitably leads to the conclusion that, at the very least, an accessory after the fact must be aware of conduct on the part of the offender that satisfies the essential elements of a particular offense against the United States. II. Having decided that the accessory after the fact statute requires the government to establish that the defendant was aware of the facts that constitute the essential elements of the offender’s crime, we turn to the question whether the government met its burden with respect to Graves. Moving on from its fallacious basic argument that it need merely prove knowledge of possession of a weapon and nothing more (the level of knowledge required for the felon-offender and the aider and abettor), the government argues that Graves could be convicted if he knew that Prince possessed the gun “unlawfully.” Aside from the fact that Graves was neither charged with nor prosecuted for being an accessory to an offender guilty of “unlawful possession,” the offender must have committed an offense against the United States, and unlawful possession is not such an offense. In fact, many unlawful possession offenses are state-law, not federal-law, crimes. See, e.g., Cal.Penal Code § 626.9(b) (possession of a firearm in a gun-free school zone); § 12028(a) (carrying a concealed firearm); § 12031(a)(1) (carrying a loaded firearm in public); § 12031(a)(2)(G) (“A person who takes a firearm without the permission of the owner or without the permission of the person who has custody of the firearm does not have lawful possession of the firearm.”). Thus, proving “unlawful” possession would not prove a federal offense to which Graves could have been an accessory after the fact. The evidence at trial did not, of course, support a finding that Graves knew Prince was a felon in possession. The only evidence that suggested that Graves knew Prince’s possession was even “unlawful” was the fact that Graves had disposed of the gun in the trash can and that he tried to help Prince escape. Because Graves had observed Prince brandishing the gun at the party, an obviously unlawful act, and knew that Prince had been arrested for that conduct, the only reasonable inference is that Graves acted in order to help Prince avoid prosecution for the offense he witnessed. As noted earlier, the judge specifically told the jury that they did not need to find that Graves knew of Prince’s prior felony and that they could convict him as an accessory after the fact as long as they found he knew Prince possessed the gun “unlawfully.” Most important of all, however, there is absolutely no evidence that Graves knew Prince was a felon, and the government did not try to establish such knowledge on his part. In sum, the government failed to present any evidence to support a finding that Graves acted “knowing that an offense against the United States ha[d] been committed,” and consequently failed to prove beyond a reasonable doubt the essential elements of the offense of being an accessory after the fact. Accordingly, Graves’s conviction must be reversed for insufficiency of the evidence. Conclusion Because the government introduced no evidence from which the jury could reasonably have inferred that Graves knew of Prince’s prior felony, there was insufficient evidence to support Graves’s conviction of being an accessory after the fact to the offense of felon in possession of a firearm. We reverse Graves’s conviction on this count and remand to the district court for a recalculation of the proper sentence as to the aiding and abetting count. REVERSED and REMANDED. MANDATE SHALL ISSUE FORTHWITH. . Shawn Prince, "the offender" for purposes of this opinion, appealed his own conviction on two counts. We dispose of his appeal in a separate unpublished disposition. . There are several other firearms-related crimes that are made federal offenses in § 922(g) in addition to felon in possession. The government has not argued that it proved, sought to prove, or could, under the indictment, have sought to prove that Prince committed any firearm offense other than felon in possession. The government argues only that it proved what it needed to prove in order to sustain a conviction on the charge of accessory after the fact to the crime of felon in possession, notwithstanding the absence of any evidence that Graves knew of Prince's felon status. . Although we acknowledge that Canon decided the question whether an aider and abettor is required to know of the principal's status as a felon, we have serious reservations regarding the soundness of that determination. In particular, we note that the decision contains no analysis in support of its conclusion, but rather in one con-clusory sentence simply points to United States v. Sherbondy, 865 F.2d 996 (9th Cir.1988) as authority. Sherbondy, however, was strictly concerned with whether the principal must have knowledge of the jurisdictional element of § 922(g). Nevertheless, Canon is consistent with the general rule that the knowledge of an aider and abettor need be no greater than the knowledge of the principal. See discussion infra Part 1(A). And our failure in Canon to make what would appear to be a logical exception in a case in which a principal is presumed to have knowledge of his own status but there is no reason an aider and abettor should be presumed to' have such knowledge, does not relieve us of the obligation to follow its dictates. . At the time the Supreme Court decided Feola, title 18 U.S.C. § 371 provided: If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined not more than $ 10,000 or imprisoned not more than five years, or both. Although the statute has since been amended, it remains substantively unchanged.
356595-15114	TJOFLAT, Circuit Judge: The United States appeals from an order of the district court, entered pursuant to Fed.R.Crim.P. 16(d)(2), suppressing certain post-arrest statements made by the defendants to a federal agent because the prosecutor failed to provide defense counsel with the substance of the statements until three days prior to trial. Concluding that the district court misconstrued the scope of its authority to remedy a party’s delayed compliance with a Rule 16 discovery order and that a less severe sanction would have achieved the result the court contemplated in entering the order, we reverse. I. This is a drug smuggling case. It began on Sunday, November 20, 1983, when the U.S. Coast Guard boarded the fishing vessel Goloson off the southeast coast of Florida and found 20,000 pounds of marijuana in a secret compartment in the vessel’s hold, adjacent to its fuel tanks and the engine room. The Goloson had a crew of five, all Honduran nationals. They are the defendants in this case: Martinez-Perez, the ship’s captain, Fuentes-Ramos, the engineer, and Euceda-Hernandez, Augusto Erazo, and Rodrigues-Barahona, the seamen. After discovering the marijuana, the Coast Guard arrested the crew and took the Goloson to Key West, Florida. There, the five crew members, after receiving Miranda cautions, made the statements the district court suppressed. A Coast Guard officer, Lt. Commander J.L. Sether, interrogated the crewmen. They told Sether conflicting stories. According to the captain, he and the others had been hired by the Goloson’s owners to take the vessel from Raotaan, Honduras to Miami, Florida. They left Raotaan on Saturday morning, November 19, and had been at sea for about one day when the Coast Guard boarded their vessel. He claimed to have no knowledge of the cargo of marijuana or the secret compartment in which it was stowed. When asked why the vessel was off course, the captain said that he had headed the vessel east to fish on the Misteriosa Banks. The captain merely shrugged his shoulders when Officer Seth-er pointed out that the boat had no fishing gear. The crewmen varied markedly as to how long they had been at sea. As noted, the captain said they had left Raotaan on November 19 and had been at sea for a little over one day. One crewman said the Goloson had been at sea for three days, another six days. Five of the crewmen said they had come straight from Honduras, with no stops. A sixth said that they had stopped in Columbia, South America. His passport, which he had obtained just for the voyage to the United States, had been stamped in Columbia on October 31, indicating that the voyage had begun over three weeks prior to the Goloson’s seizure. Officer Sether questioned the crew about the hatch covers over the fuel tanks, which opened to the secret marijuana compartment, inquiring in particular as to why the gaskets and wrenches that fit the covers were lying about the deck. None had lifted the hatch covers or could explain why the gaskets and wrenches were lying about. The engineer, the crew member responsible for the fuel and the condition of the tanks, said that he never sounded the tanks, adding that he could ascertain the fuel level from the engine room by using a “visual tube.” Before he was told that the Coast Guardsmen had discovered the secret compartment and the marijuana, the engineer volunteered that he did not know that the vessel had been carrying marijuana in a secret compartment next to the engine room. After he finished questioning the Goloson ’s crew, Officer Sether prepared a report of the boarding and seizure of the Goloson and the crew’s arrest and submitted that report and various items of evidence taken from the Goloson to the U.S. Customs office in Key West, Florida. On December 5, 1983, the defendants were indicted, in two counts, for knowingly and intentionally possessing marijuana, with intent to distribute, in violation of 21 U.S.C. § 955a(a) (1982), and for conspiring to commit such offense, in violation of 21 U.S.C. § 955c (1982). The defendants were promptly arraigned and pled not guilty to both counts. Following their arraignment the magistrate entered a standing discovery order requiring the Government to produce, among other things, “[t]he substance of any oral statement made by the defendant before or after his arrest in response to interrogation by a then known to be government agent which the government intends to offer in evidence at trial.” It is not disputed that the defendants’ oral responses to Officer Sether’s questions fell within this category and that the prosecutor was obliged to produce them. The prosecutor had no knowledge of the defendants’ post-arrest interrogation, however. In responding to the magistrate’s discovery order on December 19, therefore, he stated that “[t]here [were] no oral statements] made by the defendants] before or after arrest in response to interrogation” by any government agent that the Government intended to offer at trial. Defense counsel, apparently questioning the accuracy of the prosecutor’s response, moved the court, on December 29, to order the Government to produce all “oral, written, or recorded statements” made by any defendant. On Friday, January 20, 1984, three days before the defendants’ trial was scheduled to begin, the magistrate granted their motion, ordering the Government to produce the defendants’ statements as required by “the standing discovery order.” Meanwhile, on January 6 defense counsel convened in Key West, Florida, to examine the evidence the Coast Guard had turned over to the U.S. Customs Service. They examined everything except Lt. Commander Sether’s report of the boarding and seizure of the Goloson, the marijuana contraband, and the hatch covers from above the secret compartment in the vessel’s hold. Counsel chose not to examine the hatch covers because they had photographs of them. On Friday, January 20, as he was preparing for trial, the prosecutor met with the Coast Guard officers, including Lt. Commander Sether, who had arrested the defendants and seized the marijuana. While he was interviewing Sether, he learned for the first time that Sether had conducted a post-arrest interrogation of the defendants and thereafter made a written summary thereof. Immediately after examining the summary, the prosecutor called one of the defense attorneys in the case, advised him of the summary’s existence and the gist of its contents, and asked him to notify the other defense counsel. None of the defense attorneys made any attempt to obtain a copy of Officer Sether’s summary; nor did any of them inform the prosecutor that he would move the court to suppress his client’s statements to Sether because of the prosecutor’s delay in discovering them. On Monday morning, January 23, as the parties assembled to select the jury to try the case, the prosecutor delivered a copy of Officer Sether’s summary to each defense attorney. The whole day was spent impaneling the jury. On Tuesday, January 24, before the jury was sworn, the defendants jointly filed a motion to suppress their oral statements to Officer Sether on the ground that Sether, in questioning them, had violated their constitutional rights. The court recessed the trial to hear argument on the motion. The defense counsel began by advising the court that the prosecutor had not made them aware of the defendants’ statements to Officer Sether until the previous Friday, and they urged the court to suppress the statements on the ground that such belated discovery had violated the court’s standing discovery order. They represented that, as a result of the delay, their clients had suffered “irrevocable harm” in the form of the additional investigation counsel would have to conduct to be adequately prepared for trial. Specifically, counsel would have to inspect the gaskets and wrenches Sether referred to in questioning the Goloson’s engineer, because those items were not in the photographs they had examined in Key West on January 6 when the Government made its tangible evidence available for the defense’s inspection. Counsel also represented that they wanted to inspect the “visual tube” the engineer said he used to determine the fuel level in the vessel’s tanks. In addition to their prejudice argument, counsel suggested that the court should suppress the defendants’ statements as a means of letting the U.S. Attorney’s office know that its practice of delaying compliance with the court’s standing discovery orders in criminal cases would no longer be tolerated. Responding to defense counsel’s argument, the prosecutor said that he had not known of the existence of Officer Sether’s summary because it had not been part of the Customs case agent’s file. The case agent's file, the prosecutor explained, normally contained all of the Government’s discovery. The file in this ease, he represented, contained Officer Sether’s report describing the Coast Guard’s boarding and search of the Goloson and seizure of the contraband but nothing at all indicating that the defendants had been interrogated following their arrest; accordingly, he had no reason to suspect that the file was not complete. At this point the court ruled from the bench, ordering the defendants' statements suppressed. The court stated: “I hate to do it, but I don’t see any alternative. I think the government has got to find out what its got ... and it hasn’t been done in this case.” The court added: “[I]f [these statements] make any difference in the way the defendant should investigate or proceed in his defense it seems to me we have to exclude them.” The prosecutor then asked the court if it would consider a brief continuance as an alternative to suppressing the statements. He pointed out that the suppression remedy, which the court should order only as a last resort, was not necessary since any possible prejudice to the defendants could be cured by á short recess. The prosecutor also pointed out that the jury had not yet been sworn and that the disruption of the judicial process would thus be minimal. Finally, he noted that, in this case, the Government would be required to establish that the defendants had knowledge of the Goloson’s cargo of contraband, that it had no direct evidence of such, and that it needed every piece of circumstantial evidence available, including the defendants’ statements, to prove its case. The defense did not deny that a brief recess would cure any prejudice the defendants may have suffered. Nonetheless, the court, obviously ignoring the prejudice issue, replied that it would stand by its earlier decision to suppress the evidence because it had before it a “clear violation of the discovery order.” This appeal promptly followed. II. Fed.R.Crim.P. 16(a)(1)(A) requires the Government to produce, upon a defendant’s request, “the substance of any oral statement which the government intends to offer in evidence at the trial made by the defendant ... in response to interrogation by ... a government agent.” The magistrate’s standing discovery order, entered at the time defendants were arraigned, enforced this provision by requiring the Government to produce any such statements known to it or which, through the exercise of due diligence, could be ascertained. The trial judge found that the Government had failed to comply with this order by not discovering and divulging the contents of the statements defendants made to Officer Sether until the Friday before trial. When a party fails to comply with a Rule 16 discovery order, “the court may order such party to permit the [required] discovery ..., grant a continuance, or prohibit the party from introducing evidence not disclosed, or it may enter such order as it deems just under the circumstances.” Fed. R.Crim.P. 16(d)(2). Here, the trial judge chose the third option, prohibiting the Government from introducing into evidence, through Lt. Commander Sether’s testimony, the statements the defendants had made. A district court’s decision to impose a Rule 16(d)(2) sanction for the violation of a discovery order, and thus its choice of sanction, is a matter committed to the court’s sound discretion. Absent an abuse of discretion, the court’s decision will not be disturbed on appeal. United States v. Burkhalter, 735 F.2d 1327, 1329 (11th Cir.1984); United States v. Campagnuolo, 592 F.2d 852, 858 (5th Cir.1979). In exercising its discretion, the district court must weigh several factors, and, if it decides a sanction is in order, should fashion “the least severe sanction that will accomplish the desired result — prompt and full compliance with the court’s discovery orders.” United States v. Sarcinelli, 667 F.2d 5, 7 (5th Cir. Unit B 1982). See also Burkhalter, 735 F.2d at 1329; United States v. Gee, 695 F.2d 1165, 1169 (9th Cir.1983) (citing Sarcinelli, supra). Among the factors the court must weigh are the reasons for the Government’s delay in affording the required discovery, the extent of prejudice, if any, the defendant has suffered because of the delay, and the feasibility of curing such prejudice by granting a continuance or, if the jury has been sworn and the trial has begun, a recess. Burkhalter, 735 F.2d at 1329; United States v. Hartley, 678 F.2d 961, 977 (11th Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 815, 74 L.Ed.2d 1014 and 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027 (1983); Sarcinelli, 667 F.2d at 6-7. The district court failed to consider and weigh these factors in imposing the sanction in this case. If it had given them appropriate consideration and weight, the court would have concluded that a brief continuance would have allowed the defendants complete discovery without undue prejudice. The court suppressed the defendants’ statements because of the prosecutor’s conduct and because defense counsel represented that they would have to do some additional investigatory work before proceeding to trial. In the court’s view, that such investigation might be completed in a matter of hours was of no moment; the fact remained that the Government had committed “a clear violation of the discovery order and defense counsel would have to do some extra work.” The presence of a clear violation of a discovery order does not excuse a trial judge from weighing the factors cited above and imposing the least severe, but effective, sanction. The purpose of requiring the Government to disclose evidence is to promote “the fair and efficient administration of criminal justice by providing the defendant with enough information to make an informed decision as to plea; by minimizing the undesirable effect of surprise at trial; and by otherwise contributing to an accurate determination of the issue of guilt or innocence.” Fed.R. Crim.P. 16 advisory committee note. By suppressing the Government’s evidence rather than granting a continuance or recess, a trial judge may achieve a speedier resolution to a criminal case and reduce his docket, but he does so at the expense of sacrificing the fair administration of justice and the accurate determination of guilt and innocence.
