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3603262-16835

OPINION FREDERICK van PELT BRYAN, District Judge: On October 23, 1966, the S.S. GOLDEN STATE collided with the M/V PIONEER LEYTE while the latter was leaving Manila Harbor, in the Republic of the Philippines. The GOLDEN STATE, some 7600 gross tons and 453 feet in length, was a United States flag vessel, owned and operated by States Marine Lines, a Delaware corporation, the defendant in these two actions. The PIONEER LEYTE was a Philippine vessel, some 779 gross tons and 226 feet in length, owned by Filipinas Pioneer Lines, a Philippine corporation. The PIONEER LEYTE was sunk in the collision, with a loss of approximately 100 lives. There were also some injured survivors. All of those lost or injured appear to have been citizens and residents of the Philippines. The GOLDEN STATE suffered only damage and no casualties. These two actions arise out of that collision. The plaintiff in 68 Civ. 1394, Teresa B. Domingo, a citizen and resident of the Philippines, sues on her own behalf and on behalf of the “next of kin” to recover for the death of her husband, who was killed in the collision. The companion action, 70 Civ. 4639, is brought by (1) the next of kin or legal representatives of 93 other such decedents; (2) individuals who are, apparently, survivors; and (3) the Vice Consul of the Republic of the Philippines, as representative of the estates of all those who were killed in the collision and the survivors who were injured. Jurisdiction is based on diversity of citizenship and “general maritime law”. A number of other proceedings arising out of the collision have been instituted in various jurisdictions. An official Board of Maritime Inquiry in the Philippines conducted an investigation of the accident and found the GOLDEN STATE solely at fault. Actions have been brought in the Philippines against States Marine Lines to recover for the deaths of at least 19 of the persons killed in the collision. States Marine Lines has appeared in and is contesting those actions. An action commenced in the New York Supreme Court by the Philippines Consul General, as representative of the plaintiff Domingo and “all others similarly situated” against States Marine Lines was voluntarily discontinued, after the defendant had moved to dismiss. A second action, commenced by the plaintiff Domingo in the New York Supreme Court, was dismissed on the ground of forum non conveniens. An appeal is pending from that dismissal. Plaintiff Domingo has also instituted an action against States Marine Lines similar to her action in this District, in the Superior Court of Delaware, which is pending there. In the two actions in this District, defendant States Marine has moved to dismiss on the ground of forum non conveniens. On the record before me, it is plain that these motions should be granted. (D The doctrine of forum non conveniens is not applicable unless there is at least one other forum in which the parties can litigate their claims on the merits. In all cases in which the doctrine of forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes criteria for choice between them. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-507, 67 S.Ct. 839, 842, 91 L.Ed. 1055 (1947). See also North Branch Products, Inc. v. Fisher, 284 F.2d 611 (D.C. Cir. 1960), cert. denied, 365 U.S. 827, 81 S.Ct. 713, 5 L.Ed.2d 705 (1961); Fiorenza v. United States Steel International, Ltd., 311 F.Supp. 117 (S.D.N.Y.1969); Odita v. Elder Dempster Lines, Ltd., 286 F.Supp. 547 (S.D.N.Y.1968). There are a number of suits to recover for deaths occurring in the collision pending against States Marine in the Philippine Courts. It appears, without contradiction, that States Marine '‘has appeared in and answered such suits, and has not and cannot, under Philippine law, contest the jurisdiction of the Philippine courts.” It is uncontroverted that States Marine Lines has an agent in the Philippines, International Harvester MacLeod, duly authorized to accept service of process on its behalf, and that defendant’s vessels frequently are in Philippine ports. The plaintiffs here and those represented by the plaintiffs who have not commenced suit in the Philippines are all citizens and residents of that country. They also are entitled to sue States Marine Lines there as a matter of right and can obtain personal jurisdiction over States Marine in such actions. In addition, the defendant will be held to its affirmative representation to the Court that it is subject to Philippine jurisdiction by making its submission to jurisdiction there an express condition of the order granting the relief which it seeks. The statute of limitations will not bar recovery in the Philippines by those who have not already brought actions there, as the plaintiffs suggest. States Marine has agreed to waive the statute of limitations if such actions are brought within a reasonable time. That waiver will also be made a condition of dismissal. Thus, it is clear that another forum, that of the Philippines, is fully available to the plaintiffs. The question, then, is the application of the doctrine of forum non conveniens to the cases at bar. (2) The factors to be considered in determining whether an action should be dismissed for forum non conveniens are detailed by the Supreme Court in Gulf Oil Corp, v. Gilbert, 330 U.S. 501, 508-509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947): Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. There may also be questions as to the enforcibility of a judgment if one is obtained. Factors of public interest also have place in applying the doctrine. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself. See also Canada Malting Co., Ltd. v. Paterson Steamships, Ltd., 285 U.S. 413, 52 S.Ct. 413, 76 L.Ed. 837 (1932); De Sairigne v. Gould, 83 F.Supp. 270 (S.D.N.Y.), aff’d per curiam, 177 F.2d 515 (2d Cir. 1949), cert. denied, 339 U.S. 912, 70 S.Ct. 571, 94 L.Ed. 1338 (1950). Application of these criteria to the cases at bar compels the conclusion that the balance is so strongly in favor of the defendant that the plaintiffs’ choice of forum should be overridden. See Gulf Oil Corp. v. Gilbert, supra, 330 U.S. at 508, 67 S.Ct. 839, 91 L.Ed. 1055. All the events with which these actions are concerned took place in the territorial waters of the Republic of the Philippines. The plaintiffs’ sources of proof are almost entirely there. The witnesses on which plaintiffs can be expected to rely to establish liability, such as the officers and crew of the PIONEER LEYTE, and those who appeared before the Philippine Board of Marine Inquiry investigating the collision, are all in the Philippines. It can scarcely be imagined that plaintiffs would rely on personnel of the GOLDEN STATE on that issue, as they seem to suggest. It is obvious that the access to sources of proof on the extensive and important issues of damage arising from almost 100 separate casualties, all Philippine citizens and residents, would be vastly easier in the Philippines than it would be here. The vast majority of witnesses, both willing and unwilling, are in the Philippines. The cost of obtaining willing witnesses would be minimal there as compared with here. Compulsory process in the Philippines would be available to the plaintiffs to obtain any witnesses who are likely to be of any aid to them. It would be vastly expensive and inconvenient for plaintiffs to bring their witnesses to the United States or for the defendant to do so, if it became necessary for it to use Philippine witnesses. And, of course, none of such witnesses are amenable to process here. It is somewhat difficult to understand the plaintiffs’ eagerness to forego all the manifest and enormous advantages of litigating their claims in the Philippines. They suggest that any judgment obtained in the Philippines might be uncollectible. That might be a plausible explanation if it had any merit. It does not. Such judgments will be based upon personal jurisdiction and fully binding on the defendant. Even if defendant does not have assets on hand in the Philippines sufficient to satisfy any judgment rendered there (and no such showing has been made), its ships, which are valuable properties, are frequently in Philippine ports and likely to be available in that country for levy and execution. Moreover, New York gives conclusive effect to judgments of foreign countries based on personal jurisdiction, even though, as in the Philippines, Soorajmull Nagarmull v. Binalbagan-Isabela Sugar Co., Inc., 33 Sup.Ct. [of the Philippines] Reports Ann. 46 (1970), New York judgments are not given similar effect in the foreign jurisdiction. Johnston v. Compagnie Generale Transatlantique, 242 N.Y. 381, 152 N.E. 121 (1926); Cowans v. Ticonderoga Pulp & Paper Co., 219 App.Div. 120, 219 N.Y.S. 284 (3rd Dep’t), aff’d on opinion below, 246 N.Y. 603, 159 N.E. 669 (1927). Thus, in the unlikely event that States Marine failed to satisfy a Philippine judgment, the judgment could be enforced against States Marine by a suit on the judgment in New York where States Marine has its principal offices. It appears, also, that a Philippine judgment could be similarly enforced in Delaware where States Marine is incorporated. See Bata v. Bata, 39 Del.Ch. 258, 163 A.2d 493, 503 (Del.1960), cert. denied, 366 U.S. 964, 81 S.Ct. 1926, 6 L.Ed.2d 1255 (1961), where the Delaware Supreme Court held that a foreign judgment was res judicata. The defendant does not take the position that it would be more convenient and less expensive to produce officers and crewmen of the GOLDEN STATE as witnesses for the defense in the Philippines and it could not well do so. The defendant has not attempted to name the witnesses on whom it expects to rely in its defense and the subject matter of their expected testimony as is customary in forum non conveniens eases. Defendant’s position is that it is quite willing to produce any such witnesses in the Philippines because this district is totally unsuitable for the trial of these cases and the Philippines is plainly the forum where they should be tried. The convenience of defendant’s witnesses is not of importance here. It is the evaluation and balancing of all of the other relevant factors which must determine the question before me. It is scarcely necessary to dwell on the fact that this Court is the most heavily burdened Federal District Court in the country. The Civil Calendar grows more congested all the time. The priority now properly given to the disposition of criminal cases tends to increase this congestion. Moreover, the substantial number of vacancies on a bench of 27 emphasizes the seriousness of the congestion problem. In all likelihood it will be several years, at least, before these cases can be reached for trial in this district. There is no indication that there would be any difficulty in obtaining prompt disposition in the Philippine courts. I see no reason why this Court, with its heavy burdens and responsibilities, should be burdened with cases like these which, from every point of view, should be tried in the courts of the nation where all the relevant events occurred and whose own citizens are primarily involved. Certainly, this district and the Metropolitan area in which it is situated have no conceivable relation to this litigation except for the fact that the defendant happens to be doing business here. It is plain that Philippine law will govern. See Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953). Thus, the Philippine courts are the appropriate forum to apply the applicable law and to determine the legal issues involved in these cases. Moreover, the defendant might well be prejudiced by reason of its inability to implead or cross claim against Filipinas Pioneer Lines, the owner of the PIONEER LEYTE, in this district. Defendant could only do so in the Philippines where jurisdiction over Filipinas Pioneer Lines, a Philippine corporation, could be obtained. In fact, all the practical problems that make trial of a case easy, expeditious and inexpensive would be much more easily met by a Philippine trial. Counsel for the plaintiffs has not come forward with any sound reason why this Court should retain jurisdiction in these eases. In my view, the combination of relevant factors in these cases overwhelmingly demonstrates that they should not be tried here but should be tried in the Philippines. See Garis v. Compania Maritima San Basilio, 386 F. 2d 155 (2d Cir. 1967); Fitzgerald v. Westland Marine Corp., 369 F.2d 499 (2d Cir. 1966). This is plainly “one of those rather rare cases where the doctrine [of forum non conveniens] should be applied. . . . ” Gulf Oil Corp. v. Gilbert, supra, 330 U.S. at 509, 67 S.Ct. at 843, 91 L.Ed. 1055. The decision of the Superior Court of Delaware in the action brought in that jurisdiction by plaintiff Domingo against States Marine, which denied the defendant’s motion to dismiss for forum non conveniens, 253 A.2d 78 (Del.Super. 1969), and the holding of the Supreme Court of Delaware that the Superior Court did not abuse its discretion in so doing, 269 A.2d 223 (Del.1970), is not in any way determinative of the issues now before me. These decisions are not res judicata, as plaintiff argues, and would not be even if they had been made by the courts of New York, rather than Delaware. See Parsons v. Chesapeake & Ohio Ry. Co., 375 U.S. 71, 84 S.Ct. 185, 11 L.Ed.2d 137 (1963). Nor do I consider them in any way binding upon me. The discretionary determination to be made here requires “evaluations of similar, but by no means identical, objective criteria” (Parsons v. Chesapeake & Ohio Ry. Co., supra, 375 U.S. at 72-73, 84 S.Ct. at 186) to those considered by the Delaware courts. For example, the problem of the burdens upon his Court and the congestion which exists here is not paralleled in the Delaware case and this factor does not appear to have been even considered by the Delaware courts. These motions must be decided- on the record before me by an evaluation of the relevant criteria which apply here. The Delaware courts undoubtedly have the right to decide for themselves whether they will retain or decline jurisdiction in particular cases. Such decisions largely involve questions of Delaware law and judicial policy which are confined to that state and do not affect my decision here. Moreover, insofar as the Delaware opinions may appear to express different views on particular issues from those which I have expressed here, I do not-follow them. Defendant’s motions to dismiss these two actions on the ground of forum non conveniens are granted. Such dismissal will be upon the express conditions to be embodied in the order to be entered, (1) that defendant submit to the jurisdiction of the Philippine courts in any actions which may be commenced in the Philippines by any of the plaintiffs in the case at bar, or the representatives of such plaintiffs, to recover for death or injuries resulting from the accident of October 23, 1966, provided such actions are commenced within one year of the date of the order of dismissal to be entered herein; (2) that defendant waive the statute of limitations as a defense in any such actions; and (3) that in the event defendant fails to comply with any of these conditions, plaintiffs affected by such failure may move to vacate the dismissal and to reinstate the action, as to them, in this Court. Settle order on ten days’ notice. . The Supreme Court of Delaware held that the Delaware Superior Court did not abuse its discretion in denying a motion to dismiss for forum non conveniens. States Marine Lines v. Domingo, 269 A.2d 223 (Del.1970), aff’g, 253 A.2d 78 (Del.Super.1969).

1625111-10907

JOHN R. GIBSON, Circuit Judge. Ray Lee Spillers appeals from the judgment of the district court denying his petition for habeas corpus brought under 28 U.S.C. § 2254 (1982). He argues that the district court erred in failing to hold an evidentiary hearing on his claim that he was denied effective assistance of counsel, both at trial and on direct appeal to the state supreme court; that the admission of unspecified hearsay evidence violated his sixth amendment confrontation right; and, that the presence of the victim’s relatives visibly weeping in the courtroom violated his fifth amendment right to an impartial jury. Spillers also contends that the double jeopardy clause barred enhancement of his second-degree murder sentence under a state statute that authorizes an additional sentence where the defendant employed a firearm in the commission of a felony. We affirm the judgment of the district court. On September 4, 1979, Ray Lee Spillers and his wife joined a number of other couples, including Kenneth Williker and his wife, at a local club, where they spent the evening drinking and dancing. Spillers argued with his wife in the parking lot after the club closed. Williker came over to Spillers, apparently to calm him. As the two conversed, Spillers shot Williker. Spillers was convicted of second-degree murder, and his sentence enhanced to thirty years imprisonment under Ark.Stat.Ann. § 41-1004 (Repl.1977), which provides for an additional sentence of at least fifteen years for the use of a firearm during the commission of certain felonies. The Arkansas Su preme Court affirmed his conviction on direct appeal, Spillers v. State, 272 Ark. 212, 613 S.W.2d 387 (1981), and denied his motion for postconviction relief under rule 37 of the Arkansas Rules of Criminal Procedure. Spillers then filed for habeas relief in federal district court pursuant to 28 U.S.C. § 2254. Spillers alleged in his petition a number of grounds for relief, including denial of the sixth amendment right to effective assistance of counsel at trial and on direct appeal; denial of the fifth amendment right to an impartial jury due to the presence of several biased jurors; denial of the right secured by the confrontation clause of the sixth amendment due to the admission of hearsay and irrelevant testimony; failure of the trial court to instruct the jury on the defense of self-intoxication when the jurors were questioned about alcohol during voir dire, in violation of the fifth amendment; and, denial of fifth amendment protection against double jeopardy when his sentence was enhanced for use of a firearm during the crime. Spillers’ petition was referred to a federal magistrate,I. whose report and recommendation that the petition be summarily denied were adopted by the district court. On appeal, Spillers argues that the district court erred in dismissing his claims of ineffective assistance of counsel, his claims that his constitutional rights were violated by the admission of hearsay testimony and by the presence of weeping relatives of the victim in the courtroom, and his double jeopardy claim. I. Spillers first argues that he was denied effective assistance of counsel at trial because counsel failed to object to and properly question witnesses and prospective jurors, defend him diligently, properly prepare for trial, object to highly inflammatory and prejudicial remarks made by the prosecutor, object to the presence of several weeping relatives of the victim in the courtroom, and object to the introduction of unconstitutionally seized evidence. Spillers contends that the district court erred in not holding an evidentiary hearing to permit him to develop his claims. Under 28 U.S.C. § 2254, a federal district court must hold an evidentiary hearing when a petition alleges sufficient grounds for release, relevant facts are in dispute, and the state courts did not hold a full and a fair evidentiary hearing on the petitioner’s claims. Brown v. Lockhart, 781 F.2d 654, 656 (8th Cir.1986); Speedy v. Wyrick, 702 F.2d 723, 726 (8th Cir.1983). A hearing is unnecessary, however, if the petitioner’s allegations, even if true, fail to state a claim upon which habeas relief can be granted, Brown, 781 F.2d at 656; Lindner v. Wyrick, 644 F.2d 724, 729 (8th Cir.), cert. denied, 454 U.S. 872, 102 S.Ct. 345, 70 L.Ed.2d 178 (1981), or if the claims are “based solely on ‘vague, conclusory, or palpably incredible’ allegations or unsupported generalizations,” Beavers v. Lockhart, 755 F.2d 657, 663 (8th Cir.1985) (quoting Machibroda v. United States, 368 U.S. 487, 495, 82 S.Ct. 510, 514, 7 L.Ed.2d 473 (1962)). The trial court did not hold a hearing on Spillers’ post-conviction petition, and the Arkansas Supreme Court reviewed his appeal on the basis of an abstract of the trial transcript prepared by his counsel. To determine whether Spillers’ allegations state a sufficient basis for habeas relief, we must look to the constitutional standards for effective assistance of counsel. See Smith v. Wyrick, 693 F.2d 808, 810 (8th Cir.1982), cert. denied, 460 U.S. 1024, 103 S.Ct. 1277, 75 L.Ed.2d 497 (1983). To establish a sixth amendment violation based on ineffective assistance of counsel, the appellant must demonstrate, first, that his counsel’s representation fell below an objective standard of reasonableness under the circumstances, and, second, that his counsel’s deficient performance prejudiced his defense. Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674 (1984). Spillers’ allegations that his counsel failed to properly question witnesses and jurors, exercise diligence at trial, properly prepare for trial, object to remarks of the prosecutor, and suppress unconstitutionally seized evidence, all are conclusory, and were properly dismissed by the district court. He has not alleged any facts or provided any specifics to identify precisely how his counsel failed to fulfill those obligations. The district court did not err in dismissing these claims without a hearing as vague and conclusory. Machibroda v. United States, 368 U.S. at 495, 82 S.Ct. at 514; Urquhart v. Lockhart, 726 F.2d 1316, 1319 (8th Cir.1984). Nor did the district court err in summarily denying Spillers’ claim that counsel’s failure to object to the presence in the courtroom of several weeping relatives of the victim constituted ineffective assistance. The Arkansas Supreme Court, reviewing Spillers’ rule 37 motion for post-conviction relief, concluded that counsel’s decision to ignore the weeping relatives, one of whom was the victim’s wife, may have been a deliberate, tactical decision which, under the circumstances, would not have been unreasonable. We agree. “Judicial scrutiny of counsel’s performance must be highly deferential,” Strickland, 466 U.S. at 689, 104 S.Ct. at 2065, and we must “indulge a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance * * *.” Id. Spillers has not shown why, under the circumstances, such a tactical decision was unreasonable and thus has failed to carry his burden of proof. Spillers also argues that he was denied effective assistance of counsel at the appellate stage because counsel failed to demonstrate on appeal the customary skills and diligence of a competent attorney; raise issues of merit to the state supreme court; properly prepare the habeas petition; and adequately abstract the trial testimony, as a result of which the state supreme court was unable to review an evidentiary ruling by the trial court. The district court dismissed these allegations as conclusory and without merit. We agree with the district court that these contentions, with the exception of the last one, are vague and conclusory, and properly dismissed summarily. Brown, 781 F.2d at 656; Beavers, 755 F.2d at 663. While we believe that Spillers’ final allegation, that he was denied effective assistance by counsel’s failure to abstract properly trial testimony for appellate review, is sufficiently specific for our review, we conclude that the district court properly denied the claim. Prior to trial, Spillers filed a motion in limine to prevent the state from introducing a prior murder conviction during cross-examination if he testified. The trial court denied Spillers’ motion, and indicated that it would rule on the admissibility of the prior conviction after Spillers’ direct testimony. Spillers did not testify at trial, and challenged the trial court’s ruling on appeal. The Arkansas Supreme Court declined to review this claim, finding that “the matter is insufficiently abstracted ... [to] determine whether or not the [trial] court erred.” Spillers, 272 Ark. at 215, 613 S.W.2d at 389. We need not determine, however, whether counsel’s failure to properly prepare the appeal in these circumstances was objectively deficient, for Spillers has failed to show that he was prejudiced as a result. Strickland, 466 U.S. at 691, 104 S.Ct. at '2066-67. The Arkansas Supreme Court has held that for a defendant to obtain appellate review of a motion in limine requesting that he not be exposed to cross-examination about prior convictions, he must “by a statement of his attorney ... establish on the record that he will in fact take the stand and testify if his challenged prior convictions are excluded ... and ... sufficiently outline the nature of his testimony so that the trial court, and the reviewing court,” can determine if the probative value of the evidence outweighs its prejudicial effect. Simmons v. State, 278 Ark. 305, 314-5, 645 S.W.2d 680, 685 (1983) (quoting United States v. Cook, 608 F.2d 1175, 1186 (9th Cir.1979)), cert. denied, 464 U.S. 865, 104 S.Ct. 197, 78 L.Ed.2d 173 (1983). See also Pruett v. State, 282 Ark. 304, 310-11, 669 S.W.2d 186, 190, cert. denied, 469 U.S. 963, 105 S.Ct. 362, 83 L.Ed.2d 298 (1984); Jones v. State, 282 Ark. 56, 60, 665 S.W.2d 876, 879 (1984). Cf. Luce v. United States, 469 U.S. 38, 105 S.Ct. 460, 83 L.Ed.2d 443 (1984) (to raise and preserve for review a claim that a prior conviction is inadmissible for impeachment purposes under Federal Rule of Evidence 609, defendant must testify). Spillers has not fulfilled either requirement. The trial court therefore did not err in denying Spillers’ motion in limine. Spillers has not satisfactorily shown that there is a reasonable probability that counsel’s putative failure would have affected the outcome of the trial. See Strickland, 466 U.S. at 694, 104 S.Ct. at 2068. II. Spillers next contends that the presence of several weeping relatives of the victim in the courtroom biased members of the jury and thus deprived him of his fifth amendment right to be tried by an impartial jury. Spillers first raised this issue in connection with his sixth amendment claim of ineffective assistance of counsel in his rule 37 petition to the Arkansas Supreme Court.

4338586-14258

ORDER ROBERT J. KRESSEL, UNITED STATES BANKRUPTCY JUDGE This case came on for hearing on December 11, 2014 on an application for compensation and reimbursement of expenses by Larkin Hoffman Daly & Lindgren, Ltd. The trustee and the United States Trustee object to the application. Patrick B. Hennessy appeared on behalf of Dwight R.J. Lindquist, the trustee; Michael R. Fadlo-vich appeared on behalf of the United States Trustee; Kenneth Corey-Edstrom appeared on behalf of Larkin Hoffman Daly & Lindgren, Ltd. The court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1334(a) and 157(a). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A). BACKGROUND On January 7, 2010, Next Generation Media, Inc. filed a petition under chapter 11. After the case was commenced, Lar-kin filed an application to approve its employment as the debtor’s attorneys pursuant to 11 U.S.C § 327(a). On February 2, 2010, I entered an order approving the employment and authorizing the debtor to pay monthly invoices in accordance with the procedures of our district’s Instructions for Filing a Chapter 11 Case. Specifically, I ordered that payment could be made pursuant to Instruction No. 9, which provides, “.... all professionals whose retention has been approved may be allowed to submit regular monthly bills to the Debtor and the Debtor may be authorized to pay up to 80% of such fees and 100% of costs, pending court approval of the fees.” The United States Trustee recommended the employment and did not object to the payment arrangement. Larkin and the debtor utilized this procedure. At the onset of the case Larkin negotiated a cash collateral agreement with the largest secured creditor, PrinSource Business Credit, LLC. Shortly thereafter, the debtor defaulted on the agreement and PrinSource immediately made a motion to deny further use of cash collateral and to lift the automatic stay. On February 23, 2010, I entered an order granting Prin-Source’s motion. In hopes of salvaging the debtor’s business Larkin brought a subsequent motion for use of cash collateral. The motion was ultimately withdrawn and, on March 9, 2010, the case voluntarily converted to one under chapter 7. The fees and costs incurred by Larkin in rendering pre-conversion legal services totaled $166,445.37 . Prior to filing the case, the debtor provided Larkin with a retainer of $25,000. Pursuant to the February 2 order and Instruction No. 9, Lar-kin collected $22,377.59 in earned fees and $2,622.41 in costs and exhausted the retainer. On July 27, 2010, Larkin filed a “request for payment of pre-conversion and post-conversion administrative expenses.” A hearing was never held as it was necessary that the claim be administered in the chapter 7 estate, pursuant to Local Rule of Bankruptcy Procedure 2016-1(a). Upon completion of the chapter 7 liquidation, the trustee determined that the estate was administratively insolvent at the chapter 11 level. Pursuant to 11 U.S.C. § 704(a)(9), “the trustee shall make a final report and file account of the administration of the estate with the court and with the United States trustee.” The final report still has not been filed with the court. Apparently, it was submitted to the United States Trustee and he was unsatisfied. He “raised with [Larkin] the problem of its receipt of a disproportionately high recovery on its chapter 11 administrative expense claim” on account of the $25,000 retainer. Larkin has now filed this request for approval of its fees and costs. Although he had not previously objected, the trustee now objects to Larkin’s application at the urging of the United States Trustee. The trustee does not object to the merit or amount of fees and costs which Larkin seeks to be allowed. Instead, he argues that Larkin should be required to “disgorge” the' $25,000 retainer because the bankruptcy estate is administratively insolvent at the chapter 11 level. Accordingly, if the retainer is not returned the other creditors will receive a reduced distribution relative to what they are legally entitled. The United States Trustee also objects to the application but on slightly different grounds. He argues that Larkin is required to “turnover” the retainer because it is property of the estate and it should be distributed pro-rata pursuant to 11 U.S.C. § 726. Additionally, he objects to the merits of a portion of the application and argues that the fees are not reasonable, necessary or appropriate. While both the United States Trustee and the trustee argue that the retainer should be returned, neither has filed a motion or initiated an adversary proceeding required for such relief. Consequently, this proceeding is only on Larkin’s application for compensation. DISCUSSION Application for Compensation Approval of employment of an attorney under 11 U.S.C. § 327 does not constitute a right to be paid from the estate. Ferrara v. Alvarez (In re Engel), 124 F.3d 567, 571 (3d Cir.1997). Indeed, to be eligible for compensation an attorney’s employment must be approved, however, compensation is governed by 11 U.S.C. § 330, as follows: (a)(1) After notice to the parties in interest and the United States Trustee and a hearing... .the court may award to a... .professional person employed under section 327 or 1103— (A) reasonable compensation for actual, necessary services rendered by the.... attorney ...; and (B) reimbursement for actual, necessary expenses. (3) In determining the amount of reasonable compensation to be awarded to a... .professional person, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including— (A) the time spent on such services; (B) the rates charged for such services; (C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; (D) whether the services performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; (E) with respect to a professional person, whether the person is board cer tified or otherwise has demonstrated skill and experience in the bankruptcy field; and (F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title. Courts in the Eighth Circuit have consistently articulated the “lodestar method” as the correct approach for determining whether compensation is reasonable. “The lodestar amount is calculated by multiplying the reasonable hourly rate by the reasonable number of hours required.” Bachman v. Laughlin (In re McKeeman), 236 B.R. 667, 671 (8th Cir. BAP 1999); see also P.A. Novelly v. Palans (In re Apex Oil Co.), 960 F.2d 728 (8th Cir.1992); Johnston v. Comerica Mortg. Corp., 83 F.3d 241, 244 (8th Cir. 1996). “The bankruptcy court must make a finding as to whether the number of hours billed were reasonable in light of the complexity of the case, and then multiply that by a reasonable hourly rate for those services.” Chamberlain v. Kula (In re Kula), 213 B.R. 729, 737 (8th Cir. BAP 1997) (citing Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). The calculated lodestar amount is presumed to be reasonable although adjustments, such as enhancements for superior attorney performance, may be made in rare and exceptional circumstances. Id. at 738; see also Perdue v. Kenny A., 659 U.S. 542, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010). Larkin has filed detailed documentation providing the hours and rates for the attorneys and staff who worked on the case. Eleven attorneys billed for a total of 489.65 hours. The average rate charged by the attorneys was $301.43. The highest hourly rate billed was $375.00 and the lowest hourly rate, charged by three attorneys, was $210.00. Eight staff members also worked on the case for a total of 148.40 hours with an average hourly rate of $167.20. Overall, Larkin spent 638.05 hours on the case at an average hourly rate of $270.21. The fees totaled $172,-595.75 . The United States Trustee objects to the fees as unreasonable, unnecessary and inappropriate. Specifically, the United States Trustee objects to (1) the excessive amount of lawyers and staff utilized to work on the case, (2) fees of $4,234 for bringing a second motion to use cash collateral, and (3) all fees for work done after PrinSource’s motion to lift the automatic stay was granted. The United States Trustee’s objections are based solely on the fact that “the debtor had no cash for operations and no ability to reorganize.” Aside from this statement, the United States Trustee does not provide any evidence to support his objection. First, the United States Trustee’s argument that an excessive number of attorneys and staff worked on the case is disingenuous. While it is technically correct that eleven attorneys worked on the case, of the 489.65 attorney hours billed, two attorneys alone amassed 348.70 hours. In fact, five attorneys each billed less than 4.4 hours. Likewise, of the eight staff members that worked on it, one staff member billed 103.70 of the 148.40 total hours spent. The United States Trustee’s unsubstantiated argument has not convinced me that the hours spent and the rates charged are not commensurate with fees charged in similar bankruptcy cases. Second, the argument that the fees were unnecessary and unreasonable is merely a statement made in hindsight. At the time Larkin was faced with making a decision on whether to bring a subsequent motion for use of cash collateral, it had recently been successful in negotiating a cash collateral agreement with PrinSource. The United States Trustee overlooks the fact that while attorneys advise their clients and carry out their decisions, ultimately it is the client’s decision as to how to proceed. It was not unreasonable for the debtor to have believed that there was a possibility of another successful negotiation. After PrinSource’s motion to lift the automatic stay the debtor voluntarily converted the case within two weeks. I will not disallow fees for a prudent two-week effort to prevent conversion. After carefully reviewing Larkin’s application for compensation, including the application, responses and affidavits, I find that the fees and costs are necessary and reasonable. They are approved in the amount of $166,445.37. Disgorgement/Tumover The United States Trustee requests that Larkin “turnover” its $25,000 retainer. The trustee requests that Larkin “disgorge” the same. The United States Trustee and the trustee reason that the estate is administratively insolvent at the chapter 11 level, therefore, the retainer should be distributed pro-rata to all chapter 11 administrative expense claimants. I addressed this very issue in In re Hyman Freightways, Inc., 342 B.R. 575 (Bankr.D.Minn.2006), aff'd, 2006 WL 3757972, No. 06-2607 (D.Minn.2006). In Hyman, the United States Trustee and the trustee brought a motion, purportedly under 11 U.S.C. § 726(a), seeking a refund of attorney’s fees from Fredrikson & Byron, P.A. Fredrikson had drawn upon and exhausted its $83,312.05 retainer after an interim order was issued allowing its fees. In Hyman, like here, the case had been converted and the estate was administrar tively insolvent at the chapter 11 level. The United States Trustee and the trustee argued that if Fredrikson did not return its retainer it would unfairly receive more than its entitled pro-rata distribution. In Hyman, I denied the motion to refund the fees. The district court affirmed that decision and summarized my findings as follows: The court began its substantive discussion by observing that § 726(b) mandates only pro rata distribution of a bankruptcy estate; it contains no provision for adding property back into the estate. The court then looked to 11 U.S.C. § 541 but similarly found no provision to recover administrative fees that had already been paid. Next, the court reasoned that because 11 U.S.C. § 549 explicitly provides for recovery of post-petition transfers in some instances, § 549’s silence on the issue at hand ■meant that Congress did not intend for trustees to recover postpetition payments that were earlier authorized by a court or by the Bankruptcy Code itself. The court opined that the trustee’s argument, carried to its logical ultimate conclusion, would require the trustee to recover every payment made during the Chapter 11 case and redistribute the money, thereby unwinding the Chapter 11 process. Finally, the court acknowledged that some circumstances could warrant applying equitable principles and ordering a refund of compensation, but the court found that the equities here weighed against a refund. Hyman, 2006 WL 3757972 at *1. I acknowledge that now, like at the time of Hyman, there are some cases requiring disgorgement of attorney’s fees when a converted case is administratively insolvent. See e.g., Specker Motor Sales Co. v. Eisen, 393 F.3d 659 (6th Cir.2004). Many of these cases reason that the mandatory distribution scheme of § 726 requires disgorgement. However, when read careful-' ly, these cases do not provide any statutory analysis. Section 726 deals solely with distributing property of the estate, it does not empower the trustee with the authority to collect property. The United States Trustee argues, in essence, that it is immaterial that § 726 does not provide for collection because Larkin’s retainer is property of the estate by virtue simply because the fees have not yet been allowed. If the retainer is property of the estate then it must be turned over to the trustee for distribution pursuant to § 726. This is the logic that the United States Trustee uses to distinguish this case from Hyman. He argues that an importance difference in Hyman is that an order was entered approving Fredrikson’s fees. Here, payment was not made pursu: ant to any order, statute, or promulgated rule. According to the United States Trustee, until an order is entered approving the fees they are property of the estate. Somehow, the original order approving employment and allowing Larkin to get paid each month does not count.

844522-14725

POLITZ, Circuit Judge: David Seaman appeals an adverse summary judgment in favor of CSPH, Inc. on his American with Disabilities Act, Title VII, and Family and Medical Leave Act claims. For the reasons assigned, we affirm. BACKGROUND Seaman was employed by CSPH, which owns and operates 32 Domino’s Pizza stores in the Dallas-Fort Worth area. He began as a driver, entered the management training program and rose in the company ranks, first becoming an assistant manager and then a store manager in November 1995. As manager, he was responsible for overseeing daily operations, hiring delivery drivers and inside personnel, grooming members of his staff for management positions, and filling in when staffing shortages occurred. As manager, he was required to be on call and to carry a pager at all times. When Seaman took over the Preston-wood store there had been problems under the previous manager and the store was understaffed. The problems worsened following Seaman’s transfer as several employees left. He often was required to work long hours. Prior to and during this time, he experienced a number of traumatic deaths in his family, and his mother, estranged wife, and girlfriend suggested that he might be suffering from bipolar disorder, a condition earlier suffered by his father. Seaman alleged that in January 1996 he told Danny Dain, his Area Supervisor, of his belief that he suffered from bipolar disorder, and that he might need time off to see a doctor. He also alleged that he suffered from sleep apnea during this period and that because of the staffing problems he was working all shifts on several consecutive days. He alleged that as a result of both the long hours and his sleeping condition, he collapsed in the store in February 1996. He did not seek medical attention during January or February. The situation worsened. On March 7 Seaman- left an inexperienced employee in charge of closing the store and turned off his pager so he could not be reached. On March 9 and 10 he did not report for work and did not call in, requiring Dain to cover for him. He visited the store the evening of the 10th and spoke with Dain. He took off March 11 and 12 ostensibly to see a doctor and did not go to work on the 13th. Perry Zielinski, CSPH’s Director of Operations, spoke with Seaman and suspended him for his absence. Seaman did not return to work until March 17 at which time he told Dain that he wanted to return to an assistant manager’s position. Dain granted this request. A few days later he told Dain and Zielinski that he wished to take two weeks of vacation to take care of his father’s estate in California. He gave them a letter from his doctor stating that he was “emotionally and physically exhausted” and demonstrated “clinical criteria for a Major Depressive Reaction.” In response to this letter Zie-linski and Dain relieved Seaman of wearing a pager and sought to schedule him off two days a week. After Seaman returned to work as an assistant manager, Zielinski had to counsel him for disruptive comments on the job. In early April Seaman sought two weeks of vacation and a third week of unpaid leave commencing April 27. On April 10 he filed a charge of discrimination with the EEOC. In an April 12 telephone conversation with Mark Frisbie, Seaman’s then area supervisor, he was told that he should choose other vacation dates because the requested dates had been given to other employees. Seaman became upset, the conversation became heated, Seaman repeatedly yelled at Frisbie and Frisbie fired him. Seaman sued CSPH seeking relief under the ADA, FMLA, Title VII, and state tort law. In due course the trial court granted CSPH summary judgment, holding that although there was a factual issue whether Seaman was a qualified individual with a disability, CSPH had acquitted its duty of accommodating disability-engendered limitations. The court also held that Seaman had not made CSPH aware of facts warranting an FMLA qualifying leave and had not shown that the conduct of CSPH employees amounted to the outrageous conduct required for intentional infliction of emotional distress. Seaman timely appealed. ANALYSIS Summary judgment is appropriate when the record discloses that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. In determining whether summary judgment was appropriate, we conduct a de novo review, judging the facts in the light most favorable to the non-movant. Without weighing the evidence, assessing its probative value, or resolving factual disputes, we search the record for resolution determinative facts and, if no material disputes are found,' we apply the controlling law to the controversy. On appeal, Seaman raises various challenges to the district court’s dismissal of his ADA, FMLA and state law claims. He contends that he presented sufficient evidence that CSPH intentionally discriminated against him because of his disability, failed to accommodate his disability-engendered limitations in both his manager and assistant manager positions, and terminated his employment in retaliation for his EEOC complaint. He further maintains that the district court erred in finding that CSPH did not violate the provisions of the FMLA in failing to grant him disability leave. Finally, he contends that he presented sufficient evidence that CSPH’s employees intentionally inflicted emotional distress. ADA Claims The American with Disabilities Act is an antidiscrimination statute designed to remove barriers which prevent qualified individuals with disabilities from enjoying employment opportunities available to persons without disabilities. The ADA prohibits discrimination against a qualified individual because of a disability “in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.” One may establish a claim of discrimination under the ADA either by presenting direct evidence or by using the indirect method of proof set forth in McDonnell Douglas Corp. v. Green. To establish a prima facie case of intentional discrimination under McDonnell Douglas, a plaintiff must show that he or she (1) suffers from a disability; (2) was qualified for the job; (3) was subject to an adverse employment action, and (4) was replaced by a non-disabled person or treated less favorably than non-disabled employees. The employer then must show a legitimate, non-discriminatory reason for its action. The employee ultimately bears the burden of showing that the employer’s actions were motivated by considerations prohibited by the statute. The ADA requires the employer to make “reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability ... unless [the employer] can demonstrate that the accommodation would impose an undue hardship.” Because the ADA requires employers to accommodate the limitations arising from a disability, and not the disability itself, an employee seeking to assert a disability discrimination claim must produce evidence that the employer knew not only of the employee’s disability, but also of the physical or mental limitations resulting therefrom. Seaman contends that CSPH failed to accommodate his disability-engendered limitations by not providing sufficient co-employees so that he could take time off to seek medical care. Seaman challenges the district court’s finding that although he had presented sufficient evidence to support the conclusion that he was a “qualified individual with a disability” within the meaning of the ADA, he failed to show that CSPH knew of his disability and his resulting limitations. Our review of the record persuades that the district court did not err in finding that Seaman failed to present sufficient evidence that he notified CSPH of his disability or any limitations resulting therefrom before his breakdown in March 1996 or after his subsequent return to work. Assuming arguendo that CSPH knew of Seaman’s disability engendered limitations, the record reflects that CSPH made sufficient efforts to accommodate Seaman’s requests. Dain cooperated with Seaman and sought to grant his requests. Dain did not discipline Seaman for his unexcused absences and allowed him time off to seek medical attention once Seaman requested time off. When Seaman asked for a return to an assistant manager position, Dain and Zielinski acquiesced, allowing him two days off per week and relieving him of the obligation of wearing a pager. We have found that in cases involving mental difficulties like Seaman’s, in which the resulting limitations are not obvious to the employer, an employee cannot remain silent and expect his employer to bear the burden of identifying the need for and suggesting appropriate accommodation. Because Seaman has produced no evidence that he requested any specific accommodation and that such a request was denied, his claim must fail. Retaliation Claim To show an unlawful retaliation, a plaintiff must establish a prima facie case of (1) engagement in an activity protected by the ADA, (2) an adverse employment action, and (3) a causal connection between the protected act and the adverse action. Once the plaintiff has established a prima facie case, the defendant must come forward with a legitimate, non-discriminatory reason for the adverse employment action. If such a reason is advanced, the plaintiff must adduce sufficient evidence that the proffered reason is a pretext for retaliation. Ultimately, the employee must show that “but for” the protected activity, the adverse employment action would not have occurred. Seaman contends that CSPH terminated his employment as assistant manager because of the discrimination complaint he filed with the EEOC. He maintains that he informed Frisbie of this complaint during the telephone conversation which resulted in his termination, and that Frisbie’s firing of him moments later is sufficient to establish the requisite causal connection between the protected activity and his termination. He insists that Frisbie’s stated reason for the termination, insubordination, is pretextual. CSPH contends, and the district court found, that the evidence shows that Seaman was terminated for insubordination during his telephone conversation with Frisbie, and that Seaman did not present sufficient evidence that this non-discriminatory reason was a pretext for discrimination. We agree. Both Frisbie and Dorothy Roach testified that Seaman screamed at Frisbie during their last conversation on the phone; Seaman admits that he raised his voice. Roach testified that Seaman’s voice was so loud that she closed the door to the office so that the customers would not hear. Frisbie testified that Seaman continued yelling at him after he told him to stop screaming. The evidence establishes that Frisbie fired Seaman for his insubordination on the phone. That Seaman mentioned his EEOC complaint to Frisbie moments before the termination does not, absent other evidence, constitute sufficient proof that the termination was retaliatory. Seaman may not use the ADA as an aegis and thus avoid accountability for his own actions. His claim of retaliation is further diminished by his own admission that CSPH could have fired him on several previous occasions, but elected to give him opportunities to improve his performance. The retaliation claim lacks merit. FMLA Claim and Emotional Distress Claim The Family and Medical Leave Act provides that an employee is entitled to up to twelve weeks of unpaid leave for a serious health condition that renders the employee unable to perform the functions of his or her position. A serious health condition is defined in relevant part as “an illness, injury, impairment, or physical or mental condition that involves ... continuing treatment by a health care provider.” The FMLA provides that an employee shall make a reasonable effort to schedule treatment so as not to disrupt the employer’s operations and shall give the employer at least 30 days’ notice, if possible, but in any event, shall provide such notice as is practicable. In requesting the leave, an employee need not invoke the specific language of the statute, but must apprize the employer of the request for time off for a serious health condition. Seaman contends that he requested time off to seek treatment for his suspected bipolar condition, first in conversations with Dain during January/February 1996, and then during his last conversation with Frisbie on April 12, 1996. He contends that CSPH never complied with these requests, and that its failure to do so amounted to a violation of the FMLA. The record is devoid of proof of a request by Seaman for a leave within the meaning of the FMLA. He informed Dain in January or February 1996 that he might be suffering from bipolar disorder and needed time off to see a doctor. He never scheduled a doctor’s appointment, however, nor did he request leave for a certain day or period as a follow up to this conversation. He never informed Zielinski of a serious medical condition. Even if, as Seaman contends, he scheduled himself off duty to receive medical treatment but was nevertheless called in to work, the record reflects that he never informed CSPH that he was off duty to seek medical attention. His reference to his mental condition does not constitute the requisite notice of an intent to invoke FMLA leave. As to his April 12, 1996 request, Seaman conceded that he did not inform Frisbie that he needed time off for a serious medical condition. His only stated reason for the requested vacation time was the desire to settle his father’s estate in California. This does not qualify as a basis for FMLA leave. Seaman did not sufficiently inform CSPH of an FMLA-qualifying reason for leave and his claim must fail. Finally, we conclude that Seaman has failed to establish that CSPH’s employees intentionally inflicted emotional distress. Seaman has not met the burden of showing that the conduct of CSPH’s employees was so outrageous, went “beyond all possible bounds of decency,” and was “utterly intolerable in a civilized community.” We therefore uphold the district court’s dismissal of Seaman’s claims. The judgment appealed is AFFIRMED. . 42U.S.C.§ 12101 etseq. . 29 U.S.C. § 2612 etseq. . 42 U.S.C. § 2000e etseq. . Fed. R Civ.P. 56(c); City of Arlington v. FDIC, 963 F.2d 79 (5th Cir.1992). . Floors Unlimited, Inc. v. Fieldcrest Cannon, Inc., 55 F.3d 181 (5th Cir.1995). . City of Arlington. . Taylor v. Principal Financial Group, Inc., 93 F.3d 155 (5th Cir.1996). . 42 U.S.C. § 12112(a).

874438-7176

WALLACE, Circuit Judge: Southern Pacific Transportation Company (Southern Pacific) appeals from a substantial judgment entered against it in this wrongful death action. Southern Pacific correctly argues that the presiding magistrate committed clear error in the administration of the jury trial. In light of the particular facts of the case, however, we conclude that the error was harmless and therefore affirm. I In 1974, Dixon’s husband was struck and killed by a train operated by Southern Pacific. Dixon brought a diversity action in the district court to recover for the allegedly wrongful death of her spouse. The trial was conducted by a United States Magistrate by stipulation of the parties. The substantive issues raised during the trial were governed by Oregon law. At the close of the evidence, the magistrate instructed the jury on Oregon’s comparative negligence law. During the course of the jury’s deliberations, one of its members handed a note to the bailiff and asked that it be given to the magistrate. The bailiff telephoned the magistrate and read the note to him. The note stated: We are having difficulty with the wording of the verdict. On question 3, if the percentage of negligence (to John Dixon) is greater than 50% does that mean that no money is awarded to Mrs. Dixon. For example, if the jury finds 70% blame on John Dixon and 30% on the railroad does that mean that Mrs. Dixon will get a 30% award or that she gets nothing. The magistrate responded by directing the bailiff to tell the jury “that she would get nothing.” While the magistrate’s response was not formally made on the record, the parties do not dispute the substance of his answer. Southern Pacific now argues that the magistrate’s communication to the jury made off the record and without notice to counsel constituted reversible error. II The Supreme Court has explicitly addressed itself to the problem presented by this case: We entertain no doubt that the orderly conduct of a trial by jury, essential to the proper protection of the right to be heard, entitles the parties who attend for the purpose to be present in person or by counsel at all proceedings from the time the jury is impaneled until it is discharged after rendering the verdict. Where a jury has retired to consider of its verdict, and supplementary instructions are required, either because asked for by the jury or for other reasons, they ought to be given either in the presence of counsel or after notice and an opportunity to be present; and written instructions ought not to be sent to the jury without notice to counsel and an opportunity to object. Under ordinary circumstances, and wherever practicable, the jury ought to be recalled to the court room, where counsel are entitled to anticipate, and bound to presume, in the absence of notice to the contrary, that all proceedings in the trial will be had. In this case the trial court erred in giving a supplementary instruction to the jury in the absence of the parties and without affording them an opportunity either to be present or to make timely objection to the instruction. Fillippon v. Albion Vein Slate Co., 250 U.S. 76, 81, 39 S.Ct. 435, 436, 63 L.Ed. 853 (1919). The Court recently reaffirmed the Fillippon holding in applying the same rule to a criminal case. Rogers v. United States, 422 U.S. 35, 38, 95 S.Ct. 2091, 45 L.Ed.2d 1 (1975). See also Shields v. United States, 273 U.S. 583, 47 S.Ct. 478, 71 L.Ed. 787 (1927). We therefore conclude that in the case before us, the magistrate clearly erred in giving the supplemental instruction to the jury in the manner described. Our conclusion that error occurred does not necessarily result in reversal. We concur in the analysis of Judge Hand in applying the same principle: [L]ike other rules for the conduct of trials, it is not an end in itself; and, while lapses should be closely scrutinized, when it appears with certainty that no harm has been done, it would be the merest pedantry to insist upon procedural regularity. United States v. Compagna, 146 F.2d 524, 528 (2d Cir. 1944), cert. denied, 324 U.S. 867, 65 S.Ct. 912, 89 L.Ed. 1422 (1945). In Rogers v. United States, supra, 422 U.S. at 40, 95 S.Ct. 2091, the Court indicated that this type of improper communication between judge and jury may in some circumstances be harmless error, even in a criminal trial. This being so, we believe a fortiori that it may be harmless in a civil trial. Accordingly, our task is to determine whether, on the particular facts of this case, the error was harmless under the principle embodied in Rule 61 of the Federal Rules of Civil Procedure. Charm Pro motions, Ltd. v. Travelers Indemnity Co., 489 F.2d 1092, 1096 (7th Cir. 1973), cert. denied, 416 U.S. 986, 94 S.Ct. 2390, 40 L.Ed.2d 763 (1974). In light of the entire record, we are convinced that the improper communication did “not affect the substantial rights of the parties,” and was therefore harmless. Fed.R.Civ.P., 61. See generally, 11 C. Wright & A. Miller, Federal Practice & Procedure § 2883 (1973). Moreover, we would reach this conclusion under any of the possible standards for determining “harmlessness” in civil trials. See generally United States v. Valle-Valdez, 554 F.2d 911, 914-16 (9th Cir. 1977). The jury’s question was whether Dixon would receive any recovery if it were to find the decedent guilty of more than 50% comparative negligence. The magistrate responded that she would recover nothing if the jury so found. First, the magistrate’s answer was indisputably correct under Oregon law. See Or.Rev.Stat. § 18.470. Second, the answer to the jury’s question was apparent from the face of the verdict form itself. Interrogatory number three stated in part: If John Dixon’s percentage is greater than 50%, your verdict is for Southern Pacific. Your foreperson should sign this verdict form. Do not answer any further questions. Third, shortly before it retired, the jury was clearly instructed by the magistrate that “plaintiff may not recover if John Dixon’s fault is greater than Southern Pacific’s negligence, if any.” In addition, the wording of the supplemental instruction was incapable of misunderstanding and could not be materially improved or clarified. Finally, there is no reason to believe that the jury gave undue weight to the supplemental instruction or failed to consider all the instructions as a whole. We emphatically hold, therefore, that the magistrate’s off-the-record communication to the jury without notice to counsel was error. On these facts, however, the error did not affect substantial rights and was thus harmless. AFFIRMED. . There is of course a fundamental distinction between this type of “secret communication” occurring in a civil as opposed to a criminal trial. In a criminal trial, the defendant has a constitutional right to counsel and to be represented at each stage of the trial. On this basis, we have held that when this type of error occurs in a criminal trial, it requires reversal unless harmless beyond a reasonable doubt. Bustamante v. Eyman, 456 F.2d 269 (9th Cir. 1972). The civil trial, however, is not fraught with these constitutional considerations.

9447433-13749

MEMORANDUM OPINION Denying the Plaintiff’s Motion for a Preliminary Injunction and Dismissing the Plaintiff’s Complaint URBINA, District Judge. I. INTRODUCTION An employee of the U.S. Department of Commerce brings this Title VII action seeking an injunction to prevent that agency from assigning her to an office space which she considers detrimental to her health. In her complaint and motion for injunctive relief, the pro se plaintiff, Janet Howard (“the plaintiff’), claims that a change in her work environment will cause irreparable damage to her mental and physical health, and could lead to her premature death. After consideration of the parties’ submissions and the relevant law, the court concludes that the plaintiff has not exhausted her administrative remedies before initiating the current action and thereby fails to sufficiently demonstrate that she has a substantial likelihood of success on the merits, a necessary element for injunctive relief. Accordingly, the court does not have jurisdiction over the case and denies the plaintiffs motion for injunctive relief and dismisses the complaint. II. BACKGROUND A. Factual Background The plaintiff seeks to enjoin her employer, the U.S. Department of Commerce, Bureau of Export Analysis, Office of Enforcement Analysis, from assigning the plaintiff to an office space which she considers unsuitable, and to have her computer, telephone, and cabinets installed and reconnected in order that she may resume her assigned duties and responsibilities at work. See Compl. at 7-8. The defendant is Donald L. Evans, the Secretary of the U.S. Department of Commerce (“the defendant”), named in his official capacity. The plaintiff alleges that her office reassignment from “room 4066 on the fourth floor,” which she describes as a “bright, airy, and tranquil space,” would cause irreparable damage to her mental and physical health, as she claims to suffer from a systemic occupational illness. See id. at 2; Pl.’s T.R.O. Mot. at 1. The plaintiff has occupied room 4066 for more than five years and argues that a change in her work environment could lead to further health injuries or premature death. See Compl. at 2. In support of the plaintiffs motion for a preliminary injunction, the plaintiff submits a letter written by her treating psychiatrist to the U.S. Department of Commerce Director of Enforcement Analysis, Mr. Thomas Andrukonis, dated June 28, 2001, which states that the plaintiff is suffering from “acute and post traumatic stress induced by discord at her job.” See Pl.’s T.R.O. Mot., Ex. 1. The letter also states that the plaintiffs recovery must involve the cooperation of her supervisors not to impose “sudden deliberate changes” on the plaintiff. See id. The letter further explains that her employer’s disruption of the plaintiffs “office, telephone access, and proximity to amicable co-workers ... constitutes unnecessary and deliberately imposed stress ... resulting] in re-injury.” See id. In its conclusion, the letter causally links the plaintiffs heart condition to the aforementioned changes in her work environment. See id. Aside from various disparaging remarks allegedly directed at the plaintiff by Mr. Andrukonis, and allegedly being the subject of her co-workers’ jokes, the plaintiff also asserts that Mr. Andrukonis and the “top level managers” in the plaintiffs office have failed to provide her with assistance to deter Mr. Andrukonis’s actions. See Compl. at 2; Pl.’s T.R.O. Mot. at 2-3. The plaintiff further alleges that she has “filed 10 EEO complaints” against Mr. An-drukonis in addition to other EEO complaints. See Compl. at 1. Before pursuing the current action with this court, however, the plaintiff did not file a complaint with the EEOC because she believes that “among African Americans, there is a stigma associated with anyone who sees a psychiatrist, there is also a name for such people (crazed).” Id. at 9. As the lead agent in a class action suit involving thousands of African Americans employed by the U.S. Department of Commerce, the plaintiff insinuates that her employer is intentionally trying to cause the plaintiff premature death so that she would not survive to represent herself and other members of the class. See id. at 10; Pl.’s T.R.O. Mot. at 2. Incidentally, the plaintiff claims that one of the defendants in that class action suit is Mr. Andrukonis. See Compl. at 1. The defendant counters that the changes complained of by the plaintiff are all part of the U.S. Department of Commerce’s plan to renovate its office space. See Def.’s Statement of Material Facts in Supp. of Mot. for Summ. J. at 2-3. In a meeting held on May 10, 2000, Mr. Andru-konis allegedly explained that the location of the employees in the office would be arranged around the organization of the three divisions so that employees may be functionally located. See id. at 3^1! Mr. Andrukonis also stated that the plaintiffs division would be located in rooms 4061 through 4073. See id. at 3. In a subsequent staff meeting held on May 31, 2001, Mr. Andrukonis discussed the plaintiffs move across the hall to be with the rest of the staff in her division. See id. at 4., Ex. 1, Attach. 5. On June 18, 2001, Mr. Andrukonis informed employees located in rooms 4066/4068, including the plaintiff, that they should move out of those offices because construction would soon commence. See id. The plaintiff objected to being moved out of her office. See Pl.’s T.R.O. Mot. at 1; Compl. at 5; Def.’s Mot. for Summ. J. at 5. In response to her objection, Mr. Andrukonis met with the plaintiff on June 21, 2001, to discuss the various options at their disposal regarding the plaintiffs workspace and proposed several options for her consideration. See Def.’s Statement of Material Facts in Supp. of Mot. for Summ. J. at 5; Def.’s Mot. for Summ. J. at 6. All of the proposed options were rejected by the plaintiff. See id. Mr. Andrukonis then asked the plaintiff to suggest an office location for the plaintiff to occupy. See Def.’s Mot. for Summ. J. at 6. The plaintiff did not provide any suggestions in response. See id. Over the course of the next two weeks, Mr. Andrukonis indicates that he made repeated attempts to secure the plaintiff an alternative workspace desirable to the plaintiff. See id. at 6-9. Just as before, the plaintiff apparently declined to accept any of these proposed alternative office locations. See id. On July 6, 2001, the plaintiff was shown the work space in room 4620, which was a semiprivate location with two offices in one work bay, one employee in each office space. See Def.’s Statement of Material Facts in Supp. of Def.’s Mot. for Summ. J. at 5-6. The plaintiff supposedly indicated that she would not move there either. See id. at 6. The defendant alleges that no one in the plaintiffs position is located in an office space similar to room 4620, with the exception of one employee for documented medical reasons. See Def.’s Mot. for Summ. J. at 9. The defendant also claims that room 4620 offers the plaintiff a better workstation than the one she had because it would provide the plaintiff with the privacy she has requested and keep her separated from the rest of her division. See id. The office also allows the plaintiff to keep her telephone access just as the plaintiff had before. See id. Furthermore, because construction has already commenced, the plaintiffs old workstation no longer exists and it would be “impossible” for the plaintiff to return to her old workstation in light of the cost of tearing down the new construction. See id. at 9-10. B. Procedural History This matter came before the court on a complaint filed July 9, 2001, and a motion for a temporary restraining order (“TRO”) filed by the plaintiff on July 11, 2001. In response, the defendant filed a motion for summary judgment on July 13, 2001. After receiving the parties’ consent, the court issued an order on July 23, 2001, converting the plaintiffs TRO motion to a motion for a preliminary injunction. See Order dated July 23, 2001. The plaintiff opposed the defendant’s motion for summary judgment by filing a “motion in objection to [defendant's motion for summary judgment” on August 10, 2001. On August 28, 2001, the plaintiff filed what is titled in part as an “amended complaint” in order to include a claim for retaliation. In response, the defendant filed a motion to strike the plaintiffs amended complaint. III. ANALYSIS The central issue facing the court is whether to grant the plaintiffs requested injunctive relief. A. Legal Standard for Preliminary Injunctive Relief This court may issue a preliminary injunction only when the movant demonstrates: (1) a substantial likelihood of success on the merits, (2) that it would suffer irreparable injury if the injunction is not granted, (3) that an injunction would not substantially injure other interested parties, and (4) that the public interest would be furthered by the injunction. Mova Pharmaceutical Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C.Cir.1998) (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 746 (D.C.Cir. 1995)); see also World Duty Free Americas, Inc. v. Summers, 94 F.Supp.2d 61, 64 (D.D.C.2000). The district court must balance the strengths of the moving party’s arguments on each of the four factors. See CityFed Fin. Corp., 58 F.3d at 747. “These factors interrelate on a sliding scale and must be balanced against each other.” Davenport v. International Bhd. of Teamsters, 166 F.3d 356, 361 (D.C.Cir. 1999) (citing Serono Labs. v. Shalala, 158 F.3d 1313, 1318 (D.C.Cir.1998)). In addition, a particularly strong showing on one factor may compensate for a weak showing on one or more of the other factors. See Serono Labs., 158 F.3d at 1318. “An injunction may be justified, for example, where there is a particularly strong likelihood of success on the merits even if there is a relatively slight showing of irreparable injury.” CityFed Fin. Corp., 58 F.3d at 747. If the plaintiff makes a particularly weak showing on one factor, however, the other factors may not be enough to compensate. See Taylor v. Resolution Trust Corp., 56 F.3d 1497, 1507 (D.C.Cir.1995), amended on other grounds on reh’g, 66 F.3d 1226 (D.C.Cir.1995). It is particularly important for the movant to demonstrate a substantial likelihood of success on the merits. Cf. Benten v. Kessler, 505 U.S. 1084, 1085, 112 S.Ct. 2929, 120 L.Ed.2d 926 (1992) (per curiam ). Indeed, absent a “substantial indication” of likely success on the merits, “there would be no justification for the court’s intrusion into the ordinary processes of administration and judicial review.” American Bankers Ass’n v. National Credit Union Admin., 38 F.Supp.2d 114, 140 (D.D.C.1999) (internal quotation omitted). Moreover, the other salient factor in the injunctive-relief analysis is irreparable injury. A movant must “demonstrate at least ‘some injury’” to warrant the granting of an injunction. CityFed Fin. Corp., 58 F.3d at 747. Indeed, if a party makes no showing of irreparable injury, the court may deny the motion for injunctive relief without considering the other factors. See id. Finally, because preliminary injunctions are extraordinary forms of judicial relief, courts should grant them sparingly. See Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997). As the Supreme Court has said, “[i]t frequently is observed that a preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” Id. (citation omitted). Although the trial court has the discretion to issue or deny a preliminary injunction, it is not a form of relief granted lightly. See Ambach v. Bell, 686 F.2d 974, 979 (D.C.Cir. 1982). In addition, any injunction that the court issues must be carefully circumscribed and tailored to remedy the harm shown. See National Treasury Employees Union v. Yeutter, 918 F.2d 968, 977 (D.C.Cir.1990) (citation omitted). B. Because the Plaintiff Has Not Exhausted Her Administrative Remedies, The Court Denies The Plaintiff’s Motion for a Preliminary Injunction for Failing to Demonstrate a Likelihood of Success on the Merits of Her Title VII Claim Applying the first prong of the four-part test, the court determines that the plaintiff has failed to sufficiently demonstrate a likelihood of success on the merits of the plaintiffs Title VII claim. As suggested earlier, the D.C. Circuit has held certain that the likelihood of success on the merits is one of the four criteria needed in order for interim injunctive relief to issue. See CityFed Fin. Corp., 58 F.3d at 746; American Bankers Ass’n, 38 F.Supp.2d at 140. Thus, if a plaintiff cannot show the likelihood that he will succeed on the merits of his claim, even a very strong showing on the other three factors will not justify the extraordinary remedy of preliminary injunctive relief. See id. The defendant argues that it is unlikely for the plaintiff to succeed on the merits of her claim since the plaintiff did not administratively present a timely complaint to the Department of Commerce. See Def.’s Mot. for Summ. J. at 11,16. As previously noted, the plaintiff states in her complaint that she did not first present this matter to the EEOC before filing her claim in this court because the EEOC is “back logged” with complaints and, as a result, a timely resolution would not be reached in her case. See Compl. at 9. As such, she requests that the court “send a stronger message” to the defendants by resolving her claim and thereby forgiving her unwillingness to submit her claim to the EEOC before filing the current action with the court. See id. at 10.

925035-7544

STEPHENS, Associate Justice. This case arises upon a writ of error to the Municipal Court of the District of Columbia. The suit was an action brought by the plaintiff in error (hereinafter called plaintiff) to recover from the defendant in error (hereinafter called defendant) the value of an automobile sold by the United States Marshal at the instance of the defendant to satisfy a judgment. The plaintiff claimed a prior lien upon the automobile. In its bill of particulars the plaintiff alleged that: “on the 12th day of May, 1934, the defendant wrongfully seized and sold an automobile in the possession of William A. Thompson, upon which there was due the plaintiff the amount of $133.50 on account of the balance of the purchase price, as is evidenced by a certain promissory note of the said William A. Thompson hereto annexed and made a part hereof, which said note was secured by a conditional sales contract on said automobile, copy of which said conditional sales contract is hereto annexed and made a part hereof. Said automobile at the time of seizure and sale was worth $130.00, and the plaintiff claims said sum from the defendant, plus costs.” It appeared from the note and the contract that Lee D. Butler, Inc., had sold the automobile in question to Thompson, and had then assigned the note and contract to the plaintiff. The case was submitted to the court below upon an agreed statement of facts, orally propounded by counsel in open court, in the form, as shown by the record, following : “The defendant secured a judgment in the Municipal Court against William Thompson, case Number 286-019, on, to wit, the 23rd day of March, 1934, and thereafter on, to wit, the 12th day of May, 1934, a writ of fi fa was caused to be issued, and on, to wit, the 12th day of May, 1934, the United States Marshal executed said writ by- levying upon an automobile registered and titled in the name of William Thompson. The title certificate issued by the Director of Vehicles and Traffic, and the records of that office, showed a lien on said automobile, by virtue of a conditional sales contract, in favor of the plaintiff, in the amount of $267.00 as of October 6, 1933. Defendant did not examine said certificate. The defendant caused a search to be made of the records of the office of the Recorder of Deeds for the District of Columbia and found no record of any liens or mortgages against the said automobile, and in fact, the conditional sales contract was not recorded. At the time of the attachment, William Thompson informed the defendant that Lee D. Butler, an automobile dealer, owned the automobile. The defendant communicated with the said Lee D. Butler and was referred to the plaintiff, C. I. T. Corporation. The plaintiff informed the defendant of the existence of the conditional sales contract, and advised him, through his attorney, that there was a balance due thereon in the amount of $130.00, and that the said conditional sales contract had not been recorded. The plaintiff then conceded to the defendant that inasmuch as the said conditional sales contract was not recorded the plaintiff could not prevent the attachment, and the plaintiff supposed that.it was ‘out of luck’. It was decided to grant the plaintiff an opportunity to make some arrangement with William Thompson whereby both the plaintiff and the defendant would secure satisfaction of their respective claims. Thereafter, after several conferences, the conclusion was finally reached that this could not be done, and the plaintiff, upon being called by telephone by the defendant, through his counsel, so informed the defendant, and again told him that inasmuch as the said conditional sales contract was not recorded it supposed it was ‘out of Tuck’ and inasmuch as it could not prevent the sale and could not make any arrangement with William Thompson whereby both the plaintiff and defendant would secure satisfaction of their respective claims that he might as well ’go ahead with the sale. Thereafter the defendant sold the said automobile, through the United States Marshal, for the sum of $130.00, and thereafter the United States Marshal paid to the defendant the sum of $119.20, which represented the proceeds of said sale. Thereafter on, to wit, the 20th day of December, 1934, counsel for the plaintiff informed the defendant that he had been retained by the plaintiff to proceed against the defendant because of the wrongful attachment, and, after negotiations, this suit was filed on April 5, 1935. The conditional sales contract and note which were respectively assigned and endorsed to the C. I. T. Corporation, which were signed by William Thompson, were duly admitted in evidence by agreement, and it was conceded by the def endant that the sum of $130.00 was due and unpaid thereon at the time the attachment was levied. It was further agreed betwee'n counsel that the value of the car at the time of the attachment was $130.00.” Upon this statement of facts the' court below gave judgment for the defendant, to which exception was taken. Upon petition by the plaintiff we granted writ of error. The conditional sales contract, though unrecorded, gave rise, in the plaintiff’s favor, to a lien superior to the claim of the defendant against the automobile. Higgins v. Central Cigar Co., 59 App.D.C. 9, 32 F.(2d) 400. We therein held that an unrecorded conditional sale was valid as against a levying judgment creditor of the conditional vendee, that such a judgment creditor is not within the classification of “third persons acquiring title to said property from said purchaser” under D.C.Code 1929, Title 25, § 179, 31 Stat. 1275, c. 854, § 547, 43 Stat. 1103, c. 417, § 547, providing: . “No conditional sale of chattels in virtue of which the property is delivered to the purchaser, but by the terms of which the title is not to pass until the price of said chattels is fully paid, where the purchase price exceeds $100, shall be valid as against third persons acquiring title to said property from said purchaser without notice of the terms of said sale, unless the terms of said sale are reduced to writing and signed by the parties thereto and acknowledged by the purchaser and filed in the office of the recorder of deeds of the' District of Columbia, and said writing shall be indexed as if the purchaser were a mortgagor and the seller a mortgagee of such chattels, and shall be operative as to third persons without actual notice of it from the time of being filed . . The disputed points raised by the assignment of errors and argued in the briefs are that: I. The plaintiff was estopped to assert its prior lien. II. The plaintiff waived its prior lien. I. The plaintiff was not estopped to assert its prior lien. The following statements of the plaintiff are relied upon by the defendant as a foundation for the asserted estoppel: “The plaintiff then conceded to the defendant that inasmuch as the said conditional sales contract was not recorded the plaintiff could not prevent the attachment, and the plaintiff supposed that it was ‘out of luck’. ******* “the plaintiff, upon being called by telejihone by the defendant, through his counsel, . . . again told him that inasmuch as the said conditional sales contract was not recorded it supposed it was ‘out of luck’ and inasmuch as it could not prevent the sale and could not make any arrangement with William Thompson whereby both the plaintiff and the defendant would secure satisfaction of their respective claims that he might as well go ahead with the sale.”

4082796-22021

FINDINGS OF FACT AND CONCLUSIONS OF LAW JERRY A. FUNK, Bankruptcy Judge. This Case is before the Court upon the United States Trustee’s (the Trustee’s) Motion to Dismiss (the Motion) pursuant to 11 U.S.C. § 707(b)(1) based upon a presumption of abuse under 11 U.S.C. § 707(b)(2) and abuse arising under 11 U.S.C. § 707(b)(3). After hearings held on July 10, 2008 and October 15, 2008, the Court makes the following Findings of Fact and Conclusions of Law. FINDINGS OF FACT On January 26, 2008, Eartha Evelyn Norwood-Hill (Debtor), filed a petition under Chapter 7 of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Debtor’s Chapter 7 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income reflects annualized income of $84,694.44, which is above the median income of $49,234.00, for a household of two in Florida. Accordingly, Debtor was required to complete the remainder of Form 22A. On line 42 of Form 22A, Debtor included three secured payments for two real pieces of property that she is surrendering, for a deduction of $3,650.78. Debt- or’s Form 22A shows that she has negative monthly disposable income under § 707(b)(2) in the amount of $1,978.63. Debtor is a 49 year-old single mother, who has no real or personal property of any significant value other than the $40,000.00 she has in her Thrift Savings Plan/ 401K(TSP), and the Chapter 7 Trustee has filed a Notice of No Distribution. Debtor recently moved from Georgia to Jacksonville, in order to retain her job as a housing program specialist with the United States Department of Housing and Urban Development. The Trustee filed the instant Motion to Dismiss upon the basis that Debtor is not entitled to deduct secured payments on collateral that is being surrendered. The Trustee contends that if these deductions were disallowed that Debtor would have disposable monthly income in the amount of $2,021.41, thereby indicating that a presumption of abuse exists. If the Court finds that the Debtor may take these deductions, in which case the presumption of abuse would not arise, the Trustee alternatively maintains that Debt- or’s case should be dismissed pursuant to 11 U.S.C. § 707(b)(3), under a totality of the circumstances analysis. Specifically, the Trustee objects to the deductions Debtor is taking for contributions and loan repayments she is making to her TSP, as well as contributions to savings bonds. These deductions total $585.11 and are comprised as follows: TSP loan repayment in the amount of $151.78, TSP contribution in the amount of $325.00 and savings bond contributions in the amount of $108.33. The Trustee asserts that if Debtor did not make these contributions she would have the ability to repay her creditors at least $585.11 per month. CONCLUSIONS OF LAW In enacting the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) Congress made sweeping changes to the Bankruptcy Code to address perceived abuses of the bankruptcy system and to ensure that debtors with the ability to repay their debts do so. 11 U.S.C. § 707(b)(1) of the Bankruptcy Code provides that a court may dismiss a case filed by an individual whose debts are primarily consumer debts if it finds that granting relief would be an abuse of the provisions of Chapter 7. 11 U.S.C. § 707(b)(2)(A)© requires a court to presume that abuse exists if the debtor’s current monthly income, reduced by allowed deductions and multiplied by 60, is greater than or equal to the greater of 25% of the debtor’s nonpriority, unsecured claims or $6,575, whichever is greater, or $10,950. Stated differently, if after deducting all allowable expenses from a debtor’s current monthly income, the debtor has less than $109.58 per month in net income (i.e., less than $6,575 to fund a 60-month plan), the filing is not presumed abusive. If the debtor has monthly net income of $182.50 or more (i.e., at least $10,950 to fund a 60-month plan), the filing is presumed abusive. Finally, if the debtor’s net monthly income is more than $109.58 but less than $182.50, the case will be presumed abusive if that sum, when multiplied by 60 months, will pay 25% or more of the debtor’s non-priority, unsecured debts. A debtor may only rebut the presumption of abuse by demonstrating special circumstances, such as a serious medical condition or order to active duty service in the Armed Forces, to the extent such special circumstances justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative. 11 U.S.C. § 707(b)(2)(B)®. Alternatively, if the presumption of abuse does not arise or the Court finds the debtor has successfully rebutted the presumption of abuse, the United States Trustee may then request dismissal pursuant to § 707(b)(3). Pursuant to § 707(b)(3), the Court shall consider whether the debtor filed the petition in bad faith or whether the totality of the circumstances of the Debtor’s financial situation demonstrates abuse. In the instant case, the first issue before the Court is whether pursuant to 11 U.S.C. § 707(b)(2)(A)(iii)(l) Debtor may deduct payments for real property that will be surrendered. The Trustee asserts that if the payments on the property being surrendered are not deducted on line 42, the Debtor would have disposable income on Line 50 in the amount of $2,202.41, thus indicating that a presumption of abuse exists. However, if the Court determines that Debtor is entitled to deduct the payments on the real property, the presumption of abuse will not arise. In this instance, the Court will then turn to the Trustee’s alternative argument under 11 U.S.C. § 707(b)(3)(B) as to whether the totality of the circumstances in regards to Debtor’s financial situation demonstrates abuse. A. Snapshot approach vs. future oriented approach under 11 U.S.C. § 707(B)(2). The language of § 707(b)(2)(A)(iii) which is at issue provides as follows: 11 U.S.C. § 707(b)(2)(A)(iii). The resulting amount from this mathematical formula is then deducted from the debtor’s current monthly income as a means of determining the debtor’s disposable monthly income. [t]he debtor’s average monthly payments on account of secured debts shall be calculated as the sum of— (I) the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition; ... divided by 60. Since BAPCPA became effective in October of 2005, the meaning of § 707(b)(2)(A)(iii)(I) has been highly contested and two polar opposite schools of thought have emerged. The two most commonly adopted approaches are typically referred to as the “snapshot” approach and the “future oriented” approach. The first line of cases reasons that the plain language of § 707(b) (2) (A) (iii) (I) was meant to create a “snapshot” of the debt- or’s finances as of the petition date and does not factor into consideration a debt- or’s future intentions. It is of importance to note, that the majority of cases in which the “snapshot” approach has been adopted, have been within the context of a chapter 7 case. See In re Rudler, 388 B.R. 433 (1st Cir. BAP 2008); In re Thomas, 395 B.R. 914 (6th Cir. BAP 2008); In re Ralston, 400 B.R. 854 (Bankr.M.D.Fla. Feb.10, 2009)(holding “[A]s the function of the means test is to be a mechanical formula for establishing a presumptive bar to obtaining relief in a Chapter 7 case, it is fitting that the deductions should be bright line measurements.”); In re Parada, 391 B.R. 492 (Bankr.M.D.Fla.2008); In re Castillo, No. 08-10878, 2008 WL 4544467 (Bankr.S.D.Fla. Oct. 10, 2008); In re Burmeister, 378 B.R. 227, 231 (Bankr.N.D.Ill.2007)(reasoning that Congress meant the disposable income calculation under BAPCPA to be mechanical and held that § 707(b)(2)(A)(iii)(I) is clear on its face in requiring deductions based on payments that are “contractually due.”); In re Hayes, 376 B.R. 55 (Bankr.D.Mass.2007); In re Benedetti, 372 B.R. 90 (Bankr.S.D.Fla.2007)(“a snapshot view of the Debtor’s expenses on the date of filing makes sense in the context of a Chapter 7 case.”); In re Kelvie, 372 B.R. 56 (Bankr.D.Idaho 2007); In re Wilkins, 370 B.R. 815 (Bankr.C.D.Cal.2007); In re Kogler, 368 B.R. 785 (Bankr.W.D.Wis.2007); In re Longo, 364 B.R. 161 (Bankr.D.Conn.2007); In re Mundy, 363 B.R. 407 (Bankr.M.D.Pa.2007); In re Hartwick, 359 B.R. 16 (Bankr.D.N.H.2007); In re Sorrell, 359 B.R. 167 (Bankr.S.D.Ohio 2007); In re Randle, 358 B.R. 360 (Bankr.N.D.Ill.2006); In re Walker, 2006 WL 1314125 (Bankr.N.D.Ga.2006); In re Oliver, 2006 WL 2086691, at *3 (Bankr.D.Or. June 29, 2006)(reasoning “[I]f Congress intended to limit secured debt payments contractually due from debtors on the petition date to those where actual future payments will be made ..., it knew how to do so.”). The second line of cases utilizes a “future oriented” approach, in which only those expenses which the debtor reasonably expects to pay over the sixty month period may be properly deducted. Just as the courts that have adopted the “snapshot approach” have done so primarily in the context of a Chapter 7, the courts that have adopted the “future oriented” approach have done so mainly within the context of a Chapter 13. In re Holmes, 395 B.R. 149 (Bankr.M.D.Fla.2008); In re Vernon, 385 B.R. 342 (Bankr.M.D.Fla.2008); In re Kalata, 2008 WL 552856 (Bankr.E.D.Wis. Feb.27, 2008); In re Burden, 380 B.R. 194 (Bankr.W.D.Mo.2007); In re Spurgeon, 378 B.R. 197 (Bankr.E.D.Tenn.2007); In re McGillis, 370 B.R. 720 (Bankr.W.D.Mich.2007); In re Ray, 362 B.R. 680 (Bankr.D.S.C.2007); In re Edmunds, 350 B.R. 636 (Bankr.D.S.C.2006); In re Love, 350 B.R. 611 (Bankr.M.D.Ala.2006); In re Harris, 353 B.R. 304 (Bankr.E.D.Okla.2006); In re Skaggs, 349 B.R. 594 (Bankr.E.D.Mo.2006). Although this Court has previously dealt with the issue of how § 707(b)(2)(A)(iii)(I) should be interpreted, it did so within the context of a Chapter 13 case. In re Holmes, 395 B.R. at 152. In Holmes, this Court considered the requirement of 11 U.S.C. § 1325(b)(3) that disposable income for above median debtors shall be determined by a debtor’s “current monthly income,” less amounts reasonably necessary “to be expended” as determined by § 707(b)(2)(A) and (B). Id. In making its determination, this Court stated that it viewed “the ‘snapshot’ approach as being directly at odds with § 1325(b)(1)(B) which requires a debtor to fund a plan with all of his or her disposable income.” Id. This Court also reasoned that it “looks to what is on the table at the time of confirmation. As one of the main requirements in Chapter 13 is that a plan be funded with all of a debtor’s disposable income, it would go against the very essence of Chapter 13 to allow a debtor to deduct an expense that is non-existent at the time of confirmation.” Id. at 153. Accordingly, in the context of a Chapter 13, the Court held that a debtor’s “projected disposable income” cannot be properly determined by a strict mechanical calculation of Form B22C.” Id. It is important to note that this Court’s adoption of the “future oriented” approach in Holmes was based upon the view that the “snapshot” approach was “directly at odds with § 1325(b)(1)(B) which requires a debtor to fund a plan with all of his or her disposable income.” Holmes, 395 B.R. at 152. The mechanisms, however, of Chapter 13 and Chapter 7 are separate and distinct from one another, and there are different considerations with respect to how issues arising under these respective chapters are handled. Thus, as the instant case is a Chapter 7, the considerations this Court took into account in Holmes as to § 1325 do not arise. Therefore, the Court’s reasoning as to why it adopted the “future oriented” in Holmes is not applicable, and the Court will engage in a distinct analysis of how § 707(b)(2)(A)(iii)(I) should be interpreted in the context of a Chapter 7 case. For the reasons set forth herein, the Court finds that the “snapshot” approach best comports with the mechanisms of how Chapter 7’s are intended to function under BAPCPA. This Court agrees with the statement that “Congress chose to base the means test on historic income and expense figures that are in effect on the petition date, as opposed to figures that may change with the passage of time or with a change in the debtor’s lifestyle.” In re Benedetti, 372 B.R. at 96 (quoting In re Walker, 2006 WL 1314125 at *5). In Benedetti, the court accurately reasoned that when § 707(b)(2)(A)(iii)(I) is read as a whole that the words, “‘scheduled as contractually due to secured creditors’ does not require, as a prerequisite to allowing the deduction, that those debts actually be paid ‘in each month of the 60 months following the date of the petition.’ ” Id. at 95. Instead, “[sjection 707(b)(2)(A)(iii) directs a deduction for all of the debt that will become contractually due in the five years after the filing of the bankruptcy case, without regard to whether the property securing the debt is necessary and without regard to whether the payments are actually made.” Id. Further, as Judge Williamson reasoned in Ralston, if deductions under the means test in a Chapter 7 case were not bright line measurements, “courts would have to consider the facts and circumstances of each case, including post-petition events, such as the surrender of collateral, when conducting a Means Test analysis under Chapter 7.” In re Ralston, 400 B.R. at 863-64; see also Fokkena v. Hartwick, 373 B.R. 645, 655-56 (reasoning that to require the court in each case to look “into each debtor’s intent and individual circumstances ... would be at odds with Congress’s purpose of creating a mechanical means test.”); In re Parada, 391 B.R. at 497 (“[T]he means test is a mechanical test, based only superficially on a debtor’s reality, the purpose of which is to create a bright line presumptive test of eligibility.”). This Court agrees with the reasoning and analysis applied by courts which have adopted the “snapshot” approach, that a debtor’s financial condition for purposes of the Means Tests should be evaluated on the petition date. Thus, the Court finds that § 707(b)(2)(A)(iii)(I) does not require a forward looking assessment of the secured payments that a debtor will actually make on contractually required payments in all 60 months following the date of the petition. The Court also does not agree with the Trustee’s assertion that the “snapshot” approach fails to serve Congress’s purpose in enacting the means test. First, it is of importance to note that a determination that the presumption of abuse does not arise pursuant to the means test, does not close the door on conversion or dismissal. In instances where a court finds that the presumption does not arise, the case may still be converted or dismissed under § 707(b)(3). Thus, the Court does not find that the “snapshot” approach goes against Congress’s intent to ensure that debtors who have the resources to pay their creditors do so. As a bankruptcy court in Texas reasoned, “[t]o allow a movant to include the outcome of future events as part of the means test would eliminate the distinction between the presumption of abuse test and the totality of the circumstances test.” In re Singletary, 354 B.R. 455, 465 (Bankr.S.D.Tex.2006); see also Smale, 390 B.R. at 119 (holding “[I]f the means test included future circumstances it would no longer act as a mere “mathematical estimate” using the income and expense figures provided for on Form B22 but rather would necessitate an analysis of a variety of factors, such as whether a debtor intends to surrender collateral (and the possible effects thereof), which could significantly delay administration of the ease.”); In re Haman, 366 B.R. 307, 318 (Bankr.D.Del.2007) (reasoning that “consideration of the potential results under a hypothetical chapter 13 plan belongs more properly under the § 707(b)(3) totality of the circumstances test.”). It appears to this Court, that the means test and the totality of the circumstances test were designed to be separate and distinct from one another. The means test is meant to be applied as a strict mathematical formula, while the totality of the circumstances test is a fluid test that takes into account a variety of different factors. Thus, to utilize the “forward looking” approach in the context of a Chapter 7 would morph the means test into something it was not intended to be. Thus, this Court joins other courts in holding that § 707(b)(3) is the proper place to conduct the totality of the circumstances analysis. B. Totality of the Circumstances As the Court has determined that the presumption of abuse does not arise in the instant case, the Court will now consider the Trustee’s alternative argument that the case should be dismissed under 11 U.S.C. § 707(b)(3) based upon the totality of the circumstances. Pursuant to 11 U.S.C. § 707(b)(3) the court shall consider— (A) whether the debtor filed the petition in bad faith; or (B) the totality of the circumstances ... of the debtor’s financial situation demonstrates abuse. 11 U.S.C. § 707(b)(3). The Trustee’s primary argument is that Debtor should not be allowed to include payment deductions for her TSP loan repayments in the amount of $151.78, TSP contributions in the amount of $325.00 and the purchase of savings bonds in the amount of $108.33. If these amounts were eliminated, Trustee asserts that Debtor would have an additional $565.11 per month, which would allow her to repay $35,906.60, equating to 55% of her unsecured debt, to unsecured creditors. Prior to the enactment of BAPC-PA, courts considered whether to dismiss a case for “substantial abuse” under § 707(b) based upon the “totality of the circumstances.” Under BAPCPA, however, the standard required for dismissal has been lowered from a showing of substantial abuse to a showing of abuse. The Court still finds it appropriate though to consider the factors employed pre-BAPC-PA for determining abuse as “[s]ection 707(b)(3) incorporates the judicially constructed tests of bad faith and totality of the circumstances, concepts which were used pre-BAPCPA for determining whether a debtor’s Chapter 7 case should be dismissed for ‘substantial abuse.’ ” In re Cribbs, 387 B.R. 324, 333 (Bankr.S.D.Ga.2008). In the instant case, as Debtor has rebutted the presumption of abuse, the Trustee bears the burden of proving that the totality of circumstances as to her financial situation constitutes abuse. In re Walker, 383 B.R. 830, 836 (Bankr.N.D.Ga.2008)(“the U.S. Trustee is required to come forth with the evidence to persuade the Court that relief would be an abuse.”). The Court notes that under BAPCPA, a debtor’s ability to pay is still a 'primary although not conclusive factor to consider when looking at the totality of the circumstances under § 707(b)(3)(B). In re Cribbs, 387 B.R. at 334 (stating that “in order for the United States Trustee to satisfy its burden under the 707(b)(3)(B) “totality of the circumstances” test, the Trustee must show more than just Debtors’ ability to pay.”). In a pre-BAPCPA case, this Court rejected the contention that the ability to pay, standing alone, is sufficient to warrant dismissal. In re Degross, 272 B.R. at 313; see also In re Johnson, 318 B.R. 907, 916— 917(Bankr.N.D.Ga.2005)(“[T]he Debtor’s ability to pay as measured by what could be paid in a hypothetical chapter 13 case is not a conclusive factor.”); In re Rogers, 168 B.R. 806, 808 (Bankr.M.D.Ga.1993) (“This court will stop short, however, of adopting the position that the ability to repay debts through a Chapter 13 Plan is the only determining factor. Substantial abuse should be determined on a case-by-case basis after considering the totality of the circumstances”). Specifically, in De-gross this Court found that the better reasoned analysis is one that considers a debt- or’s ability to pay in conjunction with other circumstances and adopted the following factors to determine whether they militate against or in favor of dismissal: 1) whether unforeseen or catastrophic events such as sudden illness, disability, or unemployment propelled the debtor into bankruptcy; whether the debtor’s standard of living has substantially improved as a result of the bankruptcy filing or essentially re mained the same; the debtor’s age, health, dependents, and other family responsibilities; 4) the debtor’s eligibility for Chapter 13 relief and whether creditors would receive a meaningful distribution in a Chapter 13 case; 5) the age of the debts for which the debtor seeks a discharge and the period over which they were incurred; 6) whether the debtor incurred cash advances and made consumer purchases far in excess of the ability to repay; 7) whether the debt- or made any payments toward the debts or attempted to negotiate with her creditors; 8) the accuracy of the debtor’s schedules and statement of current income and expenses; and 9) whether the debtor filed the petition in good faith. Id. at 313-314. As the Court finds the above factors to still be applicable post BAPCPA, it will incorporate them into the analysis. Debtor is a 49 year old single mother, who relocated to Florida from Georgia, after the breakup of her marriage, in order to retain her job as a housing program specialist with the United States Department of Housing and Urban Development. There are no allegations of bad faith and upon review of the evidence it is clear that Debtor was propelled into bankruptcy based upon unforeseen circumstances. Further, there is no evidence to suggest that Debtor’s standard of living has substantially improved since filing for bankruptcy and Debtor has no real or personal property of any significant value. In fact, Debtor’s testimony at the hearing, which the Court finds to be credible, paints the picture of a single mother who is struggling through a rough economic time, after a failed marriage, with the goal of making a decent life for herself and her young son.

10543148-27789

JERRE S. WILLIAMS, Circuit Judge: This appeal arises from a deficiency judgment rendered in federal district court in Texas, against appellant Julian E. Fernandez, a Louisiana resident, who claims his contacts with the State of Texas are insufficient to support personal jurisdiction. Fernandez also claims that the district court erred in applying the Texas law of deficiency judgments instead of the Louisiana law. Finally, he claims that even under Texas law, the deficiency judgment was erroneous because it was based upon an unreasonable commercial sale under Tex.Bus. & Com.Code Ann. § 9.504(c) (Ver non Supp.1988). We affirm the decision of the district court, finding that it properly-exercised personal jurisdiction, and correctly chose and applied Texas law. I. Facts Fernandez is a Louisiana businessman and owner of several aircraft. In July of 1981 he observed an ad in the Wall Street Journal offering for sale a Schafer Piper Comanchero airplane. He responded to the ad by calling from Louisiana to Texas to speak with Shelby L. Richardson, a vice president at Clifton Bank, predecessor in interest of Interfirst Bank Clifton (“Inter-first”). Richardson and a representative of the manufacturer of the airplane thereafter flew to Patterson, Louisiana, to take Fernandez on a test flight. Some time later, Fernandez again called Richardson in Texas and offered to purchase the plane for $610,000. The bank accepted the offer and agreed to finance the sale. Fernandez signed sale and loan documents including a Loan Commitment Agreement, a $550,000 Promissory Note, and a Security Agreement, all dated July 27, 1981. Fernandez later signed a Louisiana security instrument entitled Collateral Chattel Mortgage, in Amelia, Louisiana. The mortgage was recorded in the clerk’s office of the Parish of St. Mary, Louisiana, on September 21, 1981. Fernandez became unable to make his payments on the note. He delivered the airplane to a broker in Pennsylvania to attempt its sale. After several months in which the broker was unable to sell the plane, Interfirst contacted Fernandez and informed him of an interested buyer in Texas. Based on this representation, Fernandez agreed to let Interfirst’s pilot fly the plane back to Texas in early April of 1983. In this manner, Interfirst effectively repossessed the plane. In September 1983, with the plane back in Texas, Interfirst accelerated the note and made demand for full payment. Fernandez then received and signed a letter from Interfirst in which he consented to Texas foreclosure procedures and waived his rights under Louisiana law. Approximately two years later, on December 20, 1985, Interfirst sold the plane in a private foreclosure sale for less than half the price at which it was sold to Fernandez in 1981. Interfirst then filed suit in state district court in Bosque County, Texas to recover the deficiency between the balance due on the note and the selling price of the plane. This being a diversity case, Fernandez removed to the United States District Court, Western District of Texas, Waco Division pursuant to 28 U.S.C. §§ 1441 and 1332. Fernandez then filed a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. The motion was denied, and the case proceeded to a bench trial in which Interfirst was awarded $447,921.29 in deficiency on the note, plus interest and reasonable attorney’s fees. Fernandez filed this appeal. II. Personal Jurisdiction A federal court sitting in diversity may exercise jurisdiction over a nonresident defendant, provided state law confers such jurisdiction and its exercise comports with due process under the Constitution. Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 489 (5th Cir.1974). Because the Texas long-arm statute extends to the limits of due process, Hall v. Helicopteros Nacionales De Colombia S.A., 638 S.W.2d 870, 872 (Tex.1982), rev’d on other grounds, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984), we consider only whether jurisdiction over Fernandez satisfies federal constitutional requirements. The United States Supreme Court divides this inquiry into two parts: whether the nonresident defendant purposefully established “minimum contacts” with the forum state and, if so, whether the exercise of jurisdiction results in “fair play and substantial justice.” Asahi Metal Industry Co. v. Superior Court of California, — U.S. —, —, 107 S.Ct. 1026, 1029, 94 L.Ed.2d 92 (1987); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528 (1985). We consider these due process considerations in turn. A. Minimum Contacts The minimum contacts of a nonresident defendant may support either “specific” or “general” jurisdiction. Specific jurisdiction refers to a suit “arising out of or related to the defendant’s contacts with the forum.” Helicópteros, supra, 466 U.S. at 414 n. 8, 104 S.Ct. at 1872 n. 8, 80 L.Ed.2d at 411 n. 8. General jurisdiction refers to a suit which does not arise from the nonresident’s contacts with the forum, and is asserted only over defendants who maintain “continuous and systematic” contacts in a particular forum. Id. 466 U.S. at 415,104 S.Ct. at 1873. The theory of general jurisdiction clearly is not applicable in this case. This deficiency action is directly related to Fernandez’s airplane purchase and financial arrangements with Interfirst, a Texas bank. Thus, we examine these contacts to determine whether they support a finding of specific jurisdiction. We are guided by the Supreme Court’s discussion of minimum contacts in Burger King, supra, 471 U.S. at 473-82, 105 S.Ct. at 2183-87. In Burger King the Court found specific jurisdiction based upon relatively few contacts between a nonresident defendant and the forum state of Florida. The defendant, Rudzewicz, was a Burger King franchise owner who lived in Michigan and had dealt almost exclusively with the Michigan Burger King office. Rudzew-icz had signed a twenty-year Burger King franchise agreement which contained a Florida choice-of-law clause, and which specified that payments would be made to Miami, Florida, the location of the Burger King main office. The Court held that neither the contract nor the choice-of-law clause alone justified exercising jurisdiction over the defendant, but that the combined effect of the two, along with the long-term nature of the business arrangement, evinced “purposeful availment” of Florida laws and provided a reasonable basis on which to anticipate litigation in Florida. Id. 471 U.S. at 481-82, 107 S.Ct. at 2187. Fernandez’s contacts with Texas are somewhat analogous to those of the franchise owner in Burger King. Although the loan agreement between Fernandez and Interfirst is less involved than a twenty-year franchise agreement, it combines with other contacts to show a purposeful application of the laws of Texas. Fernandez called to Texas to purchase the plane. He voluntarily agreed to finance the plane through a Texas bank, and signed a loan agreement containing a Texas choice-of-law clause. He later agreed to return the plane to Texas for sale. And most significantly, he signed a letter consenting to sale under Texas foreclosure procedures and agreeing to liability for any deficiency be tween the sale price and the amount of the note. We find that this letter, in addition to Fernandez’s other Texas contacts, shows purposeful choice of the laws of Texas and a reasonable basis on which to anticipate suit there. He consented to Texas foreclosure procedures and to liability for any deficiency. It strains logic that a party could consent to deficiency liability under a state’s foreclosure procedures without anticipating litigation in the courts that issue and enforce that state’s deficiency judgments. Based upon the letter, the voluntarily assumed loan agreement containing a Texas choice-of-law clause, and the presence of the airplane in Texas, we find that Fernandez reasonably could have anticipated litigation in Texas. B. “Fair Play and Substantial Justice” The second prong of the due process analysis set out in Burger King and Asahi requires that once minimum contacts have been found, we consider other factors to determine whether the assertion of jurisdiction comports with “fair play and substantial justice.” Asahi, supra, — U.S. at —, 107 S.Ct. at 1033; Burger King, supra, 471 U.S. at 476, 105 S.Ct. at 2184. A nonresident defendant who, like Fernandez, has been found to have purposely directed his activities toward the forum, “must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Burger King, supra, 471 U.S. at 477, 105 S.Ct. at 2185. Such other factors or considerations include “the burden on the defendant, the forum State’s interest in adjudicating the dispute, the plaintiff's interest in maintaining convenient and effective relief, the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and the shared interest of the several State’s in furthering fundamental substantive social policies.” Id. 471 U.S. at 477, 105 S.Ct. at 2184. In Burger King, the Supreme Court applied these guidelines to the facts of the case, noting throughout that many of the concerns could be accommodated either with a change of venue or through application of the forum’s choice-of-law rules. Id. 471 U.S. at 477-78, 483-84, 105 S.Ct. at 2185, 2188. We consider these “other factors” with respect to Fernandez and find that the exercise of jurisdiction over him, based on his contacts with Texas, does not violate the Constitution. Although the burden on Fernandez to defend this action in Texas is perhaps greater than the hypothetical burden on Interfirst of bringing suit in Louisiana, the Supreme Court has stated in Burger King that an adversary’s superior wealth will not defeat jurisdiction. Id., 471 U.S. at 483 n. 25, 105 S.Ct. at 2188 n. 25. Moreover, Fernandez has failed to point to an inability to present evidence which would have been available in Louisiana. The situation is unlike that in Asahi, where the defendant, a Japanese corporation, would have had to travel to California and contend with a foreign legal system. As-ahi, supra, — U.S. at-, 107 S.Ct. at 1034. Fernandez was asked only to travel to a neighboring state. As for the interests of the forum state, Texas has a legitimate concern in carrying out its own laws and protecting its own creditors. In Asahi, the plaintiff was not a resident of California, the forum state, and California’s interest was practically nonexistent in handling the indemnification issue between Asahi and a Taiwanese corporation. Id. — U.S. at-, 107 S.Ct. at 1034. Here, however, plain tiff/appellee In-terfirst corporation is a Texas resident seeking protection as a creditor under the foreclosure laws of Texas. The forum’s interest in this case is considerably greater than that of California in Asahi. Finally, the district court’s exercise of jurisdiction in this case is not clearly inconsistent with Louisiana’s interests. The choice-of-law issue is separable from the question of jurisdiction. As the Burger King Court stated: “minimum-contacts analysis presupposes that two or more states may be interested in the outcome of a dispute, and the process of resolving potentially conflicting ‘fundamental substantive social policies,’ World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980), can usually be accommodated by choice-of-law rules rather than through outright preclusion of jurisdiction in one forum.” Burger King, supra, 471 U.S. at 483-84, 105 S.Ct. at 2108 n. 26. We find that personal jurisdiction was properly exercised in this case, based upon minimum contacts which satisfied Supreme Court standards of fair play and substantial justice. We stress the significance of the letter in which Fernandez agreed to deficiency liability under Texas foreclosure procedures. Here, as in Burger King, Fernandez had fair notice of litigation in Texas by virtue of the Texas loan agreement and the letter, both specifying Texas law. A substantial, continuing relationship existed between the parties. Moreover, Fernandez, like the defendant in Burger King, failed to show that jurisdiction in Texas was fundamentally unfair. Burger King, supra, 471 U.S. at 487, 105 S.Ct. at 2190. We distinguish this case from Asahi, in which the Supreme Court found that the extension of specific personal jurisdiction was unfair, “[cjonsidering the international context, the heavy burden on the alien defendant, and the slight interests of the plaintiff and the forum state.” Asahi, supra, —— U.S. at-, 107 S.Ct. at 1035. None of those considerations were realized in this case. We therefore affirm the district court’s choice of forum, and proceed to the appropriate choice of law. III. Choice of Law A diversity court applies the choice-of-law rules of the state in which it sits. Stuart v. Spademan, supra, at 1195. Texas choice-of-law rules recognize valid choice-of-law clauses. Id.; Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984). The district court thus determined, based on the choice-of-law clause contained in the loan agreement, that Texas law controls this deficiency action. Fernandez attacks the district court’s decision on several grounds. First, he claims that because the choice-of-law clause was contained only in the loan agreement and not in the Louisiana security instrument, the clause does not control this action. We agree with the district court, however, that the choice-of-law clause contained in the loan agreement suf ficiently shows the parties’ intention to be bound by Texas law. We need not impose the additional requirement that a Texas choice-of-law clause be included in the Louisiana security agreement as well, particularly when Fernandez also signed a Texas security instrument in conjunction with the note and the loan agreement. Furthermore, the district court’s finding that the parties intended Texas law to apply is bolstered by the letter in which Fernandez agreed to Texas foreclosure procedures. Fernandez also claims that the Louisiana Deficiency Judgment Act, La. Rev.Stat.Ann. § 13:4106 et seq., bars Inter-first’s recovery of a deficiency judgment. He cites § 4106 which essentially provides that a deficiency judgment must be based on a properly held judicial sale with appraisement. The sale in this case jyas privately held; hence Fernandez claims the deficiency judgment is barred by Louisiana law. Fernandez further claims that the waiver of his rights under Louisiana law, contained in the aforementioned letter to Interfirst, is invalid under § 4107. We reject these claims on the basis of La.Rev. Stat.Ann. § 13:4108(4), which provides that the Louisiana protections against nonjudicial sale do not apply when the property or collateral is located outside of Louisiana and the creditor has elected to proceed under the laws of another state. The parties in this case agreed to Texas foreclosure procedures, and the airplane was located in Texas at the time of foreclosure. Thus, by the terms of § 4108, Louisiana law does not bar Interfirst’s deficiency judgment. Cases to the contrary cited by appellant, Universal C.I.T. Credit Corp. v. Hulett, 151 So.2d 70S (La.App. 3d Cir.1963); Murdock Acceptance Corp. v. S. & H. Dist. Co., Inc., 331 So.2d 870 (La.App.2d Cir.1976), are distinguishable from the subject case in that they did not involve a choice-of-law clause such as the one to which Fernandez agreed. It should also be noted that Louisiana is without power to impose its law on foreclosure sales which take place with lawful jurisdiction and choice of law in another state. Fernandez raises as his third contention a significant argument that Texas law cannot control this case because the Federal Aviation Act of 1958 (FAA), Section 506, 49 U.S.C. § 1406, contains a federal choice-of-law provision specifying the law of the state where the security instrument was delivered. It is Fernandez’s ar gument that because a security interest in his plane was delivered and recorded in Louisiana, that state’s law governs foreclosure. Fernandez directs us to the case of Bank of Lexington v. Jack Adams Aircraft Sales, Inc., 570 F.2d 1220 (5th Cir.1978), a diversity action in which this Court held that FAA § 1406 determines which state’s law controls the initial or inherent validity of an aircraft security instrument. At issue in Bank of Lexington was whether an aircraft security instrument required consideration. The panel held that Kentucky law controlled the issue of consideration, because the security instrument had been recorded in that state under the FAA. Id. at 1224. This Court considered the effect upon state law of another provision of the FAA in Matter of Gary Aircraft Cory., 681 F.2d 365 (1982). We recognized that § 503 of the FAA, 49 U.S.C. § 1403, in establishing the recording system preempts state law on filing and recordation of a security interest in aircraft. We held, however, that it does not displace state law assignment of priorities to security interests in aircraft. Id. at 368-69. The Supreme Court soon thereafter confined the ruling in Gary to state rules governing priority among holders of recorded security instruments only. Philko Aviation, Inc. v. Shacket, 462 U.S. 406, 412 n. 6, 103 S.Ct. 2476, 2480 n. 6, 76 L.Ed.2d 678 (1983). That case held that § 503(c) preempts state laws that allow un-document or unreported transfers of interest in aircraft to affect innocent third parties. Although neither Philko nor Gary directly involved § 506 of the FAA, 49 U.S. C. § 1406, both note that the provision is a federal choice-of-law rule for determining the substantive validity of an instrument. Philko, supra, 462 U.S. at 413 n. 7, 103 S.Ct. at 2480 n. 7; Gary, supra, 681 F.2d at 371. Appellant suggests that § 506 of the FAA, 49 U.S.C. § 1406 preempts state choice-of-law rules, even in matters which go beyond the initial validity of the instrument. But, resolution of this assertion is not necessary to the outcome of this case. For whether we apply Texas law or Louisiana law, the outcome is the same. Although as we point out above the law is by no means certain, even if we assume that beyond the mere question of validity, the entire security instrument is subject to the control of the federal statutory provision, this federal requirement does not empower the state law to forbid waiver of provisions of the security instrument. In this case, Fernandez made completely clear his intent to submit to a Texas foreclosure under the Texas law. This specific waiver of the rights he may have had under Louisiana law is not forbidden under the federal statute. Louisiana itself does not have the power to deprive another state of its lawful jurisdiction over the foreclosure sale by forbidding the waiver of rights under Louisiana law. Nor does Louisiana undertake to do so. As the analysis set out above reveals, La. Rev.Stat.Ann. § 13:4107, providing that the deficiency judgment requirements under Louisiana law “shall not be waived,” lacks extraterritorial effect. See fn. 7, supra. Instead, La.Rev.Stat.Ann. § 13:4108(4) makes clear the intent of the State of Louisiana not to undertake extraterritorial control. Louisiana has provided that if the property is located outside the state, the foreclosure of such property may take place outside the State of Louisiana at the election of the creditor. See fn. 8, supra. We find, therefore, that the specific waiver by Fernandez of the application of Louisiana law to the foreclosure of the aircraft was permissible and was effective under both federal and Louisiana law. IV. Reasonable Commercial Sale Under Tex.Bus. & Com.Code §§ 9.504(c) and 9.507(b) Fernandez claims that even under Texas law, Interfirst is barred from recovering a deficiency judgment because it failed to comply with Texas Business & Commerce Code § 9.504(c), which governs the sale of repossessed secured collateral in Texas. Fernandez also claims that Interfirst failed to plead and prove the commercial reasonableness of the sale, and hence failed to state a claim upon which relief could be granted. We briefly dispose of the latter claim as meritless. The allegation that a party has failed to state a claim upon which relief can be granted is one to be made to the district court in compliance with Fed.R. Civ.P. 12(b) & (h)(2). Nevertheless, Fernandez rests his reasoning on Tackett v. Mid-Continent Refrigerator Co., 579 S.W. 2d 545, 549 (Tex.Civ.App.—Fort Worth 1979, ref’d nre), which held, “where there is no proof of a commercially reasonable disposition of the collateral and crediting the debtor with the proceeds, a presumption arises that the proceeds equal the deficiency.” In this case there is evidence of both crediting and commercial reasonableness. Appellant’s argument simply does not apply. Further, the issue of commercial reasonableness in fact was made part of the pleadings. Although Interfirst had neglected to plead the commercial reasonableness of the sale, the district judge permitted oral amendment of the pleadings at trial and evidence was introduced over Fernandez’s objections. The district judge determined that, because Interfirst had included the issue of commercial reasonableness in its trial brief, surprise would not result from the amendment. This decision was well within the district court’s discretion, and comports with Fed.R.Civ.P. 15(b). We find that the issue of commercial reasonableness was properly included in the pleadings and proof. Fernandez’s other claim under Texas law addresses the merits of the issue. He argues that the airplane sale was commercially unreasonable under § 9.504, because Interfirst’s letter of notice went beyond merely giving notice. The letter, he claims, lulled him into inaction by stating the following: “[the Bank] plans to advertise [the plane] for sale in appropriate newspapers and to sell it for the highest price attainable at private sale on or after 12:00 noon, October 20, 1983.” Interfirst did not sell the plane until December 20, 1985, for $226,088.69, which left an outstanding balance against Fernandez of $447,921.29. Fernandez claims that Inter-first failed to live up to the “promise of its letter,” and should be barred from recovering a deficiency judgment. Under Texas law, a creditor who does not fulfill the requirements of § 9.504(c) is barred from recovering a deficiency against the debtor. Tanenbaum v. Economics Laboratory, Inc., 628 S.W.2d 769, 771 (Tex.1982). A creditor’s primary obligation to the debtor is to prove that the disposition of repossessed collateral was “commercially reasonable.” Id. at 771. We agree with the district court that Tex. Bus. & Com.Code Ann. § 9.507(b) (Vernon Supp.1988) controls this issue. Section 9.507(b) states that a sale is commercially reasonable, “if [the creditor] sells at a price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold.” We find ample evidence in the record supporting the district court’s conclusion that the sale was commercially reasonable under § 9.507(b). During the two-year lag period between repossession and sale, In-terfirst attempted to sell the plane through the following methods: special brochures and inserts sent to all owners of Piper Navaho Aircraft, five brokers given an open right to sell the plane, gradual reduction of the price of the airplane, and national advertising in the form of a twenty-inch ad in “Trade-A-Plane” circular. Interfirst also exhibited the plane at an air show. The plane was finally sold for $226,088.69, a price current in the market at the time of the sale. The sale cannot be considered commercially unreasonable simply because it took place approximately two years after repossession. The record shows that Interfirst continuously tried in good faith to sell the plane during the two-year period. Moreover, under § 9.507(b), “[t]he fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner.” Tex.Bus. & Com. Code Ann. § 9.507(b). Finally, regardless of whether Interfirst is bound by its representations in the letter, we consider those representations to have been substantially fulfilled. The sale did in fact occur “after 12:00 noon, October 20, 1983.” And, considering the variety of attempts used by Interfirst to sell the plane, the statement that it would be advertised in “appropriate newspapers” was satisfied by the ad in “Trade-A-Plane” circular. We cannot find that the district court was clearly erroneous in holding the sale to have been commercially reasonable. We affirm the district court’s exercise of jurisdiction over Fernandez, its choice of Texas law based on the choice-of-law clause contained in the loan agreement and the letter, and its holding that sale of the airplane was commercially reasonable under Texas law. AFFIRMED. . Fernandez’s contacts with the state of Texas fall short of the Supreme Court’s standards for conferring general jurisdiction. In Helicópteros, the Supreme Court held that Texas’ jurisdiction did not extend over a nonresident corporation. The suit had been filed on behalf of four American citizens killed in a helicopter crash in Peru. The plaintiffs brought suit in Texas state court against the Columbian corporation that owned the helicopter. The corporation’s only contacts with the state were as follows: purchasing helicopter equipment in Texas, sending a chief executive officer to Houston for contract negotiation, accepting checks drawn on a Houston bank, and sending personnel to Fort Worth for training. The Supreme Court held that the activities of the Columbian corporation were not sufficiently continuous or systematic to support general jurisdiction. Id. 466 U.S. at 415-18, 104 S.Ct. at 1872-74. Likewise, Fernandez’s activities in Texas were neither continuous nor systematic, but related only to his airplane purchase with Interfirst. . The Supreme Court’s plurality portion of the Asahi opinion, — U.S. at -, 107 S.Ct. at 1031-33, discusses minimum contacts in the context of "stream of commerce,” which is not directly related to the contractual situation we face in this case. Asahi, the alien defendant, was a Japanese tire valve manufacturer that had introduced its product into the stream of commerce. The Supreme Court held that the due process clause prevented California from asserting jurisdiction over Asahi. Id. — U.S. at-, 107 S.Ct. at 1026. The Court stressed the alien-age of the parties and the slight interests of California. Id. — U.S. at -, 107 S.Ct. at 1034-35. We discuss this aspect of the Asahi opinion in our consideration of "fair play and substantial justice." For a thorough treatment of Asahi, see Maltz, Unraveling the Conundrum of the Law of Personal Jurisdiction: A Comment on Asahi Metal Industry Co. v. Superior Court of California, 1987 DUKE L.J. 669 (1987). . The letter, written by Interfirst and signed by Fernandez, states in pertinent part: Under Texas procedure after the aircraft is sold, you will be entitled to receive any funds paid in excess of the debt and cost of sale, and will be liable for any deficiency. and [T]he Bank asks that you consent to the Texas procedure outlined above and by your signature to this letter waive your rights to judicial seizure and sale under the provisions of Arts. 2332, 2336, 2723, 2724, 2639, 2293, 2721, 2331, and 2722, Louisiana Code of Civil Procedure. [Emphasis added]

5909203-24134

MEMORANDUM BAYLSON, District Judge. I. Introduction Appellant-Plaintiff William Skinner appeals from the Bankruptcy Court’s decision and order dismissing with prejudice his amended adversary complaint against his brother and sister-in-law, Appellee-De-fendants Thomas and Anna Skinner. In his amended adversary complaint, William Skinner alleges that Thomas Skinner embezzled the financial assets of their mother, Dorothy Skinner, leaving her unable to pay outstanding bills for assisted living care at Saint Joseph’s Manor. Under the Pennsylvania Support Law, William and Thomas Skinner may be liable to pay for their mother’s care. Saint Joseph’s Manor has obtained a default judgment against Thomas Skinner under the Support Law, which he sought to discharge in bankruptcy. William Skinner, whose liability under the Support Law has not yet been adjudicated, alleges that to the extent he is required to pay for Dorothy Skinner’s care at Saint Joseph’s Man- or, Thomas Skinner has a non-dischargea-ble obligation to reimburse him because the debt to Saint Joseph’s Manor was caused by Thomas Skinner’s embezzlement and diversion of their mother’s assets. The Bankruptcy Court, Judge Magde-line Coleman, held that William Skinner failed to show that he has any cognizable claim against Thomas Skinner. Therefore, William Skinner was not a creditor of Thomas Skinner and lacked standing to challenge the dischargeability of Thomas Skinner’s debts. For the reasons set forth below, the Bankruptcy Court’s decision will be affirmed. II. Factual Background The facts summarized here are as alleged in Appellant-Plaintiff William Skinner’s Amended Adversary Complaint' and its attachments. Adversary No. 13-405, ECF 23 (Bankr.E.D.Pa.) (hereinafter “Compl.” or “Amended Complaint”). William Skinner and Thomas Skinner are brothers. Compl. ¶ 6. Their mother, Dorothy Skinner, is widowed. Compl. ¶ 6. Thomas Skinner is married to Anna Skinner. Compl. ¶ 8. In 2004, Thomas and Anna Skinner moved in with Dorothy Skinner at her condominium in Southamp ton, Pennsylvania. Compl. ¶ 8. In April 2005, Dorothy Skinner signed a Power of Attorney, giving Thomas Skinner authority over her account at Wachovia Bank. Compl. ¶ 13. As of early 2007, Dorothy Skinner had assets totaling about $400,000, which included her condominium, a brokerage account, a bank account, and a retirement account. Compl. ¶ 14. In addition, Dorothy Skinner received a monthly pension benefit and a social security benefit that total about $1,400 and a monthly long-term care insurance benefit. Compl. ¶ 15. • Beginning in about 2007, Thomas Skinner used his Power of Attorney to access Dorothy Skinner’s assets to pay for his and his wife’s personal expenses. Compl.- ¶¶ 16-17. Thomas and Anna Skinner also convinced Dorothy Skinner to deed her property to them, and Thomas Skinner took advances totaling about $35,000 from a line of credit with Wachovia Bank that Dorothy Skinner had secured with the property. Compl. ¶¶ 18-20. In February 2009, Thomas and Anna Skinner placed Dorothy Skinner in an assisted living home at Saint Joseph’s Man- or. Compl. ¶ 21. While residing there, Dorothy Skinner received long-term care insurance payments that should have covered most or all of her expenses. Compl. ¶ 22. However, the long-term care payments were diverted by Thomas and Anna Skinner for their personal use and Dorothy Skinner was evicted from Saint Joseph’s Manor for non-payment in June 2012, with an outstanding balance of $25,094.69 plus interest and fees. Compl. ¶¶ 23-26. As a result of Thomas and Anna Skinner’s dissipation of her assets, Dorothy Skinner was unable to pay this outstanding balance. Compl. ¶ 30. In late July or early August 2012, William Skinner filed a petition in the Orphans’ Court of Bucks County, Pennsylvania, for appointment of a guardian over the estate and person of Dorothy Skinner. Compl. ¶ 31 & Ex. C (Doc. No. 23-3). On March 20, 2013, the Orphans’ Court appointed a guardian. Compl. ¶ 32 & Ex. D. (Doc. No. 23-4). The Orphans’ Court concluded that Dorothy Skinner “suffers from dementia and depressive disorder which has significantly impaired her executive functioning” and leaves her “vulnerable to exploitation, both financial and otherwise.” Compl. Ex. D ¶¶ 24r-25. The Orphans’ Court further concluded that Thomas Skinner had mismanaged his mother’s financial affairs, that Thomas Skinner facilitated the transfer of substantial sums of his mother’s monies to himself and to other family members including William Skinner, and that neither Thomas Skinner nor William Skinner was an appropriate guardian for their mother. Compl. Ex. D ¶¶ 4, 7, 16-18, 20-21. The Orphans’ Court also noted that Thomas and William Skinner blame each other for dissipating their mother’s assets. Compl. Ex. D ¶ 8. In September 2012, Saint Joseph’s Man- or filed a lawsuit in the Court of Common Pleas of Montgomery County, Pennsylvania, against Dorothy Skinner, William Skinner, and Thomas Skinner, seeking to recover the outstanding balance for Dorothy Skinner’s care. Compl. ¶ 33 & Ex. E (Doc. No. 23-5). Saint Joseph’s Manor contended that William and Thomas Skinner were liable to pay Dorothy Skinner’s bills under a theory of unjust enrichment and under the Pennsylvania Support Law, 23 Pa. Cons.Stat. § 4601 et seq., which obligates children of an indigent person to pay for or contribute to the cost of the care for the indigent person. Compl. ¶¶ 33-34; Bankr.Ct. Memo, at 3, Adversary No. 13-405, ECF 30 (Bankr.E.D.Pa.). On February 15, 2013, a default judgment was entered in favor of Saint Joseph’s Manor and against Thomas Skinner in the amount of $32,225.56. Bankr.Ct. Memo, at 8. As of May 2015, there was no judgment entered against William Skinner or Dorothy Skinner and the state court docket reflected no activity since September 2014. Docket for Holy Redeemer Health Systems v. Skinner, No.2012-25014, available at http://webapp.montcopa.org/psi/v/ search/case (last accessed May 14, 2015). III. Procedural Background Thomas Skinner filed a voluntary petition for Chapter 7 bankruptcy on April 16, 2013, two months after the default judgment was entered in favor of Saint Joseph’s Manor. Bankr.No. 13-13318, ECF 1 (Bankr.E.D.Pa.). The case was converted to a Chapter 13 bankruptcy in July 2013, and then converted back to a Chapter 7 bankruptcy in February 2015. Id. ECF 34 & 88. The default judgment owed to Saint Joseph’s Manor was the largest debt listed in Thomas Skinner’s amended bankruptcy filings, although he also listed a property tax debt of approximately $11,600, and various consumer and credit card debts totaling about $7,000. Id. ECF 39 & 47. William Skinner filed the adversary case giving rise to this appeal on July 19, 2013. Adversary No. 13-405, ECF 1 (Bankr. E.D.Pa.). His initial complaint was dismissed without prejudice on December 19, 2013. Id. ECF 21. He filed an Amended Complaint on January 2, 2014. Id. ECF 23. The Amended Complaint set forth four counts. Count One sought a declaratory judgment that William Skinner’s claims against Thomas Skinner are non-dischargeable pursuant to 11 U.S.C. § 523(a)(4) because the debt arose from embezzlement or larceny. Id. ECF 23 ¶¶ 44-50. Count Two sought a declaratory judgment that William Skinner’s claims against Thomas Skinner are non-dischargeable pursuant to 11 U.S.C. § 523(a)(6) because the debt arose from a willful and malicious injury. Id. ECF 23 ¶¶ 51-57. Count Three asserted that Thomas and Anna Skinner misappropriated the funds of Dorothy Skinner in violation of the Pennsylvania Uniform Fraudulent Transfer Act, 12 Pa.C.S. § 5101 et seq., and sought various forms of relief. Id. ECF 23 ¶¶ 58-61:9. Finally, Count Four alleged a claim for contribution, restitution, and recoverable damages against Thomas and Anna Skinner pursuant to Section 914 of the Restatement (Second) of Torts. Id. ECF 23 ¶¶ 62-66:4. Thomas and Anna Skinner moved to dismiss the Amended Complaint on January 27, 2014. Id. ECF 25. William Skinner filed his Response in Opposition on March 3, 2014. Id. ECF 27. In a Memorandum Decision filed October 8, 2014, Bankruptcy Judge Magdeline D. Coleman granted the motion to dismiss and concluded that William Skinner was not a creditor of Thomas Skinner and therefore lacked standing to pursue his non-dischargeability claims. Id. ECF 30. William Skinner filed a timely notice of appeal on October 21, 2014. Id. ECF 34: In this Court, Appellant-Plaintiff William Skinner filed his opening brief on December 11, 2014. ECF 3. Appellee-Defendants Thomas and Anna Skinner filed their brief, on December 26, 2014. ECF 4. At the request of the Court, William Skinner filed a reply brief on February 28, 2015. ECF 5. ■ IV. Jurisdiction and Standard of Review This Court has jurisdiction over appeals from final judgments, orders and decrees of the Bankruptcy Courts under 28 U.S.C. § 158(a) (1). This appeal is from an order dismissing William Skinner’s amended adversary complaint with prejudice, and is a final order. This Court reviews “the bankruptcy court’s legal determinations de novo, its factual findings for clear error and its exercise of discretion for abuse thereof.” In re Trans World, Airlines, Inc., 145 F.3d 124, 131 (3d Cir.1998). V. Discussion At its core, William Skinner’s complaint seeks to assert claims and arguments that belong to Dorothy Skinner and Saint Joseph’s Manor. As a result, the Bankruptcy Court correctly concluded that William Skinner lacks standing to challenge the dischargeability of Thomas Skinner’s debts because William Skinner has not alleged that he has a cognizable claim against Thomas or Anna Skinner under non-bankruptcy statutory or common law. Therefore, William Skinner is not a creditor of Thomas Skinner and is not entitled to file a non-dischargeability action. As discussed below, the Court will affirm the Bankruptcy Court’s decision on all issues, although on different grounds with respect to Count Three. 1. Counts One and Two Regarding Non-Dischargeability Fail to State a Claim Because William Skinner Is Not a Creditor of Thomas Skinner Counts One and Two of William Skinner’s Amended Complaint each seek a declaratory judgment that William Skinner’s claims against Thomas Skinner are non-dischargeable pursuant to 11 U.S.C. § 523(a)(4) and (a)(6). However, a debt of the kind specified in these subsections is dischargeable unless, “on request of the creditor to whom such debt is owed,” the court determines the debt is non-dis-chargeable. 11 U.S.C. § 523(c)(1); see also Fed. R. Bankr.P. 4007(a) (“A debtor - or any creditor may file a complaint to obtain a determination of the discharge-ability of any debt.”). In short, “only a party to whom a debt is owed under the Bankruptcy Code has standing to challenge the dischargeability of that debt.” In re Jarmul, 150 B.R. 134, 138-39 (Bankr.W.D.Pa.1993). To enforce that limitation, “every dischargeability proceeding” must first consider whether “the creditor hold[s] an enforceable obligation under non-bankruptcy lav?” because “[i]n the absence of an enforceable obligation, there is no ‘debt’ that can be non-dischargeable.” In re August, 448 B.R. 331, 346 (Bankr. E.D.Pa.2011) (quoting In re Roland, 294 B.R. 244, 249 (Bankr.S.D.N.Y.2003)). Counts One and Two of William Skinner’s Amended Complaint do not identify the basis for William Skinner’s claim against Thomas Skinner and instead allege vaguely that ‘William Skinner has claims against the defendant, Thomas Skinner, to the extent that the plaintiff, William Skinner, is liable under [the] Pennsylvania Support Law.” Compl. ¶¶ 49, 56. As discussed below, the Pennsylvania Support Law does not give William Skinner a claim against Thomas Skinner. Court Three of the Amended Complaint alleges a claim against Thomas and Anna Skinner under the Pennsylvania Uniform Fraudulent Transfer Act (UFTA). Compl. ¶¶ 5861:9. In addition, Count Four of the Amended Complaint alleges a claim for “contribution, restitution, and recoverable damages” under Section 914 of the Restatement (Second) of Torts. Compl. ¶¶ 62-66:4. If any part of the Amended Complaint, particularly Counts Three or Four, stated a viable claim, William Skinner would be a creditor of Thomas Skinner and would have standing to bring Counts One and Two regarding the dischargeability of any debts owed to him. However, as discussed below, the Amended Complaint does not adequately allege that William Skinner has a cognizable claim against Thomas or Anna Skinner under the Support Law, a tort theory, or the UFTA. 2. The Pennsylvania Support Law Does Not Give William Skinner a Cause of Action Against Thomas Skinner William Skinner does not argue that the Support Law gives him a claim against Thomas or Anna Skinner. Appellant’s Br. 20; Reply Br. 4. Nevertheless, a brief overview of the Support Law provides useful context for this case. Pennsylvania first imposed a filial support law in 1771, requiring children to support their indigent parents if the children are of sufficient financial ability. Albert Einstein Med. Ctr. v. Forman, 212 Pa.Super. 450, 243 A.2d 181, 183 (1968). Similar legislation was enacted in 1803, 1836, 1857, 1915, and 1937. Id. Most recently, in 2005 the Support Law was amended and recodified to its present form. 2005 Pa. Legis. Serv. Act 2005-43 (S.B. 86) codified at 23 Pa. Cons.Stat. Ann. §§ 4601 et seq. In relevant part, the Support Law assigns “the responsibility to care for and maintain or financially assist an indigent person” to any spouse, child, or parent of the indigent person. 23 Pa. Cons.Stat. Ann. § 4603(a)(1). Indigence is not defined in the statute, but Pennsylvania courts have interpreted it broadly to include persons “who have some limited means, but whose means are not sufficient to adequately provide for their maintenance and support,” in addition to those who are “completely destitute and helpless.” Health Care & Ret. Corp. of Am. v. Pittas, 46 A.3d 719, 724 (Pa.Super.2012) (quoting Savoy v. Savoy, 433 Pa.Super. 549, 641 A.2d 596, 599-600 (1994)). The amount of liability under the Support Law is set by the courts. 23 Pa. Cons.Stat. Ann. § 4603(b). As early as 1884, the Pennsylvania Supreme Court held that if the children of an indigent person “are of such unequal ability, that some should justly pay more than others, then the [court’s] decree should equitably apportion the gross sum among them, and specify the amount to be paid by each.” Appeal of O’Connor, 104 Pa. 437, 439 (1884). Children with the means to support an indigent parent can be ordered to provide support even when another child was specifically designated to care for the indigent parent. Com. v. Hecker, 82 Pa.Super. 123, 124-25 (1923) (affirming order requiring two sons who had shared in the distribution of their mother’s property to contribute to their mother’s support even though their sister, who had received' a larger share of the mother’s property, had been designated to care for the mother). Notably, the Support Law does not provide for contribution or reimbursement. Interpreting the current version of the Support Law, the Pennsylvania Superior Court has held that a single child can be found liable under the Support Law without consideration of whether the indigent person’s spouse or other children were also liable and able to assist. Pittas, 46 A.3d at 723. If a child “desire[s] to share his support-burden, he [i]s permitted to do so by joining those individuals in [the] case [against him].” Id. Any person with “any interest in the care, maintenance or assistance” of an in digent person may petition the appropriate state court for an order of support. 23 Pa. Cons.Stat. Ann. § 4603(c)(2). Pennsylvania courts have long allowed medical providers to sue children under the Support Law to seek reimbursement of past medical expenses incurred by an indigent parent. Forman, 243 A.2d at 184 (affirming judgment under the Support Law requiring children to pay the unpaid hospital bills of their mother); Pittas, 46 A.3d at 720-24 (affirming verdict requiring son to pay $92,943.41 for indigent mother’s nursing care and treatment). The Support Law also has been used by medical providers to seek payment from the child of an indigent patient after the child allegedly used a power of attorney to transfer the parent’s financial resources to him or herself. Presbyterian Med. Ctr. v. Budd, 832 A.2d 1066, 1075-77 (Pa.Super.2003). In Budd, the Pennsylvania Superior Court reversed a lower court’s order of dismissal and remanded for further proceedings because the plaintiff medical center had stated a valid cause of action under the Support Law against a daughter who had acted as her mother’s attorney-in-fact and allegedly transferred her mother’s assets to herself.' Id. Commentators have noted that enforcement of the plain language of Pennsylvania’s Support Law “can have harsh results,” and have called for its amendment or repeal. Katherine C. Pearson, Filial Support Laws in the Modem Era: Domestic and International Comparison of Enforcement Practices for Laws Requiring Adult Children to Support Indigent Parents, 20 Elder L.J. 269, 294, 298 (2013) (noting that the Pennsylvania Bar Association has called for its repeal); Jared M. DeBona, Mom, Dad, Here’s Your Allowance: The Impending Reemergence of Pennsylvania’s Filial Support Statute and an Appeal for Its Amendment, 86 Temp. L.Rev. 849, 874-80 (2014) (proposing changes to the Pennsylvania Support Law). There is presently a bill pending in the Pennsylvania General Assembly that would repeal the Support Law’s provisions regarding relatives’ liability, 2015 Pa. H.B. No. 242, but, for now, the law remains in effect. In this case, to the extent that Dorothy Skinner is unable to pay her past medical expenses, the Support Law gives Saint Joseph’s Manor a cause of action against her children, William and 'Thomas Skinner. The Support Law does not give William Skinner any right of contribution or restitution from Thomas Skinner or Dorothy Skinner, and leaves it to the Court of Common Pleas to determine how much support, if any, each of the brothers must pay for their mother. 3. Count Three Fails to State a Viable UFTA Claim Against Thomas Skinner Because the Support Law does not provide William Skinner with a claim against Thomas Skinner, the question is whether the Amended Complaint alleges any other valid claim that would make William Skinner a creditor of Thomas Skinner. To fill this gap, William Skinner relies on Count Three, alleging a Pennsylvania Uniform Fraudulent Transfer Act (UFTA) claim, and Count Four, alleging a tort claim. In Count Three of his Amended Complaint, William Skinner alleges a claim against Thomas and Anna Skinner under the Pennsylvania UFTA, 12 Pa. Cons.Stat. Ann. § 5101 et seq. Compl. ¶¶ 58-61:9. Importantly, William Skinner alleges that the fraudulent transfers at issue were Thomas Skinner’s transfers of Dorothy Skinner’s funds and assets to himself and Anna Skinner, not transfers of Thomas and Anna Skinner’s assets to some other party. Compl. ¶¶ 5861; Appellant’s Br. 21. As such, the Court views Count Three as an attempt to show that William Skinner is a creditor of Thomas Skinner because William Skinner has a claim under the UFTA for Thomas Skinner’s actions while acting as the attorney-in-fact of Dorothy Skinner. There are two reasons why Count Three does not state a viable claim and does not establish that William Skinner is a creditor of Thomas Skinner. First, in Budd, the Pennsylvania Superior Court considered whether a medical provider could bring a UFTA claim against the daughter of an indigent patient who had allegedly used her power of attorney to transfer her mother’s assets to herself. 832 A.2d at 1073-74. The court concluded that “[t]his Commonwealth has not recognized a UFTA claim targeting the attorney-in-fact of a debtor,” which would require the novel conclusion that “an attorney-in-fact of a [UFTA] debtor is liable on the debtor’s claim to a [UFTA] creditor.” Id. at 1074. Although an Ohio court had recognized such a claim under a similar law, the Superior Court “decline[d] to decide as a general matter whether this Commonwealth’s definition of ‘debtor’ under the UFTA includes the attomey-in-fact of a debtor.” Id. Nevertheless, the court held that the plaintiff medical center had not pled sufficient facts to show that the attorney-in-fact daughter of the indigent debtor qualified as a “debtor” for purposes of the UFTA. Id. Accordingly, the Superior Court concluded that the trial court had properly dismissed the medical center’s UFTA claim against the daughter. Id. The Superior Court further commented that the daughter’s “liability to [the] Mother’s estate for any improper or fraudulent transfers [wa]s an issue properly raised in Orphan’s Court during an accounting of [the] Mother’s estate.” Id. Although Budd did not categorically rule out a UFTA claim against the attorney-in-fact of a UFTA debtor, the facts in Budd appear to be indistinguishable from this case. The holding in Budd indicates that no party here, not even Saint Joseph’s Manor, has a cognizable UFTA claim against Thomas Skinner for his alleged expropriation of Dorothy Skinner’s assets while he was Dorothy Skinner’s attorney-in-fact. As such, the UFTA does not give William Skinner a claim against Thomas Skinner. Second, even if Pennsylvania law allowed a UFTA claim against the attorney-in-fact of a. UFTA debtor, remedies under the UTFA are only available to “creditors” or those standing in their stead. 12 Pa. Cons.Stat. Ann. § 5107(a); Hecht v. Malvern Preparatory Sch., 716 F.Supp.2d 395, 402 (E.D.Pa.2010) (holding that a receiver acting on behalf of defrauded investors had standing to pursue a UFTA claim). UFTA “creditors” may only obtain relief against the UFTA “debt- or” and any “transferees” who received the “debtor’s” property. 12 Pa. Cons.Stat. Ann. § 5107(a). For purposes of William Skinner’s UFTA claim, the UFTA “debt- or” is Dorothy Skinner or, possibly, Thomas Skinner as the attorney-in-fáct controlling the assets of Dorothy Skinner. The UFTA “transferees” are Thomas and Anna Skinner. As discussed throughout this opinion, the Amended Complaint does not identify any non-UFTA claim that William Skinner holds against Thomas or Anna Skinner. It also does not allege that William Skinner holds any claim against Dorothy Skinner. As such, William Skinner is not a “creditor” for purposes of the UFTA because he does not have a claim against Dorothy Skinner or against her assets that were controlled by Thomas Skinner. William Skinner therefore lacks standing to pursue a UFTA claim regarding Thomas Skinner’s transfers of Dorothy Skinner’s assets to himself. Because Count Three does not allege a viable UFTA claim, it does not- establish that William Skinner is a bankruptcy creditor of Thomas Skinner or that he is entitled to bring a non-dischargeability action. 4. The Restatement (Second) of Torts § 911 Provides For Damages, Not An Independent Cause of Action Finally, Count Four alleges a claim for “contribution, restitution and recoverable damages” against Thomas and Anna Skinner under Section 914 of the Restatement (Second) of Torts. Compl. ¶¶ 62-66:4. Section 914 of the Restatement (Second) falls within Division Thirteen: Remedies and Chapter 47: Damages. It reads in full: (1) The damages in a tort action do not ordinarily include compensation for attorney fees or other expenses of the litigation. (2) One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action. Restatement (Second) of Torts § 914 (1979). Thus, on its face, Section 914 discusses damages available as a remedy in a tort action and, in subsection 2, sets out an exception to the typical “American Rule” that each party bears its own costs and attorney’s fees. Section 914 does not purport to establish an independent cause of action.

2037830-17744

BROWNING, Circuit Judge: The appellants, Mr. and Mrs. Hoopes, brought this action under section 4 of the Clayton Act, 15 U.S.C. § 15, against the Union Oil Company of California to recover treble damages for injuries allegedly resulting from violation of the antitrust laws, “including but not limited to” sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and section 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13. Two additional causes of action were alleged but are not at issue here. After answer, partial discovery, and other pretrial proceedings, both sides moved for summary judgment on the antitrust claim. The district court granted Union’s motion on the ground that appellants “lacked standing to sue * * for the reason that under the facts of this case they are not persons injured in their business or property by reason of anything forbidden in the anti-trust laws within the meaning of 15 U.S.C.A. § 15.” The district court determined there was no just reason for delay and directed entry of judgment. Rule 54(b), Fed.R.Civ.P. This appeal followed. We reverse. The business history which climaxed in this suit may be briefly summarized as follows. In 1945 appellants built a garage and service station on two lots which they owned in Fairbanks, Alaska. For a period of ten years, until late in 1955, the premises were operated as a Union station under “lease and leaseback” agreements between appellants and Union. In the fall of 1955 Victor D. Hart expressed an interest in purchasing the service station from appellants. Negotiations involving appellants, Union, and Hart resulted in the execution on December 21, 1955, of the following related agreements. Appellants and Union executed an instrument cancelling their “lease-leaseback” agreement on the property, which then had five and a half years to run. Appellants contracted to sell the property to Hart. Hart paid appellants a down payment, borrowed from a bank, and executed “mortgages” on the real and personal property to secure the loan. Union arranged with the bank for the loan to Hart, and agreed to satisfy the “mortgage” by payments to the bank of one cent on each gallon of Union gasoline sold by Hart at the station. Hart “leased” the property to Union for a term of fourteen years, ending December 31, 1970, Union agreeing to pay Hart “rent” of 1% cents on each gallon of its own gasoline sold at the station. Hart “assigned” these rental payments to the bank to be applied to the down payment loan. Union “leased” the property back to Hart for the same fourteen-year term, Hart agreeing to pay Union “rent” of 1% cents per gallon on all gasoline sold at the station, regardless of brand. Hart’s “lease” to Union was terminable only at Union’s option and on the occurrence of specified events affecting the usefulness of the premises as a service station. Union’s “leaseback” to Hart was terminable by either party without cause on seven days’ notice. Appellants executed a “consent clause,” attached to the Hart-Union “lease,” by which appellants agreed that if they acquired possession of the premises before the “lease” expired, Union would be entitled to possession for the remainder of the fourteen-year lease. Hart took possession of the property under this series of agreements, and operated it until August 9, 1956. On that date Hart “subleased” the station to two other individuals, Mr. Schroeder and Mr. Wisel. On April 1, 1957, Hart “subleased” the station to a corporation, Transfare, Inc., which he formed with the same two individuals. Both of these “subleases” were made with the consent of Union, and appellants allege that Union required the “sublessees” to agree to the same arrangements as existed between Union and Hart. The business did not prosper, and on May 19, 1958, Hart and Transfare, Inc. quitclaimed their interests back to appellants. Appellants then leased the premises to Transfare, Inc., at an agreed monthly rental for a five-year term. “Rental” payments to Union under the Union “leaseback” to Hart were discontinued. At this juncture Union gave notice of Hart’s default under the “leaseback” and demanded that appellants (and Trans-fare, Inc., appellants’ lessee) relinquish possession of the premises under the “consent clause” to the • Hart-Union “lease.” Upon appellants’ refusal, Union filed suit in the Alaska state courts seeking, among other things, to enforce its alleged right to possession, and to require appellants to pay off the balance due on Hart’s obligation to the bank secured by the “mortgages” on the premises. On April 30, 1961, while the state court action was pending, Transfare, Inc., surrendered the premises to appellants. Appellants allege that they then tried to sell or lease the station but their efforts were frustrated by Union, which informed prospective purchasers and lessees that it held a valid fourteen-year lease on the station and threatened appellants with suit for an injunction if they persisted in their efforts to sell the property or lease it. On April 11, 1962, the state court entered judgment denying Union relief. The court held that Union was not entitled to possession because the various agreements executed by appellants, Union, and Hart on December 21, 1955, were not intended to and did not create a landlord-tenant relationship. The court further held that appellants had not agreed to guarantee the down payment loan or to “mortgage” the premises to secure it, and that Union had no interest in the property in the nature of a “mortgage” or otherwise. The state court found that the “lease-leaseback” agreements constituted a “requirements” contract intended “to bind the owner-operator to Union’s product, as well as to impose a sanction in order to maintain an exclusive outlet for Union’s gasoline,” and that the “consent clause” to the “lease,” signed by appellants, was “part and parcel of Union’s objective of maintaining its exclusive outlet by a continued binding of the owner-operator of the subject premises to a requirements contract.” The state court found that “Union desired to tie-up the subject premises to maintain an exclusive outlet for the sale of its gasoline,”. and that “Since the date of the alleged breaches by defendants and the inception of this litigation to the date of trial, Union has received of defendants precisely the object of the overriding intent of Union throughout this transaction, and that is that since the alleged breaches to the date of trial, Union’s, and only Union’s, gasoline has been sold from defendants’ premises.” After the state court decision, Union took the position that although it was not entitled to possession of the station it “had a valid requirements contract with respect to this property,” and therefore “for the term of this requirements contract (i. e., until December 31, 1970), Union Oil products must be used in the premises.” Appellants allege that by advancing this claim, coupled with a warning that the premises were subject to a valid “mortgage,” Union frustrated negotiations between appellants and various prospective purchasers or lessees subsequent to the state court decision. Appellants allege that such incidents occurred in or about June, September, and October of 1962, and February of 1963. The complaint in the present action was filed January 18, 1963. It alleges that Union sells in excess of 40 per cent of the petroleum products sold in the Fairbanks metropolitan area and in the State of Alaska as a whole, and occupies a dominant position in the marketing of petroleum products in those areas. The complaint details Union’s conduct which resulted in the exclusion of all but Ünion products from appellants’ service station. The complaint charges that Union pursued a similar course of action with respect to “numerous” other service station owners and operators, and thereby required them to maintain their service stations as exclusive outlets for Union’s products. It alleges that Union acted for the purpose and with the effect of foreclosing competition in a substantial line of commerce, and that its conduct violated the antitrust laws. The complaint charges that by reason of Union’s acts appellants were unable to operate a service station on the premises or to sell or lease the property for that purpose from the time the station was vacated by Transfare, Inc., on April 30, 1961, and that appellants thereby suffered damage, through loss of rental income from the property and diminution of its value, in the amount of $50,000. I Union relies upon a number of cases; (particularly Harrison v. Paramount Pictures Inc., 115 F.Supp. 312 (E.D.Pa. 1953), aff’d 211 F.2d 405 (3d Cir. 1954),. and Melrose Realty Co. v. Loew’s Inc., 234 F.2d 518 (3d Cir. 1956)), which Union reads as holding that a lessor may not recover damages under 15 U.S.C. § 15 for injuries resulting from a violation of the' antitrust laws directed against the lessee, because as to the lessor such injuries are “remote,” “indirect,” or “incidental.” As this court and others have noted, language in a number of Supreme Court opinions easts doubt upon these and other restrictive “judicial glosses” upon the broad language of the Clayton Act § 4, 15 U.S.C. § 15. Be that as it may, the relationship between Union’s violation and appellants’ injury disclosed in this record satisfies all of the formulations of the statute’s requirements suggested by any decision of which we are aware, including those relied upon by Union. The gist of appellants’ charge is thai Union sought to restrain competition by restricting a substantial number of retail outlets, including appellants’ service station, to the sale of Union gasoline. The alleged purpose and effect of Union’s course of conduct was to foreclose competitive sales through appellants’ service station. Appellants, as the owners of that property, were the key to its control, and they were the direct and primary objects of the means by which Union undertook to accomplish its purpose. Appellants’ contract vendee, the successive lessees, and the various potential lessees and purchasers of the property from appellants were objects of Union’s attention only as this became necessary to the imposition and enforcement of the desired anticompetitive condition upon the use •of the property itself. Union’s allegedly illegal conduct was thus “aimed” at restricting the use of appellants’ property. Appellants and their property were within the “target area” of that conduct — “the area which it could reasonably be foreseen would be affected” by the antitrust violation. Twentieth Century Fox Film Corp. v. Goldwyn, 328 F.2d 190, 220 (9th Cir. 1964). See also Karseal Corp. v. Richfield Oil Corp., 221 F.2d 358, 362-364 (9th Cir. 1955); Conference of Studio Unions v. Loew’s Inc., 193 F.2d 51, 54-55 (9th Cir. 1951). Appellants’ claim was not “derivative,” for they sued for damages sustained by themselves and not by their tenants or others. Their injuries were “direct” for they arose out of appellants’ own relationships with Union — reflected in the “consent clause,” the state court litigation, and Union’s successful efforts to prevent appellants from leasing or selling the premises free of the restrictive condition. Appellants' injuries were not “consequential” or “secondary,” for they did not result from injury to third persons. They were not “remote,” for they were the immediate result of the illegal conduct, without intervening cause. Congress Bldg. Corp. v. Loew’s Inc., 246 F.2d 587, 592-594 (7th Cir. 1957); Steiner v. 20th Century-Fox Film Corp., 232 F.2d 190, 192-193 (9th Cir. 1956); Productive Inventions v. Trico Prods. Corp., 224 F.2d 678, 679 (2d Cir. 1955); Conference of Studio Unions v. Loew’s Inc., supra, 193 F.2d at 54-55. Imposition of liability for such damages clearly serves the statute’s purposes. South Carolina Council of Milk Producers v. Newton, 360 F.2d 414, 418-419 (4th Cir. 1966); Karseal Corp. v. Richfield Oil Corp., supra, 221 F.2d at 365; Conference of Studio Unions v. Loew’s Inc., supra, 193 F.2d at 54-55; 64 Colum.L.Rev. 570, 587 (1964); 57 Nw.L.Rev. 691, 707 (1963). It is no bar to recovery that appellants were not competitors of Union, or that appellants’ injuries did not result from the allegedly illegal restraint upon the marketing of petroleum products but rather from the means which Union used to accomplish that restraint. Radovich v. Nat’l Football League, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957); United Copper Sec. Co. v. Amalgamated Copper Co., 232 F. 574 (2d Cir. 1916). “The statute does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers. Neither does it immunize the outlawed acts because they are done by any of these. * * * The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated.” Mandeville Island Farms v. American Crystal Sugar Co., 334 U.S. 219, 236, 68 S.Ct. 996, 1006, 92 L.Ed. 1328 (1948). II Union argues that the judgment should be sustained on an alternate ground, urged upon the district court but not reached, that appellants’ antitrust claim is barred by the four-year statute of limitations. 15 U.S.C. § 15(b). Union reasons that appellants’ cause of action rests upon the “lease-leaseback” agreements executed December 21,1955; that the last act causing injury which could conceivably involve Union was its consent to the assumption of the obligation of these agreements by Mr. Schroeder and Mr. Wisel and later by Transfare, Inc.; and that the operative force of this consent expired no later than May 18, 1958, when - Hart and Transfare quitclaimed their- interests to appellants. Union views appellants’ claim too narrowly. The alleged antitrust violation consists of Union’s entire course of conduct directed to the establishment and maintenance of exclusive dealing arrangements with service station outlets in Fairbanks and other Alaska areas. Acts of Union in furtherance of this purpose, which appellants contend caused them injury and damage, included Union’s efforts to prevent appellants from selling or leasing their station free of the exclusive dealing condition. These acts continued until the complaint was filed and thereafter. Thus, appellants’ action is not barred even if the invasion of their interests is considered to have been episodic rather than continuous. See generally Steiner v. 20th Century-Fox Film Corp., 232 F.2d 190, 194-195 (9th Cir. 1956); Highland Supply Corp. v. Reynolds Metals Co., 327 F.2d 725, 731-732 (8th Cir. 1964). Ill Appellants contend that the district court erred in denying their motion for summary judgment on the issue of liability. We do not agree. Exclusive dealing arrangements are not per se illegal. Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 333, 335, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961). It cannot be determined on the present record that Union’s use of such arrangements was accompanied by such a purpose, or had such a probable effect, as would require their condemnation under the antitrust laws. See generally Lessig v. Tidewater Oil Co., 327 F.2d 459, 467-469, 474-475 (9th Cir. 1964). Reversed. . Section 4 of the Clayton Act, 15 U.S.C. § 15 reads: Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee. . Appellants allege that this one-cent payment constituted a discount or “kickback” to Hart which was not given in equal amount to other service station operators, and that this and other Union practices reflected price discrimination violating 15 U.S.C. § 13(a). As we read the allegations, these practices are attacked as among the means allegedly employed by Union to effectuate its program of exclusive dealing, and we do not consider the problems which would be raised if they stood alone. See note 6. Since appellants’ price discrimination allegations appear relevant on the theory suggested, we think the district court erred in barring discovery as to this issue. . The facts thus far stated are taken from the state court’s findings in this litigation. The parties agree that these findings of fact, and others later recited in this opinion, were necessary to the state court judgment, and are binding upon them. The state court also held that the “lease-leaseback” arrangement “would not probably foreclose competition in a substantial line of commerce affected throughout the area of effective competition.” But the parties also agree that this finding was not necessary to the state court’s judgment, and is therefore not binding. . As we have noted, text at note 3, the state court found that no interest in the property superior to appellants’ interest was created by the “mortgage” executed on December 21, 1955 by Hart. Moreover, appellants’ second cause of action in the present suit alleged that the claims based upon the “lease-leaseback” arrangements and the “mortgages” were “wrongfully and maliciously asserted and are without any right whatever.” On April 17, 1963, the district court granted partial summary judgment in appellants’ favor as to this cause of action, holding that there was “no genuine issue of any material fact” with respect to liability, and that the only issue was ' that “of damages claimed as a result of wrongful and unlawful actions on the part of [Union] in asserting such claims.”

1546194-6537

HUGHES, District Judge. FINDINGS OF FACT 1. This is an action for the recovery of federal estate taxes and interest paid by plaintiff as independent executrix of the Estate of Houston Smith, Jr., who died on July 2, 1960. 2. In 1957, the decedent, who was a building contractor, decided to build a shopping center in Odessa, Texas. In an effort to obtain permanent financing of the shopping center, decedent and his representative, F. J. Hurlbut, approached Great Southern Life Insurance Company (hereinafter referred to as Great Southern) during the month of September, 1957, with respect to obtaining a loan from Great Southern for the financing of the center to be known as Town & Country Shopping Center. 3. On Tuesday, September 24, 1957, decedent and Mr. Hurlbut conferred with G. H. McDaniels in the office of Great Southern in Houston, Texas. On September 27, 1957, McDaniels advised Hurlbut by letter that the matter had been discussed by the Loan Committee of Great Southern and that Great Southern was interested in a loan of $500,000, subject to the condition that the decedent apply for $250,000 of life insurance with Great Southern, which would be assigned as additional collateral for the loan. 4. On October 1, 1957, the decedent made application to Great Southern for an ordinary life insurance policy in the principal amount of $250,000. The application stated that the beneficiary and owner of the policy was to be Great Southern. 5. On October 4, 1957, Great Southern notified the decedent that the company did not desire tó be named as the owner and beneficiary, but that the company’s security was to be made in the form of an absolute assignment. 6. On October 16, 1957, a new application was submitted by the decedent to Great Southern which named the plaintiff as the beneficiary and the owner of the policy. 7. On October 17, 1957, Great Southern issued a commitment loan letter to the decedent, stating that it would make a loan in the amount of $575,000 secured by a first and prior lien on the land and improvements of the Town & Country Shopping Center. In addition, the loan commitment letter required as additional security the absolute assignment of $250,000 of permanent life insurance on the life of the decedent, application of such insurance to be made to Great Southern. As consideration for the commitment letter, the decedent paid to Great Southern a standby fee of $5,750. 8. As a result of obtaining the loan commitment letter from Great Southern, the decedent obtained interim financing for the shopping center and the construction began. 9. On November 4,1957, Great Southern issued its life insurance policy No. 981650 on thp life of decedent in the face amount of $250,000, naming plaintiff as the beneficiary of the policy. There was a supplemental provision attached to the policy stating that the applicant, the decedent, had designated his wife, Frankie Lou Smith, as the sole owner of the policy. 10. On May 14, 1958, Great Southern issued an additional commitment letter to the decedent agreeing to make a loan on the shopping center in the amount of $615,000'. This commitment also was conditioned upon absolute assignment of policy No. 981650 in the amount of $250,-000 to Great Southern as additional security for the loan. 11. The loan was closed on July 7, 1958, and the life insurance policy in the amount of $250,000 was assigned to Great Southern by an assignment executed by the decedent and plaintiff at the closing. 12. The life insurance policy No. 981650, issued by Great Southern on November 4, 1957, was not delivered to the decedent, or plaintiff, and at all times remained in the possession of Great Southern. 13. The application to Great Southern for the issuance of the insurance policy on the life of decedent was an integral part of decedent’s application to Great Southern for the loan. 14. The decedent was killed on July 2, 1960, in an automobile accident. At the time of his death, the balance due on the loan made by Great Southern was $565,929.84. 15. On July 14, 1960, plaintiff approached Great Southern and requested that a portion of the proceeds of the life insurance policy be released to her. 16: On July 21, 1960, Great Southern delivered to plaintiff $150,000 of the life insurance proceeds. The remaining $100,000 proceeds of the life insurance policy were applied in reduction of the principal balance of the loan by Great Southern to the decedent. 17. Plaintiff timely filed a Federal estate tax return for the Estate of Houston Smith, Jr. No portion of the $250,000 proceeds of the life insurance policy on the decedent was included in the gross estate. 18. Upon examination by agents of the Internal Revenue Service, the Commissioner of Internal Revenue included one-half, or $125,000, of the $250,000 proceeds of the life insurance policy in the gross estate. The deduction of one-half of the outstanding balance of the mortgage loan was allowed as a deduction for claims against the estate. Accordingly, a deficiency was assessed against the estate which in due course was paid by plaintiff. A claim for refund was timely filed, and on its dis-allowance, plaintiff timely instituted this action. CONCLUSIONS OF LAW 1. The Court has jurisdiction of the parties and of the subject matter involved in this proceeding. 28 U.S.C. Sec. 1340 and Sec. 1346. 2. Life insurance proceeds receivable by or for the benefit of the estate are includable in the decedent's gross estate under Section 2042(a) of the Internal Revenue Code of 1954. Commissioner v. Estate of Noel, 380 U.S. 678, 85 S.Ct. 1238, 14 L.Ed.2d 159 (1965). Treasury Regulations, Sec. 20.2042-1. 3. The loan by Great Southern Life Insurance Company to Houston Smith, Jr. having been made contingent upon the absolute assignment by Houston Smith, Jr., of the policy involved herein on the life of Houston Smith, Jr., the proceeds of said policy are receivable by the Estate of Houston Smith, Jr. 4. The proceeds of the policy involved herein being subject to the obligation of Houston Smith, Jr., to Great Southern Life Insurance Company are includable in the gross estate of the deceased, Houston Smith, Jr. 5. Frankie Lou Smith, despite the provision of the policy that she was the sole owner and her possession of the policy at the time of the death of Houston Smith, Jr., did not have the full benefits and rights of ownership to give her unfettered control over it in that Great Southern Life Insurance Company had a prior claim as a result of its security interest in the policy.

4172701-8412

PETERS, District Judge. This is a bill in equity by the Eastern Steamship Lines, Inc., against a deputy commissioner of the United States Employees’ Compensation Commission, asking to have set aside, by injunction, an award of compensation to an employee of the plaintiff as “not in accordance with law.” It appears that the employee, a longshoreman, in June, 1936, sustained an in jury to his hack while handling a bale of merchandise. He was immediately treated by a physician acting for the employer, who diagnosed the trouble as lumbosacral sprain. The employee stopped work and took the treatmént prescribed by the doctor. After several attempts to work, and working for a short time, in December, 1936, he filed a petition for compensation under the Longshoremen’s and Harbor Workers’ Compensation Act, as amended, 33 U.S. C.A. § 901 et seq., and after a hearing on February 12, 1937, received the award in question for temporary total disability. The employee is an Italian by birth, about 57 years old, weighing 245 pounds, of short stature, obviously with little knowledge of the English language, as he testified through an interpreter. In addition to the above facts, which are not disputed, the deputy commissioner found that the employee, who was illiterate, had been in the service of the plaintiff for 15 years as a winchman and freight handler; that since 1922 he had lost no time from work because of illness or injury; that after 2 months of treatment following the injury in question the claimant, acting on the advice of the employer’s physician, made several attempts to resume work, and that he was unable to continue to do so due to pain in his back; and, in the language of the deputy commissioner, “that the claimant is wholly incapacitated for performing his regular work as a longshoreman; that he suffers from a chronic back weakness involving the muscles and ligaments, which is complicated by age, obesity and hypertrophic changes in the lumbar region; that he has been under the continual medical care of the employer’s physician; that from a medical viewpoint the claimant can perform light work not requiring bending or heavy lifting ; that the claimant has co-operated with the efforts of the employer’s physician to rehabilitate him and has attempted to work whenever advised to do so by the doctor, but that light work° was not given to him; that from August 17, 1936, to December 14, 1936, the claimant tried to work on five or six different occasions, but that he was given hard work by the employer and was therefore only able to work a few hours; that such light work as the claimant, in his physical condition, is able to do is not available; that on December 14, 1936, in compliance with thé doctor’s instructions to keep at work as long as possible, the employer provided the claimant with full-time work as a longshoreman; that he was so occupied to and including December 28th, 1936, but was permitted by his employer to rest periodically and to do only such work as he was capable of performing; that on December 28th, 1936, the foreman told him that he must do a full day’s work or leave; that as the result of whatever work he did perform, the claimant, had increased pain in the back and he was advised by the attending physician to refrain from work for a while; that from December 14th, 1936, to December 28th, 1936, inclusive, which is a period of 2%th weeks, the claimant was paid the sum of $84.84 as wages, but that such amount paid does not represent wages which he was physically able to earn nor does it constitute a true or fair wage-earning capacity, considering that his disability was continuing; that there is no occupation or employment which he can engage in and upon which he can rely for a livelihood; but that for a period of 2%th weeks, from December 14, 1936, to December 28, 1936, he did not sustain any wage loss, and that he is entitled to 34V7ths weeks compensation at $22.33 per week for such temporary total disability; that the compensation for temporary total disability to February 12, 1937, inclusive, is $727.32; that the employer has paid the claimant $360.58 as compensation.” In brief, the deputy commissioner found that the employee, for a certain period, was totally incapacitated from performing a longshoreman’s work or any manual labor, except some light work that required no bending or heavy lifting, and that such work was not available. Also, that, being illiterate, he was excluded from any field of labor except manual labor. As to the findings of fact, the issue to be decided by this court is not whether the deputy commissioner was right in his conclusions from, the evidence — as to which there might be a difference of opinion — but whether there was evidence before him to support his findings. The Supreme Court, in the, case of Crowell v. Benson, 285 U.S. 22, at page 46, 52 S.Ct. 285, 291, 76 L.Ed. 598, states it thus: “Apart from cases involving constitutional rights to be appropriately enforced by proceedings in court, there can be no doubt that the act contemplates that .as to questions of fact, arising with respect to injuries to employees within the purview of the act, the findings of the deputy com missioner, supported by evidence and within the scope of his authority, shall be final. To hold otherwise would be to defeat the obvious purpose of the legislation to furnish a, prompt, continuous, expert, and inexpensive method for dealing with a class of questions of fact which are peculiarly suited to examination and determination by an administrative agency specially assigned to that task.” Voehl v. Indemnity Ins. Company, 288 U.S. 162, 53 S.Ct. 380, 77 L.Ed. 676, 87 A.L.R. 245. Lumber Mutual Cas. Ins. Co. v. Locke, 2 Cir., 60 F.2d 35. As to the finding of disability: The deputy commissioner had the benefit of the personal appearance and testimony of the employee, who described his complaints and told how he was unable to work on account of the severe pain consequent upon the attempt to do so. The man’s own claims were also, to a considerable extent, supported by the testimony of two doctors who thought that the injury was more than a muscle sprain; that the ligaments might have been pulled; and that it was out of the question for the man to do any heavy work. On this point other reputable doctors were called by the plaintiff and testified that in their opinion the employee was only partially disabled. The deputy commissioner, however, after balancing all the evidence, found the fact of disability. From the fact that there was evidence to balance it follows that I have no authority' to invade the special province of the deputy commissioner whose conclusions are final if based on evidence. The finding that the employee was illiterate was based on his own testimony and on that of the agent for the plaintiff, who testified that there was a certain line of light work, “such as freight-writer, but that he (the employee) hasn’t the education to do it.” That there was no other work that an illiterate man in his condition could-do was partly a question of extent of disability and partly a question of available jobs. The deputy commissioner found a handicap so extensive as to leave very little, if any, margin of earning capacity in the claimant, and there was no evidence offered of any so-called “light work” of such an uncommon nature as to be available to an illiterate longshoreman who could not bend his back. Under the circumstances here disclosed, of a man who by reason of physical injury and disability could do only a special and very limited class of work, a man left a “nondescript” in the labor market, the burden was upon the employer to show the availability of employment. Consona v. R. E. Coulborn & Co., 104 Pa.Super. 170, 158 A. 300; 33 A.L.R. page 122, note. White v. Tennessee Consol. Coal Co., 162 Tenn. 380, 36 S.W.2d 902. As to the findings of the deputy commissioner, it must be said, upon the whole, using the language of the Court in Lumber Mutual Casualty Ins. Co. v. Locke, 2 Cir., 60 F.2d 35, 37, “Upon the proof, it cannot be said that the findings were so without evidence as to require the District Court to set aside the order of the Deputy Commissioner (under section 21 (b) of the act, 33 U.S.C.A., § 921(b), as ‘not.in accordance with law.’ We cannot weigh the facts. Fact finding is within the sole province of the Commission.”

11592053-4354

MEMORANDUM, ORDER WEINSTEIN, Senior District Judge. Coming from Amsterdam via Paris, Johanna DeRoover was apprehended at John F. Kennedy Airport with slightly less than a kilogram of heroin concealed in her clothing. Almost immediately she agreed to assist in a controlled delivery; it was unsuccessful, leading to a denial of a 5K1 letter by the government for cooperation that would have authorized a virtually unreviewable downward departure. The Guideline offense level has been properly computed as 21, requiring a custodial sentence of 37 to 46 months. Any downward departure is opposed by the government. For the reasons indicated below a departure downward to level 9, with a sentence of five months in prison is appropriate. Ms. DeRoover is a thirty five year old citizen of the Netherlands. She had a particularly difficult childhood, involving frequent beatings by her own father, at times so severe that she could not attend gym class because of extensive bruises. The father of Ms. DeRoover’s first child died in a train wreck. Her second child’s father beat Ms. DeRoover, at one point breaking her nose; he has disappeared. The father of her last three children committed suicide during a bout of despondency after his sister and her child died in an airplane crash. All Ms. DeRoover’s five children — ages 16, 11, 8, 7 and 6 — live with her. The family has been supported by her wages as a waitress or as a machine operator in a pharmaceutical factory, as well as by a pension received by two of her children because of the death of their father, and by some public assistance. Her last employer has indicated that he would like to rehire her as a waitress upon her return to Holland. Ms. DeRoover graduated from high school in Amsterdam. She appears to be intelligent, though, understandably, highly stressed. She has never used drugs. A family therapist in Amsterdam was visited regularly by Ms. DeRoover and her older children. Following a sexual assault on one of the children a mental health counsellor was consulted by the child and Ms. DeRo-over. In prison Ms. DeRoover has had some preliminary symptoms signaling the possible onset of ovarian cancer. She has been informed that there is a strong hereditary trait for this disease in her family. Her two sisters have cancer. One child suffers from “separation anxiety” as a result of the absence of his mother. He has been under psychiatric observation after adverse contacts with the police. The elderly mother of Ms. DeRoover is now caring for the children. It seems doubtful that she could continue to carry this burden were defendant incarcerated for a substantial period in the United States. She herself has diabetes. The prosecution of Ms. DeRoover has come to the attention of the probation institution in the Netherlands. See Report of Dutch Probation, Foreign Department, 8 December, 1998. Dutch Probation reports that “[i]n order to prevent further damage to the children we think it is of the utmost importance that the continuation of this situation [separating the children from Ms. DeRoover] has to be confined to a minimum.” Id. at p. 3. In conclusion it states, “We declare ourselves prepared to take care of appropriate psychological assistance.” Ibid. The Netherlands probation system has had a great deal of experience treating people who use or who traffic in drugs. See e.g., Lisa M. Braneulli, The War on Drugs: Fact, Fiction and controversy, 21 Seton Hall Leg-is. J. 169, 188-189 (1999). The institutions of the Netherlands, the court judicially notices, can be trusted to carry out their commitment to supervise and to assist Ms. De-Roover and her family. There has been no suggestion that Ms. DeRoover has ever committed another crime. It can be reasonably predicted that, with adequate supervision and help, non-recidivism, the equivalent of rehabilitation, is assured. It is highly unlikely that Ms. De-Roover will ever commit another crime. Rehabilitation of Ms. DeRoover is extraordinary. Availability of a job will also assist her in avoiding future criminal conduct and in supporting her family. Extraordinary rehabilitation is an appropriate basis for downward departure under the Guidelines. See e.g., United States v. Bryson, 163 F.3d 742, 749 (2nd Cir.1998) (downward departure is warranted if district court finds extraordinary rehabilitation).