6459945-23198	OPINION REGARDING VALIDITY OF ARTISAN’S LIEN JAMES D. GREGG, Bankruptcy Judge. I.ISSUE Under Michigan law, is continuous possession required to maintain a valid and enforceable statutory artisan’s lien? II.JURISDICTION The court has jurisdiction over this adversary proceeding. 28 U.S.C. § 1384 and § 157(b)(1). This dispute is a core proceeding under 28 U.S.C. § 157(b)(2)(C), (E), (K), and (0). This opinion constitutes the court’s findings of fact and conclusions of law. Fed. R.BaNKR.P. 7052. III.PROCEDURAL BACKGROUND On July 17, 1995, Steven R. Lott (“Debt- or”) filed a voluntary petition for relief under chapter 13 of the Bankruptcy Code. On October 10, 1995, the Debtor filed a “Motion for Turnover Property or, in the Alternative, to Determine Secured Status” (sic). The Debtor requested a court determination that a certain John Deere 8440 Tractor, No. 8002393 (“tractor”), should be turned over to him by Heritage Equipment Co. (“Heritage”). The Debtor also requested a court determination that Heritage is an unsecured creditor who holds a “valueless lien”. (Dkt. No. 36.) On November 14, 1995, Heritage filed an Objection to Confirmation of Debtor’s Chapter 13 Plan. (Dkt. No. 58.) Heritage asserted it holds a possessory statutory artisan’s lien under Michigan law and the Debtor’s plan did not properly treat it as a secured creditor who held an interest in the tractor. Heritage also opposed the Debtor’s requested turnover of the tractor and filed its Brief in Opposition to Motion of Debtor for Turnover. (Dkt. No. 57.) At a hearing on December 12, 1995, the court ordered a turnover of the tractor by Heritage to the Debtor based upon certain conditions. The court then signed an Order Regarding Possession Pending Final Determination. (Dkt. No. 67.) Aso at the hearing, the parties submitted a consent “Order Regarding Procedure and Joinder Regarding [the tractor issue].” (Dkt. No. 66.) On December 15,1995, the Debtor filed an Amended Motion for Turnover of Property or, in the Aternative, to Determine Secured Status. (Dkt. No. 68.) In the amended motion, the Debtor alleged John Deere Credit and Dart National Bank each held perfected security -interests in the tractor and requested damages from Heritage because “of the deprivation of the subject tractor.” The Debtor also filed a Memorandum in Support of Motion of Debtor for Turnover of Property. (Dkt. No. 69.) On-December 19, 1995, the Debtor filed a Second Amended Chapter 13 Plan. (Dkt. No. 74.) The amended plan provided that if Heritage is determined to be a secured creditor, it would be paid its lien amount from the proceeds of the sale of the tractor. To the extent Heritage is not a secured creditor, it would receive a distribution on its allowed claim as an unsecured creditor. On December 19, 1995, without objection by any party in interest, including Heritage, the court confirmed the amended chapter 13 plan. (Dkt. No. 77.) On February 14,1996, an evidentiary hearing took place regarding the dispute. At the hearing, the court heard testimony from the Debtor and from a representative of Heritage. Exhibits were admitted into evidence. The court took the matter under advisement and, as requested by the parties, permitted opposing counsel to file written closing arguments and post-hearing memoranda. Also at the hearing, the parties submitted written stipulated facts which addressed some of the issues and a stipulation whereby Dart National Bank agreed its security interest would be subordinate to any valid artisan’s hen held by Heritage. (Dkt. Nos. 86 and 87.) Subsequently, the parties each filed written closing arguments and additional legal memoranda. (Dkt. Nos. 93, 102, 105, and 107.) TV. FACTS The Debtor is the owner of the tractor which is subject to a valid and perfected first priority security interest held by Deere Credit Services (“Deere”). Deere’s allowed secured claim on the tractor, as of the filing date, is $22,220.81 and the obligation bears interest at 8.9% per annum. (Trans, pp. 36-37.) The value of the tractor is between $29,500 and $31,000. (Trans, pp. 20 and 59; Stipulated Facts ¶ 15.) On May 17, 1994, Heritage picked up the tractor, with consent, from the Debtor’s farm, to perform repairs on the engine. Heritage completed an engine overhaul and, per an invoice dated August 2, 1994, billed the Debtor $7,322.36, which still remains unpaid. (Heritage Exh. A.) The invoice amount is subject to a time price differential of two percent per month until paid. After the initial repairs were completed, and without receiving any payment, Heritage delivered the tractor to the Debtor in August, 1994. Possession of the tractor was voluntarily and unconditionally relinquished by Heritage to the Debtor. The invoice does not indicate that Heritage claimed any artisan’s hen. At the time the tractor was delivered, there was no written or oral communication to the Debtor that Heritage claimed any hen on the tractor for the unpaid invoice. (Trans, pp. 22-23.) On May 15, 1995, at the Debtor’s request, Heritage again picked up the tractor, from the Debtor’s farm for warranty repairs on the engine. The repair bill for this work was $1,659.41 per an invoice dated June 17, 1995. (Heritage Exh. C.; Trans, pp. 32-33.) Heritage will not be reimbursed from Deere on a portion of the second repair unless the Debt- or first pays Heritage. (Trans, p. 35.) After Heritage again took possession of the tractor, it prepared a “Claim of Lien” which was sent to the Debtor, Deere, Dart National Bank, and Mason State Bank. This document claimed an artisan’s lien and stated the last repair work was conducted on August 2, 1994. The document asserted the lien amount owed was $8,640.32, which was the invoice amount of the first repair plus the then-accrued two percent per month time price differential. The repair of the tractor was subsequently completed on June 17, 1995. Heritage then refused to relinquish possession of the tractor until the prior invoice was paid. Because Heritage refused to release the tractor, the Debtor rented two tractors to bore plow, chisel plow, and operate a disc and soil finisher during May and June, 1995. (Trans, pp. 46-50.) A John Deere 8450 tractor was rented from the Debtor’s father for approximately 160 hours at $25 per hour with a total charge of $4,400.00. Another tractor was rented from Michigan CAT for $1,080.00. (Debtor’s Exh. A.) The total amount of tractor rental charges is $5,480.00. As of the chapter 13 filing date, Heritage still retained possession of the tractor. The tractor was released to the Debtor pursuant to a court order dated December 12, 1995, without prejudice to Heritage’s asserted artisan’s lien. V. DISCUSSION A. Does Heritage Hold an Artisan’s Lien? Heritage claims a lien on the tractor under the Michigan artisan’s lien statute. Property rights, including whether a valid artisan’s lien exists, are determined by state law unless a federal interest mandates a different result. Butner v. United States, 440 U.S. 48, 54-55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979); Matter of Delex Mgmt., 155 B.R. 161, 164 (Bankr.W.D.Mich.1993). In this proceeding, the court is called upon to decide the rather straightforward question of whether Heritage holds a Michigan statutory artisan’s lien which is cognizable in bankruptcy- Michigan law recognizes and permits the creation of an artisan’s lien as follows: When any person shall deliver to any mechanic, artizan [sic], or tradesman, any watch, clock, article of furniture or jewelry, implement, clothing or other article of value, to be altered, fitted or repaired, such mechanic, artizan [sic] or tradesman shall have a lien thereon for the just value of the labor and skill applied thereto by him, and may retain possession of the same until such charges are paid. Mioh.Comp.Laws Ann. § 570.186 (emphasis added). Michigan law permits enforcement of an artisan’s lien as follows: In either of the cases mentioned in the 2 preceding sections, if the owner of the property, materials, or stock so delivered, or the person entitled thereto shall not, when such article shall have been constructed, completed, altered, fitted, or repaired, or the time having expired for the keeping such stock, and the same being ready to be delivered to such oivner or other persons, and the charges thereon shall be due and payable, pay to such mechanic, artisan, tradesman, or other person the amount of such charges, the person having such lien may enforce the same as hereinafter provided: Provided, however, [ajny mechanic, artisan or tradesman who shall make, clean, alter or repair any article of personal property at the request of the owner or legal possessor of personal property shall have a lien on such property so made, cleaned, altered or repaired for his just and reasonable charges for work done, and material furnished, and may hold and retain possession of the same until such just and reasonable charges shall be paid, and in default of payment may foreclose said lien, as hereinafter provided. When any property upon which a mechanic, artisan, tradesman, or other person shall have a lien for unpaid charges under this act shall remain in possession of a mechanic, artisan, tradesman, or other person without payment and without proceeding at law in reference thereto, for a period of 9 months, such mechanic, artisan, tradesman, or other person may sell such property at public sale upon like notice and proceeding as in the case of a constable sale on execution. Thirty days before the date of said sale, such mechanic, artisan, tradesman or other person shall give notice of the time and place of said sale and the amount claimed, by depositing the same in the postoffiee with postage prepaid and registered and addressed to the last known address of the said owner or person who delivered said property to such mechanic, artisan, tradesman, or other person and which notice may be in substance as follows: [form of notice omitted] If such owner or other person in his behalf shall not pay the amount of such claim and charges before the advertised day of sale, said property shall thereupon be sold pursuant to said notice of sale, to the highest bidder, and said mechanic, artisan, tradesman or other person may become the purchaser. The proceeds of such sale shall be applied to the payment of said hen, costs and expenses, and the balance, if any, shall be paid to the city or township clerk of the city or township where such sale takes place, for the benefit of such owner, and notice of such deposit shall be sent to him by registered mail. Mich.Comp.Laws Ann. § 570.187 (emphasis added). The quoted statutory language is somewhat cumbersome and cryptic. The statute does not state in a direct manner that continuous possession is required to maintain an artisan’s hen that may be enforced under the statute. Heritage argues that continuous possession is not required and when it reobtains possession of the tractor for the second repair it could then enforce a hen for costs billed for the first repair. The Debtor argues that this is impermissible under the law. In any case involving a question of statutory interpretation, the first step is to closely examine the language of the statute itself. See generally, Couture v. General Motors Corp., 125 Mich.App. 174, 335 N.W.2d 668 (1983) (citing The Lamphere Schools v. Lamphere Federation of Teachers, 400 Mich. 104, 110, 252 N.W.2d 818 (1977)). The terms used in the statute should be given their plain and ordinary meaning, absent a legislative intent to the contrary. Id. Cf. Pioneer Investment Services v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380, 388-90, 113 S.Ct. 1489, 1495, 123 L.Ed.2d 74 (1993) (“Courts properly assume, absent sufficient indication to the contrary, that Congress intends the words in its enactments to carry their ordinary, contemporary, common meaning.”). After reading (and rereading) the partially obscure statutory language, one must conclude that continuous possession is required. The Michigan artisan’s hen statute permits Heritage to retain possession of the tractor “until such charges are paid.” Mioh.Comp. Laws Ann. § 570.186. The Michigan statute also provides Heritage shall have a hen on the tractor, to secure repayment of its first repair bill, and “may hold and retain possession of the same until such just and reasonable charges shall be paid, and in default of payment may foreclose said hen.” Mioh. CompLaws Ann. § 570.187 (emphasis added.). To enforce the artisan’s hen, the tractor “shah remain in the possession of a mechanic [i.e., Heritage] ... without pay ment ... for a period of 9 months.” Id. (emphasis added). The most natural reading of the statutory-provisions supports an interpretation that if possession does not “remain” with the mechanic, the artisan’s lien is lost. If the mechanic does not “hold and retain possession,” it cannot foreclose on its lien. The plain and ordinary meaning of the terms “remain” and “retain” as used in the statute strongly support the conclusion that continuous possession is required to enforce the lien. Once possession was relinquished by Heritage, there was no longer any lien on the tractor to secure repayment of its repair bill. This common sense reading of the statute is also consistent with common law origins and the legislative development of the Michigan artisan’s lien statute. In an effort to decipher the abstruse language of the current statute, the court has examined all of the prior versions of the Michigan statute. The first artisan’s lien statute appears to have been passed in 1846. Mioh.Rev.Stat., tit. XXIV, ch. 126, §§ 36-41 (1846). The language in the 1846 statute is identical to current statutory provisions pertaining to the creation of an artisan’s lien. Compare MiCH.Rev.Stat., tit. XXIV, chap. 126, § 36 (1846) with Mioh.Comp.Laws Ann. § 670.186. However, the lien enforcement mechanism differs. Under the original 1846 statute, a lawsuit before the justice of the peace, a judgment (whether in personam or by attachment), and execution thereon was required to enforce the lien. Id. §§ 37-41. As discussed below, this provision has been amended and it is no longer necessary to file a separate lawsuit in order to enforce the lien. See infra. In 1857, when the Michigan legislature compiled and arranged its statutes, the artisan’s lien statute was not changed. It was identical to the 1846 version regarding both lien creation and lien enforcement. Mich. Comp.Laws, Vol. II, ch. 154, §§ 36-41 (1857). In 1871, the artisan’s lien statute was again recodified without any changes. Mich.Comp. Laws, Vol. II, ch. 215, §§ 36-41 (1871). By 1890, there were still no changes to the statute. Mioh.Comp.Laws, tit. XXXII, How. §§ 8401-8405 (Callaghan & Co. 1890). The statutory language remained intact through the recodifications of 1897 and 1915. Mich. Comp.Laws, Vol. Ill, §§ 10747-10752 (1897); Mioh.Comp.Laws, Vol. Ill, eh. 244, §§ 14832-14837 (1915). In 1929, the legislature modified the artisan’s lien statute. The lien creation language provision remained identical to the first codification in 1846. Mioh.Comp.Laws § 13187 (1929). However, the lien enforcement mechanism was consolidated into a single statutory section. Id. § 13188. A lawsuit to enforce an artisan’s lien was no longer required. Rather, a repairer who retained possession of the property was: (1) permitted to continue in possession until the reasonable charges were paid; (2) after nine months, permitted to sell the property in the same manner as an execution sale, provided that notice was given to the owner 30 days prior to the sale pursuant to a requisite statutory notice form; (3) authorized the sale of the property to the highest bidder, whether a third person or the artisan lienholder; (4) allowed to apply the proceeds of the sale to pay the lien amount, including any costs and expenses; and (5) required to pay any surplus to the clerk of the applicable local government entity, for the benefit of the owner, with notice given to the owner by registered mail. Id. In 1948 and 1970, when the Michigan statutes were again recodified, there were no changes made to the artisan’s lien statute. Mich.Comp.Laws §§ 570.186, 570.187 (1948); MiCH.Comp.Laws Ann. §§ 570.186, 570.187 (1970) . Since the 1970 compilation, there have been no changes to the artisan’s lien statute in Michigan. Thus, a historical review of all of Michigan’s artisan’s lien statutes shows that while the enforcement mechanisms have changed, there have been no changes to the initial lien creation provision from the language originally promulgated in 1846. In the 1846 statute, and for that matter all other subsequent statutes, there is no statement of legislative intent. In the absence of any legislative history, the court must look to general principles of statutory interpretation to determine the intent of the legislature and the meaning of the statute. In Michigan, statutes must be read in conjunction with common law. The Michigan courts have consistently recognized the importance of common law in statutory interpretations. According to the Michigan Supreme Court: In enacting statutes, the Legislature recognizes that courts will apply common-law rules to resolve matters that are not specifically addressed in the statutory provision. “[W]ords and phrases that have acquired a unique meaning at common law are interpreted as having the same meaning when used in statutes dealing with the same subject” matter as that with which they were associated at the common law. People v. Reeves, 448 Mich. 1, 8, 528 N.W.2d 160, 164 (1995) (citations omitted). This view of statutory interpretation is echoed by the Michigan Court of Appeals: We recognize our obligation to read the language of the arbitration statute in light of previously established rules of common law. We acknowledge that well-settled common-law principles are not to be abolished by implication; an ambiguous statute that contravenes common law must be interpreted so as to make the least change in the common law. Dick v. Dick, 210 Mich.App. 576, 585, 534 N.W.2d 185, 190 (1995) (citations omitted). Legislative amendment of common law is not lightly presumed nor will statutes be extended by implication to abrogate established rules of common law. Hasty v. Broughton, 133 Mich.App. 107, 113, 348 N.W.2d 299, 302 (1984). Because there is no intention shown by the Michigan legislature to change prior common law, this court believes the statutes pertaining to creation of artisan’s liens in the acts of 1846, 1857, 1871, 1890, 1897, 1915, 1929, 1948 and 1970 all constitute nothing more than a codification of prior common law. What does prior common law, and therefore the current statute, require regarding possession? The Michigan Supreme Court supplies the answer. First after stating the burden of proving an artisan’s lien is upon the one asserting it, the court said: [The artisan’s lien claimant] cannot successfully claim a common-law lien after the property was unconditionally surrendered- If a common-law lien exists in this State it is lost upon an unconditional surrender of the property. If the [lien claimant] ever had a common-law lien, it was lost upon surrender of the property. Joy Oil Co. v. Fruehauf Trailer Co., 319 Mich. 277, 283, 29 N.W.2d 691, 693 (1947). In Nickell v. Lambrecht, 29 Mich.App. 191, 185 N.W.2d 155, 8 U.C.C.Rep.Serv. 1381 (1970), the Michigan Court of Appeals stated that both the common law artisan’s lien and the statutory artisan’s lien continue to coexist. This court agrees that these two lien creation provisions are coterminous — it does not matter whether the lien claimant’s theory is under common law or pursuant to statute. See also Fidelity & Deposit Co. v. Johnson, 275 F. 112, 114 (E.D.Mich.1921) (the artisan’s lien claimant “having voluntarily parted with his possession of the property, which he had been holding under claim of possessory liens thereon, thereby waived and lost such lien”); Arthur P. Boynton, Comment, Extent to Which Common-Law Artisan’s Lien Has Been Supplanted By Statute, 37 Mich.Law Rev. 273, 274 n. 9 (1938) (the scope of the Michigan artisan’s lien statute is coextensive with common law except that a more effective enforcement thereof has been provided by the statute (discussing the 1929 Michigan statute)). An interpretation of the artisan’s lien statute which requires continuous possession is also consistent with the general policy against “secret liens.” See generally, United States v. Speers, 382 U.S. 266, 275, 86 S.Ct. 411, 416-17, 15 L.Ed.2d 314 (1965) (public policy militates against enforcement of unrecorded liens). Cf. Ray v. Sec. Mutual Finance Corp. (In re Arnett), 731 F.2d 358, 363 (6th Cir.1984) (“One of the principal purposes of the Bankruptcy Reform Act is to discourage the creation of ‘secret liens’_”). If the artisan’s lien for the initial repair work was to remain in effect even after Heritage had relinquished possession of the tractor, then Heritage would in effect hold a “secret lien.” In contrast, if Heritage had retained possession of the tractor, then subsequent creditors would have constructive notice that Heritage may be asserting a lien for work performed on the tractor. Thus, the continuous possession requirement provides a form of notice and thereby alleviates some of the concerns associated with unrecorded secret liens. This court holds that, under Michigan law, once Heritage unconditionally and voluntarily released possession of the tractor to the Debtor, it lost its artisan’s lien, both common law and statutory, regarding its first repair bill on the tractor. However, when Heritage again possessed the tractor to make the second repairs, a new and separate common law and statutory artisan’s lien arose. Because Heritage did not relinquish possession of the tractor after completion of the second repairs, it holds a valid and enforceable artisan’s lien for the amount of the reasonable charges for the second repair bill, in the amount of $1,659.41. As of the chapter 13 filing date, Heritage held a valid artisan’s lien, albeit in a lesser amount than asserted, on the Debtor’s tractor. B. What is the Priority of Heritage’s Artisan’s Lien? The Uniform Commercial Code, as adopted in Michigan, answers the priority question as follows: When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise. MiCH.Comp.Laws Ann. § 440.9310. With regard to the second repair bill, Heritage holds a common law artisan’s lien which is entitled to priority over the other secured creditors, i.e., Deere and Dart National Bank. Heritage also holds a statutory artisan’s lien which is entitled to priority over the secured creditors inasmuch as the artisan’s Hen statute does not subordinate Heritage’s Hen. C. Should Heritage’s Lien be Avoided and Damages Awarded to the Debtor ?
17507-12943	PER CURIAM. This is the third appeal in this case. The issue in the present appeal is whether appellant Elizabeth Hall is entitled to attorney fees as a prevailing plaintiff against the United States and officials of the Internal Revenue Service. For the reasons that follow, we affirm the district court’s denial of attorney fees. I. In Hall v. United States, 493 F.2d 1211 (6th Cir.1974 (per curiam,), aff'd sub nom. Laing v. United States, 423 U.S. 161, 96 S.Ct. 473, 46 L.Ed.2d 416 (1976), this court affirmed the district court’s entry of a preliminary injunction restraining the Internal Revenue Service from levying appellant’s automobile and bank account to satisfy an assessment. The District Director of the IRS notified appellant that because she had been involved in illicit drug activities that would tend to prejudice collection of income tax for the period of January 1, 1973, through January 30, 1973, her taxable period was terminated as of January 31, 1973, and her income tax for that period was immediately due and payable. He demanded immediate payment of Fifty-Two Thou sand, Six Hundred Eighty and 25/100 Dollars ($52,680.25). There was no explanation of how this amount was computed. The District Director acted under the authority of section 6851 of the Internal Revenue Code. The district court and this court held that the case was controlled by Rambo v. United States, 358 F.Supp. 1021 (W.D.Ky.1972), affd, 492 F.2d 1060 (6th Cir.1974), cert. denied, 423 U.S. 1091, 96 S.Ct. 886, 47 L.Ed.2d 103 (1976). This court held the procedures for the assessment of a deficiency and demand for payment were governed by section 6861 of the Internal Revenue Code. Because the IRS had not given appellant a deficiency notice within sixty (60) days of the assessment, which would have given her access to the tax court, the injunction was upheld. 493 F.2d at 1212. The IRS petitioned for certiorari to the Supreme Court, which affirmed. Laing v. United States, 423 U.S. 161, 96 S.Ct. 473, 46 L.Ed.2d 416 (1976). The Supreme Court held that when a taxable period is terminated pursuant to 28 U.S.C. § 6861, the unreported tax due is a “deficiency” as defined in 26 U.S.C. § 6211(a) and the assessment of that deficiency is subject to the notification requirement of 26 U.S.C. § 6861. 423 U.S. at 164, 96 S.Ct. at 476. The Supreme Court opinion decided the issue solely by interpreting the tax code. It did not address due process considerations. See id. at 185-89, 96 S.Ct. at 486-88 (Brennan, J., concurring). Following the Supreme Court opinion, the district court undertook consideration of appellant’s claims for damages against the United States, District Director McHugh, another IRS official, Elmer Snider, and a state police officer, Donald Powers. The court had been holding these claims in abeyance pending resolution of the injunction issue on appeal. On summary judgment, the district court dismissed all claims for damages on various grounds, and this court affirmed. Hall v. United States, 704 F.2d 246 (6th Cir.), cert. denied, — U.S.-, 104 S.Ct. 508, 78 L.Ed.2d 698 (1983). Appellant alleged a conspiracy between federal officials and the state police officer to deprive her of due process of law. She brought the action under 42 U.S.C. §§ 1983, 1985, and 1986. This court affirmed the district court’s holding that there was insufficient evidence of conspiracy to present a jury issue on the section 1985(3) claim. 704 F.2d at 252. This court also held that no claim lay against the state police officer because appellant could point to no wrongdoing on his part. Id. The court then recognized that the remaining claims were against federal officials who acted under color of federal law; therefore, the claims could not be pursued under section 1983 and were construed as Bivens claims. Id. at 249 n. 1. See Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). The Hall II court proceeded to hold that the IRS officials established that they were entitled to qualified immunity from suits for damages because they had acted in good faith. 704 F.2d at 249-50. The court, relying on Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), held the IRS officials were entitled to qualified immunity on motion for summary judgment because they had not violated any clearly established constitutional or statutory rights of which a reasonable person should have known. This court held: As noted by the Supreme Court in disposing of the injunction issue, it was uncertain whether the IRS, when assessing and collecting the unreported tax due after the termination of a taxpayer’s period, must follow the procedures mandated by 26 U.S.C. § 6861 for the assessment and collection of a deficiency whose collection is in jeopardy. See Laing, supra, 428 U.S. at 166-67 [96 S.Ct. at 477-78]. 704 F.2d at 250. The court stressed that the IRS officials could not reasonably have been expected to know of the proper procedure when it had not been declared at the time they acted. II. After the district court had disposed of appellant’s damages claims and her appeal to this court was pending, she moved for attorney fees for her successful injunction claim. In her motion for attorney fees, filed July 13, 1982, appellant relied exclusively on the fee provision in 42 U.S.C. § 1988, which authorizes attorney fees for prevailing plaintiffs in specified civil rights actions including 42 U.S.C. §§ 1983 and 1985. The district court, in an order entered October 6, 1982, denied the fee application because “the plaintiff’s suit was not successful as an enforcement action” under any of the specified statutes listed in section 1988. The court stressed that the injunction issued because of the government’s failure to file a deficiency notice within sixty (60) days after a jeopardy assessment as required by 26 U.S.C. § 6861(b). It also noted that the injunction was not based on section 1983, which applies to individuals acting under color of state law, because the action was against federal officials acting under color of federal law. The court again emphasized this point in its order denying appellant’s motion to reconsider. At no time did the parties or the court address the availability of attorney fees under the provisions of the Equal Access to Justice Act, 28 U.S.C. § 2412. III. We conclude that appellant is not entitled to attorney fees under the provisions of 42 U.S.C. § 1988. Section 1988 provides in part: In any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92-318, or title VI of the Civil Rights Act of 1964, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs. The injunction claim upon which appellant prevailed in previous litigation was not based on any of the statutes specified in section 1988. Section 1983, upon which appellant relies, provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia. The injunction that appellant obtained restrained not action taken under color of state law, but action by officials of the IRS taken under color of federal law. Although appellant originally invoked jurisdiction under section 1983 because she alleged involvement by a state police officer in the seizures, her case concerned actions of officials of the IRS acting under authority they erroneously presumed to exist in the Internal Revenue Code. The prior decisions of this court and the Supreme Court, which are the law of the case, construe the injunction claim as an action concerning the Internal Revenue Code. The levying of property, therefore, was taken under color of federal law. Moreover, the court in Hall II held conclusively that appellant had no cause of action under 42 U.S.C. § 1985 or against any state official. This court construed the claims for damages as Bivens claims alleging that federal officials violated the United States Constitution. Section 1988 does not provide for awards of attorney fees in Bivens actions. Regardless of whether the injunction issue prevailed as a matter of federal statutory or constitutional law, the seizures were taken under color of federal law. The absence of action “under color of state law” precludes application of section 1983. The fee provision available for sections 1983 and 1985 claims simply is not available to appellant. Appellant notes that at the time the Attorney Fees Awards Act (the section 1988 amendment) was enacted in 1976, the statute dealing with award of costs against the United States, 28 U.S.C. § 2412, specifically excluded recovery of fees from the United States. She maintains that the Equal Access to Justice Act, which amended section 2412 in 1980, removed the impediment to awards of attorney fees in actions against the United States. We disagree. Two provisions of the Equal Access to Justice Act guide our analysis. The first, 28 U.S.C. § 2412(b), provides that the United States shall be liable to prevailing plaintiffs for costs and attorney fees in any action brought against the United States, or an agency or official of the United States “to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award.” The second provision, 28 U.S.C. § 2412(d)(1)(A), provides: Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort) brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. Appellant seems to argue that section 2412(b) makes the United States liable for attorney fees for Bivens actions because it is liable “to the same extent” that a state, county, or state official would be liable for attorney fees under section 1988 for a section 1983 action. This proposition has been rejected by the overwhelming majority of courts addressing the issue. See Premachandra v. Mitts, 753 F.2d 635, 641 (8th Cir.1985) (en banc); Lauritzen v. Lehman, 736 F.2d 550, 553-55 (9th Cir.1984); Saxner v. Benson, 727 F.2d 669, 673 (7th Cir.1984), cert. granted, — U.S.-, 105 S.Ct. 1166, 84 L.Ed.2d 318 (1985). See also Knights of the Ku Klux Klan v. East Baton Rouge Parish School Board, 735 F.2d 895, 899-900 (5th Cir.1984) (section 1988 applies to the United States when federal officials are involved in section 1985(3) conspiracies; court does not reach the issue of federal liability under section 1988 for pure Bivens actions). But see Boudin v. Thomas, 732 F.2d 1107, 1114 (2d Cir.1984) (dicta that federal actions may be covered by section 1988). We join the clear majority of courts and hold that the federal government is not liable for attorney fees under section 1988 for pure Bivens actions. The federal government must violate one of the sections enumerated in section 1988 to be liable for attorney fees under that section. Federal officials do not violate section 1983 by acting under color of federal law. Because this court previously held that there was no conspiracy or joint action between federal and state officials, there was no violation of sections 1983 or 1985 in this case. As the courts have recognized, reading purely federal actions into section 1988 by way of 28 U.S.C. § 2412(b) would negate the language of 28 U.S.C. § 2412(d)(1)(A). Premachandra, 753 F.2d at 638; Lauritzen, 736 F.2d at 557-58. Section 2412(b) is a limited waiver of sovereign immunity and is to be strictly construed. Premachandra, 753 F.2d at 641. Section 2412(d)(1)(A), the standard Con gress intended to govern cases such as this, provides for attorney fees against the United States when its position is not “substantially justified.” Attorney fees may not be assessed against the United States in Bivens actions where the government’s position is substantially justified. Appellant was limited to the fee provisions of the Equal Access to Justice Act. IV.