12268562-23591

ORDER ADOPTING MAGISTRATE JUDGE GOODMAN’S REPORT AND RECOMMENDATION JOSE E. MARTINEZ, UNITED STATES DISTRICT JUDGE THE MATTER was referred to the Honorable Jonathan Goodman, United States Magistrate Judge, for a Report and Recommendation on Plaintiffs’ Motion for Remand (the “Motion”) [ECF No. 13]. Magistrate Judge Goodman filed a Report and Recommendation [ECF No. 37], recommending that the Motion be granted and that the case be remanded to the Broward County Circuit Court. The Court has reviewed the entire file and record and notes that no objections have been filed. After careful consideration, it is hereby: ADJUDGED that United States Magistrate Judge Goodman’s Report and Recommendation [ECF No. 37]- is AFFIRMED and ADOPTED. Accordingly, it is: ADJUDGED that Plaintiffs’ Motion for Remand [ECF No. 13] is GRANTED. The Clerk is directed to REMAND this case to the Broward County Circuit Court. All pending motions are DENIED AS MOOT. The instant case is CLOSED. DONE AND ORDERED in Chambers at Miami, Florida, this 5 day of January, 2017. REPORT AND RECOMMENDATIONS CONCERNING PLAINTIFF’S MOTION TO REMAND TO STATE COURT Jonathan Goodman, UNITED STATES MAGISTRATE JUDGE Plaintiffs Hazel Lett, Vickie Rollins, Barbara Worthington, and Felicita Frank (“Plaintiffs”) filed a Motion to Remand to State Court (“Motion”) [ECF No. 13] and Defendants Wells Fargo Bank, N.A. (‘Wells Fargo”), Theresa Garofalo, Jackie Schatz, and Dean Ewan (“Defendants”) filed an opposition response [ECF No. 21] and Plaintiffs filed a reply [ECF No. 31]. United States District Judge Jose E. Martinez referred the Motion to the Undersigned. [ECF No. 18]. For the reasons explained below, the Undersigned respectfully recommends that the District Court grant the Motion. FACTUAL BACKGROUND On or about May 23, 2016, Plaintiffs filed their complaint against Defendants in the Circuit Court of the Seventeenth Judicial Circuit, in and for Broward County, Florida. Plaintiffs served Defendants with the Complaint on June 10, 2016, and Der fendants removed the lawsuit to this federal court on July 8, 2016, within the 30-day deadline. Plaintiffs’ lawsuit alleges eight counts. Because the removal notice alleges that Plaintiffs fraudulently joined the individual defendants in order to defeat otherwise valid diversity of citizenship jurisdiction under 28 U.S.C. § 1332, the Undersigned will list only the claims asserted against the individuals: Count V is a claim by Lett against Garofalo and Ewan for battery; Count VI is a claim by Rollins against Ewan for battery; Count VII is a claim by all Plaintiffs against all the individual Defendants for violation of the Florida Minimum Wage Act; and Count VIII is a claim by all Plaintiffs against all Defendants for violating the retaliation provision of the Florida Minimum Wage Act. According to the Complaint, Lett and Frank were lead tellers and Worthington and Rollins were tellers. The Complaint also alleges that at relevant times (1) Ga-rofalo was a regional loss prevention manager for Wells Fargo; (2) Schatz was a district manager with operational control of the branch where Frank worked; and (3) Ewan was a branch manager with day-to-day operational control of the branches where Plaintiffs Lett and Rollins worked (and could hire, fire, and make payroll decisions at that branch). The Complaint alleges that all three individual defendants knew that Plaintiffs objected to working without pay for bringing in on their time, off the clock, new accounts and other business. Concerning the battery claims, Lett alleges that Ewan hugged her after telling her that she was fired. Lett alleges that the so-called “hug” was unwarranted and constitutes a battery because, among other reasons,’ it “was done in an insincere and patronizing manner” and “caused harm to Lett.” Lett also alleges that Garofalo committed a battery on her by putting a hand on. her shoulder when she was demanding to' see a journal and by patting her in a patronizing way. According to the Complaint, Garofalo’s battery caused Lett “extreme emotional distress” because it was “so hateful and hate-filled.” Rollins .made a similar allegation about a hug (by Ewan) .and alleged that Ewan hugged her “in an unwanted and patronizing manner” and instructed her to gather her things and then escorted her from the bank building. Lett and Rollins both allege that the batteries were intentional, malicious, willful, wanton and in reckless disregard for their rights and that they have suffered lost income, emotional distress, mental anguish and humiliation. -In a -reply memorandum, Plaintiffs attached a declaration from Rollins, who commented- on an affidavit submitted by Ewan. -Rollins’ declaration stated that Ewan “did commit a battery upon me” and explained that Ewan “intentionally touched me in a way that was unwanted and unsolicited that was offensive that caused me harm.” [EOF No. 31-1]. Plaintiffs allege that Defendants were engaged in age discrimination and perpetrated a subterfuge to fire older tellers for pretextual reasons, noting that they were replaced with much younger tellers. The two claims under the Florida Minimum Wage Act allege that the individual defendants had day-to-day operational control of the- branches where Plaintiffs worked and note that they could; among other powers, hire and fire, make payroll decisions, and supervise and direct employees at the branches. They further allege that the individual defendants failed to keep track of the time they worked off of the clock and failed to ensure that teller journals would be kept. In addition, they allege that Schatz was advised that Frank was one of the older workers who objected to working off the clock to solicit new accounts. Because Defendants allege in their opposition [EOF No. 21, pp. 2-3] to the remand motion that “this is Lett’s second attempt to defeat diversity jurisdiction” and refer to an earlier lawsuit, the Undersigned will summarize the first lawsuit. Specifically, in Lett v. Wells Fargo Bank, N.A., No. 14-cv-60434 (S.D. Fla. 2014), Lett filed a state court lawsuit against the bank and Garofalo. Two counts were alleged there against Garofalo, and neither was for battery or violations of Florida’s Minimum Wage Act. Count II was for negligent infliction of emotional distress and Count III was for intentional infliction of emotional distress. Defendants removed the lawsuit to federal court, alleging that Lett fraudulently joined Garofalo in order to defeat diversity jurisdiction. Lett filed a motion to remand. United States District Judge Robin Rosenbaum denied the motion to remand, finding that Garofalo was fraudulently joined because, on the negligence claim, Lett failed to allege any cognizable duty that Garofalo allegedly owed her, and, on the intentional claim, the alleged facts did not satisfy the required standard for outrageous conduct. Lett v. Wells Fargo Bank, N.A., No. 14-cv-60434, ECF No. 26 (S.D. Fla. May 9, 2014). Because Lett failed to state claims there against Garo-falo, those claims had to be dismissed, which then meant-that the motion to remand had to be denied (because there was complete diversity for removal on diversity of citizenship grounds once Garofalo was eliminated). APPLICABLE LAW AND ANALYSIS 28 U.S.C, § 1332 provides that federal “district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between [] citizens of different States[.]” Section 1441 authorizes, with certain inapplicable exceptions, the removal of “any civil action” in which “the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). “Diversity jurisdiction, as a general rule, requires complete diversity—every plaintiff must be diverse from every defendant.” Palmer v. Hosp. Auth., 22 F.3d 1559, 1564 (11th Cir. 1994) (citation omitted). If complete diversity is not present, then the case is not removable, but where joinder of the non-diverse party is fraudulent, then diversity may still be satisfied. Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). The doctrine of fraudulent join-der discounts allegations against a non-diverse party where the defendant can show either that “(1) there is no possibility the plaintiff can establish a cause of action against the resident defendant; or (2) the plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant into state court.” Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (11th Cir. 2011) (citation and quotation omitted). To determine whether fraudulent joinder has occurred, the Court employs a procedure that “is similar to that used for ruling on a motion for summary judgment,” yet the inquiry is more limited and the Court must not go so far as to “subsume substantive determination.” Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997) (citation omitted) (noting that “federal courts are not to weigh the merits of a plaintiffs claim beyond determining whether it is an arguable one under state law”); see also Stillwell, 663 F.3d at 1332-33. Thus, the Court’s duty in this regard is “limited to checking for obviously fraudulent or frivolous claims.” Crowe, 113 F.3d at 1542. The Court may base its decision on the plaintiffs pleadings at the time of removal, as well as on other documents that the parties submit. Id.; see also Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th Cir. 1983) (“Both parties may submit affidavits and deposition transcripts”), superseded by statute as stated in Georgetown Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533 (11th Cir. 1993). In addressing a plaintiffs claims, the Court views “the factual allegations in the light most favorable to the plaintiff and resolve[s] any uncertainties about state substantive law in favor of the plaintiff.” Stillwell, 663 F.3d at 1333 (internal quotation and citation omitted) (further noting that the standard is different from the standard applicable to a 12(b)(6) motion). “If there is even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to state court.” Crowe, 113 F.3d at 1538 (citation omitted) (emphasis added); see also Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1380 (11th Cir. 1998). However, “[t]he potential for legal liability must be reasonable, not merely theoretical.” Legg v. Wyeth, 428 F.3d 1317, 1325 n.5 (11th Cir. 2005) (internal citation and quotation omitted). In the instant ease, Plaintiffs and the individual Defendants are all Florida residents. There are no federal claims alleged. Therefore, the Court lacks subject matter jurisdiction unless Plaintiffs fraudulently joined all three individual Defendants. Defendants have not suggested fraud in the pleading of jurisdictional facts, but rather that Plaintiffs cannot establish viable causes of action under Counts V through VIII. But Plaintiffs “need not have a winning case against the allegedly fraudulent defendant; [they] need only have a possibility of stating a valid cause of action in order for the joinder to be legitimate.” See Triggs, 154 F.3d at 1287 (emphasis in original). The issue is whether no court could possibly find that such claims have merit to withstand a motion to dismiss in state court (where the case was brought). Taylor Newman Cabinetry Inc. v. Classic Soft Trim, Inc., 436 Fed.Appx. 888, 890 (11th Cir. 2011) (citing Crowe, 113 F.3d at 1538). Plaintiffs argue that it would be more appropriate to permit the state court to determine whether Plaintiffs have adequately asserted state court claims against the individual Defendants. Henderson v. Wash. Nat’l Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006) (vacating the grant of a motion to dismiss state law claims and reversing denial of remand motion and holding that a decision as to the sufficiency of the pleadings regarding state law claims against non-diverse defendants should be made by the state court); Florence v. Crescent Res., LLC, 484 F.3d 1293, 1299 (11th Cir. 2007) (holding the same because it was unclear under Florida state law whether the plaintiffs could recover for the torts they pled). The Court therefore will review the viability of Plaintiffs’ claims against the individual Defendants for battery and the two statutory claims under the Florida Minimum Wage Act in order to determine if the individuals were fraudulently joined. Before doing so, however, the Undersigned points out that the earlier rejection of Lett’s claim does not control the analysis here. The two state court claims at issue there were not for the claims at issue here. So the mere fact that other claims were deemed to be improperly joined does not dictate the analysis of whether the claims here have a possibility of stating a valid cause of action in state court. The Battery Counts Defendants argue that the two Plaintiffs who asserted battery allegations cannot state claims and that these claims are otherwise preempted by Florida’s Workers’ Compensation exclusion. When an employee’s injury arises out of the course and scope of her employment, Florida’s Workers’ Compensation is the exclusive remedy for the injury and the employer is provided with immunity from any other liability for the injury. See §§ 440.09(1); 440.11, Fla. Stat. If Florida’s Worker’s Compensation exclusion applies, then there can be no claims, regardless of whether the “hugs” and the one touch on the shoulder are sufficient to state a claim for battery. Therefore, the Undersigned will first address the statutory immunity issue. The battery claims at issue here are against the fellow employees, not the employer. But this distinction is insufficient to avoid the statutory immunity because “[t]he same immunities from liability enjoyed by an employer shall extend as well to each employee of the employer when such employee is acting 'in furtherance of the employer’s business and the injured employee is entitled to receive benefits under this chapter.” See § 440.11, Fla. Stat. (emphasis added). Here, both Lett and Rollins allege in the Complaint that the batteries occurred within the course and scope of their employment. Thus, Lett’s and Rollins’ exclusive remedy for their alleged injuries is workers’ compensation. See Ruiz v. Aerogroup Corp., 941 So.2d 505, 507 (Fla. 3d DCA 2006). In Ruiz, the plaintiff alleged that her supervisor pushed her and caused her to strike her abdominal area against a counter. Id. at 506. The court affirmed dismissal of her battery claim, noting that when “an employee’s injury arises out of the course and scope of his or her employment, worker’s compensation is the exclusive remedy for the injury, and the employer is provided with immunity from any other liability for the injury.” Id. at 507-508. In Ruiz, similar to the claims here, the plaintiff alleged that the battery by her supervisor occurred within the course and scope of their employment. Accordingly, the court dismissed the battery claim on the grounds of workers’ compensation immunity. Thus, the same result—application of the statutory immunity—applies here, as well. But Plaintiffs contend that their battery claims are not precluded by worker’s compensation exclusivity. In support, they cite Byrd v. Richardson-Greenshields Sec., Inc., 552 So.2d 1099, 1103-04 (Fla. 1989) (reversing grant of summary judgment on claims for assault and battery based upon claimed instances of sexual harassment and noting that that the worker’s compensation exclusivity does not apply to such torts). Byrd emphasized that claims for severe emotional disorders are not compensable under worker’s compensation where no physical injury has occurred, and noted that “the statute expressly prohibits a worker’s compensation award for ‘[a] mental or nervous injury due to fright or excitement only.’” Id. (quoting § 440.02(1), Fla. Stat.). On the other hand, Byrd also noted that all the claims at issue arose from acts constituting sexual harassment, a scenario involving “an injury to intangible personal rights,” which is not the situation in the instant case. Id. Byrd does not support the notion that a simple battery claim unconnected to a sexual harassment scenario is also outside of the exclusivity bar. To the contrary, the Byrd Court unequivocally explained that: Florida courts have extended the definition of “accident arising out of ... employment” to encompass a wide variety of injuries caused by intentional torts, provided there is a sufficient nexus with the activities of the workplace itself. This is true where workplace tensions lead one employee to assault another, W. T. Edwards Hospital v. Rakestraw, 114 So.2d 802, 803 (Fla. 1st DCA 1959), where jealousy over a lovers’ triangle causes one worker to attack another with a workplace tool, Tampa Maid Seafood Products v. Porter, 415 So.2d 883, 885 (Fla. 1st DCA 1982), where an employee is robbed at the workplace by an armed gunman, Prahl Brothers, Inc. v. Phillips, 429 So.2d 386, 387 (Fla. 1st DCA), review denied, 440 So.2d 353 (Fla. 1983), and where a worker is robbed at home by persons seeking workplace cash register receipts. Strother v. Morrison Cafeteria, 383 So.2d 623 (Fla. 1980). Id. at 1101 (emphasis added). Because both Lett and Rollins affirmatively alleged that the alleged batteries occurred within the course and scope of their employment, Florida’s statutory exclusivity provision applies. Therefore, the claims against them cannot pass muster, and they must be ignored for purposes of determining whether their joinder was fraudulent. The Florida Minimum Wage Act Claims Plaintiffs have alleged two claims: one for failure to properly pay wages and one for retaliation. If Plaintiffs are able to state even one viable claim, then their joinder as claimants is proper and Defendants would not be able to remove (and the case would need to be remanded) because there would not be complete diversity of citizenship. Because the Undersigned concludes that Plaintiffs have sufficiently alleged a claim for retaliation in Count VIII (for the reasons outlined below), there is no need to determine whether Count VII also alleges a claim. Once one count is properly alleged, Plaintiffs are properly in the case and their joinder (at least on that count) is not fraudulent. Defendants’ initial argument on the retaliation claim against the individual Defendants is that those individual Defendants were not involved in the decision to terminate Plaintiffs. To support this argument, the individual Defendants submitted declarations stating that they did not make the decision to terminate Plaintiffs’ employment. The difficulty with this approach, however, is that there is other record evidence suggesting that they did, in fact, participate in the decision. Because the Undersigned is considering the declarations submitted by the individual Defendants, it is also appropriate to consider exhibits submitted by Plaintiffs. Specifically, Plaintiffs submitted Wells Fargo’s position statement to the EEOC. In that statement, Wells Fargo represented to the EEOC that Defendants Ewan and Garofalo “participated in the decision to terminate Ms. Lett’s employment.” Moreover, Ewan signed the letter terminating Lett, and the EEOC Investigator’s notes for Lett’s claim state that the “decision-makers” were the “store manager” (i.e., Ewan) and the “Investigator” (i.e., Garofalo). Likewise, the EEOC’s letter which quoted Wells Fargo’s Position Statement concerning Rollins mentions Ewan as the store manager of the Deerfield branch and also mentions that Garofalo was the investigator. The Statement does not expressly state which Wells Fargo employees were involved in the decision to terminate Lott, but it explained that Garofalo “conducted a thorough review” of all allegations and the relevant company procedures. It also represented that Garofalo and others “discussed the results” of the investigation “at the conclusion of Ms. Garofalo’s investigation.” Confronted with this record evidence, Defendants say that Plaintiffs are “grasping at straws” and are merely relying on “one isolated hearsay statement” in Well Fargo’s position statement. In addition, Defendants say the statement is “not inconsistent” with individual Defendants’ declarations. This perspective may well turn out to be a winning argument at trial, and it could also conceivably be sufficient to justify a summary judgment, but it is not, in the Undersigned’s view, adequate to permit me now at the pleadings stage to conclude that a state court judge would never permit the retaliation claim of each Plaintiff to go forward. See Joseph v. Nichell’s Caribbean Cuisine, Inc., 862 F.Supp.2d 1309, 1314 (S.D. Fla. 2012) (holding that “the law in the Eleventh Circuit [based on pre-split Fifth Circuit precedent] is clear that the lack of individual or enterprise coverage for an overtime claim does not defeat a retaliatory discharge claim under 29 U.S.C. § 215(a)(3)”) (citing Wirtz v. Ross Packaging Co., 367 F.2d 549 (5th Cir. 1996)); Cedano v. Alexim Trading Corp., No. 11-20600-CIV, 2011 WL 5239592, at *4 (S.D. Fla. Nov. 1, 2011) (holding that “Plaintiffs’ exemption from the protections of the wage and hour provisions of 'the [Fair Labor ’ Standards Act (“FLSA”) ] does not preclude them from bringing a claim under the retaliatory firing provision of the FLSA”); Obregon v. Jep Family Enters., Inc., 710 F.Supp.2d 1311, 1314 (S.D. Fla. 2010) (“The FLSA’s prohibition on retaliation is broader than its coverage of minimum wage or overtime wage violations, and applies even if the employee cannot show 'individual coverage’ or ‘enterprise coverage.’ ”), Defendants’ other argument on the retaliation claims is that Plaintiffs did not engage in protected activity because the wages paid to them exceed the minimum wage for each hour worked. Therefore, Defendants say Plaintiffs could not have had an objectively reasonable, good-faith belief that the employer’s conduct is unlawful. But all that is required is a good faith belief, and a retaliation claim does not become unavailable simply because the underlying substantive claim itself later proves to be incorrect. See Aery v. Wallace Lincoln-Mercury, LLC, 118 So.3d 904, 916 (Fla. 4th DCA 2013) (reversing summary judgment for employer under the Florida Whistleblower Act and noting that a good faith belief that his activity in complaining, to this employer is protected by statute is all- that -is required to set forth a prima facie case). In their Complaint, Plaintiffs allege that they complained to Defendants Ewan and Schatz, among others, about .having :to work hours for which the .bank did not pay them. Basically, they were complaining that they were required to perform off-the-clock work in order to solicit new accounts. They also allege that Garofalo knew about their complaints over, allegedly unpaid work. The Complaint further alleges that Plaintiffs were terminated shortly after they voiced their complaints, which were used as a motivating factor in the termination decisions. Therefore, the Complaint further alleges that their terminations were “in retaliation for complaints about minimum wage" violations.”--The Complaint also alleges that Plaintiffs’ believed in good faith that Defendants* actions -violated the Minimum Wa'ge Act and that their complaints' about the off-the-cloek work constitutes protected activity under the statute’s retaliation clause.

57592-10985

OPINION OF THE COURT JAMES HUNTER, III, Circuit Judge: Appellant David Lawaetz (“Lawaetz”) was declared mentally ill and committed to the custody of the Commissioner of Health of the Virgin Islands pursuant to an order of the District Court of the Virgin Islands. On appeal he challenges the facial validity and the actual application of the statute under which his status was adjudicated. Lawaetz also asserts an equal protection claim based on the apparent co-existence of two different statutory methods for determining mental illness and ordering commitment. Lawaetz argues that the standards under the statute applied in this case, 19 V.I.C. §§ 1131-1143 (1976) (“the old Act”), are less demanding than the substantive and procedural requirements of a more recent act dealing with the same subject matter. See Act of August 5, 1977, No. 4039, § 1, 1977 V.I.Sess.L. 218 (codified at 19 V.I.C. §§ 710-729 (Supp.1982)) (“the new Act”). Upon reviewing the entire record of proceedings below, we can find no substantive or procedural violation of Lawaetz’s constitutional right to due process of law. We need not decide whether the existence of two avenues for adjudicating mental illness violated the equal protection clause, because we hold that sections 710 through 729 of Title 19 repeal the conflicting provisions of the old Act. Accordingly, we will affirm the order of the district court. I. These proceedings began when a judge of the Territorial Court of the Virgin Islands issued a warrant for the apprehension of Lawaetz. This was done at the request of the Attorney General of the Virgin Islands and Lawaetz’s sister. See 19 V.I.C. § 1131(a) (1976). Lawaetz was thereafter certified to the custody of the Commissioner of Health pending commencement of further judicial proceedings. See id. § 1132(a). In accordance with normal practice, the Territorial Court transferred this case to the district court, after appointing an attorney to represent Lawaetz. The district court ordered the temporary commitment of Lawaetz for fifteen days, see id., and subsequently extended that commitment for approximately thirty days. The court, sitting without a jury, held a plenary hearing on August 18, 1982. La- waetz was not present at those proceedings. After hearing testimony presented by both parties, the court determined that Lawaetz suffered from a specific mental illness, that his mental illness created a danger of physical harm to himself and others, that his propensity for violence was greater when he was not under medication, and that no reasonable alternative to long-term institutional care existed. Accordingly, Lawaetz was adjudicated mentally ill and institutionalized. Although represented by counsel throughout these proceedings, Lawaetz has not argued that the district court’s commitment order should be reversed because the wrong statute was applied. Lawaetz never suggested, either below or on appeal, that the new Act had repealed the old. Thus, although such is our holding in Part II infra, we will not reverse on those grounds. Nor does Lawaetz claim that he was afforded fewer procedural or substantive rights than the old Act requires by its express terms. Rather, he attacks the statute under which the district court proceeded (the old Act), and the procedure by which he was committed, on constitutional grounds alone. We first address Lawaetz’s due process arguments. He contends that the old Act was unconstitutional on its face and that we must review his commitment without reference to the due process safeguards, both procedural and substantive, that were engrafted onto the statute by the district court. We reject that contention. See Government of the Virgin Islands v. Wallace, 679 F.2d 1066, 1070 (3d Cir.1982). Lawaetz concedes that the procedural and substantive safeguards recited by the district court would, if actually observed, satisfy the requirements of due process. [Brief for Appellant at 14, 17]. Thus, we need only inquire whether the district court remained true to the course it laid out. See supra note 2. We find that it did. Lawaetz’s principal challenge to the commitment proceedings below is the district court’s rejection of his motion to be present in the courtroom without medication. The court below correctly observed that the presence of the person alleged to be mentally ill is an important procedural safeguard. See supra note 2; compare 19 V.I.C. § 1133 (1976) (presence not required unless considered advisable by the court), with id. § 723(c) (Supp.1982) (presence required unless the court believes it will be injurious to him). In this case, we cannot say that the exclusion of Lawaetz was error. The district court judge had observed Lawaetz’s demeanor at the earlier guardianship proceedings. The court found on the record that Lawaetz had then been extremely disruptive, even though under medication. [App. at 82]. The court accepted the testimony of medical experts that La-waetz’s behavior would be even more disruptive if his medication were discontinued, as counsel requested in moving to permit Lawaetz’s attendance. [App. at 82-83]. In addition, in order to protect Lawaetz’s interests, and over the government’s objection, the court permitted his guardian, also a witness, to remain present through every stage of the proceedings. [App. at 34-35]. On the facts of this case, we find no reversible error in the decision to deny Lawaetz the opportunity to attend the commitment proceedings without medication. Lawaetz’s remaining due process claims are without merit. It may well be that the old Act lacked a clearly defined standard of mental illness or adequate criteria to inform the court’s commitment decision. In this particular case, however, the court expressly found that Lawaetz suffered from chronic schizophrenia, a well-defined mental illness. The court further found that Lawaetz’s condition had in the past caused Lawaetz to act in a way that posed a serious danger of physical injury to himself and others. It found that his condition would continue to pose a danger in the future and that no satisfactory alternative to institutional care existed for Lawaetz. [App. at 84-86], The court required the government to prove its case by clear and convincing evidence. Reviewing the record, we find ample medical and first-hand factual testimony to support the findings of the district court. Accordingly, we hold that the commitment proceedings below were consistent with the dictates of due process. II. Lawaetz’s equal protection argument is based on the assumption that the government was free to choose between the old Act and the more restrictive new Act in two proceedings involving similarly situated individuals. That simply was not the case. We hold that the new Act repeals and replaces the old Act in every instance where inconsistent procedures or substantive requirements are set forth. Because the government was not, and is not, free to choose between inconsistent or conflicting statutory provisions in like situations, we hold that the mental health law of the Virgin Islands does not offend equal protection. In 1977 the Virgin Islands legislature adopted the new Act, a comprehensive statute designed to deal with alcoholism, drug dependency and mental health problems. The new Act expressly provides: “Whenever any provision of this chapter conflicts or is inconsistent with any other provision of [the Virgin Islands] Code, the provision of this chapter shall govern to the extent of the conflict or inconsistency.” 19 V.I.C. § 728(b) (Supp.1982). The new Act covers each of the areas in which Lawaetz challenges the adequacy of the old Act. It provides for the temporary emergency commitment of a mentally disturbed individual who, unless so committed, is likely to harm himself or others. Id. § 722; see supra note 3. Section 723 of the new Act sets forth the requirements for the long-term involuntary commitment of the mentally disturbed. The new Act, unlike the old, defines the term “mentally disturbed person.” Id. § 711(15). It permits commitment only if a mentally disturbed person “has threatened, attempted, or inflicted physical harm on himself or another and . .. unless committed is likely to inflict physical harm on another,” id. § 723(a), and the Division of Mental Health, Alcoholism and Drug Dependency Services “is able to provide adequate and appropriate treatment for him and the treatment is likely to be beneficial,” id. § 723(d). Section 723 also provides procedural safeguards for the individual. A hearing must be held within two days of the filing of a petition seeking involuntary commitment. The statute requires notice to a number of interested parties. Id. § 723(b). The court is directed to hear “all relevant testimony” at the commitment hearing, including the testimony of medical personnel. Id. § 723(c). The new Act establishes the individual’s right to be present at his hearing “unless the court believes that his presence is likely to be injurious to him,” and directs the judge to examine the individual in open court where feasible. Id. The government must establish its case for involuntary commitment by clear and convincing evidence. Id. § 723(d). If a commitment order is entered for an indefinite length of time, “the person’s commitment shall be subjected to close periodic judicial scrutiny designed to protect said person from prolonged and unnecessary commitment.” Id. § 723(e). This court will endeavor, wherever possible, to construe statutes consistently with each other in order to avoid the implied repeal of earlier legislation. United States v. Boffa, 688 F.2d 919, 932 (3d Cir. 1982), cert. denied, — U.S. —, 103 S.Ct. 1272, 75 L.Ed.2d 494 (1983). This ease, however, presents a comprehensive legislative scheme that deals with precisely the same subject matter as the old Act. The new Act adds clarity and due process safeguards in an area where the courts of the Virgin Islands had recognized the deficiencies of the express provisions of the former legislation. Section 728(b) states that the new Act shall replace all conflicting or inconsistent provisions of the Virgin Islands Code. We thus conclude that the Virgin Islands legislature intended the repeal of the old Act and its replacement with the new. See Boffa, 688 F.2d at 932 (implied repeal supported where new legislation occupies the entire field); In re Tinsley, 421 F.Supp. 1007, 1010 (M.D.Ga.1976) (statute with general repealer), aff’d. 554 F.2d 1064 (5th Cir.1977). Because it was not within the government’s discretion to choose between the old and the new statutes, we must reject Lawaetz’s equal protection challenge. III. Accordingly, for the reasons set forth above, the order of the district court committing David Lawaetz to the custody of the Commissioner of Health, and the subsequent order of February 28, 1983 releasing Lawaetz from institutional care subject to a continuing obligation to seek treatment, will be affirmed.

373173-30623

Opinion for the Court filed by Circuit Judge MIKVA. MIKVA, Circuit Judge: This is an appeal by thirty-one black employees and former employees of the Library of Congress, challenging the district court’s refusal to allow them to intervene in a Title VII class action brought against the Library. We agree with appellants that our decision in Foster v. Gueory, 655 F.2d 1319 (D.C.Cir.1981), requires reversal of the district court’s order. I. Background In 1975, Howard Cook, David Andrews, and an organization called the Black Employees of the Library of Congress (“BELC”) filed a class action administrative complaint alleging racially and sexually discriminatory employment practices throughout the Library. The Library’s final decision, issued more than six years later, concluded that the “investigative file does not support the allegations of discrimination.” In February 1982, Cook and the BELC filed a Title VII class action complaint in the district court. Four months later they filed an amended complaint narrowing their allegations; specifically, they charged that the Library systematically discriminated against its black professional and administrative employees in making promotion and advancement decisions. At the same time, six black Library employees sought to intervene as plaintiffs and additional class representatives. The proposed amended complaint incorporated the claims of the six applicants for intervention and charged the Library with, inter alia, basing promotion decisions on “unvalidated tests which disqualify a disproportionate number of minority and female employees” and on “unchecked, unvalidated subjective recommendations of supervisory personnel.” In late 1983, the district court allowed all six employees to intervene. The court found that two of the employees, who had filed separate administrative complaints, were entitled to intervene of right under Rule 24(a)(2) of the Federal Rules of Civil Procedure. Rule 24(a)(2) requires the district court to grant a timely filed application for intervention whenever the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties. As to the other four applicants, the court found that intervention of right was unavailable, but nonetheless exercised its discretion to allow permissive intervention under Rule 24(b)(2). That subsection states that a court “may” grant a timely motion to intervene if “an applicant’s claim or defense and the main action have a question of law or fact in common.” The court also granted leave to file the amended complaint, but denied the plaintiffs’ motion for class certification. Plaintiffs moved for reconsideration. While the motion for reconsideration was pending, the thirty-one appellants in this action filed their motion to intervene. All are or were employed in administrative or professional positions at the Library, and all claim to have been discriminated against in promotion or advancement because they are black. Like the original plaintiffs in the action and the six intervenors, the thirty-one applicants alleged that they had been victimized by systematic discrimination in the Library’s personnel practices. In individual affidavits filed with a second proposed amended complaint, each of the applicants claimed experience with the Library’s personnel system “very similar” to the claims raised by the plaintiffs. In June 1984, the district court nonetheless denied the intervention motion. The court’s terse order commented only that “the four criteria for intervention under Rule 24(a) have not been satisfied and ... intervention under Rule 24(b) would subject defendant to undue prejudice and unduly delay the adjudication of the rights of the parties.” On the same date, the district court granted the plaintiffs’ motion for reconsideration of the denial of class certification. Instead of certifying the class as requested by plaintiffs, however, the court created six narrow subclasses defined to match closely the particular facts alleged by six of the named plaintiffs. It is unclear which, if any, of the appellants would have fit within any of the subclasses. In any event, counsel informed this court at oral argument that the district court subsequently decertified all but one of the subclasses, retaining class representation only for those black employees who were allegedly not promoted because of the Library’s failure to post certain job openings. Although this subclass contains close to 400 members, it apparently does not include any of the appellants. Since many of the appellants never perfected their claims by timely filing of individual administrative complaints, the district court’s denial of their motion to intervene effectively precluded them from obtaining any judicial relief for the wrongs they alleged. II. Analysis We do not reach appellants’ challenge to the district court’s discretionary denial of permissive intervention to the thirty-one appellants, because we agree with appellants that our decision in Foster v. Gueory, 655 F.2d 1319 (D.C.Cir.1981), required the district court to grant them intervention of right. In Foster, four union members sued their union and several employers under Title VII, alleging racial discrimination in matters relating to employment as pile drivers. After the district court refused to certify the suit as a class action brought on behalf of all minority victims of racial discrimination with respect to employment as pile drivers, three persons moved to intervene as additional plaintiffs. They alleged that their experience differed from that of the four original plaintiffs only in that racial discrimination had prevented the three movants from even obtaining union membership or apprenticeship training. The district court denied intervention for failure to exhaust administrative remedies, and the movants appealed. This court reversed, ruling first that the claims raised by the plaintiffs and intervenors were all so similar that the administrative complaint pursued by one of the original plaintiffs had satisfied the exhaustion requirement for the would-be intervenors as well, and second that the three appellants were entitled to intervene of right under Rule 24(a)(2). The court’s reasoning in Foster applies fully to the case at hand. A. Exhaustion. Before bringing a civil action under Title VII, a plaintiff must generally exhaust his or her administrative remedies. See, e.g., United Air Lines, Inc. v. Evans, 431 U.S. 553, 555 n. 4, 97 S.Ct. 1885, 1887 n. 4, 52 L.Ed.2d 571 (1977); Kizas v. Webster, 707 F.2d 524, 543 (D.C.Cir.1983). Along with other circuits, this court has allowed the exhaustion requirement to be satisfied vicariously under certain circumstances. See Foster, 655 F.2d at 1321-22. Although most of the thirty-one appellants failed to file timely complaints with the Library’s Equal Employment Office, the district court did not mention exhaustion when denying intervention, and the Library has raised the exhaustion issue on appeal only obliquely. Part of the explanation for the Library’s reticence may be the district court’s earlier ruling on exhaustion with respect to the six employees allowed to intervene. Four of those employees had not filed administrative charges, but the district court held that, under Foster v. Gueory, the exhaustion requirement was satisfied for those employees by the administrative class action filed by Cook and the BELC. We think that determination was correct, and for the same reason we find that the failure by some of the appellants to file individual administrative complaints does not bar their intervention in this action. The test set forth in Foster for vicarious exhaustion hinges on functional identity of claims: It thus appears that the critical factor in determining whether an individual Title VII plaintiff must file an [administrative] charge, or whether he may escape this requirement by joining with another plaintiff who has filed such a charge, is the similarity of the two plaintiffs’ complaints. Where the two claims are so similar that it can fairly be said that no conciliatory purpose would be served by filing separate [administrative] charges, then it would be “wasteful, if not vain” ... to require separate ... filings. However, where the two complaints differ to the extent that there is a real possibility that one of the claims might be administratively settled while the other can be resolved only by the courts, ... each plaintiff should be required to separately file ... [a] charge in order to effectuate the purpose of Title VII’s provisions for administrative relief. 655 F.2d at 1322 (emphasis added). Although the specific circumstances giving rise to the grievances of each of the plaintiffs and would-be intervenors in this case are distinguishable, each of the employees plans to prove his or her allegations by demonstrating the same thing: a pervasive “pattern and practice” of racial discrimination in promotion and advancement of administrative and professional employees throughout the Library. Since the existence of such systemic discrimination is precisely what the Library denied in its final decision in the administrative class action brought by Cook and the BELC, there would appear to have been no substantial possibility that any of the individual claims might have been settled administratively. In the circumstances of this case, therefore, the exhaustion requirement has been fully satisfied for all of the appellants. B. Intervention. The Foster panel read Rule 24(a)(2) to establish “four criteria for intervention of right,” 655 F.2d at 1324, and determined that the appellants before the court satisfied each of the criteria. First, the panel considered the requirement imposed by Rule 24(a) that the intervention motion be timely filed. The court found the requirement was satisfied because the appellants’ motion had been filed little more than a month after the district court had denied class certification. As the Library tacitly concedes, the timeliness requirement is therefore also satisfied in the present case, because the appellants now before us filed their intervention motion within five weeks of the denial of class certification. Second, the court addressed the requirement that an intervenor of right claim “an interest relating to the property or transaction which is the subject of the action,” Fed.R.Civ.P. 24(a)(2). Noting that “the ‘interest’ test is primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process,” 655 F.2d at 1324 (quoting Nuesse v. Camp, 385 F.2d 694, 700 (D.C.Cir.1967)), the panel concluded that the test was satisfied because [a]ppellants are persons who allege that they have suffered injury from the same or very similar wrongful acts as those complained of by the original plaintiffs, and appellants’ claims for relief are founded on the same statutory rights as are the claims of the plaintiffs. While the individual acts of discrimination suffered by the plaintiffs and the appellants may differ, they each assert their claims as a result of the same “significantly protectable interest” ... in being free of racial discrimination in employment. Id. at 1324-25 (citation omitted). As discussed below, the Library argues that the current appellants fail to meet this standard. Third, the Foster panel concluded that the appellants’ interests might be “practically impaired or impeded” by disposition of the plaintiffs’ suit, because appellants and plaintiffs challenged the same practices of the defendants, and the trial court’s consideration of the plaintiffs’ claims “could result in a determination that certain of these practices as a matter of law do not violate either Title VII or § 1981.” Id. at 1325. The panel noted that Nuesse v. Camp, 385 F.2d 694, 700 (D.C.Cir.1967), had established the sufficiency of such potential stare decisis effects as sufficient to meet the Rule 24(a)(2) requirement. The Library does not argue expressly that the appellants also fail to satisfy this third requirement, but, as discussed below, such an argument may be implied by the Library’s contention that the factual variability of the employees’ claims renders intervention inappropriate. Fourth, the court considered the “adequacy of representation” requirement. The court noted that the fourth requirement is met if the representation “may” be inadequate, and that inadequacy was quite possible in the case before the court both (a) because the appellants’ cases differed slightly from the plaintiffs’ in that the appellants had been unable even to join the union, and (b) because each of the plaintiffs and appellants was seeking back pay (as are the plaintiffs and appellants currently before us), and “there is no way that plaintiffs could represent all of appellants’ individual claims adequately.” Id. The Library does not dispute that the appellants’ motion for intervention satisfied this last criterion. Although the court’s reasoning in Foster v. Gueory appears squarely applicable to the appeal now before us, the Library attempts to distinguish Foster based on the relative complexity of the facts involved in the present case and based on a highly creative argument concerning standing. We find neither purported distinction convincing. 1. Factual complexity. The Library attempts to distinguish this case from Foster based on the variation in the factual situations presented by the appellants in this case and on the sheer number of persons who seek to intervene. In Foster, three persons sought to intervene in a suit brought by four others, and all seven claimed discrimination with respect to the same job of pile driver. Here, in contrast, thirty-one persons seek to intervene in a class action brought by seven individual plaintiffs and an organization, and the thirty-eight individuals involved hold a variety of different jobs under different promotion and advancement schemes. The Library suggests that the appellants in this case therefore fail to meet the “interest in the transaction” test for intervention of right under Foster, and by implication the Library may be understood also to deny that the appellants’ interests could be “practically impaired or impeded” by disposition of the plaintiffs’ suit. We note at the outset that we are far from convinced that the factual circumstances of the plaintiffs and intervenors in Foster were significantly more homogeneous than those presented by the plaintiffs and appellants in this case. True, there was only one job at issue in Foster —pile driver — and this case involves a myriad of different positions. But in this case all the plaintiffs and intervenors share a common employer; there is only one defendant. In Foster, several different employers and labor organizations appear to have been named as defendants. See 655 F.2d at 1321. Moreover, this case does not contain the tension between the interests of union members and non-members, a tension explicitly recognized by the court in Foster. See id. at 1325. In any event, even granting that there is more factual variability in this case, we believe Foster is still controlling. (a) Interest in the transaction. Like the appellants in Foster, the thirty-one appellants in this case, although complaining of separate personnel actions, all allege they have suffered from a system of racial discrimination “the same [as] or very similar [to]” that described in the plaintiffs’ complaint. Foster, 655 F.2d at 1325. Consequently, each may be said to have “asserted] their claims as a result of the same ‘significantly protectible interest’ ... in being free of racial discrimination in employment.” Id. Nonetheless, the Library suggests that Foster and Nuesse v. Camp, 385 F.2d 694 (D.C.Cir.1967), require a balancing of sorts, and that the balance comes out differently in this case than in Foster. Foster and Nuesse construed the “interest test” to be “primarily a practical guide to disposing of lawsuits by involving as many persons as is compatible with efficiency and due process,” 655 F.2d at 1324; 385 F.2d at 700, and the court ordered intervention in Foster only after concluding that “intervenors are indeed concerned persons whose involvement in the suit is compatible with efficiency and due process,” 655 F.2d at 1324. The Library suggests that the number of people seeking intervention in this case and the differences in the factual circumstances giving rise to their complaints mean that the involvement of appellants would not be compatible with efficiency and due process. Despite the general understanding that “[a]n application for intervention of right seems to pose only a question of law,” 7A C. Wright & A. Miller, Federal Practice & Procedure 1902 (Supp.1984), we would ordinarily be inclined to give substantial weight to a trial court’s findings with regard to whether intervention would comport with efficiency and due process. In this ease, however, there are essentially no factual findings to which to defer; in denying intervention of right the district judge stated only that “the four criteria for intervention under Rule 24(a) have not been satisfied.” Consequently, we must make our own determination under Foster and Nuesse. We do not think it could be argued seriously that allowing intervention in this case would violate due process, and the Library in any event does not press such an argument. What the Library does argue is that allowing the appellants to intervene would make no sense in terms of judicial efficiency, because at bottom “these are 31 separate disparate treatment cases.” The Library recognizes that its efficiency argument depends on a denial of the appellants’ claim that their cases will rely on substantially the same evidence as the plaintiffs’ case. The “efficiency” issue, therefore, ultimately becomes a question of acceptable methods of proof in Title VII cases. More specifically, the question is whether a plaintiff bringing a disparate treatment claim against the Library can rely on evidence of Library-wide discrimination or must instead limit his or her proof to evidence of discrimination in the plaintiff’s particular job category. Initially, it is clear that statistical evidence — despite its perhaps more familiar use to show disparate impact — can in general also be used to prove disparate treatment claims. As part of his or her prima facie case, a plaintiff alleging disparate treatment may introduce statistics tending to demonstrate a “pattern and practice” of discrimination, i.e., evidence “that racial discrimination was the [defendant’s] standard operating procedure — the regular rather than the unusual practice." International Brotherhood of Teamsters v. United States, 431 U.S. 324, 336, 97 S.Ct. 1843, 1855, 52 L.Ed.2d 396 (1977); see also, e.g., Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977); Segar v. Smith, 738 F.2d 1249 (D.C.Cir.1984); Minority Employees at NASA (MEAN) v. Beggs, 723 F.2d 958 (D.C.Cir.1983). In addition, a disparate treatment plaintiff may employ statistics concerning the employment practices of the defendant to rebut explanatory defenses as pretextual. See, e.g., MEAN v. Beggs; Sweat v. Miller Brewing Co., 708 F.2d 655, 658 (11th Cir.1983). The Library argues, however, that the only statistics relevant for these purposes are those concerning the particular job held or sought by the plaintiff: “Evidence tending to show discrimination in librarian positions would not be relevant to show discrimination in lawyer positions, or indeed in any other position.” Moreover, the Library contends, “given the different types of librarian jobs at the Library, not all librarian jobs could be lumped together.” We disagree. It strikes us as altogether obvious that statistical (or anecdotal) evi dence that the Library discriminated against its black librarians would be relevant to whether the Library discriminated against its black attorneys. Disallowing such evidence at the threshold would not only be silly, it would be pernicious: the plethora of job categories at the higher levels of the federal bureaucracy and in many other white collar organizations suggests that adopting the Library’s approach to proof of discrimination could well preclude the effective use of statistics in com-batting race discrimination in many if not most areas of high-level employment. If white collar employees, particularly in the federal government, are limited to statistics involving their particular job classification, generating a large enough numerical base from which to draw statistically significant conclusions is likely in case after case to prove impossible or prohibitively onerous. See Valentino v. USPS, 674 F.2d 56, 72 (D.C.Cir.1982); Bartholet, Application of Title VII to Jobs in High Places, 95 Harv.L.Rev. 945, 1003 (1982). The evidentiary approach recommended by the Library would thus do much to immunize from Title VII attack those sectors of the work force most in need of integration. See Bartholet, supra, at 948-49. The result would be antithetical to the broad remedial goals set by Congress in establishing this country’s strong policy against discrimination in the workplace. The Library cites several cases for the proposition that the relevant statistical pool for Title VII calculations is the pool of qualified applicants, but those cases do not support the Library’s position. Those cases establish only that the percentage of minority employees selected for a given position should be compared to the percentage of minority candidates in the pool of persons qualified for that position, not that the only positions from which meaningful statistics can be drawn are those for which the plaintiff himself or herself is qualified. For example, in Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977), the Supreme Court held that the racial composition of a school district’s teacher work force could meaningfully be compared only to the racial composition of the pool of qualified candidates, not to the racial composition of the student body. In no way, however, did the Court suggest that a comparison of, say, the racial composition of the administrative staff with that of the relevant applicant pool for administrative positions would be irrelevant to the issue of discrimination in teaching jobs. Similarly, in Valentino v. USPS, 674 F.2d 56 (D.C.Cir.1982), this court found statistical evidence inadequate to make out a prima facie case of discrimination because the plaintiff had failed to “control for occupational classifications,” id. at 69-70, but we certainly did not suggest that the only permissible way of controlling for occupational classifications was to consider only statistics concerning the plaintiff’s particular job. To the contrary, we expressly recognized the potential relevance of discrimination in jobs other than that held or desired by the plaintiff: “Proof that discrimination exists within occupational categories may well support an inference of workplace-wide discrimination.” Id. at 71 n. 27. More generally, it is well settled that “tests for the sufficiency of a Title VII prima facie case must not be applied in a ‘rigid, mechanistic, or ritualistic way.’ ... The ultimate test of sufficiency must remain ... [whether] the plaintiffs offer evidence ‘adequate to create an inference that * * * employment decisions] * * * [were] based on a discriminatory criterion illegal under the Act.” Segar v. Smith, 738 F.2d 1249, 1274 (D.C.Cir.1984) (quoting Furnco Construction Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978), and International Brotherhood of Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 1866, 52 L.Ed.2d 396 (1977)). We think the appellants are clearly correct that evidence of discrimination throughout the Library is relevant to each of their claims. The plaintiffs and the intervenors all say they plan to make such evidence of systemic discrimination the centerpiece of their case, and their representations in this regard must be accepted as true. See SEC v. Dresser Industries, Inc., 628 F.2d 1368, 1390 (D.C.Cir.) (“[T]he burden of proof rests on those resisting intervention.”), cert, denied, 449 U.S. 993, 101 S.Ct. 529, 66 L.Ed.2d 289 (1980); Central States, S.E. & S. W. Areas Health & Welfare Fund v. Old Security Life Ins. Co., 600 F.2d 671, 679 (7th Cir.1979) (“All nonconclusory allegations supporting a motion to intervene are taken as true, absent sham, frivolity, or other objections.”); Kozak v. Wells, 278 F.2d 104, 109 (8th Cir.1960) (same). Compared to the alternative of forcing those appellants who have exhausted their administrative remedies to bring separate civil actions, allowing intervention by the thirty-one appellants seems fully consistent with, if not mandated by, concerns of judicial efficiency. Allowing intervention, it need hardly be noted, does not preclude separate trials of particular claims or even issues. If these complaints are ever actually tried, the district court will have broad discretion under Rule 42(b) to order separate trials as appropriate to further the aims of justice. (b) Practical impairment of interests. In Foster, the court found that the appellants’ interests might be “practically impaired or impeded” by the plaintiffs’ litigation because it was possible “that trial of plaintiffs’ claims could result in a determination that certain of these practices [challenged both by plaintiffs and the would-be intervenors] as a matter of law do not violate either Title VII or § 1981.” 655 F.2d at 1325. That concern is not nearly so strong in this case, given the wide variety of actions challenged by plaintiffs and appellants here. Nevertheless, the reasoning does apply to some extent, since part of what the plaintiffs and intervenors all challenge in this case is the Library’s failure to adopt less subjective employment practices. More importantly, a stare decisis consideration similar but not identical to the one noted by the panel in Foster applies to this case quite forcefully: it is possible that trial of plaintiffs’ claims could result in a determination that certain statistical evidence, on which both the plaintiffs and the intervenors plan to rely, is inadmissible or insufficient as a matter of law. Consequently, the potential for practical impairment of the appellants' interests seem just as substantial here as in Foster. 2. Standing. The Library devotes little of its brief to its attempt to distinguish Foster v. Gueory based on the relative factual simplicity of that case; by far the main part of the Library’s argument on intervention of right is that appellants lack standing to intervene under Rule 24(a). Relying on this court’s recent decision in Southern Christian Leadership Conference (SCLC) v. Kelley, 747 F.2d 777 (D.C.Cir.1984), the Library builds an elaborate argument that to intervene of right a party must have standing to challenge or defend the precise actions challenged by the original plaintiffs. This is certainly an interesting interpretation, but the case quite plainly says nothing of the kind. At issue in SCLC v. Kelley was a motion by Senator Jesse Helms to intervene of right in a suit aimed in part at limiting public disclosure of tapes generated during the FBI’s electronic surveillance of Dr. Martin Luther King, Jr., in the 1960’s. Senator Helms claimed an interest in the matter because access to the tapes would, he claimed, better inform his and the Senate’s vote on a resolution to designate Dr. King’s birthday as a national holiday. This court ruled against Senator Helms on the ground that he lacked standing to pursue such a rarefied interest in federal court. For present purposes, the case stands only for the proposition that an intervenor of right, just like an ordinary plaintiff, must have standing. Senator Helms was not allowed to intervene for the same reason he would not have been allowed to bring a separate action seeking to vindicate his interest in casting an informed vote: he lacked standing to assert that interest in federal court. The problem was not that the basis of his standing differed slightly from the basis of the plaintiffs’ standing; the problem was that he had no standing at all. We do not understand the Library to suggest that the appellants in this action would lack standing to assert their Title VII rights in separate actions; indeed, separate actions are apparently just what the government thinks the law requires. The Library’s position is instead that the appellants should not be permitted to pursue their interests in this suit, because the basis of their standing differs in some particulars from the basis of the plaintiffs’ standing. Such a restriction on intervention finds no support in SCLC v. Kelley, nor in any other cases of which we are aware, nor, for that matter, in common sense. The whole point of intervention is to allow the participation of persons with interests distinct from those of the original parties; it is therefore to be expected that an intervenor’s standing will have a somewhat different basis from that of the original plaintiffs. Even if we found the Library’s argument to have some facial plausibility — which we assuredly do not — we would be obliged to reject it on the authority of Foster v. Gueory. We discern nothing in the Library’s argument concerning standing that distinguishes the facts of this case from those of Foster. The government’s brief suggested that Foster was for that reason wrongly decided, but at oral argument counsel for the government disavowed any request that we overturn Foster, and as a panel we are without authority or inclination to do so in any event. III. Conclusion We therefore vacate the district court’s denial of the appellants’ motion to intervene, and we remand the case for further proceedings consistent with this opinion. By way of guidance, we suggest that on remand the district court may wish to reconsider its denial of class certification in light of today’s decision. Particularly given the large number of employees who we hold must otherwise be granted intervention of right, it may well make more sense for this case to proceed as a class action.

4086918-4425

OPINION COOK, Circuit Judge. A year after pleading guilty to drug charges, Defendant-Appellant Shawn Doyle moved to vacate his sentence for ineffective assistance of counsel. Though the court denied the underlying ineffective assistance claim, it nonetheless granted the motion and resentenced Doyle. He now asks us to review his resentencing hearing, alleging that the court impermissibly felt itself bound to reinstate his original sentence. The government cross-appeals, arguing that because the district court rejected Doyle’s ineffective assistance claim, it lacked the authority to set aside his sentence. We agree with the government. We accordingly vacate the district court’s order granting Doyle’s § 2255 motion and reinstate his original sentence. I. Background In early 2005 a federal grand jury indicted Doyle on two counts of possession of crack cocaine with intent to distribute. Doyle pleaded guilty to one count in exchange for dismissal of the other. Based upon Doyle’s assistance in ongoing criminal investigations, the government moved for a § 5K1.1 downward departure, resulting in a sentencing guidelines range of 140-175 months, and stated that it might seek a Rule 35 post-sentencing reduction for Doyle’s continued cooperation. The district court then sentenced Doyle to 140 months’ imprisonment. From prison in the ensuing year, Doyle moved to vacate his sentence, alleging that he “explicitly instructed his counsel to institute an appeal, but the attorney failed and refused to do so.” Though the district court denied the motion, this court granted Doyle a certificate of appealability and remanded the case for an evidentiary hearing to determine “whether trial counsel did not file a notice of appeal despite a request to do so.” Doyle v. United States, No. 07-3425, at 2 (6th Cir. July 29, 2008) (order granting certificate of appealability). At the evidentiary hearing, both Doyle and his attorney testified that they discussed an appeal. Doyle then admitted that, contrary to the claims in his motion to vacate, he did not instruct his attorney to file a notice of appeal. Instead, in the days following his sentencing, his lawyer told him he “still [had] a shot at the Rule 35,” and warned that an appeal might “make the prosecution mad.” After a “lengthy discussion,” they made a “tactical decision” not to appeal. With the benefit of this evidence, the district court predictably ruled against Doyle on his ineffective assistance claim, but then unpredictably proceeded to grant the § 2255 motion nevertheless, explaining that it was “in the interests of justice for the Court to resentence Defendant, and therefore allow him the opportunity to appeal should he so decide.” United States v. Doyle, No. 1:05—CR-005, at 1-2 (S.D.Ohio Nov. 20, 2008) (order granting motion to vacate). At resentencing, the court again sentenced Doyle to 140 months. Doyle’s attorney immediately filed the instant appeal, claiming that the court overlooked Doyle’s post-sentencing rehabilitation and erroneously found itself bound to reinstate the original sentence. The government then cross-appealed. II. Analysis The government argues that because the district court found “no basis to conclude that [Doyle’s] Counsel was ineffective,” id. at 1, it lacked grounds for granting Doyle’s motion to vacate. We agree. “In reviewing the denial [or grant] of a 28 U.S.C. § 2255 motion, we apply a de novo standard of review to the legal issues and uphold the factual findings of the district court unless they are clearly erroneous.” Hamblen v. United States, 591 F.3d 471, 473 (6th Cir.2009). Ineffective assistance of counsel claims are mixed questions of law and fact, which appellate courts review de novo. Mapes v. Tate, 388 F.3d 187, 190 (6th Cir.2004). “A motion brought under § 2255 must allege one of three bases as a threshold standard: (1) an error of constitutional magnitude; (2) a sentence imposed outside the statutory limits; or (3) an error of fact or law that was so fundamental as to render the entire proceeding invalid.” Weinberger v. United States, 268 F.3d 346, 351 (6th Cir.2001) (citing United States v. Addonizio, 442 U.S. 178, 185-86, 99 S.Ct. 2235, 60 L.Ed.2d 805 (1979)). Ineffective assistance of counsel claims fall within the first of these three categories. See Pough v. United States, 442 F.3d 959, 964 (6th Cir.2006); Griffin v. United States, 330 F.3d 733, 736 (6th Cir.2003).

4094219-27626

MEMORANDUM OF DECISION GARRITY, District Judge. The Equal Employment Opportunity Commission (hereinafter “EEOC”) brought this Title VII enforcement proceeding against the International Brotherhood of Electrical Workers (hereinafter “International”) and IBEW Local 103 (hereinafter “Local 103”) to redress retaliation in violation of Section 704(a), 42 U.S.C. § 2000e-3(a). The individual aggrieved by the alleged retaliation, Carl Goodman, was allowed to intervene, pursuant to 42 U.S.C. § 2000e-5(f)(l), and he filed his own complaint claiming that the International and Local 103 violated Title VII, the Thirteenth and Fourteenth Amendments to the United States Constitution and 42 U.S.C. §§ 1981, 1983, 1985 and 1988 and, basing jurisdiction on 28 U.S.C. § 1343, 29 U.S.C. § 151 et seq. and the special jurisdictional grant in Title VII. Now before the court is the International’s motion for judgment on the pleadings or, in the alternative, for summary judgment against the EEOC. The International argues that Goodman’s failure to name the International in his charge, the EEOC’s failure to include the claims against the International, as well as the International itself by name, in the Reasonable Cause Determination contained in its Letter of Determination and to notify the International of the charge, and the total lack of any efforts on the part of the EEOC to conciliate with the International before bringing suit deprive this court of subject matter jurisdiction over the Title VII claim against the International. Upon consideration of lengthy briefs and oral argument we grant the International’s motion. Since affidavits have been filed, we treat the motion as for summary judgment and find that there is no genuine issue as to any material fact concerning the involvement of the International with the actions of which the EEOC complains and concerning the steps taken by the EEOC with respect to the International before bringing this lawsuit. We conclude that the International is entitled to judgment as a matter of law and order that summary judgment be entered in favor of the International. The factual background is as follows: Carl Goodman, the intervenor, was employed by the Massachusetts Bay Transportation Authority (hereinafter “MBTA”) as a journeyman electrician, having been referred to the MBTA by his union, Local 103. In September 1974 Goodman was laid off from his job, and on October 2,1974 he filed a charge with the Massachusetts Commission Against Discrimination (hereinafter “MCAD”) protesting racial discrimination by the MBTA and Local 103 in the layoff. On October 7, 1974, the MBTA ordered Goodman back to work over the opposition of Local 103, apparently as an affirmative action measure. After unsuccessful efforts to convince Goodman voluntarily to resume his layoff status in the order of his seniority, Local 103 then notified Goodman on November 8, 1974 that he must appear before Local 103’s Trial Board to answer charges filed by Local 103’s business agent. These charges included violations of the Building Trades and MBTA Agreement, Article XVI; the L.U. 103 IBEW and NECA Agreement, Fundamental Principles (sec. 11), Article V, secs. 1, 3, 5; the L.U. 103 Bylaws, Article XIV, sec. 8, and, of particular importance for the instant case, the IBEW Constitution, Article XVII, sec. 1 (requiring exhaustion of intra-union remedies by a local union), Article XXII, sec. 4 and Article XXVII, sec. 1, subsecs. 1, 3, 8, 9, 11 (quoted infra). On December 6, 1974, after a hearing before Local 103’s Trial Board, Goodman was convicted of all charges and fined $1000. Thereafter, according to the EEOC Letter of Determination, Local 103 once again tried to convince Goodman to accept layoff status, offering to suspend the fine if he did so. On March 5, 1975, Goodman filed a charge of discrimination with the EEOC based on violations of Section 704(a) of Title VII against Local 103 only, not naming the International. He alleged that the $1000 fine was imposed in retaliation for his having filed the original, charge with MCAD. The EEOC on March 19, 1975 sent a Notice of Charge, again only to Local 103. Following an investigation, the EEOC issued a Letter of Determination on May 27, 1976 finding reasonable cause to believe that the charge was true. The Letter of Determination named Local 103 as the only respondent and cited only Local 103’s actions in fining Goodman and offering to suspend the fine. Subsequent efforts to conciliate with Local 103 were attempted, without success. A 29 CFR 1601.23 Notice, notifying the respondent of the Commission’s decision to end its unsuccessful conciliation efforts unless the respondent requests resumption of conciliation within ten days, issued, addressed to Local 103 only, and on December 5, 1977 this lawsuit was commenced. All parties agree that the International first acquired knowledge of the circumstances surrounding Goodman’s charge and the EEOC efforts on Goodman’s behalf only after the EEOC filed its complaint with this court. See, Affidavit of John E. Flynn, June 28,1978, at ¶¶ 5-8. The International then requested a conference with the EEOC to discuss the allegations, a conference that the EEOC now characterizes as a post-complaint attempt at conciliation. The EEOC asserts as against the International that Article XXVII, sections 1(1), 1(8) and 1(11) of the IBEW Constitution amount to a per se violation of Title VII. Article XXVII, § 1 reads in relevant part: Sec. 1. Any member may be penalized for committing any one or more of the following offenses: (1) Resorting to the courts for redress of any injustice which he may believe has been done him by the I.B.E.W. or any of its Local Unions without first making use (for at least a four-month period in the United States) of the process available to him under the I.B.E.W. Constitution including any appeal or appeals from any decision against him. (8) Sending letters or statements, anonymous or otherwise, or making oral statements, to public officials or others which contain untruths about, or which misrepresent a L.U., its officers or representatives, or officers or representatives of the I.B.E.W. (11) Slandering or otherwise wronging a member of the I.B.E.W. by any wilful act or acts. Section 1 further sets out the punishments as follows: Any member convicted of any one or more of the above-named offenses may be assessed or suspended, or both, or expelled. In case of conviction of violation of subsection (1) above, the member may be assessed an amount equal to the reasonable attorneys’ fees and cost incurred by the I.B.E.W. or L.U. as a result of said violation in addition to, or in lieu of, any other penalty. The EEOC focuses in particular on Section 1(1) which requires a four month exhaustion of internal union remedies before resort to the “courts”. Reasoning that “courts” includes administrative agencies, the EEOC contends that this provision contravenes Section 704(a) of Title VII, 42 U.S.C. § 2000e-3(a) by discriminating against an individual for filing a charge with the EEOC or other relevant state or local agency before completion of the four month exhaustion period. Presumably, the EEOC also contends that the other two sections, 1(8) and 1(11), amount to a per se violation because they expose a member to punishment for filing what turns out to be a groundless charge. The EEOC does not claim that the International had any relationship with the events surrounding Goodman’s being charged and subsequently fined other than the maintenance of these challenged constitutional provisions. The International insists that it has always interpreted its constitution consistent with all legal requirements, including Title VII, and in particular that the word “courts” in Article XXVII, § 1 was never intended to include administrative agencies like MCAD. Supplemental Affidavit of Marcus L. Loftis, 11/10/78, at ¶¶6, 7. It specifically disavows any interest in the subject matter of this controversy and notes that any disciplinary action against Goodman based on Goodman’s having filed a charge with MCAD would be contrary to the IBEW constitution and IBEW policy. Supplemental Affidavit of Marcus L. Loftis, supra, at ¶ 13. With this background in mind, we now turn to an analysis of the issues presented by this motion. Section 706 of Title VII, 42 U.S.C. § 2000e-5, creates an administrative system for extra-judicial enforcement of Title VII’s equal employment opportunity mandate. Because of its importance in the overall administrative enforcement scheme, compliance with certain of the procedures set forth in Section 706 has been treated by most courts as a jurisdictional condition precedent to commencement of a civil suit. Among the jurisdictional requirements of an EEOC-initiated enforcement action are: (1) the naming of the defendant as a respondent in the original charge filed with the EEOC, e. g., Equal Emp. Op. Com’n v. MacMillan Bloedel Containers, Inc., 6 Cir. 1974, 503 F.2d 1086, 1095; see, 42 U.S.C. § 2000e-5(f)(1); (2) inclusion of the defendant and the possibly discriminatory acts for which it is responsible in the reasonable cause determination, e. g., E.E.O.C. v. Sherwood Medical Industries, M.D.Fla.1978, 452 F.Supp. 678, 681-82; see, 42 U.S.C. §§ 2000-5(b), 2000e—5(f)(1); and (3) efforts at informal settlement and conciliation prior to formal court action, e. g., Equal Employment Opportunity v. Allegheny Airlines, W.D.Pa.1977, 436 F.Supp. 1300, 1306, see, 42 U.S.C. § 2000e-5(f)(1). Of these three requirements, the most important is the attempt to conciliate, since securing voluntary compliance is the central purpose of the administrative apparatus created by Title VII. Bowe v. Colgate-Palmolive Co., 7 Cir. 1969, 416 F.2d 711, 719. The requirement of a complete and clear reasonable cause determination also takes on jurisdictional significance primarily because of its importance as a basis for subsequent conciliation: it summarizes the EEOC investigation, provides notice to the respondent of the discriminatory acts requiring correction and sets forth the framework for negotiation. See, Sherwood Medical Industries, supra, at 681. The International argues that none of these three jurisdictional requirements have been satisfied insofar as the EEOC claims against the International are concerned. The plaintiff offers three responses. First, although it admits that it never had any dealings with the International before this lawsuit commenced, the EEOC contends nevertheless that it has substantially met at least the most important prerequisites, the complete reasonable cause determination and efforts to conciliate. Second, the agency insists that this case falls within one of the judicially-carved “exceptions” to the jurisdictional requirements, excusing any failure on its part to comply. Finally, the EEOC argues that even if compliance is lacking and no exception is available, the International is a proper party under Fed.R. Civ.P., Rules 19, 20 or 21. We disagree, and the following analysis treats each argument in turn. According to plaintiff’s first point, the reasonable cause determination, construed broadly, contains reference to the illegality of Article XXVII, §§ 1(1), 1(8) and 1(11) of the IBEW constitution. The EEOC reasons that since Goodman was fined in part because he violated these provisions, any reference to the illegality of the fine in the reasonable cause determination necessarily also questions the legality of the sections of the Constitution themselves, by implication. The Letter of Determination, however, nowhere mentions the possible per se illegality of Article XXVII, §§ 1(1), (8) or (11); it summarizes the facts relating only to Local 103’s treatment of Goodman. The retaliation alleged by the EEOC consists of a reprisal against Goodman primarily for having filed a charge with the EEOC, not for failing to comply with his duties under the Constitution. Furthermore because Goodman was fined for violating rules other than Article XXVII, e. g., governing lay-off procedures, reference to the fine alone cannot serve as notice that provisions of the union Constitution in particular are being challenged. The logical connection between the imposition of the fine and the illegality of Article XXVII, § 1, is too strained for mention of the former to serve as notice to the International of the latter. The finding must be clear and explicit. Sherwood Medical Industries, supra, at 681-82. The EEOC also suggests that its meeting and correspondence with counsel for the International following commencement of this lawsuit satisfies its statutory obligation to attempt conciliation. See, Affidavit of Lanier Williams, Aug. 31, 1978, at ¶¶ 4-7. We do not accept this suggestion. Although courts are without authority to inquire into the degree of conciliation actually undertaken, see, Sherwood Medical Industries, supra, at 684, they may determine whether something properly characterizable as genuine “conciliation” within the meaning of 42 U.S.C. § 2000e-5(b) has taken place. See, Allegheny Airlines, supra, at 1305-06. The Act outlines an orderly series of procedures for processing a charge: the filing of the charge, its investigation, the issuance of a reasonable cause determination, attempts to conciliate, and only then, the commencement of a civil suit by the EEOC. Equal Employment Opportunity Com’n v. Westvaco Corp., D.Md.1974, 372 F.Supp. 985, 987-89; see, Developments-Title VII, 84 Harv.L.Rev. 1109, 1195-99 (1971). If we were to permit efforts to settle a civil enforcement proceeding to replace the statutory extra-judicial conciliation requirement, the administrative enforcement scheme would be seriously frustrated. Cf., Westvaco Corp., supra, at 991-94. The psychological factor of the imminent commencement of a lawsuit would be lost, as would the opportunity for more relaxed discussion free from consideration of an existing judicial proceeding. Also relevant is the additional burden on courts which would result from allowing this exception, a burden that the Act sought to avoid through administrative enforcement. See, Jackson v. University of Pittsburgh, W.D.Pa.1975, 405 F.Supp. 607, 615; see generally, Developments-Title VII, 84 Harv.L.Rev. 1109, 1199-1202 (1971). The EEOC’s second response to the International’s motion would have us apply one of the judicially-created “exceptions” to Title VII jurisdictional requirements. In particular, the plaintiff argues that both because Local 103 acted as the International’s agent in discriminating against Goodman and because Local 103 and the International engaged in a common discriminatory enterprise, the interests of the two unions overlap to such an extent that the International was adequately represented by Local 103 during the administrative phase. The typical situation for application of the agency and common enterprise exceptions involves two defendants (here, Local 103 and the International) with respect to only one of whom (here, Local 103) all statutory requirements have been satisfied. The exceptions are invoked in order to excuse noncompliance with respect to the other defendant (here, the International). To support its claim of an agency relationship between the International and Local 103, the EEOC cites us to general provisions of the International’s constitution as evidence of the extent to which the International controls Local 103’s activities. These provisions, however, have limited reach. They merely establish the supremacy of the International Constitution and policies over local bylaws, amendments and rules (Article XVII, §§ 7, 8, 9), require the International’s prior approval before a local bylaw, rule or regulation takes effect (Article XVII, § 7), and confer power on the International Executive Committee to discipline local unions and members (Article IX, § 4). They do not vest the International with such a degree of control over Local 103 that Local 103 can be deemed to have acted as the International’s agent when it allegedly retaliated against Goodman. Cf., United Mine Workers v. Coronado Coal Company, 1922, 259 U.S. 344, 395-96, 42 S.Ct. 570, 66 L.Ed. 975. Each local union keeps its own books and records and maintains an independent bank account funded by dues assessments. Officers and executive board members of a local union are elected by local union members and represent their local union only, and local unions are primarily responsible for the recruitment, referral and representation of employees in matters dealing with employment and for the disciplining of members for violating union rules and policies. Affidavit of Marcus L. Loftis, 7/3/78, at ¶¶ 5-10. Furthermore, the International knew nothing about the disciplinary proceedings against Goodman or about Local 103’s interpretation of Article XXVII, § 1, until after commencement of this lawsuit. These facts are sufficient to distinguish plaintiff’s principal authority, Taylor v. Armco Steel Corp., S.D.Tex.1973, 373 F.Supp. 885. In Taylor, the court emphasized that the international union knew about the discriminatory features of the local collective bargaining agreement and failed adequately to police it. 373 F.Supp., at 911. Under these circumstances, the court concluded that the local was acting as the agent of the international union in promoting its interests. The international union’s indirect involvement was sufficiently large to charge it with responsibility for the local’s activities, and since the interests of the two were substantially similar, the court concluded that the local adequately represented the international union before the Commission, 373 F.Supp., at 911. By contrast, Local 103 in the instant case operated independently of the International in disciplining Goodman. Plaintiff’s second ground for claiming adequacy of representation — the existence of a common discriminatory enterprise— fails for similar reasons. There is no evidence of a common scheme involving both the International and Local 103. The EEOC argues that by requiring a four-month exhaustion of internal union remedies and by requiring local unions to enforce this provision against disobedient union members, the International is engaged in a common enterprise with local unions, like Local 103, which discipline members for filing charges with administrative agencies. The International, however, maintains that it has always enforced Article XXVII in a manner consistent with all legal requirements and that in this case it never knew about Local 103’s interpretation of Article XXVII or the discipline of Goodman allegedly for having filed a charge before the EEOC. Hence there is not the kind of identity of interest and the degree of participation by the International in the allegedly discriminatory activities of Local 103 to establish a common enterprise. The instant case differs significantly from Cook v. Mountain States T & T Co., D.Ariz.1975, 397 F.Supp. 1217, and Byron v. University of Florida, N.D.Fla.1975, 403 F.Supp. 49, upon which plaintiff relies. In Cook, the court held that under the liberal federal pleading rules the complaint set forth facts sufficient to establish a common enterprise of discrimination in that it alleged in part that both the national union and the local cooperated with the company to implement a policy of sex discrimination in employment and that the two unions refused to negotiate collective bargaining agreements which would correct these discriminatory practices. 397 F.Supp., at 1224-25. Moreover, the evidence in Cook revealed that the national union, although not named in the EEOC charge, received notice of all EEOC proceedings and was actively involved in negotiations. 397 F.Supp., at 1225. The plaintiff in Byron sued the University of Florida and various of its officers and employees alleging a concerted effort to discriminate against her on account of her sex. One of the defendants not named in plaintiff’s charge to the EEOC moved to dismiss as to him for lack of personal jurisdiction. Limiting itself to material in the complaint, the court held that since the complaint alleged concerted action, the unnamed defendant was adequately represented before the EEOC by the others. 403 F.Supp., at 53-54. The court reasoned that those present at EEOC settlement negotiations would have pressed all defenses to the charges that the unnamed defendant might have proffered. The instant case is quite different. Local 103 had a strong interest in not presenting a defense available to the International, namely, that Article XXVII § 1 had been interpreted by the International so as not to require exhaustion prior to petitioning an administrative agency. The extent of cooperation between the International and Local 103 does not approach that among employees and officers of the same institution, like the defendants in Byron, who implement uniform institutional policies and programs. The classification of exceptions into so-called “agency” and “common enterprise” categories often conceals the underlying rationale for excusing noncompliance. Each of the cases making an exception to Title VII jurisdictional requirements turns on the presence of one of two factors: either the unnamed party had notice — actual or constructive — of the settlement negotiations and thus had an opportunity to participate, or the named and unnamed parties shared such an identity of interest that the named party could be said to have adequately represented the unnamed party. The existence of an agency relationship or a common enterprise is significant only insofar as it indicates notice or adequacy of representation. In the instant case, not only is there no agency relationship or common enterprise, but there is also neither notice nor adequacy of representation. The International had no reason to know and was in fact unaware of the charge and conciliation efforts until after the commencement of this lawsuit. Furthermore, the evidence indicates that Local 103 could not have adequately represented the International. The interests of the two unions diverge substantially. Whereas Local 103, which is directly involved in Goodman’s charge and which acted autonomously in disciplining Goodman and in adopting its own interpretation of Article XXVII, § 1, may have made the strategic decision to deny all forms of retaliation, the International might have been agreeable to some modifications of Article XXVII, since it was not otherwise implicated in the retaliation alleged by the EEOC. Moreover, the EEOC seeks in part to remove the offending sections from the IBEW Constitution. Because Local 103 alone is incapable of providing this relief, any conciliation efforts directed to this issue would have been fruitless without the participation of the International. Hence, we cannot say that there is such a substantial identity of interest between the International and Local 103 to excuse noncompliance with jurisdictional requirements in this case. See, Butler v. Local 4 and Local 269, Laborers, N.D.Ill.1969, 308 F.Supp. 528. Glus v. G. C. Murphy Co., 3 Cir. 1977, 562 F.2d 880, cited by the plaintiff, does not compel a different result. In Glus, the court combined the factors underlying the established exceptions into a four part test for determining whether to excuse a failure by an individual plaintiff to name a defendant in his EEOC charge: (1) whether the complainant could through reasonable effort have ascertained the- role-of the unnamed party at the time of filing his EEOC charge; (2) whether the interests of a named party are so similar to those of the unnamed party that it would be unnecessary to include the unnamed party in EEOC proceedings; (3) whether the interests of the unnamed party were actually prejudiced by his absence from the EEOC proceedings; and (4) whether the unnamed party represented to the complainant that it would act through a named party. 562 F.2d, at 888. First, unlike Glus, the plaintiff in the instant case is the EEOC, not a private individual. The EEOC has the benefit of an extensive investigation before it formulates its reasonable cause determination. A careful reading of the sections of the IBEW Constitution which Goodman allegedly violated would have been sufficient to disclose the International’s indirect involvement. Second, as discussed ante, the interests of the International are substantially different from those of the Local. Third, the International was certainly prejudiced by losing the opportunity to negotiate with the EEOC prior to commencement of this lawsuit. And, finally, the International made no representations to the EEOC that Local 103 could act as its agent during the administrative phase. As its final position, the EEOC argues that even if it has not complied with the statutory requirements and even if a judicial exception is not warranted, nevertheless the International is a proper party under Rules 19, 20 and 21 of the Federal Rules of Civil Procedure. The EEOC reasons that assuming the court holds Article XXVII, §§ 1(1), 1(8) and 1(11) to be per se violations of Section 704(a) of Title VII insofar as they are enforced against Title VII claim ants, cf., Rios v. Reynolds Metals Company, 5 Cir. 1972, 467 F.2d 54, 57; Rodgers v. Berger, D.Mass.1977, 438 F.Supp. 713, 717, it is plain that the International would be an indispensable party under Fed.R.Civ.P., Rule 19, if the EEOC were to be awarded the complete relief it requests, including removal of the offending constitutional provisions. The EEOC concludes that we should join the International rather than confine the scope of the lawsuit by dismissing those claims for relief with respect to which the International is an indispensable party. It is our opinion that the circumstances of this case do not justify recourse to the Federal Rules of Civil Procedure to bootstrap the International into the lawsuit. The policy favoring conciliation and settlement in the Title VII context is very strong. Cf. Great American Fed. S. & L. Assn. v. Novotny, - U.S. -, 99 S.Ct. 2345, 60 L.Ed.2d 957. A liberal application of Rules 19, 20 or 21 to allow the EEOC to sue parties which it has not included in a reasonable cause determination and with which it has not conciliated would emasculate the Title VII administrative enforcement system. If failure to comply with statutory procedures might be excused whenever necessary to make possible a broad and far-reaching remedy, courts could easily be transformed into the primary agency for Title VII enforcement, a result at odds with the statutory scheme. Unlike many of the cases cited by the plaintiff, there is no special unfairness in strictly enforcing the statutory policy when the EEOC sues. A layman is often unaware of the relationship between a remote third party and the circumstances surrounding his charge at the time he files his complaint with the EEOC. In these circumstances, courts have been especially sensitive to the injustice of dismissing the complainant’s lawsuit just because he failed to name in his charge a third party who turns out to be indispensible under Rule 19, even though the EEOC may have uncovered the role of the third party during its investigation and even though the third party may have had an opportunity to participate in the EEOC conciliation phase. To avoid this unfortunate result, some courts have permitted joinder of the third party. E. g., Evans v. Sheraton Park Hotel, D.C. Cir. 1974, 164 U.S.App.D.C. 86, 503 F.2d 177, 183; Grogg v. General Motors Corp., S.D.N.Y.1976, 72 F.R.D. 523, 533.

7846915-8187

OPINION AND ORDER CRABB, Chief Judge. This case is before the court on plaintiff’s motion to enforce the judgment entered herein on July 20, 1994 by compelling defen dant to pay plaintiff all interest due under the Prompt Payment Act, 31 U.S.C. §§ 3901-07. In support of his motion, plaintiff alleges the following facts, none of which are disputed by defendant. Pursuant to the Disaster Assistance Act of 1988, 7 U.S.C. § 1421 note §§ 204-224, plaintiff applied for disaster payments from the Commodity Credit Corporation for losses on his Mdney bean crop. Defendant made the payments to plaintiff, but later determined plaintiff had not been eligible for payments and demanded their return. Defendant effected a refund to itself by making eleven separate offsets of other payments due plaintiff and a related corporation. Nine of the offsets were made from 1990, 1991, 1992 and 1993 Corn Deficiency Act payments due plaintiff; one was made from a 1993 Corn Deficiency Act payment due Doane Ltd., a corporate entity owned by plaintiff; and the remaining offset was of a Prompt Payment Act interest penalty due plaintiff. On July 20, 1994, in conformance with an order entered by the United States Court of Appeals for the Seventh Circuit, judgment was entered in this court granting plaintiffs motion for summary judgment, dismissing defendant’s counterclaim, declaring that plaintiff was entitled to benefits under the Disaster Assistance Act of 1988, and remanding the matter to defendant with instructions to grant disaster assistance benefits to plaintiff. On August 23, 1994, defendant issued checks to plaintiff totalling $129,197.30, representing a refund of the $120,130.36 that had been collected by defendant in offsets plus $9,066.94 in interest. The interest paid represented a maximum of one year’s interest on each offset. In other words, defendant did not reimburse plaintiff for more than one year of accrued interest even on offsets made more than a year before August 23,1994, including the earliest offset made on August 13, 1990. Defendant responded to plaintiffs inquiries on the matter by stating that he had no obligation to pay more than one year’s worth of interest on the offset amounts. Attempting to understand price support and commodities legislation is a perilous adventure in which the Secretary’s overworked legal staff offers little assistance. The Secretary begins by asserting that plaintiffs claim to the unpaid interest should be dismissed for lack of jurisdiction and must be brought in the Court of Federal Claims because plaintiff is claiming payment of interest exceeding $10,000.00. On the merits, as best I can understand defendant’s opposition to paying plaintiff more than one year’s worth of interest, it is this. The United States cannot be sued in the absence of a waiver of sovereign immunity; such waivers are to be construed narrowly. Nothing in the Prompt Payment Act, 31 U.S.C. §§ 3901-07, or the Disaster Assistance Act of 1988, 7 U.S.C. § 1421 note §§ 204-224, provides for the payment of interest on disputed payments of disaster assistance. Subsection (h) of 31 U.S.C. § 3902 provides for payment of interest on overdue payments under the Agricultural Act of 1949, 15 U.S.C. § 714b(h), but disaster assistance payments are not part of the Agricultural Act. 31 U.S.C. § 3907 limits interest payments under the Prompt Payment Act to one year except in matters arising under the Contract Disputes Act, 41 U.S.C. §§ 601-613. In addition, defendant notes that subsection (c) of 31 U.S.C. § 3907 provides specifically that the chapter “does not require an interest penalty on a payment that is not made because of a dispute between the head of an agency and a business concern over the amount of payment or compliance with the contract.” Defendant does not explain why he considers subsection (c) applicable to plaintiffs claim and nothing on its face suggests that it is. Defendant does not suggest that disaster assistance payments are a contractual arrangement or that his dispute with plaintiff was over the amount of the payment and not plaintiffs eligibility for payment. Moreover, he does not make clear why he paid plaintiff one year’s worth of interest, if this provision is applicable and he had no obligation to pay any interest at all. Indeed, defendant makes no effort to explain the payment in light of his contention that neither the Prompt Payment Act nor the Disaster Assistance Act of 1988 makes provision for the payment of interest. However, I assume from the fact that defendant made this payment that he is not pursuing his contentions that the law does not authorize payment of interest or that this case is one in which defendant is relieved of any obligation to pay interest because of a dispute between the agency head and a business concern over the amount of payment or compliance with a contract. Rather, it appears that defendant rests his refusal to pay all accrued interest claimed by plaintiff on the provision in the Prompt Payment Act that caps interest payments at one year. Defendant says nothing in response to plaintiffs argument that subsection (h) of § 3902 requires defendant to pay producers interest on late payments to which the producers are entitled under the Agricultural Act of 1949, except to note correctly that the subsection does not apply to the disaster payments at issue. However, he fails to explain why he should not pay plaintiff interest on the Com Deficiency Act payments that were withheld to offset the allegedly wrongfully paid disaster assistance payments. The Com Deficiency Act payments are covered by subsection (h) and exempt from any caps imposed under § 3907. Plaintiff argues persuasively that § 3907 of the Prompt Payment Act should not be read as applying a one-year interest payment cap on any delayed payments to farm producers, including disaster assistance payments, except for those payments covered under the Contract Disputes Act of 1978. He points out that the Contract Disputes Act has no application to disputes between the government and farm producers, making it inequitable to hold producers to the restrictions that apply to entities that are covered by the act. Moreover, he argues, the purpose of the Contract Disputes Act is to encourage contractors to resolve disputes promptly; farm producers do not have the mechanisms available to contractors for dispute resolution or the ability to control the resolution of their disputes. Plaintiff may be correct, but I find it unnecessary to inquire further into that matter because I am persuaded that plaintiff is entitled to reimbursement for his lost interest under § 3902(h). I turn first to defendant’s contention that this court has no jurisdiction over plaintiffs claim for improperly withheld interest and that plaintiff must file his claim in the Court of Federal Claims. Although neither party has advised the court of the amount of interest at stake, I will assume that it exceeds $10,000, as defendant alleges and as appears in the exhibits that were to have been attached to plaintiffs brief and were submitted today. If the assumption is correct, and if plaintiffs claim were one brought originally simply for the amount of the unpaid interest, defendant’s contention would have merit. However, plaintiffs claim is not a freestanding one, but a matter of ensuring that a court order is implemented properly. It is well within this court’s jurisdiction to interpret and oversee the implementation of its own orders and judgments. Kokkonen v. Guardian Life Ins. Co. of America, — U.S.-,-, 114 S.Ct. 1673, 1676, 128 L.Ed.2d 391 (1994) (federal courts have ancillary jurisdiction that can be asserted “to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees”); Ligurotis v. Whyte, 951 F.2d 818, 821 (7th Cir.1992) (district court has jurisdiction to ensure that plaintiff receives what he is entitled to receive under the judgment). Plaintiffs motion is nothing more than a means of allowing this court to ensure that plaintiff has received what he is entitled to receive under the judgment entered in his favor.

646042-23427

ORDER HURLEY, District Judge. In the above-captioned action, Plaintiff Stephen Phillips (“Phillips”) alleges that Defendants have violated his constitutional right to due process and his rights under the Administrative Procedure Act, 5 U.S.C. § 551, et seq., by suspending him from the United States Military Academy at West Point (“the Academy”). Currently before the Court is Plaintiffs motion, brought by Order to Show Cause, for an order reinstating Plaintiff to full academic status at the Academy, with privileges restored, pending final determination of the action. For the reasons stated below, Plaintiffs motion is denied. BACKGROUND Phillips was admitted as a cadet to the Academy in June, 1993. He attended the Academy regularly until October, 1995, when he was suspended from the Academy following an investigation of alleged Cadet Honor Code violations, to wit, it was alleged that Phillips lied in response to questions posed by a superior officer. The conduct of the Academy in the Honor Code Investigation, and Phillips’s suspension, form the factual bases of Phillips’s Complaint. Phillips, in his Verified Complaint, Order to Show Cause with supporting affirmations, and Supplemental Affirmation, alleges six causes of action against Defendants. Specifically, Phillips alleges that: 1) Defendants violated the Administrative Procedure Act (“APA”) and denied him due process of law in failing to permit Phillips’s counsel to participate in the voir dire of members of the Honor Board (“the Board”) (see Suppl.Aff. at 1-4); 2) the Academy denied Phillips due process of law in that the Board failed to follow Board procedures by receiving “redundant” and “cumulative” opinion testimony which was prejudicial to Phillips (see id. at 5-6); 3) & 4) the Academy denied Phillips due process of law in that the Board “fail[ed] to follow and adhere to procedures designed to allow a voir dire that provides [Pjlaintiff with fair and impartial board members[J” (id. at 6-8); 5) the finding of the Board was not supported by substantial evidence (id. at 9), and 6) the Academy violated the APA by the following “arbitrary and capricious acts”: i) substantial disregard of the findings and recommendations of the Board, (id. at 10); ii) imposition of a sanction not commensurate with Phillips’s infraction, labeled “minor” by Phillips, (id); ni) submission of Phillips’s case to the Secretary of the Army in derogation the Army’s “60 day rule,” (id), and iv) failure to follow established procedures related to the voir dire of Board members and the admission of opinion testimony. (Id. at 11.) Defendants, in opposition, argue that: 1) the failure to allow Phillips’s counsel to participate in voir dire violates neither due process nor the APA (Defs.’ Mem.Further Supp. at 5-12); 2) the Honor Investigative Hearing and Academy proceedings were conducted in accordance with Academy procedures (id. at 12-16); and 3) the record reflects that the findings of the Board were supported by substantial evidence. (Id. at 18-19.) Additionally, Defendants argue that Phillips has failed to exhaust his administrative remedies. (Id. at 19-20.) In reply to the Defendants’ submissions in opposition to Phillips’s motion, Phillips elected to request that the Court consider his original and supplemental affirmations and memoranda in support of the instant motion. The matter being fully briefed, the Court proceeds with its factual and legal analysis. A. The Honor Committee Investigative Procedures and The Proceedings Below The Cadet Honor Code states that a cadet will not “lie, cheat or steal, nor tolerate those who do.” (See USCC 15-1 at 2-1.) The Procedures to be followed when it is alleged that a cadet has violated the Honor Code, providing numerous stages of investigation and review, are outlined in USCC 15-1, chapter 2 (“the Procedures”). Those stages of review, and the corresponding proceedings in Phillips’s case, are related below. 1. Honor Code Investigation & Procedures A suspected Honor Code violation should be initially reported to a Company Honor Representative (“CHR”). (USCC 15-1 at 2-2.) CHRs are charged with the initial inquiry of the merits of an allegation, and must determine whether credible evidence exists to warrant a further investigation by an Investigative Team. (Id.) CHRs should 1) notify a suspected cadet that an investigation is underway, 2) inform the cadet of the nature of the allegation(s), and 3) inform the cadet that he or she has the right to remain silent and to consult with legal counsel. (Id.) A cadet may retain civilian counsel at his or her ,own expense, or military counsel from the Defense Counsel Branch, Office of the Staff Judge Advocate. (Id.) On or about July 26, 1995, Phillips was so notified of the allegations against him, of the investigation and of his rights. (See Cohen Decl. ¶ 7; Record at 273-74.) The CHR, on completion of the initial inquiry, must submit a written report of findings and recommendations to the Regimental Honor Representative (“RHR”). (USCC 15-1 at 2-2.) The RHR, in turn, must review the case and determine whether it should be forwarded for further investigation by an Investigative Team. (Id. at 2-3; Cohen Decl. ¶ 9.) The CHR and RHR in Phillips’s case each found that the matter should be forwarded for the appointment of an Investigative Team (“a Team”). (Record at 285-87.) The Team is charged with performing a complete and impartial investigation, and with issuing a written recommendation, in order to assist the Commandant of Cadets in making a referral decision in the matter. (USCC 15-1 at 2-3.) A cadet who is the subject of a Team inquiry retains the right to remain silent and, further, has the right to submit written statements to the Team. (Id.) Phillips was so notified of these rights on or about August 8,1995. (Record at 277-78; Cohen Decl. ¶ 12.) The Team investigating Phillips’s case issued a recommendation that the case be forwarded to a full Honor Investigative Hearing (“HIH”). (Record at 284-85.) After a recommendation is issued by an Investigative Team, the RHR must again evaluate the propriety of the investigation, (USCC 15-1 at 2-3), and recommend to the Vice Chairman for Investigations (“the VCI”) whether the case should be forwarded to an HIH. (Id.) The VCI is further required to make an independent review of the case file, and should the VCI determine the case should be forwarded to an HIH, the VCI shall send the case file to the Staff Judge Advocate (“SJA”) for legal review. (Id. at 2-3, 2-4.) In Phillips’s ease, these requirements were met; the SJA, after completion of his legal review, found that the file on the allegations against Phillips contained sufficient evidence to submit the matter to an HIH. (Record at 291-92; Cohen Decl. ¶ 20.) Additionally, the SJA recommended that the allegations against Phillips be separated into two allegations for clarity and that specific witnesses be called to testify. In compliance with the Procedures, the file was returned to the VCI for a final decision on whether an HIH should be convened; the VCI, in turn, recommended that the Commandant refer the allegations against Phillips to an HIH. (Record at 288; USCC 15-1 at 2-4.) The Commandant of Cadets has the option of requiring further investigation, dismissing the matter, or convening an HIH. (USCC 15-1 at 2-4.) The Commandant referred the case to an HIH on August 14,1995. (Record at 293.) The HIH is charged with taking evidence on the allegations against a cadet, determining whether the cadet did or did not commit the violation(s) alleged, and providing input to the Superintendent of cadets as to disposition of the case. (USCC 15-1 at 2-6 through 2-10). Phillips was notified on August 16, 1995 that an HIH would be convened on August 24, 1995. (Record at 294; Cohen Decl. ¶ 30.) The HIH notice detailed Phillips’s rights under the Procedures, i.e., to remain silent, to consult with legal counsel, to present evidence, to cross-examine adverse witnesses, and to challenge members of the HIH for cause. (Record at 294-96; see USCC 15-1, 2-10.) 2. The Honor Investigative Hearing & Procedures At the first of two preliminary sessions, Phillips, again pursuant to the Procedures, was given the opportunity to raise any challenge to the Hearing Officer or make any motions or requests regarding witnesses, the contents of the case file, or other pertinent matters. (Record at 33-38.) Phillips’s civilian counsel, Daniel W. Shimek, and his Cadet Advisor were present at the first preliminary session. (Id.) At that session, Phillips stated that he was satisfied with his counsel’s advice. (Record at 33; Cohen Decl. ¶33.) Phillips also objected to several exhibits to the Record; those objections were ruled upon by the then-presiding Hearing Officer. (Record at 33.) At the second preliminary session, Phillips was present with his Cadet Advisor, Mr. Shimek, and Phillips’ private counsel in the case pending before this Court, Edward L. Vaezy, Esq., and Joseph C. Stroble, Esq.. (Record at 3£M1.) The Hearing was commenced on August 30,1995. Phillips’s Cadet Advisor and private legal counsel again were present. (Id. at 39) After the Hearing Officer conducted voir dire examination of the Honor Board members who had heard the evidence, Phillips had the opportunity to discuss the voir dire and the chosen Honor Board members with counsel. (Record at 42.) When asked if he had any objections to the Honor Board members, Phillips replied that he did not. (Id. at 41-42.) Phillips made opening and closing statements, questioned and cross-examined witnesses, and submitted evidence on his own behalf. (Id. at 46-195.) Following deliberations, a majority of the Honor Board found one of the allegations against Phillips to be supported by substantial evidence, to wit, that Phillips had lied to his superior officer. (Id. at 304.) After reaching their determination, each member of the Honor Board completed a Hearing Member Worksheet (‘Worksheet”). (See Record at 307-33; USCC 15-1 at 2-15, 2-16.) Under the Procedures, the Superintendent of Cadets is required to review the Worksheets, which “provide the Superintendent with board member input toward disposition of a case where the cadet has been found to have violated the Honor Code.” (USCC 15-1, 2-16.) B. Postr-Hearing Review After the Hearing, Phillips’s case was sent for legal review to the Staff Judge Advocate, who in turn advised the Superintendent to review the file but withhold action until the Commandant recommended a course of action and Phillips submitted any additional materials. (Record at 19-22.) The Commandant of Cadets recommended to the Superintendent that Phillips be separated from the Academy with the opportunity to reapply for admission after 8-12 months of active duty. (Record at 11.) Phillips’s counsel submitted two letters in his behalf. (Cohen Deck ¶ 53.) C. Action by the Superintendent The determination as to what sanction will be imposed on a cadet who has violated the Honor Code lies within the Superintendent’s discretion. (USCC 15-1 at 2-16.) “Although the normal sanction for a violation of the Honor Code is separation, the Superintendent may exercise discretion[.]” (Id. (emphasis added)) Cadets who are separated from the Academy may, for example, be invited to reapply for admission after completion of approximately one year in active duty, during which year the cadet works with a mentor on a course of ethical development. (Id.) Following his review of the case file, the Commandant’s recommendation, and a personal interview with Phillips, the Superintendent approved the findings of the HIH, forwarded the file to Headquarters, Department of the Army (“Headquarters”), and recommended that Phillips be separated from the Academy and be given an honorable discharge. (Record at 3.) The Superintendent also recommended that Phillips be given an opportunity to reapply to the Academy following eight (8) months of active duty. (Id.) Phillips was so notified of the Superintendent’s decision by memorandum dated October 23, 1995. (Record at 4-5.) On November 2, 1995, Plaintiff agreed to the Academy’s offer to apply for readmission to the Academy according to the Superintendent’s recommendation. (Cohen Deck If 61) The offer, and the Superintendent’s recommendation, are currently under review by the Assistant Secretary of the Army for Man power and Reserve Affairs for a final decision. (Id.; see USCC 15-1 at 2-17.) At present, Phillips is suspended from the Academy. (Id. ¶ 62.) If the Assistant Secretary concurs with the recommendation of the Superintendent, Phillips will be separated from the Academy. (Cohen Decl. ¶ 67.) According to the Academy, Phillips’s case will be reviewed by several offices of the Department of the Army before a final decision is made. (Cohen Decl. ¶ 65.) Additionally, according to representations by counsel at oral argument on the instant motion, review of Phillips’s case is available from the Army Board for the Correction of Military Records pursuant to 10 U.S.C. § 1552. (Tr. Oct. 31, 1995 at 20.) C. The “60-day Rule” The Academy operates under a “60-day rule,” imposed by the Secretary of the Army, pursuant to which Cadet Honor cases must be processed within sixty (60). (USCC 15-1 at 2-18.) The sixty (60) days for the processing of Cadet Honor cases commence, under the rule, with the report of a violation to a CHR and conclude (if a violation is found) when the case is received by Headquarters. (Id.) Certain days are excluded in computing the sixty (60) days within which Headquarters is required to receive the case. (See id. at 2-19, 2-20). According to Defendants, the Superintendent’s recommendation as to Phillips’s case was sent by overnight mail on October 23,1995, that is, on the fifty-ninth (59th) countable day from the report to the CHR. (Cohen Decl. at ¶ 69.) Due to difficulties beyond Defendants’ control, however, Headquarters did not receive the recommendation until October 26, 1995, that is, on the sixty-second (62nd) day. (Id.) The Procedures are silent as to eases in which Headquarters receives the Superintendent’s recommendation past the sixtieth (60th) day. DISCUSSION Although Defendants have asserted the exhaustion doctrine in support of their purported motion to dismiss, this Court finds the application of the exhaustion doctrine dispositive of the instant motion by Phillips for injunctive relief and, accordingly, begins its discussion with that issue. A. Exhaustion of Administrative Remedies “Under the exhaustion rule, a party may not seek federal judicial review of an adverse determination until the party has first sought all possible relief within the agency itself.” Guitard v. Secretary of the Navy, 967 F.2d 737, 740 (2d Cir.1992) (citing Myers v. Bethlehem Shipbuilding Corp. 303 U.S. 41, 50-51, 58 S.Ct. 459, 463-464, 82 L.Ed. 638 (1938)). The exhaustion rule applies with equal if not greater force to Academy administrative proceedings, an area within the peculiar province of the military. See Cody v. Scott, 565 F.Supp. 1031, 1034 (S.D.N.Y.1983) (citing Kolesa v. Lehman, 534 F.Supp. 590 (N.D.N.Y.1982)). In Guitard, the plaintiff, a lieutenant in the Navy Nurse Corps, refused to take a drug test and his refusal was noted in his record. Guitard, 967 F.2d at 738. Subsequent to his refusal to take a drug test, he tested positive for marijuana use in a random drug test sweep. Id. Following a court-martial, Guitard was ordered discharged. Id. Guitard’s court-martial conviction was overturned by the Navy and Marine Corps Court of Military Review, id., but a subsequently-convened Board of Inquiry found him guilty of drug-related misconduct and recommended his discharge. Id. at 739. The Secretary of the Navy approved the recommendation and ordered Guitard’s discharge. Id. Before appealing to either the Board for the Correction of Naval Records or to the Naval Discharge Review Board, Guitard sought and obtained a temporary restraining order from the district court. Id. The district court, on the grounds that there were sufficient issues regarding the propriety of the Board of Inquiry proceedings, ordered the Navy to conduct further hearings which culminated in a report which again recommended Guitard’s discharge. Id. Dissatisfied with the Navy’s response, the district court issued a second temporary restraining order, from which the Navy appealed. The Second Circuit reversed, stating that “[bjeeause Guitard failed to exhaust his administrative remedies, the district court should not have intervened in the proceedings between Guitard and the Navy.” Id. at 740. Further, “[t]he imperatives concerning military discipline require the strict application of the exhaustion doctrine in military cases.” Id. District courts in this Circuit have applied the exhaustion doctrine to cases involving administrative proceedings at West Point and other military service academies. For example, in Cody v. Scott, 565 F.Supp. 1031 (S.D.N.Y.1983), a West Point cadet sought an order staying his separation from the Academy following disciplinary proceedings in which he was found guilty of drug use. 565 F.Supp. at 1031. As in the case at bar, the cadet in Cody brought an action in the district court prior to the Secretary of the Army’s review of the case, and prior to seeking relief pursuant to the Army Board of Correction of Military Records. Id. at 1033. Finding that “[pjlaintiff has not advanced adequate justification to short-cut the normal administrative proeedure[,]” the district court found the action barred by the administrative exhaustion doctrine. Id. Similarly, in Kolesa v. Lehman, 534 F.Supp. 590 (N.D.N.Y.1982), the plaintiff, a scholarship student in the Navy Reserve Officers Training Corps (“NROTC”) was disenrolled from NROTC and ordered to commence active duty following a hearing before a Review Board that he had used illicit drugs and had shown only marginal military performance in the NROTC program. 534 F.Supp. at 591. In lieu of appealing to the Board of Correction of Naval Records (“BCNR”), the plaintiff brought an action in the district court to restrain the Secretary from ordering the plaintiff to active duty. Id. Finding that the notice provided to the plaintiff failed to appraise him of all of the matters that would be considered by the Board of Review, and thus raised constitutional concerns, the district court nevertheless declined to issue a preliminary injunction, opining that “an airing of plaintiffs claims in a BCNR will erne any constitutional deficiencies that may have attended his Board of Review hearing[.]” Id. at 595. The parties in Kolesa having consented to the continuation of a temporary restraining order pending entry of final judgment, the district court retained jurisdiction but refrained from decision on the substance of the plaintiffs claims pending completion of the administrative review process. Id. The record submitted to this Court warrants a similar restraint. To date, Phillips’s case has proceeded through the seemingly exhaustive investigative and review procedures established by the Academy. See supra at 103-106. Phillips has, however, attempted to “short-cut” the normal administrative process by bringing an action in this Court before a final decision by the Department of the Army and before seeking redress from the Army Board for the Correction of Military Records. Case law in this Circuit clearly holds that in military disciplinary and honor code proceedings, courts must await the exhaustion of the administrative process. See Guitard, 967 F.2d at 740; Kolesa, 534 F.Supp. at 595; Cody, 565 F.Supp. at 1034. As to matters raised by Phillips in this Court regarding procedural irregularities, e.g., the impartiality and propriety of the Honor Board proceedings and admission of opinion testimony — stages in the administrative review process remain in which such alleged procedural irregularities may be addressed. This is especially true as to the asserted violation of the “60-day rule,” which is imposed by the Secretary of the Army on the Academy. (See USCC 15-1, 2-18 through 2-20.) Because the decision to separate Phillips from the Academy is not final, and because he has not exhausted the available avenues of administrative review, this Court declines to intervene in the proceedings between Phillips and the Department of the Army, and the instant motion is denied. B. Phillips’s Allegations as to Due Process and Administrative Procedure Act Violations Notwithstanding that the Court disposes of the instant motion on the aforementioned ground, the Court notes that a review of applicable case law and of the record before the Court strongly suggest that Phillips has not made the necessary showing for a preliminary injunction. In short, the record before the Court does not indicate a likelihood of success on the merits of the claims that the Academy has violated Phillips’s rights to due process and under the Administrative Procedure Act. “The general standard for issuing a preliminary injunction is well-settled. ‘The party seeking the injunction must demonstrate (1) irreparable harm should the injunction not be granted, and (2) either (a) a likelihood of success on the merits, or (b) sufficiently serious questions going to the merits and a balance of hardships tipping decidedly toward the party seeking injunctive relief.’ ” Able v. United States, 44 F.3d 128, 130 (2d Cir.1995) (citing Resolution Trust Corp. v. Elman, 949 F.2d 624, 626 (2d Cir.1991)). However, “as long as the action to be enjoined is taken pursuant to a statutory or regulatory scheme ... government action with respect to [a] litigant requires application of the ‘likelihood of success’ standard.” Able, 44 F.3d at 131. Moreover, a preliminary injunction is an extraordinary remedy not to be routinely granted. Medical Soc’y v. Toia, 560 F.2d 535 (2d Cir.1977). Undoubtedly, Phillips is entitled to full due process protection in the underlying proceedings which may, or may not, in the final analysis, culminate in his separation from the Academy. See Tully v. Orr, 608 F.Supp. 1222, 1226 (E.D.N.Y.1985); Cody v. Scott, 565 F.Supp. at 1034; Lightsey v. King, 567 F.Supp. 645, 648 (E.D.N.Y.1983). Due process is a flexible concept, however, and in this Circuit the standard is clear: in military separation proceedings such as Phillips’s, an individual must be given a full and fair hearing. Wasson v. Trowbridge, 382 F.2d 807 (2d Cir.1967). The individual must receive notice of the charges against him and a fair opportunity to present a defense. He should be given the opportunity to appear, and to present statements, evidence and witnesses on his behalf. With respect to counsel, the Court in Wasson reasoned that counsel is not ordinarily required where the proceeding is noncriminal in nature; where the proceeding is essentially investigative and the government does not proceed with counsel, and where the individual concerned is sufficiently mature and educated to develop the facts adequately. Kolesa v. Lehman, 534 F.Supp. at 593-94; see Hagopian v. Knowlton, 470 F.2d 201 (2d Cir.1972) (hearing and opportunity to present evidence, witnesses and testimony required when the separation of a cadet is envisioned, but representation by counsel not required), questioned on other grounds, Phillips v. Marsh, 687 F.2d 620, 624 (2d Cir.1982) (Winters, J., concurring).

4293336-23357

OPINION & ORDER DENISE COTE, District Judge: DNAML Pty, Ltd. (“DNAML”) brings this action against Apple Inc. (“Apple”) and five book publishers (“Publishers”), pursuant to Section 1 of the Sherman Antitrust Act, to recover damages it asserts it sustained due to the defendants’ conspiracy to fix prices and reduce competition in the e-book industry. The defendants have moved to dismiss the complaint. For the following reasons, the motions are granted as to any claims arising from either foreign sales of e-books or Apple’s policies concerning its App Store, and are otherwise denied. BACKGROUND The complaint contains the following allegations, which are accepted as true for purposes of this motion. DNAML is an Australian company. It has been involved in the e-book industry, primarily as a software developer, for over a decade. It has offered software tools, for authors to produce their own e-books and created websites that feature information about the e-book industry. At some point, DNAML began selling e-books on its websites www.eBook.com and www.sharewareebooks.com. Although DNAML did not have its own dedicated device for reading e-books, consumers could purchase an e-book from DNAML’s websites and download the e-books to their devices. DNAML predicated its sale of e-books on aggressive price competition. It built software marketing tools to provide discounts and discounted bundling services. It regularly offered discounts of over 20%; During its “Happy Hour” promotions, it offered popular e-book titles at even steeper discounts. DNAML sold e-books in bundles, allowing consumers to save money when purchasing multiple books at one time. Sometimes, DNAML gave away bundles of e-books for free with the purchase of other digital products. It also offered discount coupons. Two of the Publishers — Hachette Book Group, Inc. (“Hachette”) and HarperCol-lins Publishers, LLC (“HarperCollins”) — were the primary e-book suppliers to DNAML. DNAML converted thousands of their titles to its own proprietary digital rights management format (“DRM”). As a result of their conspiracy with Apple, which is described below, certain unnamed Publishers demanded that DNAML sign agency agreements if DNAML wished to continue to sell their e-books. The agency agreements gave the Publisher control over the retail prices of e-books. As a result of these agency agreements, DNAML was forced to stop discounting its prices for e-books and offering discount-driven promotions. This crippled DNAML and precluded it from establishing a foothold in the e-book retail market. DNAML suffered a second injury. It was in the final stages of developing an app known as the DNL Reader version 2. This app would allow consumers to purchase and read e-books on an iPad, iPhone, and other tablet devices. In 2011, intending to “eradicate retail competition and price transparency,” Apple modified its policies regarding apps (“App Store Policies”). Under the modified App Store Policies, an e-book seller wishing to sell an e-book through its app had to pay Apple a 30% fee on top of what the retailer was already paying the publisher. As a result, Apple’s iBookstore became the only “practical” way to purchase e-books for Apple devices. Knowing that it could no longer offer competitive prices, DNAML ceased development of its DNL Reader version 2 app for iPads and iPhones. DNAML carpe to realize that it could not establish an e-book retail presence through its domain name eBook.com. It sold the'domain name in 2012. The complaint’s description of the antitrust conspiracy between Apple and five Publishers is drawn from the Department of Justice (“DOJ”) complaint filed in this district against these six defendants in 2012. DNAML’s complaint also refers to this Court’s Opinion of July 10, 2013, which found that Apple had violated federal antitrust law, as alleged in the DOJ complaint. In brief, the DNAML complaint asserts that Amazon, an internet retailer, offered newly released and bestselling e-books to consumers for $9.99 after it launched its Kindle ereader. Publishers feared . that this $9.99 price would become a standard price of such e-books and deflate the prices of hardcover books. The Publishers are five of the six largest publishers of trade books in the United States. In addition to Hachette and Har-perCollins, they include Verlagsgruppe Georg von Holtzbrinck GmbH and Holtz-brinck Publishers, LLC (“MacMillan”), The Penguin Group (USA), Inc. (“Penguin”), and Simon & Schuster, Inc. (“Simon & Schuster”). Knowing that they could not compel Amazon to raise e-book prices by acting alone, the Publishers settled on a strategy to raise retail e-book prices by replacing the. wholesale model for selling e-books with an agency model. Under the agency model, the Publisher sells the e-book to the consumer and sets the price for that sale. In contrast, under the traditional wholesale model, retailers such as Amazon purchased the e-book from a publisher at the wholesale price and set their own retail price for the e-book. Apple’s entry into the e-book business provided the opportunity for this collective action to implement the agency model and raise retail e-book prices. Apple saw the agency model as one that would be highly profitable to it and one that would shield it from retail price competition. Apple realized that one result of the scheme would be an increase in the retail prices of e-books. Apple demanded a 30% commission from the Publishers on its sales of their e-books. It also demanded that every Publisher force every other retailer of e-books to accept the agency model. It accomplished this by insisting on a most favored nation or MFN clause that required each Publisher to guarantee that it would lower the retail price of each e-book in Apple’s iBookstore to match the lowest price offered by any other retailer. Apple also created pricing tiers that set caps for the maximum prices for e-books, linked to the title’s hardcover list price. The Apple agency agreements took effect on April 3, 2010 with the release of Apple’s iPad. The pricing caps in the Apple price tiers became, in practice, the new retail e-book prices. The conspiracy between Apple and the Publishers raised and stabilized retail e-book prices. It eliminated retailers’ ability to compete on price. Consumers have paid tens of millions of dollars more for e-books since the conspiracy commenced. The conspiracy also forced retailers like DNAML to cease e-book retail operations. This action was filed on September 16, 2013. Plaintiff had an opportunity to amend its complaint; it elected not to do so. Apple and the Publishers each filed a motion to dismiss on January 17, 2014. The motions were fully submitted on March 28, 2014. DISCUSSION The Publishers and Apple each contend that the complaint must be dismissed because it fails to allege antitrust standing in two separate ways. They argue that the complaint fails to allege that DNAML suffered an antitrust injury and that DNAML is an efficient enforcer of the antitrust laws. After a brief discussion of the origins of the concept of antitrust standing, these arguments are addressed in turn. Section 4 of the Clayton Act establishes a private right of action for violations of the federal antitrust laws. It entitles “[a]ny person who [is] injured in his business or property by reason of anything forbidden in the antitrust laws” to treble damages. 15 U.S.C. § 15. As the Supreme Court has explained, in passing this law, “Congress was primarily interested in creating an effective remedy for consumers who were forced to pay excessive prices.” Associated Gen. Contractors of Ca., Inc. v. Ca. State Council of Carpenters, 459 U.S. 519, 530, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). Congress “did not intend the antitrust laws to provide a remedy in damages for all injuries that might conceivably be traced to an antitrust violation.” Id. at 534, 103 S.Ct. 897 (citation omitted). Accordingly, courts have imposed “boundaries” on the invocation of this private enforcement tool to ensure that an action for treble damages is invoked in service of “the purpose of the antitrust laws: to protect competition.” Gatt Commc’ns, Inc. v. PMC Assoc., LLC, 711 F.3d 68, 75 (2d Cir.2013). The limiting contours imposed over the right to pursue private actions for treble damages under Section 4 are “embodied in the concept of antitrust standing.” Id. (citation omitted). The assessment of antitrust standing is made at the pleading stage based on the allegations in the complaint. Id. There are “two imperatives” for antitrust standing. Id. at 76. A plaintiff must plausibly plead both that it suffered an antitrust injury and that it is an efficient enforcer of the antitrust laws. Id. Antitrust standing must be shown even when the plaintiff alleges a per se violation of the antitrust laws due to horizontal price fixing. Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 344, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990) ("ARCO”). I. Antitrust Injury There is a three-step process to determine whether there is a sufficient pleading of antitrust injury: First, the party asserting that it has been injured by an illegal anticompeti-tive practice must identify the practice complained of and the reasons such a practice is or might be anticompetitive. Next, we identify the actual injury the plaintiff alleges.... Finally, we compare the anticompetitive effect of the specific practice at issue to the actual injury the plaintiff alleges. Gatt, 711 F.3d at 76 (citation omitted). Requiring a plaintiff to demonstrate antitrust injury “ensures that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place.” Id. (citing ARCO, 495 U.S. at 342, 110 S.Ct. 1884). DNAML has alleged that it was harmed by the price-fixing scheme among Apple and the Publishers that they put into effect in 2010. DNAML asserts that the conspiratorial adoption of the agency model raised e-book prices through the elimination of retail price competition, and thereby deprived DNAML of the ability to set the retail prices for its e-books. Due to this conspiracy, DNAML was “forced to cease its efforts to establish an e-book retail presence” since its business model was “predicated on aggressive price competition” and the discounted bundling of e-books. DNAML has identified an illegal anti-competitive practice. As this Court explained in its decision following a liability trial brought by DOJ and certain States against Apple, the agreement between Apple and the Publishers to raise e-book prices was a per se violation of the antitrust laws. See United States v. Apple Inc., 952 F.Supp.2d 638, 694 (S.D.N.Y.2013). To achieve their goal of raising e-book prices, the defendants eliminated retail price competition, arrogated to themselves the power to set retail prices for their e-books, and raised those prices dramatically. The second prong of the test for an antitrust injury is the identification of the “actual injury” alleged by the plaintiff. Gatt, 711 F.3d at 76 (citation omitted). “This requires us to look to the ways in which the plaintiff claims it is in a worse position as a consequence of the defendant’s conduct.” Id. (citation omitted). DNAML has identified its injury. It asserts that its inability to discount the prices for e-books led to the demise of its business and the loss of the profits it hoped to achieve from that business. The third step for evaluating antitrust injury is the comparison of the anticompetitive -effect of the practice to the injury alleged .by the plaintiff. This comparison requires more than a demonstration that the practice and injury are causally linked. Id. “Rather, in order to establish antitrust injury, the plaintiff must demonstrate that its injury is of the type the antitrust laws were intended to prevent and that flows from that which makes or might make defendants’ acts unlawful.” Id. (citation omitted). See also Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 487-88, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). Even where the alleged conduct is per se unlawful under the antitrust laws, a plaintiff must still establish antitrust standing, as such conduct “may nonetheless have some procompeti-tive effects, and private parties might suffer losses therefrom.” ARCO, 495 U.S. at 342-43, 110 S.Ct. 1884. To establish standing, the plaintiff must show that its loss “stems from a competition-reducing aspect or effect of the plaintiffs behavior.” Id. at 344, 110 S.Ct. 1884. With such a showing, a plaintiff falls within “the zone of interests protected by” the antitrust laws. Lexmark Int'l, Inc. v. Static Control Components, Inc., - U.S. -, 134 S.Ct. 1377, 1388, 188 L.Ed.2d 392 (2014) (citation omitted). Courts have long permitted distributors to bring antitrust suits against manufacturers engaged in price-fixing. For example, in Monsanto Co. v. Spray-Rite Serv. Corp., the Supreme Court affirmed a verdict for a distributor, “a discount operation,” against a manufacturer who conspired with other distributors to “maintain resale prices and terminate price cutters.” 465 U.S. 752, 756, 765, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984). See also Pace Elecs., Inc. v. Canon Computer Sys. Inc., 213 F.3d 118, 122-23 (3d Cir.2000) (holding wholesale dealer had antitrust standing in suit against manufacturer where dealer refused to comply with minimum resale price levels set by manufacturer and was terminated as a dealer). Cf. ARCO, 495 U.S. at 336, 345, 110 S.Ct. 1884 (noting, in rejecting manufacturer’s suit against competitors who set a maximum price, that where anticompetitive consequences occur — and specifically, where “the actual price charged under a maximum price scheme is nearly always the fixed maximum price” and so “the scheme tends to acquire all the attributes of an arrangement fixing minimum prices” — that “consumers and the manufacturers’ own dealers may bring suit”). . Here, DNAML’s alleged injury— its inability to survive in the market in the absence of price competition, where its business model hinged on aggressive price competition — is not some far-flung consequence of defendants’ price-fixing, but rather is “precisely the type of loss that [defendants’ ■ conduct] would be likely to cause” by colluding to strip retailers of pricing discretion. Blue Shield of Va. v. McCready, 457 U.S. 465, 479, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982) (citation omitted). DNAML alleges that, as a discount e-book retailer, its “ability to compete was crippled” when the Publishers fixed prices. Such an “intrusion] upon the ability of [retailers] to compete and survive in the market” is one of the chief anticompetitive harms that may flow from collusive manufacturer price-fixing, and the exit of discount retailers increases retailer concentration, which tends to reduce nonprice competition as well. ARCO, 495 U.S. at 335, 110 S.Ct. 1884. Thus, DNAML’s lost profits resulting from its inability to engage in price competition constitute injury “of the type the antitrust laws were intended to prevent and that flows from that which makes or might make defendants’ acts unlawful.” Gatt, 711 F.3d at 76 (citation omitted). Apple’s argument to the contrary relies on cases holding that a manufacturer cannot complain of antitrust injury where competing manufacturers have conspired to inflate prices. These cases are based on the simple premise that no injury should exist: plaintiff manufacturer should be able to undercut the conspiring manufacturers with competitive pricing and win market share. See Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 583, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Freedom Holdings, Inc. v. Cuomo, 624 F.3d 38, 52 (2d Cir.2010). These cases are inapposite to the instant suit, as DNAML is not a competitor of the conspiring Publishers. DNAML coúld not undercut the Publishers’ artificially inflated prices — indeed, DNAML’s alleged injury stems precisely from its inability to engage in price competition. The Publishers erroneously assert that a distributor’s lost profits cannot constitute antitrust injury from a price-fixing scheme, and that the only cognizable injury is the payment of inflated prices to the manufacturer, citing Gatt. The Publishers misread Gatt, which held that, assuming a manufacturer’s bid-rigging scheme violated federal antitrust laws, plaintiff distributor did not suffer antitrust injury from its “participation in or exile from such [a] scheme[ ],” as the plaintiff had “no right ab initio to participate” in and profit from such conduct. 711 F.3d at 77. Gatt does not stand for the broad proposition that a distributor’s lost profits from a manufacturer’s price-fixing conspiracy do not constitute antitrust injury. Lost profits and the payment of inflated prices are “two ... conceptually different measures” of damages for antitrust injuries. In re DDAVP Direct Purchaser Antitrust Litig., 585 F.3d 677, 689 (2d Cir.2009). A claim for lost profits can constitute a cognizable antitrust injury in the appropriate case. Id. Defendants also argue that their conspiracy did not deprive retailers of the opportunity to profit, and indeed retailers were guaranteed a 30% commission on each sale of the Publishers’ e-books and they retained control over the retail prices of other publishers’ e-books. This does not undermine DNAML’s allegation that it was injured by the conspiracy. The Publishers accounted for roughly 50% of the trade e-book market. United States v. Apple Inc., 952 F.Supp.2d 638, 685 (S.D.N.Y.2013). As a discounter, DNAML could not effectively compete in a market infected to this extent by collusive price fixing. Finally, the defendants argue that a retailer does not have antitrust standing in a conspiracy to fix prices that was “directed at consumers.” While it is undisputed that consumers were directly injured by the defendants’ illegal conspiracy to fix and raise e-book prices, the elimination of retail price competition also affected — as those very words suggest — the competitive environment in which retailers operated. Indeed, consumers were injured in a scheme that took direct aim at retailers’ pricing authority. “[T]he Sherman Act was enacted to assure customers the benefits of price competition.” Associated Gen., 459 U.S. at 538, 103 S.Ct. 897. Thus, those retailers who wished to compete on price suffered an antitrust injury of the type the Sherman Act was designed to prevent. II. Efficient Enforcer In addition to establishing that it suffered antitrust injury, DNAML must adequately allege that it would be an efficient enforcer of the antitrust laws. To determine whether a plaintiff is an efficient enforcer of the antitrust laws, the Court of Appeals for the Second Circuit directs courts to the following factors: (1) the directness or indirectness of the asserted injury; (2) the existence of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement; (3) the speculativeness of the alleged injury; and (4) the difficulty of identifying damages and apportioning them among direct and indirect victims so as to avoid duplicative recoveries. Gatt, 711 F.3d at 78 (citation omitted). The Supreme Court has recently discussed these factors in the context of the Lanham Act, noting that these latter two factors are “problematic” and that “potential difficulty in ascertaining and apportioning damages is not ... an independent basis for denying standing where it is adequately alleged that a.defendant’s conduct has proximately injured an interest of the plaintiffs that the statute protects” and other relief may be available to plaintiff. Lexmark, 134 S.Ct. at 1392. With respect to the first factor, “[d]irectness in the antitrust context means close in the chain of causation.” Gatt, 711 F.3d at 78 (citation omitted). This is essentially a proximate cause analysis and asks “whether the harm alleged has a sufficiently close connection to the conduct the statute prohibits.” Lexmark, 134 S.Ct. at 1390; accord Lotes Co., Ltd. v. Hon Hai Precision Indus. Co., Ltd., 753 F.3d 395, 411-12, 2014 WL 2487188, at *14 (2d Cir. June 4, 2014). As such, it is a threshold requirement which every plaintiff must meet. Lexmark, 134 S.Ct. at 1392. DNAML has alleged an injury that was proximately caused by the violation of the antitrust laws. It is true that the immediate victims of the defendants’ price-fixing conspiracy were consumers. Many paid higher prices for the Publishers’ e-books because of the conspiracy described in the complaint. But, retailers were directly impacted as well; their injuries were not “too remote” from the defendants’ unlawful conduct. Id. at 1390. Defendants removed pricing discretion from retailers; that directly injured retailers engaged in discounting, as they were no longer able to compete on price. These retailers are indisputably “competitors in the market in which trade was restrained.” Associated Gen., 459 U.S. at 539, 103 S.Ct. 897. As to the second factor, retailers like DNAML are “an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement.” Here, DNAML seeks recovery for lost profits that resulted from defendants’ conspiracy to end retail price competition for e-books; its interests align with the public’s interest in promoting price competition. It is true, as defendants note, that the DOJ, the States, and a class of consumers have already brought suit to recover for overcharges to e-book purchasers, but none has sought recovery for injury to retailers. A retailer’s lost profits are wholly distinct from consumer overcharges, and to “[d]eny[ ] the plaintiff[ ] a remedy in favor of a suit by [consumers] would thus be likely to leave a significant antitrust violation ... unremedied.” In re DDAVP, 585 F.3d at 689 (citation omitted). In any event, “ ‘inferiority’ to other potential plaintiffs can be relevant, but is not dispos-itive.” Id. (citation omitted). Finally, taking the final two factors together, DNAML’s alleged injury — the demise of its business — has speculative, as well as quantifiable, components. Lost profits are quite speculative, as DNAML had only just entered the market and it will be difficult to determine what market share, if any,' DNAML would have won from the “large international conglomerates” that DNAML alleges occupy the retail market. Moreover, DNAML continued to explore entry into this market for roughly a year after the adoption of the agency model, which suggests that DNAML will find it difficult to show that the adoption of the agency model, and its elimination of retail price competition, was the cause of the harm DNAML has identified in its complaint. It appears that Apple’s revision of its App Store Policies in 2011 was the more immediate and direct cause of harm to DNAML’s business plans. Given these facts, DNAML’s ability to show reasonably certain lost profits due to the conspiracy may be challenging in the extreme. But, while DNAML will not be able to obtain damages “without evidence of injury proximately caused by [the defendants’ antitrust violation, it] is entitled to a chance to prove its case.” Lexmark, 134 S.Ct. at 1395.

1710222-17107

FAIRCHILD, Senior Circuit Judge. Appellants Chrysler Marine Corporation and Chrysler Corporation (“Chrysler” or “the Company”) appeal from the district court judgment enforcing an arbitrator’s award and awarding attorney’s fees to ap-pellees International Union, Allied Industrial Workers of America and Local 879 (“the Union”). Jurisdiction was based on § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185. For the reasons set forth below, we will Affirm the enforcement of the arbitrator’s award, and Reverse the grant of attorneys’ fees. FACTS In May, 1983, Chrysler and the Union began to negotiate a successor agreement to that covering the Company’s Hartford and Beaver Dam, Wisconsin, plants, which was due to expire on June 30, 1983. Because of rumors that. Chrysler was considering closing or selling these plants, the Union twice proposed severance pay plans, both of which Chrysler rejected. In agreeing to a new contract, the Union accepted a company letter of intent stating that “in the event the Company should close all of its Hartford and/or Beaver Dam Plants, the Company will provide the Union six (6) months advance notice of such closing and will negotiate with the Union regarding a Severance Pay Plan.” In August, 1983, Chrysler began to negotiate with Bayliner Corporation for the sale of the Hartford and Beaver Dam plants. Bayliner agreed to acquire Chrysler’s assets, to operate the Hartford plant for one year, excluding a reasonable transition period, and to operate the Beaver Dam plant for at least two months. The sale was originally scheduled to become effective December 30, 1983. The agreement was reached December 8,1983 and the sale was first made known to the Union and the employees at that time. On December 12, 1983, the Union filed a grievance alleging that the sale was a closing which violated the June 30 agreement because six months’ notice had not been given. It requested that the closing be delayed for at least six months for negotiation of a severance pay plan. Chrysler denied the grievance, contending that the sale was not a closing, and the issue was ultimately submitted to arbitration. The Union immediately brought suit to enjoin the sale pending arbitration. The district court granted a preliminary injunction, but on January 9, 1984, this court granted a stay, finding that the risk of irreparable injury weighed most heavily against Chrysler. The preliminary injunction was reversed May 31, 1984, 735 F.2d 1367. Both orders were unpublished. On January 11, 1984, Chrysler informed all employees at both plants that effective January 13, 1984, they would no longer be employed. Ownership of the Hartford assets was transferred to the buyer on January 13, 1984, but the Beaver Dam assets were never sold, and operations there continued without interruption. Although Bayliner did not guarantee that the Company’s employees would be retained, as of February 6, 1984, 223 of 272 former Chrysler employees were employed at the Hartford plant. The parties then proceeded with arbitration as provided by their collective bargaining agreement. On May 30, 1984, the arbitrator issued an award. The arbitrator found that the term “close” applied to the sale of the Hartford operation and that Chrysler had therefore obligated itself to give six months’ notice of the sale, and to negotiate a severance pay plan. He ordered several adjustments, affecting groups of employees, consistent with the theory that the sale could not have occurred less than six months after December 8, 1983, the date the employees learned of it. These adjustments are not in issue on this appeal. He also directed the parties to attempt to agree upon a severance pay plan comparable to plans in comparable relationships. He stated his opinion “that had such negotiations occurred prior to the effectuation of the sale in question, the Union would have been in an advantageous bargaining position, since the Company would probably have sought its acquiescence to a waiver of the six months’ notice requirement which would have enabled it to. meet the purchaser’s demands with respect to the timing of the transaction. Based upon these considerations, it is the undersigned’s opinion that the Union would in all likelihood have been able to negotiate a severance pay plan which provided benefits comparable with the more generous of such plans in existence at that time in comparable employee-union relationships.” The parties were given 90 days in which to negotiate, after which the proceeding would be reconvened at the request of either party. Chrysler brought an action seeking to set aside the award. The par ties did not negotiate, and the arbitrator reconvened the proceeding. A supplemental award was issued on March 15, 1985, including, among other things, a severance pay plan for all former Chrysler employees. The arbitrator reviewed severance pay plans collectively bargained in three plants neighboring Chrysler’s. Based upon them, he termed the plan awarded “a fair and generally comparable severance pay plan.” The arbitrator stated that because it was impossible to determine with any certainty the Union’s and the employees’ damages as a result of Chrysler’s violation of the contract, he had attempted in the first award to provide an incentive for the Company to reach an agreement with the Union. That having failed, imposition of a severance pay plan is “the most viable way of affording the employees whose contractual rights were violated meaningful relief, and of imposing upon the Company obligations which in any way coincide with the obligations it had at the time of the contractual violation.” Supplemental Award at 14. The arbitrator also observed that no lesser or more traditional remedy, such as a cease and desist order or a direction to bargain, could be effective because the parties no longer had a bargaining relationship and Chrysler had no incentive to reach an agreement with the Union. Even employees hired by Bay-liner were to receive severance pay, because when Chrysler ceased operations, its employees had no rights to employment with the buyer. Moreover, while one purpose of severance pay is to provide income between jobs, it also compensates employees for their service and for termination for reasons unrelated to their conduct. The district court ordered enforcement of both awards. It found that the arbitrator’s construction of the contract did not manifestly ignore the agreement, and that the creation of the severance plan was within the scope of his remedial powers. The court also awarded attorney’s fees incurred by the Union to enforce the award. ARBITRATION AWARD This court has repeatedly stressed that review of an arbitration award is extremely limited. See International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW and Local 449 v. Keystone Consolidated Industries, Inc., 782 F.2d 1400, 1402 (7th Cir.1986) and cases cited therein. So long as the arbitrator interpreted the contract in making the award, even if arguably incorrectly, it must be upheld. Ethyl Corp. v. United Steelworkers of America, 768 F.2d 180, 187 (7th Cir.1985). An award may be overturned only if the arbitrator must have based his. award on his own personal notions of right and wrong, for only then does the award fail “to draw its essence from the collective bargaining agreement” as required by the Supreme Court in United Steelworkers v. Enterprise Wheel,- 363 U.S. 593, 597, 80 S.Ct. 1353, 1361, 4 L.Ed.2d 1424, and by ourselves in Ethyl Corporation, 768 F.2d at 184-85; Jones Dairy Farm v. Local No. P-1236, United Food and Commercial Workers International Union, 760 F.2d 173, 176 (7th Cir.1985), certiorari denied, — U.S.-, 106 S.Ct. 136, 88 L.Ed.2d 112; Miller Brewing Co. v. Brewery Workers Local Union No. 9, 739 F.2d 1159, 1162 (7th Cir.1984), certiorari denied, 469 U.S. 1160, 105 S.Ct. 912, 83 L.Ed.2d 926.... This low standard of review is essential to prevent a “judicialization” of the arbitration process. Ethyl Corporation, 768 F.2d at 184. Arbitration is an alternative to the judicial resolution of disputes, and an extremely low standard of review is necessary to prevent arbitration from becoming merely an added preliminary step to judicial resolution rather than a true alternative. Id. The parties have bargained ex ante for arbitration as an alternative means of dispute resolution, and ex post they must abide by this bargain. Camacho [v. Ritz-Carlton Water Tower, 786 F.2d 242, 244 (7th Cir.1986)]. E.I. Dupont de Nemours v. Grasselli Employees Independent Ass’n of East Chicago, Inc., 790 F.2d 611, 614 (7th Cir.1986). Chrysler does not challenge the arbitrator’s construction of the collective bargaining agreement nor his finding of a breach by failing to give the Union six months’ notice of the sale and failing to negotiate regarding a severance pay plan. Instead, it argues that the remedy awarded exceeds the authority granted to the arbitrator by the contract. The arbitration clause provides that: [t]he decision of the arbitrator shall be final, and binding on all parties. The arbitrator shall have authority only to decide questions as to the meaning and application of the terms of this Agreement, and such arbitrator shall have no authority to change existing rate ranges, incentive base rates or day work rates, for any labor grade or to add, delete or modify any of the terms of this Agreement. Chrysler contends that by creating the duty “out of whole cloth” to provide severance pay, the arbitrator modified the terms of the agreement by imposing the obligation to come to terms, where only negotiations had been bargained for. It also argues that the arbitrator’s reasoning was faulty, and that the award to employees who were hired by Bayliner exceeds his remedial powers by creating a windfall and contradicting the parties’ bargaining history- We disagree. When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true when it comes to formulating remedies. There is the need for flexibility in meeting a wide variety of situations. The draftsmen may never have thought of what specific remedy should be awarded to meet the particular contingency. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960); see Miller Brewing Co. v. Brewery Workers Local Union No. 9, 739 F.2d 1159, 1163 (7th Cir.1984) (“Collective bargaining agreements often say little or nothing about the arbitrator’s remedial powers; yet it cannot be that he has none; and since he derives all his powers from the agreement, the agreement must implicitly grant him remedial powers when there is no explicit grant.”). Concerning the breadth of such implication, we have said, In these circumstances we must consider whether it is at all plausible to suppose that the remedy he devised was within the contemplation of the parties and hence implicitly authorized by the agreement. Only if we think it clearly was not may we reverse. Id. at 1164. See also United Elec., Radio and Mach. Workers of Am., Local 1139 v. Litton Microwave Cooking Products, 728 F.2d 970, 972 (8th Cir.1984) (en banc); Desert Palace, Inc. v. Local Joint Executive Bd. of Las Vegas, 679 F.2d 789, 793 (9th Cir.1982) (as long as solution is within general framework of agreement, arbitrator may decide what parties would have agreed had they foreseen the dispute). Of course, if Chrysler had given six months’ notice of its sale and had negotiated in good faith, but unsuccessfully, for a severance pay plan, no plan could have been imposed upon it under the collective bargaining agreement. Here, however, Chrysler has made it impossible to determine with certainty what would have been the result of negotiation either if six months’ notice had been given, or, as seems more likely under the circumstances, Chrysler had also sought a Union waiver of the full six months’ notice period. “We cannot say that the arbitrator clearly exceeded his authority or violated the collective-bargaining agreement, when he resolved doubts as to the remedy against the party that had broken its promise.” United Electric, 728 F.2d at 972. The arbitrator carried out what appears to be a careful and reasonable determination of a plan which would probably have resulted from negotiation under the latter assumption. Expressly conferring on the arbitrator, as the agreement does, the authority to decide the meaning and applica tion of the agreement, necessarily implies the authority to find that there has been a breach of the agreement as interpreted, and, we think, further implies the authority to prescribe a remedy which can be said reasonably to cure the breach. Thus the award was within the range of remedial authority which can reasonably be said to be implied by the contract. Other remedies did not appear feasible, and Chrysler proposes none; indeed, its position leads to the conclusion that the arbitrator was helpless to provide redress for the Company’s breach, a conclusion not mandated by the agreement or by common sense. Cf. Grigoleit Co. v. United Rubber, Cork, Linoleum and Plastic Workers of Am., Local No. 270, 769 F.2d 434, 440-41 (7th Cir.1985); United Elec. Radio & Machine Workers of Am. v. Honeywell, Inc., 522 F.2d 1221, 1226 (7th Cir.1975) (arbitrators have flexibility in formulating remedies); Mogge v. District 8 Int’l Ass’n of Machinists, 454 F.2d 510, 514 (7th Cir.1971) (where contract is not explicit concerning the proper remedy, arbitrator has wide latitude in fashioning appropriate remedy). Chrysler challenges the arbitrator’s assumption that the contractual entitlement to six months’ notice of the sale gave the Union bargaining power by withholding consent to a shortening of the notice period. In this challenge, Chrysler relies on this court’s stay and reversal of a preliminary injunction against proceeding with the sale in January, 1984 after only one month’s notice. This argument rests on an inapt comparison between the premises of the court’s decision and those of the arbitrator’s. This dispute was whether the “sale” was a “closing” under the collective bargaining agreement. That issue had not been resolved when this court decided that Chrysler’s risk of irreparable hardship if it lost the sale opportunity and ultimately won on the merits was much greater than the Union’s risk if the sale occurred and it ultimately won on the merits. Before the arbitrator prescribed the remedy, however, he had reached the merits and determined the Company’s contractual obligation not to sell without six months’ notice. This court’s two unpublished orders did not, of course, address the merits of the dispute, nor even assess the probability of success. They were plainly based on this court’s evaluation of the respective risks of irreparable injury. The stay order (incorporated also in the final order) suggests that this court perceived an award of (if not agreement on) a severance pay plan as at least a very probable outcome, for it said, at page 5: Finally, as we previously stated, if Chrysler is not permitted to complete the sale, there is a substantial likelihood that Chrysler will lose large amounts of money greatly in excess of the $1,000 injunction bond filed by the union in this case. After all, in a large commercial transaction such as this, time is sensitive and of the essence. The union members face no such dilemma. If the sale is completed, the Union still has the opportunity to arbitrate severance pay under the collective bargaining agreement against a solvent Chrysler. If the arbitrator finds an award of severance pay to be proper in this instance, then every union member not hired by Bayliner will be entitled to such pay. The arbitrator’s award of severance pay will be in the form of money damages, easily calculable, and within the power of the panel to award. The Union simply cannot complain of irreparable harm if it is remitted to this remedy. Moreover, arbitration may be avoidable since Chrysler has offered to pay in settlement the severance pay proposed by the Union immediately prior to the time the labor contract was signed. Chrysler further points out that most of the affected employees were hired by Bay-liner, the purchaser of the Hartford plant. Chrysler seems to contend that even if a severance pay plan is an appropriate remedy, it “must be limited to former hourly Chrysler employees who, despite reasonable efforts, have not secured other employment.” It relies on two decisions which held that pension administrators’ interpretation of employers’ severance pay policies so as not to afford benefits to persons employed by a successor employer did not violate ERISA. Sly v. P.R. Malloy & Co., Inc., 712 F.2d 1209 (7th Cir.1983) and Jung v. FMC Corp., 755 F.2d 708 (9th Cir.1985). These cases involved different situations and have little pertinence here. ATTORNEY’S FEES

1369179-21802

CUDAHY, Circuit Judge. Plaintiffs are 59 former employees of Edgcomb Metals Company’s (“Edgcomb”) Indianapolis plant. In 1980 they accompanied their union, defendant United Steelworkers of America (the “Union”), in a strike against Edgcomb’s seven plants. The strike was unsuccessful. Edgcomb hired replacement workers and forced the Union into concessions. Plaintiffs lost their jobs. After the strike plaintiffs filed suit against the Union, alleging, inter alia, that the Union had breached its duty of fair representation by misrepresenting whether plaintiffs could lose their jobs by striking and whether the company could retain replacements hired during the strike. Plaintiffs also alleged that the Union had committed an unfair labor practice and breached its duty of fair representation by bargaining to impasse over the inclusion of two Edgcomb plants in North Carolina in the union-employer “master” collective bargaining agreement. The district court granted the Union summary judgment on the misrepresentation issue and found for the Union after a bench trial on the bargaining to impasse issue. We affirm. In 1978 Edgcomb acquired five steel service centers from Jones & Laughlin Steel Company, including a service center in Indianapolis, Indiana. The Union was the collective bargaining representative for these plants. At the time of Edgcomb’s acquisition, the five plants were covered under a single “master” collective bargaining agreement between the Union and Jones & Laughlin. Edgcomb agreed to honor this contract until it expired in October 1980. Edgcomb also operated two plants in North Carolina that were not covered under the master contract. Elections at these plants in 1979 made the Union the bargaining agent for these plants as well. In its initial negotiations with Edgcomb regarding a new contract for the five former Jones & Laughlin plants, the Union sought to include the North Carolina plants under the same master contract. Edgcomb, by contrast, not only resisted including the North Carolina plants in a master contract, but sought to eliminate the master contract entirely and instead negotiate separate contracts for the individual plants. Several meetings between the Union and Edgcomb failed to resolve differences over the scope of the contract. Additionally, the company told the Union it would no longer agree to cost of living allowances. In September 1980, the Union polled its members, who voted to strike if a collective bargaining agreement was not obtained by the expiration date. On September 30, 1980, the day before the termination of the Jones & Laughlin contract, the Union advanced a proposal which stated, inter alia, The Union withdraws any proposals or implied suggestions that the Greensboro and/or the Charlotte, North Carolina operations be covered in , any way by the renewal of the Master Agreement. Nor is the Union requiring as a basis for a settlement of the Master Agreement that a separate Agreement be reached at either the Company’s Greensboro and/or Charlotte, North Carolina Operations. Union’s Contract Offer to Edgcomb, Sept. 30, 1980, Appellee’s Supplemental Appendix at 1. Edgcomb rejected this offer and on October 1, 1980, the Union commenced a strike at all seven plants. On that day, Edgcomb sent the strikers a letter indicating that it had the right to hire and retain replacements. Soon afterwards, Edgcomb in fact did hire replacements for the Indianapolis plant. During the course of the strike numerous offers were considered and rejected by both sides. The Union sent many letters to its members exhorting them to stand firm. In December 1980, an Edgcomb vice-president sent strikers at the five former Jones & Laughlin plants a letter stating that the Union had rejected an Edgcomb offer, among other reasons, because “any settlement [of the strike at the five Jones & Laughlin plants] was dependent upon a prior settlement of contracts for employees at Edgcomb’s Charlotte and Greensboro Plants.” Hugh H. Williamson III, Letter to Edgcomb Employees, Appellants’ Appendix 2 at 27. The Union demanded that Edgcomb fire the replacement workers while Edgcomb insisted they be retained. In February 1981, Edgcomb stated that it was making a permanent reduction in force and that strikers returning to work would have to accept the jobs available. Additionally, the company stated that strikers could not use their seniority to bump new employees except in the event of a further reduction in force. The Union rejected these terms. On March 4 and 5, 1981, 23 strikers at the Indianapolis plant crossed the picket line, leaving 67 employees remaining on strike. Soon after, the Union officials met and concluded that the strike had failed. On March 17, 1981, the Union and Edgcomb agreed upon separate but identical contracts for the five Jones & Laughlin plants. The replacement employees were to keep their jobs. Strikers who unconditionally offered to return were to be placed on a recall list. Previous seniority was to mean nothing as to recall unless a layoff occurred after the settlement. In July 1981, plaintiffs filed a six-count suit against the Union. They claimed the Union: 1) misrepresented the company’s right to hire permanent replacements during the strike, 2) misrepresented available strike fund benefits, 3) failed to accept an offer to extend the contract term for 90 days before striking, 4) bargained to impasse over a nonmandatory issue — including the two North Carolina plants in the master contract, 5) influenced favored workers to cross the picket line and return to work, and 6) improperly agreed to methods of recall following the strike. The Union moved for summary judgment on all six counts. The court granted the Union’s motion on the first three counts and found for the Union after a bench trial on the remaining three issues. Plaintiffs appeal only the issues whether the Union misrepresented the company’s right to hire replacements and whether the Union bargained to impasse. I. Misrepresentation Plaintiffs claim that, when they first received Edgcomb’s letter announcing its right and intention to hire replacements, they contacted Union officials who dismissed the letter as “propaganda,” “garbage” and “lies” and urged members to “pay no attention.” Additionally they note that, in their affidavits, two Union officials admitted never warning members that striking could result in the loss of their jobs. Thus, before the trial court, plaintiffs charged that the Union both actively misled and misinformed members regarding the risks of striking and also that it failed to apprise members of the risks of striking. This, they argued, was a breach of the Union’s duty of fair representation under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1982). After reviewing over 1,000 pages of depositions and affidavits, the court concluded that the charge of active misrepresentation “seriously exaggerate^] the union’s conduct as shown by all the facts in the record.” Swatts v. United Steelworkers of America, 585 F.Supp. 326, 331 (S.D.Ind.1984). The court noted that only two affidavits claimed active misrepresentations of whether the company could hire permanent replacements. By contrast, 45 affidavits stated that the Union had never said the company could not hire replacements but had only stated that it was likely that such replacements would be dismissed upon the settlement of the strike. This, the court found, was reasonable in light of the Union leaders’ prior experience. As no court had previously recognized a duty upon a union to explain to members the general hazards of striking and as the great bulk of evidence showed that the Union had not actively misrepresented issues in the strike, the court found summary judgment appropriate. On appeal, plaintiffs contend that summary judgment was improper. They repeat that they “were consistently reassured by Union representatives Kizzee, Heineman, and Sirolli that no job loss was possible,” Appellants’ Brief at 11, and that the “Union deliberately lied to the strikers, telling them over and over that all company statements concerning permanent replacements were untrue.” Id. at 12. They note that “Union representative Ray Kizzee and Local President George Heineman both admit that they did not inform plaintiffs that the strike might cost them their jobs.” Id. This conduct, the plaintiffs argue, amounts to a breach of the Union’s duty of fair representation. “A breach of the statutory duty of fair representation occurs only when a union’s conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith.” Vaca v. Sipes, 386 U.S. 171, 190, 87 S.Ct. 903, 916, 17 L.Ed.2d 842 (1967). This circuit has interpreted this test to mean, at least in cases arising out of a union’s administration of the grievance system, that “courts may enforce the duty of a union to fairly represent an employee only when union conduct breaching that duty is intentional, invidious, and directed at the employee.” Hoffman v. Lonza, 658 F.2d 519, 520 (7th Cir.1981). See Dober v. Roadway Express, Inc., 707 F.2d 292, 294 (7th Cir.1983); Superczynski v. P.T.O. Services, Inc., 706 F.2d 200, 202 (7th Cir.1983), Cannon v. Consolidated Freightways Corp., 524 F.2d 290, 293 (7th Cir.1975). Because of the limited nature of court intervention in this area, the Supreme Court has noted that in interpreting what conduct is arbitrary “[a] wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.” Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S.Ct. 681, 686, 97 L.Ed. 1048 (1953). “Mere negligence, poor judgment or ineptitude are insufficient to establish a breach of the duty of fair representation.” NLRB v. American Postal Workers Union, 618 F.2d 1249, 1255 (8th Cir.1980). Cases involving the duty of fair representation most often pertain to the union’s representation of employees in its dealings with the employer. Some courts, however, have found the requisite arbitrary and intentional conduct when a union has made “affirmative misrepresentations” in its dealings with members. Cf. Schultz v. Owens-Illinois Co., 696 F.2d 505, 516 n. 15 (7th Cir.1982). Thus, in Anderson v. United Paperworkers International Union, 641 F.2d 574 (8th Cir.1981), the Eighth Circuit found that a suit could lie for breach of the duty of fair representation when a union leader falsely claimed that the collective bargaining agreement established a security fund to protect workers in the event of the company’s bankruptcy, and employees relied on that statement in ratifying the agreement. Plaintiffs point to Warehouse Union Local 860 v. NLRB, 652 F.2d 1022 (D.C.Cir.1981), as an instance in which mere failure to warn — as opposed to active misrepresentation — was sufficient to establish a breach of the duty of fair representation. There, clerical workers demanded a 70-cent wage increase. The employer told union representatives that if workers persisted in this demand, the clerical unit would be eliminated. The union never informed members of the employer’s stance. The workers persisted with their strike and lost their jobs. Warehouse Union v. NLRB is readily distinguishable from the facts at hand. There, the union representative had privileged access to company information not available to the general membership. Here, the Edgeomb letter of October 1, stating that replacements would be hired, informed workers of the company position. The information not disseminated in Warehouse Union was specific to the clerical workers’ particular wage demand. Here, the crux of plaintiffs’ complaint concerns the Union’s failure to give them information that was readily available to any member of the general public — that strikers sometimes lose their jobs because employers find replacements to fill their slots. Moreover, in this case there is no evidence of the kind of intentional, invidious, affirmative misstatement that would seem to be consistent with what this circuit has required before finding a breach of the duty of fair representation in the context of a union’s handling of grievances. Cf. Hoffman v. Lonza, 658 F.2d at 523-25 (Cudahy, J., concurring). Particularly, because the information in question was widely known, the standards applied to the Union’s strike-related communications should not be more demanding than standards applied to a union acting as the exclusive representative of workers in a grievance procedure. And as the district court noted, the statements complained of were merely opinions which had “reasonable support in the experience of union leaders.” Swatts v. United Steelworkers, 585 F.Supp. at 332 (1984). Two union members complained of misstatements, but their testimony was not supported by 45 fellow union members who attested that no active misrepresentation occurred. See Anderson v. Liberty Lobby, Inc., — U.S. —, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (“the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact”) (emphasis original). Additionally, even assuming that some misstatement might have occurred, every inaccuracy should not form the basis of a federal suit. A strike often presents unique pressures. The atmosphere may be tense, charged and confused. The situation is intensely adversary. Decisions and statements are sometimes made in haste, under pressure and in the belief that the other side is disseminating manipulated or distorted information to which a response is required. Union leaders, in exhorting the membership, may voice opinions that later prove inaccurate, or make claims that turn out to be hyperbole. So long as such statements are not intentionally misleading and are not of a nature to be reasonably relied upon by the membership — rather than discounted as partisan exhortation delivered under conditions of conflict — they may not rise to the level of invidious actions barred by the duty of fair representation. To conclude otherwise would have a chilling effect on the right to strike itself by instilling a fear of unjustifiable lawsuits. We emphasize that we do not condone fabrications designed to mislead the membership. But there must be a demanding standard for measuring such violations. Nor is plaintiffs’ demand reasonable that union officials be required to warn of the dangers of striking. As the district court noted, what plaintiffs seek is a right similar to the “ ‘Miranda’ rights of accused defendants or the right of medical patients to full information before consent.” Swatts v. United Steelworkers, 585 F.Supp. at 332 (1984). No court has recognized such a duty. On the basis of these facts, then, we agree with the district court’s finding that summary judgment was appropriate. II. Bargaining to Impasse Plaintiffs contend that one cause for the strike was the Union’s demand that Edgcomb negotiate with the seven service centers as a unit and that this was an unfair labor practice and a breach of the duty of fair representation. In NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958), the Supreme Court held that unions and employers had an obligation to bargain with each other in good faith with respect to “wages, hours, and other terms and conditions of employment____” The duty is limited to those subjects, and within that area neither party is legally obligated to yield. As to other matters, however, each party is free to bargain or not to bargain, and to agree or not to agree. Id. at 349, 78 S.Ct. at 722 (citation omitted). The Court added, “it does not follow that, because the company may propose these clauses, it can lawfully insist upon them as a condition to any agreement.” Id. The insistence on a nonmandatory subject constitutes an unfair labor practice. The size of the bargaining unit has frequently been found to be such a nonmandatory bargaining subject. See National Fresh Fruit & Vegetable Co. v. NLRB, 565 F.2d 1331, 1334 (5th Cir.1978); Newport News Shipbuilding & Dry Dock Co. v. NLRB, 602 F.2d 73, 76 (4th Cir.1979); Newspaper Printing Corp. v. NLRB, 625 F.2d 956, 963 (10th Cir.1980), cert. denied, 450 U.S. 911, 101 S.Ct. 1349, 67 L.Ed.2d 335 (1981). However, the fact that a union cannot insist upon a nonmandatory bargaining subject as a sine qua non for its acceptance of a collective bargaining agreement does not mean that it cannot pursue a nonmandatory bargaining subject at all. As the District of Columbia Circuit explained in Oil, Chemical and Atomic Workers International Union, Local 3-89 v. NLRB, 405 F.2d 1111 (D.C.Cir.1968): What is forbidden is such insistence on a nonmandatory proposal that a failure to bargain on the mandatory subjects results. Borg-Warner and its progeny are concerned not with nonmandatory proposals which are included to enhance the attractiveness of offers made on mandatory subjects. Nor do they forbid ... packages and proposals which economically augment the mandatory proposals in an effort to secure acceptance of non-mandatory ones. This is the very fabric of effective collective bargaining. This court has previously recognized that a party “ha[s] a right to present, even repeatedly, a demand concerning a non-mandatory subject of bargaining, so long as it [does] not posit the matter as an ultimatum.” What the Act prohibits is a party’s insistence to the point of impasse upon a nonmandatory proposal, so that acceptance of the proposal becomes “a condition precedent to accepting any collective-bargaining contract.” Id. at 1117 (citations and footnote omitted). Following a bench trial the district court found as a fact that the Union did not insist on the inclusion of the two North Carolina plants as a prerequisite to signing the collective bargaining agreement. As noted, the day before the strike the Union submitted a proposal to Edgcomb which stated: The Union withdraws any proposals or implied suggestions that the Greensboro and/or the Charlotte, North Carolina operations be covered in any way by the renewal of the Master Agreement. Nor is the Union requiring as a basis for a settlement of the Master Agreement that a separate Agreement be reached at either the Company’s Greensboro and/or Charlotte, North Carolina Operations. Union’s Contract Offer to Edgcomb, Sept. 30, 1980, Appellee’s Supplemental Appendix at 1. The district court noted: “At the very first negotiating session following the [beginning of the] strike the Union both volunteered and also answered in response to a direct question from the Edgcomb negotiator that the North Carolina plants were not an issue.” Swatts v. United Steelworkers of America, mem. op. at 9 (August 30, 1985). Moreover, Edgcomb’s attorney and principal negotiator stated in his deposition that after September 30, 1981, there was never a demand that the North Carolina negotiations be bound into negotiations with the other five plants. Although plaintiffs point to the December 5 letter from Edgcomb’s vice-president stating that the Union insisted on resolution of the North Carolina contracts as a condition for ending the strike, the district court noted that this vice-president was not present during negotiations. The vice-pres ident’s letter contained certain false statements and omitted facts, for example, that Edgcomb was trying to eliminate cost of living allowances. Additionally, this vice-president certainly had a motive to prejudice Union members against their Union. Plaintiffs also based their bargaining to impasse charge on the fact that representatives of the North Carolina locals sat in on the negotiations for the other five plants, and on the numerous references in the strike bulletins that all seven units were hanging together. The district court concluded that this only demonstrated a coordinated bargaining strategy, which is permissible. See NLRB v. Indiana & Michigan Electric Co., 599 F.2d 185 (7th Cir.1979), cert. denied, 444 U.S. 1014, 100 S.Ct. 663, 62 L.Ed.2d 643 (1980). After reviewing the evidence, the district court concluded, “In the final analysis all that we have in this case are recriminations over a strike that failed.” Swatts v. United Steelworkers of America, mem. op. at 11 (Aug. 30, 1985). The district court’s findings of fact are subject to review under the clearly erroneous standard. “If the district court’s account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.” Anderson v. City of Bessemer City, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985). On appeal, plaintiffs contend the court was clearly erroneous because the evidence showed “an open, intentional decision by the Union to favor its members employed at the North Carolina facilities while risking the jobs of members covered by the Master Agreement.” Appellants’ Brief at 25. In addition to committing an unfair labor practice by bargaining to impasse, plaintiffs argue, the Union violated the intentional, invidious standard enunciated in Hoffman v. Lonza, 658 F.2d 519. Although bargaining to impasse in flagrant disregard of union members’ interests might in some circumstances be both a breach of the duty of fair representation and an unfair labor practice, we agree with the district court that the facts here show neither a bargaining to impasse nor an intentional and invidious disregard of workers’ rights.

5716979-8282

ORDER DENYING CERTIFICATES OF APPEALABILITY JEROME A. HOLMES, Circuit Judge. Johnnie and Peggy Franklin-El, federal prisoners proceeding pro se, each seek a certificate of appealability (“COA”) to challenge the district court’s dismissal of their motions to vacate, set aside, or correct their sentences pursuant to 28 U.S.C. § 2255. Mr. Franklin-El also moves for leave to proceed in forma pauperis on appeal. Exercising jurisdiction under 28 U.S.C. §§ 1291 and 2253(a), we deny Mr. and Ms. Franklin-El’s applications for COAs and dismiss their appeals because neither party makes a substantial showing of the denial of a constitutional right. We also deny Mr. Franklin-El’s motion to proceed informa pauperis. BACKGROUND Mr. Franklin-El was convicted of seventeen counts of health care fraud and one count of obstruction of justice. See R:10-3079, Vol. I, at 68 (J.Crim. Case, filed Aug. 21, 2007). Ms. Franklin-El was convicted of 52 counts of health care fraud and one count of obstruction of justice. See R:10-3084, Vol. I, at 69 (J.Crim. Case, filed Aug. 21, 2007). On direct appeal, this court affirmed Mr. Franklin-El’s health care fraud convictions, but reversed his conviction for obstruction of justice. United States v. Franklin-El, 555 F.3d 1115 (10th Cir.2009). We affirmed all of Ms. Franklin-El’s convictions. United States v. Franklin-El, 554 F.3d 903 (10th Cir.2009), cert. denied, — U.S.-, 129 S.Ct. 2813, 174 L.Ed.2d 307 (2009). The Franklin-Els filed motions to vacate, set aside, or correct their sentences pursuant to 28 U.S.C. § 2255 in the United States District Court for the District of Kansas. The district court dismissed the Franklin-Els’ habeas petitions, holding that “[t]he files and records clearly demonstrate that defendants are entitled to no relief.” R:10-3079, Vol. I, at 99 (Dist. Ct. Order, filed Mar. 16, 2010); R:10-3084, Vol. I, at 100 (same). DISCUSSION A COA is a jurisdictional prerequisite to this court’s review of a habeas corpus petition. See 28 U.S.C. § 2253(c); Allen v. Zavaras, 568 F.3d 1197, 1199 (10th Cir.2009) (citing Miller-El v. Cockrell, 537 U.S. 322, 336, 123 S.Ct. 1029, 154 L.Ed.2d 931 (2003)). “We will issue a COA ‘only if the applicant has made a substantial showing of the denial of a constitutional right.’ ” Allen, 568 F.3d at 1199 (quoting 28 U.S.C. § 2253(c)(2)). To make such a showing, an applicant must demonstrate “that reasonable jurists could debate whether ... the petition should have been resolved in a different manner or that the issues presented were adequate to deserve encouragement to proceed further.” Id. (quoting Slack v. McDaniel, 529 U.S. 473, 484, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000)) (internal quotation marks omitted). In determining whether to grant a COA, we need not engage in a “full consideration of the factual or legal bases adduced in support of the claims,” Miller-El, 537 U.S. at 336, 123 S.Ct. 1029; instead, we undertake “a preliminary, though not definitive, consideration of the [legal] framework” applicable to each claim, id. at 338, 123 S.Ct. 1029. Although an applicant need not demonstrate that his appeal will succeed, he “must prove ‘something more than the absence of frivolity’ or the existence of mere ‘good faith’ ” to obtain a COA. Id. at 338, 123 S.Ct. 1029 (quoting Barefoot v. Estelle, 463 U.S. 880, 893, 103 S.Ct. 3383, 77 L.Ed.2d 1090 (1983)). Where a “COA application rests on claims of ineffective assistance of counsel, in order to determine if [a movant] can make a substantial showing of the denial of a constitutional right we must undertake a preliminary analysis ... in light of the two-part test for ineffective assistance” articulated in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). United States v. Harris, 368 Fed.Appx. 866, 868 (10th Cir.2010), cert. dismissed, — U.S.-, 131 S.Ct. 455, 177 L.Ed.2d 1149 (2010). “Under Strickland, [a movant] must show that counsel’s performance fell below an objective standard of reasonableness as measured against prevailing professional norms, and he must show that there is a reasonable probability that the outcome would have been different but for counsel’s inadequate performance.” Sandoval v. Ulibarri, 548 F.3d 902, 909 (10th Cir.2008) (citing Strickland, 466 U.S. at 688, 694, 104 S.Ct. 2052), cert. denied, — U.S.-, 130 S.Ct. 133, 175 L.Ed.2d 87 (2009). Mr. and Ms. Franklin-El seek COAs on their claims that their trial counsel was ineffective for failing to object to the district court’s allegedly erroneous calculation of their offense levels. In addition, Mr. Franklin-El claims that his obstruction of justice sentencing enhancement should have been removed after this court reversed his conviction for obstruction of justice on direct appeal, and Ms. Franklin-El asserts an ineffective assistance of counsel claim based on religious discrimination. I. Erroneous Offense Level Calculation Claims Mr. and Ms. Franklin-El each assert ineffective assistance of counsel claims for trial counsel’s failure to object to the district court’s allegedly erroneous calculation of their offense levels. Mr. and Ms. Franklin-El each claim that the district court included sentencing enhancements for vulnerable victim, pursuant to U.S. Sentencing Guidelines Manual (“U.S.S.G.”) § 3A1.1, and abuse of a position of trust, pursuant to U.S.S.G. § 3B1.3, despite ruling that it would not do so. The FranklinEls are mistaken: the district court did not include these sentencing enhancements in calculating their total offense levels. Mr. and Ms. Franklin-El’s Presentence Investigation Reports (“PSRs”) each included sentencing enhancements for vulnerable victim and abuse of a position of trust. See R:10-3079, Vol. II, at 30 (PSR, rev.Aug.l, 2007); R-.10-3084, Vol. II, at 32 (PSR, rev.Aug.l, 2007). However, the district court sustained the Franklin-Els’ objections to the two-point enhancements for vulnerable victim and abuse of position of trust, reducing their respective total offense levels by four. See Sentencing Tr., dated Aug. 10, 2007, at 41-43. But, the district court also increased their respective specific offense characteristic enhancement from twelve to sixteen offense levels, pursuant to U.S.S.G. § 2Bl.l(b)(l) (providing enhancements based upon the amount of loss). See id. at 40-41, 43. Thus, the district court’s rulings offset each other and did not change the Franklin-Els’ total offense levels. In arguing that the district court erroneously included sentencing enhancements for vulnerable victim and abuse of a position of trust, the Franklin-Els apparently overlook the fact that the district court increased their specific offense characteristic by four offense levels. Thus, the Franklin-Els cannot establish that their counsel’s performance was constitutionally ineffective because counsel failed to object to the district court’s calculation of their offense levels related to the vulnerable victim and abuse of a position of trust enhancements. II. Mr. Franklin-El’s Obstruction of Justice Enhancement Claim Mr. Franklin-El also asserts a claim based on the district court’s imposition of a two-level enhancement for obstruction of justice, pursuant to U.S.S.G. § 3C1.1. As discussed above, Mr. Franklin-El argues that his trial counsel was ineffective for failing to object to the district court’s allegedly erroneous offense-level calculation, including the obstruction of justice enhancement. Mr. Franklin-El further argues that his obstruction of justice sentencing enhancement should have been removed after this court reversed his conviction for obstruction of justice on direct appeal. Mr. Franklin-El did not raise his ineffective assistance of counsel argument based on the obstruction of justice enhancement before the district court and it is therefore waived. See Parker v. Scott, 394 F.3d 1302, 1307 (10th Cir.2005) (concluding that a habeas petitioner waives claims not raised before the district court). III. Ms. Franklin-El’s Religious Discrimination Claim Ms. Franklin-El also asserts an ineffective assistance of counsel claim based on religious discrimination. This argument was not presented to the district court and is therefore waived. See id. IV. Mr. Franklin-El’s Motion for Leave to Proceed In Forma Pau-peris

3971185-13623

ORDER DENYING CERTIFICATE OF APPEALABILITY TIMOTHY M. TYMKOVICH, Circuit Judge. Petitioner Tony T. Heckard, a New Mexico state prisoner, seeks a certificate of appealability (“COA”) in order to appeal from the district court’s denial of his 28 U.S.C. § 2254 habeas petition. See 28 U.S.C. § 2253(c). We deny Mr. Heckard’s application for a COA and dismiss the appeal. I. In 1998, Mr. Heckard was convicted by a New Mexico jury of two counts of trafficking cocaine in violation of N.M. Stat. § 30-31-20, and one count of aggravated battery on a peace officer in violation of N.M. Stat. § 30-22-25. He was sentenced to twenty years’ imprisonment. On direct appeal, Mr. Heckard’s aggravated battery conviction was reversed, but his drug trafficking convictions were affirmed. State v. Heckard, No. 19,909 (N.M.Ct.App. July 11, 2000) (unpublished). The New Mexico Supreme Court denied his petition for writ of certiorari on September 11, 2000. He also filed a state petition for habeas relief, which was denied. Mr. Heckard then filed a timely § 2254 petition challenging the constitutionality of his conviction. He raised three claims: (1) he was denied due process when the trial court would not permit a particular question to be asked on voir dire examination of a juror, Joe Harvey, a former police officer; (2) his trial and appellate counsel were constitutionally ineffective for failing to preserve and raise this voir dire issue; and (3) his trial counsel was constitutionally ineffective for failing to use a preemptory challenge to excuse Mr. Harvey. At trial, during voir dire before the jury, the judge refused to allow defense counsel to ask Mr. Harvey if he had ever known police officers to lie. Defense counsel withdrew the question and did not challenge the court’s ruling. The trial court offered counsel an additional opportunity to voir dire Mr. Harvey in chambers, but counsel did not ask any questions. Mr. Heckard raised Claim One on direct appeal. The New Mexico Court of Appeals ruled his counsel had waived the issue by failing to object and, in any event, the trial court had not abused its discretion because Mr. Harvey testified he would evaluate the credibility of police witnesses without bias. The New Mexico Supreme Court denied his petition for writ of certiorari. Mr. Heckard did not raise Claim Two on direct appeal, but did raise it in his state habeas petition. The state district court summarily denied the habeas petition. Mr. Heckard states that his petition for writ of certiorari challenging this ruling was denied as untimely filed; the record does not include either his petition or an order of denial. Mr. Heckard did not raise Claim Three in the state courts. The district court denied his § 2254 petition. As to Claim One, it ruled that Mr. Heckard had not established the trial court’s limitation on voir dire resulted in a biased jury and, thus, he had not demonstrated any denial of due process. It further ruled that he had procedurally defaulted Claim Two by failing to seek timely certiorari review of the denial of his state habeas petition. Finally, it ruled that Mr. Heckard failed to exhaust Claim Three, but nonetheless addressed this unexhausted claim on the merits. It ruled that counsel’s decision not to exercise a preemptory challenge was a strategic decision, that Mr. Heckard had alleged no facts showing that Mr. Harvey was biased or that he suffered prejudice from his counsel’s failure to remove this juror, and, therefore, he was not entitled to habeas relief on that claim. II. Before addressing Mr. Heckard’s request for COA, we first consider whether the district court had jurisdiction over his § 2254 petition, a question that turns on whether his § 2254 petition constitutes a “second or successive” habeas petition under 28 U.S.C. § 2244(b). Prior to filing his § 2254 petition, petitioner filed a petition for writ of habeas corpus under 28 U.S.C. § 2241 in July 2000. In it, he alleged that his transfer to and incarceration in a privately-run prison facility violated his constitutional rights. The district court denied the § 2241 petition, and this court affirmed. See Heckard v. Williams, No. 00-2395 (10th Cir. Nov. 6, 2001) (holding that, under Montez v. McKinna, 208 F.3d 862 (10th Cir.2000), a prisoner’s placement in a private prison does not state a federal constitutional claim for relief). The Antiterrorism and Effective Death Penalty Act (AEDPA) “[ ]amended habeas corpus statutes [to] restrict the power of the federal courts to entertain second or successive applications for writs of habeas corpus.” Spitznas v. Boone, 464 F.3d 1213, 1215 (10th Cir.2006); see 28 U.S.C. § 2244(b). “Before a petitioner may file a second or successive 28 U.S.C. § 2254 petition in the district court, he must successfully apply to this court for an order authorizing the district court to consider the petition.” Spitznas, 464 F.3d at 1215; see 28 U.S.C. § 2244(b)(3). Section 2244(b) provides, in relevant part: (1) A claim presented in a second or successive habeas corpus application under section 2254 that was presented in a prior application shall be dismissed. (2) A claim presented in a second or successive habeas corpus application ... that was not presented in a prior application shall be dismissed unless— (A) the applicant shows that the claim relies on a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable; or (B) (1) the factual predicate for the claim could not have been discovered previously through the exercise of due diligence; and (ii) the facts underlying the claim, if proven and viewed in light of the evidence as a whole, would be sufficient to establish by clear and convincing evidence that, but for constitutional error, no reasonable factfinder would have found the applicant guilty of the underlying offense. (3)(A) Before a second or successive application permitted by this section is filed in the district court, the applicant shall move in the appropriate court of appeals for an order authorizing the district court to consider the application. 28 U.S.C. § 2244(b). If Mr. Heckard’s § 2254 habeas petition constitutes a second or successive petition within the meaning of § 2244(b) because of his prior § 2241 petition, the district court lacked jurisdiction even to deny it because Mr. Heckard did not seek or obtain appellate-court authorization under § 2244(b). See Berryhill v. Evans, 466 F.3d 934, 937 (10th Cir.2006); Spitznas, 464 F.3d at 1215. This court has not yet determined whether a § 2254 petition constitutes a “second or successive” habeas petition within the meaning of § 2244(b) if the petitioner previously filed a habeas petition under § 2241. We appointed counsel for Mr. Heckard and requested that the parties file supplemental briefs addressing this jurisdictional question. Both parties filed briefs stating their position that Mr. Heckard’s § 2254 petition is not a “second or successive” petition because it is his first collateral challenge to his state conviction, whereas his prior § 2241 habeas petition challenged the execution of his sentence. We agree that Mr. Heckard’s § 2254 petition is not a second or successive petition. Section 2244 does not define what constitutes a “second or successive” petition. See Reeves v. Little, 120 F.3d 1136, 1138 (10th Cir.1997). Nonetheless, “[c]ourts have uniformly rejected a literal reading of Section 2244, concluding that a numerically second petition does not necessarily constitute a ‘second’ petition for the purposes of AEDPA.” James v. Walsh, 308 F.3d 162, 167 (2d Cir.2002); see also Crouch v. Norris, 251 F.3d 720, 723-24 (8th Cir.2001) (collecting cases). The Supreme Court, this court, and other circuit courts have applied pre-AEDPA “abuse-of-the-writ” standards and principles in determining whether a habeas petition is second or successive. See Slack v. McDaniel, 529 U.S. 473, 486, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000) (stating that “[t]he phrase ‘second or successive petition’ is a term of art given substance in our prior habeas corpus cases”); Stewart v. Martinez-Villareal, 523 U.S. 637, 643-45, 118 S.Ct. 1618, 140 L.Ed.2d 849 (1998) (looking to pre-AEDPA law to interpret § 2244(b)); Haro-Arteaga v. United States, 199 F.3d 1195, 1196 (10th Cir.1999) (per curiam) (collecting cases from Tenth Circuit); Benchoff v. Colleran, 404 F.3d 812, 817 (3d Cir.2005) (collecting circuit cases). In applying “abuse-of-the-writ” principles, the courts have held that the second- or-successive gatekeeping requirements of § 2244(b) do not apply when a petitioner files a second habeas petition to litigate a claim that could not have been raised in his earlier petition or was not properly the subject of adjudication in an earlier habeas petition. Singleton v. Norris, 319 F.3d 1018, 1023 (8th Cir.2003) (holding that § 2244(b) does not bar a claim that had not arisen when petitioner filed his first habeas petition); Crouch, 251 F.3d at 724 (holding that petitioner’s second § 2254 petition was not subject to § 2244(b) because he could not have raised his parole-related claims in his first habeas petition challenging his conviction); In re Cain, 137 F.3d 234, 236-37 (5th Cir.1998) (holding that claim that had not arisen at the time of the previous petition is not barred by § 2244(b)); Cf. Martinez-Villareal, 523 U.S. at 643-45, 118 S.Ct. 1618 (holding that 2244(b) did not bar petitioner’s request to reconsider habeas claim dismissed by district court as necessarily unripe). “[T]he purpose of AEDPA’s habeas restrictions ... was ‘primarily to preclude prisoners from repeatedly attacking the validity of their convictions and sentences.’ ” Crouch, 251 F.3d at 724 (quoting Cain, 137 F.3d at 235). The Supreme Court has noted that a rigid construction of AEDPA by which a habeas petitioner would be entitled to file only one petition and thereafter all claims would be subject to AEDPA’s gatekeeping provisions even if he could not have received an adjudication of that claim in the initial petition would have “far reaching and seemingly perverse” implications. Martinez-Villareal, 523 U.S. at 644, 118 S.Ct. 1618. Under this circuit’s precedent, Mr. Heckard’s first habeas petition sought relief available only under § 2241. We have held that “[pletitions under § 2241 are used to attack the execution of a sentence, in contrast to § 2254 habeas and § 2255 proceedings, which are used to collaterally attack the validity of a conviction and sentence.” McIntosh v. United States Parole Comm’n, 115 F.3d 809, 811 (10th Cir.1997). Applying that distinction, we have held that a § 2241 petition is the proper procedural means for a state prisoner to challenge the constitutionality of his placement in a private prison. See Rael v. Williams, 223 F.3d 1153, 1154 (10th Cir.2000); Montez, 208 F.3d at 865 (finding that an attack on where one’s sentence will be served “seems to fit better under the rubric of § 2241”). In contrast, § 2254 serves as means for state prisoners to challenge the constitutionality of their conviction or sentence. See Montez, 208 F.3d at 865. Thus, Mr. Heckard could only raise his claims challenging his state conviction in a § 2254 petition, and could not have included them in his § 2241 petition. Because his first habeas petition sought relief available only under § 2241, his subsequent petition under § 2254 challenging his conviction is not a second or successive petition. See Jacobs v. McCaughtry, 251 F.3d 596, 597 (7th Cir.2001) (per curiam) (holding § 2254 petition was not a second or successive petition where previous petition was properly characterized as a § 2241 petition); Chambers v. United States, 106 F.3d 472, 474 (2d Cir.1997) (holding that where a § 2255 motion follows a § 2241 petition, it is not a second or successive petition if the prior petition sought relief available only under § 2241); see also Crouch, 251 F.3d at 725 (holding that second petition challenging parole decision not a second or successive petition under § 2244(b) because the parole claim was not challenging petitioner’s conviction or sentence and could not have been raised in his earlier petition). Accordingly, because this § 2254 petition is not a second or successive petition, we conclude that the district court had jurisdiction to rule on its merits. III. A COA will issue “only if the applicant has made a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). This standard requires “a demonstration that ... includes showing that reasonable jurists could debate whether (or, for that matter, agree that) the petition should have been resolved in a different manner or that the issues presented were adequate to deserve encouragement to proceed further.” Slack v. McDaniel, 529 U.S. 473, 484, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000) (quotation marks omitted). In other words, the applicant must show that the district court’s resolution of the constitutional claim was either “debatable or wrong.” Id. If the application was denied on procedural grounds, the applicant must make a substantial showing of the denial of a constitutional right, and must also show “that jurists of reason would find it debatable ... whether the district court was correct in its procedural ruling.” Id. “Where a plain procedural bar is present and the district court is correct to invoke it to dispose of the case, a reasonable jurist could not conclude either that the district court erred in dismissing the petition or that the petitioner should be allowed to proceed further.” Id.