3652142-10065	HUTCHESON, Circuit Judge. Taxpayers, married persons living in Texas, beneficiaries of the McFaddin trust, a trust of Texas property established and managed in Texas, returned as community all the income they had received from the trust in the tax years in question, 1938 and 1939. Disagreeing with the taxpayers in respect of several matters, including (1) their claim that all of the income from the trust was community property, and (2) that profits from the sale of an addition known as Central Gardens should be returned not as ordinary income but as capital gains, and if not, should be returned as community, the commissioner determined deficiencies accordingly. The Tax Court agreed with the commissioner on these two matters and with taxpayers on the others, and redetermined the deficiencies accordingly. Taxpayers are here seeking relief from the findings and order. The issue of whether the profits from Central Gardens are returnable as ordinary income or as capital gains may be shortly disposed of by saying that the decisions have settled it that property, subdivided and sold as Central Gardens was here, is regarded as sold in the business of the taxpayer and the profits from such operations are regarded as ordinary income. As to the alternative claim that if these profits are to be regarded as profits of a business and, therefore as ordinary income, the income must then be regarded as community, we think it sufficient to say, that while a case might arise where the character and extent of the community efforts and outlays were such that the profits from the subdivisional sale of separate real estate might be properly regarded as something other than the mere proceeds of the sale of separate property, and therefore, community property, the evidence makes out no such case here. All that appears is that the properly was subdivided into an addition and sold by the agent, who having an exclusive agency for, and being in entire charge of, the sales, did all advertising at his own expense and was paid a commission of 25 per cent on all sales. Neither the trustees nor any of the taxpayers had anything to do with the management of the property except that the trustees contributed some moneys to lay out the property and grade the streets. Under these circumstances to say that the profits were “obtained * * * by the toil, talent, thrift, energy, industry or other productive faculty” of a member of the marital community so as to convert into community the profits of the sale of separate property would be to run a good and sound theory into the ground. The main question, whether the evidence offered by the taxpayers was sufficient to overthrow the commissioner’s determination that the income taxed to them as profits of separate property was in law and in fact separate, requires more ample treatment. Here, as in the Tax Court, taxpayers insist that all the income in question was community, because all the properties of the trust were beneficially owned not by their separate hut by their community estates. Here, as in the Tax Court, tax payers insist in the alternative that if all was not community property, that part of it was which came from property acquired by the trustees with funds in part community and in part separate but so inextricably confused and commingled as that trader Article 4619 of the Texas Statutes, they and the property purchased with them must be deemed to be community property. A subordinate contention of the Taxpayers is that the commissioner, having segregated the gross income from the property into that which he held to be community and that which he held to b.e separate, wrongly allocated all charges against the gross income to the part of the income which he had determined to be community and none of them against that part which he treated as separate income. The Tax Court, in an opinion fully setting out the facts as to the creation and operation of the trust, rejected the taxpayers’ first contention that ihe beneficiaries acquired their interest in the trust by onerous title. It found to the contrary that the trust was created by the father of the beneficiaries, joined by his wife, with a specific donative intent toward his children, and that their interest in all of the property originally granted in trust was their separate property acquired, within the constitutional definition, by gift. The taxpayers’ alternative contention, that part of the income was community because from property acquired afterward by the trustees by the use of commingled funds, was disposed of by the Tax Court upon the ground that the rights of the beneficiaries did not attach to the gross income but only to the distributable net, and that the gross income the trustees had used to purchase additions to-the trust was not, and could not be, community income. The subordinate point, allocation of all charges to community income was disposed of by the Tax Court upon the ground that the evidence of the taxpayers had failed to show that the commissioner’s allocations were wrong. We agree with the Tax Court that the facts that the lands were conveyed to the trust subject to named debts and liens and that the trust was charged with the payments to Mrs. McFaddin are without effect to overcome the clearly manifested donative intent of the settlors so as to convert what would otherwise be a gift of separate property into a conveyance upon onerous consideration of community property. We, therefore, agree with its conclusion that the oil royalties and bo imses derived from, and the profits from sales of, the properties originally conveyed in trust to the separate beneficial interests of the taxpayers came to them as separate property and are taxable as separate income. Upon the taxpayers’ alternative contention, however, that part of the sums taxed to it as separate income were derived from property acquired by the trust in such manner as to make it their community property, the matter stands quite differently. The theory of the Tax Court that none of the commingled property with which the after-acquired property was purchased was community property because, under the terms of the trust instrument, gross income was treated as corpus, the rights of the beneficiaries did not attach to gross income but only to the distributable net income, and the gross income used by the trustees was, therefore, not community property, will not at all do. The taxpayers were the beneficial owners of the trust properties, and every part and parcel of them, including income from them, belonged beneficially to them, either as separate or as community property, in the same way that it would have belonged to them had the property been deeded to the taxpayers and operated by themselves. The greater part of the normal income from the property during the years preceding the tax years in question was community income. When it was commingled in a common bank account with other funds of the trust so that the constituents had lost their identity, the whole fund became community ; and when it was used by the trustees to purchase additional properties, those properties, taking the character of the funds which bought them, were community property. But, says the commissioner, if it be conceded, contrary to the view of the Tax Court, that undistributable trust income is to be regarded as community, and the community and separate property which went into the acquisition of the additional property were so unidcnlifiably commingled as that under Texas law, the whole commingled fund would, because of Article 4619, supra, and the prevailing presumption in favor of the community, be regarded as community property, still the taxpayer cannot prevail because the presumption is not substantive but procedural and is overcome by the commissioner’s finding that the property was separate. We do not think so. In Howard v. United States, 5 Cir., 125 F.2d 986, 994, this court had occasion to consider the disputable presumption in favor of the community created by Articles 2402 and 2405 of the Civil Code of Louisiana, similar in purpose to the Texas Article 4619. Saying: “ * * * since the ultimate tax question here depends upon the ownership of the funds on deposit, and since the law of Louisiana is controlling, the disputable presumptions above mentioned are so bound together with local property rights that the failure to apply them would result in serious interference with the local substantive law” — we there gave full effect to the statutory presumption; while in Stewart v. Commissioner of Internal Revenue, 5 Cir., 95 F.2d 821, a Texas income tax case, this court gave like effect to Article 4619 of the Texas Statutes. Finally, the commissioner urges upon us here, that because these trusts were spendthrift trusts, they were in effect conveyances of income to the separate use of the beneficiaries. Putting to one side that, as to the tax years in question, the spendthrift provisions were not valid because the trust was continued and in effect created by the beneficiaries themselves, and assuming that these provisions remained valid, it is sufficient to say that, in the Porter and Lightner cases, we considered and disposed adversely to the commissioner of the same contention. The Tax Court was wrong in sustaining the commissioner’s determination that all the income in question was separate income throughout. It was wrong too in sustaining the commissioner’s allocation of all the charges against community income. Because of these errors, while we agree with its finding on the other matters appealed from and the redetermination is affirmed as to them, as to the matters in which we have found error, the cause will be remanded to the Tax Court with directions to determine how much of the claimed separate income came from the original and how much from the after acquired property, and also the proper apportionment as between separate and community property of the charges and expenses attributable to them, and to redetermine the deficiencies accordingly.
10532657-9052	BEAM, Circuit Judge. Eugene Rodgers sued various employees of the Arkansas Department of Correction under 42 U.S.C. § 1983 (1982), alleging that the defendants deprived him of procedural due process during a disciplinary proceeding and that the conditions of his confinement pending the disciplinary hearing constituted cruel and unusual punishment. After an evidentiary hearing conducted before a magistrate, the defendants moved for a directed verdict. The magistrate found that plaintiff had adduced insufficient evidence to withstand the motion and recommended dismissal. Based on the magistrate’s recommendation, the district court dismissed Rodgers’ complaint, and Rodgers appeals from this order. We affirm. I. BACKGROUND A. Standard of Review In reviewing the propriety of granting a motion for directed verdict, we must utilize the same standard as the district court. Such motions are to be granted only when the nonmoving party has presented insufficient evidence to support a jury verdict in his favor. In deciding this question, we must view the evidence in the light most favorable to the nonmov-ing party without assessing credibility. The nonmoving party is entitled to the benefit of all inferences which may be drawn from the evidence without engaging in speculation. Svoboda v. Bowers Distillery, Inc., 745 F.2d 528, 530 (8th Cir.1984) (citing Hauser v. Equifax, Inc., 602 F.2d 811, 814 (8th Cir.1979)). B. Facts Rodgers was incarcerated at the Benton Work Release Center, a minimum security facility of the Arkansas Department of Correction. Rodgers was allowed an overnight furlough extending from February 14, 1987, until 3:00 p.m. on February 15, 1987. A condition of the furlough was that Rodgers remain in Pulaski County, Arkansas. On February 14, Rodgers’ mother and sister picked him up at the Benton Unit and drove to his sister’s home in Pulaski County. Rodgers later visited his girlfriend and several friends but remained in Pulaski County. After these visits, he returned to his sister’s house. On the morning of February 15, Rodgers tried to procure a ride back to the Benton Unit. He could not reach his mother or sister, so he called, at work, Eamestine Starr, his sister’s roommate. She agreed to drive Rodgers to the Benton Unit. Due to inclement weather, they did not reach the Unit until 3:10 p.m. Meanwhile, Rodgers' mother called Major Parsons at the Benton Unit, stating that “they” had gone to church in Cotton Plant and explaining that Rodgers might be late because of the difficult driving conditions caused by the bad weather. Parsons understood these statements to mean that Rodgers had gone with his mother to church in Cotton Plant, which is located outside of Pulaski County. Parsons confronted Rodgers, upon his return, with this alleged breach of the conditions of furlough, but Rodgers denied leaving Pulaski County. On February 15, 1987, Rodgers was stripped to his underwear and placed in an isolation cell, pending investigation of the alleged breach of institutional rules. On February 18, 1987, he was served with a disciplinary charge for leaving Pulaski County and for giving false information to Parsons. Rodgers was denied a copy of the inmate handbook and had no paper or pencils while in isolation. He requested several witnesses for the disciplinary hearing but was limited to three. On February 19, 1987, the hearing was held before a Disciplinary Committee. The Committee obtained statements from Rodgers’ witnesses and his mother via telephone. Based on this evidence, Rodgers was found guilty of both violations. Rodgers remained in the isolation cell until February 20, 1987. During his five days in isolation, Rodgers was given no clothing except socks and underwear. He had no toilet, sink, or bed. He slept on a mattress on the floor and was given a sheet and a blanket. He was allowed one shower during this time. The guards checked on Rodgers frequently and were responsive to his requests to use the bathroom or to get a drink of water. No evidence was presented of unsanitary conditions. II. DISCUSSION A. Procedural Due Process Rodgers first argues that he presented sufficient evidence to withstand a motion for directed verdict on the issue of whether his procedural due process rights were violated. He contends that he was denied due process in the disciplinary proceeding because he was not afforded the opportunity to call certain witness and had no opportunity to cross-examine Parsons; he was denied the necessary tools for preparing his defense (paper, pencil, and the inmate handbook); and he was punished prior to the hearing by being confined to an isolation cell. The district court effectively addressed and dismissed all of these allegations. On the issue of witnesses, the court noted that the lack of an opportunity to cross-examine Parsons does not support a due process claim because the Disciplinary Committee subsequently confirmed the mother’s statement with a follow-up telephone call. The district court also pointed out that although an inmate facing a disciplinary proceeding should be allowed to call witnesses, “[p]rison officials must have the necessary discretion to keep the hearing within reasonable limits.” Wolff v. McDonnell, 418 U.S. 539, 566, 94 S.Ct. 2963, 2980, 41 L.Ed.2d 935 (1974). Upon notification of the charges against him, Rodgers initially requested three witnesses. Later, Rodgers requested additional witnesses. Allowing additional witnesses would have caused a postponement of the disciplinary hearing. There is no indication that Rodgers would not have been allowed these additional witnesses had he initially requested them upon notification of the charges. While prison officials may not arbitrarily deny an inmate’s request to present witnesses, they may circumscribe his right to do so in order to provide “swift discipline.” Ponte v. Real, 471 U.S. 491, 495, 105 S.Ct. 2192, 2195, 85 L.Ed.2d 553 (1985). On the issue of whether Rodgers was able to adequately prepare his defense, the district court held that although Rodgers did not have access to paper, pencil, or the handbook, he was not deprived of the opportunity to mount a defense because statements were obtained from his witnesses. We also note that Rodgers was allowed the requisite twenty-four hours after notification of the charges against him to prepare his defense for the disciplinary hearing. See Wolff, 418 U.S. at 564, 94 S.Ct. at 2978. On the issue of punishment, the district court found that assignment to an isolation cell is the only option available to Benton officials for assignment of inmates under investigation for rules violations. Because the Benton Unit is a minimum security facility, there is no other secure housing location available as these are the only cells at the Unit. The court held that Rodgers’ assignment to the cell was not punishment; rather, his punishment for rules violations came later when he was returhed to his parent correctional facility. We find the reasoning of the district court persuasive, and we agree that insufficient evidence was presented by Rodgers to support a jury verdict in his favor on the question of procedural due process. Therefore, we affirm the grant of a directed verdict on this issue. B. Cruel and Unusual Punishment Rodgers also argues that sufficient evidence was presented to show violation of his eighth amendment rights. When considering an eighth amendment claim, the fact finder must consider the “totality of the circumstances” surrounding the punishment. Rhodes v. Chapman, 452 U.S. 337, 362-63, 101 S.Ct. 2392, 2407, 69 L.Ed.2d 59 (1981). The district court concluded that, based on the totality of the circum stances surrounding Rodgers’ confinement, no reasonable juror could conclude that the defendants subjected Rodgers to cruel and unusual punishment. In order to establish an eighth amendment violation after incarceration, a prisoner must establish the unnecessary and wanton infliction of pain, mental or physical. Cowans v. Wyrick, 862 F.2d 697, 699-700 (8th Cir.1988) (citations omitted). In determining whether a prisoner’s pain was inflicted unnecessarily and wantonly, we must consider relevant factors such as whether “force was applied in a good faith effort to maintain or restore discipline,” the need to apply force, the relationship between the need and the amount of force actually used, and the extent of the injury. Id. at 699 (quoting Whitley v. Albers, 475 U.S. 312, 320-21, 106 S.Ct. 1078, 1084-85, 89 L.Ed.2d 251 (1986)). Our first determination, then, must be whether the terms of Rodgers’ confinement, pending his disciplinary hearing, was a good faith effort by the prison officials to maintain discipline and whether a legitimate need existed for the disciplinary measures that were taken. Because the isolation cells are the only secure location at the Benton Unit for housing inmates under investigation, we conclude that placing Rodgers in an isolation cell was done in good faith and in a legitimate effort to maintain prison discipline.
12530505-23748	NOREIKA, U.S. DISTRICT JUDGE: Before the Court is the motion (D.I. 9) of Defendants the United States Department of Homeland Security and its Secretary, Kirstjen Nielsen, to dismiss the Complaint (D.I. 1) filed by Plaintiffs LKQ Corporation and Keystone Automotive Industries, Inc. (collectively "LKQ" or "Plaintiffs") for lack of subject matter jurisdiction and failure to state a claim. For the reasons discussed below, the Court will GRANT Defendants' motion. I. BACKGROUND Since April of 2017, the United States Customs and Border Protection ("CBP"), an agency within Defendant, United States Department of Homeland Security, has executed more than 165 seizures of LKQ replacement automotive grilles ("Repair Grilles") because of alleged infringement of U.S. trademarks. (D.I. 1 at ¶¶ 2-4). Seizures have occurred at the Port of Savannah, Georgia, Port of Long Beach, California, and Port of International Falls, Minnesota. (Id. ¶ 4). For each seizure, CBP issued written notification to LKQ identifying the property seized and outlining the processes by which Plaintiff could challenge the seizure. (Id. ¶ 5; D.I. 11, Ex. 3). The notices explain the petition option as follows: Petition: You may file a petition with this office within 30 days from the date of this letter in accordance with title 19 United States Code (U.S.C.), section 1618 ( 19 U.S.C. § 1618 ) and title 19, Code of Federal Regulations (C.F.R.), section 171.1 and 171.2 ( 19 C.F.R. §§ 171.1, 171.2 ), seeking remission of the forfeiture. The petition does not need to be in any specific form, but it must describe the property involved, identify the date and place of the seizure, include all the facts and circumstances which you believe warrant relief from forfeiture, and must include proof of your interest in or claim to the property. * * * If you are dissatisfied with the petition decision (initial petition or supplemental petition), you will have an additional 60 days from the date of the initial petition decision or 60 days from the date of the supplemental petition decision, or such other time as specified by the Fines, Penalties and Forfeitures Officer to file a claim to the property, along with the required cost bond, requesting referral of the matter to the U.S. Attorney's Office for judicial action. * * * At any point prior to the forfeiture of the property, you may request a referral to the U.S. Attorney by filing a claim and cost bond. Please see section 4 of this letter for information on how to file a claim and cost bond . If you take such action after filing a petition for relief, your pending petition will be withdrawn from consideration. (D.I. 11, Ex. 3 at 2-3). After receiving the notices, LKQ submitted at least 81 petitions for remission or mitigation. (D.I. 1 ¶ 6). Those petitions were "referred to the Chief, Intellectual Property Rights Branch [of the CBP] for a recommendation." (Id. , Ex. C). Plaintiffs characterize the petitions by category: (1) grilles that were seized but then deemed to be returned "because LKQ was licensed to make those grilles under its design patent license agreements;" (2) grilles that were seized and then deemed to be returned, but for which CBP "alleges it had probable cause at the time to seize because the Automakers told CBP that the grilles violated their rights;" (3) "grilles that CBP now acknowledges are not counterfeit but that CBP, instead, now alleges are confusingly similar to the asserted mark;" (4) "grilles that CBP maintains are allegedly counterfeit;" (5) grilles "that have been seized on the basis that they are counterfeit but that CBP has not yet formalized its seizure decision;" and (6) grilles for which Plaintiffs have requested referral to the U.S. Attorney. (Id. ¶¶ 6, 8). At the time of the Complaint, the grilles in the first two categories were subject to storage fees and "hold-harmless" agreements "disallowing any future claims against the government related to the improper seizures." (D.I. 1 ¶¶ 7, 9). It is undisputed, however, that CBP later "agreed to remit these grilles without those conditions." (D.I. 10 at 8; D.I 16 at 17). Petitions relating to at least thirteen (13) seizures have been withdrawn, filed as claims, and referred to the U.S. Attorneys' offices in the districts where the original seizures took place. (D.I. 10 at 8-9). On February 2, 2018, Plaintiffs filed their Complaint in this Court. (D.I. 1). The Complaint contains seven counts alleging the following: violations of the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2)(A) (Counts I-V), excessive fines in violation of the Eighth Amendment (Count VI); and violation of Plaintiffs' due process rights in violation of the Fifth Amendment (Count VII). (Id. ). Defendants filed their motion to dismiss (D.I. 9) on May 9, 2018, asserting pursuant to Rule 12(b)(1) that the Court lacks subject matter jurisdiction for Counts I through VI, and pursuant to Rule 12(b)(6) that Counts VI and VII fail to state a claim upon which relief may be granted. (D.I. 10 at 10-20). Plaintiffs oppose the motion. II. LEGAL STANDARD A complaint must contain " 'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the ... claim is and the grounds upon which it rests.' " Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 554-55, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citing Conley v. Gibson 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ; Fed. R. Civ. P. 8(a)(2) ). A. Standard Pursuant to Rule 12(b)(1) "If the court determines ... it lacks subject matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). Motions brought under Rule 12(b)(1) for lack of subject matter jurisdiction may present either a facial or factual challenge to the court's jurisdiction. Lincoln Ben. Life Col. v. AEI Life, LLC , 800 F.3d 99, 105 (3d Cir. 2015). A challenge is facial when a motion to dismiss is filed prior to an answer and asserts that the complaint is jurisdictionally deficient on its face. Cardio-Medical Assoc., Ltd. v. Crozer-Chester Medical Center , 721 F.2d 68, 75 (3d Cir. 1983). In reviewing a facial challenge under Rule 12(b)(1), the standards relevant to Rule 12(b)(6) apply. Lincoln , 800 F.3d at 105 ("In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff"). A plaintiff bears the burden of establishing subject matter jurisdiction. Id. B. Standard Pursuant to Rule 12 (b)(6) When dismissal is sought under Rule 12(b)(6), the court conducts a two-part analysis. Fowler v. UPMC Shadyside , 578 F.3d 203, 210 (3d Cir. 2009). First, the court separates the factual and legal elements of a claim, accepting "all of the complaint's well-pleaded facts as true, but [disregarding] any legal conclusions." Id. at 210-11. Second, the court determines "whether the facts alleged in the complaint are sufficient to show ... a 'plausible claim for relief.' " Id. at 211 (quoting Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). A claim is facially plausible where "plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' " Id. Further, "[t]he complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element" of the plaintiff's claim. Wilkerson v. New Media Tech. Charter Sch. Inc. , 522 F.3d 315, 321 (3d Cir. 2008) (internal quotations omitted). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." In re Burlington Coat Factory Sec. Litig. , 114 F.3d 1410, 1420 (3d Cir. 1997) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ). The court may grant a motion to dismiss only if, after "accepting all well pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, [the] plaintiff is not entitled to relief." Id. "In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputed authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick , 605 F.3d 223, 230 (3d Cir. 2010) (emphasis added). III. ANALYSIS Defendants have challenged each of the Complaint's seven Counts under either Rule 12(b)(1) or 12(b)(6). Defendants argue that Counts I, II, III, IV, V, and VI must be dismissed because Plaintiffs have failed to establish that the Court has subject matter jurisdiction over those claims, and that Counts VI and VII must be dismissed because Plaintiffs have failed to state a claim upon which relief may be granted under Rule 12(b)(6). A. The Court Lacks Subject Matter Jurisdiction Over Counts I - VI 1. Counts I, II, III "It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction." United States v. Mitchell , 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). Under the APA, Congress has waived sovereign immunity over actions "seeking relief other than monetary damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority." 5 U.S.C. § 702. This waiver, however, does not apply when (1) "such an action 'is committed to agency discretion by law,' " State of New Jersey v. United States , 91 F.3d 463, 470 (3d Cir. 1996) (citing 5 U.S.C. § 701(a)(2) ), (2) there is "other adequate remedy in a court," 5 U.S.C. § 704, or (3) the challenged action is not a "final agency action." Id. Plaintiffs bear the burden of establishing that none of the exceptions apply to their claims. See Mortensen v. First Federal Sav. and Loan Ass'n , 549 F.2d 884, 891 (3d Cir. 1996). Counts I, II, and III ask the Court to review determinations made by the CBP about petitions for remission. Count I alleges "the issuance of CBP's final agency decision in response to LKQ's petitions ... constitutes 'agency action' under the APA" and challenges the decision as "arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence, and contrary to law because (a) the trademark doctrine of functionality renders the Recorded Marks inapplicable to LKQ's Repair Grilles in the aftermarket parts market; and (b) the Repair Grilles are authorized by law under the repair doctrine." (D.I. 1 ¶¶ 79-80). Count II challenges "CBP's interpretation and application of the extent of LKQ's design patent license agreement" alleging "CBP [ ] ignored the plain text of the license agreements and the tenets of design patent law." (Id. ¶¶ 84-85). Count III challenges "CBP's interpretation and application of the Lanham Act" in its petition determinations. (Id. ¶¶ 89-91). The Court does not have the authority to review discretionary actions that are "committed to agency discretion by law." State of New Jersey , 91 F.3d at 470 (citing 5 U.S.C. § 701(a)(2) ). A petition for remission "does not serve to contest the forfeiture, but rather is a request for an executive pardon of the property based on the petitioner's innocence." Ibarra v. United States , 120 F.3d 472, 475 (4th Cir. 1997) (citing United States v. Vega , 72 F.3d 507, 514 (7th Cir.1995) ); see also Schrob v. Catterson , 948 F.2d 1402, 1412 n.9 (3d Cir. 1991) (calling the petition process a remedy that "allows the government and claimant to resolve the dispute informally, rather than in a judicial forfeiture proceeding"); In re Sixty Seven Thousand Four Hundred Seventy Dollars ("In re $ 67470") , 901 F.2d 1540, 1543 (11th Cir. 1990) ("remission of forfeitures is neither a right nor a privilege, but an act of grace."). Moreover, federal courts have held that "once the Government initiates forfeiture proceedings, the district court is divested of jurisdiction," and "remains without jurisdiction during the pendency of the proceedings unless the claimant timely files a claim and cost bond." See e.g. Ibarra , 120 F.3d at 475-76. Even after an administrative determination has been reached, courts generally have no power to review that decision. Schrob , 948 F.2d at 1412 n.9 ; see also Yskamp v. DEA , 163 F.3d 767, 770 (3d Cir. 1998) ("appeal from a petition for remission or mitigation is limited to assuring that the [administrative agency] complied with statutory and procedural requirements"); In re $ 67470 , 901 F.2d at 1543 ("federal common law consistently has held that federal courts lack jurisdiction to review the merits of a forfeiture decision" by an administrative agency acting within its discretion). The remission statute provides the CBP with wide discretion to make a determination on remission or mitigation. 19 U.S.C. § 1918 ; see also Farrace v. Bureau of Alcohol, Tobacco, Firearms and Explosives , No. 14-468 (GMS), 2015 WL 2265384, at *3 (D. Del. May 13, 2015) ("The court lacks jurisdiction to review ATF's rulings on Farrace's petition for remission or his request for reconsideration. These decisions fall within the agency's executive discretion, akin to a pardon."). Here, Plaintiffs do not allege that CBP failed to comply with statutory or procedural requirements; but instead, ask the Court to review the legal underpinnings of the CBP's decision on petitions and to order "that all currently seized and imminently-to-be-forfeited Repair Grilles are not counterfeit and do not infringe any of the Recorded Trademarks." (D.I. 1 at 37). Given the statutory language affording the CBP discretion with petitions for remission, as well as precedent finding that such discretionary decisions are unreviewable absent allegations of procedural or statutory violations, the Court finds Counts I, II, and III are barred under the APA and thus the Court has no subject matter jurisdiction over these claims. Moreover, even assuming arguendo that Plaintiffs could challenge the CBP's refusal to remit their Repair Grilles, the Court also lacks jurisdiction over Counts I, II and III because Plaintiffs have an alternative judicial remedy. "Congress did not intend the general grant of review in the APA to duplicate existing procedures for review of agency action." Bowen v. Mass. , 487 U.S. 879, 903, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988). The Third Circuit has held that the "other adequate remedy" threshold is crossed where a party is provided access to judicial review even after an administrative determination has been made. See Turner v. Secretary of U.S. Dept. of Housing and Urban Dev. , 449 F.3d 536, 539-40 (3d Cir. 2006). In Turner , the court reviewed a claim against the United States Department of Housing and Urban Development ("HUD") for an adverse housing discrimination decision against Plaintiff. Id. at 537-38. The court noted that the plaintiff, following the decision, was informed by HUD that the Fair Housing Act provided a private right of action against those who allegedly discriminated against her, and plaintiff then pursued such an action before also suing HUD under the APA. Id. at 538. The Third Circuit held that the alternative procedure was an adequate remedy and barred the district court from undergoing judicial review of HUD's original decision under the APA. Id. at 540-41. Here too, Plaintiffs have had an effective remedy as outlined in the judicial forfeiture procedure of the seizure notice from CPB. Specifically, the notices state "[i]f you are dissatisfied with the petition decision (initial petition or supplemental petition), you will have an additional 60 days from the date of the initial petition decision or 60 days from the date of the supplemental petition decision, or such other time as specified by the Fines, Penalties and Forfeitures Officer to file a claim to the property, along with the required cost bond, requesting referral of the matter to the U.S. Attorney's Office for judicial action." (D.I. 11, Ex. 3 at 2-3). The procedure here not only provides an alternative route, but also requires the CBP to refer the case to the U.S. Attorney who must either bring an in rem forfeiture proceedings against the goods or return the goods to Plaintiffs. 19 U.S.C. § 1608. Plaintiffs argue that "[w]ith CBP having issued determinations documenting its misunderstanding of trademark law, LKQ's only means of ensuring a substantive resolution of this dispute was to file this declaratory judgment action." (D.I. 16 at 11). Plaintiffs, however, tacitly recognize that a judicial forfeiture procedure still exists, arguing that it "does not provide LKQ with adequate judicial relief." (Id. ) (emphasis added). Thus, even if (as Plaintiffs allege) CBP misunderstands trademark law, as alleged, the agency's determination is not the last word. Following CBP's determination not to remit certain Repair Grilles, Plaintiffs can compel referral to the U.S. Attorney in the district of the original seizure. This is an alternative judicial remedy and provides Plaintiffs with judicial review of trademark laws as they pertain to the seized goods. That Plaintiffs may not prefer the venue or process by which the judicial forfeiture proceedings would follow is of little moment to the Court, which is bound by the statutory scheme codified in the customs laws and was provided by notice to the Plaintiffs. See Turner , 449 F.3d at 541 ("[a] legal remedy is not inadequate for purposes of the APA because it is procedurally inconvenient for a given plaintiff."). A clear and adequate alternative judicial forum exists to determine whether LKQ's goods should be forfeited, and thus this Court does not have subject matter jurisdiction over Counts I, II, or III. 2. Counts IV and VI The Constitution provides that the judicial power of the federal courts shall only extend to actual "Cases" and "Controversies." U.S. Const., Art. III, § 2. A court's "judgments must resolve a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." North Carolina v. Rice , 404 U.S. 244, 246, 92 S.Ct. 402, 30 L.Ed.2d 413 (1971) (internal citations and quotations omitted). It is not enough that a case or controversy existed at the time of the filing, but rather "[t]he rule in federal cases is that an actual controversy must be extant at all stages of review." Preiser v. Newkirk , 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975). Counts IV and VI of the Complaint assert claims regarding the imposition of conditions on the remission of certain LKQ goods. Specifically, Count IV challenges "CBP's decision to impose conditions on the release of [repair grilles]" as a violation of the APA and Count VI raises an Eighth Amendment excessive fines claim for the same conduct. (D.I. 1 at 33-35). There is no dispute that the conditions previously imposed on the return of repair goods are no longer in place. (D.I. 10 at 13; D.I. 16 at 17). Instead, Plaintiffs argue the question is not mooted because "[i]t is foreseeable that ... CBP will re-institute demands for such 'forfeiture amounts' as conditions for the release of those goods," and cites a D.D.C. case emphasizing its point. (D.I. 16 17-18). In the Third Circuit, however, "[t]he capable-of-repetition doctrine is a narrow exception that 'applies only in exceptional situations' where '(1) the challenged action is in its duration too short to be fully litigated prior to cessation or expiration, and (2) there is a reasonable expectation that the same complaining party will be subject to the same action again.' " Hamilton v. Bromley , 862 F.3d 329, 335 (3d Cir. 2017) (citing Spencer v. Kemna , 523 U.S. 1, 17, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998) ). Here, Plaintiffs' provide a cursory rebuttal to the mootness question and repetition doctrine. After review of the facts provided, the Court cannot find sufficient basis to apply this narrow exception. There is no indication that conditions applied would be too short in duration to be litigated fully had they not been removed by the CBP and the government has argued "[it] has provided LKQ with no reason to think ... that it would subsequently condition the[ ] release [of grilles] on a monetary payment." (D.I. 18 at 9). Moreover, the Court does not expect the CBP to change its position and again impose fees and conditions on Plaintiffs following the dismissal of this action. Thus, the Court finds that Counts VI and VI are moot and thus it lacks subject matter jurisdiction over them. 3. Count V The APA allows review of "final agency action[s]." 5 U.S.C. § 704. Courts have identified two factors for determining whether an action is final: (1) "the action must mark the 'consummation' of the agency's decisionmaking process" and "not be of a merely tentative or interlocutory nature;" and (2) "the action must be one by which 'rights or obligations have been determined,' or from which 'legal consequences will flow.' " Ocean County Landfill Corp. v. EPA , 631 F.3d 652, 655 (3d Cir. 2011) (citing Bennett v. Spear , 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (internal citations omitted) ). Further, the Third Circuit has also considered: 1) whether the decision represents the agency's definitive position on the question; 2) whether the decision has the status of law with the expectation of immediate compliance; 3) whether the decision has immediate impact on the day-to-day operations of the party seeking review; 4) whether the decision involves a pure question of law that does not require further factual development; and 5) whether immediate judicial review would speed enforcement of the relevant act. Id. (citing Univ. of Med. & Dentistry of N.J. v. Corrigan , 347 F.3d 57, 69 (3d Cir.2003) ). Based on the facts alleged, the seizures at issue are not "final agency actions." This is particularly so given the Third Circuit precedent recognizing that "[its] cases have interpreted pragmatically the requirement of administrative finality, focusing on whether judicial review at the time will disrupt the administrative process." Delaware Riverkeeper Network v. Sec'y of Pennsylvania Dept. of Environ. Protection , 870 F.3d 171, 176 (3d Cir. 2017). Here, judicial review of the seizures would disrupt the administrative process. The CBP has statutory authority to inspect and seize imported goods which it believes violate the trademark laws. See 19 U.S.C. §§ 1499(2), 1595a(c)(2)(C), 1526. Following the seizure of the grilles at issue, Plaintiffs were given notice and provided with options for challenging the seizure. Under no reasonable interpretation of "finality" can the seizure of goods, which sets off a codified procedure for forfeiture or petitions, be considered the "consummation" of an "agency's decisionmaking process." Ocean County , 631 F.3d at 655. Seizures do not determine the rights or obligations of LKQ, nor do legal consequences flow from the decision to seize the goods under the customs laws. The seizures themselves are not final agency actions, and the APA does not provide a waiver of sovereign immunity under which Plaintiff can bring these claims. Thus, the Court cannot exert subject matter jurisdiction over a challenge thereof, Count V must be dismissed. B. Count VII Fails to State a Claim Upon Which Relief May Be Granted
4204557-18214	OPINION PAUL L. FRIEDMAN, District Judge. This matter is before the Court on the defendants’ motions to dismiss. For the reasons discussed in this Opinion, the motions will be granted, and this action will be dismissed with prejudice. I. BACKGROUND Plaintiffs Anthony and Darryl Jerdine bring this action against the Federal Deposit Insurance Corporation (“FDIC”) in its capacity as the receiver for Washington Mutual Bank (‘WaMu”), Select Portfolio Servicing Inc. (“SPS”), and DLJ Mortgage Capital Inc. (“DLJ”) on claims arising “in Cuyahoga County, Ohio by virtue of a mortgage loan and related inter-temporal transactions associated therewith which concern the [plaintiffs’ primary residential real estate which is located in Pepper Pike, Ohio 44124[.]” Compl. ¶ 9. Plaintiffs secured mortgage financing from WaMu. Compl. ¶ 21. At the closing in February 2005, they “executed Promissory Notes and Security Agreements in favor of ... WaMu,” id., which “retained a security in [the] Pepper Pike, Ohio [property].” Id. ¶ 22. For the first two years, the interest rate was fixed; thereafter the rate adjusted at six-month intervals. Id. ¶ 12. WaMu allegedly entered into this transaction knowing that plaintiffs could not repay the loan and that “[plaintiffs likely would be placed in a position of default, foreclosure, and deficiency judgment upon not being able to meet their increased loan obligations once the fixed rate interest period expired and the adjustable rate applied[.]” Id. ¶ 11(e). WaMu “assigned the Note and mortgage to ... SPS,” id. ¶ 29, which in turn bundled the loan with others to be sold as a mortgage-backed security. See id. ¶¶ 11(g), 30,108. A. Foreclosure Proceedings On August 23, 2005, WaMu initiated foreclosure proceedings in the Court of Common Pleas for Cuyahoga County, Ohio against Darryl Jerdine, ALJ Holdings Group, Ltd., and Citibank Federal Savings Bank “alleging breach of a promissory note for a 2005 mortgage secured by a mortgage deed for Ohio real property.” Memorandum of Points and Authorities in Support of the [FDIC’s] Motion to Dismiss (“FDIC Mem.”) at 4; see id., Ex. 1 (Docket, Wash. Mut. Bank v. Jerdine, No. CV-05-570626 (Cuyahoga County Ohio Ct. Com. Pl. Oct. 23, 2005)) at 13. On February 12, 2007, a judge of the Court of Common Pleas adopted a magistrate’s decision, decreed foreclosure for WaMu, and entered judgment in WaMu’s favor in the amount of $1,017,663.33 plus interest. Id., Ex. 1 (Journal Entry, Wash. Mut. Bank v. Jerdine, No. CV-05-570626 (Cuyahoga County Ohio Ct. Com. Pl. Feb. 12, 2007)) at 7. The court authorized the Sheriff of Cuyahoga County to sell the property and to dispose of the proceeds of the sale. Id., Ex. 1 (Magistrate’s Decision, Wash. Mut. Bank v. Jerdine, No. CV-05-570626 (Cuyahoga County Ohio Ct. Com. Pl. filed Jan. 12, 2007) at 19-20). Darryl Jerdine twice appealed this decision. FDIC Mem., Ex. 1 (Dockets, Wash. Mut. Bank v. Jerdine, No. CA-08-091823 (Ohio 8th Dist.Ct.App. July 18, 2008) and Wash. Mut. Bank v. Darryl Jerdine, No. 08-091444 (Ohio 8th Dist. Ct.App. filed May 16, 2008)) at 25-26, 29-30. Both appeals were dismissed. Id., Ex. 1 (Journal Entries, Wash. Mut. Bank v. Darryl Jerdine, No. CA-08-091823 (Ohio 8th Dist.Ct.App. August 18, 2008), and Wash. Mut. Bank v. Darryl Jerdine, No. CA-08-091444 (Ohio 8th Dist.Ct.App. filed June 2, 2008)) at 27, 29. B. Challenges to Foreclosure Proceedings In October 2007, Anthony Jerdine filed a civil action in the United States District Court for the Northern District of Ohio against WaMu, Judge Bridget M. McCafferty, the judge who presided over the foreclosure proceedings, and Cuyahoga County Sheriff Gerald T. McFaul, who sold the Pepper Pike property. See FDIC Mem., Ex. 2 (Civil Docket, Jerdine v. Wash. Mut. Bank, No. 07-cv-02984 (NJD.Ohio Oct. 1, 2007)). SPS and DLJ characterized the complaint as one to “[qjuiet [tjitle which included allegations of racketeering and alleging a private nuisance against [WaMu], Magistrate McCafferty and the sheriff who was to conduct the sale of the [Pepper Pike] [property.” Defs.’ [SLS] and [DLJ] Memorandum of Points and Authorities in Support of Motion to Dismiss Plaintiffs’ Complaint (“Defs.’ Mem.”) at 2-3. Anthony Jerdine alleged that the Court of Common Pleas of Cuyahoga County had not been created by law, that the Ohio Revised Code had not been enacted, that Judge McCafferty did not properly hold her position, and that Sheriff McFaul had no authority to sell off the Pepper Pike property, such that the foreclosure sale was void. Complaint, Jerdine v. Wash. Mut. Bank, No. 07-cv-02984 (N.D. Ohio Oct. 1, 2007). Among other relief, plaintiff demanded that the district court void the Ohio Court of Common Pleas’ January 12, 2007 decision, quiet title in plaintiffs favor, and enjoin the sale of the Pepper Pike property, which was to occur later in the month of October 2007. See id. The district court dismissed the action sua sponte on the ground that a federal district court has no jurisdiction over challenges to state court decisions. Its opinion stated in relevant part: In the present action, plaintiff directly attacks a state court’s decision, and the action is clearly predicated on his belief that the state court was mistaken in rendering its decision against him. Any review of plaintiffs claims would require the court to review the specific issues addressed in the state court proceedings. This court lacks subject matter jurisdiction to conduct such a review or grant the relief as requested. In light of the foregoing, this action is appropriately subject to summary dismissal. Jerdine v. Wash. Mut. Bank, No. 1:07-cv-2984, 2007 U.S. Dist. LEXIS 75288, at 3 (N.D.Ohio Oct. 10, 2007) (internal citations omitted). In short, “[u]nder ... the Rook-er-Feldman Doctrine, a party losing a case in state court is barred from seeking what in substance would be appellate review of the state judgment in a United States District Court based on the party’s claim that the state judgment itself violates his ... federal rights.” Id., 2007 U.S. Dist. LEXIS 75288, at 2. The Sixth Circuit affirmed without opinion. Order, Jerdine v. Wash. Mut. Bank, No. 08-3676 (6th Cir. Feb. 4, 2010). In March 2008, Darryl Jerdine filed a petition for a writ of mandamus in the Court of Appeals of Ohio, Eighth District, seeking to stay the underlying foreclosure proceedings. FDIC Mem., Ex. 3 (Docket, In re Darryl Jerdine, No. CA-08-091172 (Ohio 8th Dist.Ct.App. Mar. 19, 2008)) at 2. The court struck the pleading because Jerdine “failed to establish that he [was] entitled to a writ of mandamus.” In re Jerdine, No. CA-08-091172, 2008 Ohio App. LEXIS 1648, at 5 (Ohio 8th Dist.Ct.App. Apr. 21, 2008). Returning to the Court of Common Pleas, Darryl Jerdine filed a new civil action against WaMu and others. FDIC Mem., Ex. 4 (Docket, Jerdine v. Select Portfolio Servs., No. CV-08-668159 (Cuyahoga County Ohio Ct. Com. Pl. Aug. 19, 2008)). The court dismissed these proceedings without prejudice because of plaintiffs failure to comply with two court orders. Id., Ex. 4 at 1. Darryl Jerdine appealed, but the appeal was dismissed on March 20, 2009. Id., Ex. 4 (Docket, Jerdine v. Select Portfolio Servs., No. CA-09-092890 (Ohio 8th Dist.Ct.App. Mar. 20, 2009)) at 11. On February 10, 2009, Anthony Jerdine and Darryl Jerdine filed a civil action in the United States District Court for the Northern District of Ohio against the FDIC, WaMu, SLS and DLJ. Complaint, Jerdine v. Fed. Deposit Ins. Corp., No. 1:09-cv-00307-JG (N.D.Ohio Feb. 10, 2009). The court dismissed the complaint on the ground that the doctrine of res judicata barred Anthony Jerdine’s “third attempt to collaterally attack the foreclosure judgment issued against him in the Cuyahoga County Court of Common Pleas.” Memorandum Opinion and Order, Jerdine v. Fed. Deposit Ins. Corp., No. 1:09-cv-00307 (N.D. Ohio June 18, 2009) at 4. The Jerdines appealed the decision to the Sixth Circuit. Notice of Appeal, Jerdine v. Fed. Deposit Ins. Corp., No. 1:09-cv-00307 (N.D. Ohio June 18, 2009). The appeal subsequently was dismissed for want of prosecution, that is, for failure to pay the filing fee within the time period set by the Circuit. Order, Jerdine v. Fed. Deposit Ins. Corp., No. 09-3955 (6th Cir. July 14, 2010). On March 23, 2009, Anthony Jerdine and Darryl Jerdine filed yet another complaint in the Court of Common Pleas against the FDIC. FDIC Mem., Ex. 6 (Docket, Case No. CV-09-688130) (Cuyahoga County Ohio Ct. Com. PI. Mar. 23, 2009) at 6. The matter was dismissed on July 30, 2009 because plaintiffs had not appeared for a pre-trial conference. See id. at 2. Thereafter, Anthony Jerdine and Darryl Jerdine filed a civil action against the FDIC in the United States District Court for the Western District of Washington. Complaint, Jerdine v. Fed. Deposit Ins. Corp., No. 09-cv-01596 (W.D.Wash. Nov. 9, 2009). As of the date of this Opinion, this civil action is still pending. C. Administrative Claims to the FDIC The FDIC became WaMu’s receiver on September 25, 2008. In December 2008, plaintiffs submitted two administrative claims to the FDIC. FDIC Mem., Ex. 8 (Proof of Claim) at 1-2. By letters of notice dated June 22, 2009, the FDIC notified plaintiffs of the disallowance of their claims. Id., Ex. 8 (Notices of Disallowance of Claims) at 3-4. In neither instance did plaintiffs provide factual allegations or proof to support their claims. See id. The FDIC notices included the following statement: Pursuant to [12 U.S.C. § 1821(d)(6) ], if you do not agree with this disallowance, you have the right to file a lawsuit on your claim ... in the United States District ... Court within which the failed institution’s principal place of business was located or the United States District Court for the District of Columbia within 60 days from the date of this notice. IF YOU DO NOT FILE A LAWSUIT ... BEFORE THE END OF THE 60-DAY PERIOD, THE DISALLOWANCE WILL BE FINAL, YOUR CLAIM WILL BE FOREVER BARRED AND YOU WILL HAVE NO FURTHER RIGHTS OR REMEDIES WITH RESPECT TO YOUR CLAIM. Id., Ex. 8 at 8 (emphasis in original); see id., Ex. 8 at 9. D. Civil Action No. 09-18^0 The Clerk of this Court received plaintiffs’ complaint on August 31, 2009, evidenced by the date stamp on the first page of the original pleading. On that date the Clerk also received Anthony Jerdine’s application to proceed in forma pauperis. The Clerk provisionally filed these items on the Court’s electronic docket on September 28, 2009, pending receipt of a certified copy of Anthony Jerdine’s trust fund account statement. The application permitting plaintiffs to proceed informa pauperis was approved on November 3, 2009. Generally, plaintiffs allege that defendants have violated the Home Ownership Equity Protection Act, 15 U.S.C. § 1639 et seq.; the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq.; the Truth in Lending Act, 15 U.S.C. § 1601 et seq.; the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.; and various provisions of Ohio law. Plaintiffs also assert common law tort claims of fraudulent misrepresentation, breach of fiduciary duty, unjust enrichment, and civil conspiracy. Among other relief, plaintiffs demand a declaratory judgment rendering the mortgage loan transaction void and finding that WaMu lacked standing to bring the underlying foreclosure action, in addition to an award of $27.4 million in damages. II. DISCUSSION A. Lack of Subject Matter Jurisdiction Under FIRREA The FDIC moves to dismiss the complaint under Rule 12(b)(1) of the Federal Rules of Civil Procedure on the ground that the Court lacks subject matter jurisdiction. “Federal courts are courts of limited jurisdiction ... [and it] is to be presumed that a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). It is plaintiffs’ burden to demonstrate that this Court has subject matter jurisdiction. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In ruling on a motion under Rule 12(b)(1), the Court “must accept as trae all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Under the Financial Institutions Reform, Recovery and Enforcement Act (“FIRREA”), see 12 U.S.C. § 1821(d), the Director of the Office of Thrift Supervision may appoint a receiver “for the purpose of liquidation or winding up any savings association’s affairs.” 12 U.S.C. § 1821(d)(6). In its capacity as WaMu’s receiver, the FDIC is obligated to “publish a notice to the depository institution’s creditors to present their claims, together with proof, to the receiver by a date specified in the notice.” 12 U.S.C. § 1821(d)(3)(B). Under FIRREA, the FDIC is authorized “after the declaration of an institution’s insolvency, [to] settle all uninsured and unsecured claims on the receivership with a final settlement payment which shall constitute full payment and disposition of the [FDIC’s] obligations to such claimants.” 12 U.S.C. § 1821(d)(4)(B)(i); see City of New York v. Fed. Deposit Ins. Corp., 40 F.Supp.2d 153, 159 (S.D.N.Y.1999) (describing FDIC’s claims process). The FDIC is obligated to make its decision to allow or disallow a claim within 180 days of its receipt, 12 U.S.C. § 1821(d)(5)(A)(i), unless the FDIC and the claimant agree in writing to extend this time period, 12 U.S.C. § 1821(d)(5)(A)(ii). If it disallows a claim, the FDIC must provide written notice of the disallowance, 12 U.S.C. § 1821(d)(5), after which a claimant may seek either administrative review of the disallowance or judicial review, 12 U.S.C. § 1821(d)(6)(A). There is a 60-day period within which a claimant must file a civil action in a federal district court; if he “fails to ... file suit on such claim ... before the end of the 60-day period ..., the claim shall be deemed to be disallowed. [As] of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.” 12 U.S.C. § 1821(d)(6)(B). The FDIC argues that plaintiffs’ complaint must be dismissed for lack of subject matter jurisdiction because the pleading was not timely filed. FDIC Mem. at 8-10. According to the FDIC, plaintiffs filed their complaint on September 28, 2009, “more than 90 days after the FDIC-Receiver’s letter disallowing their administrative claims,” id. at 10, and, therefore, plaintiffs “have no further rights or remedies as to any claim against WaMu.” Id. On June 2, 2009, the FDIC requested an extension until December 17, 2009 to make its determination on plaintiffs’ administrative claim. Memorandum of Points and Authorities in Support of the Plaintiffs’ Motion to Oppose Dismissal (“Pis.’ Opp’n to FDIC Mot.”), Ex. A (Request for Extension) at 1. Plaintiffs argue that they “had until December 17, 2009” to file their complaint in a federal district court because the FDIC requested, and plaintiffs agreed to, an extension of the 180-day period within which a decision on the claim was to be made. Pis.’ Opp’n to FDIC Mot. at 2. Plaintiffs apparently consider the FDIC’s extended deadline, December 17, 2009, as the filing deadline for this lawsuit. Their position is untenable. By consenting to the FDIC’s request for an extension of time for the receiver to allow or disallow plaintiffs’ claims, plaintiffs agreed to the following provision: If you agree to the requested extension of time, your statutory rights will remain in full force, including the right to file a lawsuit on your claim during the 60-day period beginning on the earlier of (1) the expiration of the Extended Determination Date; or (2) the date the claim is disallowed by the Receiver, if it is disallowed. Id, Ex. A at 1 (emphasis in original). By virtue of this extension the FDIC had until December 17, 2009 to make its determination, but the FDIC in fact made its decision denying plaintiffs’ claims on June 22, 2009. The 60-day period within which plaintiffs were required to file a civil action therefore began to run on June 22, 2009, the date of the FDIC’s written notice of the denial of their claims. It ended sixty days later on or about August 21, 2009. Based on the Clerk’s “received” stamp on the original pleading, plaintiffs’ complaint was deemed filed on August 31, 2009, 70 days after the date on which the FDIC disallowed their claims. Plaintiffs’ complaint therefore was untimely. Because plaintiffs did not file their lawsuit within sixty days as required by Congress under the FIRREA, the FDIC’s determination is final and not reviewable by this Court. See Hanson v. Fed. Deposit Ins. Corp., 113 F.3d 866, 869-70 (8th Cir.1997) (“[T]he failure of a claimant to satisfy the requirements of § 1821(d)(6)(B) within the prescribed time period bars the claimant from seeking judicial review of his claim.”); Fed. Deposit Ins. Corp. v. Shain, Schaffer & Rafanello, 944 F.2d 129, 132 (3d Cir.1991) (“Congress expressly withdrew jurisdiction from all courts over any claim to a failed bank’s assets that are made outside the procedure set forth in section 1821.”); Jette v. Orange County Fin., Inc., No. 2:08-CV-1767-GEB-EFB, 2009 WL 5029563, at 3 (E.D.Cal. Dec. 15, 2009) (concluding that “Plaintiffs’ failure to act within the sixty day statutory time period is fatal to their [Truth in Lending Act] claim against the FDIC”); Judd v. Resolution Trust Corp., No. 95-1074, 1997 WL 678171, at 17 (D.D.C. Oct. 22, 1997) (Magistrate Judge recommendation to dismiss claims against receiver because plaintiffs “delayed over one year past the ... statutory deadline for filing an action”); Arends v. Eurobank and Trust Co., 845 F.Supp. 60, 64 (D.P.R.1994) (dismissing claims of plaintiffs who failed to file suit within the 60-day period); Freeman v. Resolution Trust Corp., No. C-93-4215-VRW, 1994 WL 398515, at 3 (N.D.Cal. July 20, 1994) (“The court has no jurisdiction over claims filed outside of the 60-day statute of limitations mandated by § 1821(d)(6)(B).”). B. Lack of Subject Matter Jurisdiction Under Rooker-Feldman Doctrine
1920208-18145	PATRICK E. HIGGINBOTHAM, Circuit Judge: Newpark Marine Services, Inc. appeals from a judgment entered after a bench trial in favor of King Fisher Marine Service, Inc. for the value of a King Fisher barge sunk while in tow by Newpark. The district court awarded damages for the total loss of the barge plus interest. Newpark argues that King Fisher Marine failed to prove Newpark’s liability, that the district court awarded excessive damages and interest, improperly modified its opinion and that King Fisher furnished an unseaworthy vessel. Finding the court’s modification appropriate and its findings not clearly erroneous, we affirm. I For several years King Fisher, president of King Fisher Marine, had been looking for a barge suitable for use as a platform for a drydock. In early February 1979 King Fisher, accompanied by the seller’s representative, Jessie Pruitt, inspected a barge which had been advertised in the Waterways Journal. Once an undersea mat for a drilling rig, the barge was basically a large steel box with four internal compartments and two attached pontoons. The barge was capable of carrying 180 tons per foot of depth and when empty had approximately two to three feet of freeboard. According to King Fisher, he inspected both pontoons through open manhole covers and found them filled with Styrofoam and evidently he was told that the internal compartments were empty but that the pontoons were filled with Styrofoam. Pruitt’s men then cut a hole in one of the internal compartments and King Fisher found only about one inch of condensation inside. Pruitt testified that all eight manhole covers to the barge had been unbolted by his crew, that King Fisher opened manholes in the center of the barge, and that he and King Fisher inspected the barge for two to three hours. Pruitt and King Fisher told McMenany’s men to reweld the hole and manhole covers. When Pruitt and King Fisher left the men were preparing to do so but had not yet begun. King Fisher was satisfied that the barge had internal integrity due to the small amount of water they found, the fact that the barge was sitting level and that it had recently carried a large quantity of steel. Newpark’s representative, Wayne Martin, testified that King Fisher told him that the barge could not sink because of the Styrofoam. King Fisher denied making such a statement. Rene LeBouef, captain of New-park’s tug the Sunbonnet, and the ship’s mate, Donald Theriot, inspected the barge on February 13, 1979. LeBouef noted that at least one of the barge hatches was loose and that the compartment underneath it contained Styrofoam. LeBouef also found a narrow two-foot crack on the barge. Theriot found a hole three feet in diameter covered with a plate. When he lifted the plate four to five inches Theriot could see Styrofoam underneath. Although Theriot reported this to LeBouef, LeBouef did nothing about any of the findings and failed to report them to Newpark’s office. Because of fog, the Sunbonnet did not go into the Gulf for another day and a half. During that time, LeBouef noticed no loss of freeboard, indicating to him that there were no holes in the bottom of the barge and he testified that the barge was seaworthy. Although LeBouef and Theriot were not licensed to command an offshore towing tug, on February 14th the Sunbonnet, with the barge in tow, sailed into the Gulf. At midnight Theriot took over the helm and LeBouef went to sleep. Theriot thought the tug’s speed was six to seven miles per hour while LeBouef recalled that when he left the helm the tug was at a three quarter speed of four miles per hour. Theriot testified that when he took over the helm the swells were to three feet and were breaking over the barge. LeBouef testified that he thought the swells were smaller when he relinquished command but that later that morning they increased. The barge was being towed directly astern with a 300 foot line. Theriot relied on several lights attached to the barge to keep sight of it, but was unable to see its freeboard because the tug’s spotlight would not rotate a full 360°. After a while Theri-ot could not see the lights of the barge. Still later he turned the tug to reach the barge with the spotlight. Only then did he realize that its bow was under water and only the starboard stern was visible. Theri-ot then woke LeBouef who on calling New-park’s office was told to head slowly toward more shallow water. LeBouef gave this order and went back to sleep. After about an hour Theriot again awakened LeBouef and informed him that the barge was completely submerged and water was entering the stern of the tug. LeBouef ordered the line cut. At trial LeBouef conceded that had he to do it over again he would have let out more line instead of cutting the line so quickly. The barge sank in approximately thirty feet of water. No buoy was attached to the line before it was cut. Instead, LeBouef read his location and dropped a buoy to mark the site. Newpark reported the sinking to the Coast Guard stating that the hatch covers were not secured and recommended that they be secured in the future. The barge was never located. II The district court found that the barge was seaworthy and that Newpark’s negligence caused the loss of the barge. The tow, King Fisher, warrants the seaworthiness of the vessel — that it is sufficiently staunch to withstand the pressures that ordinarily accompany the intended voyage. S.C. Loveland, Inc. v. East West Towing, Inc., 415 F.Supp. 596, 605 (S.D.Fla.1976) aff'd 608 F.2d 160 (5th Cir.1979), cert. denied 446 U.S. 918, 100 S.Ct. 1852, 64 L.Ed.2d 272 (1980); Derby Co. Ltd. v. A.L. Mechling Barge Lines, Inc., 258 F.Supp. 206, 211 (E.D.La.1966) aff’d. 399 F.2d 304 (5th Cir. 1967). Although a tug is neither a bailee nor an insurer of the tow it is obligated to provide reasonable care and skill “as prudent navigators employ for the performance of similar service.” Stevens v. The White City, 285 U.S. 195, 202, 52 S.Ct. 347, 350, 76 L.Ed. 699 (1932); Consolidated Grain & Barge Co. v. Marcona Conveyor Corp., 716 F.2d 1077, 1081, (5th Cir.1983); Agrio Chemical Co. v. M/V Ben W. Martin, 664 F.2d 85, 90 (5th Cir.1981). The law has harmonized the obligations of the tow and the towing vessel largely through burdens of proof. Where “a barge in tow sinks in calm water for no immediately ascertainable cause ... in the absence of proof that the barge was improperly handled, the vessel’s sinking is presumed to be a direct result of her unseaworthiness,” Consolidated Grain & Barge Co. v. Marcona Conveyor Corp., 716 F.2d at 1081. At the same time, the tug cannot complain about a condition of unseaworthiness or other weakness that caused the loss if it knew of the condition and failed to use reasonable care under the circumstances. Tidewater Marine Activities, Inc. v. American Towing Co., 437 F.2d 124, 130 (5th Cir.1970); Horton & Horton, Inc. v. T/S J.E. Dyer, 428 F.2d 1131, 1134 (5th Cir. 1970); Bisso v. Waterways Transportation Co., 235 F.2d 741, 745 (5th Cir.1956). If the alleged unseaworthiness is so apparent that it would be negligent for the tow to attempt to proceed, it cannot disclaim responsibility for the loss. Damaron-White Co. v. Angola Transfer Co., 19 F.2d 12, 14 (5th Cir.1927); Otto Candies, Inc. v. Great American Insurance Co., 221 F.Supp. 1014, 1018 (E.D.La.1963) aff’d. 332 F.2d 372 (5th Cir.1964). As the district court recognized, King Fisher had the burden of proving Newpark negligent. See Consolidated Grain & Barge Co. v. Marcona Conveyor Corp., 716 F.2d at 1082. Nat G. Harrison Overseas Corp. v. American Tug Titan, 516 F.2d 89, 94 (5th Cir.1975). In admiralty, findings of proximate cause and negligence are reviewed under the clearly erroneous standard. Consoldiated Grain & Barge Company v. Marcona Conveyor Corp., 716 F.2d at 1082. Because Newpark knew of the open manhole and cracks on the ship’s surface and there is no other evidence that the barge was unseaworthy, the district court’s refusal to find King Fisher negligent was not clearly erroneous. The barge had carried a heavy load of steel without apparent difficulty. An internal compartment checked by King Fisher looked fit and the barge was not heeling. LeBouef watched the barge for a day and a half and found no change in its freeboard and thought her seaworthy. While the district court necessarily found that the water entered the unbolted manhole and assorted cracks on the barge’s surface, these cracks cannot be relied upon as breaches of the warranty that the barge was seaworthy because Newpark, through LeBouef, was aware of the condition. Theriot and LeBouef testified that water could have entered the manhole cover and cracks that they had seen. Newpark in its brief admits that it is not known whether water which might have seeped into the pontoons could fill the barge. Newpark’s own statement to the Coast Guard stated “barge sank-no hatch covers in place” and recommended “secur[ing] hatches on barges before moving.” It appears that Newpark knew it was possible for water to seep into the manhole and cracks even though there was Styrofoam, below. Newpark then took the barge into the Gulf of Mexico in tow of a tug whose spotlight could not accurately focus on the barge’s freeboard unless the tug altered its course. Moreover, the Sunbonnet towed the barge at speeds which caused water to cover the deck of the barge. It was not until the bow was submerged that Newpark slowed and began moving toward shallower waters. Even at this point, Newpark had almost one hour in which to secure a buoy to the line or prepare to do so in case it became necessary to cut the line due to the complete submersion of the barge. When the barge did sink, Newpark did not try to gain slack in the line by reversing the engines of the tug but instead immediately cut the line. Of course it is within the captain’s discretion to cut a line to a barge when the tug and its crew are in danger but this captain went back to sleep with no plans to reverse the tug if it appeared that the barge was submerging or to fix a buoy to the line if it had to be cut. In sum, the district court’s findings that Newpark was negligent and its refusal to find the barge unseaworthy were not clearly erroneous. Ill Newpark also claims that the district court’s damage award of $232,996.75 is excessive. King Fisher purchased the barge on February 13, 1979, for $30,000 although it had been advertised for $35,000. He then contracted with Newpark to tow the barge across the Gulf of Mexico and insured the barge against the perils of the journey for $50,000. The barge was lost on February 15, 1979. King Fisher did not find a suitable replacement barge until November 1979. There was uncontroverted expert testimony that the first barge was ideally suited as a drydock platform; that only six other similar mats existed in the world; and that none of them had been on the market since the loss of King Fisher’s barge. Similarly, there was evidence that a new barge of similar specifications would cost one million dollars to build and that combining smaller barges into a barge similar to the one lost would cost King Fisher approximately $600,000. The replacement barge also cost $30,000 but it had a hole which the court found King Fisher paid $202,996.75 to patch in April 1981. Finally, there was uncontro-verted expert testimony that the cost incurred by King Fisher to modify the replacement barge to make it similar to the first was reasonable and that King Fisher’s efforts were the most economical way to obtain a drydock base. In sum the district court awarded the cost of a replacement barge capable of the same use as the lost barge. IV It is fundamental that when a vessel is lost or damaged “the owner is entitled to its money equivalent, and thereby to be put in as good a position pecuniarily as if his property had not been destroyed.” Standard Oil Company v. Southern Pacific Company, 268 U.S. 146, 155, 45 S.Ct. 465, 466, 69 L.Ed. 890 (1924). To further this policy courts have long held that where a vessel is a total loss the measure of damages is the market value at the time of the loss. Id. at 155, 45 S.Ct. at 466. Where there are insufficient sales to establish a market other evidence such as replacement cost, depreciation, expert opinion and the amount of insurance can also be considered to determine the value of the lost vessel. See Greer v. United States, 505 F.2d 90, 93 (5th Cir.1974); Carl Sawyer, Inc. v. Poor, 180 F.2d 962, 963 (5th Cir.1950). Newpark claims the evidence establishes that the market value of the barge was $30,000 because that is what King Fisher paid for it in an arm’s length sale only two days before it was lost. As far as it goes, the argument is unassailable. The difficulty is that the barge was not purchased to perform as a barge. It was instead purchased for use as a drydock platform. The barge’s price in the barge market is not determinative of its value because its unique capabilities made it valuable for use other than as a barge. The district court found that no “accurate market price” could be determined for this barge and un-controverted expert testimony supported that conclusion. There was testimony that similar barges so readily transformed into drydocks were not then or have since been available. Indeed, King Fisher testified that he looked for several years before he found the now lost barge. King Fisher’s expert testified that only one drydock a year is built and although it would cost $1,000,000 to build a new barge similar to the one lost, it might “not sell ... for a dime.” When King Fisher bought the barge he appears to have been the only one in the market for such a drydock platform. That the market did not value the barge’s use as a drydock platform was supported by the fact that King Fisher paid $30,000 for a replacement barge that could not be used as the drydock platform without considerable modification. The district court correctly found that the price paid by King Fisher for the now lost barge did not represent its value as a drydock platform. The limited number of relevant cases support the decision of the district court. In Boston Iron & Metal Co. v. S.S. Winding Gulf, 85 F.Supp. 806, 1949 A.M.C. 1149 (D.Md.1949) aff’d 209 F.2d 410 (4th Cir. 1954), reversed on other grounds 349 U.S. 122, 75 S.Ct. 649, 99 L.Ed. 933 (1955), Boston Iron had recently purchased an obsolete ship to use as scrap. It sank while being towed from its place of purchase to Boston Metal’s facility. The tow urged that the value of the lost ship was its recent purchase price plus the cost of tow. Boston Iron replied that as scrap the ship was worth much more. The court found that given the limited number of opportunities to purchase such ships and Boston Iron’s special skill in the field that it had been able to purchase the ship at a bargain and that Boston Iron should be reimbursed for the loss incurred. The court noted difficulties in Boston Iron’s method of computing the ship’s scrap value and did not award the total claimed, but it did award substantially more than the cost of the lost ship and towage to Boston Iron. Similarly, in American Mail Line, Ltd. v. Skagit River Navigation and Training Co., 91 F.2d 835, 844 (9th Cir.1937) (The President Madison), the lost boat had qualities that were valued in its local Skagit River environment but it was the only such boat. The court refused to find that the market price was the price for which it could be sold on the Columbia River, because those purchasers did not have the same needs and would not fully value the ship’s worth. The price established by others with different needs “could not give the owner, who needs these special features in his trade, the value of what he had lost.” Id. 91 F.2d at 844. See also Lockwood v. Motor Boat Spitfire II, 1926 A.M.C. 1185, 1189 (E.D.S.C.1926). Newpark cites United States v. Toronto, Hamilton & Buffalo Navigation Co., 338 U.S. 396, 402, 70 S.Ct. 217, 221, 94 L.Ed. 195 (1949) for the proposition that the value of the drydock is what an “ordinary purchaser” would have paid for the barge. While the Court did not elaborate on its definition of ordinary purchaser it noted that when considering the price that could have been obtained for the lost vessel the court should consider what an ordinary seller in the trade would do. Id. at 406, 70 S.Ct. at 223. The price an ordinary drydock purchaser would have paid is the object of our inquiry. King Fisher established that there was no market for drydock platforms created by ordinary drydock purchasers. Here the lost barge had special qualities as a base for a drydock that filled legitimate commercial needs that would not be recognized in the “market” price of the barge. While the barge may only have been a large steel box to some, King Fisher recognized and took advantage of an opportunity to purchase a suitable drydock platform at low cost. The value of the barge was not reflected by its cost to King Fisher. The district court was not clearly erroneous in awarding King Fisher the value of its lost barge measured by its cost of replacement. V Newpark also claims that the district court improperly modified its opinion. When the district court originally awarded King Fisher $232,996.75 plus interest it stated that the market value of the lost barge was $30,000. In response to Newpark’s motions for rehearing and new trial the district court modified its opinion to conclude that the lost barge had no market value. The district court’s modification of its opinion to clarify its analysis of its damage award in response to Newpark’s motions for new trial was proper under Rule 59 of the Federal Rules of Civil Procedure. See e.g., United States v. Hollis, 424 F.2d 188, 191 (4th Cir.1970). VI Finally, Newpark claims that the district court’s award of interest on the full $232,-996.75 from the date of the loss of the barge was error. Newpark notes that King Fisher did not spend the $30,000 for the replacement barge until November 1979 and it did not begin to spend the $202,-996.75 for repairs until April 1981.
3763027-13453	ORDER ON OBJECTIONS TO INTERROGATORIES NEVILLE, District Judge. The plaintiff, United States of America has objected to certain interrogatories directed to it by defendant Beatrice Foods Company (Beatrice) and moves for protective orders in connection therewith. The motions were argued before the court on January 14, 1971 in Minneapolis, Minnesota and extensive and exhaustive briefs have been submitted on the issues raised. A brief summary of the case is necessary to an understanding of the government’s objections. Pursuant to a complaint filed by the Federal Trade Commission (FTC) attorneys in 1956, an F. T.C. Trial Examiner after voluminous hearings entered a decision in 1964 finding Beatrice in violation of 15 U.S.C. § 45 and requiring divestiture of certain interests or holdings and prohibiting acquisition of similar interests without FTC approval. This decision was sustained by a final order of the Commission on December 10, 1965, and Beatrice filed a petition for review with the Court of Appeals for the Ninth Circuit. During the pendency of that appeal, the parties arrived at a negotiated agreement modifying the original order to some extent, and by joint motion sought its adoption by formal decree of the Ninth Circuit. On May 23, 1967, the court entered a final order affirming this negotiated agreement as filed by the parties. The FTC’s subsequent modified Order, issued June 7, 1967, in accordance with the Ninth Circuit’s decree, is the binding Order upon which this enforcement action is brought. Shortly before the negotiation of the Beatrice agreement, the FTC apparently reached similar agreements with at least three other major dairy companies, which agreements forbade the acquisition of “the whole or any part of the stock, share capital, or assets” of any milk or milk products firm. The FTC’s original order in the Beatrice proceedings and the settlement decree ultimately negotiated and approved by the Ninth Circuit, however, prohibited (at Paragraph III therein) the acquisition of “any interest” in such firms. This Section 45(i) enforcement action alleges, inter alia,, at Paragraph 7 of the complaint, that defendant Beatrice “acquired an interest” in Maple Island Dairies, Inc., a corporation operating in Minnesota on or about September 1, 1968, in violation of the Order. Such allegation obviously draws into question the scope and effect of the Order’s prohibition of acquiring an “interest” in such firms. Beatrice apparently takes the position that the word “interest” in the 1967 Order must be construed as substantively equivalent to the language “stock, share capital, or assets” which appears in the consent decrees entered between the FTC and the other dairy products companies prior to the negotiation of the final Beatrice Order, and that the meaning of “interest” is thus governed by the subsequent judicial and administrative decisions, if any, and the “practical construction” given the language used in those other decrees. It seeks to establish the equivalence of these terms by reconstructing the negotiations between Beatrice and the FTC to demonstrate the intentions behind the modification of the original Order. Evidence of such negotiations, it contends, will be relevant under the exception to the parol evidence rule to establish the intentions of the contracting parties as to ambiguous contractual language. It is against this background that the following motions must be considered: I. The Government has moved for a protective order which would entitle it to ignore Interrogatory #1, which reads: “State the name and address of each person who negotiated the terms of the contract which constitutes the settlement decree referred to in the complaint.” The Government objects to this Interrogatory on the ground that its answer would not conceivably lead to the discovery of facts relevant to the issues in the ease. It contends that the order by definition expresses the intention of the approving court, and that evidence of the intentions of the parties is irrelevant to the issue of the meaning of the word “interest”. The parties have briefed the court in extensio on the question whether evidence as to the negotiations which underlie the 1967 final order is admissible in the trial of the case. The court deems it unnecessary and inappropriate to resolve that issue at this stage of the litigation. The statute under which this action is brought, 15 U.S.C. § 45(1), provides for a penalty “of not more than $5,000 for each violation” of the FTC’s order, and “each day of continuance of such failure or neglect shall be deemed a separate offense.” While good faith is not a defense to such an action, it is clearly relevant to the court’s discretionary determination of the extent of civil penalties to be assessed under that provision. United States v. H. M. Prince Textiles, Inc., 262 F.Supp. 383, 388-389 (S.D.N.Y.1966); United States v. Vitasafe Corp., 212 F.Supp. 397 (S.D.N.Y.1962), aff’d 352 F.2d 62 (2d Cir. 1965). Thus, evidence tending to establish that the defendant’s allegedly violative conduct was consistent with its reasonable understanding of the scope of the governing order may well be relevant on the issue of damages. The court thus overrules the government’s objection to Interrogatory No. 1 and hereby orders it to answer the same. The court recognizes that its inquiry on this motion is not as to the ultimate admissibility of any evidence garnered as a result of the government’s answer to Interrogatory No. 1. As indicated above, the court does not now decide whether the language of the order is ambiguous or whether the exception to the parol evidence rule applies to the construction of such order. This ruling should govern objections on the same theory which might be lodged by the government if and when counsel for Beatrice attempt to depose under the discovery rules those individuals whose identities ai'e disclosed pursuant to Interrogatory No. 1. II. The government also requests protective orders with respect to defendant’s Interrogatories No. 2 and No. 3, which read: No. 2. “Referring to Paragraph 7 of Count I of the complaint, state with particularity any ‘interest’ in Maple Island Dairies, Inc. owned by the defendant.” No. 3. “Referring to Paragraph 7 of Count I of the complaint, state with particularity any ‘interest’ in Maple Island Dairies, Inc. in which the defendant has any ‘direct or indirect’ ownership.” The government objects first to the terminology of the Interrogatories, specifically to the characterization of the action as involving only “ownership” of Maple Island Dairies, Inc. , The complaint unequivocally alleges acquisition of an “interest” in Maple Island, which language conforms to the term used in the order as discussed hereinabove. Certainly the government cannot be bound by any gloss applied to the language of its complaint by the defendant, and resolution of the question whether “interest” means something other than “ownership” will not be influenced by the defendant’s choice of words in discovery proceedings. Therefore, such is not a valid ground for issuance of a protective order or sustaining an objection to Interrogatories No. 2 and No. 3. The government in its answers to interrogatories No. 2 and No. 3 regarding “ownership” should deal with all alleged acquisitions of “interests” in Maple Island Dairies and not omit certain transactions which it intends to demonstrate constitute acquisitions of “interests,” within the prohibition of the order, which somehow fall short of “ownership” as that term is understood in the context of this case. To fail to do so just invites further interrogatories and creates delay. The government also objects to Interrogatories No. 2 and No. 3 as calling for a full exposure of “each segment of its legal theory as involving transactions which were engineered, refined and consummated by the defend ant itself.” It contends that the information sought by such Interrogatories is within Beatrice’s present possession inasmuch as the complaint charges violations of the order by virtue of the Beatrice relationship with Maple Island. As such, it is argued, requiring response would place a heavy burden on the government with no countervailing benefit to Beatrice. Beatrice, on the other hand, argues that its purpose is “to find out what the government’s contentions are when it charges a violation of the agreed order so it can prepare a defense to them.” A further purpose, not argued by Beatrice, would be to discover information relevant to the claimed acquisitions which might be beyond the information available to Beatrice. If such information exists, it ought to be made available to Beatrice. The scope of inquiry by Interrogatories under Fed.R.Civ.P. Rule 33 is governed in part by Rule 26 as most recently amended, which reads at 26(b) (1) in pertinent part: “Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.” As the Supreme Court noted in Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1946), one of the purposes of discovery under the Federal Rules is to narrow the issues for trial. Thus, courts have consistently held that a party may propound interrogatories calling for the disclosure of the opposing party’s specific position as to the facts underlying his claim, notwithstanding that such facts, divorced from their application to the legal principles governing the case, may already be known or accessible to the propounding party. United States v. Article of Drug, 43 F.R.D. 181 (D.Del.1967); Baim & Blank, Inc. v. Philco Distributors, Inc., 25 F.R.D. 86 (E.D.N.Y.1957); Wright, Federal Courts (2nd Ed., 1970), § 81, p. 356. Cf. Leumi Financial Corp. v. Accident & Indemnity Co., 295 F.Supp. 539 (S.D.N.Y.1969); Diversified Products Corp. v. Sports Center Co., 42 F.R.D. 3 (D.Md.1967). The court in Bairn & Blank, supra, accordingly reasoned: “The purpose of the deposition-discovery procedure is not only for the ascertainment of facts, but also to determine what the adverse party contends they are, and what purpose they will serve, so that the issues may be narrowed, the trial simplified, and time and expense conserved. It has also been held that inquiry, either by deposition or interrogatory, into facts within the discoverer's own knowledge, and of which he already has information, are proper. Benevento v. A. & P. Food Stores, Inc., D.C.E.D.N.Y., 26 F.Supp. 424; Nakken Patents Corp. v. Rabinowitz, D.C.E.D.N.Y., 1 F.R.D. 90; Moore’s Federal Practice, 2nd Ed., Secs. 26.21, 33.13.” 25 F.R.D. at 87. Against the foregoing body of case law, the court must consider the following 1970 amendment to Rule 33: “An interrogatory otherwise proper is not necessarily objectionable merely because an answer to the interrogatory involves an opinion or contention that relates to fact or the application of law to fact, but the court may order that such an interrogatory need not be answered until after designated discovery has been completed or until a pre-trial conference or other later time.” The Notes of the Advisory Committee responsible for that amendment indicate that it was not intended to constrict the scope of discovery of specific facts and contentions of the parties: “Rule 33 is amended to provide that an interrogatory is not objectionable merely because it calls for an opinion or contention that relates to fact or the application of law to fact. Efforts to draw sharp lines between facts and opinions have invariably been unsuccessful, and the clear trend of the cases is to permit ‘factual’ opinions. As to requests for opinions or contentions that call for the application of law to fact, they can be most useful in narrowing and sharpening the issues, which is a major purpose of discovery.” Under the circumstances, the court concludes that responses to Interrogatories No. 2 and No. 3 may substantially aid in narrowing the issues for trial, and that the government has not demonstrated adequate basis upon which to issue the requested protective order or to sustaining objections to such interrogatories. Therefore, the government’s motion with respect to Interrogatories No. 2 and No. 3 is denied. III. Finally, the government requests a protective order as to certain categories of documents, the existence of which was disclosed pursuant to defendant’s Interrogatory No. 4(e). That Interrogatory reads: “Identify each and every document or memorandum in your possession referring to the matters alleged in the complaint.” The government’s brief listed, inter alia, the following categories of such documents, as to all of which it claims protection under the doctrines of Work Product and Attorney-Client privilege: “1. Category A — Legal Memoranda from Joseph J. Gereke, Chief, Compliance Division, to the Commission concerning Compliance Reports of Defendant, the issuance of compulsory process under Section 6(b) of the Federal Trade Commission Act (15 U.S.C. § 46(b)) and recommendations as to the bringing of the present suit. 2. Category E — Legal Memoranda and attached exhibits submitted to the Department of Justice outlining the theory of the case and setting forth the facts, evidence and anticipated defenses. 3. Category J — Legal Memoranda from Joseph J. Gereke to the Commission concerning the eventual divestiture of the assets which are the subject matter of Count II.”
9169360-19139	ORDER DISMISSING PLAINTIFFS’ EMTALA CLAIMS AND DENYING PLAINTIFFS’ MOTION TO AMEND THE COMPLAINT CASSELL, District Judge. This ease presents a -statute of limitations question under the Emergency Medical Treatment and Active Labor Act (EM-TALA). In June 2002, plaintiff Adam Merce was discharged from emergency room treatment by defendant doctors David M. Pope and Mark W. Greenwood. Shortly after that discharge, he suffered serious injuries — injuries, he alleges, the doctors should have discovered in his emergency room visits. More than two years later (in July 2004), Merce filed the lawsuit alleging several claims, including violations of EMTALA’s anti-dumping provisions. The doctors moved to dismiss the EMTALA claims, citing EMTALA’s two-year statute of' limitations. Merce responded that the two-year statute had not run because of various state law tolling provisions, including tolling provisions for pre-litigation screening procedures and for delayed discovery of an injury. The court rejects Merce’s argument that EMTALA’s two-year statute of limitations is tolled by these state law provisions. Congress chose to adopt an iron-clad two-year statute, rather than allow tolling for such reasons. The court must therefore follow the congressional determination and dismiss Merce’s EMTALA’s claims. I. Background For purposes of this motion, the court finds the following facts. Plaintiff Adam Merce began feeling sick on June 15, 2002. On June 18, 2002, during a CT scan, Merce suffered a grand mal seizure and was taken to the emergency room at Sevier Valley Hospital in Richfield, Utah. Dr. Pope was the emergency room physician who examined Mr. Merce there. Dr. Pope diagnosed a grand mal seizure, prescribed Dilantin and told Mr. Merce to go home. Merce went home as ordered, but his problems continued. In the early morning hours of June 19, 2002, Merce returned to the emergency room. Dr. Greenwood examined him, gave him a spinal tap and, diagnosed viral spinal meningitis. Dr. Greenwood prescribed morphine and antibiotics and admitted Merce to the hospital. The next day, worried by his apparent lack of improvement and ultimately dissatisfied with the care at Sevier Valley hospital, Merce’s companion, plaintiff Emily De-mong, drove Merce to Utah Valley Medical Center in Provo. His condition continued to worsen until, on June 22, 2002, an MRI was finally performed. The MRI revealed that Merce suffered from herpes simplex encephalitis. Merce slipped into a coma that same afternoon. Plaintiffs allege that Merce suffered acute brain injury as a result of the failure to accurately diagnose or treat his condition. Plaintiffs have brought state law medical malpractice and EMTALA claims against Drs. Pope and Greenwood in connection with these events. II. Pope’s and Greenwood’s Motion to Dismiss Plaintiffs’ EMTALA claims Dr. Pope’s alleged EMTALA violation occurred on June 18, 2002. Dr. Greenwood’s allegedly occurred on June 19, 2002. But plaintiffs did not file their present EMTALA claims until July 1, 2004, more than two years after these alleged violations took place. Dr. Pope has therefore moved to dismiss plaintiffs’ EMTALA claims under EMTALA’s two-year statute of limitation, and Dr. Greenwood has joined that motion. In response, plaintiffs argue that EM-TALA’s two-year statute of limitations is tolled by the pre-litigation procedures required under Utah State law and that EM-TALA’s statute of limitations does not run until a claimant “discovers” the violation. Oddly, neither defendant has raised a straightforward challenge to plaintiffs’ EMTALA claim against him: namely, that under the plain language of the Act, only hospitals can be sued for violations. A private right of action against an individual doctor does not appear to be authorized. However, because the court disposes of plaintiffs’ EMTALA claims against Drs. Pope and Greenwood on statute of limitations grounds, it has no need to further address this issue. EMTALA provides a private cause of action for its violation and contains its own statute of limitations provision: “[n]o action may be brought under this paragraph more than two years after the date of the violation with respect to which the action is brought.” In addi tion, EMTALA contains a preemption provision, which states that nothing in the act “preempt[s] any State or local law requirement, except to the extent that the requirement directly conflicts with a requirement of this section.” EMTALA is a separate federal statute,, not merely an outgrowth of state malpractice law. As the Tenth Circuit has repeatedly noted, EMTALA “[s]ection 1395dd is an anti-dumping provision, not a federal medical malpractice law.” EMTALA does, however, incorporate state law provisions regarding available damages. Utah state law contains several provisions circumscribing the statute of limitations in medical malpractice cases. Under Utah law, the two-year limitations period is expressly tolled while plaintiffs comply with the required pre-litigation screening procedures. Pre-litigation screening and certification of claims is required under Utah law before a medical malpractice claim can be filed and a request for panel review must be made within 60 days after service of the statutorily-required notice of intent to commence a medical malpractice action. The Division of Professional Licensing must complete its pre-litigation hearing within 180 days of the date a request for review is filed or else its jurisdiction terminates and a claimant is held to have complied with all requirements for commencement of a court action. In addition to these pre-litigation requirements, Utah law also provides that the statute of limitations does not begin to run until “discovery” of the conduct giving rise to the alleged injury. Plaintiffs argue that because EMTALA adopts substantive state law provisions governing available damages, it also incorporates substantive state law procedural provisions governing malpractice claims (including provisions tolling the statute of limitations) and that EMTALA’s two-year statute of limitations is thus tolled by these provisions. While the Tenth Circuit has not addressed this issue, the Fourth Circuit has squarely rejected plaintiffs’ argument. In Vogel v. Linde, the Fourth Circuit held that EMTALA’s two-year limitations period is not tolled by infancy or incompetency (as limitations periods would be under Virginia state law) because it is black letter law that statutes of limitation do not toll unless the statute expressly so provides. Subsequently, in Power v. Arlington Hospital the Fourth Circuit concluded. that pre-litigation claim screening provisions required under Virginia state law -did not toll EMTALA’s two-year limitations period because the state law provisions conflicted with the federal statute and were thus preempted by EMTALA. Power involved a situation inverse to the situation here; it was the defendant seeking to incorporate state law restrictions on the statute of limitation, rather than the plaintiff. But the principle remains the same: state law does not alter EMTALA’s congressionally-determined procedural requirements regardless of whom they benefit. Thus, the defendant hospital in Power had moved to dismiss plaintiffs EMTALA claim because she had failed to submit her claim for pre-litigation review by a medical malpractice review panel as required under Virginia law. The district court denied the hospital’s motion to dismiss and the Fourth Circuit affirmed, holding that EMTALA does not “expressly or impliedly incorporat[e] state-mandated procedural requirements for EMTALA claims.” The Circuit agreed with a previous ruling by the Virginia Supreme Court that Virginia’s “notice of claim provision, and its requirement that suits cannot be filed until after they are reviewed by a malpractice review panel, directly conflicts with EM-TALA.” The Circuit then noted that “[n]otwithstanding the fact that the Virginia Act tolls the statute of limitations during compliance with its procedural prerequisites, these state law tolling provisions cannot toll the running of EMTALA’s statute of limitations,” and cited as support for this position the U.S. Supreme Court’s recognition that “ ‘[i]f Congress expressly puts a limit upon the time for enforcing a right which it created, there is an end of the matter.’ ” The Circuit thus concluded that because Virginia’s pre-litigation procedures had the potential to directly conflict with EMTALA, they were “not applicable to an EMTALA claim.” Failure to comply with state procedures, in other words, would not bar plaintiffs EMTALA claim. The U.S. District Court for the District of Colorado also recently reached a similar conclusion. In Bird v. Pioneers Hospital, plaintiff Bird brought an EMTALA claim against Pioneers Hospital after she was discharged during labor and told to drive herself to another hospital in Grand Junction, Colorado. She started to deliver her baby en route and due to complications that developed, her baby suffered severe injuries and died 15 days later. Pioneers Hospital moved to dismiss plaintiffs EM-TALA claim on the ground that she had failed to comply with the notice-of-claim requirements under the Colorado Governmental Immunity Act (CGIA). The district court rejected this argument. The court held that EMTALA preempts the state law notice-of-claim requirement “because the state statute ... is potentially in direct conflict with EMTALA’s statute of limitations.” In so doing, the district court followed the Fourth Circuit’s reasoning in Power. Under the CGIA ... a plaintiffs notice requirement is triggered by the “discovery” of his injury, whereas EMTALA’s statute of limitations commences as of the date of the violation of the Act. Further, the CGIA tolls statutes of limitations pending compliance with the CGIA’s procedural requirements where the time necessary for such compliance would otherwise exceed the limitations period. Consequently, a plaintiff may discover his injuries and provide notice within EMTALA’s statute of limitations but still fail to complete the CGIA’s presuit compliance procedures and file his complaint within the federal limitations period. As a result, there is a potential direct conflict between compliance with the CGIA’s procedural re quirements and EMTALA’s statute of limitations. Accordingly, I conclude that EMTALA preempts the CGIA’s notice of claim statute because the state procedural requirement stands as an obstacle to the accomplishments and execution of Congress’ objectives in enacting EMTALA. The reasoning of both the Fourth Circuit in Power and the District of Colorado in Bird is persuasive here. State procedural requirements could stand as an obstacle to the congressional determination that a two-year statute of limitations is appropriate for EMTALA claims. The court therefore holds that because a potential direct conflict exists between Utah’s pre-litigation claim screening requirements and EMTALA’s statute of limitations, EMTALA preempts state law on this point. As a result, Utah state pre-litigation screening requirements are not “incorporated” into EMTALA and do not toll EMTALA’s two-year limitations period. The Second Circuit’s decision in Hardy v. New York City Health & Hospitals Corp. and the Ninth Circuit’s decision in Draper v. Chiapuzio do not alter the court’s conclusion. Both Draper and Hardy involved the interrelationship between state law notice-of-claim provisions and EMTALA’s statute of limitations. In both cases, the Circuits held that EMTALA did not preempt the state law notice-of-claim requirements. The Circuits reasoned that compliance with both EMTALA’s two-year statute of limitations and the state law notice-of-claim provisions at issue was not an impossibility and thus, that no direct conflict between state and federal law existed. Draper and Hardy may be incorrectly decided. The New Mexico Court of Appeals came to this conclusion in Godwin v. Memorial Medical Center. In Godwin, the state trial court had granted summary judgment to the hospital on Godwin’s EM-TALA claim finding that Godwin had not filed a notice-of-claim within 90 days of the event giving rise to the injury as required under New Mexico’s Tort Claims Act and that this notice-of-claim provision was incorporated into EMTALA thus barring Godwin’s suit. The Court of Appeals reversed, holding that the notice-of-claim provision in the state’s Tort Claims Act did not apply to EMTALA actions. The Court of Appeals thus rejected the reasoning of Draper and Hardy, instead concluding that [t]he fact of the matter is that if failure to give a 90-day notice bars an Emergency Act claim, the two-year period given [under EMTALA] is taken away. The two-year limitations period in effect is reduced to 90 days or less and effectively vitiated. These circumstances create a direct conflict between the Tort Claims Act notice-of-claim requirement and the Emergency Act’s statute of limitations and purposes. We hold that the Tort Claims Act notice-of-claim requirement is preempted by the Emergency Act and therefore not applicable to an Emergency Act claim. The court need not go so far as the New Mexico Court of Appeals, however, because Draper and Hardy are distinguishable from the case at hand. Both Draper and Hardy involved state law requirements that at least arguably created no conflict with EMTALA. Both cases involved state laws requiring merely that a notice of claim be filed — and nothing more — before a plaintiff could file suit. Such laws are different than Utah’s medical malpractice scheme, which requires not only the simple filing of a notice-of-claim but also undergoing a pre-litigation panel review process during which the statute of limitations is tolled. This difference is crucial because while a state law requiring a plaintiff to give notice of claim does not clearly conflict with EMTALA’s statute of limitations, an express tolling provision such as Utah’s certainly may in some circumstances. Thus, Hardy and Draper can ultimately be harmonized with Power and Bird by recognizing that the simple state law notice-of-claim provisions at issue there were not inconsistent with EMTA-LA. As the District Court for the District of Colorado persuasively explained in Bird, Hardy and Draper are distinguishable from the circumstances presented here because unlike the notice-of-claim statute in [CIGA], the statutes in Hardy and Draper only require timely notice and do not mandate further compliance with any pre-suit procedures. Therefore, Hardy and Draper did not address tolling provisions similar to those found in [CIGA], which I conclude are in conflict with EMTALA’s statute of limitations. I thus find that [CIGA] is more analogous to the Virginia notice-of-claim statute in Power which contained similar tolling provisions. Here, as in Power and Bird, the pre-litigation claim screening requirements— with their attendant tolling provisions — do pose a potential direct conflict with EM-TALA’s statute of limitations and are therefore preempted by EMTALA. Plaintiffs would also have the court hold that EMTALA’s two-year statute of limitations is tolled until the discovery of the conduct giving rise to the injury, just as it is under state law. Plaintiffs reiterate their “incorporation” arguments and raise equitable concerns in support of this position. But any state law provision about “tolling until discovery” directly conflicts with the plain language of 42 U.S.C. § 1395dd(d)(2)(C), which provides that EMTALA’s limitations period begins to run from the “date of the violation.” And as for plaintiffs’ argument that it would be unfair to more seriously injured patients not to toll EMTALA’s statute of limitations until discovery of violations, some potential unfairness is inherent in the very conception of a statute of limitations. That unfairness to the plaintiff must, of course, be balanced against the need for defendants to know in a timely way whether they will be sued. In enacting EMTALA, Congress certainly could have expressly provided for tolling of the limitations period until discovery of the conduct giving rise to the injury. The fact that it chose not do so likely reflects an attempt to strike the proper balance between the harm to patients and the legitimate concern providers have in being able to predict their potential liabilities for insurance and other reasons. In any event, the weighing of the competing concerns is for Congress, and not this court, to tackle. Finally, plaintiffs argue that failure to allow tolling of EMTALA’s two-year statute of limitations until the date of discovery of the injury would violate their rights to due process and equal protection under the 14th Amendment to the United States Constitution. The court will not address the merits of these dubious arguments for lack of adequate briefing of the issues. III. Plaintiffs’ Motion to Amend the Complaint Plaintiffs have moved to amend their complaint to add facts establishing that Mr. Merce was incapacitated until July 7, 2002, and thus could not have discovered the EMTALA violation prior to that date. But because the court has already rejected plaintiffs’ argument that EMTALA’s statute of limitation runs from the date of discovery of the injury instead of from the date of the violation, plaintiffs’ amendment, even if allowed, would not prevent dismissal of the EMTALA claims and would thus be futile. Because plaintiffs’ proposed amendment would be futile, leave to amend need not be granted and plaintiffs’ motion to amend is, accordingly, denied. IV. Sevier Valley Hospital’s and Utah Valley Regional Medical Center’s Motion to Dismiss Plaintiffs EM-TALA claims IHC Health Services, Inc., doing business as both Sevier Valley Hospital and Utah Valley Regional Medical Center, have also filed a motion to dismiss plaintiffs’ EMTALA claims on statute of limitations grounds. They filed this motion after briefing and oral argument on Drs. Pope and Greenwood’s motion had been completed. Although the court fails to see why the reasoning of this opinion would not apply with equal force to this later-filed motion to dismiss, the court nonetheless gives plaintiffs three weeks in which to either oppose the motion to dismiss or to indicate them lack of objection to dismissal of the remaining EMTALA claims. V Conclusion Because plaintiffs’ EMTALA claims were not filed until more than two years after the date of the alleged violations of the act, and because the court finds that EMTALA does not incorporate state law pre-litigation claim screening requirements and that its two-year limitations period begins to run from the date of the alleged violations, plaintiffs’ EMTALA claims were untimely filed and defendants Pope and Greenwood’s motion to dismiss (9-1; 12-2) is GRANTED. Because the proposed amendment would be futile, plaintiffs’ motion to amend the complaint (14-1) is DENIED. The case will proceed, of course, on the state law medical malpractice claims. . 42 U.S.C. § 1395dd(d)(2)(A). . 42 U.S.C. § 1395dd(d)(2)(C). . 42 U.S.C. § 1395dd(f).