3931228-22787

MEMORANDUM OPINION FARNAN, District Judge. Presently before the Court are Motions To Dismiss filed by Defendants Google, Inc. (“Google”), Yahoo! Inc. (“Yahoo”), and Microsoft Corporation (“Microsoft”) (D.I.10, 18, 20, 51, 54, 56), Plaintiffs Motions For Default Entry And Default Judgment As To Time Warner Companies, Inc. (“Time Warner”), AOL LLC (“AOL”), Yahoo (D.I.25), and Microsoft Corporation (D.I.28), and Plaintiffs Motions To Strike Motions To Dismiss (D.I.30, 31, 32). For the reasons set forth below, the Court will deny as moot the Motions For Default Entry And Default Judgment as To Time Warner and AOL (D.I.25), and will deny the Motions For Default Judgment as to Yahoo and Microsoft (D.I.25, 28). The Court will deny in part and grant in part Google’s Motion To Dismiss The Amended Complaint, will grant Yahoo and Microsoft’s Motions To Dismiss The Amended Complaint (D.I.51, 54, 56), and will deny as moot the remaining pending motions (D.I.10,18, 20, 30, 31, 32). I. BACKGROUND Plaintiff, who proceeds pro se, filed his original complaint on May 17, 2006. (D.I.l.) Waivers Of Service were returned executed to the Court on June 5, 2006. (D.I.4, 5, 6, 7.) The Court Docket indicates that Defendants’ Answers were due to be filed by July 31, 2006. Id. On July 24, 2006, Defendants Google, Yahoo, AOL, and Microsoft filed Motions To Dismiss The Complaint. (D.I.10, 11, 12.) Plaintiff filed Motions For Default Entry And Default Judgment on August 1, 2006, and on August 7, 2006. (D.I.25, 28.) Plaintiff also filed Motions To Strike The Motions To Dismiss filed by Microsoft, AOL, and Yahoo. (D.I.30, 31, 32.) Plaintiff subsequently filed a Voluntary Dismissal In Part, Without Prejudice. (D.I.43.) Plaintiff dismissed all claims against Time Warner and its subsidiary AOL, and the claims against Google, Yahoo, and Microsoft for violations of the Commerce Clause, violations of any state or federal anti-trust laws, and any violations of the Communications Act. Two days later, on September 21, 2006, Plaintiff filed an Amended Complaint against Google, Yahoo, and Microsoft. (D.I.44.) Next, Plaintiff filed “corrections” to the Amended Complaint and an Affidavit regarding Microsoft’s “fraud.” (D.I.48, 49.) In turn, Google, Yahoo, and Microsoft filed Motions To Dismiss The Amended Complaint. (D.I.51, 54, 56.) Plaintiff opposes the motions. (D.I.61.) II. THE AMENDED COMPLAINT Plaintiff has two internet websites; www.NCJusticeFraud.com (“N C Justice”) and www.ChinaIsEvil.com (“China”). The Amended Complaint alleges that the NC Justice website exposes fraud perpetrated by various North Carolina government officials and employees, including Roy Cooper (“Cooper”), the North Carolina Attorney General, and that the China website delineates atrocities committed by the Chinese government. The Amended Complaint alleges that Defendants refused to run ads on the two websites, specifically two Cooper ads on the NC Justice website and one ad on the China website. More particularly, Plaintiff alleges that Google gave a fraudulent excuse for not running the Cooper ads, that the reasons for refusal do not appear in its website or in its ad content policy, and that Google gave no reason for not running the China ad. Plaintiff alleges that Microsoft refuses to run his ads and has given no reason for its refusal. Finally, Plaintiff alleges that Yahoo refused to run his ads because his websites are not hosted by Yahoo. Plaintiff alleges that the Defendants’ refusal to run his ads violates his First and Fourteenth Amendment rights under the U.S. Constitution and under the Delaware Constitution. He also alleges that Google, Yahoo, and Microsoft violated Delaware law through fraud, breach of contract, deceptive business practices pursuant to Del. Code Ann. tit. 6, § 2517, and the doctrine of public calling. Most of the allegations in the Amended Complaint are directed towards Google. Plaintiff alleges that Google disapproved his ads on the basis of unacceptable content, stated that it did not permit ad text that advocates against an individual, group, or organization, or ads that advocate against a group protected by law. (D.I. 44, at 3.) He alleges that Google’s reasons for refusing to run the Cooper ads are fraudulent. (D.I. 44, at 3-4.) Plaintiff alleges that because Google never alleged that his ads violated Google’s content policy or editorial guidelines, they are inapplicable to him. Id. at 4. Plaintiff alleges that Google’s “purported content policy” is part of its pattern of fraud, deceit, and misrepresentation regarding its advertising policies and search engine results. Id. at 5. Plaintiff alleges that the rejection or acceptance of ads is based upon whether the political viewpoint of the ad and the related website agree with those of Google’s executives and employees, all in contravention of its “fraudu lent content policy.” Id. at 9. Plaintiff alleges that Google engages in fraud when it encourages advertisement and then disallows ads for reasons that are contrary to its content policy, while at the same time allowing ads that do not comply with its content policy. Id. at 11. He alleges that Google made fraudulent and deceptive statements such as its search results are objective, they are based upon the popularity of the websites, it lacks bias, its search results are objective and neutral, and it encourages diversity in its search results. He further alleges that Google removed his NC Justice website from its search results for “Roy Cooper” and “Attorney General Roy Cooper,” and that during the time in question a same search on MSN ranked his website at eight. Plaintiff alleges that Google’s delisting of the NC Justice website from its search results hurt its ranking with other search engines. Id. at 14. Plaintiff alleges that Google fraudulently implied it was legally compelled to remove his website from its search results, but that after he filed his original Complaint, Google reinstated the NC Justice website. Plaintiff alleges that reinstatement of the NC Justice website proves that the initial delisting was fraudulent, arbitrary, and punitive. Id. at 15. Plaintiff also alleges that Google censored his website, but in China it allows the Chinese government to censor Google’s search results. Plaintiff alleges that Google’s de facto content policy does not allow advertisement critical of the Chinese government. Plaintiffs allegations against Microsoft are that he applied for and was accepted into Microsoft’s pilot ad program, submitted his China ad, but never received a response. Plaintiff alleges that ignoring him resulted in a defacto refusal to run his ad. He alleges that Microsoft is using fraud to breach its contract. Plaintiffs allegations against Yahoo are that he attempted to advertise on Yahoo’s search engine, but was told by a Yahoo representative that it does not accept advertising for websites it does not host. Plaintiff alleges he wrote to Yahoo regarding the matter but received no response. Plaintiff also alleges that Yahoo delisted his NC Justice website from its search results, but after the original complaint was filed, Yahoo reinstated the website. Plaintiff alleges that he has no viable alternative other than to advertise on Defendants’ search engines. He seeks declaratory and injunctive relief and compensatory and punitive damages. Google moves for dismissal of the Amended Complaint on the bases that it does not comply with Fed.R.Civ.P. 8, the claims are barred as a matter of law, and dismissal is appropriate pursuant to Fed. R.Civ.P. 12(b)(6) because the Amended Complaint fails to state a claim upon which relief may be granted. (D.I.51, 53.) Yahoo moves for dismissal arguing that the Amended Complaint fails to state viable common law and statutory claims under Delaware law, and it fails to state viable Commerce Clause, Right to Petition, or Free Speech claims. (D.I.54, 55.) Microsoft moves for dismissal on the bases that the Amended Complaint fails to allege Plaintiff was directly injured by Microsoft, the doctrine of public calling is inapplicable, the Amended Complaint fails to state a claim under the First Amendment or the Delaware Constitution for a violation of right to free speech, for breach of contract, fraud, and deceptive business practices, and it is immune from suit for its decisions to screen content. (D.I.56, 57.) III. DISCUSSION A. Standard of Law 1. Default Entry of default judgment is a two-step process. Fed.R.Civ.P. 55(a), (b). A party seeking to obtain a default judgment must first request that the Clerk of the Court “enter.. .the default” of the party that has not answered the pleading or “otherwise defended],” within the time required by the rules or as extended by court order. Fed.R.Civ.P. 55(a). Timely serving and filing a motion to dismiss under Fed.R.Civ.P. 12(b), precludes entry of default. See Francis v. Joint Force Headquarters Nat’l Guard, Civ. No. 05-4882(JBS), 2006 WL 2711459 (D.N.J. Sept. 19, 2006). Even if default is properly entered, the entry of judgment by default pursuant to Rule 55(b)(2) is within the discretion of the trial court. Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir.1984). 2. Motion to Dismiss Rule 12(b)(6) permits a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The purpose of a motion to dismiss is to test the sufficiency of a complaint, not to resolve disputed facts or decide the merits of the case. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir.1993). To that end, the Court assumes that all factual allegations in Plaintiffs pleading are true, and draws all reasonable factual inferences in the light most favorable to Plaintiff. Amiot v. Kemper Ins. Co., 122 Fed.Appx. 577, 579 (3d Cir.2004). However, the Court should reject “unsupported allegations,” “bald assertions,” or “legal conclusions.” Id. A Rule 12(b)(6) motion should be granted to dismiss a pro se complaint only when “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). B. Default Judgment Plaintiff moves for entry of default and default judgment against Defendants Time Warner, AOL, and Yahoo on the basis that they failed to plead or otherwise defend and therefore are in default. (D.I.25.) The motion is moot as to Defendants AOL and Time Warner inasmuch as Plaintiff voluntarily dismissed them from the case. See D.I. 43. Plaintiff also seeks entry of default and default judgment against Microsoft on the basis that Plaintiff never received, via U.S. mail, a copy of Microsoft’s Motion To Dismiss filed on July 24, 2006, he did not receive the Motion To Dismiss until August 3, 2006, and then it was via Federal Express. (D.I.28.) Plaintiff argues that Microsoft’s pleading was mailed two days after the time had expired to file an answer or otherwise plead. Plaintiff also seeks entry of default and default judgment on the basis that counsel for Defendants “deceived” him. (D.I.29.) Yahoo and Microsoft oppose the motions arguing that the record is clear that they timely responded to the lawsuit filed by Plaintiff. (D.I.34.) Regardless of the date when Plaintiff actually received the Motions To Dismiss, the docket sheet reflects that they were timely filed. Accordingly, default is improper since Defendants have “otherwise defended” the pleading. Moreover, even if the motions were not timely filed, Plaintiff has failed to demonstrate that he was prejudiced by the alleged late receipt of the service copies. Accordingly, the Court will deny the Motions For Default Entry And Default Judgment against Yahoo and Microsoft. (D.I.25, 28.) C. Motion to Dismiss 1. Rule 8 Google contends that the Amended Complaint should be dismissed for failure to comply with Fed.R.Civ.P. 8. Rule 8(a)(2) provides that the complaint shall consist of a short and plain statement of the claim showing that the pleader is entitled to relief, and part (e)(1) of Rule 8 provides that each averment of a pleading shall be simple, concise, and direct. Fed.R.Civ.P. 8. Google argues that the Amended Complaint lacks any semblance of compliance with Rule 8 standards, that it is disorganized, contains unnumbered paragraphs, is redundant, vague and conclusory, inflammatory, and contains irrelevant material. Plaintiff proceeds pro se. As is well-known, pro se complaints are held to “less stringent standards than formal pleadings drafted by lawyers” and can only be dismissed for failure to state a claim when “it appears ‘beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.’ ” Haines v. Kerner, 404 U.S. 519, 520-521, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In light of the fact that Plaintiff proceeds pro se and the liberal pleading standards, the Court will deny Google’s Motion To Dismiss on the basis that the Amended Complaint does not comply with the requisites of Rule 8. 2. Injury-In-Fact Microsoft moves for dismissal of all claims raised against it on the basis that the Amended Complaint fails to satisfy the requirements that Plaintiff suffered an injury-in-fact. The cases and controversies requirement in Article III demand that all litigants in federal court demonstrate that they have suffered a concrete, legally cognizable injury-in-fact that is either actual or imminent. American Fed’n of Gov’t Employees v. Styles, 123 Fed.Appx. 51, 52 (3d Cir.2004) (citing U.S. Const. art. Ill, § 2). It is incumbent on the party invoking federal jurisdiction to establish this and every other prerequisite for standing. Id. (citing FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990)). Microsoft’s position is well-taken. Here, Plaintiff alleges that he never received a response from Microsoft after he submitted an ad to it. Plaintiff alleges that he was ignored by Microsoft. While Plaintiff may believe he was ignored while waiting for an answer from Microsoft, this alleged slight is not an injury-in-fact sufficient to confer standing on Plaintiff as to his claims against Microsoft. See e.g., Takhar v. Kessler, 76 F.3d 995 (9th Cir.1996) (uncertainty that a veterinarian experienced while waiting for clarification from the FDA is not an injury-in-fact sufficient to confer standing). Plaintiff has failed to allege an injury-in-fact sufficient to defeat the Microsoft’s Motion To Dismiss. Therefore, the Court will grant the Motion. 3. Defendants’ First Amendment Rights Google and Microsoft argue that Plaintiffs claims are barred as a matter of law, and that the relief sought by him is precluded by their First Amendment Rights. Google points to the relief sought by Plaintiff that Google, Yahoo, and Microsoft place Plaintiffs ads for his websites in prominent places on their search engine results and that Defendants “honestly” rank Plaintiffs websites. Google argues that such relief would compel it to speak in a manner deemed appropriate by Plaintiff and would prevent Google from speaking in ways that Plaintiff dislikes. It contends such relief contravenes the First Amendment. Plaintiff did not respond to this issue. The First Amendment guarantees an individual the right to free speech, “a term necessarily comprising the decision of both what to say and what not to say.” Riley v. National Fed’n of the Blind of North Carolina, Inc., 487 U.S. 781, 796-97, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988). Defendants are correct in them position that the injunctive relief sought by Plaintiff contravenes Defendants’ First Amendment rights. See Miami Herald Publ’g Co. v. Tornillo, 418 U.S. 241, 256, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974) (forcing newspapers to print candidates’ replies to editorials is an impermissible burden on editorial control and judgment). Sinn v. The Daily Nebraskan, 829 F.2d 662 (8th Cir.1987) (University newspaper’s rejection of roommate advertisements in which advertisers stated their gay or lesbian orientation was a constitutionally protected editorial decision); Associates & Aldrich Co. v. Times Mirror Co., 440 F.2d 133 (9th Cir.1971) (Court cannot compel the publisher of a private daily newspaper to accept and print advertising in the exact form submitted based upon the freedom to exercise subjective editorial discretion in rejecting a proffered article). Accordingly, the Court will grant Google’s and Microsoft’s Motion To Dismiss the Amended Complaint on the basis that Plaintiff seeks relief precluded by their First Amendment rights. 4. Communications Decency Act Google and Microsoft argue that the Communications Decency Act, 47 U.S.C. § 230(c)(2)(A), provides them immunity from suit from claims grounded upon their exercise of editorial discretion over internet content and editorial decisions regarding screening and deletion of content from their services. Google cites case law that holds Google is considered an “interactive computer service” as contemplated by § 230. Google also relies upon Third Circuit precedent as set forth in Green v. America Online (AOL), 318 F.3d 465 (3d Cir.2003). Plaintiff argues that § 230 is inapplicable because none of the Defendants refused to run the Cooper ads because they were obscene or that the websites were harassing. He also argues that neither Google nor Microsoft offered a reason for not running the China ads and that Yahoo provided a false reason for not running the ads. Plaintiff argues that Defendants cannot create “purported reasons” for not running the ads. Section § 230 provides immunity from civil suits as follows: “No provider or user of an interactive computer service shall be held liable on account of ... any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.” 47 U.S.C. § 230(c)(2)(A). As determined in Green, “[b]y its terms, § 230 provides immunity to [Defendants] as [ ] publishers or speakers of information originating from another information content provider”. Green, 318 F.3d at 471. “The provision ‘precludes courts from entertaining claims that would place a computer service provider in a publisher’s role,’ and therefore bars ‘lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions — such as deciding whether to publish, withdraw, postpone, or alter content.’ ” Id. (citing Zeran v. America Online, Inc., 129 F.3d 327, 330 (4th Cir.1997)); see also, e.g., Ben Ezra, Weinstein & Co., Inc. v. America Online, Inc., 206 F.3d 980, 986 (10th Cir.2000) (“Congress clearly enacted § 230 to forbid the imposition of publisher liability on a service provider for the exercise of its editorial and self-regulatory functions”). It is evident from the allegations in the Amended Complaint that Plaintiff attempts to hold Defendants liable for decisions relating to the monitoring, screening, and deletion of content from their network. As noted by the Green Court, these actions are “quintessentially related to a publisher’s role,” Green, 318 F.3d at 471, and “ § 230 ‘specifically proscribes liability’ in such circumstances.” Id. (quoting Zeran, 129 F.3d at 332-33). Plaintiffs position that § 230 is inapplicable is not well-taken. Plaintiff argues there was no refusal to run his ads on the basis they were obscene or harassing, and that Defendants cannot create “purported reasons for not running his ads.” (D.I. 61 at 9). He omits, however, reference to that portion of § 230 which provides immunity from suit for restricting material that is “otherwise objectionable.” Section 230 provides Google, Yahoo , and Microsoft immunity for their editorial decisions regarding screening and deletion from their network. Therefore, the Court will grant the Motions To Dismiss all such claims as raised by Plaintiff. 5. Plaintiffs First Amendment Rights Defendants argue that Plaintiff cannot state a claim for violation of his right to free speech under either the United States or Delaware Constitution because they are not state actors. Particularly, Google contends that the Amended Complaint makes clear that it is a for-profit company as it is identified as a corporation and there are allegations of Google’s for-profit AdWords program. (D.I. 53 at 15-16.) Plaintiff alleges that internet search engines are public forums, and that private property opened to the public may be subject to the First Amendment. Plaintiff compares internet search engines to malls and/or shopping centers and contends that Google has dedicated its private property as a public forum. Plaintiff relies upon several U.S. Supreme Court cases to support his position. He also posits that Google works with private and public universities and that this government entwinement with a private entity results in state action as required by 42 U.S.C. § 1983. When bringing a § 1983 claim, a plaintiff must allege that some person has deprived him of a federal right, and that the person who caused the deprivation acted under color of state law. West v. Atkins, 487 U.S. 42, 48, 108 S.Ct. 2250, 101 L.Ed.2d 40 (1988). To act under “color of state law” a defendant must be “clothed with the authority of state law.” West, 487 U.S. at 49, 108 S.Ct. 2250. Plaintiff has failed to state a claim that Defendants violated his First Amendment right to free speech. Defendants are private, for profit companies, not subject to constitutional free speech guarantees. See e.g., Howard v. America Online, 208 F.3d 741, 754 (9th Cir.2000); Noah v. AOL Time Warner, Inc., 261 F.Supp.2d 532, 546 (E.D.Va.2003). They are internet search engines that use the internet as a medium to conduct business. Plaintiffs position that Google is a state actor because it works with state universities is specious. “A conclusory allegation that a private entity acted in concert with a state actor does not suffice to state a § 1983 claim against the private entity.” Ciambriello v. County of Nassau, 292 F.3d 307, 324 (2nd Cir.2002). Further, there are insufficient allegations in the Amended Complaint that “there is a sufficiently close nexus between the State and the challenged action of [Defendants] so that the action[s] of the latter may be fairly treated as that of the State itself.” Blum v. Yaretsky, 457 U.S. 991, 1004, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982); see also Mark v. Borough of Hatboro, 51 F.3d 1137, 1142 (3d Cir.1995).

6542183-8180

ORDER ON EMERGENCY MOTION TO DISMISS AND TO IMPOSE SANCTIONS PURSUANT TO B.R. 9011 ALEXANDER L. PASKAY, Chief Judge. THE MATTER under consideration in this Chapter 11 case is an Emergency Motion to Dismiss and to Impose Sanctions Pursuant to B.R. 9011, filed by Richard Griffith and Yvonne Griffith (Griffiths), creditors in the above-captioned case. The Griffiths seek an order from this Court dismissing the above-captioned Chapter 11 case pursuant to 11 U.S.C. § 1112(b) on the ground that Indian Rocks Landscaping of Indian Rocks Beach, Inc. (Debtor), did not file its Petition for relief under Chapter 11 in good faith. The Griffiths also seek an Order from this Court imposing sanctions pursuant to Bankruptcy Rule 9011 against Thomas C. Little (Little), counsel for the Debtor, on the grounds that Little filed the Debtor’s Chapter 11 Petition in violation of Bankruptcy Rule 9011. The Court has considered the record, heard arguments of counsel, and finds the undisputed facts relevant to the Motion under consideration as follows: On April 22, 1986, the Debtor, who from the style of the caption of the Petition appears to be a Florida corporation, and the Griffiths entered into a lease of certain real property owned by the Griffiths. The term of the lease ran from May 15, 1986, through April 14, 1987. Upon the Debtor’s failure to make its February rent payment, the Griffiths commenced eviction proceedings on March 19, 1987, in the Pinellas County Court. The hearing on this matter was set for April 15, 1987, and was scheduled to commence at 9:45 a.m. On the same day at 9:08 a.m. the Debtor filed its Chapter 11 Petition. Counsel for the Debt- or failed to appear at the eviction hearing, and a Judgment by Default was entered, the terms of which directed the clerk of court to issue a Writ of Possession as to the property leased by the Debtor. On May 7, 1987, the Griffiths filed their Emergency Motion to Dismiss and for Sanctions. In addition to the chronology set forth above, the following undisputed facts relevant to the Motion under consideration have been established. First, the Debtor was never validly incorporated under the laws of the State of Florida, as evidenced by a written certification dated May 8,1987 and signed by the Florida Secretary of State. Even assuming without admitting that the Debtor was a corporation de facto, albeit not de jure, the Debtor’s Chapter 11 Petition, which listed the Griffiths as the only creditors of the Debtor’s estate, was signed by the general manager of the corporation and not by a duly authorized corporate officer. The Motion under consideration seeks in part a dismissal of the case pursuant to 11 U.S.C. § 1112(b) for “cause,” the cause being alleged bad faith of the Debtor in seeking relief in this Court. In support of this contention the Griffiths point out that the Petition was filed for the sole purpose of forestalling and delaying the Griffiths’ eviction action and not for any legitimate purpose of financial reorganization. In seeking dismissal as noted above the Griffiths rely on 11 U.S.C. § 1112 (b), which provides in pertinent part: § 1112. Dismissal or Conversion (b) Except as provided in subsection (c) of this section, on request of a party in interest, and after notice and a hearing, the court may convert a case under this chapter to a case under Chapter 7 of this title or may dismiss a case under this chapter, whichever is in the best interest of the creditors and the estate, for cause ... The term “cause” as used in this section is not defined and was intended to be a flexible concept. This is evident from the legislative history of 11 U.S.C. § 1112(b) which states that in determining “cause,” a court may utilize equitable powers to achieve just and fair results in cases. H.R. Rep. No. 595, 95 Cong., 1st Sess. 406 (1977), U.S. Code Cong. and Admin. News 1978, pp. 5787, 6362. Clearly, the broad scope of “cause” encompasses the filing of a Petition in bad faith. See Little Creek Development Co. v. Commonwealth Futures Corp., 779 F.2d 1068 (5th Cir.1986). In determining the existence of bad faith, all facts and circumstances of a case must be considered by the Court. In re Southern Communities, 57 B.R. 215 (Bankr.M.D.Fla.1986). This Court recently addressed the bad faith of a Debtor who sought relief in the Bankruptcy Court in the case of In the Matter of Welwood Corp., 60 B.R. 319 (Bankr.M.D.Fla.1986). In this case the Debtor, which was no longer operating any business, had no employees, no unsecured debts, and no assets, filed its Chapter 11 Petition merely to gain the protection of the automatic stay imposed by 11 U.S.C. § 362 and to litigate a money damage claim in the bankruptcy court. In dismissing the case for bad faith filing pursuant to 11 U.S.C. § 1112(b) this Court noted that ... if it is evident from the outset that there is no reasonable expectation that the financial situation of a debtor can be successfully repaired through the reorganization process, and the case is filed solely to use the bankruptcy forum to litigate a two-party dispute, “cause” is present which warrants a dismissal because such case is not filed in good faith. As in Welwood, the case at hand must be dismissed for bad faith filing. Of great importance in the determination of bad faith filing is the fact that the Debtor filed its Chapter 11 Petition merely to forestall and delay the state court eviction action and to gain the protection of the automatic stay. This conclusion is supported by the facts .that the Griffiths, the Debtor’s adversaries in the state court eviction proceeding, are the only creditors listed by the Debtor, who filed its Petition within minutes of the scheduled eviction hearing. Furthermore, it is without dispute that the Debtor has no employees, conducts no business, has no assets, and is without any source of income to fund a plan of reorganization. Thus, the case at hand involves nothing more than a two-party dispute in which only the Debtor and the Griffiths are involved. In addition the Debtor was not validly incorporated, contrary to the caption of the petition; thus it is not an entity eligible for relief under the Bankruptcy Code. Moreover, even assuming the Debt- or is a de facto corporation and thus may be eligible to file a Chapter 11 Petition, the Petition was not signed by a corporate officer duly authorized by the Board of Directors or corporate by-laws to sign a Petition for Relief. On the contrary, the Petition was signed by the Debtor’s general manager who clearly had received no authority to sign the Petition. Based on the foregoing, this Court is satisfied that this Debtor’s Chapter 11 Petition was not filed in good faith. Because there appears to be neither a need nor an ability to reorganize the financial affairs of this Debtor, it is appropriate to grant the Motion to Dismiss this Chapter 11 case for “cause” pursuant to § 1112 (b)(1). The Motion under consideration also seeks the imposition of sanctions against the Debtor’s attorney, Little, on the grounds that he violated Bankruptcy Rule 9011 by failing to make “reasonable inquiry” concerning the Debtor’s Petition before signing the same. Bankruptcy Rule 9011, which governs the signing and verification of papers, provides in part: The signature of an attorney or a 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 it 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 harrass, to cause delay, or to increase the cost of litigation ...If a document is signed in violation of this rule, the court on motion or on its own initiative, shall impose on the person who signed it, the represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the document, including a reasonable attorney’s fee.

4160186-20685

HOLLY, District Judge. Armour and Company, an Illinois corporation, engaged in the purchase and slaughter of livestock, filed its complaint in the Circuit Court of Cook County against the Alton Railroad Company and various other railroad companies and trustees of railroad companies praying that the court decree that it is “entitled to delivery of livestock consigned to it at the Union Stock Yards, Chicago, Illinois, at the unloading pens at the Union Stock Yards at Chicago, Illinois, or at such other point as the same may be tendered, upon plaintiff paying, or making lawful arrangement to pay, the tariff rates and charges of defendants applicable to such shipments without the imposition of any charge or charges in addition thereto, and free from any lien or claim of the Stock Yards Company or of any other person, firm or corporation”; “that a mandatory injunction be entered requiring the defendants, and each of them, under penalty of the law, on and after a date to be fixed by this court, to provide suitable ingress for Plaintiff to a point at which such livestock is tendered and proper and reasonable egress for removal of its livestock from the unloading, pens of the Defendants, or from such other point in said station where delivery may be tendered to plaintiff at the Union Stock Yards in Chicago, Illinois, without the payment of any charge or charges therefor by the Plaintiff to the Stock Yards Company, or any other person, firm or corporation, save and except the said rate for transportation for said livestock, lawfully applicable there to,” and for an accounting as to monies therefor paid by plaintiff to the Union Stock Yards Company for yardage and other charges. Each of the defendants has filed a mo.tion to dismiss. The corporate defendants set up as ground therefor that the questions raised by the complaint are questions over which the Interstate Commerce Commission and the Illinois Commerce Commission have primary jurisdiction, and until those questions have been decided by the Commission in favor of the plaintiff neither the State nor Federal Court may entertain the suit, and further, that there is a defect and non-joinder of a party indispensible to the suit in that the Union Stock Yards and Transit Company of Chicago has not been joined as a party. Further, the trustee defendants have moved to dismiss on the ground that the corporations which they represent are in the process of reorganization under Section 77 of the Bankruptcy Act, 11 U.S.C.A. § 205; that leave has not been granted to plaintiff in those proceedings to bring this action and that the action may not be maintained without such leave having first been granted. The facts as set forth in the complaint are as follows: Plaintiff is engaged in the purchase and slaughter of livestock and the processing and sale of meats derived therefrom, operating a plant for such purpose in the City of Chicago, Illinois, adjacent to the properties of the Union Stock Yards and Transit Company (hereinafter referred to as the Stock Yards Company). Plaintiff purchases and ships to itself from points in Illinois and other States livestock which is shipped over the railroad lines of defendants consigned to a station of the defendants at the Union Stock Yards at Chicago. This is a joint station used by all of the defendants. It is not on land owned by defendants or any of them but is located on the private property of the Stock Yards Company. This station had been so used as such common depot or station for the receiving, loading, unloading and delivery of ordinary livestock and included loading and unloading platforms, chutes, chute pens, alleys and storage pens and other'facilities necessary to the shipment, receipt for shipment or delivery of livestock transported by rail, all of which facilities are and for many years have been located adjacent to the rails used by each of the defendants’ trains in reaching said Union Stock Yards and into which* facilities inbound shipments of livestock are unloaded, and from which facilities delivery of such livestock- consigned to said station is tendered to consignees after such unloading. The said unloading platforms, chutes, chute pens, alleys and storage pens at said station have been for many years and are now owned and operated by said Stock Yards Company. The Union Stock Yards Company is and has been since December 30, 1931, a public stockyard posted as such by the Secretary of Agriculture pursuant to the provisions of Section 302 .of the Packers and Stockyards Act, 1921, U.S.C.A. Title 7, Chapter 9, Section 202, and the defendants have for many years had, and still have, an arrangement with the Stock Yard Company whereby said company would act and has acted and still acts as their agent in receiving cars, unloading from cars and holding livestock in its pens at the Union Stock Yards until delivery thereof could be tendered to or taken from said Stock Yards by the consignee. For many years each of said defendants have- transported livestock in car loads to said station with their own respective engines and crews to the railroad track immediately adjacent to the unloading platforms of the Stock Yard Company and have there delivered possession of such shipments on the track in cars to said Stock Yard Company and engaged the Stock Yard Company as their agent to unload such livestock from said cars and to otherwise complete each transportation contract of the respective defendants with respect to livestock consigned to the Union Stock Yards and has paid the Stock Yards Company for such unloading and placing the livestock in pens. Prior to May 25, 1933, plaintiff for many years has made shipments of livestock to itself at the Union Stock Yards Company which the Stock Yards Company was authorized to accept and hold for plaintiff or store or drive to plaintiff’s packing plant as plaintiff’s agent after the transportation thereof by unloading and placing in the pens had been completed. But on May 9, 1933, plaintiff notified each of the defendants and the Stock Yards Company in writing that on and after May 25, 1933, it would accept delivery on all shipments of livestock consigned to it either at the unloading chutes or at such other point at which delivery of livestock was tendered by defendants and would remove the livestock from the point of de livery within a reasonable time after such delivery; and that on and after said date it would not pay the defendants or to the Stock Yards Company any charges on livestock accepted and removed by it save and except the charges lawfully applicable for the transportation thereof; that on May 10, 1933, the Stock Yards Company notified plaintiff in writing that it had received said notice but that it would demand the payment of certain yardage charges alleged to be due it on all livestock at said station and placed in possession of said Stock Yards Company by any or all defendants; that no one of the defendants owned or maintained any pens or other facilities at said station through which livestpck unloaded by said Stock Yards Company could be delivered to plaintiff without payment of the charge over and above the rates and charges named in defendants’ tariffs for transportation, and that on and after May 25, 1933, said Stock Yards Company would refuse to deliver to plaintiff livestock of plaintiff coming into the possession of it, the Stock Yards Company, as carriers’ agent for unloading, unless and until plaintiff paid or promised to pay to the Stock Yards Company the charges demanded by said Stock Yards Company over and above all charges for transportation by defendants. Thereafter on May 16, 1933, plaintiff notified each of the defendants of the demands of said Stock Yards Company, and that on and after May 25, 1933, the Stock Yards Company would not have authority, after unloading such livestock, to accept or receipt therefor in plaintiff’s name or for its account; that any delivery of plaintiff’s livestock by any defendant to the Stock Yards Company (other than delivery as defendants’ unloading and delivery agent) would constitute a conversion of plaintiff’s property and that any payment made by plaintiff in order to gain possession of its property from said Stock Yards Company would be made under protest for account of defendant who had placed the livestock in possession of the Stock Yards Company, and in mitigation of damages. At the same time plaintiff notified the Stock Yards Company that on and after May 25, 1933, it would accept delivery of such livestock at the unloading chutes or any other point where tender thereof was made and promptly remove the same from the premises of the Stock Yards Company and that on and after said date plaintiff did not desire and would not accept, receive or pay for any service rendered to, or facilities used by said Stock Yards beyond the point at which it was ready and willing to accept said livestock when and where tendered, and from which it was ready and willing to promptly remove such livestock from the point of delivery. Each defendant well knew that it could not fully perform its contracts for the transportation of shipments of livestock to said Union Stock Yards, and for delivery thereof to the plaintiff at such station, save by use of the pens, platforms, chutes and other facilities of said Stock Yards Company and well knew before it delivered possession of said livestock to said Stock Yards Company for unloading from cars that said Stock Yards' Company would unload, hold and tender delivery of the same at a point which was accessible to plaintiff only by crossing other property of said Stock Yards Company and from which, after tender and acceptance of possession, no egress could be had by plaintiff with its livestock, except by crossing the property of said Stock Yards Company, and well knew that said Stock Yards Company would refuse to complete said transportation contract or surrender possession of said livestock to plaintiff unless and until the plaintiff had paid or promised to pay a toll or charge for crossing the premises of said Stock Yards Company and for driving its animals across said premises after delivery, notwithstanding which defendants, on May 25, 1933, refused, and have since said date continuously refused, to provide or establish at their common station, Union Stock Yards, Chicago, Illinois, any depot or platform, pens, and facilities over and through which plaintiff might accept delivery of, and from which plaintiff might remove its said shipments, without payment of any toll or charge other than the charges lawfully applicable to the transportation of such livestock, and that the defendants wholly failed to make any arrangement with the Stock Yards Company by virtue of which plaintiff might have free ingress to the point at which the delivery of livestock was tendered and egress from the point of delivery thereof to a public street or other point off the premises of said Stock Yards Company without being compelled to pay a toll or charge over and above the lawful charges for transportation. Since May 25, 1933, plaintiff has been compelled, in order to obtain delivery of livestock consigned to it and arriving at the Union Stock Yards Company over the lines of defendants to pay a charge made by the Stock Yards Company for keeping such livestock and for ingress to and egress from the yards of said Stock Yards Company. The lines of the defendants, so it is stated in the complaint, constitute all the carriers by rail traversing the livestock production areas within which plaintiff purchases and ships or caused to be shipped livestock to its order at the Union Stock Yards, Chicago, Illinois. Plaintiff at no time has demanded from any defendant or the Stock Yards Company the right to use any specific pens, alleys, runways, overhead drives or tunnels of the Stock Yards Company in accepting delivery or removing livestock from the point at which delivery was tendered to the packing plants of plaintiff but sought only to be permitted to take possession of its shipments of livestock at the unloading point used by the defendants as their depot or station in said Union Stock Yards, or at whatever point therein tendered, and thence remove said shipments of livestock to a public street or to such other point off the premises of said Stock Yards Company as that company or the defendants might designate and by whatever route or means of egress might from time to time be determined by the defendants or the Stock Yards Company. The gist of the controversy appears to be this: Plaintiff buys at various points in the country and ships to itself over the railroads of defendants livestock destined to the joint station of defendants at the Union Stock Yards, Chicago. Defendants have the duty, under the law, of unloading the livestock in pens ready for delivery to the consignee. Covington Stock-Yards Co. v. Keith, 39 U.S. 128, 11 S.Ct. 461, 35 L.Ed. 73. Defendants’ station is not located on the property of the defendants or any of them, but on the private property of the Union Stock Yards Company. The defendants employ the Union Stock Yards Company to perform for them the duty of unloading the livestock and putting it in pens, these pens being the property of the Stock Yards Company situated on the private property of that company. Prior to May 25, 1933, the Stock Yards Company stored in their pens the livestock consigned to plaintiff. The livestock was delivered to plaintiff by the Stock Yards Company when called for by plaintiff who paid the Stock Yards Company a charge referred to in the briefs as “Yardage”. About ten days prior to the 25th of May, 1933, plaintiff notified the defendants and the Stock Yards Company that it did not desire the services of that company (other than the service of unloading and placing in pens the cost of which was included by defendants in the costs of transportation)' and demanded that the defendants deliver the livestock to it and permit it to remove it from the Stock Yards without the payment of any charge in addition to the regular charge for transportation. The defendants refused to take any action other than to deliver the livestock in the pens in the Stock Yards, although they knew, as plaintiff alleges, that the Stock Yards Company would not permit plaintiff to remove its livestock without the payment of the charge for yardage. The Union Stock Yards Company replied simply that it would refuse to deliver the livestock to plaintiff unless and until plaintiff paid the yardage charge. Since May 25, 1933, plaintiff has paid the yardage under protest and under this complaint seeks to recover of the defendants the amounts it has been compelled to pay to the Stock Yards Company to obtain possession of its livestock. It also prays for a mandatory injunction as set out above. The matters for the court to determine are whether the questions presented are primarily for the Illinois and Interstate Commerce Commissions rather than for the court, and whether the Stock Yards Company is a necessary party. There is also the question whether this suit may be maintained against the trustees without first obtaining leave of the court or courts which appointed them. First. If this were a suit to recover merely a charge for transportation in excess of the tariff rates approved by the Interstate Commerce Commission, plaintiff could maintain its action. Great Northern Ry. Co. et al. v. Merchants’ Elevator Co., 259 U.S. 285, 42 S.Ct. 477, 479, 66 L.Ed. 943. But in that case the court said: “Whenever a rate, rule, or practice is attacked as unreasonable or as unjustly discriminatory, there must be preliminary resort to the Commission. Sometimes this is required because the function of being exercised is in its nature administrative in contradistinction to judicial. But ordinarily the determining factor is not the character of the function, but the character of the controverted question and the nature of the inquiry necessary for its solution. To determine what rate, rule or practice shall be deemed reasonable for the future is a legislative or administrative function. To determine whether a shipper has in the past been wronged by the exaction of an un reasonable or discriminatory rate is a judicial function. Preliminary resort to the Commission is required alike in the two classes of cases. It is required because the inquiry is essentially one of fact and of discretion in technical matters; and uniformity can be secured only if its determination is left to the Commission. Moreover, that determination is reached ordinarily upon voluminous and conflicting evidence, for the adequate appreciation of which acquaintance with many intricate facts of transportation is indispensable, and such acquaintance is commonly to be found only in a body of experts. But what construction shall be given to a railroad tariff presents ordinarily a question of law which does not differ in character from those presented when the construction of any other document is in dispute.” This case seems to me to come squarely within the rule there laid down. Here the defendants have made no charge in excess of the established rates. They have received no money other than that to which they were entitled for the carriage of the livestock. The stock was carried to the station designated by the shipper. It was unloaded and placed in pens in the manner that had been customary for many years prior to May 25, 1933, and to which plaintiff assented prior to the giving of the notice mentioned in the complaint. Plaintiff has long known that the Union Stock Yards station of defendants was on the property of the Union Stock Yards and Transit Company. It knew that the livestock when taken from the cars was put in pens located on the property of and owned by the Stock Yards Company. It now demands that the livestock be delivered directly to it and that it be given the right of ingress to and egress from the property of the Stock Yards Company without being required to make payment to that company. Its demand may be proper and reasonable, but that is a question of administration for the Interstate Commerce Commission and Illinois Commerce Commission. It may well be that if a railroad establishes its station upon private property it is bound to make such arrangements with the owners of the property that consignees of freight may, without payment of fee to the owner of the ground, have access to the station for the removal of the freight. Ordinarily, such service would be required. But here we have a situation where for many years plaintiff and other shippers have consigned and are now consigning their stock to the Union Stock Yards station knowing that after the unloading of the stock and placing it in pens it could not be removed to their processing establishments without the use of the facilities owned by the Stock Yards Company. Whether there are other 'stations in Chicago of the defendants provided with facilities for the delivery of livestock and which plaintiff might use does not appear of record. It is possible that the solution of the problem is to require the railroads to provide proper stations on their own property or adjacent to plaintiff’s plant. Covington Stock-Yards Co. v. Keith, supra. All these are questions for the Commerce Commissions of the State and Federal governments. Plaintiff urges the court to take jurisdiction to this case because under the doctrines of Procter & Gamble Co. v. United States, 225 U.S. 282, 32 S.Ct. 761, 56 L.Ed. 1091, if it were to go to the Interstate Commerce Commission and be denied relief, no matter how erroneous the ruling of the Commission, plaintiff would have no right to appeal. Whatever fears the plaintiff may have had on this score would seem to have been set at rest, in my opinion, by the Supreme Court in Rochester Telephone Corporation v. United States et al., 59 S.Ct. 754, 83 L.Ed. —, decided April 17, 1939, not yet officially reported. This is a case for the Commerce Comrnissions and not for the court, and for that reason the complaint should be dismissed. Second. Is the Union Stock Yards and Transit Company an indispensable party to this litigation? In my opinion it is. Plaintiff prays for a mandatory injunction compelling defendants to provide plaintiff suitable ingress to the yards of the Stock Yards Company, and egress from the yards with its livestock without payment of any charge. How the court, not having jurisdiction of the Stock Yards Company, could enforce such an order plaintiff does not explain. Because of the non-joinder of the Stock Yards Company the complaint should be dismissed.

9272817-6860

MEMORANDUM OPINION AND ORDER LAMBERTH, District Judge. Before the Court is the Federal Defendants’ Motion to Dismiss the plaintiffs complaint for lack of jurisdiction and failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). Upon consideration of the defendants’ motion, the applicable law and the record in this case, the Court finds that the plaintiff has failed to state a claim upon which relief can be granted. Therefore, the Court grants .the defendant’s motion and dismisses the plaintiffs complaint pursuant to Fed.R.Civ.P. 12(b)(6). BACKGROUND In 1986, the Office of Hearings and Appeals (“OHA”) of the Department of Energy (“DOE”) engaged in administrative proceeding that resulted in refund awards to consumers of crude oil who had been subject to past, overcharges. The plaintiff filed an application for attorney’s fees under the common-fund doctrine. The DOE denied the plaintiffs application for attorney’s fees. The plaintiff filed the instant action, seeking judicial review of that determination, and the federal defendants filed the motion to dismiss now before the Court. Pursuant to a 1986 settlement agreement, the DOE adopted a restitutionary policy for cases involving crude oil over charges. See In Re the Department of Energy Stripper Well Exemption Litigation, 653 F.Supp. 108, 113 (D.Kan.1986). Parties to the settlement were accorded individual escrow accounts from which they would receive a portion of the funds due. See Stripper Well, 653 F.Supp. at 112. Claimants who were not parties to the settlement, such as those represented by the plaintiff, were directed to the Modified Statement of Restitutionary Policy, which provides that victims of overcharges may submit claims in refund proceedings pursuant to the agency’s Subpart V procedures. See 10 C.F.R. Part 205. The modified policy authorizes OHA to initially reserve up twenty percent of all crude oil overcharge funds in the agency’s escrow for distribution under this policy. The DOE determines whether a claim has merit and the amount of eligible product. The DOE • then refunds a certain amount of money, based upon the volume of eligible product purchased, to successful claimants. An entity named Hercules, Incorporated applied for a refund and received only partial relief because the total volume claimed was deemed ineligible under the standards that existed at that time. Hercules, then, filed a motion for reconsideration. The DOE issued a proposed decision on August 3, 2001 and invited comments. The DOE also specifically notified the plaintiff of the proposed decision. The plaintiff, representing his clients, participated in the administrative proceedings. At the close of the proceedings, OHA found that the claimed volumes qualified for refunds and reasonable percentages were determined. Since this final decision, the plaintiff, representing a group of clients, has filed numerous lawsuits over the past eleven years in an effort to obtain larger overcharge fund reimbursements. The plaintiff, in his own capacity, filed a fee application, invoking the common-fund doctrine and claiming that he should be paid attorney’s fees out of the restitutionary fund and requesting $60, 000. Under the common-fund doctrine, a litigant or lawyer who recovers a common fund for the benefit of third persons is entitled to reasonable attorney’s fees from the fund as a whole. See Boeing Co. v. Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980). However, the common-fund doctrine is an exception to the American rule, which maintains that a prevailing party is not entitled to collect a reasonable attorney’s fee from the loser. See Alyeska Pipeline Sev., Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). OHA treated the plaintiffs fee application as a Petition for Special Redress upon finding that the request was not covered by any specific DOE procedural regulation. ' OHA denied the plaintiffs request for attorney’s fees on March 10, 2003 upon finding, consistent with D.C.Cir. case law, that the plaintiffs suit was barred by sovereign immunity. Therefore, OHA denied the plaintiffs application for fees without reaching the merits of his application. The plaintiff now seeks reversal of the agency’s decision. ANALYSIS Consistent with a recent decision from the D.C.Cir., involving the same parties and similar claims, this Court finds that the plaintiffs suit is barred by sovereign immunity, and, therefore, that it need not reach the merits of the plaintiffs claim. See Kalodner v. Abraham, 310 F.3d 767, 769 (D.C.Cir.2002). In Kalodner, the D.C.Cir. reviewed a DOE denial of a fee application filed by Kalodner and a district court’s subsequent rejection of his request for review. In holding that Kalodner’s suit was barred by sovereign immunity, the court invoked a basic tenet of federal jurisprudence, “that the United States cannot be sued at all without the consent of Congress.” Kalodner, 310 F.3d at 769 (quoting Block v. North Dakota, 461 U.S. 273, 287, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983)). To be amenable to suit, the federal government must “unequivocally” waive its immunity, and such waiver must be readily located in the “statutory text.” Id (quoting Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996)). Based on the doctrine of sovereign immunity, the court rejected Kalodner’s argument, that he was suing the United States only as the escrowee of funds that actually belonged to successful restitution claimants, not in its federal sovereign capacity. The court held that “[t]he government need not have an actual interest in the funds in order to invoke [sovereign immunity],” it is enough that the funds sought are in the possession of the United States Treasury. Id. (citing United States v. New York Rayon Importing Co., 329 U.S. 654, 67 S.Ct. 601, 91 L.Ed. 577 (1947)). A common-fund fee award itself requires an unequivocal waiver of sovereign immunity. The only Common-fund waiver is found in a provision of the Equal Access to Justice Act, 28 U.S.C. § 2412(b), and it is wholly inapplicable to the plaintiff. § 2412(b) provides that: a court may award reasonable fees and expenses of attorneys, ..., to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be hable under the common law or under the terms of any statute which specifically provides for such an award. See 28 U.S.C. § 2412(b). This provision clearly applies exclusively to parties who were adverse to and prevailed against the United States in a civil action.

1795721-8587

SPARKS, Circuit Judge (after stating the f aets as above). The following questions are presented by this appeal: (1) Is equity without jurisdiction? (2) In the absence of a waiver does the failure to make proofs of loss within the time required hy the several policies constitute a bar to this action? (3) Was there a waiver1 of appellants as to such proofs of loss? (4) If there was such waiver proven, will that fact be of avail to appellee, in the absence of an allegation of such waiver in the bill? (5) Is the award of the appraisers void by reason of their misconduct? (6) Did the trial court comply with Equity Rule 70% (28 USC'A § 723) in adopting as its own -the master’s findings of fact, and conclusion of law? (7) Did the trial court err in rendering a joint decree against appellants? Unless the first question be answered in the negative a consideration of the remaining questions will not he necessary. A court of equity will reform an instrument only when necessary to enable a party to assert some right thereunder. Thompson v. Phoenix Insurance Company (C. C.) 25 E. 296. The only allegations in the bill upon which appellee based his right to equitable relief relate to the reformation of the written agreement to submit to appraisal. He sought to reform that instrument: (1) By inserting the date of its execution. (3) By showing that the instrument was signed by John C’itro, not in his individual capacity but as agent and attorney for appellee. The date of an instrument which bears no date, or the true date of an instrument which bears a date, may be shown by parol evidence at law as well as in equity. Lambe v. Manning, 171 Ill. 612, 49 N. E. 509; Thompson v. Schuyler, 2 Gilman (7 Ill.) 271; United States v. Le Baron, 19 How. (60 U. S.) 73, 15 L. Ed. 525. The mere omission of the date of the execution of an instrument does not require reformation to make it enforceable or admissible in evidence, and is not sufficient to give equity jurisdiction, because the remedy at law in that respect is adequate and equally efficient. Loomis v. Freer, 4 Ill. App. 547. A contract made by an agent in his own name may be shown by parol evidence to be that of the principal, where the transaction relates to the affairs of the principal and not to the personal affairs of the agent (Whitney v. Wyman, 101 U. S. 392, 25 L. Ed. 1050; Sun Printing and Publishing Association v. Moore, 183 U. S. 642, 22 S. Ct. 240, 46 L. Ed. 366; Lockwood v. Coley (C. C.) 22 F. 192); and such a contract may be enforced at law by or against the principal, if within the agent’s authority, although the agency was undisclosed. Prichard v. Budd (C. C. A.) 76 F. 710; Pope v. Meadow Spring Distilling Company (C. C.) 20 F. 35. It is obvious, therefore,- that it was not necessary to reform the instrument in the particulars mentioned in order to enable appellee to assert his rights. Bacon v. Ward, 10 Mass. 141, cited by appellee, was not an equitable proceeding, and it held that a written dat/s is not essential to a contract, and that a false or impossible date may be explained and corrected by extraneous evidence whenever it is important to have the true date ascertained. Appellee insists in his brief, however, that equity has jurisdiction in order to avoid a multiplicity of suits and to provide a more efficient and adequate remedy, but in his bill he makes no mention of those grounds as a basis for equitable relief, as required by Equity Rule 25 (28 USCA § 723). Equitable grounds of relief must be both averred in the bill and established by proof before purely legal rights may be determined by a court of equity. Brauer v, Laughlin, 235 Ill. 265, 85 N. E. 283; Toledo, St. Louis & New Orleans R. R. Co. et al. v. St. Louis & Ohio River Railroad Co. et al., 208 Ill. 623, 70 N. E. 715; Palmer v. Fleming, 1 App. D. C. 528. This objection, would be met, however, if appellants by their acts waived their right to object to equitable jurisdiction, as he contends they did, but that contention will he discussed later. In support of the proposition that this court has jurisdiction in order to avoid a multiplicity of suits and to provide a more efficient and adequate remedy, appellee cites Milwaukee Mechanics’ Insurance Company v. Ciaccio et al. (C. C. A.) 38 E.(2d) 153, a ease decided by this court. In that ease appellees had originally instituted five separate actions at law on the policies in suit. They later brought an action in equity against the same five insurance companies to recover for their total loss under all the policies. In the actions at law the companies appeared and, with plaintiffs, stipulated in writing to waive a jury trial. On the trial the court consolidated the law actions and in one trial heard the evidence in the equity suit and, presumably, in the consolidated law actions. It refused to compel the insured to elect whether they would proceed with the law actions or with their suit in equity. A money decree was entered against the appellant company in the equity suit, rather than in the action at law. The court could have transferred the cause from equity to law and entered the same money judgment upon the same evidence. To avoid a multiplicity of suits was one of the grounds relied upon to invoke equitable jurisdiction. Also, one of the policies contained a misdescription of the property, and as against said company equitable relief was sought in the nature of reformation of that description. That mistake was such as to require reformation, and bears no analogy to the mistakes sought to be corrected in the instant case. There was also a controversy as to whether one of the policies was in force at the time of the fire. The total amount of insurance in force being controverted, and as each policy in force was bound to contribute'its proportionate share of the total amount of insurance in force, it was quite necessary for the same court to ascertain that total amount, and to reform the misdescription, in order to afford appellee a complete, efficient* and adequate remedy. This a court of law could not do on account of the necessity of a reformation of the description of the property in one of the policies. In the instant ease a similar state of facts does not exist. It has never been denied by the companies that all the policies in suit were in force at the time of the fire, and that the total amount of insurance then in force was $30,000, and the bill pleads no such denial, nor is there evidence to show it. The appellants admitted in their answers that the total amount of insurance in force at the time of the fire was $30,000, and the policies provide explicitly what portion of tha total loss each company is to pay, in ease there is a liability. That proportion as provided in the policies is based on the total amount of insurance in force at the time of the fire, and can be in no way affected by the inability of any company to pay, nor by any change of conditions since the fire. The liability of any company or companies may be defeated by proof of certain acts occurring since the fire, but such fact can in no manner change the proportions of the amount of total loss due from those who are held liable under the provisions of their respective policies. The liabilities of the several companies therefore are not interrelated or interdependent, and it cannot be said that equity will furnish a more efficient, adequate, and complete remedy for appellee’s alleged rights than separate actions at law would furnish. In the Ciaceio ease, supra, there were five actions at law involved, and the appeal to equity was largely relied upon in order to avoid a multiplicity of suits, but this court did not rely upon that ground alone to sustain equitable jurisdiction. The instant controversy would require three separate actions at law, and they would afford appellee a complete, efficient and adequate remedy on the respective policies. That number of actions, under the circumstances, could scarcely be referred to as a multiplicity of suits. It is contended by appellee, however, that an objection to equity jurisdiction comes too late after reference and proceedings before the master; and he further contends that appellants waived their objection to equitable jurisdiction by demanding equitable relief in their answers, that is to say, they asked that the pretended award of the appraisers be set aside. As to the first contention, it is sufficient to say that appellants’ objection to equity jurisdiction was made at the first opportunity by way of answer, and before reference to the master.

6477505-15902

MEMORANDUM AND DECISION ALAN H.W. SHIFF, Bankruptcy Judge. The debtor seeks an order confirming its Third Amended Plan of Reorganization. Although no party in interest has objected, 11 U.S.C. § 1128(b), and the Office of the United States Trustee has filed no comment suggesting that confirmation should be denied, 28 U.S.C. § 586(a)(3)(B), for the reasons that follow I conclude that the debtor has failed to meet its burden of proving that its plan is confirmable. In re Texaco Inc., 84 B.R. 889, 891 (Bankr.S.D.N.Y.1988) (“Even in the absence of an objection to confirmation by a party in interest, the debtor has the burden of establishing all of the requirements for confirmation delineated under 11 U.S.C. § 1129.”). BACKGROUND On March 21, 1988, the debtor, which is in the typesetting business, filed a petition under chapter 11 of the Bankruptcy Code. The debtor filed a Second Amended Plan on April 18, 1989, and a Third Amended Plan (the “Plan”) on April 19. The Plan lists the following classes: Secured Claims Class 1 is the secured claim of North American Bank & Trust Co., estimated at $21,859.00; Class 2 is the secured claim of Vendor Funding Co., Inc., estimated at $24,-679.72; Class 3 is the secured claim of Connecticut National Bank (“CNB”), estimated at $27,957.68; Class 4 is the secured claim of Capital Impact Corporation, estimated at $598,058.00; Class 5 is the secured claim of Linotype Co., estimated at $13,227.27; Class 6 is the secured claim of GMAC, estimated at $48,972.66; Class 7 is the disputed secured claim of Graphics/Firestone Leasing Co., for an unspecified amount; Class 8 is the secured claim of Midlantic Commercial Leasing Corp., estimated at $6,745.75; Class 9 is the disputed secured claim of Systems Leasing, for an unspecified amount, Class 10 is the “secured” claim of Technical Equipment Leasing (“TEL”), “which has been deemed unsecured by agreement of the parties”, Third Amended Plan of Reorganization, Article Two, ¶ 11, at 3, estimated at $125,350.00; Class 11 is the disputed secured claim of the State of Connecticut Department of Revenue Services, estimated at $922.82; Class 12 is the secured claim of Pitney Bowes, for an unspecified amount. With the exception of the claim of CNB (class 3), all other undisputed secured claims are to be paid on the effective date of the Plan. CNB’s claim had been accorded that treatment under the Second Amended Plan, but just prior to the confirmation hearing the debtor filed the Plan, which technically impairs CNB’s claim by deferring payment for fifteen days. See infra at 38-40. While the amount of the claims of Graphics/Firestone Leasing Co. and Systems Leasing are listed as “unknown”, testimony at the confirmation hearing demonstrated that they may total as much as $60,000.00. Unsecured Claims — Priority Priority claims, which are listed but unclassified under the Plan, are treated as follows. Administrative expenses totalling $142,000.00, including $95,000.00 in post-petition taxes, are to be paid in full on the effective date of the plan. 11 U.S.C. § 1129(a)(9)(A). Other priority claims, consisting for the most part of pre-petition federal, state, and municipal taxes, total-ling approximately $300,000.00, are to be paid within six years of the date of assessment, commencing thirty days after the effective date of the Plan with interest as provided by 28 U.S.C. § 196(a). See 11 U.S.C. § 1129(a)(9)(C). It is noted that the Internal Revenue Service has an unsecured general claim for $47,125.15 which the Plan appears to treat as a priority claim. See infra at 37-8. Unsecured Claims — General Class 13 consists of allowed, unsecured claims. There are sixty-eight creditors in this class with claims totaling approximately $455,000.00. The Plan proposes to pay Class 13 creditors a pro rata share of $5,000.00, or about one percent of their claims. Class 13 has rejected the Plan. Interest of Shareholder Class 14 consists of the debtor’s sole shareholder, Roger Wright. The Plan proposes that on the effective date, all shares of stock will be cancelled, and 1,000 new shares will be issued to Wright, who will thereby retain a 100% ownership interest. The debtor contends that Wright will pay $339,350.00 for that interest as follows: (1) $95,000.00 in cash; (2) a $125,350.00 claim of TEL (class 10), which is wholly owned by Wright, will be forgiven; and (3) Capital Impact Corporation (class 4) will be directed by Wright to pay $119,000.00 to the IRS in satisfaction of administrative claims. See infra at 37. DISCUSSION A. Cramdown of impaired class of noncon-senting unsecured claims under § 1129(b)(2)(B)(ii) Code § 1129(a) provides in part: The court shall confirm a plan only if all of the following requirements are met: (8) with respect to each class of claims or interests— (A) such class has accepted the plan; or (B) such class is not impaired under the plan. Code § 1129(b) provides for the confirmation of a plan notwithstanding the requirements of paragraph (8): (1) ... [I]f all of the applicable requirements of subsection (a) of this section other than paragraph (8) are met with respect to a plan, the court, on request of the proponent of the plan, shall confirm the plan notwithstanding the requirements of such paragraph if the plan does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the plan. (2) For the purpose of this subsection, the condition that a plan be fair and equitable with respect to a class includes the following requirements: (B) With respect to a class of unsecured claims— (ii) the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest any property. In arguing that its plan is confirmable notwithstanding § 1129(b)(2)(B)(ii), the debtor relies upon Case v. Los Angeles Lumber Products Co., 308 U.S. 106, 60 S.Ct. 1, 84 L.Ed. 110 (1939), which recognized an exception to the absolute priority rule. The absolute priority rule is now codified as § 1129(b)(2)(B)(ii). H.R.Rep. No. 95-595, 95th Cong., 1st Sess. 413 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787. Under the Los Angeles Lumber exception, holders of equity security could “make a fresh contribution and receive in return a participation reasonably equivalent to their contribution....” Los Angeles Lumber, supra, 308 U.S. at 121, 60 S.Ct. at 10. See also Official Creditors’ Comm. v. Potter Material Serv., Inc. (In re Potter Material Serv., Inc.), 781 F.2d 99, 101 (7th Cir.1986) (“The new capital investment must ... equal or exceed the value of the retained interest in the corporation.”); In re Future Energy Corp., 83 B.R. 470, 499 (Bankr.S.D.Ohio 1988) (new investment must equal or exceed retained interest). Moreover, under that exception, the investment must be “money or money’s worth”, that is, something tangible, alienable and leviable. See Los Angeles Lumber, supra, 308 U.S. at 122, 60 S.Ct. at 10-11; Matter of Stegall, 865 F.2d 140,142 (7th Cir.1989). The continued vitality of the Los Angeles Lumber exception was questioned but not decided by the Supreme Court in Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 108 S.Ct. 963, 99 L.Ed.2d 169 (1988), because the Court concluded that even if the exception were viable after the enactment of the Bankruptcy Reform Act of 1978, the debtor’s plan failed to meet its requirements. For the same reason, it is not necessary to consider that question here. In an attempt to satisfy the Los Angeles Lumber test, the debtor offered evidence that its present value as a going concern is $196,940-.00, as compared to Wright’s alleged $339,350.00 capital investment. Both figures are grossly inaccurate. (1) Value of the Reorganized Debtor The debtor offered the testimony of its accountant, who claimed to use a “yield capitalization” or “discounted value” formula to compute the going concern value of the reorganized debtor. I find, however, that although that formula is acceptable, albeit somewhat cumbersome, see infra at 37, the accountant did not properly apply it. As a consequence, the present value of the debtor’s business as a going concern was substantially understated. (a) Discount Rate In calculating the discount rate, or weighted cost of capital, see supra note 3, the accountant assumed that the total debt was $1,669,637.00, the cost of debt was approximately 8%, the total equity eontri- bution was $214,000.00, and the expected rate of return on equity was 20%. From those numbers he arrived at a discount rate of 10.446%. That rate is skewed, however, by the incorrect numbers used in computing both the weighted cost of the reorganized debt and the weighted cost of equity components of the discount rate calculation. See supra note 3. No allowance was made for the disputed claims of Graphics/Firestone and Systems Leasing. More important, the $455,000.00 Class 13 unsecured debt and the $123,-350.00 claim of TEL, which are not a part of the debt to be administered by the Plan, are included in the total debt calculated by the accountant, notwithstanding the clear indication in In re Fiberglass Industries, Inc., 74 B.R. 738, 746 (Bankr.N.D.N.Y.1987), relied upon by the debtor, that the reorganized debtor’s post-confirmation debt should be used in the calculation. As a result of that error, the total post-confirmation debt is overstated by at least $525,-000.00, thereby distorting the proportion of debt to capital calculation. See supra note 3. The accountant also failed to make any allowance for the cost of approximately $80,000.00 owed in tax claims, which are to be paid over time, in figuring the cost of debt. See supra note 3. In computing the proportion of equity to capital, see supra note 3, the accountant used $214,000.00 as the total equity contribution, although the debtor claims that Wright will pay $339,000.00 under the Plan to retain his 100% equity interest. This obvious contradiction was not explained. Moreover, the accountant used a 20% expected rate of return on equity, that is, the cost of equity. See supra note 3. Although projections necessarily depend upon assumptions, experts are expected to offer the basis upon which their assumptions are made. No testimony was elicited that the debtor’s accountant has any expertise with respect to the risk involved with this business, the typesetting industry in general, or the rate of return generally expected by investors from comparable investment opportunities. Without such evidence there is no basis to conclude that the 20% rate of return is anything more than an arbitrary guess. (b) Methodology A more fundamental defect in the debt- or’s analysis is the lack of a “residual value” calculation. See supra note 3, ¶ (b)(ii), (iii). The accountant discounted projected operating income to present value for a five year period, but although it is doubtful that the accountant assumed that the debtor’s reorganized business would terminate at the end of that period, he went no further in his calculations. Without calculating the pres'ent value of operating income for future years after the fifth year, the computed present .value is grossly inaccurate. In re Fiberglass Indus., Inc., supra, 74 B.R. at 743 (it is necessary to discount to present value operating income for given years “and for a terminal year which represents a normalized projection for all years” which follow the last given year in a discounted operating income analysis). See also The Matter of Valuation Proceedings Under Sections 303(c) and 306 of the Regional Rail Reorganization Act of 1973, 531 F.Supp. 1191, 1226 (Regional Rail Reorg.Ct.1981) (“Of course, the ... witness did not assume that an enterprise would disappear at the end of twenty years.... The total value of the enterprise is equal to the [present discounted value] of the annual cash flow projections plus the [present discounted value] of the terminal value.”). The court in Matter of Valuation Proceedings explained a method for calculating the residual value of an enterprise at the end of a given period: To calculate terminal value one divides the normalized year’s earnings by the appropriate discount rate — exactly the same as the calculation of capitalized earnings value.... Next, one calculates the [present discounted value] of the terminal value.... Matter of Valuation Proceedings, supra, 531 F.Supp. at 1226 n. 55. The “normalized year”, which represents the expected income for future years, is assumed to be the final given year’s income. See id. at 1226. Under that method, if it is assumed that the debtor’s $49,280.00 estimated operating income for 1994 represents a “normalized year” and that the 10.446% discount rate used by the debtor were accurate, this final calculation would add $287,-058.76 to the value of the debtor, bringing its total value to approximately $483,-998.76. This finding is supported by using the “direct capitalization” or “capitalized earnings” method of determining value. Under that method, an estimate of a single year’s income or an estimate of average income for a period of time is divided by the appropriate rate. Id. at 1225 n. 52; In re Jartran, 44 B.R. 331, 372-73 n. 84 (Bankr.N.D.Ill.1984); Judge D. Houston & Judge J. Queenan, Valuation in Bankruptcy Proceedings 27-30 (Paper delivered at April 13-15, 1988, Boston seminar for Bankruptcy Judges). When the average of the reorganized debtor’s five year expected operating income, $51,688.00, is divided by the 10.446% discount rate used by the debtor, a value of $494,811.41 is computed. It is therefore apparent that even if the discount rate used by the debtor were accurate, the value of the reorganized debtor would be approximately $490,000.00. The $196,940.00 value calculated by the debt- or’s accountant is thus undoubtedly the result of his seriously flawed methodology. (2) Wright’s Contribution In addition to understating its value, the debtor also grossly overstated the contribution to be made by Wright. The $119,-000.00 which Wright is to “direct” Capital Impact Corporation to pay to the IRS constitutes no contribution. That money was withheld by Capital Impact when it loaned the debtor $598,058.00. Although the debt- or now contends that that money was borrowed by Wright and the debtor, the loan is treated in the Disclosure Statement and Plan as an obligation of the debtor alone. Even if Wright is acting as agent of the debtor, that is not the equivalent of Wright paying $119,000.00. Any payment by Capital Impact to the IRS would merely substitute that company for the IRS as a creditor to the extent of the payment. The Plan does not state that Wright will pay the debtor’s increased obligation to Capital Impact. It also is apparent that waiving TEL’s “secured” claim for $125,350.00 does not constitute a contribution by Wright. The simple fact is that that claim is unsecured, that unsecured claims are treated in Class 13 by payment of a pro rata share of $5,000.00, and that the waiver of that claim does not reduce the debtor’s obligation to that class. I conclude that Wright’s $95,000.00 cash contribution stands alone, so that even if the debtor’s going concern valuation of $196,940.00 were accepted as accurate, Wright’s capital investment would fall far short of the Los Angeles Lumber exception to the absolute priority rule. B. §§ 1129(a)(1), 1122(a) Section 1129(a) provides in part: The court shall confirm a plan only if all of the following requirements are met: (1) The plan complies with the applicable provisions of this title. The plan must therefore comply with § 1122, which in relevant part provides: (a) ... [A] plan may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests of such class.

4146239-18048

NORTHCOTT, Circuit Judge. This is a suit in equity brought in the District Court of the United States for the Southern District of West Virginia, at Charleston, seeking to enjoin, set aside, annul, and suspend a certain order of the Interstate Commerce Commission, hereinafter referred to as the commission. Upon the bringing of the suit, the judge of the District Court convened a three judge court under section 266 of the Judicial Code, as amended (28 USCA § 380). Upon the convening of the court, the Is land Creek Coal Company, a corporation, and the West Virginia Coal & Coke Corporation were permitted to intervene in support of the petition, and the commonwealth of Kentucky, the Northeast Kentucky Coal Bureau, and the Interstate Commerce Commission were permitted to intervene in opposition. It was stipulated between the parties that the hearing should be final. The petitioner is a corporation organized under the laws of the state of Virginia and is a citizen and resident of the Eastern District of that state and owns and operates, or leases and operates, as a common carrier, lines of railroad in several states, among others, in the states of West Virginia and Kentucky. It is engaged in the interstate transportation of persons and property, including transportation of bituminous coal, in the Big Sandy districts in Kentucky, from what is known as the Northeast Kentucky field, to Catlettsburg, Ky., and from what is 'known as the Logan field in West Virginia to Huntington, W. Va. In July, 1933, Northeast Kentucky Coal Bureau, as complainant, filed a complaint with the commission (Docket No. 26080) against the railway company, alleging that while the all rail rates from the Northeast Kentucky field in Kentucky and the Logan field in West Virginia are the same to interstate destinations, the railway company maintained a proportional rate of 50 cents per net ton on bituminous coal from points in the Logan field to Huntington, W. Va., when for transshipment by river to destinations beyond Huntington, that the railway did not maintain a proportional rate on bituminous coal from origin points on its line in the Northeast Kentucky field to Catlettsburg, Ky., when for transshipment by river to points beyond Catlettsburg, but maintained a rate of $1.17 per net ton for such coal. The complaint further alleged that the railway’s failure to establish and apply rail rates of 50 cents per net ton for the haul to Catlettsburg from the Northeast Kentucky field for river transshipment was unreasonable and unjust and in violation of section 1 of the Interstate Commerce Act (49 USCA § 1), and unduly disadvantageous to complainants in violation of section 3 of said act (49 USCA § 3). Complainant prayed that the commission, by order, command' the railway to cease and desist from said violations of said act and put in force a rate from points on its line in the Northeast Kentucky field to Catlettsburg, for transshipment by river, a rate not in excess of the 50 cents per ton charged by the railway for the transportation of bituminous coal from points in the Logan field to Huntington. The Northeast Kentucky field referred to in the complaint before the commission, and in the petition herein, is served by one of petitioner’s.branch lines running northward to Catlettsburg, a point on the Ohio river near the mouth of the Big Sandy river, in the extreme northeastern .section of Kentucky, a short distance west of Huntington, W. Va., and a junction with petitioner’s east and west main line. Across the Big Sandy river in West Virginia is located the Logan field, which is likewise served by a branch line of petitioner herein running northward to join the east and west main line at Barboursville, W. Va., a, point east of Huntington, W. Va., also on the Ohio river. Coal traffic for transshipment by water beyond Catlettsburg was, at the time of the filing of the complaint, entirely prospective, no transshipment facilities being in existence for transferring coal at Catlettsburg. Complainant asserted its intention to build and operate such transshipment facilities upon the establishment and maintenance of the 50-cent rate sought. After the filing of the complaint, before the commission, hearings were held, briefs were filed, and the case was orally argued. On May 22, 1934, the commission, by division 2, one commissioner dissenting, issued its report and order dismissing the complaint and finding that the rates from the Northeast Kentucky coal field to Catlettsburg were not unreasonable or unduly prejudicial. In July, 1934, complainant filed a petition for reargument and reconsideration by the entire commission; in September, 1934, the proceeding was reopened and re-argument was had before the entire commission. On February 7, 1935, the commission, the chairman and one commissioner dissenting, issued its report and order reversing the finding of division 2, and entered the following order: “It appearing, That on May 22, 1934, division 2 made and filed its report and entered its order in the above-entitled proceeding, and on September 28, 1934, the Commission, by appropriate order, reopened said proceeding for reargumeut and reconsideration ; “It farther appearing, That such reargument and reconsideration has been had, and that the Commission has, on the date hereof, made and filed a report on reargument and reconsideration, containing its further findings of fact and conclusions thereon, which said report and the aforesaid report of May 22, 1934, are hereby referred to and made parts hereof: “It is ordered, That the above-named defendant be, and it is hereby, notified and required to cease and desist, on or before May 24, 1935, and thereafter to abstain, from publishing, demanding, or collecting for the transportation of bituminous coal, in carloads, from and to the points designated in the next succeeding paragraph hereof, rates which exceed those prescribed in said paragraph. “It is further ordered, That said defendant be, and it is hereby, notified and required to establish, on or before May 24, 1935, upon notice to this Commission and to the general public by not less than 30 days’, filing and posting in the manner prescribed in section 6 of the Interstate Commerce Act, and thereafter to maintain and apply for the transportation of bituminous coal, in carloads, from mines in northeastern Kentucky, as described in the aforesaid reports, to Catlettsburg, Ky., for interstate movement beyond by river, or for interstate rail movement in connection with such river traffic, rates which shall not exceed the corresponding concurrent rates maintained by it on bituminous coal, in carloads, from mines in the Logan, W. Va., coal field, as described ifi said reports, to the same destinations. “And it is further ordered, That this order shall continue in force until the further order of the Commission.” (The effective date of this order was afterwards extended to July 24, 1935.) The petitioner herein thereupon brought this suit seeking to enjoin and set aside the order made by the commission. The interveners, the Island Creek Coal Company and the West Virginia Coal and Coke Corporation, are producers of coal in the Logan field, shipping under the rate given by the railway to Huntington for transshipment by river, and intervene in the instant proceeding for the purpose of supporting the petition for the injunction. Interveners Interstate Commerce Commission, Northeast Kentucky Coal Bureau, and the commonwealth of Kentucky, intervene in this proceeding for the purpose of sustaining the order of the commission. When the cause came on to be heard, the proceedings had before the Interstate Commerce Commission were introduced in evidence and it was shown by stipulation that the railway company had, since the entry, by the commission, of the order complained of, put into effect a new schedule of rates covering the transportation of coal from the Logan field and from the Northeast Kentucky field. Under this new schedule the rate on coal from the Logan field to Huntington by rail and from the Northeast Kentucky field to Catlettsburg by rail was fixed at 87 cents per ton, and the rate from the Logan field to Huntington for transshipment by water was fixed at 75 cents per ton. After oral argument, briefs were filed and the cause submitted. Three grounds were alleged by the railway company in attacking the validity of the order entered by the commission; first, that, under the pleadings, the evidence and the commission’s report on the complaint of the Northeast Kentucky Coal Bureau, the order made by it was beyond the issues involved and constituted an invalid attempt to exercise authority under section 3 of the Interstate Commerce Act; second, that there was no substantial evidence to support the commission’s finding and conclusion that the assailed rates to Catlettsburg, Ky., were unduly prejudicial in violation of said section 3; third, that the commission’s order was not supported by proper findings of the basic or quasi jurisdictional facts. As to the first point, we are of the opinion that the order made by the commission was within the issues raised by the pleadings. The complaint of the Northeast Kentucky Coal Bureau, filed before the commission, clearly alleges the violation of section 3 of the Interstate Commerce Act and charges that the rates at that time maintained and enforced by the railway company were unreasonable and unjust. There is nothing in the argument made on behalf of the petitioner that this allegation should be considered withdrawn because it appeared that the complainant would be satisfied only with a 50-cent rate. While the complaint as filed before the commission emphasized the request for a 50-cent rate by the Kentucky Coal Bureau, neither in the complaint nor in the pro ceedings before the commission was it at any time stated that an alternative order, which could be complied with by increasing the rates alleged to be preferential, was not sought. It is, of course, true that the complainant sought to secure the 50-cent rate if possible. This was quite natural and is a usual method of procedure, yet it clearly appears from all the proceedings that, if the 50-cent rate could not be secured, the complainant sought for an equalized rate for transshipment by river. Complainant’s counsel made it clear at the hearing before the commission that the allegation that section 3 of the act had been violated had not been withdrawn. The cases relied upon on behalf of the petitioner as authority to the effect that the allegation of unjust discrimination was, in effect, withdrawn are easily distinguishable. In these cases an alternative order was not sought and statements to this effect were direct and positive. Under paragraph 1, § 13, of the Interstate Commerce Act (49 USCA § 13, par. 1),' after a complaint is filed before the commission, it becomes the duty of the commission to investigate the complaint and take proper action upon its own motion. While it seems clear that the action of the commission was proper under the issues raised by the complaint, it is also true that, when a complaint of an unjust discrimination is made before the commission, its power is not restricted by the issues raised on the complaint, provided, of. course, that the railway alleged to have committed the violation of the act had full opportunity to make defense against such charge. Here the railway had such an opportunity and the issue of unjust discrimination, as to the rates in effect for transshipment by river, was fully discussed in the hearing before the commission and evidence was offered on this point. It cannot be said that the railroad had no opportunity to make defense against the charge. It is the duty of the commission to look to the substance of the complaint rather than its form and it is not limited in its action by the strict rules of pleading and practice which govern courts of law. Pennsylvania Ry. Co. v. United States (D. C.) 288 F. 88; United States v. Baltimore & Ohio S. W. R. Co., 226 U. S. 14, 33 S. Ct. 5, 57 L. Ed. 104. See, also, Louisville & N. R. Co. v. Sloss-Sheffield Steel & Iron Co. (C. C. A.) 295 F. 53; Id., 269 U. S. 217, 46 S. Ct. 73, 70 L. Ed. 242. A full discussion of this point will be found in A. & S. R. R. v. United States (D. C.) 49 F.(2d) 414. See, also, New York Central & Hudson River Railroad Co. v. Interstate Commerce Commission (C. C.) 168 F. 131; Spiller v. Atchison, Topeka & Santa Fe Ry. Co., 253 U. S. 117, 40 S. Ct. 466, 64 L. Ed. 810. While it is true that the complainant sought a 50-cent. rate if it could possibly secure it, it also sought, in any event, parity with the rate from the Logan field. The action of the commission in entering the order complained of was within the scope of its authority and the order was entered after the petitioner here had had its day in court. As to the second point, we are again of the opinion, not only that there was substantial evidence to support the commission’s finding that the rates complained of were unduly prejudicial and in violation of section 3 of the Interstate Commerce Act, but we do not see how the commission could have reached a different conclusion. The evidence proved, as was stated by one of the commissioners in dissenting from the report of division 2 of the commission, that the coal from both the Kentucky and West Virginia fields was similar in quality, was mined from practically the same vein, moved in the same direction, over the petitioner’s railroad, and under practically the same condition as to transportation. It was also shown in the evidence before the commission that the members of the complainant bureau were damaged by the difference in the rates, through loss of the sale of their coals by having to charge a higher price per ton. The mere fact that there was a discrimination in rates of itself would carry with it the presumption that the parties paying the higher rate were damaged. The evidence was ample upon which to base the finding and order of .the commission. The purpose of this section of the Interstate Commerce Act was to secure equality of treatment to all and to prevent unjust discrimination, and the language of the act is comprehensive enough to include every form of unjust discrimination. New York, etc., R. Co. v. Int. Com. Comm., 200 U. S. 361, 26 S. Ct. 272, 50 L. Ed. 515; Louisville & Nashville R. Co. v. Mottley, 219 U. S. 467, 31 S. Ct. 265, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671; United States ex rel. Morris v. Delaware, L. & W. R. Co. (C. C.) 40 F. 101; Nashville, etc., Ry. v. Tennessee, 262 U. S. 318, 43 S. Ct. 583, 67 L. Ed. 999. It is claimed that a former finding of the commission to the effect that a $1.17 rate to Catlettsburg was reasonable precluded the finding of the commission as to unjust discrimination, but the Supreme Court has held that a rate may be reasonable under section 1 and still violate section 3 as being an unjust discrimination. Interstate Commerce Commission v. Baltimore & Ohio R. Co., 145 U. S. 263, 12 S. Ct. 844, 36 L. Ed. 699; United States v. Ill. Central R. Co., 263 U. S. 515, 44 S. Ct. 189, 68 L. Ed. 417. The existence of undue preference is a question of fact to be determined by the commission. Texas & Pacific R. Co. v. Int. Com. Comm., 162 U. S. 197, 16 S. Ct. 666, 40 L. Ed. 940; Int. Com. Comm. v. Alabama Midland R. Co., 168 U. S. 144, 18 S. Ct. 45, 42 L. Ed. 414. It is contended that the evidence failed to establish a similarity of operating conditions between the two coal fields, but we cannot agree with this contention. The evidence on this point was ample, especially in view of the fact that if the operating conditions were not equal, the evidence necessary to establish that fact lay peculiarly within the knowledge of the railroad. Piad the operating conditions not been similar, it would have been a simple and easy matter for the railroad to have shown the difference. This it did not do. We are also of the opinion that the commission’s order was supported by a proper finding of facts. An examination of the report of the commission, after re-argument, shows that the commission found that while there was at that time no river transshipment facilities at Catlettsburg, the complainant intended, upon the establishment of a lawful rate from the mines, to build and operate such facilities : that it was apparent that there was a prospective movement which could readily and undoubtedly be handled in a'manner to establish its interstate character; that the conditions existing on the respective branches of the petitioner railroad running from the Logan field to Huntington and from the Northeast Kentucky coal field to Catlettsburg were about the same; that the average distance of the haul from the Logan field was about 85 or 90 miles and from the Kentucky field only 10 or 12 miles greate ; that the coals from the two fields were o f the • same grade and quality and keenly competitive; and that on all rail traffic to central territory the rates from the two fields were on a parity. Upon these facts the commission concluded that the situation which gave the coal producers in the Logan field the benefit of so great a difference in the rates in question necessarily was to the detriment and damage of the coal producers in the Northeast Kentucky field, a conclusion in which we concur. As was aptly stated by the commission: “The act is specifically directed against undue preference and all other forms of unjust treatment of the shipping public.” These findings of fact were amply sufficient to support the order made. Only the ultimate condition, and not formal and precise findings of fact, are required of the commission in order to bring a particular case within the terms of this section of the statute. United States v. B. & O. Ry., 293 U. S. 454, 55 S. Ct. 268, 79 L. Ed. 587. Here the commission has not only found the ultimate condition bringing the case within the terms of the statute but has also found the specific facts.