4057973-9464	OPINION PER CURIAM. Wayne McNeill, pro se, appeals from an order of the District Court granting Greyhound Lines, Inc.’s motion for summary judgment. For the following reasons, we will affirm. McNeill, an African American man who has worn his hair in dreadlocks since 2007, was a Philadelphia-based driver for Greyhound from 1998 until his termination in 2013. Greyhound’s employee grooming policy requires that men’s hair be styled so that it does not “stick out over [the] shirt collar.” Under Greyhound’s “personal conduct/courtesy” policy, drivers must “be pleasant and courteous in dealing with passengers ... and fellow employees” and refer disputes to a supervisor for resolution so as to avoid arguments. Under Greyhound “Work Rules,” an employee may be discharged for “[discourtesy to any customer.” Once he started wearing dreadlocks, McNeill sometimes tied them back in a ponytail hanging down his back while at work. Supervisors would tell him to “tie it up, cover it up. Do something with it.” Greyhound Northeast Regional Vice President Michael Fleischhauer noticed that McNeill wore his hair hanging down his back in violation of the grooming policy and, according to McNeill, would warn him about the violation every time they spoke. In February 2011, Greyhound Pool Manager Mark Black conducted a “road check” on McNeill, who was driving the Philadelphia-Scranton route. After driving to Scranton, Black observed, McNeill deviated from his route by driving to a Walmart near Mt. Pocono for two hours with a female Greyhound driver from New York as a companion. Black cited McNeill for the deviation and for violating the uniform policy — including for wearing his braided hair “over his jacket collar to his shoulder blades” — and he was suspended without pay for three days in March 2011. In May 2011, McNeill filed a complaint with Equal Employment Opportunity .Commission (“EEOC”) and Pennsylvania Human Rights Commission (“PHRC”), alleging that Greyhound supervisors were discrimi nating against him based on gender and race. On November 3, 2011, Philadelphia Operation Manager Reginald James and District Manager Evan Burak saw McNeill in the Philadelphia terminal. McNeill said his hair was tied up at the time but a few strands might have fallen out. Burak approached him and asked if he was “taking care of that problem,” and McNeill asked in reply, “What problem?” Based on that incident, James suspended McNeill without pay for three days for violating the grooming policy. McNeill filed another EEOC and PHRC complaint alleging race and gender discrimination on November 14, 2011. On December 22, 2012, a Greyhound dispatcher in Texas sent McNeill out to rescue a bus en route to New York that broke down in Sugarloaf, Pennsylvania. She directed McNeill to, once there, wait with the disabled bus for the tow truck to arrive while the other driver, Dana Hawkins, drove her passengers on to New York in McNeill’s bus. Once he arrived, Hawkins told him to drive to New York because she was too tired to, although McNeill knew she still had driving hours left on her schedule. They called the dispatcher on Hawkins’ cell phone for clarification, and got into a disagreement on the nearly empty broken down bus over who should drive. The dispatcher transferred the call to a Greyhound manager in Texas, Michael Massinburg, who told McNeill to drive. James then called McNeill on his cell phone and asked him to “be the bigger person” and drive the passengers to New York. McNeill agreed, returned to his bus, which all but one of the passengers — who had arranged to be picked up in Sugar-loaf — had boarded, and left without saying anything else to- Hawkins or the lingering passenger. James undertook.an investigation of the Sugarloaf incident and solicited statements from Hawkins and McNeill. Hawkins alleged that McNeill cursed, called her lazy, demonstrated enough anger to cause the passenger to comment, threw her phone after the call with Massinburg ended, ignored the passenger’s question to him, and drove off, leaving them behind. James reviewed McNeill’s disciplinary record and discussed firing him with City Manager Roderick Gibson and Human Relations Manager Gerrod Norman. On January 3, 2013, Greyhound. terminated McNeill for violating the “personal, eonduct/courtesy” driver rule at Sugarloaf coupled with his prior disciplinary record. McNeill sued Greyhound under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), 3(a), and the Pennsylvania Human Relations Act (“PHRA”), 43 Pa. Cons.Stat. § 955, alleging that Greyhound — specifically, Fleischhauer and Bu-rak — engaged in (1) racial and gender discrimination on account of his ethnic and cultural hairstyle and (2) retaliation for his filing discrimination complaints with the EEOC and PHRC. He advanced disparate treatment and disparate impact theories. On November 5, 2013, the District Court dismissed his disparate impact claims. On November 25, 2014, the District Court entered summary judgment in Greyhound’s favor, dismissing McNeill’s disparate treatment claims. McNeill timely appealed. We have jurisdiction under 28 U.S.C. § 1291. McNeill does not challenge the District Court’s dismissal of his disparate impact claims, only its entry of summary judgment against his disparate treatment claims. We review de novo an order granting summary judgment. Curley v. Klem, 298 F.3d 271, 276 (3d Cir.2002). Summary judgment is appropriate where there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). To survive summary judgment, there must be sufficient evidence to support a reasonable jury returning a verdict in favor of the nonmoving party. See Anderson v. Liberty Lobby, Inc,, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We view the evidence in favor of the nonmoving party and give him the benefit of all reasonable inferences. Halsey v. Pfeiffer, 750 F.3d 273, 287 (3d Cir.2014) (citation omitted). At the threshold, Greyhound argues that McNeill’s appeal should be denied because he filed a disorganized and indecipherable brief that fails to develop any issues or cite authority and lacks an appendix. Because McNeill is proceeding pro se on appeal, we liberally construe his filings and hold them to “less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (internal citation and quotation marks omitted). Even pro se litigants’ briefs must present and argue issues, however, so that we may know what district court action they dispute. See Fed. R.App. P. 28(a)(5)-(8); Al-Ra’id v. Ingle, 69 F.3d 28, 31 (5th Cir.1995). McNeill asserts that the District Court incorrectly decided the facts and erroneously applied the law without explaining how it did either. The only issues McNeill even minimally develops concern his claims that Greyhound “submitted numerous false statements” and, during depositions, its counsel “coached witnesses, raised repeated speaking objections, and interrupted [Greyhound’s] own witnesses before they could reveal damaging information.” He does not explain, however, what statements were false or support his assertions with evidence. He also claims that Greyhound witnesses heard each other’s testimony. McNeill was represented by counsel during the depositions. His attorney had the opportunity to object to any inappropriate behavior, to cross-examine witnesses on any testimony that Greyhound sought to obscure, or to move for a witness-sequestration order pursuant to Fed. R.Civ.P. 26(c)(1). Finally, McNeill failed to address most of these issues on summary judgment before the District Court. See Liberies v. County of Cook, 709 F.2d 1122, 1126 (7th Cir.1983) (“It is a well-settled rule that a party opposing a summary judgment motion must inform the trial judge of the reasons, legal or factual, why summary judgment should not be entered. If it does not do so, and loses the motion, it cannot raise such reasons on appeal.”) McNeill also argues that the District Court should have ignored Greyhound’s statement of facts entirely, as the district judge’s briefing procedure left him no opportunity to dispute them. This argument is meritless. The District Court’s scheduling order directed parties to adhere to a “traditional” summary judgment procedure and submit statements of facts along with the motion and response. McNeill could have disputed Greyhound’s factual assertions in his response; indeed, his statement; of facts at times relies entirely on certain claims in Greyhound’s statement. Greyhound understood and seized its opportunity to dispute McNeill’s facts in its reply. The District Court properly deemed undisputed any of Grey hound’s facts that did not contradict those presented by McNeill. See Fed.R.Civ.P. 56(e)(2). McNeill fails to specifically challenge any other action by the District Court. His generalized assertions of legal and factual error are unhelpful and insufficient to raise issues for our review. See Al-Ra’id, 69 F.3d at 31. Similarly, the seemingly haphazard attachments to McNeill’s brief — to the extent we can decipher them and infer their import — present either irrelevant material or excerpts of argument submitted to the District Court prior to summary judgment. By and large, these documents do not indicate how the District Court’s ensuing decision is allegedly reversible. See id
343677-5513	PER CURIAM: Taxpayers appeal the tax court’s denial of their motion for summary judgment and from the entry of stipulated decisions against them. We affirm. Facts Appellants, husband and wife, timely filed joint tax returns for the years 1976 and 1977. On these returns, they claimed deductions for losses on coal lease investments. In October, 1979, and again in October, 1981, the IRS informed appellants that the companies in which appellants had invested were under investigation. Appellants executed two Forms 872-A, one on April 20, 1981 (for the 1976 return) and the other on October 30, 1981 (for the 1977 return). Form 872-A is a form which grants an indefinite extension of the time within which the IRS may assess deficiencies. The forms provide that the IRS may assess a deficiency up to ninety days after 1) the IRS receives Form 872-T from the taxpayer, or 2) the IRS mails Form 872-T to the taxpayer, or 3) the IRS mails to the taxpayer a notice of deficiency. Form 872-T is entitled “Notice of Termination of Special Consent to Extend the Time to Assess Tax.” It asks for the taxpayer’s name, address and social security number, the kind of tax at issue, and the tax periods covered by the notice. The form provides that if the tax returns are under consideration by the Examination Division, the taxpayer should mail the notice to the Chief of the Examination Division. Between October 30, 1981 and August 30, 1982, appellants received no communications from the IRS. On August 30, 1982, appellant Norman Tapper sent a certified letter to the Los Angeles District Director of the IRS: Dear Sir: I am requesting an Immediate Satuto-ry (sic) Notice of Deficiency for the Cal Am Corporation and the Cambridge Corporation (coal leases) for the years 1976-1977. These are under the names of Norman B. and Eileen Tapper — social security numbers are [ XXX-XX-XXXX ] and [ XXX-XX-XXXX ]. Sincerely yours, Norman B. Tapper Appellants did not send the Form 872-T termination as required by the extension agreement. The appellants received the return receipt for the letter, but the IRS mail room employees did not connect the letter with the appellants’ tax returns because they did not have instructions to forward such correspondence to the audit division. On February 16, 1983, the IRS proposed a settlement for the 1977 tax year, and the appellants said they were interested in a settlement. Five weeks later, Norman Tapper telephoned an IRS representative to ask whether the statute of limitations had run. The representative told Tapper that the IRS did not receive the letter and that taxpayers must submit Form 872-T to terminate the extension. The IRS issued appellants two notices of deficiency, one for 1976 and one for 1977. Appellants filed petitions in the tax court for redetermination of the deficiencies and moved for summary judgment on the grounds that their letter revoked the Form 872-A extension and that the statute of limitations barred the assessments. The tax court denied the motion for summary judgment because the appellants did not revoke their extension on the proper form. Thereafter, appellants consented through their attorney to the entry of stipulated decisions against them. The agreements provide: “It is hereby stipulated that the Court may enter the foregoing decision in this case.” On July 17, 1984, the tax court entered the stipulated decisions, which assessed deficiencies of approximately $6,700.00. Discussion Generally, a party cannot appeal a judgment entered with its consent. This court recognizes two exceptions to this rule: 1) where the party did not actually consent, or 2) where the court lacked subject matter jurisdiction to enter the judgment. United States v. Bechtel Corp., 648 F.2d 660, 663 (9th Cir.), cert. denied, 454 U.S. 1083, 102 S.Ct. 638, 70 L.Ed.2d 617 (1981). Appellants concede that the tax court has jurisdiction to determine whether a deficiency exists, but they assert that if the statute of limitations has run, the tax court has jurisdiction only to enter a judgment that no deficiency exists. Appellants rely on section 7459(e) of the Internal Revenue Code, 26 U.S.C. § 7459(e), which provides: If the assessment or collection of any tax is barred by any statute of limitations, the decision of the Tax Court to that effect shall be considered as its decision that there is no deficiency in respect of such tax. Section 7459(e) is inapplicable because the tax court did not decide that the statute of limitations had run. Moreover, the statute of limitations is a defense which may be waived, and a claim that the statute of limitations has run does not deprive the court of jurisdiction. Badger Materials, Inc. v. Commissioner, 40 T.C. 1061, 1063 (1963); Hradesky v. Commissioner, 65 T.C. 87, 91-92 (1975), aff'd on other grounds, 540 F.2d 821 (5th Cir.1976). See also Holbrook v. United States, 284 F.2d 747, 753 (9th Cir. 1960) (taxpayer’s waiver of the statute of limitations is an abandonment of a defense). The tax court had jurisdiction to enter the stipulated decisions, and the appellants consented to their entry. The appellants do not meet either exception to the general rule against appeals from consent judgments. Even if an appeal will lie from the consent judgments, the tax court properly denied the motion for summary judgment because Norman Tapper’s letter did not revoke appellants’ consent to waive the statute of limitations. Form 872-A requires the parties to use Form 872-T to terminate the extension.