9434836-25979

Affirmed by published opinion. Judge DIANA GRIBBON MOTZ wrote the opinion, in which Judge TRAXLER and Judge BROADWATER joined. OPINION DIANA GRIBBON MOTZ, Circuit Judge. These appeals grow out of a 1998 settlement of litigation that many states brought against a group of major tobacco companies. West Virginia, North Carolina, and South Carolina, like all other states participating in the settlement, stand to receive substantial funds pursuant to it. Residents of each of those states, who have received Medicaid assistance for medical problems related to tobacco, filed suit to obtain a share of the funds their respective states will receive under the settlement. In each case, the district court dismissed the patients’ complaints on multiple grounds. Because federal law bars the claims, see 42 U.S.C.A. § 1396b(d)(3)(B)(ii) (West Supp.2001), we affirm the judgment of the district court in each case. I. These cases concern the relationship between the Medicaid program, which provides funds for health care for poor people, and the 1998 tobacco settlement. To facilitate understanding of the issues involved, we briefly describe the relevant federal and state Medicaid law, the litigation and 1998 settlement between the states and the tobacco companies, and the claims raised in these appeals. A. In the United States, a person who cannot pay his or her medical bills may be eligible for financial assistance under the Medicaid program. If so, and if the state in which the person lives participates in the federal Medicaid program, both the federal government and the government of his or her state contribute through the program to pay some of the medical bills. See 42 U.S.C.A. §§ 1396, 1396a-1396u (1992 & West Supp.2001). West Virginia, North Carolina, and South Carolina all participate in the Medicaid program and receive federal funds under the program. See N.C. Gen.Stat. § 108A-54 (1999); W. Va.Code Ann. §§ 9-1-1 to 9-2-3 (Michie 1998 & Supp.2001); S.C.Code Ann. § 43-7-20, 43-7-410 to 43-7-460 (Law. Coop.1985 & Supp.2001). In some instances, third parties are liable for the health-care expenses of Medicaid patients, through, for example, insurance, tort liability, or a court order based on familial obligation. To obtain federal assistance with Medicaid costs, a state must require Medicaid recipients to assign any rights they possess against such third parties to the state, and must make reasonable efforts to collect on all third-party claims that are assigned. See 42 U.S.C.A. §§ 1396a(a)(25), 1396k(a) (West 1992 & Supp.2001). In keeping with these federal requirements, West Virginia, North Carolina, and South Carolina each mandate such an assignment. See W. Va.Code Ann. § 9-5-ll(a) (Michie 1998); S.C.Code Ann. §§ 43-7-420 to 43-7-430 (Law.Co-op.Supp. 2001); N.C. Gen.Stat. §§ 108A-57, 108A-59(a) (1999). Federal law also governs a participating state’s distribution of any recovery on a third-party claim assigned by a Medicaid recipient. If a state recovers “under an assignment,” payments from third parties go first to the state up to its relevant Medicaid expenses; then to the federal government, up to its relevant Medicaid expenses (minus an incentive payment to encourage the state to collect, see 42 C.F.R. § 433.158 (2001)); and finally, if any funds remain, to the patient who assigned the claim. See 42 U.S.C.A. § 1396k(b); see also 42 C.F.R. § 433.154 (2001). A state must distribute any remainder to the individual Medicaid recipient. See 42 U.S.C.A. § 1396k(b) (requiring that after both governments cover all of their expenses, “the remainder of such amount collected shall be paid to such individual” (emphasis added)). B. In the 1998 settlement of the tobacco litigation, each settling state recovered a substantial amount of money from tobacco companies. In many of the settling states, including West Virginia, North Carolina, and South Carolina, Medicaid patients then brought suit against state officials. The patients contend that at least part of the tobacco settlement constituted a Medicaid recovery subject to the statutory framework outlined above. Therefore, they argue, state officials should distribute excess funds recovered under the settlement to them. Before analyzing these contentions, we describe the nature of the state lawsuits against tobacco companies and the settlement reached. 1. In the 1990s, nearly all the states sued major tobacco companies for harm arising from the deliberate concealment of the health risks posed by tobacco. In their complaints, West Virginia, North Carolina, and South Carolina all cited the medical costs of treating smoking-related injuries as a major source of damages. West Virginia filed suit on September 20, 1994. The state’s third amended complaint lists a number of tobacco harms to the state, including its expenses in treating tobacco-related health problems, its expenses in countering tobacco advertising aimed at young people, products-liability claims, and antitrust violations. The complaint includes fourteen counts; several discuss damage to the state other than health-care costs, such as the cost of public campaigns about the dangers of tobacco, and pursue relief other than the money the state had spent on health-care costs. South Carolina filed suit on May 12, 1997. Preliminary language in its amend ed complaint describes only the medical expenses the state had incurred. The complaint includes sixteen counts. The only harm to the state discussed in any of the counts is the cost of medical treatment for tobacco-related health problems. However, South Carolina did seek an order requiring the tobacco companies to fund a campaign of public education about smoking and health, as well as orders barring them from marketing and sales practices aimed at minors and requiring them to disclose information related to tobacco. North Carolina filed suit on December 21, 1998. (North Carolina’s lawsuit actually followed the execution of the settlement between the tobacco companies and many other states by several weeks; on the same day, the state. both filed suit and immediately dismissed its suit in order to join the settlement.) The complaint included two state-law claims, for restraint of trade and unfair commercial practices. The state cited the financial harm that the shrinking tobacco market inflicted on its communities that depended on growing tobacco and health-care costs incurred in treating smoking-related illnesses. It sought damages “for the past and future medical costs paid by North Carolina to medical assistance beneficiaries, state employees, and others for treatment of tobacco-related illnesses.” The state also sought injunctions and “mandatory orders” to bar tobacco advertising and tobacco-related conspiracy and to provide funds for public education about the dangers of tobacco and for financial assistance to “tobacco-dependent communities.” 2. Late in 1998, without admitting liability, the tobacco companies settled the claims of West Virginia, North Carolina, South Carolina, and most other states. In a document entitled “Master Settlement Agreement” (MSA), the companies agreed to pay billions of dollars to the states in future installments. Under the MSA, settlement funds went into escrow, with Citibank as the escrow agent. The total amounts involved cannot be fixed exactly, but the patients pursuing these cases allege that West Virginia expects to receive $1,933 billion, South Carolina $2.3 billion, and North Carolina $4.6 billion, and that these payments exceed what each state has paid and expects to pay for Medicaid costs related to tobacco. In return for these funds, the states released their rights to pursue a wide range of claims against the tobacco companies. The states released the companies from liability based on their past conduct and from future monetary liability arising solely from use of or exposure to tobacco. Some of the claims released by the states did not relate to health-care costs; the MSA covered all claims “directly or indirectly based on, arising out of or in any way related, in whole or in part, to (A) the use, sale, distribution, manufacture, development, advertising, marketing, or health effects of, (B) the exposure to, or (C) research, statements or warnings regarding, Tobacco Products.” West Virginia, North Carolina, and South Carolina have all received payments under the MSA. A South Carolina statute assigns all MSA receipts to a Tobacco Settlement Revenue Authority created by the statute, which issues bonds (though not to the state) and pays their proceeds to various trust funds. S.C.Code Ann. § 11-49-50, 11-49-70 (Law.Co-op.Supp.2001). Similarly, a North Carolina statute assigns 50% of that state’s MSA funds to a nonprofit corporation called The Golden L.E.A.F. (Long-term Economic Advancement Foundation) to provide financial assistance to tobacco-dependent areas of North Carolina. See 1999 N.C. Sess. Laws 2, available at http:// www.ncga.state.nc.us/SessionLaws/1999_/ sll9990002/default.htm (last visited April 11, 2002). In 1999, after the tobacco settlement had been reached, Congress passed an amendment to federal Medicaid law that specifically addresses the MSA, in a section of an emergency appropriations act, entitled “Prohibition on Treating Any Funds Recovered From Tobacco Companies as an Overpayment for Purposes of Medicaid.” See 1999 Emergency Supplemental Appropriations Act, Pub.L. No. 106-31, 113 Stat. 57, 103-04, codified at 42 U.S.C.A. § 1396b(d)(8)(B) (West Supp. 2001). Congress addressed the tobacco settlement in two provisions that altered the usual manner for distribution of recovery on third-party claims. See 42 U.S.C.A. § 1396b(d)(3)(B)(i, ii). The first provision exempts the tobacco settlement from the usual statutory payment scheme for state reimbursement of federal Medicaid costs. Ordinarily, a state reimburses the federal government by designating the federal share of a recovery as part of an “overpayment” on the federal obligations under Medicaid, to be repaid to the federal government. See 42 U.S.C.A. §§ 1396b(d)(2)(A), (2)(B), (3)(A) (West Supp.2001). Under the 1999 amendment, however, Congress directed that this procedure shall not apply to any amount recovered or paid to a State as part of the comprehensive settlement of November 1998 between manufacturers of tobacco products ... and State Attorneys General [the MSA], or as part of any individual State settlement or judgment reached in litigation initiated or pursued by a State against one or more such manufacturers. 42 U.S.C.A. § 1396b(d)(3)(B)(i). This provision, which for ease of reference we designate “clause (i),” effectively eliminates any federal right to a share of the proceeds of the M.S.A. § or certain other tobacco settlements. The second provision, which is crucial to our disposition of these appeals, states that, except for litigation costs proscribed by 42 U.S.C.A. § 1396b(i)(19), a State may use amounts recovered or paid to the State as part of a comprehensive or individual settlement, or a judgment, described in clause (i) for any expenditures determined appropriate by the State. 42 U.S.C.A. § 1396b(d)(3)(B)(ii). We refer to this provision herein as “clause (ii).” C. By April 26, 2000, Medicaid patients suffering from tobacco-related illnesses had filed the three similar amended complaints against officials in West Virginia, North Carolina, and South Carolina, which form the basis for these appeals. In these complaints, the patients seek a share of the M.S.A. § funds received by their respective states, under the theory that the Medicaid recovery provisions described above apply to the M.S.A. § settlement, and that they have a right to payments in excess of the states’ actual medical expenses. Specifically, proceeding under 42 U.S.C.A. § 1983, the Medicaid patients allege that state officials violated provisions of the Medicaid statute that require states to disburse excess funds to individual recipients, see 42 U.S.C.A. § 1396k(b), and make reasonable efforts to pursue all third-party liability on behalf of individual patients. See 42 U.S.C.A. § 1396a(a)(25). They further allege that these asserted deprivations violate the Due Process Clause and the Takings Clause. By suing state officials rather than the state itself, the patients seek to invoke the Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), exception to the Eleventh Amendment immunity of the states. The patients ask for a declaratory judgment of their rights and their state’s obligations under federal Medicaid law, and injunctive relief requiring state officials inter alia to “disburse ... or to cause the disbursement” of the MSA settlement funds that assertedly belong to the patients. In each case, the district court dismissed the patients’ claims on multiple grounds. See Strawser v. Lawton, 126 F.Supp.2d 994 (S.D.W.Va.2001); Joseph v. Condon, No. 00-324 (D.S.C. Mar. 19, 2001) (opinion and order dismissing the case with prejudice); White v. Hunt, No. 00-14 (W.D.N.C. Sept. 25, 2001) (same); White v. Hunt, No. 00-14, 2000 WL 33261006 (W.D.N.C. July 13, 2000) (magistrate judge’s report and recommendations). These appeals followed. Our review is de novo. See TFWS, Inc. v. Schaefer, 242 F.3d 198, 204 (4th Cir.2001); Lynn v. West, 134 F.3d 582, 585 (4th Cir.1998). We heard oral argument in all three cases. Because of the identical central issues presented in each, however, we resolve all three appeals in this single opinion. II. The patients’ central contention is that the usual provisions for distribution of Medicaid recoveries apply to the funds the states receive from the MSA, so that under 42 U.S.C.A. § 1396k(b), they have a federal right to a share of those funds. The state officials respond that the district court in each case properly dismissed the complaints because, for numerous reasons, the complaints fail to state a claim on which relief can be granted and, in any event, the state officials enjoy Eleventh Amendment immunity from these lawsuits. Each district court made rulings on both grounds, and, in particular, each ruled that the 1999 amendment to the Medicaid statute bars any claim by the patients to part of their respective states’ shares of the tobacco settlement. We affirm on that basis. A. Even though generally “[q]uestions of jurisdiction ... should be given priority,” and some courts have held that the Eleventh Amendment constitutes such a jurisdictional bar, see Vermont Agency of Natural Res. v. United States, 529 U.S. 765, 778, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) (discussing circuit split), in this case, we can properly base our holding on the plain language of the 1999 amendment to the Medicaid statute without resolving the Eleventh Amendment question. This is so for two reasons. First, the limited nature of our holding permits this. In Vermont Agency, the Supreme Court specifically held it “appropriate” to determine whether a statute permitted a cause of action against the states without resolving an Eleventh-Amendment question. Id. at 779-780, 120 S.Ct. 1858. The Court explained that the statutory question was both “logically antecedent” to the Eleventh-Amendment question and so limited that there was no “realistic possibility that addressing” it could “expand the Court’s power beyond the limits that the jurisdictional restriction has imposed.” Id. at 779, 120 S.Ct. 1858. Cf. BellSouth Telecomms., Inc. v. North Carolina Utils. Comm’n, 240 F.3d 270, 275-76 (4th Cir.2001) (ruling that a federal court may not avoid ruling on an assertion of Eleventh Amendment immunity while permitting a case to proceed). Even if the statutory question here is not as plainly “logically antecedent” to the Eleventh Amendment question, it provides the basis for an even more limited holding than that in Vermont Agency. That case held that individual plaintiffs could obtain no relief of any type from the states under a particular federal statute (31 U.S.C.A. § 3729(a) (West Supp.2001)); we merely hold that individual plaintiffs cannot obtain certain relief (tobacco settlement funds) from the states under a particular federal statute (41 U.S.C.A. § 1396k(b)). Thus, as in Vermont Agency, resolution of the statutory question here does not involve a court in “pronounc[ing] upon any issue, or upon the rights of any person, beyond the issues and persons that would be reached under the Eleventh Amendment inquiry.” Vermont Agency, 529 U.S. at 799, 120 S.Ct. 1858. Second, and independent of the limited nature of our holding, the states’ litigating position renders it appropriate to resolve these cases on the basis of the Medicaid statute. Both in their briefs and at oral argument the states have relied on the contention that the 1999 amendment bars the patients’ claims, as well as their Eleventh Amendment defense. Although at oral argument counsel for the state officials carefully refrained from in any way waiving that defense, they did not insist on it. Thus, like the state officials in McClendon, the officials here argue the merits and rely “upon that defense only if it is necessary to prevent judgment against them on the merits.” 261 F.3d at 1238. The Eleventh Amendment can be waived by a party, see, e.g., College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675, 119 S.Ct. 2219, 144 L.Ed.2d 605 (1999), and so does not automatically divest a court of jurisdiction. See Wisconsin Dept. of Corr. v. Schacht, 524 U.S. 381, 389, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998). The states’ restricted use of the Eleventh Amendment defense here provides another reason permitting us “to decide in their favor on the merits.” McClendon, 261 F.3d at 1258. Additionally, we note that avoiding the constitutional question and resolving this case on the merits—on the basis of the 1999 amendment to the Medicaid statute—well accords with the venerable principle that a court will not decide a constitutional question, particularly a complicated constitutional question, if another ground adequately disposes of the controversy. See INS v. St. Cyr, 533 U.S. 289, 299 301 & n. 13, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001); Ashwander v. TVA, 297 U.S. 288, 347, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring). While the statutory question here is easy, several courts have concluded that the Eleventh-Amendment question presents real difficulty. See Greenless, 277 F.3d at 607; Tyler, 280 F.3d at 121; Floyd, 227 F.3d at 1034-35. In fact, no circuit has upheld the states’ contention that the Ex parte Young exception does not apply. See Harris, 264 F.3d at 1288-94 (expressly holding that an Ex parte Young exception is available); Greenless, 277 F.3d at 606-08 (holding on the merits); Tyler, 280 F.3d at 121 (same); McClendon, 261 F.3d at 1256-59 (same); Floyd, 227 F.3d at 1034-35 (same). For these reasons, we can and do resolve this case on the merits, without reaching the Eleventh-Amendment question. B. Resolution of the patients’ claims on the merits is straightforward. But for an exception that is irrelevant here for litigation costs proscribed by 42 U.S.C.A. § 1396b(i)(19), the 1999 Medicaid amendment expressly provides that “a State may use amounts recovered or paid to the State” under the MSA “for any expenditures determined appropriate by the State.” See 42 U.S.C.A. § 1396b(d)(3)(B)(ii). The states argue that the permission to use the funds freely applies to all “amounts recovered or paid to” them under the tobacco settlement, and that it therefore extinguishes the rights of individual Medicaid recipients under 42 U.S.C.A. § 1396k(b), with respect to tobacco-settlement funds alone. The patients respond that the permission to undertake “any expenditures determined appropriate by the State” applies only to the funds that the federal government itself relinquished. The statutory text supplies a clear answer. The relevant statutory language in clause (ii) provides that: a State may use amounts recovered or paid to the State as part of a comprehensive or individual settlement, or a judgment, described in clause (i) for any expenditures determined appropriate by the State. 42 U.S.C.A. § 1396b(d)(3)(B)(ii). Clause (i), meanwhile, provides that certain provisions under which the federal government ordinarily recoups its share of a Medicaid recovery shall not apply to any amount recovered or paid to a State as part of the comprehensive settlement of November 1998 between manufacturers of tobacco products ... and State Attorneys General [the MSA], or as part of any individual State settlement or judgment reached in litigation initiated or pursued by a State against one or more such manufacturers. 42 U.S.C.A. § 1396b(d)(3)(B)(i). Clause (i) thus discusses an “amount,” the MSA it self, and “individual state settlements] or judgments].” The patients’ theory rests on two propositions. First, they assert that in clause (ii), the phrase “described in clause (i)” modifies “amounts,” not “settlement, or ... judgment.” According to the patients, clause (ii) only provides the states federal permission to do what they like with “amounts ... described in clause (i),” whatever those might be. Second, the patients contend that the “amounts ... described in clause (i)” constitute only “the federal share of the tobacco settlement,” not all the money recovered. Thus, the permission granted in clause (ii) applies only to the federal .share of the MSA, leaving the individual claims under § 1396k(b) intact. Neither proposition is tenable. First, clause (ii)’s term “described in clause (i)” is better read to modify “settlement, or ... judgment.” Clause (ii) provides that “a State may use amounts recovered or paid to a state as part of a comprehensive or individual settlement, or a judgment, described in clause (i)” as it likes. It is the phrase “settlement, or ... judgment” that would be vague without the modifier directing the reader to clause (i), not the phrase “amounts recovered or paid to the State.” An amount recovered or paid to a state under a settlement or judgment is the incoming money, plainly. Meanwhile, without more, “a comprehensive or individual settlement, or a judgment,” is much broader than the scope of the 1999 amendment. The modifier is only necessary for the latter. 'Moreover, even if the phrase “described in clause (i)” did modify “amounts,” the “amount” that clause (i) itself discusses is “any amount recovered or paid to a State” as a result of the MSA or other tobacco settlements — not just the federal share. See Tyler, 280 F.3d at 122-23; Harris, 264 F.3d at 1295-96; Strawser, 126 F.Supp.2d at 1000. This is true even though clause (i) itself functions to exempt such amounts from the ordinary processes by which the states repay the federal government for its share of Medicaid expenses. We thus reject both propositions supporting the patients’ reading of clause (ii). Turning to the impact of clause (ii) on the patients’ claims in these cases, we consider its statement that “a State may use amounts recovered or paid to the State” under the MSA “for any expenditures determined appropriate by the State.” This provision permits a state to use “amounts recovered or paid ... for any expenditure,” and does not qualify the term “amounts.” There is no ambiguity in this sentence: Congress declares that the states may spend any money they receive tinder the MSA on any expenditure. See Greenless, 277 F.3d at 609 (“Congress made its intent clear in the amendment.”); Tyler, 280 F.3d at 124 (“[T]here is no ambiguity in the language of § 1396b(d)(3)(B)(ii).”); Earns, 264 F.3d at 1295. C. Notwithstanding the clarity of this language, the patients offer several reasons why we should ignore it. 1. First, they maintain that the legislative history, the title, and the context of the 1999 amendment require rejection of its clear language. Even if it were appropriate to consider legislative history when the statutory text is plain, and it is not, the legislative history here does not contradict the statutory text; indeed, the legislative history does not even mention individual Medicaid recipients. See Tyler, 280 F.3d at 124; Harris, 264 F.3d at 1297. Rather, the legislative history of the 1999 amendment describes, without reference to individual patients, the existence and nature of a federal right to a share of the MSA. The patients actually emphasize this silence, suggesting that it supports them, because the legislative history does not expressly discuss the states’ entitlement to all funds from the tobacco litigation here. However, total silence on a point is far from the “substantial, unambiguous evidence” necessary for a court to consider reaching “a contrary interpretation” of clear statutory language. Matala v. Consolidation Coal Co., 647 F.2d 427, 430 (4th Cir.1981). The title of the amendment similarly contains no mention of the rights of individual Medicaid patients. - That title— “Prohibition on Treating Any Funds Recovered From Tobacco Companies as an Overpayment for Purposes of Medicaid”— instead simply refers to “an overpayment,” the term of art used for refunding state money to the federal government in this context. See 42 U.S.C.A. §§ 1396b(d)(2)(A), (2)(B), (3)(A). Nor, contrary to the patients’ suggestion, does the 1999 amendment’s context — the amendment’s “distance” of 113 pages in the U.S.C.A. from § 1396k(b), under which the patients seek to recover — affect the amendment’s legal import. In short, we agree with the states (and with the First, Second, and Tenth Circuits) that the plain language of the Medicaid statute, specifically the 1999 amendment, permits the states to do whatever they like with all “amounts recovered” under the MSA, that is, with all the money they derive from it. See Greenless, 277 F.3d at 605-09; Tyler, 280 F.3d at 121-24; Harris, 264 F.3d at 1294-97; see also McClendon, 261 F.3d at 1262 (Noonan, J., concurring in the judgment). 2.

1874984-11570

POLITZ, Chief Judge: Schindler Elevator and The Hartford Insurance Co., third-party defendants, appeal an adverse judgment. We reverse and render judgment in favor of Schindler and The Hartford. Background Grace James filed suit in state court against Hyatt Corporation of Delaware and its comprehensive general liability insurer, National Union Fire Insurance Company of Pittsburgh, claiming that she was injured as a result of an escalator malfunction in Hyatt’s hotel in New Orleans. Hyatt and National Union removed the case to federal court and Hyatt impleaded' Schindler, the escalator maintenance contractor. Shortly before the scheduled trial Hyatt and National Union settled with James. Hyatt then filed an amended third-party complaint adding National Union as third-party plaintiff and The Hartford as third-party defendant. In the third-party action, Hyatt and National Union sought to recover under an indemnity provision of the Service Agreement between Hyatt and Schindler which also required Schindler to maintain a comprehensive general liability policy on its own behalf and an owners and contractors protective liability policy naming Hyatt as an insured. Hyatt and National Union claimed that under the CGL and OCPL policies The Hartford had an obligation to defend Hyatt in the James action. The matter was tried by consent before a magistrate judge who, after trial, found neither negligence nor strict liability as relates to Schindler nor any requirement to indemnify Hyatt for the settlement. The trial judge concluded, however, that under the two policies The Hartford had a duty to defend Hyatt. Judgment was rendered against Schindler and The Hartford in soli-do for the full amount of the settlement plus statutory penalties, attorney’s fees, and costs. Schindler and The Hartford timely appealed. Analysis We review judgments rendered by a magistrate judge pursuant to 28 U.S.C. § 636(c) as we would those rendered by a district judge. The interpretation of the terms of indemnity and insurance contracts are matters of law which we review de novo. Findings of fact are upheld unless clearly erroneous. A. HARTFORD’S LIABILITY The Comprehensive General Liability Policy Reading the CGL policy’s contractual liability provision in conjunction with the Service Agreement, the trial judge concluded that The Hartford had a duty to defend Hyatt. The Hartford counters that it had no duty to defend Hyatt under the CGL policy because Hyatt was not a named insured. Under Louisiana law an insurer has no duty to defend one who is not a named insured. In Musgrove, Lopez, and Ordo-n ez the insureds each contractually agreed to provide liability insurance covering a third party but failed to do so. In each instance the court found that the insurer had no duty to defend the third party. In Ordonez the court held that the insurer had no duty to defend the contractual indemnitee of its insured. Under the contractual liability provision of the policy at issue therein, the insurer’s exposure was “limited to damages for which the named insured becomes liable as a result of a contractual agreement to indemnify or hold harmless.” In the case at bar, James’ complaint stated a claim for which Schindler ultimately could have been held liable under the indemnity agreement; as a result, the contractual liability provision required The Hartford to defend its insured — Schindler. But The Hartford had no concomitant duty to defend Hyatt under the CGL policy. In ruling to the contrary, the magistrate judge erred. The Owners and Contractors Protective Liability Policy Hyatt was a named insured under the OCPL policy, and the magistrate judge found that The Hartford had a duty to defend Hyatt under this policy as well. It is well-established that an insurer’s duty to defend is broader than its liability for damage claims. The insurer has a duty to defend its insured provided the pleadings disclose any possibility of liability under the policy. An insurer may refuse to defend only if the allegations of the petition unambiguously exclude coverage. Failure to acquit the duty to defend renders the insurer liable for the insured’s expenses, including reasonable attorney’s fees. The Hartford contends that the magistrate judge erred in finding that the allegations of plaintiff’s complaint did not fall within an OCPL policy exclusion. The OCPL policy covered bodily injury and property damage arising from Schindler’s performance of its duties under the Service Agreement, or arising from the negligence of the Hyatt in connection with its general supervision of Schindler’s work. The policy also contains the following exclusions: This insurance does not apply: (b) to bodily injury or property damage occurring after (1) all work on the project (other than service, maintenance or repairs), to be performed by or on behalf of the named insured at the site of the covered operations has been completed or (2) that portion of the designated contractor’s work out of which the injury arises has been put to its intended use by any person or organization. (Emphasis in original.) The James’ petition alleged that Hyatt and ABC Elevator Company did not adequately inspect and maintain the escalator, and that the Hyatt failed to exercise reasonable care to guard against accident or injury. This states a claim arising out of the operations performed by Schindler, the escalator maintenance contractor. The essential question, however, is whether the allegations of the petition unambiguously fall within one of the policy exclusions. We conclude that they do. The" Hartford contends that James’ claims fall within exclusion (b)(2), arguing that the OCPL policy covers only damage which occurs while service or maintenance work is in progress. In effect, the policy treats each act of servicing or maintenance as a discreet insurable event. Schindler was not servicing or maintaining the escalator and the escalator was being put to its intended use when James was injured. Accordingly, this occurrence falls within the (b)(2) exclusion. Exclusion (b)(2) is similar to the completed operations exclusion found in many CGL policies. Completed operations exclusions consistently have been held to be clear and unambiguous. Hyatt contends that these completed operations exclusion cases are inapposite. We do not agree. For example, in Rothman the exclusion was applied to an air conditioner repair contractor. The Rothman court found that the policy did not cover the claims against the contractor by a homeowner whose residence was destroyed by fire shortly after the contractor worked on his heating system. Because the repair was complete when the fire began, the exclusion applied. Hyatt also maintains that by requiring Schindler to obtain an OCPL policy naming Hyatt as the insured, the parties intended that Hyatt have protection equivalent to a CGL policy. If this was the parties’ intent, it is to be expected that their agreement would have insisted that Schindler obtain a CGL policy on Hyatt’s behalf. This is not an ambiguous policy; the policy Hyatt required Schindler to obtain simply did not cover every possible claim related to the operation of the escalator. We conclude that the court á quo erred in ruling that the plaintiff’s claim was not within the policy exclusions. We conclude that The Hartford was under no duty to defend Hyatt either under the CGL or OCPL policy. Statutory Penalties Statutory penalties are available when the insurer’s failure to pay a claim is “arbitrary, capricious, or without probable cause.” Because we find that the insurer was under no obligation to defend or pay, the award of statutory penalties and third-party plaintiffs’ attorney’s fees must be reversed. B. SCHINDLER’S LIABILITY The Indemnity Agreement The trial court rendered judgment against Schindler and The Hartford “for $17,517.77 plus statutory penalties and third party plaintiffs’ attorneys fees and expenses.” Schindler contends that because the district court found Schindler was not negligent, there is no basis for such judgment against it. Schindler’s liability to Hyatt, if any, must be based upon the indemnity provisions of the Service Agreement. The district court, however, expressly declined to address Schindler's liability under that agreement. Interpre tation and application of the indemnity agreement present purely legal questions which we appropriately may address on appeal. Generally, an indemnitee must establish his actual liability in order to recover payment from an indemnitor. “[A]n indemnity agreement does not render the indemnitor liable until the indemnitee actually makes payment or sustains loss.” When the indemnity agreement also covers defense costs, the allegations of the complaint against the indemnitee are irrelevant to the indemnitor’s obligation to pay. The terms of the indemnity agreement itself govern the obligations of the parties. According to Hyatt, in the following situations an indemnitee settling with the plaintiff need only demonstrate potential liability to recoup the amount of a reasonable settlement: (1) if the indemnitee tenders the defense to the indemnitor, (2) the indemnity claim is founded upon a judgment, or (3) the indemnity claim is based upon a written indemnity contract. In any event, the indemnitee must also demonstrate that the amount of settlement was reasonable. We are not persuaded that this contention accurately states controlling Louisiana indemnity law. In the Sears case we find Sears seeking indemnification from its contractor, Shamrock, for damages incurred as a result of a gas tank leak, including amounts Sears paid to the fire department for clean-up reimbursement. The court found that “a negligence finding is a prerequisite to indemnification by the contractor to the owner under this contract and as no negligence was found herein, appellant is not entitled to indemnification.” Whether the contractor was potentially liable for the amounts paid the fire department was not even considered. In this case, the indemnity agreement provided indemnity only for losses caused by Schindler. The trial judge found no negligence or other basis for liability of Schindler. This finding has adequate record support. Accordingly, Schindler is not required to indemnify either Hyatt or National Union. C. STATUTORY PENALTIES Schindler is east in judgment with The Hartford not only for the costs of defense and the amount of the settlement, but also for statutory penalties. Schindler is not an insurer and thus cannot be subject to statutory penalties. In addition, neither Schindler nor The Hartford had a duty to defend; neither is liable for penalties. For these reasons the judgment appealed is REVERSED and judgment in favor of the third-party defendants, Schindler and The Hartford, is RENDERED. .The service agreement provides: Contractor [Schindler] agrees to indemnify Hyatt and hold it harmless from and against any direct loss suffered in any liability to third-parties (including without limitation, the employees of either of them) when such loss or liability is directly due to the bodily injury of any person or damage to any property directly caused by the negligent acts or omissions of contractors or those of its employees, sub-contractors, agents or servants in the performance of any work under this agreement. This indemnity agreement shall include attorney’s fees and settlements of claim or suit. . 28 U.S.C. § 636(c). . 28 U.S.C. § 636(c)(3); Gulf States Enterprises v. R.R. Tway, Inc., 938 F.2d 583 (5th Cir.1991).

2977430-5230

ORDER Malcolm McGee, a federal prisoner proceeding pro se, seeks a certificate of appealability (“COA”) to appeal the district court’s order denying his 28 U.S.C. § 2255 petition to vacate, modify, or set aside his sentence. In his § 2255 petition, Mr. McGee alleged he received ineffective assistance of counsel because (1) his trial and appellate counsel failed to argue that he was improperly classified as a career offender; (2) trial counsel failed to recognized he was not a career offender during the plea bargain negotiations; and (3) trial counsel failed to file a notice of appeal of the amended judgment. Mr. McGee also moved to amend his petition to add a Sixth Amendment Blakely claim, which the district court denied. Before us, Mr. McGee raises the ineffective assistance claims, and also seeks to challenge the constitutional validity of his prior convictions. Because Mr. McGee has failed to make a “substantial showing of the denial of a constitutional right,” see 28 U.S.C. § 2253(c)(2), we deny his application for a COA and dismiss this appeal. I. BACKGROUND As detailed in our opinion affirming Mr. McGee’s conviction and remanding for re-sentencing, United States v. McGee, 291 F.3d 1224, 1225-26 (10th Cir.2002): [A] jury found Mr. McGee guilty of conspiring to possess phencyclidine (PCP) in violation of 21 U.S.C. § 846 [Count 1], causing another person to unlawfully possess with intent to distribute PCP in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(l)(A)(iv) and 18 U.S.C. § 2(b) [Count 2], and using a communication facility to facilitate the commission of a felony in violation of 21 U.S.C. § 843(b) [Count 3]. The district court granted Mr. McGee’s motion to arrest judgment as to Count 1. It then sentenced him to life imprisonment on Count 2 and 56 years on Count 3, to run concurrently. On appeal, Mr. McGee contended] that the government presented insufficient evidence to support his Count 2 conviction and that the district court imposed an illegal sentence on Count 3. On direct appeal we affirmed the judgment of the district court as to Count 2 and remanded for resentencing on Count 3. On remand, the district court resentenced Mr. McGee to 96 months’ imprisonment on Count 3. Mr. McGee did not directly appeal this new sentence. II. DISCUSSION In order to obtain a COA, Mr. McGee must make “a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). He may make this showing “by demonstrating that jurists of reason could disagree with the district court’s resolution of his constitutional claims or that jurists could conclude the issues presented are adequate to deserve encouragement to proceed further.” Miller-El v. Cockrell, 537 U.S. 322, 327, 123 S.Ct. 1029, 154 L.Ed.2d 931 (2003). “[A] claim can be debatable even though every jurist of reason might agree, after the COA has been granted and the case has received full consideration, that [the] petitioner will not prevail.” Id. at 338, 123 S.Ct. 1029. Mr. McGee contends he received ineffective assistance of counsel because counsel erroneously advised him that he was a career offender based upon a 1987 prior conviction for possession of cocaine. Under U.S.S.G. § 4B1.1, a defendant may qualify as a career offender if: (1) the defendant was at least eighteen years old at the time the defendant committed the instant offense of conviction, (2) the instant offense of conviction is a felony that is either a crime of violence or a controlled substance offense, and (3) the defendant has at least two prior felony convictions of either a crime of violence or a controlled substance offense. In the challenge to his career offender classification, the district court agreed with Mr. McGee that his 1987 conviction for possession of cocaine was not a “controlled substance offense” for application of the career offender enhancement unless the record reflected that the crime involved additional elements required under U.S.S.G. § 4B1.2. District Ct. Order, filed Apr. 27, 2007, at 8-9. The district court concluded however, that Mr. McGee’s 1988 conviction for possession for sale of cocaine base and a 1990 conviction for battery with serious injury presented two prior qualifying felony convictions under § 4B1.2. It also concluded that any error on the part of his attorney was immaterial, and hence, non-prejudicial because of his statutory mandatory life sentence on Count 2. Because of this ruling, Mr. McGee seeks a stay of the present proceedings so that he may go back to state court and challenge his prior 1988 and 1990 state convictions as constitutionally invalid. Mr. McGee maintains that his recently recovered transcripts from these cases demonstrate that these convictions “were not constitutionally valid at the time of the commencement of the instant offense.” Aplt’s Br. at 3. He contends that these convictions are invalid under Boykin v. Alabama, 395 U.S. 238, 242, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969), which holds that the Due Process Clause of the Fourteenth Amendment requires that guilty pleas be entered into knowingly and voluntarily. Mr. McGee thus requests a stay so that he may review and exhaust his claims attack ing his 1988 and 1990 convictions in state court.

8937075-24479

BEEZER, Circuit Judge: Appellee Alta Health & Life Insurance Company (“Alta”), administrator of an ERISA-regulated employee welfare benefit plan, denied appellant Karla H. Abatie’s claim for life insurance benefits for the death of her husband, Dr. Joseph Abatie (“Dr.Abatie”). After conducting a bench trial, the district court held that Alta did not abuse its discretion. Abatie appeals. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we AFFIRM. I Dr. Abatie was employed by the Santa Barbara Medical Foundation Clinic (“Clinic”) until November 1992, when he took a medical leave of absence and applied for disability benefits. In early 1993, when Dr. Abatie was suffering from both lymphoma and anemia, the Clinic classified him as a retiree. Dr. Abatie’s health improved following a successful splenectomy in 1998, but he died in June 2000 from a combination of conditions. We turn to discuss the terms of the insurance policy and sketch the events leading to this dispute. A The life insurance policy at issue was' part of an employee welfare benefit plan provided by the Clinic. The Clime’s plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461. The group life insurance plan was originally issued by Home Life Financial Assurance Company (“HLFAC”). Alta is a successor in interest to HLFAC’s rights and responsibilities under the plan. The policy provides that, in order for insurance coverage to start, “you must be at active full-time work for your Employer.” , Coverage ends, according to the policy, when “employment ends ... unless the Policy provides otherwise.” The policy further provides that in the event an insured becomes totally disabled while he is covered, life insurance coverage may be continued even without a premium charge, upon approval of what is commonly referred to. as a “waiver of premium application.” As defined in the policy, a total disability occurs when the insured is “not able to work at all at any job or business for pay or profit due to injury or sickness.” One of the conditions of such continued life insurance coverage in the event of total disability requires that the insurer “receive proof of [the insured’s] total disability within 12 months after the date [the insured] become[s] totally disabled.” “This proof must be sent to [Alta’s] Home Office.” Even if a waiver of premium application is granted, this coverage ends when the insured is “no longer totally disabled” or fails to provide “proof of continued disability.” B Several months after Dr. Abatie’s death, the Clinic wrote to Alta requesting the payment of life insurance benefits. The Clinic admitted that “[w]hen Dr. Abatie’s disability began in late 1992, the benefits coordinator failed to initiate the paperwork for waiver of premium to which he was entitled.” Even so, the Clinic sought “retroactive” qualification of Dr. Abatie for insurance coverage. A letter from the Clinic’s insurance broker to Alta also noted that “due to administrative error, the waiver of premium application was not filed.” Alta denied the claim for life insurance benefits because, according to its records, a waiver of premium application was not filed within twelve months of the date Dr. Abatie became totally disabled. Alta also relied on the Clinic’s insurance broker’s written admission that a waiver of premium was never filed as “further confirm[ation]” that the mandatory application was never filed. As a result, Alta wrote, coverage was no longer in force when Dr. Abatie died. The notice of denial, sent in March 2001, permitted Abatie to appeal Alta’s determination within 60 days. Rather than proceed with the administrative review process, however, Abatie decided to file a lawsuit against Alta in June 2001. After Abatie filed this lawsuit, the parties conducted additional discovery, supplementing the administrative record. The parties then agreed to permit Alta to conduct an additional review and render a final determination of the claim. After reviewing the supplemented administrative record, Alta issued its final determination on the life insurance claim. Alta again denied coverage, repeating its observation that Dr. Abatie failed to submit a waiver of premium application, as evidenced by the clinic’s admission that a waiver application was never filed, the lack of records in Alta’s files and computer systems, and the paucity of documentation in the Clinic’s files. Alta noted that it was prejudiced by Dr. Abatie’s failure to file a claim because of the importance of setting aside reserves, managing the claim, and periodically verifying the continuance of the alleged disability. In addition, Alta concluded that there was insufficient proof that Dr. Abatie was totally disabled from all occupations until his death; it cited this conclusion as a second, additional reason for denying the claim. After a bench trial, the district court held that abuse of discretion review applied and that Alta did not abuse its discretion in denying Abatie’s claim. II When a plan administrator’s denial of benefits is challenged under ERISA, the default rule holds that courts review the administrator’s denial de novo, “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility 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). Abatie vigorously argues that we must review Alta’s denial of benefits de novo because the Plan does not adequately grant discretion to Alta. Abatie also argues that even if the Plan does effectively grant Alta discretion, Alta’s behavior manifested a serious conflict of interest which demands heightened review. We address, and reject, each contention. A Only if a plan unambiguously grants discretion to the administrator to determine eligibility will we review an administrator’s denial of benefits for an abuse of discretion. Id.; Kearney v. Standard Ins. Co., 175 F.3d 1084, 1088-89 (9th Cir.1999) (en banc). The standard of review depends on whether the “plan documents unambiguously say in sum or substance that the Plan Administrator or fiduciary has authority, power, or discretion to determine eligibility or to construe the terms of the Plan[.]” Sandy v. Reliance Standard Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir.2000). Although the plan must effectively grant the administrator discretion in interpreting the plan or determining eligibility, there is no requirement that the word “discretion” be used. Id. (observing that “there is no magic to the words ‘discretion’ or ‘authority’ ”). Alta’s plan provides: The responsibility for full and final determinations of eligibility for benefits; interpretation of terms; determinations of claims; and appeals of claims denied in whole or in part under the HLFAC Group Policy rests exclusively with HLFAC. It is readily evident that the Alta plan grants such authority to Alta — a successor in interests and responsibilities to HLFAC — in conveying to Alta the “exclusively]” “responsibility for full and final” determinations as to eligibility and plan interpretations. See Bergt v. Ret. Plan for Pilots Employed by MarkAir, Inc., 293 F.3d 1139, 1142(9th Cir.2002) (applying the abuse of discretion standard where the policy grants the administrator “the ‘power’ and ‘duty’ to ‘interpret the plan and to resolve ambiguities, inconsistencies and omissions’ and to ‘decide on questions concerning the plan and the eligibility of any Employee ....’”) (citing Sandy, 222 F.3d at 1207); Bendixen v. Standard Ins. Co., 185 F.3d 939, 943, 943 n. 1 (9th Cir.1999) (holding that a plan that gave “ ‘full and exclusive authority’ ” to the administrator “ ‘to determine ... eligibility for insurance [and a policyholder’s] entitlement to bene fits’ ” “clearly confer[red]” discretion to the plan administrator). A side-by-side comparison reveals that the Alta plan more clearly conveys discretion than those plans which we have held to fall short of granting discretionary authority. See Kearney, 175 F.3d at 1089-90(holding that language providing that the insurer will pay disability benefits “upon receipt of satisfactory written proof that you have become disabled” does not unambiguously confer discretion upon the administrator). In Ingram v. Martin Marietta Long Term Disability Income Plan, 244 F.3d 1109, 1112-13 (9th Cir.2001), the plan provided that “[t]he carrier solely is responsible for providing the benefits under this Plan”; (2) “[t]he carrier will make all decisions on claims”; and (3) “[a]ceordingly, ... the review and payment or denial of claims and the provision of full and fair review of claim denial pursuant to[ERISA] shall be vested in the carrier.” We concluded that such language was insufficient to convey discretion and therefore failed to give rise to abuse of discretion review. Id. at 1113-14. We held that the statements simply identified the carrier as the entity that paid benefits and administered the plan. Id. at 1112-13. The bare allocation of decision-making authority was insufficient to give rise to “a grant of discretionary authority in making those decisions.” Id. By contrast, the Alta plan explicitly grants to Alta, and “exclusively” to Alta, “[t]he responsibility for full and final determinations” of claims, plan interpretation, plan eligibility, and appeals. We hold that Alta’s plan explicitly grants discretion to Alta to interpret the plan and determine eligibility, so that, barring other justifications for removing deference, we must review Alta’s denial of benefits for an abuse of discretion. B Alta’s dual role as administrator and funding source gives rise to an apparent conflict of interest, but that “does not automatically remove the deference” normally accorded to ERISA administrators. Lang v. Long-Term Disability Plan of Sponsor Applied Remote Tech., Inc., 125 F.3d 794, 797(9th Cir.1997); see also Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, 370 F.3d 869, 876 (9th Cir.2004) (“[W]hile the plan has a financial interest in keeping [the money], that alone cannot establish [a] conflict of interest in the administrator, because it would leave no cases in the class receiving deferential review....”); Doyle v. Paul Revere Life Ins. Co., 144 F.3d 181, 184 (1st Cir.1998) (observing that where a plan administrator is also the payor, “[t]he conflict is not as serious as might appear at first blush,” because of incentives upon the insurer to refrain from being overly eager to deny claims). Where a plan grants discretion to the plan administrator, abuse of discretion is our prevailing standard of review because the parties themselves have contracted for it. Jordan, 370 F.3d at 875(“When we review for abuse of discretion, it is because the plan has put the locus for decision in the plan administrator, not in the courts, so we cannot substitute our judgment for the administrator’s.”). To minimize costs of employee benefit plans, ERISA allows for administrative resolution of claims, which we review in a deferential manner. See Amato v. Bernard, 618 F.2d 559, 567 (9th Cir.1980) (noting that the key goals of ERISA, in allowing for administrative resolution of claims, were to “help reduce the number of frivolous lawsuits,” “provide a nonadversarial method of claims settlement,” and “minimize the costs of claims settlement for all concerned.”). It is only when a serious conflict of interest exists that our standard of review changes. Jordan, 370 F.3d at 875. To prove that a serious conflict of interest exists, and to override a plan’s unambiguous conferral of discretion to the plan administrator, the plaintiff must “provide[] material, probative evidence, beyond the mere fact of the apparent conflict, tending to show that the fiduciary’s self-interest caused a breach of [its] fiduciary obligations to the beneficiary.” Atwood v. Newmont Gold Co., 45 F.3d 1317, 1323(9th Cir.1995). If plaintiff satisfies this burden, de novo review is appropriate if the administrator fails to “produc[e] evidence to show that the conflict of interest did not affect the decision to deny benefits.” Id. The district court’s choice and application of the standard of review is itself reviewed de novo. Lang, 125 F.3d at 797. Underlying findings of fact are reviewed for clear error. Friedrich v. Intel Corp., 181 F.3d 1105, 1109 (9th Cir.1999). The district court concluded that Abatie “failed to meet her burden of producing material, probative evidence that the apparent conflict has ripened into an actual conflict sufficient to alter the standard of review.” We agree. 1 Abatie argues that an actual conflict of interest is evident because Alta offered different reasons for denying the claim at different stages of review. In its initial decision denying benefits, Alta explained that it was denying the claim because a waiver of premium had never been requested. In Alta’s second decision letter, which was written after this lawsuit was filed and with a newly supplemented administrative record, Alta again relied on the failure of Dr. Abatie and the Clinic to file a waiver of premium. This final administrative determination added, as an additional reason for denial, that there was insufficient proof that Dr. Abatie remained totally disabled until his death. We have found an actual conflict to exist where an administrator has presented inconsistent reasons for denial that emerged after the administrator’s first ground for denial was rebutted by clear evidence. Lang, 125 F.3d 794 at 799. Lang does not govern the instant case, however, because Alta merely offered an additional reason for denying benefits. We have never held that an ERISA administrator’s assertion of a supplemental reason for denying a claim subsequent to the initial denial is sufficient evidence to demonstrate that a plan administrator has breached its fiduciary duties to the beneficiary. The context of the administrative process in this case emphasizes the appropriateness of Alta’s decision-making process. Alta’s final determination was the only decision that Alta rendered based on the entire administrative record. To be sure, a plan administrator could not be expected to articulate all reasons for denial until the administrative record was complete. Further, Alta’s invocation of the additional reason for denial on appeal did not procedurally prejudice Abatie. Since the initiation of her appeal, Abatie has known that even if she were successful in persuading the appellate body that the initial benefit determination that her husband was no longer covered under the Plan was incorrect, she would still need to demonstrate that her husband remained totally disabled until his death. There is no rule that an ERISA administrator, after failing to raise a denial reason in the initial benefit determination, is estopped from invoking that reason for denial upon appeal. The Act simply provides that at the initial stage of review the administrator must, upon denying a claim, and “[i]n accordance with regulations of the Secretary” of Labor, provide adequate, understandable notice that “set[s] forth the specific reasons for such denial.” 29 U.S.C. § 1133(1). The Act requires that there be a “reasonable opportunity” to appeal a denial of a claim “for a full and fair review by the appropriate named fiduciary.” 29 U.S.C. § 1133(2) (emphasis added). The statute’s dictate that the appellate body’s review be “full and fair” suggests that the appellate administrative body is not limited to a review of the reasons articulated by the administrator who initially denied the claim. The regulations in effect at the time Abatie- filed her claim reiterate the requirement that the appellate body conduct a “full and fair” review of a denied claim. Those regulations require the appellate body to set forth its decision in writing, with no indication that the decision be limited to the reasons for denial as articulated by the initial decision-maker. See 29 C.F.R. § 2560.503-1 (1999) (regulations in effect at the time Abatie filed her claim). We hold that an ERISA administrator’s articulation of a new reason for denying a claim on appeal after the initial benefit determination has been rendered is permissible and so does not constitute material, probative evidence that the administrator’s conflict of interest manifested itself into an actual breach of its fiduciary obligations. 2 Abatie alleges that Alta’s failure to discuss certain pieces of evidence in its decisions denying Abatie’s claim illustrates her contention that Alta’s conflict of interest led to a breach in its fiduciary duty. For guidance in assessing Abatie’s claim, we again refer to Atwood, which states that “material, probative evidence ... tending to show that the fiduciary’s self-interest caused a breach of [its] fiduciary obligations” must be set forth in order to dislodge our deferential standard of review. Atwood, 45 F.3d at 1323. Applying Atwood, we hold that a plan administrator’s failure to discuss non-dispositive evidence does not constitute material, probative evidence that the fiduciary’s self-interest has led to a breach of its fiduciary obligations. i Abatie first points to deposition testimony of an employee of the Clinic, who testified that she contacted someone who worked for the insurer to request a waiver of premium for Dr. Abatie. Abatie argues that Alta’s failure to mention this deposition testimony in its final decision denying benefits demonstrates a serious conflict of interest that demands heightened review. We disagree. Alta’s final determination was set forth in a detailed, eleven-page letter, which contains a significant discussion of the policy and the pertinent issues relating to insurance coverage on the life of Dr. Aba-tie. Therein, Alta engages in a careful and thorough four-page, single-spaced analysis as to whether Dr. Abatie had successfully obtained a waiver of premium. Alta explicitly noted that it “based [its] determination on an examination of the Administrative Record as a whole, as well as on an examination of its own business records and computer systems relating to disability waiver of premium claims.” The final determination contained a detailed analysis of the typical documentary evidence that would exist in the Clinic’s and the insurers’ files if a waiver of premium had been granted. In its discussion, Alta considered several undated documents prepared by a Clinic employee which suggested that the employee had filed a waiver of premium application, with a handwritten note stating that “waiver was granted 2/94.” Alta allowed that these brief documents and handwritten note “provide some inferential evidence that at waiver claim was submitted,” but emphasized that the documents “do not specifically state to whom the claim was allegedly submitted, what specific information was provided, who evaluated and approved the claim, and the specific grounds on which the claim was approved.” Alta concluded that the “lack of critically important information, combined with the absence of any documentation from [the insurer] concerning this claim ..., substantially outweighs any inference that can be drawn that a waiver claim was submitted on behalf of Dr. Abatie.” Although the deposition testimony was not discussed in Alta’s final denial letter, the record does not support the proposition that the testimony was either “ignored” or “disregarded.” Alta explicitly noted in its final denial that it “based [its] determination on an examination of the Administrative Record as a whole,” revealing that Alta did consider the deposition testimony, which was part of the amended administrative record. Given our deferential stance toward decisions of ERISA administrators, where an ERISA administrator states that it considered the record “as a whole,” we must assume that it did so, in the absence of clear and convincing evidence to the contrary. We conclude that Alta was under no obligation to discuss deposition testimony about the alleged waiver of premium application. The plan requires that proof of an insured’s total disability “be sent to [the insurer’s] Home Office,” indicating that the application and corresponding proof must be in writing. In assessing whether the waiver of premium application and accompanying proof of disability was ever filed, we hold that a plan administrator is entitled to rely exclusively on the written documentation in the administrative record, a record to which both sides of this case had an opportunity to contribute. This proposition derives from the plan itself, a document to which both parties agreed, which requires that a written waiver of premium application be submitted. Alta was not required to delve into a he-said, she-said debate as to whether a waiver of premium application was ever filed. Because a plan administrator is entitled to rely exclusively on documentary evidence to determine whether the plan-required paperwork was filed, Alta was under no obligation to discuss the deposition testimony. In its discretion as the plan administrator, Alta can certainly consider oral testimony if it wishes, but the plan’s requirement for a written waiver of premium application along with written proof of total disability allows it to solely consider documentary evidence to ascertain whether the documents were filed. With no obligation on Alta to consider the evidence in the first instance, it follows that the failure to discuss the deposition cannot constitute “material, probative evidence” that Alta breached its fiduciary obligations. Moreover, the unreliable and inconclusive nature of the deposition testimony at issue is evident. It was only in response to leading questions from Abatie’s attorney that Melissa Peter, a former employee of the Clinic, testified in the deposition that she had contact with an individual at the insurer to “process” Dr. Abatie’s waiver of premium. Peter does not remember the name of the individual with whom she allegedly spoke. She alleges that the insurer granted the waiver of premium, but does not remember from whom she learned the information, nor does she recollect whether such notification was oral or written. Peter testified that in a case such as Dr. Abatie’s, a disabled employee would typically be sent a form to complete and return to the Clinic’s Human Resources office. The Clinic, in turn, would submit the waiver of premium application to the insurer. The record does not demonstrate that Dr. Abatie completed the application form. In her deposition, Peter did not testify that she either received the completed form from Dr. Abatie or submitted it to the insurer. Peter’s testimony spoke to possibilities, not to actualities: “I believe Dr. Abatie would have completed the form, I would have received it, it would have been submitted.” More generally, Peter testified that when she dealt with an insurance company and received oral confirmation, there would be follow-up in writing to obtain written confirmation from the insurer. The record contains no evidence of any such official written confirmation that the insurer had granted Dr. Abatie a waiver of premium. This ambiguous deposition testimony comes against the backdrop of a written admission both by the Clinic and its insurance broker that the waiver of premium application was never filed. See Part I.B., supra. A further problem with the Peter deposition is the high probability that the Peter testimony was self-serving. Peter may well have been motivated by sympathy for Abatie and a desire to cover up the Clinic’s, and possibly her own, failure to properly file Dr. Abatie’s waiver of premium application. In sum, the deposition hardly clears the air on the subject, and so it is not a piece of evidence that an administrator must discuss. The category of evidence that an administrator must discuss is extremely limited in light of our deferential review of decisions of ERISA administrators who are granted discretion to adjudicate claims by their plan. Because of the discretion granted to the administrator by the ERISA plan, we are unable to interject ourselves as a micromanager in the plan’s affairs. We hold that a “full and fair review,” 29 U.S.C. § 1133(2), does not demand that an ERISA administrator recite every piece of evidence somehow relevant to its decision or write a treatise as to every claim that comes before it.

825725-20274

McGOWAN, Circuit Judge. This is an appeal from the dismissal of a complaint under the Declaratory Judgment Act. 28 U.S.C. §§ 2201-2202. Appellants sought in the District Court a determination that appellees, in their official capacities as Secretary of Commerce and Director of the Census, are required to implement the provisions of Section 2 of the Fourteenth Amendment, which contemplates a reduction in the basis of a state’s representation in Congress when that state denies or abridges the right to vote. For the reasons appearing hereinafter, we do not reinstate the complaint. I Appellants, who brought this action on behalf of themselves and others similarly situated, Rule 23(a) (3) Fed.R.Civ.P., comprise two groups by their own designation. The so-called Group I appellants are registered voters from Pennsylvania, Massachusetts, Missouri, Illinois, Ohio, and California. They assert that, if apportionment were to be effected in accordance with the literal commands of Section 2, the alleged denials and abridgements of the right 'to vote by certain other states would compel a reduction in the representation of those latter states, and a corresponding increase in the representation of their own. Since appellees do not presently provide the necessary statistical basis for such reapportionment, the Group I appellants claim that (1) their congressmen represent more persons than the congressmen from states which deny or abridge the right to vote, (2) the value of their votes is consequently diluted in violation of their constitutional rights, and (3) enforcement of Section 2 is necessary in order to protect their votes from such dilution. The remaining appellants classify themselves as Group II. They are citizens of Virginia, Mississippi, and Louisiana, claiming to be qualified voters in all respects except that various discriminatory practices, including literacy tests and poll tax requirements, deprive them of their right to vote. They invoke Section 2 in order to deter the deprivations which they are allegedly suffering. All appellants point out that, under the relevant statutes, appellees are presently charged with the responsibility for compiling a tabulation of the population for the purposes of representation, preparing a statement showing the representation to which each state is entitled, and submitting that statement to the President for transmittal to Congress. They contend that these laws, properly construed, also require appellees, contrary to their present practice, to take into account whatever reduction in representation may be required by Section 2 of the Fourteenth Amendment; and that, if these statutes be viewed as not embodying this requirement, they must be declared void and of no effect as unconstitutional. The complaint prays for a declaration that appellees are now required (1) to take steps to compile statistics in the 1970 census on the denial and abridgement of the right to vote, and (2) thereafter to prepare an apportionment statement based upon such statistics for submission to the President and ultimate transmittal to Congress. In the event such a reading of the statutes is not made, the complaint asks that the existing statutes relating to the administration of the census and the preparation of the apportionment statement be invalidated. Appellees filed a timely motion to dismiss or, in the alternative, for summary judgment. This motion asserted that appellants lacked standing to sue, a justiciable controversy was absent, and the complaint failed to state a cause of action for which equitable relief is available. Attached to the motion was an affidavit of the then Director of the Census to the effect that the compilation of the statistics demanded by appellants was not feasible. In opposing the motion, appellants submitted a counteraffidavit contradicting the Director’s assertions in this regard. The District Court, being of the view that, under Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923), both groups of appellants lacked standing to sue, granted the motion to dismiss. As to the Group I appellants, the court regarded as sheer speculation their allegations that increased representation of their states was a likely consequence of the relief sought. • In any event, the claimed dilution of the value of their vote was viewed by the court as shared with millions of other voters in other states where the right to vote is neither abridged nor denied. The Group II appellants were thought to be in no better position. The possibility that the relief requested would serve as a meaningful deterrent to the alleged denials and abridgements of voting rights was, to the court, too remote and speculative to found judicial intervention. Although the order appealed from is limited to a grant of the motion to dismiss, the District Court volunteered the further opinion that, even if appellants had standing, summary judgment in favor of appellees would be appropriate. It did not regard appellees as under a statutory duty to compile the statistics and submit the apportionment statement demanded; nor did it regard the omission of any such duty as rendering the legislation unconstitutional. United States v. Sharrow, 309 F.2d 77 (2d Cir. 1962), cert. denied, 372 U.S. 949, 83 S.Ct. 939, 9 L.Ed.2d 974 (1963), was cited by the court to support its view that the census machinery was not the constitutionally requisite channel for carrying out the purposes of Section 2 of the Fourteenth Amendment. II Immediately in issue on this appeal is appellants’ contention that the District Court erred in dismissing their complaint, either for lack of standing or non-justiciability. Wesberry v. Sanders, 376 U.S. 1, 84 S.Ct. 526, 11 L.Ed.2d 481 (1964), and other reapportionment cases are said to establish beyond any doubt the standing of the Group I appellants to protect the full weight of their right to vote. And the Group II appellants have standing, so it is said, because Section 2 of the Fourteenth Amendment was directed at protecting the very rights of an individual and personal nature which these particular appellants are asserting. If, we are told, these latter appellants do not have standing to invoke Section 2, then it is unlikely that any one does. Contrary to the view of the court below, appellants insist that the threat of breathing life into Section 2 would be of great practical utility in securing greater recognition of their rights to vote. The doctrine of standing does not, in this submission, require a showing of absolute certainty of success. In response, appellees argue that standing is lacking because the recent civil rights legislation either has removed or is fast removing the barriers to voting of which appellants complain. By the 1970 census it is likely, they contend, that these barriers will be eliminated. Alternatively, they argue that dismissal was proper, even if standing existed, because a non-justiciable question is involved, since apportionment is a duty which has been constitutionally entrusted to Congress, which an unreviewable discretion as to how it is to be accomplished. In enacting the recent civil rights legislation, culminating in the Voting Rights Act of 1965, Congress has selected its own method of insuring the right of all citizens to vote. Whatever Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962), did to limit the political question doctrine with respect to the intrusion of the federal judiciary into matters of state government, it is claimed to have no relevance to cases involving the relationship of co-equal branches of the federal government. In any event, the determination of whether, within the meaning of Section 2, an individual has been wrongfully denied his right to vote is said to involve a standard which it would not be feasible for either the courts or the executive department to try to apply. In disposing of this appeal, however, we need not — and do not — proceed solely by reference to the precise grounds pressed upon us by the parties. Our point of departure is that this is an action brought under the Declaratory Judgment Act. As we have said on another occasion, in accord with numerous declarations by this court as well as the Supreme Court, “The courts have a broad measure of discretion to decline to issue declaratory judgments * * Marcello v. Kennedy, 114 U.S.App.D.C. 147, 312 F.2d 874 (1962), cert. denied, 373 U.S. 933, 83 S.Ct. 1536, 10 L.Ed.2d 692 (1963). The language of the Act is permissive: “[A]ny court of the United States * * * may declare the rights and other legal relations of any interested party seeking such declaration * * *” (emphasis added). These provisions have been regarded as “an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.” Public Service Comm’n of Utah v. Wyeoff Co., 344 U.S. 237, 241, 73 S.Ct. 236, 239, 97 L.Ed. 291 (1952). Thus it is appropriate, in the context of a declaratory judgment suit, to weigh a wider range of considerations than would be either necessary or appropriate if the only issue were one of standing. This discretion is not unbounded, and the admonition in Wesberry v. Sanders that dismissal for want of equity cannot mask what is in effect an improper dismissal for “political question” reasons must be observed. 376 U.S. 1, 4, 7, 84 S.Ct. 526 (1964). But some circumstances have been recognized as appropriate for declining to exercise jurisdiction under the Declaratory Judgment Act, and the factors there relevant are present here as well. In matters of public law, courts should be careful to avoid “futile or premature interventions” that would reach far beyond the particular case; and “[t]he disagreement must not be nebulous or contingent but must have taken on fixed and final shape * * * .” Public Service Comm’n of Utah v. Wycoff Co., supra at 244-245, 73 S.Ct. at 240. When the possibility of the injury’s occurring is remote and uncertain, a declaratory judgment is inappropriate. See Eccles v. Peoples Bank, supra 333 U.S. at 431, 68 S.Ct. at 644, where it is said that “Especially where governmental action is involved, courts should not intervene unless the need for equitable relief is clear, not remote or speculative.” So it is that we must be concerned with the timing of the present action. The problem is not so much one of whether, as in some of the cases discussed herein-above, an injury not yet incurred is likely ever to happen. We are under no illusions as to what has been going on in the states of residence of the Group II appellants. The remote and speculative character of the relief sought here derives, rather, from the fact that it cannot, by its very nature, become effective before several years have elapsed. Meanwhile, and largely since this suit was first filed, Congress has moved directly and in a massive way to eliminate the injuries which this complaint seeks to get at indirectly by means of the 1970 census and the apportionment made on the basis of it for the election of 1972. It is these events which create a remoteness of their own, and bring into play in this suit considerations of judicial economy and reluctance to prescribe for, or to correct, a coordinate branch of the national government in the discharge of its constitutional responsibilities as it understands them. The Group I appellants claim to be injured because the value of their votes in allegedly non-discriminating states is diluted by the discrimination of other states against Negro voting. The continuation of this discrimination is an essential predicate to the relief they request. If these practices cease, there is no dilution of their votes and, consequently, no injury needing redress. Whether the Group I appellants suffer any injury depends upon whether the allegations made by the Group II appellants concerning the denials and abridgements of the right to vote by their states can be sustained. The Group II appellants claim to be injured because of certain state-created obstacles to their exercise of the franchise. More specifically, the Virginia appellants complain that they are unable to vote because Virginia law requires the payment of a poll tax and the completion of a registration form in the registrant’s handwriting. The Mississippi appellants advance a similar disability because of the constitutional interpretation test and poll tax required by their state. And the appellant from Louisiana asserts a like disability because of that state’s requirement that voter registration forms must be completed without error of any kind. The Voting Rights Act of 1965, however, was directed at eliminating voting discrimination for reasons of race or color through the use of literacy tests and similar devices. Under Section 4 of that Act, if the Attorney General of the United States determines that such devices were maintained by a state on November 1, 1964, and the Director of the Census determines that less than fifty per cent of the persons of voting age residing in that state were registered for or voted in the presidential elections of 1964, then use of such devices is to be suspended. The requisite findings have been made by the Attorney General and the Director of the Census as to Virginia, Mississippi, and Louisiana; and the literacy tests of which appellants complain have been suspended. The Twenty-fourth Amendment, which became effective in February of 1964, erases poll tax requirements for federal elections. Although it does not reach the imposition of poll taxes in state elections, Section 10 of the Voting Rights Act of 1965 recognizes that problem. That Act includes a Congressional declaration “that the constitutional right of citizens to vote is denied or abridged in some areas by the requirement of the payment of a poll tax as a precondition to voting.” It authorizes the Attorney General to institute actions to set aside such taxes, and suits have been brought, pursuant to these provisions, to eliminate the poll tax requirements in the states in question. Appellants suggested that a substantial question exists as to the constitutionality of state poll taxes, but the Supreme Court has recently, in Harper v. Virginia State Board of Elections, 86 S.Ct. 1079 (March 22, 1966), removed that issue from the realm of speculation. In that case, the Court declared a Virginia poll tax of $1.50 repugnant to the equal protection clause, and spoke in words which leave no doubt as to the unconstitutionality of poll taxes as a prerequisite to voting. Congress has, thus, acted vigorously and comprehensively to remove the obstacles to voting of which the appellants complain. To regard its measures as having no effect upon the discriminations alleged by the Group II appellants, and derivatively relied upon by the Group I appellants, would not afford them the respect an Act of Congress deserves. Congress has established a plan of direct action for assuring to all citizens a nondiscriminatory right to vote, and steps have been taken to implement these provisions. At this time we cannot assay the final impact of these measures upon discrimination against Negro voting; nor do any of the allegations in the complaint assist in this task. It has been thought the better part of judicial wisdom to withhold declaratory relief when “it appears that a challenged ‘continuing practice’ is, at the moment adjudication is sought, undergoing significant modifications so that its ultimate form cannot be confidently predicted.” A. L. Mechling Barge Lines, Inc. v. United States, 368 U.S. 324, 331, 82 S.Ct. 337, 342 (1961). In this case, in light of the specific steps taken by Congress to eliminate the Group II appellants’ causes for complaint, our discretion is best exercised by declining to compel the District Court to open the door to judicial relief until it can fairly be said that discrimination persists despite these new measures. That the relief appellants seek concerns preparation for a census which will not occur until 1970 reinforces our view that the march of events has made the: complaint premature. Although litigation involves delay and time must be allowed to prepare for taking the census, some considerable latitude would still seem to exist for appraisal of the effectiveness of the new Voting Rights Act, before appellants turn in desperation once more to the indirect sanction they believe to be imbedded in Section 2 of the: Fourteenth Amendment. Appellants argue that the Voting-Rights Act is not certain to eliminate the-injuries which are the basis for this suit.. But we cannot speculate on that score. Congress has selected the means it deems suitable. It should be presumed that these measures will receive the support that is commensurate with their high aims. If the Congressional means fall short of the Congressional ends, whether through lack of enforcement or stubborn resistance, that is a matter to be explored by the trier of fact at a later day. In deciding to leave the District Court’s dismissal of the complaint undisturbed, many of the contentions so vigorously made by the parties are not reached. We intend thereby neither to intimate any decision on the merits of this case, nor to disparage the seriousness of the questions presented. Issues affecting the right to vote touch upon “matters close to the core of our constitutional system.” Carrington v. Rash, 380 U.S. 89, 96, 85 S.Ct. 775, 780, 13 L.Ed.2d 675 .(1965). In telling appellants that events have made their complaint unsuitable for judicial disposition at this time, we think it also premature to conclude that Section 2 of the Fourteenth Amendment does not mean what it appears to say. Affirmed. . “Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial'officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.” . 2 U.S.C. §§ 2a, 6; 13 U.S.C. §§ 4, 5, 11, 21, 141. 2 U.S.C. § 2a provides that the President shall transmit an apportionment statement to Congress showing the number of representatives to which each state is entitled. 2 U.S.C. § 6 declares that the number of representatives apportioned shall be reduced in accordance with Section 2 of the Fourteenth Amendment. 13 U.S.C. §§ 4, 5, and 141 variously authorize the Secretary of Commerce to take the census, to tabulate “total population by States as required for the apportionment of Representatives * * to report to the President, and to delegate his functions. 13 U.S.C. § 11 authorizes the appropriations needed to carry out these provisions, and 13 U.S.C. § 21 provides for the appointment of a Director of the Census. . Appellants assert that “while it is the President who transmits the figures to Congress, he is merely a conduit for the statement prepared, compiled and computed by the Secretary and Bureau of the Census.” . Reliance was placed upon (1) the language of 2 U.S.C. § 2a which requires the President to transmit to Congress an apportionment statement showing “the whole number of persons in each State, excluding Indians not taxed * * * ” (emphasis added) ; (2) the failure to effect amendments to the Census and Reapportionment Act which would have required the compilation of statistics to enforce Section 2; and (3) various legislative and judicial statements that Section 2 has never yet been implemented by Congress. . Cases allowing taxpayers to challenge the apportionment of taxes among the states are also cited to support appellants’ con- . tention that voters have standing to challenge the apportionment of representatives.

1810437-11776

CHESNUT, District Judge. The plaintiff sues to recover an alleged overpayment of federal estate taxes on the estate of the late Thomas H. Bowles, who died July 24,1923. In December, 1920, more than two years before his death, Thomas H. Bowles transferred certain preferred and common shares of stock of the Marine Securities Company to his wife, Louise C. Bowles, absolutely. In the executor’s return, the fact of this transfer was disclosed and the contention submitted that the value of the stock should not be included in the estate, on the ground that the transfer was not made in contemplation of death and was not intended to take effect in possession or enjoyment at death. But the collector rejected the contention and insisted on the payment of tax on the value of the stock, to wit, a tax of $19,-300.40 on a value of $193,004. The plaintiff paid the tax so demanded and filed a petition for refund, which was overruled. Mr. Bowles was a resident of Maryland, and his estate was administered in the orphans court of Baltimore county, Md. Defendant’s fourth plea to the second count of the declaration traverses the allegation that the transfer was not made in contemplation of death. The plaintiff first demurred to this plea on technical grounds but I understand the demurrer is withdrawn and issue will be joined as to the fact. But the defendant’s third, plea sets up the defense that, at the time of the transfer of the stock, “the said Thomas H. Bowles was not mentally able to realize the nature of the alleged act and that the same being thereby wholly null and void,” the tax imposed was, therefore, legal. The plaintiff has demurred to this plea. The substantial question presented is whether, under the Revenue Act of 1921 (42 Stat. 227), the value of the property conveyed away during' his lifetime by one non compos mentis is nevertheless lawfully required to be included in the valuation of the gross estate for the computation of estate taxes. Sections 401 and 402 (a) of the Act are as follows: “See. 401. That, in lieu of the tax imposed by Title IV of the Revenue Act of 1918, a tax equal to the sum of the following percentages of the value of the net estate (determined as provided in section 403) is hereby imposed upon the transfer of the net estate of every decedent dying after the passage of this Act, whether a resident or nonresident of the United States.” “See. 402 * * * (a) To. the extent of the interest therein of the decedent at the time of his death which after his death is subject to the payment of the charges against his estate and the expenses of its administration and is subject to distribution as part of his estate.” Other subsections of section 402' require the inclusion in the value of the gross estate of (b) the interest of a surviving spouse; (c) the value of property transferred or put in trust in contemplation of, or intended to take effeet in possession or enjoyment at or after death;, (d) property held jointly or as tenants by the entirety; (e) property passing under a general power of appointment; and (f) proceeds of life insurance policies, to a certain extent. It is at once apparent that the particular item of property is not taxable under subsections (b), (d), (e), or (f), and, as a matter of pleading, the possibility of its being taxable under section (e) is eliminated for present considerations, because the declaration expressly alleged that the transfer was made not under conditions covered by subsection (c) and the third plea now demurred to does not traverse this allegation. It necessarily results, for the purpose of passing on this demurrer, that if the property is taxable it must be by reason of subsection (a); that is to say, because at the time of the death of Mr. Bowles he had an interest therein which, after his death, was subject to (a) payment of the charges against'his estate, and also (b) to the expenses of its administration, and (c) also subject to distribution as part of his estate. Crooks v. Harrelson, 282 U. S. 55, 51 S. Ct. 49, 75 L. Ed. 156. The exact question on the demurrer, therefore, is whether the single fact that Mr. Bowles was non compos mentis at the time of making the transfer to his wife, more than two years pri- or to his death, sub jects the stock so conveyed by him to the payment of his debts and expenses of administration of his estate, and to distribution as a part of his estate. At the outset, it is to be noted that the plea does not allege that Mr. Bowles had been, adjudicated non compos mentis, nor that he was under guardianship at the time, nor that his alleged ineompeteney was known to the grantee. Nor do the pleadings allege whether the transfer was purely voluntary or based on a partial or adequate consideration. It should also be noted the plea does not allege that the transfer was “merely colorable,” nor does it allege any conspiracy or fraudulent intent of any kind with respect either to creditors or evasion of taxation. The plea does allege that the transfer was wholly null and void, but this is a conclusion of law based only on the bare fact alleged that Mr. Bowles “was not mentally able to realize the nature of the alleged act.” The first question for consideration is what is the effect of the allegation that the transfer was wholly null and void. Is the conclusion of law so alleged justified from the bare fact of mental ineompeteney not established by adjudication, and where the alleged lunatic .is not under guardianship at the time? The ultimate question is whether the property is subject to the payment of costs of administration and to distribution as part of the estate of Mr. Bowles. This is necessarily to be determined by the local law, as in the Harrelson Case, 282 U. S. 55, 51 S. Ct. 49, 75 L. Ed. 156; and I think the Maryland law in this ease is also a “rule of decision” in the sense of the decisions of the Supreme Court applying the rule of the United States Code Annotated, Title 28, section 25. Burgess v. Seligman, 107 U. S. 20, 33, 2 S. Ct. 10, 27 L. Ed. 359; Sim v. Edenborn, 242 U. S. 131, 135, 37 S. Ct. 36, 61 L. Ed. 199; E. Hines Yellow Pine Co. v. Martin, 268 U. S. 458, 45 S. Ct. 543, 69 L. Ed. 1050; Old Colony Trust Co. v. City of Tacoma, 230 P. 389 (C. C. A. 9th).. In my opinion, the Maryland eases very clearly hold that contracts and conveyances by persons non compos mentis, before adjudication and not under guardianship, are merely voidable, and not void. Atkinson v. McCulloh, 149 Md. 662, 132 A. 148; Plach v. Gottschalk Co., 88 Md. 368, 41 A. 908, 42 L. R. A. 745, 71 Am. St. Rep. 418; Riley v. Carter, 76 Md. 581, 25 A. 667, 19 L. R. A. 489, 35 Am. St. Rep. 443; Evans v. Horan, 52 Md. 602. And this rule is in accordance with the gi’.eat weight of authority. 32 C. J. page 742, § 528. And I understood the United States attorney at the oral argument, to concede that for the purposes of the demurrer the allegation of the plea should be treated as if it characterized the transaction as voidable instead of wholly null and void. In any event, I think it must be so regarded under the Maryland law; and, if so, then it follows that the property in its present situation is not an asset of the estate. The question here is not similar or analogous to cases of transfers or gifts held invalid for want of insufficient consummation as, for instance, where there is no sufficient delivery. See White v. Bingham, 25 F.(2d) 837 (C. C. A. 1st). The exact question, as has been already said, is whether this property, under the circumstances alleged, is nevertheless subject to debts, expenses of administration and distribution as a part of the estate of Mr. Bowles. It does not appear that the estate without this property is insolvent or that there are any unpaid creditors. If it be assumed that the property could be subjected to the claims of creditors, reference may be made to the Maryland Code, article 45, section 1, which provides as follows: “No acquisition of property passing to the wife from the husband after coverture shall be valid if the same has been made or granted to her in prejudice of the rights of his subsisting creditors, who, however, must assert their claims within three years after the acquisition of the property by the wife, or be absolutely barred, and, for the purpose of asserting their rights under this section, claims of creditors of the husband not yet due and matured shall be considered as due and matured.” t It does not appear that this conveyance from husband to wife was in fact attacked by creditors within the period of limitation permissible. However, as Mr. Bowles died within less than three years after the conveyance, it may be assumed that, at the time of his death, this property could have been subjected to the payment of his debts subsisting at the time of the conveyance, if there had been any still unpaid. Whether this subjection to some of the debts is sufficient to comply with the requirement of section 402 (a) that the property must be “subject to the payment of the charges against his estate,” may be debatable; but if it be assumed that it is subject to this payment, still the property would not he taxable unless it is also subject to the expenses of administration and to distribution as a part of his estate. It is obvious that un-. der existing conditions, as neither Mr. Bowles during his lifetime, nor his personal representative after his death, has challenged this conveyance, the property is in fact now not part of his estate, and was not a part of his estate at the time of his death. It could have been made a part of his estate after his death only by a successful direct proceeding brought by the executor against Mrs. Bowles, who claims it in her own right adversely to the executor. And to hold that for estate tax purposes it is to be included in the estate is to advance the proposition that the conveyance can be collaterally attacked. It has been held that conveyances by persons non compos mentis are not subject to collateral attack. 32 C. J. 530, page 744. See Evans v. Horan, 52 Md. 602, 612. The proposition now advanced by the government is novel. It is fréely stated by counsel that no precedent for or against the contention can be found. If sound, it will establish an entirely new principle in estate or inheritance taxation, both federal and state. The District Attorney has advanced an interesting and attractive argument in support of this new principle of taxation. The judicial mind ought not be impervious to ideas, merely because they are new, provided they are sound in principle. But in view of the wide extent of inheritance taxes and the number of years during which they have existed in the scheme of either state or federal taxation, it .is imperative that a new principle not expressly established by statute within Constitutional limitations ought not to be accepted unless clearly within the reach of the language of the applicable taxing statute under consideration, .especially when, as in this ease, the result would be to introduce great confusion into the administration of estates. The Supreme Court has .recently reiterated that: “in statutes levying taxes the literal meaning of the words employed is most important for such statutes are not to be extended by implication beyond the clear import of the language used.” Crooks v. Harrelson, 282 U. S. 55, 51 S. Ct. 49, 51, 75 L. Ed. 156; United States v. Merriam, 263 U. S. 179, 187, 188, 44 S. Ct. 69, 68 L. Ed. 240, 29 A. L. R. 1547. And where there is doubt as to the meaning of the statute it should be resolved in favor of the taxpayer. Gould v. Gould, 245 U. S. 151, 153, 38 S. Ct. 53, 62 L. Ed. 211; Reinecke v. Trust Company, 278 U. S. 339, 348, 49 S. Ct. 123, 73 L. Ed. 410, 66 A. L. R. 397.

1096737-8952

THOMAS, Circuit Judge. This appeal presents the question whether the district court erred under the circumstances in denying to the appellant, a farmer-debtor, the benefits of the FrazierLemke Act, section 75, sub. s of the Bankruptcy Act, 11 U.S.C.A. § 203 sub. s. The appellant owns and with her husband resides on a farm of 120.acres situated in Montgomery county, Iowa, on which the appellee holds a mortgage. On February 27, 1939, appellant filed her petition under section 75, subs, a to r. The court approved the petition and referred the matter to the Conciliation Commissioner. Prior to the commencement of the bankruptcy proceedings the appellee had instituted foreclosure of its mortgage in the state court. Thereafter the appellee filed its claim in the bankruptcy proceeding. Having failed to secure a composition with her creditors, the appellant on May 12, 1939, amended her petition, stating that she desired to obtain the benefits of section 75 sub. s of the Bankruptcy Act, praying that she be adjudged a bankrupt, that her property be appraised, that her exemptions be set aside to her, and that she be allowed to retain possession of the remainder of her property for a period •of three years as provided in the Act. The amended petition was referred to the Conciliation Commissioner. On May 16, 1939, appellee was adjudged a bankrupt, and on May 18, 1939, an order was entered by the Commissioner acting as referee setting aside her exemptions and providing that a hearing be had on June 5, 1939, “at which time and place the creditors may appear and show cause why said exemptions or any part thereof should not have been set off, and further why an order should not be entered staying all proceedings and continuing the debtor in possession of the remainder of his [her] property, determine a reasonable rental for said property, or, if necessary, appoint a trustee.” Notice in accordance with the order was given May 22, 1939. Appraisers were appointed, and they filed a report appraising all of the debtor’s property. On June 5, 1939, upon application of the appellee the referee entered an order extending the time for filing objections to granting a three-yeár stay order and to the order setting off exemptions. On June 14, 1939, the appellee filed objections to the granting of a stay order on the grounds (a) that the application therefor was not made in good faith, (b) that the offer of composition had not been made in good faith by the debtor, and (c) that an emergency no longer exists in the state of Iowa. Appellee prayed that the stay order be denied, that the estate be liquidated, or in the alternative that the land covered by appellee’s mortgage be rejected as a burdensome asset in the bankrupt estate. Without further notice, without a hearing, and in the absence of the debtor or her attorney, the Commissioner acting as referee, on June 21, 1939, entered an order denying a stay order and decreeing that the 120 acres of land covered by appellee’s mortgage is a burdensome asset and rejecting the same as such and that “creditors holding mortgages on said lands are hereby given leave to proceed as if no debtor’s proceedings had been had hereunder.” This order was based upon a finding that “there is no equity in said lands over and above the mortgage indebtedness and that the possibility of financial rehabilitation of said debtor * * * is far too remote to justify the granting of such order * * * that the offer of composition * * * was not made in good faith for the reason that the possibility of performance * * * is practically impossible.” On October 18, 1939, appellant filed an application before the referee reciting the proceedings referred to supra, and alleging that the order of June 21, 1939, denying a stay of the foreclosure proceedings and releasing the land from bankruptcy was entered without a hearing, without the knowledge of appellant, and without taking proof; and that the order is beyond the jurisdiction o.f the referee and is void and without effect. She prayed that a hearing be had, that the rental value of the land be fixed, and that the order of June 21, 1939, be vacated and an order entered staying further proceedings in the state court for a period of three years and granting to her the rights to which she is entitled under the Act. After due notice and hearing upon this application the referee entered an order on November 4, 1939, denying the relief sought. On November 14, 1939, the appellant petitioned the district court for a review of the orders of June 21, 1939, and November 4, 1939. In her petition she alleged that the referee had exceeded his authority in denying a stay of the foreclosure proceedings instituted by appellee in the state court. The prayer of the petition was that the court set aside the orders of the referee; that the court grant a stay of the foreclosure proceedings; and that the court direct the referee to proceed in accordance with the provisions of the statute. Pursuant to this petition the district court on November 17, 1939, entered its order allowing the review and directing the referee to certify to the court the entire record of the proceedings had before him. On December 2, 1939, following, a hearing, the district court signed an order which was filed on December 4, 1939, directing that “the orders appealed from, dated June 21, 1939, and November 4, 1939, should be and the same are hereby approved.” On December 5, 1939, the appellant filed a motion for a rehearing, asking the court to reconsider its order of December 2, 1939. In her motion she called the attention of the court to the decision of the Supreme Court in the case of John Hancock Mutual Life Insurance Company v. Bartels, 308 U.S. 180, 60 S.Ct. 221, 84 L.Ed. 176, decided December 4, 1939. At the conclusion of a hearing on January 15, 1940, the court entered an order denying the motion for a rehearing. The decision of the Supreme Court in the Bartels case clearly demonstrated that the orders of the referee were erroneous. In approving those orders in its order of December 2, 1939, the district court apparently relied upon the decisions of this court in Cowherd v. Phoenix Joint Stock Land Bank, 8 Cir., 99 F.2d 225, and Bender v. Federal Farm Mortgage Corporation, 8 Cir., 99 F.2d 252, holding that whenever it appears that no reasonable hope for the financial rehabilitation of the debt- or exists and that the liquidation of his' property is inevitable the court should dismiss his petition. In the Bartels case [308 U.S. 180, 60 S.Ct. 223, 84 L.Ed. 176], the Supreme Court held: “The subsections of Section 75 which regulate the procedure in relation to the effort of a farmer-debtor to obtain a composition or extension contain no provision for a dismissal because of the absence of a reasonable probability of the financial rehabilitation of the debtor. Nor is there anything in these subsections which warrants the imputation of lack of good faith to a farmer-debtor because of that plight.” The court declared that the purpose of § 75 was to afford relief to such debtors who found themselves in economic distress however severe; and it pointed out that the procedure under the statute is intended to protect all interests. This decision of the Supreme Court in effect reversed the decisions of this court in the Cowherd and Bender cases, supra, and placed a contrary construction on the Act. Section 75, sub. s(l) of the Act provides that: “After the value of the debtor’s property shall have been fixed by the appraisal herein provided, the referee shall issue an order * * * that the possession, under the supervision and control of the court, of any part or parcel or all of the remainder [after setting aside the unencumbered exemptions] of the debtor’s property shall remain in the debtor, as herein provided for, subject to all existing mortgages,” etc. And subsection (2) provides that “When the conditions set forth in this section have been complied with, the court shall stay all judicial or official proceedings in any court * * * for a period of three years.” The statute then sets forth the conditions upon which the debtor may retain possession and makes provision for the protection of the rights of the creditors. In the Bartels case the Supreme Court held that the provisions of the Act define the procedure to be followed. In the instant case the referee refused to follow that procedure, rejected the mortgaged land as burdensome, and gave the appellee leave to proceed with its foreclosure proceedings. The district court approved the orders of the referee and refused to stay foreclosure of the appellee’s mortgage. Subsequent to the decision in the Bartels case, the court entered an order declining to reconsider its order of December 2, 1932. Thus by the orders complained of the debt- or has been deprived of the rights granted by the statute. Such rights can only be had by a reversal of these orders.

6100271-12021

OPINION ASHLAND, Bankruptcy Judge. The debtors, who are farmers, appeal from an order confirming a creditors' Chapter 11 liquidation plan over the debtors’ objection. We modify the order and affirm. FACTS Quay and Ardis Jorgensen are Chapter 11 debtors in possession under a petition filed July 27, 1984. The debtors own and farm trees on over 14,000 acres of timberland in Western Washington. They have assets of approximately $43 million and liabilities of about $21 million. The largest creditor is appellee, Federal Land Bank of Spokane (Bank), with over $15 million of secured obligations. The debtors filed a disclosure statement and a proposed plan of reorganization on April 9, 1985. On June 11, 1985 several creditors, including the Bank as the principal proponent, filed a plan which would liquidate debtors’ assets over eighteen months. The debtors filed an amended plan and disclosure statement on July 16, 1985. The court approved debtors’ and creditors’ disclosure statements on August 5, 1985. On September 3, 1985 the debtors requested permission to distribute $450,000 to certain creditors. The request was denied. The debtors renewed the request on October 29, 1985. The confirmation hearing was held October 29 and November 1, 1985. At the hearing on October 29, the court was informed that post-petition payments to creditors had been made in derogation of court order. The court found that the debtors had attempted to “end-run the code” in bad faith making the plan defective. 11 U.S.C. § 1129. The court denied confirmation of the debtors’ plan. (Tr. of 10/29/85 hrg., pp 31-32.) The court next considered the creditors’ plan. The court heard testimony and took evidence. On November 1 the debtors sought to substitute counsel and obtain a continuance. The debtors sought to call their attorney as a witness to testify to debtors’ good faith in making the post-petition payments. The court allowed the substitution but not the continuance. The court confirmed the creditors’ liquidating plan over the debtors’ objections by order of November 20, 1985. The plan provided for the controlled sale of timber and land for a period of 18 months under the supervision of a marketing agent. A liquidating and disbursing agent, with examiner’s powers, would be employed to present sales to the court for approval. At the end of 18 months, assets would be liquidated at public auction if sufficient monies had not been generated to satisfy all creditors. Notice of appeal was timely filed on November 29, 1985. On December 4, 1985 a hearing was held to resolve ambiguities and problems anticipated under the creditors’ plan. The court authorized the cutting of timber and established accounting procedures. The debtors have engaged in logging operations pursuant to the plan. ISSUE Whether the bankruptcy court erred in confirming the creditors’ Chapter 11 liquidating plan over the objection of the farmer-debtors and, if not, whether the plan met the requirements of 11 U.S.C. § 1129(a). DISCUSSION Findings of fact may not be set aside unless clearly erroneous and conclusions of law are subject to de novo review. In re Pizza of Hawaii, 761 F.2d 1374 (9th Cir.1985). Bankr.Rule 8013. The creditors begin their attack of the debtors’ appeal arguing that there has been a “substantial consummation” of the plan rendering the appeal moot. See, 11 U.S.C. § 1101(2). Because the debtors failed to obtain a stay pending appeal and sold timber pursuant to the plan any appellate relief was rendered ineffective. In re Roberts Farms, Inc., 652 F.2d 793 (9th 1981), In re AOV Industries, Inc., 43 B.R. 468 (D.C.D.C.1984). We disagree. Substantial consummation means: (A) transfer of all or substantially all of the property proposed by the plan to be transferred; (B) assumption by the debtor or by the successor to the debtor under the plan of the business or of the management of all or substantially all of the property dealt with by the plan; and (C) commencement of distribution under the plan. 11 U.S.C. § 1101(2). Substantial consummation of a plan of reorganization turns on the facts of each case. Ohio v. Madeline Marie Nursing Homes, 694 F.2d 449 (6th Cir.1982). Subsections (B) and (C) have been satisfied but the requirements of subsection (A) have not. See, In re Heatron, Inc., 34 B.R. 526 (Bankr.W.D.Mo.1983), (a debtor was not precluded from modifying a confirmed plan where 53% had been paid out under plan.). The word “substantial” suggests more than halfway, more than a mere preponderance. Heatron at 529. The debtor has only completed four months of selling timber under the 18 month plan; approximately $2 million has been generated to satisfy $21 million of debt. The concept of substantial consummation usually arises in the context of plan modification and the binding effect of a confirmed plan. 11 U.S.C. §§ 1127(b), 1141. (Post-confirmation modification may take place before “substantial consummation” of plan.) Here the debtors do not seek a modification of the creditors’ plan rather they appeal the order of confirmation. Failure to obtain a stay pending appeal does not render the appeal moot and is not dispositive of this appeal. The real issue in this appeal is whether the court could confirm creditors’ liquidating plan over the objection of the debtors. There is no dispute that the debtors are farmers as defined in 11 U.S.C. § 101(17) and that the creditors’ plan is one of liquidation. The debtors contend that the Bankruptcy Code implicitly exempts farmers from Chapter 11 liquidation. Section 303(a) prohibits the filing of an involuntary petition against a farmer under Chapters 7 and 11. Section 1112(c) precludes the involuntary conversion of a Chapter 11 to 7 if the debtor is a farmer. Therefore, it is contended that the court cannot convert a farmer’s Chapter 11 to 7 by means of a liquidating plan over his objection. Two circuit courts hold that a liquidating plan can be confirmed over the farmer’s objection. In Matter of Jasik, 727 F.2d 1379 (5th Cir.1984), the court reviewed the code and legislative history. The court found that while Congress did give farmers special defensive protections, farmers could not use the Code offensively to block creditors from submitting a plan. Jasik at 1381. See, 11 U.S.C. §§ 1123(a)(5)(D) and (b)(4). The court in Matter of Button Hook Cattle Co., Inc., 747 F.2d 483 (8th Cir.1984), agreed with the Jasik court that farmers are treated the same as other debtors in determining who can file a reorganization plan. Section 1121 was drafted to respond to the problems under the Bankruptcy Act where only the debtor could propose a plan and by delay could force settlements out of unwilling creditors. Allowing creditors to submit plans eliminated the potential harm and disadvantages to creditors and democratized the reorganization process. Section 1121 limits the debtor’s exclusive right to file a plan to the 120 days after the date of the order of relief. Once the period elapses without timely extensions creditors may file a plan. 11 U.S.C. § 1121. Sections 1123(a)(5)(D) and 1123(b)(4) provide for liquidating plans and § 1129 allows for a plan to be confirmed without the approval of debtor. Farmers as debtors are not exempt from this working of the Code. “Congress envisioned that creditors would propose liquidation plans in Chapter 11 proceedings but did not except farmer-debtors from such plans.” Matter of Button Hook Cattle Co., Inc., 747 F.2d 483, 486 (8th Cir.1984). In the preceding cases the debtors did not file plans of reorganization before or after the 120 day exclusivity period. Here debtor has submitted a plan and an amended plan to the court for confirmation. Creditors have submitted a competing plan. The court can confirm a plan which satisfies § 1129. A creditor’s liquidating plan may be confirmed over farmer-debtors’ objection. A farmer-debtor is not immune from the burdens imposed by filing bankruptcy. He may not comply only with those provisions which aid him but evade those which do not. Upon becoming a debtor the farmer accepts the benefits subject to the risks. To hold otherwise would limit a creditor’s remedy to a motion to dismiss the bankruptcy. Creditors would then resort to state law remedies to satisfy their claims. Having determined that the plan could be confirmed over debtors’ objection we next address whether the plan satisfied the prerequisites of § 1129. Debtors first contest the court’s finding under § 1129(a)(ll) that the creditors’ plan is feasible. They state that the plan is vague and ambiguous; the effective date was undetermined; there were contradictory provisions; and it was unclear which properties were to be sold. The court heard testimony and took evidence on the feasibility of the creditors’ 18 month plan. The court had a thorough knowledge of the business and affairs of the debtor. The court found the plan feasible. Order on Confirmation of Plan, p. 4. The court was presented with ample evidence to demonstrate the reasonable probability of success'of the plan. In re Acequia, Inc., 787 F.2d 1352 (9th Cir.1986). Feasibility has been defined as whether the things which are to be done after confirmation can be done as a practical matter under the facts. In re Clarkson, 767 F.2d 417 (8th Cir.1985). Notwithstanding some ambiguities, the plan was feasible if the parties cooperated, especially the debtors in possession. See Tr. of 12/4/85 hrg. at 69. The creditors’ plan provides that the effective date for confirmation is the date on which the confirmation order became final and non-appealable or the date on which the creditors’ fund has sufficient cash to pay administrative claims, whichever occurs later. To date, neither has occurred. Nonetheless, the court set January 1, 1986 as the effective date for the plan. Tr. of 12/4/85 hrg., p. 76, In. 12. We find this to be harmless error. The court’s selection of the effective date does not adversely affect substantial rights of the parties. 28 U.S.C. § 2111. With the continued supervision of the court and a sincere effort by the parties the plan was feasible. The exact properties and timber to be sold would be under court supervision. The plan is not fatally vague and ambiguous. The debtors challenge the authority of the court to appoint a marketing agent and a liquidating and disbursing agent. The court under §§ 105 and 1142(b) can make necessary orders to carry out the provisions of the plan. Moreover, the creditors’ plan provided for the appointment of agents and allowed the court to make necessary orders to carry out the plan. Section 105 sets out the power of the bankruptcy court to fashion orders as necessary pursuant to purposes of the Code. In re Chininchian, 784 F.2d 1440 (9th Cir.1986). Section 1123(b)(5) permits a plan to include provisions not inconsistent with the Bankruptcy Code. Although the plan provided for the appointment of a particular person as marketing agent the court appointed Mr Jorgen-sen. The appointment of Mr Jorgensen, although “against his will”, was based on the court’s determination that he was the most knowledgeable and motivated to obtain the best return on his property. The only way for the debtors to keep as much of their timber farm as possible was for Mr Jorgensen to “market his timber and land in earnest.” The court placed the destiny of the debtors in Mr Jorgensen’s hands. The appointment of the liquidating and disbursing agent is consistent with § 1123(b)(5). Traditionally, courts have appointed agents to make disbursements pursuant to plans, the function of a trustee with limited powers. Here, the property of the estate does not vest in the debtors until such time as all claims are paid in full. Creditors’ plan, 114.8. The creditors’ plan did not provide for the appointment of an arbitrator. The court’s appointment of an arbitrator if disputes arose is not a legitimate exercise of its power. The court may appoint an arbitrator only with the stipulation of the parties. See Bankr.Rule 9019(c).

142847-17169

ORDER JOHN LEWIS SMITH, Jr, District Judge. On May 13,1971 the defendant was indicted for violations of 18 U.S.C. §§ 231 (a) (3) and 2101. On June 30, 1971 he moved, pursuant to Rules 16 and 41, F.R. Crim.P, and the Fourth, Fifth and Sixth Amendments to the Constitution, for disclosure of all records of electronic surveillance of any communications to which he was a party or which were conducted at his premises. He also requests such records for any premises in which he had an interest; of any surveillance conducted for the purpose of gathering leads or evidence against him; any such surveillance conducted at a place where he was present; any such surveillance during which he was referred to; any such surveillance in which any party is unidentified; and any such surveillance involving his attorneys. Defendant also seeks an evidentiary hearing prior to trial to determine whether the government has fully complied with all of his requests, to determine his standing to raise the issue of the legality of such surveillance, and to determine the extent to which such surveillance has tainted the evidence upon which the indictment is based. In opposition to that motion the government states that Hoffman has never been the subject of direct electronic surveillance but that conversations believed to be his have been overheard during five surveillances conducted without prior judicial approval but authorized by the President to obtain foreign intelligence information or safeguard the national security. The government has, in a sealed exhibit, submitted the records of those five surveillances as they pertain to the defendant and requested that the Court examine those records in camera. On July 21, 1971 this motion was extensively argued by counsel. In Alderman v. United States, 394 U.S. 165, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969), the Supreme Court held that the government must disclose to the defendant any conversations participated in by him or occurring on his premises, provided those conversations were overheard during the course of an illegal electronic surveillance. Disclosure is required so that the defendant may determine whether any evidence against him is based on illegal surveillance. Hoffman has standing to object to the use of any of the five surveillances which this Court finds to be illegal because he was a party to the overheard conversations. Alderman v. United States, supra. The government contends that disclosure of these surveillance records is not required by Alderman because they were not illegal, in spite of being initiated and conducted without prior warrant. A finding by this Court that the surveillances in this case were lawful would make disclosure and further proceedings unnecessary. Giordano v. United States, 394 U.S. 310, 89 S.Ct. 1163, 22 L.Ed.2d 297 (1969). As Justice Stewart pointed out in his concurring opinion in Giordano, Aider-man did not specify the procedures to be followed by the district court in making the preliminary determination of whether the surveillance violates the Fourth Amendment. Neither does Alderman require an adversary hearing and full disclosure for resolution of every issue raised by an electronic surveillance or give the defendant the right to rummage through government files. Taglianetti v. United States, 394 U.S. 316, 89 S.Ct. 1099, 22 L. Ed.2d 302 (1969). Upon examination, in camera, of the documents submitted in the sealed exhibit, the Court deems it appropriate to make the required preliminary determination of whether any of the . conversations of the defendant were overheard in violation of his Fourth Amendment rights. An evidentiary hearing is not required to make that determination. The surveillance records submitted by the government clearly indicate that they were not directed against the defendant nor at his premises. Those five surveillances were expressly authorized by the President, acting through the Attorney General, without judicial approval, and deemed necessary to protect national security. The government contends that the President has the inherent power to gather intelligence information through electronic surveillance, upon his determination that it is necessary to protect the national security, without securing a pri- or warrant. Reliance for this authority is grounded upon the presidential power in the field of foreign affairs, a thirty-year history of authorizations by Presidents recognizing the necessity for such surveillance where national defense is involved, and the congressional recognition of that power by the enactment of 18 U.S.C. § 2511(3). It is contended that the power .to authorize surveillance deemed necessary to protect national security is closely related to the power to obtain foreign intelligence information. The government maintains that the protection of national security could not be adequately achieved within the context of a warrant procedure because of the wide range of factors which bear on the decision, the secrecy of some of those factors, and the possibility of leaks. It claims that even without the warrant requirement, the Presidential prerogative is not without restraints. For instance, only the President and his sole delegate, the Attorney General, may exercise the power; the President must apply the strict standard of “national security” involvement; such surveillance is subject to in camera judicial review, such as is suggested here; and the President is subject to the will of the electorate if his exercise of the power is not approved by a majority. The government position in likening the foreign intelligence justification to situations where the President determines that the national security warrants it is especially pertinent in this case where four of the five surveillances were of domestic organizations and were instituted for the express purpose of gaining information regarding the activities of those organizations, obtaining evidence of violations of federal law, or both, and the fifth surveillance was for the purpose of gathering foreign intelligence information which was deemed necessary in the conduct of foreign affairs. This Court must, therefore, determine the legality of both the “foreign” and the “domestic” surveillances. The government contends that foreign and domestic affairs are inextricably intertwined and that any attempt to legally distinguish the impact of foreign affairs from the matters of internal subversive activities is an exercise in futility. That argument is not compelling, however, after an examination by the Court of the five surveillance authorizations involved in this case. Further, in view of the important individual rights protected by the Fourth Amendment, any such difficulty in separating foreign and domestic situations should be resolved in favor of interposing the prior warrant requirement. The government has apparently chosen to deal with dissident domestic organizations in the same manner as it does with hostile foreign powers. The same arguments presented by the government here have recently been considered by several district courts and at least one circuit. United States v. United States District Court for Eastern Dis. of Mich., So.Div., 444 F.2d 651 (6th Cir., 1971), cert, granted, 403 U.S. 930, 91 S. Ct. 2255, 29 L.Ed.2d 708 (1971); United States v. Donghi, Cr. No. 1970-81 (W.D. N.Y., May 14, 1971); United States v. Hilliard, Cr. No. 69-141 (N.D.Cal., May 4, 1971); United States v. Smith, 321 F.Supp. 424 (C.D.Cal., 1971); United States v. O’Neal, Cr. No. KC-CR-1204 (D.C.Kan., September 1, 1970); and United States v. Dellinger, Cr. No. 180 (N.D.Ill., February 20, 1970). All of those cases appear to involve the surveillance of domestic organizations to protect national security rather than the mation. The clear weight of those augathering of foreign intelligence inforthorities is that disclosure is required by Alderman where the surveillance was directed at domestic organizations although recognizing that the constitutional limitations which are reasonable and proper when solely domestic subversion is involved may not apply to the conduct of foreign affairs. The legality of electronic surveillance for the gathering of foreign intelligence information deemed necessary for the conduct of foreign affairs and the protection from espionage and sabotage is still an open question. Giordano v. United States, Id. at 313, 89 S.Ct. 1163 (Stewart, J., concurring); Katz v. United States, 389 U.S. 347, 364, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967), (White, J„ concurring). Alderman, however, would require disclosure even where national security interests are at stake if it is determined that the surveillance was illegal. The Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. § 2510, et seq., recognizes that its provisions or the provisions of the Communications Act of 1934, 47 U.S.C. § 605, are not deemed to limit the constitutional power of the President to gather essential foreign intelligence information and protect against the overthrow of the government by force or other unlawful means. However, the contents of any communications intercepted by authority of the President under those powers may only be received in evidence where such interception is reasonable. 18 U.S.C. § 2511 (3). There is no constitutional provision authorizing the President to conduct warrantless searches in domestic situations although authorization may impliedly exist where necessary in the conduct of foreign affairs. The government contention that where electronic surveillance has been deemed necessary by the President to safeguard national security there has been a determination of reasonableness would eliminate the warrant requirement of the Fourth Amendment. This prior warrant requirement is subject only to narrow, well-recognized exceptions, Chimel v. California, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969), even where the facts disclose later that probable cause did exist. Katz v. United States, Id. Claims of inherent Presidential powers, where such powers have invaded constitutionally protected individual rights, have been rejected by the Supreme Court. New York Times Co. v. United States, 403 U.S. 713, 91 S.Ct. 2140, 29 L.Ed.2d 822 (1971); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 72 S.Ct. 863, 96 L.Ed. 1153 (1952). United States v. Clay, 430 F.2d 165 (5th Cir. 1970), rev’d on other grounds, 403 U.S. 698, 91 S.Ct. 2068, 29 L.Ed.2d 810 (1971), involved a strikingly similar situation in that the fifth of five electronic surveillances, records of which the defendant sought to obtain, had been instituted for the purpose of gathering foreign intelligence information. The fifth log was considered in camera after which it was held that the surveillance was lawful, reasonable and necessary to protect the government’s interest. The Court balanced the rights of the defendant with the national interest and found that his rights were properly safeguarded by the in camera examination of the fifth log. A similar result was rejected, however, where the rights of the defendant were balanced with the national interest in conducting warrantless surveillances in domestic security situations. United States v. Keith, Id. The Court, in Clay, also recognized that 18 U.S.C. § 2511(3) is a clear statement by Congress not to limit the prerogative of the President to obtain foreign intelligence information. This issue was presented to the Supreme Court in the application for writ of certiorari. The writ was granted, however, only on the issue of conscientious objector status. 400 U.S. 990, 91 S.Ct. 457, 27 L.Ed.2d 438 (1971). In Katz, the Supreme Court explicitly discarded the property concept in search and seizure cases and held the Fourth Amendment fully applicable to electronic eavesdropping. All of the interceptions involved in this case were made after the decision in Katz and that ruling is fully applicable. Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914), and Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1284, 6 L.Ed.2d 1081 (1961), have established that any products of a search conducted in violation of the Fourth Amendment shall not be admitted against the defendant at his trial. In Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920), the exclusionary rule of Weeks was expanded to prohibit the admission of any fruits derived from illegally seized evidence. This Court finds that the defendant’s conversations intercepted during the four electronic surveillances conducted on the domestic organizations were intercepted illegally and that Alderman mandates their disclosure. This Court also finds that the defendant’s conversations intercepted during the fifth electronic surveillance, conducted for the purpose of gaining foreign intelligence information, was not intercepted illegally. The interceptions of Hoffman’s conversations through the four domestic surveillances involve six separate, brief conversations occurring during a period of almost two years, the most recent being at least a month prior to the date of the indictment. It appears to the Court that none of those interceptions are related to the subject matter of that indictment. Those surveillance records, however, may have impeachment value or may relate, in some way not readily apparent, to the evidence presented during the trial of this case. The defendant’s contention that the evidence upon which the indictment is based is illegal is without merit. Further, because of the apparently unrelated nature of the interceptions to the subject matter of the indictment, the interest of neither the defendant nor the government would be best served by a pretrial hearing to determine whether the evidence to be presented during the trial has been tainted. The proper course appears to the Court to be one ordering disclosure of the domestic surveillance records to the defendant just prior to trial and under a protective order prohibiting further disclosure. A determination of the extent of taint, if any, may be appropriate at the conclusion of the trial. Neither Rule 41(e), F.R.Crim.P., nor Battle v. United States, 120 U.S.App.D.C. 221, 345 F.2d 438 (1965), require a pretrial hearing where, as here, the legality of the interceptions has been determined. Accordingly, it is this 23rd day of November, 1971 Ordered that the records of the five surveillances submitted by the government and examined in camera will be sealed by this Court and returned to the Department of Justice to be so retained subject to any further orders of this Court or any other court of competent jurisdiction, and it is further Ordered that at least two (2) days pri- or to the trial of this case the government make full disclosure to defendant Hoffman of his conversations overheard during the four electronic surveillances of the domestic organizations herein involved, and it is further Ordered that the existence, nature and contents of any material disclosed pursuant to this Order shall be made available only to counsel of record for the defendant, and that the existence, nature and contents of any material disclosed pursuant to this Order shall not be revealed to any other person unless pursuant to further order of this Court or any other court of competent jurisdiction and it is further Ordered that the defendant’s other requests be and they hereby are denied. On Motion to Dismiss Indictment The defendant was indicted for interstate travel with intent to organize, promote, encourage and participate in a riot, 18 U.S.C. § 2101, and for obstructing, impeding and interfering with a law enforcement officer during the commission of a civil disorder, 18 U.S.C. § 231(a) (3). Specifically, Count I of that two count indictment charges that on or about April 29, 1971 Hoffman did travel in interstate commerce from outside the District of Columbia to the District of Columbia with intent to organize, promote, encourage, participate in and carry on a riot and he thereafter on or about May 3, 1971, in the District of Columbia participated in a riot, to wit, Hoffman, being a part of an assemblage of more than three persons, erected a barricade in a public thoroughfare for the purpose of organizing, promoting, encouraging, participating in and carrying on a riot (§ 2101). Count II charges that on or about May 3, 1971, within the District of Columbia, Hoffman did commit and attempt to commit an act to obstruct, impede and interfere with a member of the Metropolitan Police Department, Washington, D. C., then lawfully engaged in the lawful performance of his official duties incident to and during the commission of a civil disorder, which disorder obstructed, delayed and adversely affected commerce, etc., and the conduct and performance of a federally protected function. On June 30, 1971 the defendant filed a motion to dismiss the indictment for the unconstitutionality of 18 U.S.C. §§ 2101 and 231(a) (3), setting forth examples of legislative history and hypothetical situations which defendant contends would result in unconstitutional applications of those criminal provisions.

385849-6980

VAN GRAAFEILAND, Circuit Judge: This is an appeal from an order of the United States District Court for the Southern District of New York disqualifyix g Michael B. Pollack, Esq., from representing appellant in a pending criminal prosecution. The ground for disqualification was that, while employed as a Government attorney, Pollack had participated in criminal investigations so related to the present action that he now is in a position to use information obtained during those investigations to aid his present client. We affirm. From 1970 to 1975, Pollack was employed by the Department of Justice as a special attorney assigned to the Brooklyn Strike Force. While he was serving as a federal prosecutor, Pollack’s official duties brought him into contact with three persons whom the Government intends to call as witnesses at appellant’s trial. Pollack personally prosecuted two of those men, Barresi and Geller, and called the third, Brown, as a witness at Geller’s trial. Pollack’s prosecution of Barresi arose from Barresi’s alleged extortionate activities as an officer of the union local from which appellant is charged with having embezzled $2.3 million. Pollack prosecuted Geller for income tax evasion in connection with an alleged scheme to draw unearned money from a corporation in the form of salaries and deduct the withdrawals from the corporation’s income as legitimate business expenses. Geller and Brown owned check-cashing establishments in New York City. Brown had sold an establishment to Geller and frequently stopped by to help him learn the business. Pollack interviewed Brown and called him as a witness at Geller’s trial. After the trial, Pollack had discussions with the New York County District Attorney’s office concerning its investigation of illegal check-cashing operations, an investigation which extended to the businesses of Geller and Brown. Pollack arranged for federal agents under his supervision to review papers seized from Brown’s establishment. They were also given access to evidence seized from Geller’s place of business. The Government intends to call both Geller and Brown to testify concerning transactions they had with appellant in connection with their check-cashing operations. Their testimony will be offered in support of the Government’s claim that appellant attempted to avoid paying income taxes by using fictitious entities and false names to conceal his true financial status. The Government contends that Pollack’s earlier supervision of the review of the documents seized from the check-cashing establishments of Geller and Brown revealed information to him about the matters concerning which Geller and Brown will be asked to testify. The Government made no showing as to Barresi’s anticipated testimony or the relationship between his alleged extortionate activities and the conduct forming the basis of the instant indictment, representing only that “Pollack’s involvement as the prosecutor of [Barresi] doubtless provided information to him which perhaps could be of use to him when Barresi appears as a Government witness in the trial of this case.” This Court recently noted that disqualification motions should be granted where the attorney in question is potentially in a position to use privileged information obtained during prior representation of the movant. Board of Education v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979). Disqualification of counsel in such cases is rooted in notions of fundamental fairness; allowing an attorney to represent a client in a situation where he may use information obtained in the course of former representation of the client’s adversary gives the client an “unfair advantage.” Id. at 875-76; see Emle Industries, Inc. v. Patentex, Inc., 478 F.2d 562, 571 (2d Cir. 1973); Note, Attorney’s Conflict of Interests: Representation of Interest Adverse to That of Former Client, 55 B.U.L.Rev. 61, 64 (1975) (purpose of Canon 4 is to ensure “fundamental fairness”). The applicability of this standard of conduct to former Government attorneys is clear, see General Motors Corp. v. City of New York, 501 F.2d 639, 648-49 (2d Cir. 1974); Empire Linotype School, Inc. v. United States, 143 F.Supp. 627, 631-33 (S.D.N.Y.1956); United States v. Standard Oil Co., 136 F.Supp. 345 (S.D.N.Y.1955), and is supported by sound policy considerations. Allowing an attorney to represent a client in a matter with which he became uniquely familiar during his public employment may encourage Government attorneys to conduct their offices with an eye toward future private employment. Handelman v. Weiss, 368 F.Supp. 258, 264 (S.D.N.Y.1973); ABA Comm, on Professional Ethics, Opinions, No. 342 at 9 (1975); New York State Bar Association Comm, on Professional Ethics, Opinions, No. 506 at 2 (1979). Allowing such representation also unduly favors those litigants whose attorneys were able to gather valuable pertinent information while on the Government payroll. Allied Realty, Inc. v. Exchange National Bank, 283 F.Supp. 464, 467 (D.Minn.1968), aff’d, 408 F.2d 1099 (8th Cir.), cert. denied, 396 U.S. 823, 90 S.Ct. 64, 24 L.Ed.2d 73 (1969). Finally, as in all Canon 4 cases, the danger exists that the former Government attorney may breach a confidence by divulging or unfairly utilizing information obtained in the course of his former employment. Emle Industries, Inc. v. Patentex, Inc., supra, 478 F.2d at 571. These considerations are pertinent not only where the issues involved in the lawyer’s former and present representation are the same, but also where, as here, the privileged information obtained in the course of the former representation may be used to impeach or discredit important Government witnesses in a closely related matter. The principle is well established that an attorney should be disqualified from opposing a former client if during his representation of that client he obtained information “relevant to the controversy at hand”, United States v. Standard Oil Co., supra, 136 F.Supp. at 353, or “pertaining to the pending matter”, General Motors Corp. v. City of New York, supra, 501 F.2d at 651 (emphasis in original). Here, the Government’s case rests to a large extent upon the testimony of Geller and Brown, who are expected to testify concerning appellant’s improper use of their check-cashing businesses. Pollack’s earlier investigation of Brown and prosecution of Geller, and his probe of illegal check-cashing operations, gave him access to facts about their businesses and their backgrounds that make them peculiarly susceptible to his cross-examination in this case. Because much of what a Government attorney learns while investigating a case does not become part of the prosecution’s files, the fact that some impeachment material may be available to appellant under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), minimizes but does not eradicate the unfair advantage that appellant secures through Pollack’s representation.

4243268-4468

BRENNAN, Chief Judge. The plaintiff is a creditor of one William Holst, doing business as Jack Holst Contracting Company, who was apparently engaged in the building and construction business during the period from March 24, 1952 to September 5, 1952. The complaint alleges that the plaintiff issued its policy of compensation insurance to Holst, which insured his employees during this period in accordance with the Workmen’s Compensation Law of the State of New York, McK.Consol. Laws, e. 67. During the period above referred to the agreed price and reasonable value of the premium earned upon the policy was $9,000.48, on account of which the sum of $800 has been paid. The complaint further alleges that during such period of time Holst entered into contracts for the improvement of real property, and through his employees performed labor in connection therewith from which Holst received moneys in accordance with the provisions of said contracts; that, under the provisions of Sections 36-a and 36-b of the Lien Law of the State of New York, McK.Consol. Laws, c. 33, such moneys received by Holst constituted trust funds in his hands to be applied to the payment for labor performed and materials furnished, and to the payment of the premiums on insurance accruing in connection with the real property improvements, which were the subject of the contracts. It appears that the agents of the Internal Revenue Department of the United States during the period above mentioned negotiated with Holst as to the payment of an individual income tax indebtedness. Between April 30, 1952 and May 31, 1952, Holst paid to the defendant on account of said indebtedness the sum of $11,000 from the moneys impressed with a trust as above mentioned. On November 21, 1952, Holst filed a petition under Chapter 11 of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq., in the United States District Court for the Eastern District of New York, and in that proceeding the defendant claims a lien against the assets of the bankrupt in excess of the full value thereof. The plaintiff now invokes the provisions of the Sections of the Lien Law above mentioned, and brings this action in behalf of itself and other creditors similarly situated. Judgment is requested that the defendant be declared to hold the sum of $11,000 and any other moneys received from Holst as a trustee for the benefit of the parties entitled thereto; that the interests of such parties be determined, and that the plaintiff recover the sum of $8,200.48, with interest. Jurisdiction of this court is based upon the provisions of Title 28 U.S.C.A. § 1346 and the Sections of the Lien Law above referred to. The defendant contends on this motion that the United States has withheld its consent to be sued in the matter referred to in the complaint. The language of the complaint indicates that the action is based upon the action of the agents of the Internal Revenue Department in wrongfully collecting the sum of $11,000 in moneys which it knew or should have known were held by Holst in trust, as described above, and in deliberate disregard of the rights of the plaintiffs who were the legal beneficiaries of such trust. Neither party cites judicial precedents, except Broadway Open Air Theatre, Inc. v. U.S., D.C.E.D.Va.1953, 119 F.Supp. 150, in which it was held that the waiver of immunity set forth in 28 U.S.C.A. § 1346 (b) was specifically restricted by 28 U.S.C.A. § 2680(c) to except from the court’s jurisdiction any claim arising in respect to the collection of any tax. The motion to dismiss was granted in that ease. It is beyond argument that the United States may be sued only where its immunity has been specifically waived by statute, and that such waiver may not be implied in the construction of an ambiguous statute. This court has no difficulty in reaching the conclusion that the complaint must be dismissed without reliance upon the exception created by Section 2680(c). This is an action in which equitable relief only is sought and is unauthorized under the section invoked. 28 U.S.C.A. § 1346(b). Money damages is the limit of the relief available thereunder. As originally enacted, the statute gave the court jurisdiction to hear and determine any claim “for money only”. The language was changed in re-codifying, but this accomplished no change in the substantive law. Feres v. U. S., 340 U.S. 135, 71 S.Ct. 153, 95 L. Ed. 152. See note, 340 U.S., at bottom of page 140, 71 S.Ct. 156.

5752518-20603

ROGERS, Circuit Judge. Zulfia Fayzullina, a native and citizen of Russia, challenges the order of her removal for having provided a materially false writing regarding her marital and residential status and for having been convicted of providing a materially false document to the government, a crime of moral turpitude. Sufficient evidence supports the conclusion that she made the false writing, that it was material, and that she committed a crime of moral turpitude when she submitted it to the government. For that reason, and because neither of the provisions for waiver of removal upon which Fayzullina relies applies in this case, her petition for review lacks any tenable basis. Fayzullina and Matthew Grey entered into a sham marriage for the purpose of evading U.S. immigration laws. Fayzulli-na entered the United States from her native Russia on May 31, 2005, on a non-immigrant visa. On March 17, 2006, she married Grey and, shortly thereafter, petitioned to change her status to that of a lawful permanent resident. The government granted her petition on August 26, 2008. In January, 2009, Fayzullina sought reentry after travelling abroad, and was admitted. Then, on August 5, 2009, a federal grand jury indicted Fayzullina and Grey. The indictment included three counts against Fayzullina. Count 1 charged that Grey and Fayzullina had married “for the purpose of evading a provision of the immigration laws of the United States.” Count 2 charged that Fayzullina “did knowingly and willfully make and use a material false writing and document by presenting to the CIS an 1-485, Application to Register Permanent Residence or Adjust Status, knowing the same to be false; that is false and misleading information regarding his [sic] marital status including his [sic] residence information.” Count 4 alleged that Fay-zullina and Grey made material false statements so that a third party could receive compensation and so that another third party could evade the immigrations laws. Fayzullina pled guilty to Count 2 of the indictment in exchange for dismissal of Counts 1 and 4. The federal district court entered judgment against Fayzullina on March 24, 2010, finding her guilty of violating 18 U.S.C. § 1001(a)(3). Section 1001(a)(3) provides: [W]hoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully ... makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry ... shall be fined under this title [or] imprisoned not more than 5 years.... 18 U.S.C. § 1001(a)(3). The court sentenced Fayzullina to two years’ probation. On September 30, 2010, the Department of Homeland Security (DHS) initiated removal proceedings against Fayzullina by serving her with a Notice to Appear (NTA). The original NTA included only four factual allegations, but DHS subsequently amended it by striking the third and fourth allegations and replacing them with four new allegations, for a total of six allegations. Fayzullina admitted the first four allegations in the amended NTA, but denied Allegations 5 and 6. Allegation 5 charged that Fayzullina: procured [her] admission, visa, adjustment, or other documentation or benefit by fraud or by willfully misrepresenting a material fact, to wit: [she] knowingly provided false representations regarding [her] marriage to Matthew Grey in [her] 1-485 adjustment of status application and [she] knowingly provided false statements regarding [her] marriage to Matthew Grey at [her] adjustment of status interview in order to procure [her] admission, visa, adjustment, or other documentation or benefit by fraud or by willfully misrepresenting a material fact. A.R. 168. Allegation 6 charged that: On or about March 22, 2010, after pleading guilty, [Fayzullina was] convicted in the U.S. District Court for the Southern District of Ohio ... of Making a False Statement and Representation in violation of 18 U.S.C. § 1001(a)(2) [sic] and [she was] sentenced to probation for a period of two years for this offense (although the statutory maximum sentence of five years imprisonment could have been imposed). Id. While Fayzullina acknowledged having pled guilty to lying about her marriage in her 1-485, she denied Allegation 5 because, she said, the government had not adequately established that her misrepresentation was material. Fayzullina also denied Allegation 6, on the ground that she had never been convicted of violating 18 U.S.C. § 1001(a)(2), and that in any event the crime she was convicted of, framed in the disjunctive, was, in part, not one of moral turpitude. The . IJ adopted Allegations 5 and 6. With respect to Allegation 5, he concluded that Fayzullina’s guilty plea was sufficient to sustain the factual allegation with respect to her 1-485 statements, and also that a Statement of Facts submitted to the district court and prepared and signed by Fayzullina admitted that she made false statements at the adjustment of status interview. That admission, the IJ found, established that Fayzullina had knowingly lied to the CIS officer at her adjustment of status interview. Regarding Allegation 6, the IJ acknowledged that the charging document listed the wrong statute of conviction — 18 U.S.C. § 1001(a)(2), rather than § 1001(a)(3). Rather than dismiss the allegation, however, the IJ determined, sua sponte, to “amen[d] the alleged statute of conviction to 18 U.S.C. § 1001(a)(3),” and then adopted the amended allegation. Next, the IJ addressed the government’s two stated bases for removability: 8 U.S.C. §§ 1227(a)(1)(A) and 1227(a)(2)(A)®. Section 1227(a)(1)(A) provides that, “Any alien who at the time of entry or adjustment of status was within one or more of the classes of aliens inadmissible by the law existing at such time is deportable.” 8 U.S.C. § 1227(a)(1)(A). The IJ determined that Fayzullina was inadmissible when she became a lawful permanent resident because of 8 U.S.C. § 1182(a)(6)(C)®, which makes inadmissible “[a]ny alien who, by fraud or willfully misrepresenting a material fact, seeks to procure (or has sought to procure or has procured) a visa, other documentation, or admission into the United States or other benefit provided under this chapter.” 8 U.S.C. § 1182(a)(6)(C)®. The IJ concluded that Fayzullina’s conviction under 18 U.S.C. § 1001(a)(3) — for “knowingly and willfully ... makpng] or us[ing] [a] false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry,” 18 U.S.C. § 1001(a)(3) — met 8 U.S.C. § 1182(a)(6)(C)(i)’s requirements of willfulness and materiality, making Fayzullina removable under 8 U.S.C. § 1227(a)(1)(A). The IJ also concluded that Fayzullina was removable under 8 U.S.C. § 1227(a)(2)(A)®. That statute makes removable “Any alien who (I) is convicted of a crime involving moral turpitude committed within five years ... after the date of admission, and (II) is convicted of a crime for which a sentence of one year or longer may be imposed.” 8 U.S.C. § 1227(a)(2)(A)®. Relying on Sixth Circuit and BIA precedents, the IJ found that Fayzullina’s violation of 18 U.S.C. § 1001(a)(3) necessarily entailed both knowledge and materiality, such that it constituted a crime of moral turpitude. Because Fayzullina’s conviction under 18 U.S.C. § 1001(a)(3) occurred within five years of her arrival in the United States and was punishable by more than a year in prison, the IJ determined that she was removable under 8 U.S.C. § 1227(a)(2)(A)®, as well. Fayzullina moved the IJ to reconsider his finding that she was removable under 8 U.S.C. § 1227(a)(2)(A)®. The IJ denied Fayzullina’s motion on June 7, 2012, finding that any violation of 18 U.S.C. § 1001(a)(3) constitutes a crime involving moral turpitude. Because violations of § 1001(a)(3) are categorically crimes of moral turpitude, he concluded, there was no need to consider the particulars of Fay-zullina’s record of conviction in determining whether she was removable under 8 U.S.C. § 1227(a)(2)(A)®. After the IJ denied her motion for reconsideration on removal, Fayzullina applied for waiver of removal under 8 U.S.C. §§ 1227(a)(1)(H) and 1182(h). Section 1227(a)(1)(H) permits waiver of removal when an alien: is the spouse, parent, son, or daughter of a citizen of the United States or of an alien lawfully admitted to the United States for permanent residence; and ... was in possession of an immigrant visa or equivalent document and was otherwise admissible to the United States at the time of such admission except for those grounds of inadmissibility specified under paragraphs (5)(A) and (7)(A) of section 1182(a) of this title which were a direct result of that fraud or misrepresentation. 8 U.S.C. § 1227(a)(1)(H). Section 1182(h) permits waiver of removal when the alien: is the spouse, parent, son, or daughter of a citizen of the United States ... [and] it is established to the satisfaction of the Attorney General that the alien’s denial of admission would result in extreme hardship to the United States citizen or lawfully resident spouse, parent, son, or daughter of such alien.... No waiver shall be granted under this subsection in the case of an alien who has previously been admitted to the United States as an alien lawfully admitted for permanent residence if ... the alien has not lawfully resided continuously in the United States for a period of not less than 7 years immediately preceding the date of initiation of proceedings to remove the alien from the United States. Id. at § 1182(h). The IJ determined that Fayzullina did not meet either section’s criteria for relief. First, he found Fayzullina was not eligible for waiver under § 1227(a)(1)(H), which allows waiver only where the grounds of removability are the “direct result of [] fraud or misrepresentation.” But the direct cause of Fayzullina’s removability, the IJ decided, was not her fraud or misrepresentation; it was her conviction on the basis of fraud or misrepresentation. As he explained: The Respondent was convicted of a crime involving moral turpitude. The Respondent’s inadmissibility under INA § 212(a)(2)(A)(i)(I) is the direct result of that conviction. The underlying fraud is an indirect cause, and is thus not covered by INA § 237(a)(1)(H). A.R. 135. The IJ concluded that, because Fayzullina’s removability was not the direct result of fraud or misrepresentation, she was not eligible for waiver of removal under § 1227(a)(1)(H). The IJ next found that Fayzullina did not meet the requirements for eligibility under 8 U.S.C. § 1182(h), since she had not lawfully resided continuously in the United States for seven years before removal proceedings commenced. Section 1182(h) expressly applies only to aliens who have resided in the United States for seven years before the government initiates proceedings to remove them from the country. 8 U.S.C. § 1182(h). Fayzullina entered the country on May 31, 2005, and was served with the NTA on September 30, 2010, and therefore she had been in the country for just over five years when the government initiated removal proceedings. Fayzullina appealed the IJ’s decision, but the BIA dismissed the appeal on November 5, 2018. The Board concluded that the'IJ properly sustained Allegation 5 in the charging documents because DHS provided sufficient evidence to establish that Fayzullina knowingly provided materially false oral and written statements regarding her prior marriage to obtain adjustment of status. The BIA also concluded that the IJ had not violated Fayzul-lina’s due process rights in changing Allegation 6 to properly reflect Fayzullina’s statute of criminal conviction, because Fayzullina had been aware of the nature of her criminal conviction and, therefore, was “not unduly prejudiced by the DHS’s error in the Form 1-261.” The BIA then upheld the IJ’s finding that Fayzullina was removable under 8 U.S.C. § 1227(a)(2)(A)(i), citing Sixth Circuit and BIA precedent for the proposition that an offense under 18 U.S.C. § 1001 is categorically a crime involving moral turpitude. The BIA also upheld each of the IJ’s findings pretermitting waiver. First, the BIA held that 8 U.S.C. § 1227(a)(1)(H) could not operate to waive a charge of removability under 8 U.S.C. § 1227(a)(2)(A)® because § 1227(a)(1)(H), by its terms, applies exclusively to “[t]he provisions of this paragraph,” ie., paragraph (a)(1) of § 1227. The BIA determined that 8 U.S.C. § 1227(a)(1)(H) thus could not effect a waiver of removability based on 8 U.S.C. 1227(a)(2)(A)®. The BIA also concluded that Fayzullina was ineligible for a waiver under 8 U.S.C. § 1182(h) because she could not meet that waiver provision’s requirement of seven years’ physical presence in the United States. The Board accordingly dismissed Fayzullina’s appeal in its entirety. Fay-zullina now petitions for review of the BIA decision. None of Fayzullina’s arguments warrants granting her petition for review. First, notwithstanding Fayzullina’s argument, a violation of 18 U.S.C. § 1001(a)(3) is categorically a “crime involving moral turpitude” for purposes of removal under 8 U.S.C. § 1227(a)(2)(A)®. This conclusion is supported by precedents of our court and of the BIA. The BIA has “long held that crimes involving fraud or making false statements have been found to involve moral turpitude.” Matter of Pinzon, 26 I. & N. Dec. 189, 193 (BIA 2013); see also Matter of Correa-Garces, 20 I. & N. Dec. 451, 454 (BIA 1992). Its construction of ambiguous statutory provisions — like the term “crime involving moral turpitude” — is entitled to Chevron deference. Ruiz-Lopez v. Holder, 682 F.3d 513, 516 (6th Cir.2012). Consequently, this court “must uphold the BIA’s construction [of 8 U.S.C. § 1227(a)(2)(A)®] unless it is arbitrary, capricious, or manifestly contrary to the statute.” Kellermann v. Holder, 592 F.3d 700, 702 (6th Cir.2010) (quoting Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)) (internal quotation marks omitted). Our circuit has held— along with a number of other circuits— that the BIA’s interpretation of “crime involving moral turpitude” is reasonable. Novatchinski v. Holder, 516 Fed.Appx. 526, 530-31 (6th Cir.2013) (holding the BIA’s interpretation reasonable and listing cases reaching the same conclusion); Ghani v. Holder, 557 F.3d 836, 841 n. 3 (7th Cir.2009) (listing additional cases). This court’s precedents, too, stand for the proposition that crimes of deliberate dishonesty involving material facts categorically involve moral turpitude. For example, in Kellermann v. Holder, we held that pleading guilty to having “unlawfully, ■willfully, and knowingly conspire[d] ... to knowingly and willfully make false, fictitious, and fraudulent statements or representations concerning a material fact within the jurisdiction of a department or an agency of the United States” supported removability under 8 U.S.C. § 1227(a)(2)(A)®. 592 F.3d at 703-05. We have reasoned similarly in cases involving lying on a student loan application, Kabongo v. INS, 837 F.2d 753, 758 (6th Cir.1988), and knowingly possessing illicit identification documents with intent to use or transfer them, Yeremin v. Holder, 738 F.3d 708, 715-16 (6th Cir.2013). Most recently, in Imran v. Holder, 531 Fed.Appx. 749 (6th Cir.2013), we held that, for purposes of 8 U.S.C. § 1227, it made no difference whether the petitioner had pled guilty to making a fictitious statement or a false statement, since either admission constituted a crime of moral turpitude. “Making a fictitious statement to a government agency knowing that it is fictitious involves no less moral turpitude than making a false statement to a government agency knowing that it is false.” Id. at 750. These cases make clear that crimes of making deliberately dishonest statements involving material facts are inherently crimes involving moral turpitude. Those elements — materiality and knowledge — are manifestly present in Fayzullina’s case. Indeed, she pled guilty to “mak[ing] or us[ing] any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry.” 18 U.S.C. § 1001(a)(3) (emphasis added). This admission is more than sufficient to establish her violation of § 1001(a)(3) as a crime involving moral turpitude. It makes no difference that the aforementioned cases construed statutory language other than the current version of 18 U.S.C. § 1001(a)(3). The statutes they addressed use language that is not materially distinguishable from the language of § 1001(a)(3). Imran, for example, dealt with 18 U.S.C. § 1001(a)(2), which criminalizes “knowingly and willfully ... mak[ing] any materially false, fictitious, or fraudulent statement or representation.” See Imran, 531 Fed.Appx. at 750. In comparison, 18 U.S.C. § 1001(a)(3) criminalizes “knowingly and willfully ... mak[ing] or us[ing] any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry.” 18 U.S.C. § 1001(a)(3). The differences do not affect the degree of moral turpitude. First, paragraph (a)(2) applies to “statement[s] or representation[s],” whereas (a)(3) applies to “writing[s] or document[s].” But there is no reason why a written falsehood should involve moral turpitude any more or less than a spoken one. Second, paragraph (a)(2) applies to any false, fictitious, or fraudulent statements or representations, whereas paragraph (a)(3) is expressly limited to writings or documents made with the knowledge that the writings or documents “contain any materially false, fictitious, or fraudulent statements] or entries].” If anything, paragraph (a)(3)’s requirement that a writing or document be made with knowledge of the falsehood makes a guilty plea under paragraph (a)(3) more likely to involve moral turpitude than a plea under paragraph (a)(2), since it limits convictions under paragraph (a)(3) to defendants who acted with scienter. See Ruiz-Lopez v. Holder, 682 F.3d 513, 519 (6th Cir.2012) (citing Matter of Silva-Trevino, 24 I. & N. Dec. 687, 706 & n. 5 (BIA 2008)). Fayzullina also argues that the IJ and the BIA failed to apply the correct framework in analyzing her claims, but her argument is without merit in the circumstances of this case. We have recently explained that, when a court considers whether conviction under a criminal stat ute with alternative elements constitutes a conviction for a crime of moral turpitude, the court need not go beyond the terms of the statutes (i.e., use a “modified categorical approach”) where each of the criminal alternatives is independently a crime of moral turpitude: In determining whether a conviction under a federal statute fits the BIA’s definition of a crime involving moral turpitude, we apply what are known as the categorical and modified-categórical approaches. First, the categorical approach is applied, in which we consider whether the full range of conduct encompassed by the statute constitutes a crime of moral turpitude. We thus look to the elements of the offense, rather than the underlying facts of the specific case. If the full range of conduct encompassed by the statute constitutes a crime of moral turpitude, then the conviction is for an offense qualifying as a crime involving moral turpitude. Yeremin v. Holder, 738 F.3d 708, 715 (6th Cir.2013) (citations and internal quotation marks omitted). What the BIA did in this case is fully consistent with this first step. The BIA concluded accurately that “both the Board and the [Sixth Circuit] ... have held that an offense under 18 U.S.C. § 1001 is a categorical crime involving moral turpitude.” A.R. 11. A person who pleads guilty under 18 U.S.C. § 1001(a)(3) necessarily admits having knowingly used a document that is materially false, fictitious, or fraudulent. 18 U.S.C. § 1001(a)(3). Regardless of how the misinformation is characterized, the elements of materiality and scienter are inescapably present in any such plea, so that pleading guilty to violating § 18 U.S.C. § 1001(a)(3) is tantamount to admitting to crime involving moral turpitude. Because a violation of 18 U.S.C. § 1001(a)(3) is categorically a crime involving moral turpitude, there was no reason for the BIA or the IJ to apply a modified-categorical analysis in Fayzullina’s case.'In short, the BIA did not err in concluding that Fayzullina’s violation of 18 U.S.C. § 1001(a)(3) was a crime involving moral turpitude.

11535482-28756

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, DENYING MOTION TO SEVER PLAINTIFFS AND/OR STRIKE CLASS ACTION ALLEGATIONS AND DENYING MOTION TO STRIKE PORTIONS OF PLEADING FOGEL, District Judge. This case presents a broad, vigorously disputed challenge to an alleged law enforcement practice known as racial profiling. Defendants have filed three motions directed at the pleadings: (1) a motion to dismiss the First Amended Complaint; (2) a motion to sever plaintiffs and/or strike Plaintiffs’ class action allegations; and (3) a motion to strike certain portions of the First Amended Complaint. Plaintiffs oppose the motions. The Court has read the moving and responding papers and has considered the oral arguments of counsel presented on February 18, 2000. For the reasons set forth below, the motion to dismiss will be granted in part and denied in part, and the motion to sever plaintiffs and/or strike the class action allegations and the motion to strike portions of the First Amended Complaint will be denied. I. BACKGROUND Plaintiffs’ First Amended Complaint alleges that Defendants maintain a policy, pattern and practice of targeting African-Americans and Latinos in conducting stops, detentions, interrogations and searches of motorists. The individual plaintiffs have alleged specific incidents of racial profiling which they claim occurred on or near State Highway 152 and Interstate Highway 5 in the Pacheco Pass area of Santa Clara and Merced Counties. Both the individual and the organizational plaintiffs allege that racial profiling is an integral part of a federally funded drug interdiction program sponsored by the United States Drug Enforcement Agency known as “Operation Pipeline” as well as other drug interdiction efforts. Plaintiffs base their allegations in part upon a draft report of California’s Joint Legislative Task Force on Government Oversight on September 29,1999, which alleges the existence of racial profiling in Operation Pipeline. II. MOTION TO DISMISS A. Legal Standard The issue to be decided on a motion to dismiss is not whether a plaintiffs claims have merit but rather whether the moving defendant has shown beyond doubt that the plaintiff can prove no set of facts entitling him or her to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The court’s review is limited to the face of the complaint, docu ments referenced by the complaint and matters of which the court may take judicial notice. See Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1483 (9th Cir.1991); In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405 n. 4 (9th Cir.1996); MGIC Indem. Corp. v. Weismcm, 803 F.2d 500, 504 (9th Cir.1986). Ordinarily, a complaint may be dismissed as a matter of law for only two reasons: (1) lack of a cognizable legal theory or (2) insufficient facts under a cognizable legal theory. See Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir.1984) (citing 2A J. Moore, Moore’s Fed. Practice ¶ 12.08 at 2271 (2d ed.1982)). When a court considers a motion to dismiss, all allegations of the complaint are construed in the plaintiffs favor. See Sun Savings & Loan Ass’n v. Dierdorff, 825 F.2d 187, 191 (9th Cir.1987). In particular, “[cjivil rights complaints are to be liberally construed,” and need only comply with F.R.Civ.P. 8(a). Buckey v. County of Los Angeles, 968 F.2d 791, 794 (9th Cir.1992). For a motion to dismiss to be granted, it must appear to a certainty that the plaintiff would not be entitled to relief under any set of facts that could be proved. See Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1439 (9th Cir.1987). Motions to dismiss generally are viewed with disfavor under this liberal standard and are rarely granted. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir.1997). B. NAACP’s and LULAC’s Standing Both of the organizational plaintiffs— NAACP and LULAC — are nonprofit membership organizations which allege that they are suing on behalf of their members. Defendants argue that NAACP and LU-LAC lack standing to sue on behalf of their members under the circumstances of this case. “[Ejven in the absence of injury to itself, an association may have standing solely as representative of its members.” Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); see, e.g., NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958); International Union, United Auto. v. Brock, 477 U.S. 274, 106 S.Ct. 2523, 91 L.Ed.2d 228 (1986). Associational standing is particularly appropriate where “the association is seeking to represent the interests which are central to the purpose of the organization” and “where the relief sought is some form of prospective remedy, such as declaratory judgment, which will inure to the benefit of the organization’s membership.” Peick v. Pension Benefit Guar. Corp., 724 F.2d 1247, 1259 (7th Cir.1983). An association has standing if (1) its members would have standing to sue in their own right; (2) the interests the organization seeks to protect are relevant to the organization’s purpose; and (3) neither the claim asserted nor the relief sought requires the participation of individual members of the organization in the lawsuit. See Brock, 477 U.S. at 282, 106 S.Ct. 2523; Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977); Individuals for Responsible Gov’t, Inc. v. Washoe County, 110 F.3d 699, 702 (9th Cir.1997). Defendants do not dispute that the interests sought to be protected by NAACP and LULAC in this litigation are relevant to the purposes of these organizations, which include opposing racial discrimination against African-Americans and Latinos, respectively. In addition, Defendants also acknowledge that Plaintiffs have alleged that individual members of NAACP and LULAC have been stopped and detained by CHP and BNE officers on the basis of race. Defendants’ primary argument is that the organizational plaintiffs’ allegations are too general and that more specific allegations should be made so that one may determine the actual identities of particular members of each organization who claim to have been subjected to Defendants’ alleged illegal practices. However, while information about claimed injuries caused to members of NAACP and LU-LAC may be obtained in the course of discovery, no legal authority requires that the names and contact information of individual members be alleged in the complaint. Legal Aid Society of Hawaii v. Legal Services Corp., 145 F.3d 1017, 1030 (9th Cir.1998), cited by Defendants, is in-apposite. That case considered the issue of standing in the context of a motion for summary judgment rather than a motion to dismiss; it thus involved an examination of the entire record following an opportunity for discovery rather than a bare pleading. See id. at 1030-31. Defendants also argue that Plaintiffs’ claims cannot be adjudicated -without the participation of individual members of NAACP and LULAC. Defendants quite reasonably point out that proof of the existence of a policy or practice of racial profiling requires proof of more than one instance of official misconduct. However, Plaintiffs in fact have pled more than one instance of official misconduct. There is no authority for the proposition that only members of the organizational plaintiffs can serve as individual plaintiffs; at this early stage of the proceedings, it would appear to be sufficient that the individual plaintiffs are members of the racial and ethnic groups for whom the organizational plaintiffs state that they are advocates. The Court concludes that for present purposes NAACP and LULAC have standing to sue on behalf of their members. As in Legal Aid Society of Haivaii, see id., at 1029-31, this conclusion does not preclude a determination that these organizations lack standing later in the litigation. C. Venue The incident of racial profiling alleged by Rodriguez occurred in Santa Clara County, which is located in the Northern District of California; the incidents alleged by Lopez and Washington occurred in Merced County, which is in the Eastern District of California. Defendants argue that the proper venue for the Lopez and the Washington incidents is the Eastern District rather than the Northern District. However, venue is proper in any district “in which a substantial part of the events or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2) (1999). Section 1391(b)(2) does not require that a majority of the events have occurred in the district where suit is filed, nor does it require that the events in that district predominate. See Sidco Indus. Inc. v. Wimar Tahoe Corp., 768 F.Supp. 1343, 1346 (D.Or.1991) (language of §, 1391(b)(2) “contemplates that there may be more than one district in which a substantial part of the events giving rise to the claim occurred, and that venue would be proper in each such district”); see also Bates v. C & S Adjusters, Inc., 980 F.2d 865, 867 (2d Cir.1992); First of Mich. Corp. v. Bramlet, 141 F.3d 260, 264 (6th Cir.1998). All that Plaintiffs need show is that a substantial part of the events giving rise to their claims occurred in the Northern District of California. Rodriguez, a resident of Santa Clara County, allegedly was stopped in Santa Clara County, in the Northern District. Moreover, Plaintiffs claim in their class action allegations that Defendants routinely utilize racial profiling in the Pacheco Pass area, much of which is located in the Northern District. Plaintiffs allege that the stops of Rodriguez, Lopez, Washington and all other purported class members are related because they stem from the same alleged practice or policy of racial profiling in the Pacheco Pass area. Plaintiffs thus clearly are alleging that a substantial part of the events giving rise to this action occurred in the Northern District. Accordingly, while venue would be proper in the Eastern District, venue also is proper in the Northern District. D. Claims Against Helmick and Doane as Supervisory Officials Defendants urge dismissal of the claims against Helmick and Doane because the First Amended Complaint does not contain specific factual allegations supporting the alleged conclusion that these defendants maintain or are responsible for a policy which leads directly to stops of Plaintiffs’ vehicles on the basis of race. However, the United States Court'of Appeals for the Ninth Circuit explicitly has rejected a judicially crafted heightened pleading standard for civil rights cases; instead, it has held that such claims need only comply with F.R.Civ.P. 8(a). See Bergquist v. County of Cochise, 806 F.2d 1364, 1367 (9th Cir.1986), disapproved on other grounds by City of Canton v. Harris, 489 U.S. 378, 388, 109 S.Ct. 1197, 103 L.Ed.2d 412 (1989). As the circuit court has stated: This circuit applies a rule of reason to civil rights actions challenged for sufficiency at the pleading stage. While a liberal interpretation of a civil rights complaint may not supply essential elements of the claim that were not initially pled, plaintiff is not expected to plead his evidence or specific factual details not ascertainable in advance of discovery. Gibson v. United States, 781 F.2d 1334, 1340 (9th Cir.1986) (internal quotation marks and citations omitted); see also San Jose Charter of the Hell’s Angels Motorcycle Club v. City of San Jose, No. C 99 20022 SW PVT, 1999 WL 1211672, at *12 (N.D.Cal. Dec.6, 1999) (“Civil rights plaintiffs ... have never been expected to plead their evidence or specific factual details not ascertainable before discovery has taken place.”) A supervisory law enforcement official is liable in his or her individual capacity “if he [or she] set in motion a series of acts by others, or knowingly refused to terminate a series of acts by others, which he [or she] knew or reasonably should have known, would cause others to inflict the constitutional injury.” Larez v. City of Los Angeles, 946 F.2d 630, 646 (9th Cir.1991) (internal quotation marks, brackets and citation omitted); see also Bergquist, 806 F.2d at 1370. The First Amended Complaint alleges that Helmick and Doane personally participated in racial profiling, acted jointly and in concert with others who racially profiled, authorized, acquiesced in or failed to take action to prevent racial profiling, promulgated policies and procedures pursuant to which racial profiling occurred, with deliberate indifference failed and refused to implement and maintain adequate training and supervision and/or ratified the use of racial profiling. The First Amended Complaint also alleges that CHP and BNE supervisors and management continue to encourage these activities in Operation Pipeline despite evidence that drivers of color are targeted and subjected to unwarranted stops, detentions, interrogations and searches, and that the supervisors have been aware that CHP and BNE officers are engaging in racial profiling but have refused to stop it. These allegations, if proved, would establish liability under Larez, Bergquist and Harris. Cf. Maryland State Conference of NAACP Branches v. Maryland Dep’t of State Police, 72 F.Supp.2d 560, 565 (D.Md.1999). Accordingly, applying as it must the ordinary pleading standard of F.R.Civ.P. 8(a), the Court concludes that the claims against Helmick and Doane are sufficient to withstand a motion to dismiss. E. Immunity Under the California Tort Claims Act Defendants assert that they are immune from Plaintiffs’ state law statutory and common law tort claims under three separate provisions of the California Government Code. These code sections provide as follows: Except as otherwise provided by statute, a public employee is not liable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion be abused. Cal. Gov’t Code § 820.2. Except as otherwise provided by statute, a public employee is not liable for an injury caused by the act or omission of another person. Nothing in this section exonerates a public employee from liability for injury proximately caused by his own negligent or wrongful act or omission. Cal. Gov’t Code § 820.8. Except as otherwise provided by statute, a public entity is not liable for an injury resulting from an act or omission of an employee of the public entity where the employee is immune from liability. Cal. Gov’t Code § 815.2(b). Preliminarily, the Court notes that these immunity provisions do not apply to claims for declaratory and injunctive relief. See Cal. Gov’t Code § 814. The Court also is mindful of the admonition of the California Supreme Court that “in governmental tort cases, the rule is liability, immunity is the exception.” Lopez v. Southern Cal. Rapid Transit Dist., 40 Cal.3d 780, 221 Cal.Rptr. 840, 710 P.2d 907, 915 (1985) (internal quotation marks and citations omitted). As was explained in Lopez, section 820.2 confers immunity only with respect to those “basic policy decisions” which have been committed to coordinate branches of government, and does not immunize government entities from liability for subsequent ministerial actions taken in the implementation of those basic policy decisions. This distinction is sometimes characterized as that between the “planning” and the “operational” levels of decision-making. Id. Under California law, government defendants have the burden of proving that the actions of government employees fall within scope of a statutory immunity. In Lopez, “[s]ueh a showing was not and could not have been made by [the defendant] at the demurrer stage,” and “[i]t therefore would [have been] error to sustain [the defendant’s] demurrer based on Government Code section 820.2.” Id. at 916; see also Bell v. California, 68 Cal.App.4th 919, 74 Cal.Rptr.2d 541, 547 (1998) (section 820.2 “requires proof that the specific conduct that gave rise to the suit involved an actual exercise of discretion — a conseious balancing of risks and advantages; the term is limited to ‘basic policy decisions’ ”). As was the case in Lopez, The First Amended Complaint alleges actions on the part of Defendants which go beyond “basic policy decisions.” For example, it is alleged that Defendants’ supervisory personnel were consciously aware of the racially discriminatory nature of Operation Pipeline and similar programs in training individual officers and encouraged and commended them in their alleged discriminatory tactics, and that the officers who stopped Rodriguez, Lopez and Washington did so with a conscious racial motive. The individual plaintiffs also allege that they were falsely imprisoned, allegations as to which there is an explicit statutory basis of liability under Government Code § 820.4. Thus, because Plaintiffs’ allegations in the present case are broad enough to encompass conduct not within the scope of the cited immunity provisions, the Court cannot resolve at the pleading stage the issue of whether any or all of the immunities bar Plaintiffs’ claims. Davison by Sims v. Santa Barbara High School District, 48 F.Supp.2d 1225 (C.D.Cal.1998), relied upon by Defendants, is inapposite because the allegations of the complaint in that case were limited to “basic policy decisions.” F. Title VI of the Civil Rights Act of 1964 The First Amended Complaint alleges a violation of Title VI of the Civil Rights Act of 1964, which provides that No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. 42 U.S.C. § 2000d. The regulations implementing Title VI provide that no program receiving federal assistance through the Department of Justice shall utilize criteria or methods of administration which have the effect of subjecting individuals to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program as respects individuals of a particular race, color, or national origin. 28 C.F.R. § 42.104(b)(2). Defendants argue the Plaintiffs have failed to state a claim under Title VI because they fail to allege specific facts from which it can be concluded that Defendants engage in racial discrimination. However, as noted above, there is no heightened pleading standard in the Ninth Circuit for civil rights complaints; compliance with F.R.Civ.P. 8(a) generally constitutes sufficient particularity to withstand a motion to dismiss. Under Title VI, there are two types of potential liability. Plaintiffs may state a claim for damages pursuant to the statute, for equitable relief pursuant to the regulations or for both. See Larry P. by Lucille P. v. Riles, 793 F.2d 969, 981-82 (9th Cir.1984) (citing Guardians Ass’n v. Civil Serv. Comm’n of City of New York, 463 U.S. 582, 103 S.Ct. 3221, 77 L.Ed.2d 866 (1983)). The statute requires proof of discriminatory intent; the regulations do not. See 793 F.2d at 981-82. “To state a claim for damages under 42 U.S.C. § 2000d, et seq., a plaintiff must allege that (1) the entity involved is engaging in racial discrimination; and (2) the entity involved is receiving federal financial assistance. Although the plaintiff must prove intent at trial, it need not be pled in the complaint.” Fobbs v. Holy Cross Health Sys. Corp., 29 F.3d 1439, 1447 (9th Cir.1994) (citations omitted). In the present matter, Plaintiffs have met the pleading standard set forth in Fobbs. Plaintiffs allege that Defendants engage in racial discrimination by stopping, detaining, interrogating and searching motorists on the basis of race, and they describe the discriminatory methods and practices Defendants allegedly employ. Plaintiffs also allege that CHP and BNE are recipients of federal funding. Nothing more is required to state a claim under Title VI, although Plaintiffs also allege that Defendants acted with discriminatory intent. To establish a prima facie case that Defendants violated Title VI regulations, Plaintiffs must demonstrate that Defendants have a program, policy or practice that has a “discriminatory impact.” Larry P. by Lucille P., 793 F.2d at 982. Plaintiffs allege that CHP’s drug interdiction efforts have a discriminatory impact on motorists of color. Anticipating Defendants’ position that their drug interdiction tactics are justified by law enforcement necessity, see id., Plaintiffs further allege that these tactics are largely unsuccessful and therefore not justified. Specifically, Plaintiffs allege that only a small percentage of Operation Pipeline stops and searches result in the discovery of incriminating evidence, yet large numbers of motorists of color are the victims of racial discrimination through racial profiling. The Court concludes that the allegations of the First Amended Complaint adequately state a discriminatory-intent claim for damages and a discriminatory-impact claim for equitable relief under Title VI. Cf. Maryland State Conference of NAACP, 72 F.Supp.2d at 566-68. G. Fourth Amendment In Whren v. United States, 517 U.S. 806, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996), the United States Supreme Court held that the Fourth Amendment is not violated when a minor traffic violation is a pretext rather than the actual motivation for a stop by law enforcement. Thus, the individual plaintiffs’ allegations that they were stopped for pretextual reasons, without more, would not state a claim under the Fourth Amendment. However, Plaintiffs make Fourth Amendment claims which are not barred by Whren. Plaintiffs allege that Defendants have subjected them not only to baseless stops but also to prolonged detentions, intrusive interrogations and searches without probable cause or reasonable suspicion to believe that any traffic violation or crime has been committed and without consent. For example, Rodriguez and Washington allege that they were stopped even though Defendants did not have a reasonable suspicion that either had committed any traffic violation or crime , that they were searched even though neither had consented to being searched and that Defendants had no basis for searching them without warrants. The Fourth Amendment is violated when a motorist is stopped without reasonable suspicion of a traffic violation or crime and searched without consent or probable cause. See, e.g., United States v. Jimenez-Medina, 173 F.3d 752, 754 (9th Cir.1999); Whren, 517 U.S. at 809-10, 116 S.Ct. 1769. Detentions or searches that are prolonged or otherwise unreasonable in view of the reason for the stop also are unlawful under the Fourth Amendment. See, e.g., United States v. Foppe, 993 F.2d 1444 (9th Cir.1993) (describing as a violation of the Fourth Amendment an officer’s search of a motorist unrelated to the traffic violation that originally justified the stop of the motorist’s vehicle). The First Amended Complaint alleges facts with respect to each of the Plaintiffs which, if proved, would establish that CHP violated the Fourth Amendment by the intrusiveness and duration of its searches and detentions even assuming a valid stop. See, e.g., Martinez v. Nygaard, 831 F.2d 822, 827 (9th Cir.1987) (“The stop may last only so long as is necessary to carry out its purpose and the investigative methods used should be the least intrusive means reasonably available to confirm or dispel the officer’s suspicion.”); Florida v. Royer, 460 U.S. 491, 500, 103 S.Ct. 1319, 75 L.Ed.2d 229 (1983) (same). The Court therefore concludes that Plaintiffs have sufficiently alleged a Fourth Amendment claim. H. Equal Protection Defendants next assert that Plaintiffs have failed to state a claim for violation of the Equal Protection Clause because they have failed to identify “similarly situated” Caucasian individuals who were treated differently from Rodriguez, Lopez and Washington. However, in the civil context, plaintiffs properly state a claim for relief under the Equal Protection Clause if they allege that Defendants acted with discriminatory intent. See, e.g., Washington v. Davis, 426 U.S. 229, 247-48, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976). Pursuant to F.R.Civ.P. 9(b), Plaintiffs are permitted to plead intent generally. Plaintiffs have met this standard. Defendants rely heavily upon United States v. Armstrong, 517 U.S. 456, 116 5.Ct. 1480, 134 L.Ed.2d 687 (1996), in support of this aspect of their motion to dismiss. However, while Armstrong is a case of critical importance in the criminal context, it is less instructive in a civil case such as the present one. In Armstrong, several criminal defendants were indicted on drug and firearm charges involving crack cocaine. The defendants, who claimed that they were being subjected to selective prosecution because they were African-American, filed a motion seeking evidence to support their claim and to support a motion to dismiss the criminal charges. The Court held that while F.R.Crim.P. 16(a)(1)(C) authorizes criminal defendants to examine government documents material to a defense against the government’s case-in-chief, these defendants could not discover documents material to their selective prosecution claim unless they produced some evidence that similarly situated defendants of other races had not been prosecuted. Armstrong neither addressed the standard for discovery in civil cases based upon an Equal Protection claim nor interpreted the Federal Rules of Civil Procedure; rather, it addressed the distinct question of what showing a criminal defendant must make to obtain discovery of evidence which might be relevant to a selective prosecution motion seeking dismissal of criminal charges. The Court in Armstrong emphasized that the judiciary owes special deference to the prosecutorial office. The exercise of prosecutorial discretion in bringing charges is a power within the “ ‘special province’ of the Executive.” Id. at 464, 116 S.Ct. 1480. “As a result, the presumption of regularity supports their prosecuto-rial decisions and, in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties.” Id. (internal quotation marks, brackets and citation omitted). Law enforcement officers, in contrast, never have been afforded the same presumption of regularity extended to prosecutors. Courts have recognized the possibility that officers in the field occasionally may abuse their discretion and selectively target specific groups and individuals on the basis of race or other illegitimate factors. See, e.g., United States v. Martinez-Fuerte, 428 U.S. 543, 559, 96 S.Ct. 3074, 49 L.Ed.2d 1116 (1976); Delaware v. Prouse, 440 U.S. 648, 661, 99 S.Ct. 1391, 59 L.Ed.2d 660 (1979). The result in Armstrong rests in part on the Court’s conclusion that “[t]he similarly situated requirement does not make a selective prosecution claim impossible to prove” because the class of similarly situated individuals is limited to the group of individuals arrested for the particular crime at issue. 517 U.S. at 466, 116 S.Ct. 1480. In the civil context, however, such a requirement well might be impossible to meet. In the present action, the class of similarly situated individuals necessarily would include all motorists present in areas where Defendants were patrolling. It is highly doubtful that Defendants or any other law enforcement agency maintain records identifying law-abiding individuals who are not stopped. The only similarly situated persons as to whom records might be maintained would be the relatively small subset of individuals who were stopped and questioned by the police but not arrested, and even for this group, it is difficult to conceive what data Plaintiffs could obtain absent discovery which have not been alleged in the First Amended Complaint already. Consistent with Washington and its progeny, this Court concludes that Plaintiffs have stated an Equal Protection claim by alleging that Defendants acted with discriminatory intent and that Defendants knew about but refused to stop racially discriminatory practices on the part of their officers and by alleging the existence of statistical evidence and other facts which if proved would support an inference of discriminatory intent. I. Equitable and Declaratory Relief Defendants contend that Plaintiffs lack standing to seek injunctive relief because they have failed to allege a real or immediate threat of future injury as a result of Defendants’ alleged conduct. Defendants also assert that Plaintiffs are not entitled to declaratory relief because they have not presented a live case or controversy.

10529803-16756

HENRY, Circuit Judge. These four appeals derive from the same underlying action commenced and pursued to a partially favorable judgment by plaintiff under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671-2680. Plaintiff sued the government for maintenance of a dangerous condition that caused her to fall and injure herself on the steps outside the United States Post Office in Sand Springs, Oklahoma, early on the morning of August 15, 1987. A first trial resulted in a defense verdict, reversed on appeal due to the district court’s extra-judicial examination of the accident scene. See Lillie v. United States, 953 F.2d 1188 (10th Cir.1992). On remand, the case was tried to the magistrate judge, see 28 U.S.C. § 636(c)(1), who found the government and plaintiff equally at fault, and awarded plaintiff a net recovery of $36,-140.45. This award did not include any damages for loss of future income. Apart from the judgment on the merits, the judge also ruled the government had unjustifiably delayed producing a document — requested by plaintiff before the first trial — until after the initial appeal and remand. The court held the omission harmless and awarded only $1 to plaintiff “as a matter of principle and a symbolic gesture.” Appellant’s App. at 18. Each of these decisions has generated an appeal and cross-appeal of its own. The judgment on the merits is the subject of appeal No. 93-5052, in which plaintiff objects to the finding of comparative negligence and the denial of damages for future lost income, and cross-appeal No. 93-5088, in which the government objects to the determination of its liability for maintaining a hidden danger. The $1 sanction award is challenged by plaintiff as legally deficient in appeal No. 93-5249, and by the government as unwarranted in cross-appeal No. 93-5278. JUDGMENT ON THE MERITS A Government Liability The magistrate judge issued the following pertinent findings of fact and conclusions of law regarding the liability of the government for plaintiffs accident and resulting injury: 5. On August 15,1987, on the second step from the bottom on the west half of the steps [in front of the main entrance on the north side of the post office], and immediately adjacent to the middle handrail, there was a spalled area in the cement extending for about ten inches from the vertical handrail support along the edge of the steps and back from three to six inches from the edge of the step. The spalled area was rough and uneven. This spalled area is in substantially the same condition today as it was on August 15,1987 with the exception that its dimensions have increased slightly. 7. On Saturday, August 15,1987, at about 6:00 a.m. and while it was still dark, Plaintiff stopped at the post office on her way to work. She had been to the post office six to eight times before August 15, 1987. She parked her car in the parking area on the north side of the post office and proceeded to the west section of the steps. She walked down the steps, holding the handrail with her left hand. Toward the bottom of the steps, she fell.... Plaintiff had never previously had any difficulty negotiating the steps and had never previously observed, and on August 15,1987 did not observe, the spalled area or any defect in the steps. 29. The Defendant failed to have all available lighting turned on at the post office on August 15, 1987. 30. The Defendant failed to repair the spalled area on the post office steps, and had longstanding knowledge of this condition. 31. The combination of the existent lighting conditions and spalling of the step was a contributory cause of Plaintiffs fall and injury. Although the spalling of the step was not severe enough to constitute a hazard in broad daylight, it became a hidden danger under the diminished lighting conditions present at the time of the accident. 10. At the time of the accident, the lack of lighting and spalled condition of the step presented a danger that Defendant either knew about or should have known about in the exercise of reasonable care. 13. Plaintiff has established that the negligence of Defendant caused her injury. However, Plaintiff substantially contributed by her failure to exercise due care in descending the steps. Appellant’s App. at 3-5, 9-10, 12-13 (emphasis added). The government does not take issue with the general negligence principles acknowledged and applied by the magistrate judge. See generally Franklin v. United States, 992 F.2d 1492, 1495 (10th Cir.1993) (liability under FTCA is governed by state law). Rather, its objection rests on the meaning and significance of the particular factual finding underscored above. The government asserts that both of the conditions whose combination is identified as the operative hidden danger in the highlighted finding were, taken individually, nonactionable — the spalling because it was a trivial defect and the inadequate lighting because it was open and obvious. The magistrate judge evidently agreed with this assessment. See Appellant’s App. at 9 (spalling “not severe enough to constitute a hazard in broad daylight”), 12 (“Defendant did not have any duty to warn Plaintiff of the poorly lighted condition of the steps, as the danger was readily observable by Plaintiff.”). From this the government con-. eludes, “The principle that a building owner has no duty to warn of unlighted conditions on a stairway logically means that the [government] cannot be held liable for a fall that it would not be liable for if the lighting were adequate.” Brief of Appellee/Cross-Appel-lant at 19. There is no citation of authority for this last, critical point. The government does discuss two cases in which the Oklahoma Supreme Court held negligence claims could not be premised on improper lighting and the absence of a handrail on a stairway. See Harrod v. Baggett, 418 P.2d 652, 655 (Olda.1966); Pruitt v. Timme, 349 P.2d 4, 5-6 (Okla.1959). However, Pruitt is a licensee ease and therefore inapplicable here. See Foster v. Harding, 426 P.2d 355, 359-60 (Okla.1967) (expressly limiting and distinguishing Pruitt on this basis in invitee context). And in Harrod, the two conditions were obvious to and observed by the plaintiff, see id. at 360; Harrod, 418 P.2d at 655, so that the inadequate lighting did not, as it did here, simultaneously interact with the danger posed by an otherwise trivial defect and act to conceal that very danger from the plaintiff.. We agree with the magistrate judge that the whole of the dangerous condition involved here was greater than the sum of its trivial and obvious components. The judge did not err in holding the government liable for negligent maintenance of that condition. B. Plaintiff’s Comparative Negligence The magistrate judge initially made the following findings regarding plaintiffs comparative negligence: 32. Plaintiff did not pay attention and exercise due care or diligence when she was descending the post office steps which she knew were not well lighted. She had used the stairway several times before. She admitted she was in a hurry at the time she fell.... 33. Plaintiffs lack of attention was a contributory cause of her fall and injury. 34. In comparing the respective negligence of Plaintiff and Defendant, the court finds that Plaintiff was 50% negligent and Defendant was 50% negligent. Appellant’s App. at 9-10. Plaintiff challenged the resulting judgment under Fed. R.Civ.P. 59, arguing, as she does now on appeal, that the negligence attributed to her — a hurried failure to pay attention as she descended the defective steps — could not, as a matter of law, have contributed to her fall. She reasoned that because Oklahoma law defines hidden dangers as “defects or conditions ... not known to the invitee and [which] would not be observed by him in the exercise of ordinary care,” Harrod, 418 P.2d at 655, any failure of attention on her part was legally irrelevant to the accident, as she would not have been able to discover and avoid the hidden danger on the steps even if she had descended with ordinary care. Cf. Carnes v. White, 511 P.2d 1101, 1105 (Okla.1973) (where accident was unavoidable, “even if it could be said that the plaintiff was negligent in failing to keep a proper lookout, such negligence could not be the proximate cause of her injury”). The magistrate judge rejected this argument and denied plaintiffs Rule 59 motion. The judge carefully amended his prior comparative negligence finding to clarify that plaintiffs negligence consisted of a general lack of attention while hurrying down the poorly lit stairs, rather than any specific failure to observe the hidden danger thereon: [Amended] Finding of Fact No. 34: In comparing the respective negligence of Plaintiff and Defendant, the court finds that Plaintiff was 50% negligent and Defendant was 50% negligent. Plaintiffs percentage of negligence was not based on her ability to see the spalled area, but rather her descent down the stairs without using ordinary care under the circumstances where lighting was inadequate. Appellee’s App. at 31-32. In Oklahoma, the issue of comparative/eontributory negligence is generally reserved to the finder of fact. Okla. Const. art. 23, § 6; see, e.g., Morris v. Sorrells, 837 P.2d 913, 916 (Okla.1992); Jack Healey Linen Serv. Co. v. Travis, 434 P.2d 924, 928 (Okla.1967). But see Diederich v. American News Co., 128 F.2d 144, 146 (10th Cir.1942) (“[This] Oklahoma constitutional provision is not controlling in trials in federal courts.”). Here, the magistrate judge found as a factual matter that negligence by the plaintiff — unrelated to her inability to observe the spalling on the steps — was causally connected to her fall and resultant injury. For this court now to hold, as a matter of law, that the judge should have rejected the defense of comparative negligence, “there must be an utter absence of evidence.” Bullard v. Grisham Constr. Co., 660 P.2d 1045, 1048 (Okla.1988). There is ample evidence in the record in this ease to support the magistrate judge’s finding, and therefore, we cannot say that allowing the comparative negligence defense in this case was in error. C. Damages for Future Lost Income Plaintiff maintains the anide injury suffered in her fall at the post office ultimately necessitated her early retirement in 1990 at age sixty-two (more than eighteen months after her return to full-time work— with overtime — following the accident). Consequently, she contends it was error for the magistrate judge not to award damages for future lost income covering the period up until her mandatory retirement at age sixty-five. As the parties’ briefs reflect, there is a great deal of evidence relating to the question whether plaintiffs early retirement was caused by her ankle injury or was prompted by unrelated considerations, including numerous other physical and psychological problems. The magistrate judge, who had the advantage of direct observation of the witnesses, took the latter view. Upon consideration of the materials cited and argued by the parties, and keeping in mind that the burden was on plaintiff to establish a causal connection between her injury and retirement (and not on the government to show what else necessitated her early retirement, if it was indeed necessary at all), we conclude the magistrate judge’s account of the evidence was plausible and, therefore, cannot be deemed clearly erroneous. See Anderson v. City of Bessemer City, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985) (where there are two permissible views of the evidence, fact finder’s choice between them cannot be clearly erroneous). SANCTION AWARD During a deposition of the Sand Springs postmaster taken before the first trial, plaintiffs counsel requested all records “of the repairs that were done to the spalled area on the walkway [outside the post office building].” Appellee’s App. at 75. It was not, however, until after this court’s remand for retrial that present government counsel, informally reminded of this outstanding request, produced the material underlying plaintiffs motion for sanctions. See Appellant’s App. at 162. This documentation included the following pre-accident statements by the postmaster regarding the completion of certain items of deferred maintenance on the building: I do not feel that I can accept Item 1 [repair of walks in front of building], due to what I feel could be a potential safety hazard. The lessor cut out and replaced one complete section of the side walk. There is one section left which he states he does not plan to replace or repair, due to our necessary use of calcium chloride during the winter months which he feels has caused the spalling. There is one place in this section of the walk which i [sic] feel could be a problem. Id. at 167. Plaintiff argued that this material clearly fell within the scope of her request and, moreover, showed the postmaster’s general awareness of the presence and danger of spalled concrete outside the post office budding prior to her accident. Contending that timely production could have avoided the initial unfavorable judgment of the district court, and hence the time and effort of the first appeal, plaintiff sought fees and expenses she claimed were necessitated by the government’s conduct. The magistrate judge noted plaintiff had never filed and obtained a favorable ruling on a motion to compel this material, Appellant’s App. at 18, a precondition for application of the discovery sanctions then set out in Fed. R.Civ.P. 37(b)(2). Accordingly, the judge analyzed plaintiff’s request for sanctions under Fed.R.Civ.P. 26(g) instead. At that time, Rule 26(g) contained an attorney certification requirement much like that found in Fed. R.Civ.P. 11, and enforced it with the following sanction provision: If a certification is made in violation of th[is] rule, the court, upon motion or upon its own initiative, shall impose upon the person who made the certification, the party on whose behalf the [certification] is made, or both, an appropriate sanction, which may include an order to pay the amount of the reasonable expenses incurred because of the violation, including a reasonable attorney’s fee. Fed.R.Civ.P. 26(g) (1988). Expressly recognizing that Rule 26(g) questions are governed by the same objective standards applied under Rule 11, see In re Byrd, Inc., 927 F.2d 1135, 1137 (10th Cir.1991), the judge found a violation, but imposed only a nominal sanction because (1) “[i]t [was] a close call as to whether the document [came] within plaintiffs Request for Documents and therefore whether the conduct of defense counsel was objectively reasonable,” and (2) “[w]hile defendant failed to produce the document in question, it was not relevant to the outcome of the first trial in this case or to the issues in the second trial.” Appellant’s App. at 18. The government insists that it did not violate Rule 26(g), asserting that a document complaining of repairs left undone is not, strictly speaking, a record of “repairs that were done” — the language used in plaintiffs request. We review the magistrate judge’s decision on this matter solely for an abuse of discretion. In re Byrd, 927 F.2d at 1137; see also Hughes v. City of Fort Collins, 926 F.2d 986, 988 (10th Cir.1991). Upon review of the materials in question, we will not second-guess the judge’s determination that government counsel’s conduct was not in compliance with the duties imposed under Rule 26(g). See Hughes, 926 F.2d at 989. Plaintiff’s sole challenge to the sanction order concerns the authority under which it was issued. She contends the magistrate judge erred in applying a Rule 11 standard, under which the award of attorney fees is discretionary, in lieu of the standard prescribed in Fed.R.Civ.P. 16(f), under which compensatory attorney fees are a mandatory component of the sanction unless expressly excepted for specified reasons. Because we hold the judge properly chose not to rely on Rule 16(f) at all, we affirm the sanction order without addressing the bulk of plaintiffs appellate argument, which concerns the analysis required under that rule. [Rule 16(f) ] is narrow-gauged. It authorizes the imposition of sanctions in only four specific instances: (1) failure to obey a scheduling or pretrial order, (2) failure to appear at a scheduling or pretrial conference, (3) substantial unpreparedness on the occasion of such a conference, or (4) failure to participate in such a conference in good faith. Fed.R.Civ.P. 16(f). Its use must be limited accordingly; Rule 16(f) sanctions cannot be prescribed as a panacea to cure the ills of a bar which sometimes falls short of meeting, generally, acceptable standards of practice.