9234740-18451	ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT PREGERSON , District Judge, Sitting by Designation. This matter comes before the Court on the plaintiffs’ motion for summary judgment. After reviewing the materials submitted by the parties and hearing oral argument, the Court grants in part and denies in part the motion, and adopts the following order. 1. Background A. Factual History In tax year 1996, the plaintiffs Ronald P. Marangi and Erma K. Marangi (the “plaintiffs”), a married couple, resided in Guam. The plaintiffs timely filed their 1996 income tax return with the defendant Government of Guam (the “defendant”) on August 5, 1997. On July 11, 2000, Guam’s Department of Taxation and Revenue (the “Department”) selected the plaintiffs’ 1996 tax return for an audit examination and mailed a Notice of Examination to the last known address that the Department had for the plaintiffs. {See Meno Decl. ¶ 4, Ex. B thereto.) However, the plaintiffs had since moved to California and did not receive the Notice of Examination until the plaintiff Mr. Marangi returned to Guam on July 24, 2000. On that same date, Mr. Marangi telephoned Colleen Meno (“Ms. Meno”), a revenue agent at the examination branch of the Department, and in formed her that he and his wife had moved to California, and that the records requested by the Department were in storage in California. Mr. Marangi informed Ms. Meno that he would retrieve the requested documents, bring them when he returned to Guam in October 2000, and contact the Department for an appointment at that time. Following his telephone conversation with Ms. Meno, On July 24, 2000, Mr. Marangi faxed a letter to Ms. Meno reiterating what he had told her over the telephone. (Id. ¶¶ 6-7, Ex. C thereto.) Because the statute of limitations for assessing additional taxes was due to expire on August 4, 2000, the Department requested that Mr. Marangi sign a Form 872, entitled “Consent to Extend the Time to Assess Tax.” Mr. Marangi gave Ms. Meno a Guam fax number and, on July 28, 2000, she faxed Mr. Marangi Form 872. (Id. ¶ 9, Ex. D thereto.) Because Mr. Marangi did not return the form, the Department issued a Notice of Deficiency on August 4, 2000, which was mailed to the plaintiffs at their 790 N. Marine Drive address in Guam. (Id. ¶ 10, Ex. E thereto.) The Notice of Deficiency did not contain any information regarding the taxpayer advocate, the significance of which is set forth in the analysis section of this proposed order. On August 8, 2000, the plaintiffs contacted Mr. Robert Steffy (“Mr.Steffy”) and executed a Power of Attorney in favor of Mr. Steffy. (Id., Ex. G-l thereto.) The Power of Attorney provides for Mr. Steffy to represent the plaintiffs in this matter. (Id.) The Power of Attorney also provides that original documents, including notices, are to be sent to the plaintiffs, and that copies of original documents are to be sent to Mr. Steffy. (Id.) On August 10, 2000, Mr. Steffy met with Ms. Meno and showed her the Power of Attorney that the plaintiffs executed. On that same date, Mr. Steffy signed the Form 872, extending the time within which to make an assessment to December 81, 2001. On December 19, 2001, the Department issued another Notice of Deficiency to the plaintiffs. This Notice was addressed to the plaintiffs in care of Mr. Steffy, but was sent only to Mr. Steffy’s address. (Id., Ex. 1-1 thereto.) As with the first Notice of Deficiency, the December 19, 2001 Notice of Deficiency contained no reference to the taxpayer advocate. On April 24, 2002, Kenneth Benavente (“Mr.Benavente”), a revenue officer at the collection branch of the Department, issued a Notice of Intent to Levy, seeking to levy against property owned by the plaintiffs to pay the alleged tax deficiency. (Benavente Decl. ¶¶ 1-2, Ex. G thereto.) The Notice of Intent to Levy was sent to the plaintiffs’ old mailing address on Guam and was returned to the sender. Neither the original nor a copy of this notice was sent to Mr. Steffy, and the Department did nothing further to ensure that the plaintiffs were provided with this notice. According to Mr. Benavente, he was unaware of the change of the plaintiffs’ address because the Department’s collection branch was not provided with the complete file. Thereafter, on September 12, 2002, without the plaintiffs’ knowledge, the Department issued a Notice of Levy and served it on the office of Merrill, Lynch, Pierce, Fenner & Smith, Inc. (“Merrill Lynch”) in New Jersey in the amount of $76,705.15. The Levy stated that the assessment date was March 26, 2002. The Levy was subsequently reduced to $43,850.00. Merrill Lynch put the plaintiffs’ funds on hold and has not released them to the Department. B. Procedural History On November 20, 2003, the plaintiffs commenced this action by filing a complaint for injunctive relief, fees and costs of suit, and damages. On November 26, 2003, the plaintiffs filed a motion for preliminary injunction, seeking to compel the defendant to release from Levy the plaintiffs’ account with Merrill Lynch. Following a hearing on the plaintiffs’ motion for a preliminary injunction, on March 24, 2004, Judge Unpingco issued an order denying the motion. Judge Unpingco found that, while the plaintiffs demonstrated “the likelihood that the [N]otice of [L]evy was improperly issued” (see 03/24/04 Order at 4:22-23), the plaintiffs failed to show that they lacked an adequate legal remedy to warrant the equitable relief requested (see id. at 5:5-18). In response to the March 24, 2004 Order, the plaintiffs filed a First Amended Complaint (“FAC”) on April 19, 2004. In the FAC, the plaintiffs seek permanent injunctive relief (first cause of action), or, in the alternative, a judgment against the defendant for a refund of the amount subject to the Levy together with interest thereon (second cause of action). Three days after amending their complaint, on April 22, 2004, the plaintiffs filed the instant motion for summary judgment. By this motion, the plaintiffs seek: (1) a declaratory judgment that the March 26, 2002 assessment is void; (2) a permanent injunction requiring the defendant to immediately release the Levy filed with Merrill Lynch; and (3) reimbursement for attorney’s fees and costs incurred in this action. The plaintiffs do not seek a refund of the amount subject to the Levy, presumably because the plaintiffs have not paid the assessment in the first instance. II. Discussion A. Legal Standard Summary judgment is appropriate where “there is no genuine issue as to any material fact, and ... the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). A genuine issue exists if “the evidence is such that a reasonable jury could return a verdict for the nonmov-ing party,” and material facts are those “that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, the “mere existence of a scintilla of evidence” in support of the nonmoving party’s claim is insufficient to defeat summary judgment. Id. at 252, 106, S.Ct. 2505. In determining a motion for summary judgment, all reasonable inferences from the evidence must be drawn in favor of the non-moving party. Id. at 242, 106 S.Ct. 2505. ' B. Analysis 1. The March 26, 2002 Assessment is Void Section 6212(a) of the Internal Revenue Code authorizes the issuance of a Notice of Deficiency. Specifically, that section provides: If the Secretary determines that there is a deficiency in respect of any tax imposed by subtitles A or B or chapter 41, 42, 43, or 44, he is authorized to send notice of such deficiency to the taxpayer by certified mail or registered mail. Such notice shall include a notice to the taxpayer of the taxpayer’s right to contact a local office of the taxpayer advocate and the location and phone number of the appropriate office. 26 U.S.C. § 6212(a) (emphasis added). The last sentence of § 6212(a) makes clear that a Notice - of Deficiency shall include contact information for the local office of the taxpayer advocate. Moreover, under the Organic Act of Guam, the income tax laws in force in the United States are “held to be likewise in force in Guam.” 48 U.S.C. § 1421i(a). Indeed, the Organic Act of Guam expressly provides that, “where not manifestly inapplicable or incompatible,” the income tax laws in force in Guam include “all provisions of subtitle F” of the Internal Revenue Code. Id. § 1421i(d)(l). Included within subtitle F of the Internal Revenue Code is § 6212(a), the provision set forth above that requires that a Notice of Deficiency include contact information for the taxpayer advocate. In the instant action, neither the August 4, 2000 nor the December 19, 2001 Notice of Deficiency sent to the plaintiffs included any reference to the taxpayer advocate. It is undisputed that the Notice of Deficiency form used by the Department does not contain such information, and that the Government of Guam does not have a taxpayer advocate. (See Opp. at 12:12-13.) Thus, based on the mandatory language of 26 U.S.C. § 6212(a), and the Organic Act of Guam’s express adoption of that section as the law of Guam, the Notices of Deficiency sent to the plaintiffs lacked required information, and therefore, are void. The defendant argues that the taxpayer advocate requirement of § 6212(a) of the Internal Revenue Code should not be' applied to Guam because that requirement is “manifestly incompatible” with the intent of the Organic Act of Guam. (Opp. at 12:5-11.) According to the defendant, the Internal Revenue Service Restructuring and Reform Act of 1998, PL 105-206 (HR 2676), July 22,, 1998, 112 Stat. 685 (the “1998 Act”), which created the taxpayer advocate requirement in its present incarnation, substantially restructured and established several new positions within the Internal Revenue Service. (Id. at 12:14-25.) The defendant contends that while the 1998 Act reorganized the structure and management of the Internal Revenue Service, it does not necessarily follow that Congress intended to reorganize the structure and management of the Department. (Id. at 13:3-6.) The Court finds the defendant’s argument unpersuasive for three reasons’. First, § 6212(a) of the Internal Revenue Code contains two requirements: (1) the Notice of Deficiency must be sent to the taxpayer by dertified mail or registered mail; and (2) the Notice of Deficiency must include contact information for the local office of the taxpayer advocate. See 26 U.S.C. § 6212(a). If the defendant’s argument were adopted, only the first requirement of § 6212(a) would apply to Guam.' However, there is nothing in the statutory language that supports the defendant’s interpretation. Second, the provisions of the 1998 Act that reorganized the Internal Revenue Service, and to which the defendant refers, are not made applicable to Guam by the Organic Act of Guam. Under § 1421i(d) of the Organic Act of Guam, only certain portions of the Internal Revenue Code, including § 6212(a), are expressly made applicable to Guam. Third, the Ninth Circuit has held that the term “manifestly incompatible,” as used in the Organic Act of Guam, must be read narrowly. Holmes v. Director of Revenue & Taxation, 827 F.2d 1243, 1246 (9th Cir.1987). The Ninth Circuit construed the term “as giving the court the flexibility to avoid results that are absurd on their face or that lead to internal con tradictions in the application of the Code .... ” Id. Here, the defendant has not demonstrated that it would be absurd or contradictory to require the Government of Guam to establish an office of the taxpayer advocate and to provide the office’s contact information on Notices of Deficiency sent to taxpayers. The Court is unaware of any reason why taxpayers on Guam should be precluded from enjoying the same protections and rights afforded taxpayers in the fifty states by the taxpayer advocate office. Section 7803(c) of the Internal Revenue Code, which created the “Office of the Taxpayer Advocate” within the Internal Revenue Service, provides, “It shall be the function of the Office of the Taxpayer Advocate to — (i) assist taxpayers in resolving problems with the Internal Revenue Service; (ii) identify areas in which taxpayers have problems in dealings with the Internal Revenue Service; (iii) to the extent possible, propose changes in the administrative practices of the Internal Revenue Service to mitigate problems identified under clause (ii); and (iv) identify potential legislative changes which may be appropriate to mitigate such problems.” 26 U.S.C. § 7803(c)(2)(A).. Subsections (iii) and (iv) of § 7803(c)(1)(B) set forth the qualifications and employment restrictions of the National Taxpayer Advocate, who is appointed by the Secretary of the Treasury and supervises the Office of the Taxpayer Advocate. Id. § 7803(c)(l)(B)(iii) & (iv). The individual appointed to be the National Taxpayer Advocate cannot have been an officer or employee of the Internal Revenue Service during the two-year period ending with such individual’s appointment, and must agree not to accept employment with the Internal Revenue Service for at least five years after ceasing to be the National Taxpayer Advocate. Id. In addition, the local offices of the taxpayer advocate “shall, at. the initial meeting with any taxpayer seeking ... assistance ..., notify such taxpayer that the taxpayer advocate offices operate independently of any other Internal Revenue Service office and report directly to Congress through the National Taxpayer Advocate.” Id. § 7803(c)(4)(A)(iii). Last, the local offices of the taxpayer advocate “may, at the taxpayer advocate’s discretion, not disclose to the Internal Revenue Service contact with, or information provided by, [the] taxpayer.” Id. § 7803(c)(4)(A)(iv). The foregoing provisions of the 1998 Act, all of which have been .expressly adopted as the law in force on Guam, reveal Congress’s intent to create an independent body within the Internal Revenue Service to provide taxpayers with meaningful assistance and protection. Indeed, in enacting the 1998 Act, “Congress believed that the Taxpayer Advocate serves an important role within the IRS in terms of preserving taxpayer rights and solving problems that taxpayers encounter in their dealings with the IRS.” See Joint Comm. Print 1998, 105th Cong., 2d Sess., General Explanation of Tax Legislation Enacted in 1998. Based on the foregoing considerations, the Court finds that the Internal Revenue Code provisions pertaining to the taxpayer advocate, including the requirement that a Notice of Deficiency contain contact information for the local office of the taxpayer advocate, are significant. The Government of Guam, by not including such information in the Notices of Deficiency sent to the plaintiffs, failed to comply with an important notice requirement, thereby rendering the notices fatally deficient and thus void. Moreover, the plaintiffs have submitted evidence that there was no discussion among Department employees about the changes brought about by the 1998 Act. Mr. Joseph Rios, Jr. (“Mr.Rios”), the employee responsible for advising the Director of the Department about changes in the tax laws, testified that he does not recall having had discussions with the Director or anyone else within the Department about the 1998 Act or its implementation in Guam. (Rios Depo. at 11:18-21, attached to Zamsky Deel.) Mr. Rios further testified that the Department did nothing to establish a taxpayer advocate position. (Id. at 14:14-17.) Based on Mr. Rios’s testimony, it appears that the Department failed to adequately consider the 1998 Act and its application to Guam. The Department cannot avoid provisions of law merely because it failed to act as is required by law. For the foregoing reasons, the Court finds that the August 4, 2000 and the December 19, 2001 Notices of Deficiency sent to the plaintiffs are void. Because the December 19, 2001 Notice of Deficiency is void, the time within which to make an assessment expired on December 31, 2001. The assessment was not made until nearly three months later, on March 26, 2002, and was therefore time-barred. Accordingly, the Court finds, as a matter of law, that the assessmént is void, and therefore grants the plaintiffs’ motion for summary judgement on this issue. 2. The Plaintiffs’ Request for Permanent Injunctive Relief The Court now considers whether the plaintiffs have alleged sufficient grounds to warrant injunctive relief. Actions to enjoin .the assessment and collection of taxes are narrowly limited by the Anti-Injunction Act,- 26 U.S.C. § 7421(a). Elias v. Connett, 908 F.2d 521, 523 (9th Cir.1990). Pursuant to the Anti-Injunction Act, courts are barred from entertaining any action filed for the purpose of “restraining the assessment or collection of any tax” by the government. The purpose of the Anti-Injunction Act is to permit the government “to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund. In this manner the [government] is assured of prompt collection of its lawful revenue.” Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962) (footnote omitted). While no suit is to be maintained restraining the assessment or collection of any tax, several statutory exceptions exist. If a suit does not fall within one of the exceptions, subject matter jurisdiction does not exist and the court must dismiss. Elias, 908 F.2d at 523. Here, the plaintiffs claim that there is a statutory exception supporting the issuance of a preliminary injunction. Section 6213(a) 'of the Internal Revenue Code provides that an injunction may issue if a collection action is taken before the expiration of the ninety-day period following' a Notice of Deficiency. 26 U.S.C. § 6213(a). Because the December 19, 2001 Notice of Deficiency is void, the plaintiffs argue, the time frame for commencing a collection action was not triggered, and the Department’s March 24, 2002 assessment occurred before a proper Notice of Deficiency was sent. The Court agrees with the plaintiffs, and finds that they satisfy the exception contained in § 6213(a). Thus,, the. plaintiffs are not jurisdictionally barred from seeking an injunction.
3527013-8795	NEWMAN, Circuit Judge. Plaintiff Bowers Investment Company, LLC (“Bowers”) appeals the dismissal by the United States Court of Federal Claims of Bowers’ claim against the Federal Aviation Administration (FAA) for nonpayment and underpayment of rent. We affirm the ruling that these claims are precluded by Bowers’ prior claim, which was appealed to and finally decided by the Civilian Board of Contract Appeals (CBCA). The present claims are based on the same transactional facts, and could have been and should have been raised and resolved in the prior proceeding. Background On October 1, 1993, Bowers and the FAA entered into a Lease agreement for certain office and warehouse space in South Fairbanks, Alaska. The FAA agreed to make monthly rental payments beginning in January 1994, at a monthly rent starting at $19,509.60 and payable each month “in arrears.” Payment was “due on the first workday of each month.” The parties agreed that Bowers would make various initial build-outs. The Lease was renewable annually at the FAA’s option, and the parties modified the Lease eight times until the termination date of September 30, 2006. On February 25, 2008, Bowers filed a claim totaling $82,203.72 with the contracting officer. See 41 U.S.C. § 7103(a)(1) (“Each claim by a contractor against the Federal Government relating to a contract shall be submitted to the contracting officer for a decision.”). Bowers asserted entitlement to compensation for the final month’s rent, and other claims relating to damage to the property. With respect to the claim for the final month’s rent, Bowers stated that because the contract provided for payment “in arrears,” the FAA’s payment made on September 13, 2006 was for the August 2006 rent; thus Bowers stated that the FAA did not pay the rent for September 2006. The government responded that despite the contract payment terms it was not paying the rent in arrears, but in advance. The contracting officer agreed, and denied Bowers’ claim for the September 2006 rent. The officer allowed other minor claims, not here at issue. Bowers appealed to the CBCA, pursuant to 41 U.S.C. § 7104(a) (“A contractor, within 90 days from the date of receipt of a contracting officer’s decision ..., may appeal the decision to an agency board.... ”). During the CBCA proceedings, the FAA produced records of its historical payments to Bowers. These records show monthly rental payments starting with a payment made on May 2, 1994. The records also show total payments of several hundred thousand dollars during the first three months of 1994, described by Bowers as for the agreed build-outs, but not specified further in the record. The FAA records do not show specific rental payments for January, February, and March 1994. Bowers then argued to the CBCA that the rent for the first three months of the leasehold was not paid, and sought to amend his claim to request payment of the rent for these three months. The CBCA denied the request, stating: “For us to agree with Bowers’ argument would require our acceptance of a scenario under which one or more of the first three payments commencing January 1994 were not made and Bowers did not complain in writing or otherwise regarding the FAA error.” Bowers Inv. Co. v. Dep’t of Transp., CBCA 1196, 09-2 BCA ¶ 34,238. Bowers signed a certificate of finality, stating that it accepted the award from the CBCA as full and final satisfaction of its case. On November 25, 2009 Bowers submitted to the contracting officer two claims for rent under the Lease. The first claim was for $56,640.78 (plus interest) for the assertedly unpaid rent for January, February, and March of 1994. The second claim stated that “the FAA has underpaid its rental obligation by $664 every month from October 1, 1998 to October 1, 2006,” for a total of $64,408.00 (plus interest). On January 27, 2010 these claims were denied by the contracting officer. Bowers appealed to the Court of Federal Claims. The government moved to dismiss under Rule 12(b)(1) of the United States Court of Federal Claims, arguing that Bowers had already proceeded in the CBCA with respect to rents due under the Lease, and had received a decision from which no appeal was taken. The government also moved to dismiss under Rule 12(b)(6), arguing that Bowers could have brought its rent underpayment claim when it brought its nonpayment claim, and failed to do so. The government asserted claim preclusion, res judicata, and lack of jurisdiction. The Court of Federal Claims held that it had jurisdiction, but that Bowers’ claims were precluded. Bowers sought to excuse its failure to bring all its claims to the CBCA, stating that it “did not notice the non-payment [of rent for January, February, and March of 1994] before because there was a significant amount of money being paid to Bowers around this time by the FAA as a result of the initial build-out called for under the lease.” The court was skeptical of Bowers’ assertion that Bowers was unaware that it had not received the three missing rent payments, and was not aware ■ of the now-asserted miscalculation that produced years of rental underpayments, until the FAA provided its payment records in the CBCA proceeding. The court observed that Bowers was a commercial entity, “should have kept records of rental payments”, and “should have known of the facts giving rise to its present [nonpayment and underpayment] claims” prior to its appeal to the CBCA. The court held that the CBCA’s final decision precluded litigation of these claims in the Court of Federal Claims. This appeal followed. Discussion Claims arising from a contract with the federal government must first be submitted to the contracting officer, 41 U.S.C. § 7103(a)(1), and the contracting officer’s decision may be appealed to either the appropriate board of contract appeals or the Court of Federal Claims, at the contractor’s election. 41 U.S.C. § 7104(a)-(b)(1); see Nat’l Neighbors, Inc. v. United States, 839 F.2d 1539, 1542 (Fed.Cir.1988) (“Once a contractor makes a binding election under the Election Doctrine to appeal the contracting officer’s adverse decision to the appropriate board of contract appeals, that election must stand and the contractor can no longer pursue its claim in the alternate forum.”). Bowers states that its claim in the Court of Federal Claims is a different claim from that decided by the CBCA, and thus is not limited by the Election Doctrine. The Court of Federal Claims agreed with Bowers that the claims were distinct to the extent that the Election Doctrine did not deprive the court of jurisdiction, and declined to dismiss under Rule 12(b)(1). The court held that the claims that Bowers filed in 2008 and appealed to the CBCA were “separate and distinct,” for purposes of the Election Doctrine, from those filed in 2009 and appealed to the court. The court premised this distinction on the fact that the claim for the final rental payment of September 2006 was the only rental claim that had been presented to the contracting officer in 2008, while the 2009 claim was for other underpayments or nonpayments of rent. The court granted the government’s motion to dismiss under Rule 12(b)(6). “In ruling on a 12(b)(6) motion to dismiss, the court must accept as true the complaint’s undisputed factual allegations and should construe them in a light most favorable to the plaintiff.” Cambridge v. United States, 558 F.3d 1331, 1335 (Fed.Cir.2009). The Court of Federal Claims held that the current rental claims could have been and should have been brought in the prior action. The court held that the' current rental claims all “arise from the same set of transactional facts” as the claims previously before the CBCA, and that the claims are now precluded. Bowers agrees that it requested the Lease payments for January, February, and March 1994 from the CBCA in the 2008 action, but contends that the CBCA “chose not to address that issue.” That is inaccurate, for the CBCA received this argument but did not grant the requested payments, expressing doubt that Bowers would have remained silent if the FAA actually failed to pay three months’ rent. Bowers explained to the Court of Federal Claims that it had not raised this question in its first submission to the contracting officer because Bowers was unaware of the nonpayment and underpayments until the FAA produced its payment history in the CBCA. The Court of Federal Claims again expressed skepticism that Bowers had been unaware that it was not receiving rental payments for the first three months of the Lease, and not receiving the agreed rent over the entire lease term. We do not discern clear error in the court’s findings, and in its ruling that the claims for rent were precluded by the final decision of the CBCA.
5724502-4290	MEMORANDUM OPINION AND ORDER KIRKLAND, District Judge. This cause is before the Court on defendants’ motion to dismiss plaintiff’s complaint. Plaintiff seeks to redress deprivation of Constitutional rights guaranteed under the Fourteenth Amendment. Jurisdiction is invoked under 42 U.S.C. § 1983 and 28 U.S.C. §§ 1843(3) and (4). The complaint alleges that defendant members of the Capital Development Board, acting under color of the Capital Development Board Act, Illinois Revised Statutes ch. 127, §§ 771 et seq., unlawfully awarded a contract to defendant Carroll Seating Company and so deprived plaintiff of a substantial right (. . . protected by the Fourteenth Amendment . . .) to be treated fairly, equally, and on the same footing as every other bidder on the [Founders’ Library] project. Defendants move to dismiss the complaint on several grounds, two of which are relevant here: (1) plaintiff’s lack of standing and (2) plaintiff’s failure to state a claim under 42 U.S.C. § 1983. DEFENDANTS’ STANDING ARGUMENT Defendants first argue that plaintiff, as an affirmatively rejected bidder on a contract, does not have standing to challenge the award of a state contract. This Court agrees. In Perkins v. Lukens Steel, 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108 (1940) the Supreme Court recognized that although government contract bidding procedures may benefit the public generally, those procedures do not create enforceable rights in bidders. In support of its conclusion that unsuccessful bidders have no standing to challenge allegedly improper contract awards, the Court reasoned that Courts should not, where Congress has not done so, subject purchasing agencies of the Government to delays necessarily incident to judicial scrutiny at the instance of potential sellers, which . . would create a new concept of judicial controversies. It is . . . essential to the even and expeditious functioning of Government that the administration of the purchasing machinery be unhampered. (310 U.S. at 130, 60 S.Ct. at 878) The rationale of the Perkins case is still viable today and operates to preclude judicial challenges by unsuccessful bidders except when specific legislation allows it. For example, Congress has enacted Section 10(a) of the Administrative Procedure Act (the “Act”), 5 U.S.C. § 702, which allows bidders on federal contracts to challenge contract awards made by federal agencies. Plaintiff cites several cases in support of its contention that judicial review of bidding procedures is correct. However, each case was decided under Section 10(a) of the Act. Such authority is inapplicable to consideration of the award of state contracts. As the court noted in Curtiss-Wright Corporation v. McLucas, 364 F.Supp. 750 (D.N.J. 1973), the Perkins case has been modified by legislation which only allows review of arbitrary and capricious decisions of federal purchasing agencies. This Court agrees. Accordingly, this action based on a state contract fails for plaintiffs lack of standing. DEFENDANTS’ SECTION 1983 ARGUMENT Defendants correctly note that plaintiff’s complaint also fails to state a claim under 42 U.S.C. § 1983. Section 1983 provides that: Every person who, under color of any statute . . . subjects or causes to be subjected, any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. (Emphasis added.) Defendants argue plaintiff has failed to show deprivation of “rights, privileges and immunities” under the United States Constitution. Plaintiff characterizes its claim as follows: Estey alleges that its property rights, created by the Illinois Purchasing Act, and by the contract which arose from its acceptance of the bid specifications, have been taken away from it by defendants in violation of the 14th Amendment. Estey . got no hearing concerning why its bid was allegedly rejected, and, far from the fair and equal treatment which the Constitution mandates for all persons, it has been victimized by a back-door, manifestly illegal conspiracy to afford another bidder distinctly different treatment. (Plaintiff’s Memorandum in Opposition at 19 — 20).