9492770-27411

OPINION AND ORDER WARD, District Judge. Plaintiffs move for an order directing compliance with certain provisions of the Marisol State Settlement Agreement. The Court held an evidentiary hearing on August 9, 10, 18, and 22, 2001. For the following reasons, the motion is granted in part and denied in part. BACKGROUND Plaintiffs filed a complaint in’ this Court on December 13, 1995, alleging systemic deficiencies in the administration of the New York City child welfare system. The complaint sought declaratory and injunc-tive relief against various officials of New York City and New York State who were responsible for the operation or oversight of New York’s child welfare system. On the eve of trial, which was to commence on July 27, 1998, the parties informed the Court that they were engaged in settlement negotiations. The trial was adjourned and on December 2, 1998, after four months of negotiations, two settlement agreements were filed with the Court, one agreement between Plaintiffs and the City Defendants and the other between Plaintiffs and the State Defendants. The Court approved the settlement agreements on March 31, 1999. See Marisol A. v. Giuliani, 185 F.R.D. 152 (S.D.N.Y.1999), aff'd, 218 F.3d 132 (2d Cir.2000). One of the goals of the State Settlement Agreement was to strengthen the New York State office that has responsibility for overseeing the New York City child welfare system. To that end, the New York State Office of Children and Family Services (“OCFS”) was required to establish and maintain an office in New York City, known as the New York City Regional Office (“NYCRO”). NYCRO’s primary function is to monitor and supervise New York City’s child welfare system, which is administered by the New York City Administration for Children’s Services (“ACS”). The Agreement established a method for Plaintiffs to monitor OCFS’s compliance. See State Settlement Agreement ¶ 29 (OCFS shall provide copies of certain documents to Plaintiffs); id. ¶ 30 (OCFS shall meet with Plaintiffs’ counsel periodically to review OCFS’s compliance with the Agreement). Prior to taking any action against OCFS arising out of an alleged breach of the Agreement, Plaintiffs were required to provide notice to counsel for OCFS of the areas of alleged noncompliance. OCFS then had to provide Plaintiffs with information sufficient to establish OCFS’s reasonable good-faith efforts towards compliance. The parties were then required to make a good-faith effort to resolve any disputes. See id. ¶ 34. Upon approval of the Agreement by this Court, all of Plaintiffs’ claims against the State Defendants were dismissed with prejudice, except that the Court retained jurisdiction “for the sole purpose of enforcing any specific terms and conditions of this Agreement against the Commissioner of OCFS for which Plaintiffs allege noncompliance and the parties have been unable to resolve” under the procedures set forth in ¶ 34. Id. ¶ 36. The Agreement further provides: “In the event that Plaintiffs seek judicial enforcement of the term(s) of this Agreement, Plaintiffs will in the first instance seek an order directing compliance with this Agreement and thereafter may, if necessary, seek further judicial remedies to enforce the terms and conditions of this Agreement in dispute.” Id. ¶ 37. The Agreement contains a termination provision under which several sections expired on December 31, 2000, while others expired on March 31, 2001. See State Settlement Agreement ¶ 38 (the Court will refer to the time during which the Settlement Agreement was in effect as the “Settlement Period”). As of this date, every section of the Agreement has expired. Plaintiffs filed their motion on January 8, 2001, and now seek an order directing OCFS to comply with three provisions of the Agreement. First, ¶ 14 of the Agreement required the State Central Register (“SCR”), a New York State hotline which receives reports of abuse and neglect, to make reasonable efforts to determine that calls are not screened out inappropriately. Second, under ¶¶ 18-21 OCFS had to issue case record reviews in specified areas to insure that ACS engaged in effective casework practice and complied with applicable laws and regulations. Third, under ¶ 22 OCFS was to use reasonable efforts and means available to it to develop and implement a statewide computer system known as CONNECTIONS. DISCUSSION “Settlement agreements are contracts and must therefore be construed according to general principles of contract law.” Red Ball Interior Demolition Corp. v. Palmadessa, 173 F.3d 481, 484 (2d Cir.1999). “[A] party cannot create an ambiguity in an otherwise plain agreement merely by ‘urgfing] different interpretations in the litigation.’ ” Id. (citations omitted). If the agreement is clear, “courts must take care not to alter or go beyond the express terms of the agreement, or to impose obligations on the parties that are not mandated by the unambiguous terms of the agreement itself.” Id. Neither party in the present case contends that the State Settlement Agreement is ambiguous. Thus, the Court will interpret the parties’ obligations as set forth within the four corners of the Agreement. Plaintiffs have the burden of demonstrating non-compliance by a preponderance of the evidence. With these guiding principles in mind, the Court turns to the provisions of the Agreement at issue. 1. The Provisions in Dispute A. The State Central Register — ¶ 14 The purpose of ¶ 14 is to ensure that the SCR does not inappropriately screen out reports of abuse and neglect that should be investigated. It states: The SCR shall make reasonable efforts to determine that calls are not screened out inappropriately, including the use of its current procedure for periodic spot checks on the screening out of such calls. SCR shall make reasonable efforts to determine how to upgrade its technical capacity to receive calls consistent with its policies. State Settlement Agreement ¶ 14. Plaintiffs acknowledge that they do not have evidence tending to show that OCFS or the SCR have not complied with ¶ 14. They argue instead that, because the procedures employed by the SCR in assessing the performance of hotline specialists lead to incomplete information, Plaintiffs cannot determine whether OCFS has complied with the Agreement. Defendants counter that the SCR has made, and continues to make, substantial improvements in its monitoring of hotline calls. Under procedures employed by the SCR, hotline specialists are monitored by SCR supervisors who attempt to reach an independent conclusion as to whether an appropriate screening decision has been made and whether the hotline specialist obtained all available information before making a decision with respect to a call. See Affidavit of Teresa Palumbo in Opposition to Plaintiffs’ Motion for an Order Directing Compliance (“Palumbo Aff.”) ¶¶ 4-5. In May 2000, the SCR revised the form used to assess worker performance in order to increase its utility. It added a data-gathering component which assists supervisors in analyzing screening-out practices. See id. ¶¶ 6-9. In addition, the SCR has continuously worked to modify the assessment form as needed to improve performance. See id. ¶ 12. Furthermore, OCFS actively maintains a full staff at the SCR. A “blanket waiver” of the New York State prohibition on hiring new staff enables the SCR to regularly replace staff. Supervisory staffing has been increased to provide guidance twenty-fours hours per day, seven days per week. See id. ¶¶ 13-14. These supervisory staff members are, in turn, monitored by the SCR managers who are also involved in the assessment process. See id. ¶¶ 18-19. The SCR employs a supervisory consultation policy which requires a hotline specialist to consult a supervisor when he or she has determined not to act on a report of abuse or neglect. This offers a second level of review prior to declining to act on a call. Additionally, each member of the SCR staff is required to give his or her name to all callers, thereby increasing accountability and the ability to review improperly screened-out calls. See id. ¶¶ 15-16. Based on the affidavit of Teresa Palumbo, which essentially went unchallenged, and the lack of any evidence demonstrating a failure to use reasonable efforts to determine whether calls were inappropriately screened out, the Court finds that Plaintiffs have not met their burden of proving non-compliance with ¶ 14 of the State Settlement Agreement. B. The Case Record Reviews — ¶¶ 18-21 In order to insure that ACS engaged in effective casework practice and complied with applicable laws and regulations, the State Settlement Agreement directed OCFS to conduct and issue periodic case record reviews. OCFS was required to conduct case record reviews in nine specified areas “to determine ACS’s compliance with applicable laws and reasonable case work practice.” State Settlement Agreement ¶ 18. These case record reviews were required to be completed at least once prior to the expiration of the Agreement with copies furnished to Plaintiffs no less than ninety days prior to the expiration of the Agreement. See id. ¶ 19. Furthermore, ¶ 21 states: If, after completing its case record review(s), OCFS determines that ACS is in substantial non-compliance with applicable laws, regulations and/or reasonable case work practice, OCFS shall direct ACS to take Corrective Action designed to improve ACS’s performance in the specific areas of noncompliance. The NYCRO will use reasonable efforts to provide technical assistance and exercise its monitoring authority as it deems necessary and appropriate. OCFS shall meet with Plaintiffs as provided for in Paragraph 30, below, to report such efforts towards achievement of this objective and the last such meeting shall occur at least sixty (60) business days prior to the expiration of this Agreement. Id. ¶ 21. Under ¶ 30, the Commissioner of OCFS and Director of NYCRO were required to meet with Plaintiffs’ counsel to review Defendants’ compliance with certain provisions of the Agreement on or about April 1 and September 1, 1999, and March 1 and October 7, 2000. See id. ¶ 30. Plaintiffs contend that the last section of ¶ 21 permitted them to meet with OCFS and NYCRO after the last case record review was issued in December 2000 to monitor the corrective action being taken and determine whether NYCRO fulfilled its obligation to insure that ACS adopt appropriate corrective action. Since the corrective action plans, known as Performance Improvement Plans (“PIPs”), were not complete until March and April 2001 and the Agreement expired on March 31, 2001, Plaintiffs argue that they were deprived of their rights under the Agreement. However, as the Court reads the plain language of the Agreement, it generally required OCFS to do four things. First, OCFS had to undertake case record reviews in certain areas and furnish them to Plaintiffs no less than ninety days prior to expiration of the Agreement. See id. ¶¶ 18, 19. Second, if OCFS determined that ACS was in substantial non-compliance, it was required to direct ACS to take corrective action. Third, NYCRO was directed to use reasonable efforts to provide technical assistance to ACS and monitor ACS’s performance as NYCRO deemed necessary and appropriate. Fourth, OCFS was required to meet with Plaintiffs pursuant to the terms of ¶ 30 to report efforts towards achieving ACS’s compliance, with the last meeting to occur at least sixty days prior to expiration of the Agreement. See id. ¶ 21. Defendants met these obligations. OCFS issued the last case record review reports to Plaintiffs on December 28, 2000, ninety-three days before the Agreement was set to expire. After completing the case record reviews, OCFS directed ACS to take corrective action designed to improve ACS’s performance in specific areas. See Hearing Transcript (“Tr.”) at 268. ACS was required to submit PIPs within sixty days addressing those areas in which OCFS believed there was substantial noncompliance with applicable laws, regulations and/or reasonable case work practice. See id. at 268-69. During the sixty day period that ACS was drafting the PIPs, NYCRO met with ACS to provide assistance. See id. at 269. OCFS and NYCRO rejected ACS’s initial proposed PIPs. See id. at 270. They required ACS to revise and resubmit their PIPs. ACS’s proposed PIPs were ultimately resubmitted and accepted by OCFS and NYCRO in March and April 2001. See id. at 271, 273, 277. The last meeting between Plaintiffs and OCFS pursuant to ¶ 30 was held in October 2000. Plaintiffs allegedly anticipated that OCFS would furnish the case record reviews much earlier than December 2000, and therefore, thought the October 2000 meeting would be timely for the purpose of monitoring OCFS’s and NYCRO’s efforts. Since the last case record review was not furnished until December 2000 and the PIPs were not approved until March and April 2001, the October 2000 meeting was essentially meaningless for these purposes. However, the parties’ obligations are governed by an unambiguous contract with which Defendants have complied. The Court will not read into the clear language an obligation that Plaintiffs contemplated but did not memorialize in writing. Accordingly, the Court finds that OCFS has complied with ¶ 21 of the Agreement. C. CONNECTIONS — ¶ 22 The federal Administration for Children and Families (“ACF”) requires all states to create a Statewide Automated Child Welfare Information System (“SACWIS”). The State Settlement Agreement requires OCFS to make reasonable efforts to implement and maintain New York’s SACWIS system, known as CONNECTIONS. Under ¶ 22 of the Agreement: OCFS shall use reasonable efforts and means available to it to develop and implement in New York State, at the earliest practicable date, an accurate and reliable state-wide computer system (now referred to as “CONNECTIONS”) to provide information concerning: a) child welfare case activity necessary to manage and supervise the child welfare system and determine compliance with fiscal and legal standards; and b) child welfare case management reports sufficient to create aggregate data on issues including but not limited to: timeliness of investigations; re-occurrence of indicated reports; timeliness of case plans; time in care; number of placements; number of re-entries into care; and adoption statistics. State Settlement Agreement ¶ 22. In 1995, New York began to develop CONNECTIONS. See Plaintiffs’ Exhibit (“PLEx.”) K-1. By March 1999, prior to the commencement of the Settlement Period, the CONNECTIONS system was in disarray. A large sum of money had been spent on the system and yet it remained dysfunctional in many key areas. In October 1997, OCFS Commissioner John Johnson received a letter from the child welfare commissioners of the six largest New York counties (the “Big Six” counties), in which the commissioners complained that CONNECTIONS failed to meet their needs. They requested that Commissioner Johnson suspend the development of CONNECTIONS for one year in order to meet with the counties and revisit OCFS’s plan for development. See Def. Ex. 24. In response, Commissioner Johnson temporarily ceased the development of CONNECTIONS. See Tr. at 125. In 1998, the Office of the State Comptroller (the “OSC”) issued a report on the development of CONNECTIONS, which was highly critical of OCFS’s efforts to that point. See Pl.Ex. K-l. Then in March 1999, at the beginning of the Settlement Period, the New York State Governor’s office issued a report prepared by a panel appointed by the Governor, entitled “Panel Review of CONNECTIONS Project.” See Pl.Ex. M. The report consisted of ten general recommendations in areas in which CONNECTIONS needed improvement. One recommendation was for OCFS to hire a project integrator that would coordinate the CONNECTIONS project until it became operational. See id. at 2. Maximus, Inc. was hired as the project integrator in September 1999. In March 2001, Maximus issued the “CONNECTIONS Reassessment Report,” which was generally critical of OCFS’s efforts. Maximus did suggest, however, that the system could be saved through future modifications and upgrades. See Pl.Ex. W. The Maximus report proposed three alternatives for OCFS to follow to improve CONNECTIONS. First, OCFS could essentially work with what it had in effect at the time. Second, OCFS could make improvements to the then-existing system. Third, OCFS could replace the old CONNECTIONS system by beginning work on a new system. See id. at VII-1. OCFS opted for the second alternative. Also in March 2001, the New York State Assembly issued the results of its investigation into CONNECTIONS. The report, entitled “Too Much, Too Little, Too Late,” was generally critical of OCFS’s efforts in implementing CONNECTIONS. See PL Ex. L. Dr. F. James Seaman, an independent computer consultant in the area of Information Technology management with twenty-five years of experience, testified for Plaintiffs and gave his opinion that OCFS had not made reasonable efforts to develop CONNECTIONS at the earliest practicable date as required by the Agreement. Although he did not think that OCFS necessarily made any missteps in its approach to developing CONNECTIONS during the Settlement Period, he believed OCFS did not act with the sense of urgency mandated by the circumstances. He opined that OCFS should have acted with greater haste in trying to improve a system that was essentially in crisis at the beginning of the Settlement Period. See Tr. at 65-66. Furthermore, Dr. Seaman did not believe that OCFS’s plan to follow the second alternative proposed by Maximus was a satisfactory approach to fixing CONNECTIONS. See id. at 67. Dr. Seaman also pointed out that the data contained in CONNECTIONS may be inaccurate. See id. at 69. In his view, it is critically important for the system’s data to be accurate because a functional system that produces inaccurate data is useless. See id. at 70. Larry Brown and Zachary Zambri, the two project directors for CONNECTIONS, testified for OCFS and painted quite a different picture of OCFS’s efforts during the Settlement Period. According to Mr. Brown and Mr. Zambri, throughout the Settlement Period OCFS was unable to take several steps in implementing CONNECTIONS due to administrative restraints. For example, at the beginning of the Settlement Period, OCFS had insufficient core staff to implement several measures. It sought to create sixty-four new positions (or “items”) but needed support from the legislature, the comptroller, and the governor’s office, among others. See id. at 126-27. The request for these items was made in 1999 but was not approved in the State’s budget until April 2000. See id. at 127. In addition, OCFS’ effort to engage Maximus as the project integrator was a lengthy process requiring approval by both the OSC and the federal government. See id. at 149. While OCFS was waiting for that approval, Maximus began its work, but did so at risk that its contract with OCFS would not be approved. See id. at 150. Despite these obstacles, OCFS has made efforts to improve CONNECTIONS, with mixed results. The CONNECTIONS system is comprised of a number of “Releases.” For example, Release Two, which relates to child protective services, has been operational since 1997. Release Three is the “Foster and Adoptive Home Development” component and is also currently operational. See id. at 131-32. OCFS planned to have Release Four, which was the foster care system component, operational by 1997. As of August 2001, it was not in operation. OCFS now estimates that it will not be functional until June 2004. Release Five would have related to management reports about the foster care data compiled in Release Four. However, since Release Four was not operational in 1997, Release Five would not have worked either. See id. at 199. In place of what was originally Release Five, OCFS is using a “Data Warehouse,” which was created in early 2000. See id. at 119-20, 199. The Data Warehouse project attempts to use data from CONNECTIONS, in conjunction with data from the Child Care Review Service (“CCRS”), an existing computer information system, to address the needs of OCFS’s users. See Affidavit of Larry Brown in Opposition to Plaintiffs’ Motion for an Order Directing Compliance (“Brown Aff.”) ¶ 8. However, while most of the data in the Data Warehouse is currently available, it is not scheduled to be fully operational until the end of 2001. See Tr. at 207-08. Also, OCFS is currently implementing CITRIX, a program that allows OCFS to update the 15,000 computers across the State which use CONNECTIONS applications. Prior to CITRIX, each of those 15,000 computers had to be updated by hand. With CITRIX, OCFS can quickly fix applications without having to rely on manual corrections which could only be done approximately twice per year. See id. at 133-34. Furthermore, OCFS has created the Child Protective Record Summary (“CPRS”), a program that gives caseworkers easier access to files on their computers by improving the visual organization of information on their screens. See id. at 144-45. The CPRS is scheduled to be operational in October 2001. See id. at 217. In addition to these structural changes, OCFS has apparently gained the support of some of its former critics. For example, the OSC, which had been critical of OCFS in its 1998 report, see Pl.Ex. K-1, issued a second report in October 1999 indicating that it believed OCFS had made “significant progress in implementing the recommendations” contained in the first report. See PLEx. K-5. The federal government has also signaled its approval of the steps OCFS is taking with regard to CONNECTIONS. In order to enter into any contract relating to CONNECTIONS, OCFS is required to have prior federal government approval since the project must comply with federal SACWIS requirements. See Tr. at 344. At the beginning of the Settlement Period, OCFS’s relationship with the federal government was so poor that federal funds had been suspended and OCFS could not get approval for many of its contracts. However, since the commencement of the Settlement Period, federal funding has been restored. See id, at 159. Furthermore, on April 16, 2001, the commissioners of the Big Six counties wrote to Commissioner Johnson. Whereas their first letter to Commissioner Johnson in October 1997 requested that OCFS suspend the development of CONNECTIONS for one year because it worked so poorly, in April 2001 the commissioners believed that OCFS had taken their initial concerns “seriously and began a very productive dialogue” with them. Def. Ex. 25. In addition, the commissioners indicated that they supported OCFS’s recommendations. See id. It is undisputed that OCFS does not currently have a complete, functional, statewide computer system, or even a date by which one can be expected. Of course, the Agreement did not require OCFS to complete the system during the Settlement Period, only that it use “reasonable efforts and means available to it” to develop and implement the system at the “earliest practicable date.” State Settlement Agreement ¶ 22. At the hearing, the Court was presented with conflicting evidence with regard to the reasonableness of OCFS’s efforts. On the one hand, two reports published in March 2001 were highly critical of OCFS’s efforts. Furthermore, Dr. Seaman gave his opinion that OCFS has not made reasonable efforts to develop CONNECTIONS at the earliest practicable date. On the other hand, it is clear from the evidence presented by OCFS that OCFS has made commendable efforts to improve CONNECTIONS. Nevertheless, many of the measures taken by OCFS during the Settlement Period were preliminary steps necessary to achieve the ultimate goal of functionality. OCFS will not know the results of its efforts for some time. Accordingly, although it is a close question, the Court finds it appropriate to enter an order directing OCFS to comply with ¶ 22. II. Remedy Having found that OCFS has failed to comply with ¶ 22 of the Agreement, the Court must fashion a remedy that will insure compliance. Plaintiffs ask the Court to continue its jurisdiction over ¶ 22 of the Agreement and assign an independent monitor to supervise OCFS’s efforts. While the Court will agree to continue its jurisdiction over ¶ 22, an independent monitor is not warranted. Despite the fact that CONNECTIONS is not yet fully functional, the Court is convinced that the program is now in capable hands and that OCFS is working hard toward achieving compliance with ¶ 22 of the Agreement. Furthermore, there is enough independent oversight of OCFS through Maximus and the executive and legislative branches of the New York State government to insure that OCFS will continue to work diligently towards full implementation of CONNECTIONS. Nevertheless, the Court and Plaintiffs should be kept informed of OCFS’s progress. Accordingly, the Court continues its jurisdiction over ¶ 22 and directs that OCFS comply with ¶ 22 and furnish semiannual reports to the Court with copies to Plaintiffs’ attorneys. The first report shall be furnished on January 2, 2002 and the last report shall be furnished when the system is fully functional. A. Authority in the State Settlement Agreement Defendants object to the Court’s continuing jurisdiction. They argue that the Agreement contains an express and unconditional expiration date and no mechanism by which to extend that date. Under the Agreement, ¶ 22 expired on March 31, 2001. See State Settlement Agreement ¶ 38. However, the Agreement states that the Court shall “retain jurisdiction for the sole purpose of enforcing any specific terms and conditions” of the Agreement for which Plaintiffs allege non-compliance. Id. ¶ 36. “Where the parties to a settlement agreement provide for the Court to retain jurisdiction over the settlement agreement, the Court has jurisdiction to enforce the terms of the settlement agreement.” Scharf v. Levittown Public Schs., 970 F.Supp. 122, 129 (E.D.N.Y.1997). By filing their motion prior to the expiration date of March 31, 2001, and otherwise following the procedures set forth in the Agreement for attempting to resolve disputes, Plaintiffs preserved their right to challenge Defendants’ compliance with the Agreement notwithstanding the fact that ¶ 22 has since expired. Since the Court has determined that OCFS has not complied, the Court can, pursuant to ¶ 36, retain jurisdiction over ¶ 22 solely to enforce that paragraph. This includes the authority to enter all orders necessary to enforce the Agreement. If the Court were precluded from retaining jurisdiction or limited in its ability to enforce its order beyond the expiration date, the order and the Agreement’s enforcement provisions would lack any significance. B. Eleventh Amendment Immunity Defendants also argue that under the Eleventh Amendment, the Court lacks jurisdiction to award any relief against OCFS that goes beyond the specific terms of the State Settlement Agreement. They contend that the Court’s jurisdiction is limited to entering an order directing OCFS to comply with ¶ 22 of the Agreement. Plaintiffs counter that by entering into the Settlement Agreement and consenting to the Court’s continuing jurisdiction, Defendants waived their Eleventh Amendment immunity defense.

269292-18935

MEMORANDUM OPINION AND ORDER DENYING MOTION FOR SUMMARY JUDGMENT AND COMPELLING TURNOVER OF TAX REFUND JENNIE D. LATTA, Bankruptcy Judge. Before the court is the debtor’s Complaint to Compel Turnover of 1995 Tax Refund and a Motion for Summary Judgment filed by the defendant, the United States of America, on behalf of its agency the Internal Revenue Service (“IRS”)- The complaint raises the question of the effect of a dismissal and subsequent reinstatement of a Chapter 13 bankruptcy case upon an intervening interception of an income tax refund where the debtor had no notice of the claim of the IRS, the dismissal of her bankruptcy case, or the intention of the IRS to intercept her refund. For the reasons outlined below, based upon the totality of facts and circumstances presented in this case, the court denies the IRS’s motion for summary judgment and orders the IRS to turn over to the debtor her tax refund. This memorandum shall constitute findings of fact and conclusions of law in accordance with Fed. R. Bankr. P. 7052. This is a core proceeding. 28 U.S.C. § 157(b)(2)(A), (E) and (0). BACKGROUND FACTS The parties have submitted this proceeding to the court upon certain stipulated facts. Those stipulated facts are as follows: 1. The parties agree that this Court has jurisdiction pursuant to 28 U.S.C. Section 157(a) and this is a core proceeding. 2. The debtor filed this Chapter 13 bankruptcy on December 23, 1991, and the plan was confirmed on March 3, 1992. 3. The defendant was listed as a priority creditor for tax debt for which the tax year was unspecified in the amount of $1,366.65 in debtor’s Schedule E. 4. The Internal Revenue Service filed a timely claim in the amount of $838.63 for the 1988 tax year which was paid in full on June 10, 1995, through payments through the plan trustee. 5. The debtor’s case was dismissed on March 4, 1996, for a lack of payment. 6. The debtor’s ease was reinstated by this Court on June 13,1996. 7. During the period when the debtor was not in bankruptcy after the case had been dismissed on March 4, 1996, and prior to the reinstatement of June 13, 1996, the Internal Revenue Service intercepted the Debtor’s 1995 refund in the amount of $887.84 and applied it to a tax, penalty and interest for the 1987 tax debt, for which the IRS did not file a proof of claim. Stipulation of Facts, filed June 4,1997. In addition to the facts stipulated by the parties, the court notes certain additional facts from the bankruptcy case file . In this Chapter 13 case, the deadline for filing proofs of claim was May 4, 1992. On or about February 2, 1992, the standing Chapter 13 trustee filed a motion to dismiss or convert the debtor’s bankruptcy case as the result of receiving an insufficient funds check from the debtor. The motion resulted in the entry of an order on September 14, 1992, conditionally denying the Chapter 13 trustee’s motion to dismiss. That order provided that the case could be dismissed without further notice to the debtor upon the first payment missed without satisfactory explanation to the Chapter 13 trustee. The debt- or’s Chapter 13 case was dismissed by order entered March 12, 1996, upon the authority of the September 14, 1992 order, apparently as the result of a missed payment. The debtor’s motion to reinstate her ease was filed on April 9, 1996. The debtor’s motion recites that she did not receive notice of the dismissal of her bankruptcy case until the week prior to the filing of her motion; that the case had been dismissed without prior notice to her because she had previously been placed on probation; that she had continued to make payments to the Chapter 13 trustee without knowledge of the dismissal; and that she had substantially completed payments due under the plan. The District Director of the Internal Revenue Service, Special Procedures Staff, Nashville, Tennessee 38202, was mailed a notice of the debtor’s motion to reinstate her Chapter 13 case on April 17, 1996. No objection to the motion was filed by the IRS. The debtor’s motion to reinstate was granted by order entered June 17, 1996. That order does not provide an explanation for the reinstatement, but merely recites that the debtor’s motion should be granted. That order is further silent as to its effect upon the prior order of dismissal. The parties have offered no information concerning the specific facts and circumstances surrounding the dismissal and reinstatement. Although the parties have stipulated that the interception of the debtor’s tax refund occurred during the interim between dismissal and reinstatement, the precise date of the IRS action is not given. The Order Confirming Plan, entered March 9, 1992, indicates that the payments under the debtor’s Chapter 13 plan should have been completed approximately sixty months after the first payment was due on January 23, 1992; that is, the debtor should have completed her plan payments on approximately Januax-y 23, 1997. The court cannot determine from the present record whether all payments have been completed. It does appear that the debtor has not yet received a discharge, however. The debtor’s complaint to compel turnover of her income tax refund was filed on November 1,1996. The IRS filed its motion for summary judgment on February 27, 1997. The debtor responded by filing a “Memorandum in Support of Complaint to Compel Turnover of 1995 Tax Refund” on April 29, 1997. In the debtor’s memorandum, the debtor prays “that her motion be gx-anted and that Defendant be ordered to refund the 1995 overpayment to her.” Debtox-’s Memorandum in Suppoxt of Complaint, etc. p. 8. From this and the lawyers’ statements to the court that they were submitting the matter to the court upon stipulated facts, the court concludes that the debtor intended her memorandum to be treated as a cross-motion for summary judgment. This conclusion is supported by the “Response to Plaintiffs Memorandum in Support of Complaint to Compel Turnover of 1995 Tax Refund” filed by the IRS on May 13,1997. In that Response, the IRS “asks that this Court deny the complaint for turnover of the refund as the Internal Revenue Service was within its rights to seize the refund during the dismissal of the case.” IRS’s Response, etc., p. 5. DISCUSSION Fed.Rule Bankr.P. 7056(c), which incorporates Fed.R.Civ.P. 56(c), provides in pertinent part: [Summary judgment] shall be rendered forthwith 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. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Any inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). In order for a fact to be material, it must be one “that might effect the outcome of the suit under the governing law____ [Materiality is only a criterion for categorizing factual disputes in their relation to the legal elements of a claim and not a criterion for evaluating the evidentiary underpinnings of those disputes.” Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. The debtor seeks turnover of her 1995 income tax refund pursuant to 11 U.S.C. § 542(a) and (b). Those sections px-ovide: (a) Except as provided in subsection (c) or (d) of this section, an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of [title 11], or that the debtor may exempt under section 522 of [title 11], shall deliver to the trustee, and account for, such property, unless such property is of inconsequential value and benefit to the estate. (b) Except as provided in subsection (c) or (d) of this section, an entity that owes a debt that is property of the estate and that is matured, payable on demand, or payable on order, shall pay such debt to, or on the order of, the trustee, except to the extent that such debt may be offset under section 553 of this title against a claim against the debtor. The IRS correctly asserts that once this bankruptcy case was dismissed, the debtor and her assets were no longer protected by the automatic stay of 11 U.S.C. § 362(a). The effect of a dismissal is set forth at 11 U.S.C. § 349. Unless the court orders otherwise, the dismissal of a bankruptcy case restores the parties as far as possible to their pre-petition status. “It is as though the bankruptcy case never had been brought.” France v. Lewis & Coulter (In re Lewis & Coulter, Inc.), 159 B.R. 188, 189 (Bankr.W.D.Pa.1993). The debtor does not allege that the interception of her refund constituted a violation of the automatic stay, however. Rather the debtor asserts that the interception of her refund was improper because the claim of the IRS had been paid in full through her Chapter 13 plan prior to the dismissal of her bankruptcy case, and thus that the IRS was not entitled to recover anything further. The IRS responds that it owes no debt that is property of the estate (and thus potentially subject to turnover under Section 542(b)) because it properly applied the 1995 overpayment to the debtor’s liability arising out of the 1987 tax year during the period of time when no automatic stay prevented it from doing so. Both the debtor’s argument and the IRS’s response turn upon whether or not the IRS held an enforceable claim arising out of the 1987 tax year at the time it intercepted the debtor’s 1995 tax refund. The parties’ stipulations in this case are inadequate for the court to determine whether the IRS had an enforceable claim or not, and the court will not decide that issue without giving the IRS an opportunity to assert its claim and the debtor an opportunity to respond. The court nevertheless has decided that the IRS should turn over the tax refund to the debtor because it does not appear that the debtor had prior notice of the claim of the IRS, the dismissal of her case, or the IRS’s intent to intercept her refund. The IRS admits that “[t]he majority of cases which have considered the effect of a reinstatement conclude that the reinstatement does not affect the validity of a creditor’s actions taken during the period the case was dismissed, unless there was a violation of due process. ” Memorandum of Authorities filed February 27,1997 (emphasis mine). A number of cases have discussed the due process requirement in the context of a foreclosure sale of the debtor’s residence during a period between dismissal and reinstatement of a Chapter 13 bankruptcy case. For example, in In re Acosta, 181 B.R. 477 (Bankr.D.Ariz.1995), the bankruptcy court set aside a foreclosure sale of the debtors’ residence which occurred between the dismissal and subsequent reinstatement of their Chapter 13 ease because the debtors were not given actual notice of the continued foreclosure sale. In that case, a foreclosure sale of the debtors’ residence was initially scheduled prior to the filing of the debtors’ voluntary petition. After the filing of the petition, the foreclosure sale was orally continued from time to time during the pendency of the bankruptcy case, as is permitted by Arizona state law. The debtors’ Chapter 13 case was dismissed as the result of the debtors’ failure to provide their trustee with proof that then-state income tax return had been filed. The debtors subsequently filed the required return, provided proof of filing to their trustee, and filed a motion to reinstate their Chapter 13 case. The foreclosure sale occurred during the interim dismissal period, but while the debtors’ motion to reinstate was pending. The secured creditor was the successful bidder. The bankruptcy court held that whether or not a motion to reinstate had been filed, because of the intervening bankruptcy, the secured creditor had a duty to give the debtors .actual notice of the rescheduled foreclosure sale even after dismissal of the debtors’ petition. The Acosta court relied upon the “essential right under the United States Constitution that before property can be taken and sold by a creditor, due process requirements must be met.” Id. at 479. The court cited basic due process requirements as established by the Supreme Court: An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise intei’ested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such a nature as reasonably to convey the required information and it must afford a reasonable time for those interested to make their appearance.... Id. (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950)). Similarly, in Great Pacific Money Markets, Inc. v. Krueger (In re Krueger), 88 B.R. 238 (9th Cir.BAP 1988), the bankruptcy appellate panel affirmed the decision of the bankruptcy court voiding a foreclosure sale held after dismissal of a Chapter 13 bankruptcy ease where the bankruptcy case was dismissed as the result of the failure of the debtors to appear at a continued confirmation hearing when, despite being directed to do so, counsel for the secured creditor gave neither the debtors nor their counsel notice of the continued hearing. As in Acosta, a foreclosure sale of the debtors’ residence was initially scheduled prior to the filing of the debtors’ voluntary petition, and then orally continued from time to time during the pendency of the bankruptcy case. Upon learning of the dismissal of their case, the debtors obtained an ex parte order vacating the order dismissing the bankruptcy case and reinstating the bankruptcy case effective as of the date of dismissal. The bankruptcy judge did not set aside the foreclosure sale ex parte, however, but informed the debtors that they would have to bring a separate action to do so. The debtors filed a complaint to set aside the foreclosure sale, which resulted in the entry of an order voiding the sale and reverting the property to the debtors. The bankruptcy judge concluded that 11 U.S.C. § 105(a) gave him the equitable power to unwind the foreclosure sale due to the creditor’s bad faith in not notifying the debtors of the continued confirmation hearing and due to the lack of due process. The bankruptcy appellate panel affirmed noting that “an order is void if it is issued by a court in a manner inconsistent with the due process clause of the Fifth Amendment.” Id. at 240. Because the order dismissing the bankruptcy case was void, the panel reasoned, “the automatic stay was continuously in effect from the date the petition was filed.” Id. at 241. Thus the foreclosure sale, which occurred in violation of the automatic stay, was deemed void and without effect. Id. A third case also supports the position that due process requires adequate notice of a creditor’s intent to foreclose. In Tome v. Baer (In re Tome), 113 B.R. 626 (Bankr.C.D.Calif.1990), the bankruptcy court held that a foreclosure sale must be set aside where the foreclosing creditors did not give adequate notice of the sale after obtaining relief from the automatic stay. In other instances, depending on the facts and circumstances of the particular case before it, bankruptcy courts have refused to exercise their equitable powers to unwind a foreclosure sale. For example, in G.E. Capital Mortgage Services, Inc. v. Thomas (In re Thomas), 194 B.R. 641 (Bankr.D.Ariz.1995), the bankruptcy court held that the debtors were not entitled to have their dismissed case reinstated as of the date the debtors filed their motion to reinstate, so as to avoid a trustee’s sale. In this case, as in those previously discussed, a foreclosure sale was pending at the time the debtors’ bankruptcy petition was filed. In this case, however, the debtors conceded that they had prior notice of the rescheduled sale dates during the pendency of their bankruptcy case. The bankruptcy case was dismissed once because of the debtors’ failure to file their mailing mate, but reinstated one day later. The bankruptcy case was dismissed a second time when the debtors failed to appear for their meeting of creditors. Although the debtors at first claimed that they did not receive notice of the meeting of creditors, based on correspondence from the debtors and their statements at oral argument, the court concluded that they had received notice of the meeting of creditors, but simply miscalendared it. The debtors’ ease was dismissed on March 13,1995, and their motion to reinstate was filed on March 28, 1995. The debtors conceded that they knew on March 28th that the foreclosure sale on their residence was scheduled for April 4,1995. The debtors did not (i) submit a form of order to reinstate the case, (ii) request an immediate hearing for reinstatement of the case, or (in) request a temporary restraining order or any other injunctive relief. After the sale was conducted, the debtors sought to avoid the foreclosure sale. Their request was denied. The debtors then filed a motion for reconsideration and the creditor filed a motion for relief from the automatic stay to enable it to complete eviction proceedings. The debtors asked the court either to deem their case reinstated as of March 28, 1995, the date they filed their motion to reinstate, or to deem their case continuously pending since the date it was originally filed. The debtors relied upon In re Krueger as authority for the bankruptcy court to exercise its equitable powers in their favor. The bankruptcy court concluded that unlike in Krueger, the debtors in Thomas were accorded due process. They knew that their case had been dismissed in advance of a rescheduled foreclosure sale, and they knew the date of the rescheduled foreclosure sale, yet they took no steps to obtain injunctive relief. While the bankruptcy court criticized Krueger and Tome, and distinguished Acosta on its facts, the decision in Thomas is nevertheless consistent with those cases in recognizing the fundamental due process requirement of notice before a debtor is deprived of property. See Thomas, 194 B.R. at 648. The court notes the limited circumstances under which a bankruptcy court may exercise its equitable power to avoid a foreclosure sale: The court certainly has the power to rescind its orders, but the court does not exercise such a power which will avoid a foreclosure sale conducted pursuant to state law, if at all, unless the debtor has shown that he or she was not accorded due process. Id. at 650.

12257352-6641

OPINION DAVID A. SCHOLL, Bankruptcy Judge. Presently before us in the instant case is a sequel to our decision in the above-captioned adversarial proceeding, reported at 73 B.R. 616 (Bankr.E.D.Pa.1987), involving another aspect of the rights of the same creditor whose status was at issue there, Louis Shrager & Sons (hereinafter referred to as “Shrager”). The present issue raised is whether a judicial lien passes unaffected through a Chapter 11 bankruptcy when the lienholder fails to file a timely Proof of Claim. We hold that the lien does indeed pass through the bankruptcy. Thus, we hopefully have resolved all of the issues which Shrager put before us and the disposition of the proceeds of a sale of the Debtor’s realty in a posture for swift final resolution, which our accompanying Order shall promptly schedule. The history of the matter in issue has already been related, in most relevant particulars, in our previous decision, at 73 B.R. 617-20, and will not be repeated here. Picking up with additional developments subsequent to that Opinion, issued on May 22, 1987, we note that, on June 11, 1987, after an extension in the time originally accorded it to do so, Shrager opted not to void the sale of the Debtor’s realty which took place on March 25, 1986. Thereafter, at a hearing ultimately continued until July 29, 1987, the Trustee’s counsel reported that papers to effect resolutions of the eleven separate adversarial proceedings seeking to avoid various judgment liens allegedly obtained by creditors within ninety (90) days of filing as preferential transfers, mentioned in our previous Opinion, 73 B.R. at 619, had been filed. The only issue reported to be remaining open which bore relevance to the disposition of the sale proceeds was the determination of whether the judgment lien of Shrager was affected by the fact that he failed to file a Proof of his secured claim in timely fashion. The Trustee’s preference-avoidance action against Shrager was settled by a Stipulation of the parties that the judgment was non-preferential and non-avoidable to the extent of $27,346.27. It will be recalled that, on January 9, 1986, Shrager filed a secured Proof of Claim in the amount of $28,710.00 in this case. Id. at 620. On November 10, 1986, the Trustee filed an Objection to this Proof of Claim, contending that, although the Claim was listed as “disputed,” Shrager had failed to file said Proof of Claim prior to the Bar Date, i.e., July 3, 1985. See 11 U.S.C. § 1111(a). On December 2,1986, the Objection came before us for a hearing and we issued an Order of that date scheduling briefing into January, 1987. The principal contention of Shrager was that, since its lien passed through the sale, the status of its Proof of Claim was, in a practical sense, inconsequential. Thereafter, the dispute between Shrager and the Trustee over the validity of the sale of March 25, 1986, addressed in the prior Opinion, arose, and it was perceived that the result in that matter could render the disposition of the validity of Shrager’s lien moot. Therefore, we did not rule on the issue. However, after we rendered the decision in that matter on May 22, 1987, counsel for the Official Unsecured Creditors’ Committee indicated a desire to take up the Trustee’s argument against Shrager and argue that Shrager’s lien would not pass through the sale. Additional briefing was completed on June 18, 1987. On July 29, 1987, the Trustee’s counsel advised us that the disposition of this issue was all that was necessary to permit him to determine precisely how distribution should be made. Our review of the pertinent authorities convinces us that the weight of reason and authority favors Shrager’s argument that its lien passes through the bankruptcy irrespective of its having filed its Proof of Claim in untimely fashion. Ever since the brief Opinion of the Supreme Court in Long v. Bullard, 117 U.S. 617, 621, 65 S.Ct. 917, 918, 29 L.Ed. 1004 (1886), it has consistently been held that “security [of a secured creditor] [is] preserved notwithstanding the bankruptcy of his debtor.” Thus, citing Long and a host of other Supreme Court decisions, the Court of Appeals for the Seventh Circuit squarely held in In re Tarnow, 749 F.2d 464, 465 (1984), that the late filing of a Proof of Claim in a Chapter 11 case, while preventing the tardy claimant from participating in the distribution contemplated by the Debtor’s Chapter 11 Plan, did not justify the extinction of the secured creditor’s lien. The Tamow court reasoned thusly: “The destruction of a lien is a disproportionately severe sanction for a default that can hurt only the defaulter.” Id. Our Court of Appeals has held, in the context of a Chapter 7 case, that “although an underlying debt is discharged in bankruptcy, the lien created before bankruptcy against property to secure that debt survives.” Estate of Lellock v. Prudential Insurance Co., 811 F.2d 186, 188 (3d Cir.1987). Thus, “[a secured creditor’s] filing of a proof of claim [is] not necessary to preserve its status as a secured creditor if in fact it held valid pre-bankruptcy liens.” In re Andrews, 22 B.R. 623, 625 (Bankr.D. Del.1982). Accord, e.g., In re Weathers, 15 B.R. 945, 949 (Bankr.D.Kan.1981). The same reasoning has been applied in many Chapter 13 cases. See, e.g., In re Owens, 67 B.R. 418, 425 (Bankr.E.D.Pa.1986); In re Bradshaw, 65 B.R. 556, 557-58 (Bankr.M.D.N.C.1986); and In re Work, 58 B.R. 868, 869-70 (Bankr.D.Ore.1986). The Trustee here virtually conceded this issue until it was resuscitated by the Creditors’ Committee. In its Brief, the Committee cites two cases which purportedly support a contrary position, In re Wise, 41 B.R. 51 (Bankr.W.D.La.1984); and In re Yoder Co., 29 B.R. 299 (Bankr.N.D.Ohio 1983). Also, the Committee, in arguing the point, suggested that, although it was quite aware of the principle that a secured creditor’s lien survives even if the creditor fails to file a Proof of Claim in a Chapter 7 or a Chapter 13 case, this rule should not be applicable in a Chapter 11 case. Yoder is totally inapposite. It merely holds that, in a Chapter 11 case, a creditor whose claim is listed as “disputed,” must file a Proof of Claim to participate as a creditor in the proceedings. The decision in Wise does appear to support the Committee’s position. However, we note that the Opinion includes no citations, and hence appears to evince a lack of awareness of, rather than attempting to distinguish, the long-standing principles which cut to the contrary. Therefore, we are not prepared to follow Wise and reject the reasoning of the Court of Appeals in Tamow.

201223-14023

VOGEL, Circuit Judge. Willie Frank Foster, who will hereinafter be referred to as the defendant, was charged by grand jury indictment in six counts with narcotic violations of 26 U.S.C.A. § 4705(a) and 21 U.S.C.A. § 174. He was originally brought to trial before a jury on October 18, 1961. During the cross-examination of the first government witness, one Oscar Hatcher, Hatcher reversed his testimony. On defendant’s motion, a mistrial was declared. Hatcher was summarily found guilty of contempt of court and sentenced to six months’ confinement. Defendant was charged under 18 U.S.C.A. § 1503 with intimidating a witness. On December 11 and 12, 1961, he was tried on the latter charge and acquitted by a jury. On January 22, 1962, there began the retrial of the defendant on the original charges. By jury verdict returned on January 24, 1962, defendant was found guilty on all six counts. He was sentenced to confinement for a period of twelve years. He appeals to this court from the judgment of conviction. Defendant lists what he claims to be errors on the part of the trial court as follows: 1. “The Court erred in refusing to allow defense to explain the charge and verdict in the case of United States vs. Willie Frank Foster, 61 Cr. 283(2) in Defense’s opening statement.” [Defendant is referring to the intimidation case resulting in defendant’s acquittal.] 2. “The Court erred in refusing to allow defense an inspection of all pertinent portions of the file prepared by Agent Hall and used by the government in the trial.” 3. “The Court erred in refusing to instruct the Jury in the matters contained in defendant’s requested instruction No. 2.” We consider the first claimed error. Upon the commencement of the case, the government prosecutor opened his voir dire examination of the jury panel with a brief statement by way of background. He concluded it by saying: “* * * Now, this is a narcotic case, and incidentally, this case was in court once before, and I would like to inquire, is there anyone on this panel that was on the panel when the case was in court once before? If so, would you indicate it by raising your hand. I don’t have that jury list, and I don’t recall everybody that was there.” Subsequently, counsel for the defendant stated to the jury: “Mr. Mattern: Mr. Martin has asked you if there were any of you who were on the panel at the prior trial of this same case. Are there any of you who have knowledge of that prior trial, or any of you that have knowledge of the case of the U. S. vs. Willie Foster?” After the selection and swearing in of the jury, government counsel made his opening statement detailing the six charges against the defendant, the defendant’s plea of not guilty and gave an outline of what the government’s evidence would be. No reference was made therein to the defendant’s trial on the intimidation charge. Defendant’s counsel in his opening statement, however, attempted to tell the jury about the intimidation trial and defendant’s acquittal therein. The government objected. The following transpired out of the presence of the jury: “The Court: Well, but you can do that when it comes to examining these witnesses, but to make those things in this opening statement— what do you intend to say? “Mr. Mattern: I intend to say that the case was originally tried; that the government brought forth a paid informer, or informer, who reversed himself on the stand; a mistrial was declared, and my man was charged with intimidating the witness. My man was then found innocent of intimidation, and the original case is being tried here again today. I think they’re entitled to know that nothing has changed from the opening of court at the original trial. Now, the jurors are under the impression that there have been cases gone on before in this trial, and I think they’re entitled to know that my man — that the trials have either been declared mistrials or he’s been found innocent of everything, and he’s as free as one of us being tried. Of course I think they now have the impression that there have been several trials in here, and there’s going to be created in their mind the idea that if they’re bringing this many cases against him, they must have something. “The Court: Well, I don’t like to try a lawsuit this way, but if you referred to that other — as you said you did — I didn’t recall it to be quite that extensive, but if you did refer to some former case, why I suppose probably he’s entitled to show it.” [Government prosecutor had not referred to the intimidation case but only to “ * * * incidentally, this case was in court once before.”] Counsel for the defendant still persisted. “Mr. Mattem: I realize that, your Honor, but I still think that the jury should know that my man was indicted for the tampering with the witness in the first trial that caused the mistrial, and my man was found innocent of that, so they have to take this witness at face value rather than somebody who might still be under duress, for all the jury is going to know, because he’s still going to say yes, but I said that because Foster told me to. “The Court: Well, I think that better be left to see how the evidence develops, Mr. Mattern, and I’d prefer you leave that other matter out. I’ll let you refer to this first trial which was declared a mistrial, but leave the other out until we see how things develop. I’m going to let you try everything that’s fair to your client, I assure you, but I don’t want this jury to be confused in trying this ease by something that happened in some other case that has absolutely no bearing upon the issues in this case, except as there may be some impeachment.” The only purpose of opening statements is to inform the jury what the case is about and to outline the proof that will be used — on the one hand to establish the commission of the crime and on the other to outline the defense ■ — so that the jurors may more intelligently follow the testimony as it is related by the witnesses. Here government counsel had made no reference in his opening statement to the intimidation trial. Only on voir dire had he referred to the fact that “this case” had been in court once before. Under the circumstances, whether testimony regarding the intimidation trial would become pertinent for impeachment was entirely conjectural. We think the trial court acted within his discretion and free of prejudice in refusing to allow defense counsel to go into the details of the intimidation trial in his opening statement and in directing that he “leave the other out until we see how things develop”. Counsel for the defendant was, in the remainder of his opening statement to the jury, allowed to inform them as follows: “ * * * This is the second time that Willie Foster has been tried for these three acts that Mr. Martin has outlined to you. The prior trial, back in October, it started about October 17th, the trial commenced, and the government’s witness, Oscar Hatcher, who Mr. Martin has made mention of, started to testify. Halfway through the cross-examination, or partially through; at least the cross-examination was started, Judge Weber, who is now deceased, stopped the trial and declared a mistrial. This is now a retrial of that first case, so when Mr. Martin refers to Mr. Foster being in court before on a narcotics charge, it’s not another narcotics charge, it’s the same one.” We think, additionally, that there is here much ado about nothing because later in the trial at the cross-examination of the witness Oscar Hatcher, defendant’s counsel was allowed to bring out everything he wanted to include in his opening statement with reference to the intimidation trial of the defendant, Willie Frank Foster, and the fact that he was tried and acquitted of the alleged threats. Accordingly, if there could possibly have been error, and we feel certain there was not, it was completely healed by the subsequent disclosures. Defendant’s second alleged error is based upon the court’s refusal “to allow defense an inspection of all pertinent portions of the file prepared by Agent Hall”, apparently meaning a large investigation file used by government counsel during the trial and described by the trial judge as “a file which would be at least one inch thick of papers”. Federal Bureau of Narcotics Agent Ernest H. Hall had testified for the prosecution with reference to two of the three purchases made by the witness Oscar Hatcher, who had preceded him on the stand. Defendant’s attorney began his cross-examination of Hall as follows: “Q. Agent Hall, have you made a written report of this case to the government? “A. Yes, sir. “Q. Have you given this report to the government? “A. Yes, sir. “Q. Was this report prepared in your office subsequent to your investigation ? “A. Yes, it was. “Q. Is the testimony that you have given here today substantially the same as it appears in that report? “A. To the best of my knowledge, yes, sir. “Mr. Mattern: Your Honor, I move at this time for inspection of this report, for use in cross-examination for impeachment purposes. “The Court: If you have such a statement, you may produce it, Mr. Martin. “Mr. Martin: Mr. Hall, will you find it in there, please, sir? “Witness: Do you want those as to each separate transaction? “Mr. Mattern: I’d like the written report that you have given to the government. “Witness: You mean to Mr. Martin’s office? “Mr. Mattern: Yes, sir.” An 8-page typewritten report signed by Agent Hall was given to defendant’s counsel. Defendant’s counsel was not satisfied. Apparently referring to the thick investigation file, he appealed to the court as follows: “Mr. Mattern: Your Honor, I’ve noticed that the United States Attorney has been looking at this document (indicating) the whole time. I think under the provisions of what’s commonly referred to as the Jenks [sic] Act, I’m entitled to have the Court examine that to see if there isn’t pertinent testimony in it.” Without at any time being specific, defendant’s counsel continued to demand the entire file, that it be made available to him or that the court examine it. This was denied. In addition to Hall’s signed report, however, he was given, on demand, three signed statements from the file, made by the witness Oscar Hat-cher, although at that time Hatcher had already testified, been cross-examined and excused. Counsel for defendant relies on Holmes v. United States, 4 Cir., 1959, 271 F.2d 635, 638, and in this court he argues: “Here, it is obvious that all of the statements and notes contained in Agent Hall’s thick file was information that he, Agent Hall, had actually obtained during the course of his investigation and should be considered a ‘statement’ within the meaning of the Act.” At no time does counsel for the defendant malee it clear exactly what he is asking for excepting only that he was demanding the government’s entire file so that he could see whether it contained anything helpful to him or not. He stated to the trial court: “Mr. Mattern: Yes, he has presented me with an eight page typewritten report submitted by Agent Hall. “The Court: To the United States Attorney’s office; right? Is that right? “Mr. Martin: Yes, your Honor. “The Court: Isn’t that what you asked for? “Mr. Mattem: I asked Agent Hall— “The Court (Interrupting) Isn’t that what you asked for? Didn’t you ask the Court and the United States Attorney to furnish you with a copy of that report? “Mr. Mattern: No, sir. I asked for a copy of any report that he furnished to the government, and I saw them sitting here with a file about this thick (indicating) that he would keep refreshing Mr. Martin’s memory from, and I wanted to see that file. This little typewritten thing is nothing more than what he testified to. I want to know the background of how they found Oscar Hatcher, how he came to work for them, and I have not been presented that. And my only motion before the Court at this time — I admit he gave me the report; I looked at it; I thanked him for it.” At this stage in the trial, Hatcher and Hall were the only government witnesses who had testified and, as stated, defense counsel had received Hall’s 8-page signed report and three statements signed by Hatcher referred to in Hall’s report. There may have been, and very probably were other statements contained in the Narcotics Agent’s investigation file to which counsel would have been entitled upon proper and timely request. It is, however, incumbent upon the defense to be definitive in their request, at least to the extent of limiting their demands to “statements” before there is any duty on the prosecution or the court to seek out and produce such material. . [3-5] Under 18 U.S.C.A. § 3500 the defendant is entitled, “After a witness called by the United States has testified on direct examination, * * * ” (emphasis supplied) to any written statement “ * * * signed or otherwise adopted or approved by him” which is in the possession of the government and which relates to the subject matter as to which the witness has testified. The purpose is impeachment only. The Act is one of limitation. It circumscribes what may be obtained and the purpose for which it may be used. Its adoption by Congress followed the Supreme Court case of Jencks v. United States, 1957, 353 U.S. 657, 77 S.Ct. 1007, 1 L.Ed.2d 1103, and it, rather than the opinion of the Supreme Court in Jencks, measures the right to obtain statements or reports in the possession of the United States and the procedure to be used in obtaining them. See United States v. Killian, 7 Cir., 1960, 275 F.2d 561, 568-570. Following the adoption of the Act, the Supreme Court, in Palermo v. United States, 1959, 360 U.S. 343, 351, 79 S.Ct. 1217, 1224, 3 L.Ed.2d 1287, stated: “ * * * The purpose of the Act, its fair reading and its overwhelming legislative history compel us to hold that statements of a government witness made to an agent of the Government which cannot be produced under the terms of 18 U.S.C. § 3500 cannot be produced at all.”

1319223-26268

MARCUS, Circuit Judge: The plaintiffs, Access Now, Inc. and Robert Gumson, appeal the district court’s Rule 12(b)(6) dismissal of their claim against the defendant Southwest Airlines Company (“Southwest”) under the Americans with Disabilities Act (“ADA”). The case centers around the inaccessibility of Southwest’s web site, Southwest.com, to individuals like Mr. Gumson who are visually impaired and use the Internet through a special software program called a “screen reader.” Some features of Southwest.com make it very difficult for the visually impaired to access using a screen reader. The plaintiffs claim that this limitation places Southwest.com in violation of Title III of the ADA, which requires privately operated “places of public accommodation” to be accessible to disabled individuals. Unfortunately, we are unable to reach the merits of this case, however, because none of the issues on appeal are properly before us. Accordingly, we are constrained to dismiss the appeal. I. The facts and procedural history in this case, which involves the application of Title III of the Americans with Disabilities Act, 42 U.S.C. § 12181, to the Internet web site of Southwest Airlines, Southwest.com, are not in dispute. Southwest Airlines, the fourth-largest American domestic air carrier, first created Southwest.com in April 1996, making it the first major American airline to establish a web site. Now, Southwest.com allows individuals to check fares and schedules, make flight reservations, and learn about Southwest sales and promotions. The web site allows visitors to book reservations for hotels and car rentals. It also allows visitors to obtain transfers between the airport and the hotel, or elsewhere, travel insurance, tickets to local attractions, and other information about destinations. Southwest.com offers a “do it yourself’ reservation system allowing customers to book and pay for airline flights as well as hotel rooms and rental cars. Exclusively through its web site, Southwest offers “click and save Internet specials” that provide weekly discounts on plane tickets, hotel rooms, car rentals, and vacation packages. Southwest.com also offers a “rapid rewards” program that offers incentives to make purchases on the site. According to company factsheets, approximately 46 percent, or over $500 million, of Southwest’s passenger revenue for the first quarter of 2002 was generated by online bookings via Southwest.com. However, none of these revenues apparently came from web surfers with serious vision impairments. Robert Gumson is one of 1.5 million Americans with vision impairments who use the Internet. Being blind, Gumson is unable to use a computer monitor or a mouse. To overcome this difficulty, Gum-son has installed on his computer a “screen reader,” which is an inexpensive software program that converts graphic and textual-information on his monitor into speech that an electronically synthesized voice reads out through the computer’s speakers. Using the screen reader has enabled Gumson to access web browsers, e-mail, and other computer functions. Many sites on the World Wide Web are accessible to the visually impaired by the use of screen readers. Southwest.com, however, is not among them. Its unlabeled graphics, inadequately labeled data tables, online forms inaccessible to the blind, and lack of a “skip navigation link” make it all but impossible for Gumson and other visually impaired individuals to access the features and services of Southwest.com. Because he cannot access Southwest.com, Gumson cannot take advantage of the beneficial services and information available to the site’s visitors. Mr. Gumson and Access Now, Inc., a nonprofit advocacy organization for disabled individuals, brought suit in the United States District Court for the Southern District of Florida, seeking a declaratory judgment that Southwest.com violates (1) the ADA’s communication barriers removal provision; (2) the ADA’s auxiliary aids and services provision; (3) the ADA’s reasonable modifications provisions; and (4) the ADA’s full and equal enjoyment and participation provisions. They asked the district court to enjoin Southwest from continuing to violate the ADA, to order it to make Southwest.com accessible to the blind, and for attorneys’ fees and costs. Southwest moved to dismiss for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted the motion and dismissed the claim with prejudice, finding that Southwest.com is not a place of public accommodation and therefore not covered under Title III. Access Now, Inc. v. Southwest Airlines, Co., 227 F.Supp.2d 1312, 1322 (S.D.Fla.2002). This appeal ensued. II. The case before us hinges entirely on a question of statutory construction, addressing whether Southwest may have violated Title III by making Southwest.com inaccessible to the visually impaired. We review the district court’s dismissal pursuant to Rule 12(b)(6) de novo, applying the same legal standard that the district court did. Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir.2002). Dismissal under Rule 12(b)(6) is appropriate “only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations” of the complaint. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). However, we are unable to reach the merits of the plaintiffs’ claim because, simply put, they have presented this Court with a case that is wholly different from the one they brought to the district court. As we see it, the plaintiffs have abandoned the claim and argument they made before the district court, and in its place raised an entirely new theory on appeal — one never presented to or considered by the trial court. In their complaint before the district court, the plaintiffs alleged: The SOUTHWEST.COM website is a public accommodation as defined by Title III of the ADA, 42 U.S.C. § 12181(7), in that it is a place of exhibition, display and a sales establishment. SOUTHWEST has discriminated and continues to discriminate against Plaintiffs, and others who are similarly situated, by denying access to, and full and equal enjoyment of the goods, services, facilities, privileges, advantages and/or accommodations of their website (SOUTHWEST.COM) in derogation of the ADA. Complaint ¶ 9 (emphasis added). The complaint then detailed the various ways in which the web site was inaccessible to the visually impaired, including, for example, by failing to provide “alternative text” to make it possible for a screen reader program to use and failing to provide accessible online forms. See id. ¶ 10-14. The plaintiffs’ four claims for relief in the complaint all hinged on their inability to access the Southwest.com web site (purportedly a place of public accommodation), without any reference to any connection or “nexus” with any other goods or services (such as travel services) provided by Southwest Airlines. Specifically, Count I alleged that the “website denies access to Plaintiffs through the use of a screen reader and therefore, violates the communications barriers removal provision of the ADA, 42 U.S.C. § 12182(b)(2)(A)(iv), because it constitutes a failure to remove existing communications barriers from the website.” Id. ¶ 18. Count II, in turn, claimed that “Defendant’s website violates the auxiliary aids and services provision of the ADA, 42 U.S.C. § 12182(b)(2)(A)(iii), because it constitutes a failure to take steps to ensure that individuals who are blind are not denied access to the website, and does not provide an effective method of making this ‘visually delivered material available to individuals with visual impairments.’ ” Id. ¶ 22 (citing 42 U.S.C. § 12102(l)(b)). Count III said that “Defendant’s website denying access to the Plaintiffs to use it through a screen reader violates the reasonable modifications provisions of the ADA, 42 U.S.C. § 12182(b) (2)(A) (ii), in that it constitutes a failure to make reasonable modifications to policies, practices and procedures necessary to afford access to the website to persons who are blind.” Id. ¶ 25. Finally, Count IV alleged that “Defendant’s internet website violates the full and equal enjoyment and participation provisions of the ADA pertaining to access to goods and services and advantages offered by SOUTHWEST.COM (42 U.S.C. §§ 12182(a), 12182(b)(1)(A)®, and 12182(b)(l)(A)(ii)), in that it constitutes a failure to make the website fully accessible and independently usable by individuals who are blind.” Id. ¶ 27. All of the counts in the complaint thus focused entirely on the inaccessibility of the web site itself as a place of public accommodation, making no connection between Southwest.com and any other supposed place of public accommodation. Moreover, in their memorandum filed with the district court in response to Southwest’s motion to dismiss, the plaintiffs again reiterated that their Title III claim was based on the simple idea that Southwest.com was itself a place of public accommodation. Thus, one major section heading in the response was entitled “Southwest.com is a ‘Place of Public Accommodation.’ ” Memorandum in Response to Motion to Dismiss Complaint with Prejudice at 3. The plaintiffs began this section noting: “Central to defen dant’s attack is that the Southwest.com website is not a place of ‘public accommodation.’ ” Id. The plaintiffs then attempted to rebut the argument, but notably did not say that Southwest, in arguing that Southwest.com is not a place of public accommodation, had somehow mischar-acterized their argument. Instead, they addressed head-on the website-as-public-accommodation claim, again making it abundantly clear that this was their argument. In a comprehensive order dismissing the case, the district court also focused entirely on the plaintiffs’ argument that the web site itself was a place of public accommodation; indeed, it had no opportunity to address any other claim or argument because that was the only one the plaintiffs presented. In holding that the plaintiffs had failed to state a claim upon which relief could be granted, the district court observed, in a section heading of the opinion, that “Southwest.com is Not a ‘Place of Public Accommodation’ as Defined by the Plain and Unambiguous Language of the ADA.” Access Now, 227 F.Supp.2d at 1317 The court examined the relevant statutory text and ease law supporting this conclusion. See id. at 1317-19. It said that “the plain and unambiguous language of the statute and relevant regulations does not include Internet websites among the definitions of ‘places of public accommodation.’ ” Id. at 1318. According to the district court, “to fall within the scope of the ADA as presently drafted, a public accommodation must be a physical, concrete structure. To expand the ADA to cover ‘virtual’ spaces.would be to create new rights without well-defined standards.” Id. The court determined that the three categories of public accommodation purportedly covered by Title III— “exhibition,” “display,” and “sales establishment”- — -“are limited to their corresponding specifically enumerated terms, all of which are physical, concrete structures.” Id. at 1319. The opinion’s next section was entitled “Plaintiffs Have Not Established a Nexus Between Southwest.com and a Physical, Concrete Place of Public Accommodation.” Id. at 1319. The court came to this conclusion not because the plaintiffs had tried and failed to establish some connection between the web site and a physical location, but rather because the plaintiffs never attempted to establish any such link, instead arguing that no link to a physical location was necessary for a website to be covered by Title III. See id. at 1319-21. The court concluded that “because the Internet website, southwest.com, does not exist in any particular geographical location, Plaintiffs are unable to demonstrate that Southwest’s website impedes their access to a specific, physical, concrete space such as a particular airline ticket counter or travel agency.” Id. at 1321. Accordingly, the district court dismissed the plaintiffs’ complaint with prejudice. Id. at 1322. The' plaintiffs have not appealed from the determination made by the district court that Southwest.com is not a place of public accommodation under Title III. Rather, the plaintiffs have presented a very different theory, one wholly distinct from the' complaint and the arguments presented below. Their appellate brief, for the first time, argues that Southwest Airlines as a whole is a place of public accommodation because it operates a “travel service,” and that it has violated Title III precisely because of the web site’s connection with Southwest’s “travel service.” .Indeed, the plaintiffs’ summary of the argument in the front of their blue brief alleges, for the first time, that “Southwest Airlines is a ‘travel service’ and thereby one of the ADA’s 'covered public accommo dations.” Id. at 9 (emphasis added). The titles of the briefs sections also make this abundantly clear. The overall heading of the plaintiffs’ substantive argument says: “As a public accommodation, Southwest cannot discriminate against persons with disabilities in the provision of travel services offered through their Internet website.” Appellants Brief at 10. Subsection A.1. of the argument asserts that “Title III applies to privileges and services of a public accommodation, even when provided off-site through the Internet.” Id. at 17. Subsection A.2. says: “Although Southwest’s Internet website has a nexus with a physical facility, the ADA nevertheless prohibits discrimination in the prov[i]sion of services of a place of public accommodation.” Id. at 21. Subsection A.3. reads: “The absence of specific mention of services provided off-site does not restrict the ADA’s coverage.” Id. at 24. None of these headings — nor, notably, any of the text that follows — give any hint that the plaintiffs have any intention of rearguing that Southwest.com is itself a place of public accommodation. Rather, they focus on the “travel service” provided by the airline, of which Southwest.com is merely a part, and they now claim that a Title III violation is the result of the connection between the inaccessible web site and the travel service provided by the airline. The plaintiffs expressly say that “the internet ... is a mechanism to take advantage of the goods and services offered by a public accommodation, in this case, a travel service.” Id. at 28. They also claim that “an internet website is merely one device, similar to a telephone, a ticket counter, or a facsimile machine, that Southwest, a public accommodation, uses to place its services in the marketplace.” Id. at 17 (emphasis added). Our problem on appeal is that the new argument depends on critical facts (and a new theory) neither alleged in the complaint nor otherwise presented to the district court. Simply put, the plaintiffs now contend that “there is a sufficient nexus between [Southwest’s] physical ‘facilities’ and their off site internet use to prohibit discrimination.” Id. at 22. To support this claim, the plaintiffs must show that these “physical ‘facilities’ ” exist and that they bear a reasonable “nexus” or connection with Southwest.com that subjects it to the public accommodations requirements of Title III. The plaintiffs say for the first time on appeal that “Southwest is introducing self-service physical kiosks at physical airport facilities in which it operates,” id., and that “Southwest maintains many physical locations throughout the United States, including its headquarters in Texas, and locations throughout airports at its destination cities,” id. at 21. These factual averments were never made in district court. Likewise, the complaint made no reference to the “travel service” category of places of public accommodation, 42 U.S.C. § 12181(7)(F), instead alleging that Southwest.com was a place of public accommodation because it was a “place of exhibition, display and a sales establishment,” see id. § 12181(7)(C), (E), (H). The district court never had the opportunity to consider the merits of the new “nexus” claim, and, indeed, the defendant never had the opportunity to respond to the new allegations. At oral argument, the plaintiffs again focused on their new claim that Southwest Airlines operates a travel service that operates, among other ways, through Southwest.com. Thus, the claim presented to the district court — that Southwest.com is itself a place of public accommodation— appears to us to have been abandoned on appeal, and a new (and fact-specific) theory — that Southwest.com has a “nexus” to Southwest Airlines’ travel service — has been raised for the first time on appeal. For the reasons we detail at some length, we believe it is improper for us. to evaluate the merits of either. III. In the first place, the law is by now well settled in this Circuit that a legal claim or argument that has not been briefed before the court is deemed abandoned and its merits will not be addressed. The Federal Rules of Appellate Procedure plainly require that an appellant’s brief “contain, under appropriate headings and in the order indicated ... a statement of the issues presented for review.” Fed. R. App. P. 28(a)(5). See AAL High Yield Bond Fund v. Deloitte & Touche LLP, 361 F.3d 1305, 1308 (11th Cir.2004) (“BAS argued to the district court that it should have been included in the plaintiff class because it was a purchaser of Notes. It has declined to renew that argument on appeal, and the argument is deemed abandoned as to BAS.”); United States v. Nealy, 232 F.3d 825, 830 (11th Cir.2000) (“Parties must submit all issues on appeal in their initial briefs.”); United States v. Mejia, 82 F.3d 1032, 1036 n. 4 (11th Cir.1996) (same); Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1114 n. 1 (11th Cir.1993) (same); Greenbriar, Ltd. v. City of Alabaster, 881 F.2d 1570, 1573 n. 6 (11th Cir.1989) (same); Fed. Sav. & Loan Ins. Corp. v. Haralson, 813 F.2d 370, 373 (11th Cir.1987) (same). Any issue that an appellant wants the Court to address should be specifically and clearly identified in the brief. As we recently said in United States v. Jemigan, 341 F.3d 1273 (11th Cir.2003): Under our caselaw, a party seeking to raise a claim or issue on appeal must plainly and prominently so' indicate. Otherwise, the issue — even if properly preserved at trial — will be considered abandoned.... Our requirement that those claims an appellant wishes to have considered on appeal be unambiguously demarcated stems from the obvious need to avoid confusion as to the issues that are in play and those that are not. ‘ Id. at 1283 n. 8. If an argument is not fully briefed (let alone not presented at all) to the Circuit Court, evaluating its merits would be improper both because the appellants may control the issues they raise on appeal, and because the appellee would have no opportunity to respond to it. Indeed, evaluating an issue on the merits that has not been raised in the initial brief would undermine the very adversarial nature of our appellate system. As the First Circuit has stated, “[i]n preparing briefs and arguments, an appellee is entitled to rely on the content of an appellant’s brief for the scope of the issues appealed.” Pignons S.A. de Mecanique v. Polaroid Corp., 701 F.2d 1, 3 (1st Cir.1983). Simply put, the plaintiffs’ appellate brief and oral argument have not alleged that Southwest.com is itself a place of public accommodation. As such, we. deem this argument abandoned and do not address its merits. IV. Rather, on appeal, as detailed above, the plaintiffs have advanced, for the first time, a very different theory and argument. Neither the complaint presented to the district court nor the response to the defendant’s motion to dismiss relied upon the “travel service” provision of Title III, 42 U.S.C. § 12181(7)(F), and the plaintiffs did not argue that Southwest Airlines as a whole is or operates a travel service. Nor did the plaintiffs say anything in district court about a physical “nexus” between Southwest.com and some physical location that could qualify as a place of public accommodation. Their failure to do so requires us to address whether we may now consider their “nexus” argument on appeal. This Court has “repeatedly held that ‘an issue not raised in the district court and raised for the first time in an appeal will not be considered by this court.’ ” Walker v. Jones, 10 F.3d 1569, 1572 (11th Cir.1994) (quoting Depree v. Thomas, 946 F.2d 784, 793 (11th Cir.1991)); see also Midrash Sephardi, Inc. v. Tomb of Surfside, 366 F.3d 1214, 1222 n. 8 (11th Cir.2004) (“The district court was not presented with and did not resolve an equal protection argument based on Surf-side’s treatment of private clubs and lodges. Therefore, we will not consider this argument on appeal.”); Lovett v. Ray, 327 F.3d 1181, 1183 (11th Cir.2003) (“Because he raises that argument for the first time in his reply brief, it is not properly before us.”); Hurley v. Moore, 233 F.3d 1295, 1297 (11th Cir.2000) (“Arguments raised for the first time on appeal are not properly before this Court.”); Nyland v. Moore, 216 F.3d 1264, 1265 (11th Cir.2000) (same); Provenzano v. Singletary, 148 F.3d 1327, 1329 n. 2 (11th Cir.1998) (same); FDIC v. Verex Assurance, Inc., 3 F.3d 391, 395 (11th Cir.1993) (same); Allen v. State of Ala., 728 F.2d 1384, 1387 (11th Cir.1984) (same); Spivey v. Zant, 661 F.2d 464, 477 (5th Cir. Unit B Nov.1981) (same); Easter v. Estelle, 609 F.2d 756, 758-59 (5th Cir.1980) (same). The reason for this prohibition is plain: as a court of appeals, we review claims of judicial error in the trial courts. If we were to regularly address questions — particularly fact-bound issues — that districts court never had a chance to examine, we would not only waste our resources, but also deviate from the essential nature, purpose, and competence of an appellate court. In Irving v. Mazda Motor Corp., 136 F.3d 764 (11th Cir.1998), we expressed our concern that “[t]oo often our colleagues on the district courts complain that the appellate cases about which they read were not the cases argued before them. We cannot allow Plaintiff to argue a different case from the case she presented to the district court.” Id. at 769. We share that concern. Plainly, as an appellate court with no fact finding mechanism, and, indeed, without any factual averments made in the trial court, we are naturally hesitant to consider this claim. We also observe that the plaintiffs had every opportunity to raise the new theory in district court, whether in their initial complaint or in an effort to amend their complaint. As best we can tell, at no time did the plaintiffs do so. The argument that the plaintiffs have raised on appeal is not only new, but also one that is highly dependent on specific facts regarding Southwest Airlines’ physi cal locations and “travel service,” and their connections with the Southwest.com web site. _ It is undeniable that these facts were never alleged in a claim presented to the district court; were never explicated in any document or argument before that court; and no discovery was ever conducted about them. As a result, the district court never had an opportunity to make any findings as to the new allegations, and we have nothing to go on other than scattered (and unsupported) factual references in the appellants’ brief before this Court. Thus, it would be improvident for us to try to grapple with the important question whether Southwest Airlines operates a “travel service” and whether Southwest.com has a sufficient “nexus” to that travel service to subject the site to Title III. This question is rendered still more difficult because airlines such as Southwest are largely not even covered by Title III of the ADA. See 42 U.S.C. § 12181(10) (defining the “ ‘specified public transportation’ ” covered by Title. Ill as “transportation by bus, rail, or any other conveyance (other than by aircraft)” (emphasis added)); see also Love v. Delta Air Lines, 179 F.Supp.2d 1313, 1316 (M.D.Ala.2001) (saying that “aircraft are expressly excepted from the statutory definition of ‘specified public transportation’ ”), rev’d, on other grounds, 310 F.3d 1347 (11th Cir.2002). Rather, airplanes and their accompanying terminals and depots are covered by another disability-access statute, the pre-ADA Air Carriers Access Act, 49 U.S.C. § 41705. et seq. (the “ACAA”). Thus, the question whether Southwest owns and operates anything that might fall outside the air travel exemption in Title III is one that would depend on a thorough and meticulously calibrated factual analysis — an analysis that the district court was never asked to perform, and that we are unable to competently perform for the first time on appeal. We recognize that a circuit court’s power to entertain an argument raised for the first time on appeal is not a jurisdictional one; thus we may choose to hear the argument under special circumstances. See Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355, 360 (11th Cir.1984) (saying that the notion that an appellate court will not consider issues not raised before the district court is “not a jurisdictional limitation but merely a rule of practice”). We have permitted issues to be raised for the first time on appeal under five circumstances: First, an appellate court will consider an issue not raised in the district court if it involves a pure question of law, and if refusal to consider it would result in a miscarriage of justice. Second, the rule may be relaxed where the appellant raises an objection to an order which he had no opportunity to raise at the district court level. Third, the rule does not bar consideration by the appellate court in the first instance where the interest of substantial justice is at stake. Fourth, a federal appellate court is justified in resolving an issue not passed on below ... where the proper resolution is beyond any doubt. Finally, it may be appropriate to consider an issue first raised on appeal if that issue presents significant questions of general impact or of great public concern.

153024-12552

OPINION OF THE COURT FUENTES, Circuit Judge. After a jury trial in the Territorial Court of the Virgin Islands, defendant, Alexander Viust, was convicted of one count each of first degree murder and first degree assault. Viust was sentenced to life imprisonment for the murder conviction and a fifteen year term for the assault conviction. On appeal to the District Court of the Virgin Islands, Appellate Division, Vi-ust challenged, among other things, the trial court’s denial of his pretrial motion to suppress evidence against him and the trial court’s denial of his motion for a new trial based on newly discovered evidence. In a per curiam opinion, the Appellate Division affirmed Viust’s conviction. See Anderson v. Gov’t of the Virgin Islands, Crim.App. No.1996-242 (D.V.I.2001). Upon a thorough review of the record on appeal, we discern no error and, therefore, we affirm the judgment of the Appellate Division. I On November 30, 1994, the Government filed an information charging appellant Alexander Viust with murder in the first degree of Malik Meyers and assault with a deadly weapon upon George Van Holten, each in relation to a shooting that took place on January 9, 1994, in the Paul M. Pearson Gardens Housing Complex (“PMP”). The government contended that the shootings were the result of a rivalry between two competing street gangs, the “West Side Posse” and the “Hospital Ground Posse,” and that Robbie Smalls, the leader of the West Side Posse, had ordered the killing of Meyers and Van Holten. The government’s case against Viust relied heavily on the testimony of Viust’s cousin, Danny Guzman. The trial testimony established that on January 8, 1995, Viust, his co-defendant Avery Anderson, Robbie Smalls and one other individual, all members of the West Side Posse, attended a jam session above a Wendy’s restaurant in St. Thomas. At the jam, Viust saw his cousin, Danny Guzman, and told him to leave because “something was going down.” Guzman testified that he saw that the four were armed with guns and so decided to heed Viust’s advice and to leave the area. As he was leaving, he saw the four men, joined by one other, conferring at a street corner. Meanwhile, Meyers and Van Holten, whom the police believed to be members of the Hospital Ground Posse, left the jam and walked toward home, crossing through PMP. Danny Guzman happened to be walking behind the two at some distance. Guzman testified that he next saw Viust and Anderson run toward Meyers and Van Holten as they crossed a basketball court in PMP. Guzman stated that Viust had a gun in each hand, one a 9 mm and the other a 32 caliber, and that Anderson carried a TEK-9, a semiautomatic pistol that uses a 10 to 50 round magazine. Guzman saw Viust run to the bleachers along the basketball court and begin firing while Anderson ran directly behind Meyers and Van Holten and opened fire. Meyers was shot and killed instantly, while Van Holten was shot fifteen times and seriously injured. Immediately after the shooting, Guzman walked away from the basketball court, toward his aunt’s apartment in PMP. As he approached, he ran into Viust, who also lived there. Guzman saw two handguns stuck in Viust’s waistband. Guzman exclaimed, “I just saw what happened.” Vi-ust replied, “I ain’t got nothing to do with it. Partner want to do it by [himjself. Avery (Anderson) deal with it [himjself.” As this shooting was taking place, Smalls, the West Side Posse’s leader, walked up to a truck full of young men in Mandela Circle and shot into it, killing one person and wounding another. Smalls was then shot himself by an off-duty police officer and chased in the direction of PMP. While searching for Smalls, police came upon Meyers and Van Holten, sprawled on the ground near the basketball court in PMP. Homicide Detective Granville Christopher responded to the PMP shooting and then proceeded to the hospital to locate and interview witnesses. In the hospital parking lot, Christopher found about twelve witnesses to the Mandela Circle shooting, standing near the truck into which Smalls had shot. The witnesses began to describe to Christopher what had occurred. They all claimed to have seen a “Spanish or Arab” looking man conferring with Smalls immediately prior to the shooting. While Christopher was speaking to these witnesses, Viust pulled up to the hospital, in a car that Christopher recognized was owned by Smalls. Several of the witnesses immediately identified Viust as the “Spanish or Arab” looking man who had been with Smalls immediately prior to the truck shooting. They yelled to Christopher to “stop the car! Stop the car! That guy was in the shooting!” Based on these statements and his knowledge of recent gang-related activity between the two rival “posses,” Christopher arrested Viust in connection with the Mandela Circle murder. While Viust was in custody, police performed a gunshot residue test on his hands. Although the results of that test were positive, Viust was released soon thereafter. He was later picked up and, in November 1994, was charged with the murder and assault at PMP. II On April 5, 1995, Viust filed a motion to suppress evidence, namely the results of the gunshot residue test. Viust claimed that the police had lacked probable cause when they had initially arrested him for the Mandela Circle truck shooting. As a result, Viust argued, any evidence obtained with regard to that murder was inadmissible as the fruit of an illegal arrest. On March 2, 1996, the Territorial Court denied Viust’s motion to suppress the results of the gunshot residue test. A motion to reconsider that decision was also denied by the Territorial Court. On May 20, 1996, after a seven day jury trial, Viust was convicted, along with co-defendant Anderson, of the murder of Meyers, and of aggravated assault against Van Holten. On May 24, 1996, Viust and Anderson filed a motion for a new trial, pursuant to Fed.R.Crim.P. 33, claiming that the Government had denied them the opportunity to interview, prior to trial, Danny Guzman (“Guzman”), an eyewitness to the shooting, who later testified for the Government at the trial. On July 10, 1996, both Viust and Anderson were sentenced to life imprisonment for the murder charge and fifteen years for the assault charge. On August 9, 1996, Viust moved to “expand and supplement” his motion for a new trial to include allegedly newly discovered evidence. Viust claimed to have only recently discovered the identity of Andrew “Danny” Williams, a friend and co-eyewitness with Guzman to the shooting. Viust also offered Danny’s newly obtained affidavit, containing statements that contradicted Guzman’s testimony. On September 20, 1996, the Territorial Court denied Viust’s motion for a new trial. The Court determined that Viust’s failure to discover “Danny’s” identity prior to trial was due primarily to the defendant’s lack of diligence rather than to any alleged intransigence on the part of the Government. On October 9, 1996, Viust timely filed an appeal to the District Court of the Virgin Islands, Appellate Division. Viust presented four claims, including two that are relevant to this appeal. The District Court rejected all of Viust’s arguments and upheld his conviction by the Territorial Court. III The District Court for the Virgin Islands, Appellate Division, had jurisdiction to review the orders of the Territorial Court under 4 V.I.C. 33. We exercise jurisdiction over Viust’s appeal from the Appellate Division under 48 U.S.C. 1613a (c). Viust now challenges the trial court’s denial of his pretrial motion to suppress evidence and the trial court’s denial of his motion for a new trial based on newly discovered evidence. Our review of a determination of probable cause for a war-rantless arrest or search is made de novo. United States v. Harple 202 F.3d 194, 196 (3d Cir.1999). We review a trial court’s denial of a Rule 33 motion for a new trial based upon newly discovered evidence for abuse of discretion. See Gov’t of the Virgin Islands v. Lima, 774 F.2d 1245, 1250 (3d Cir.1985) IV We turn first to Viust’s contention that the Territorial Court erred in denying his motion to suppress the results of the gunshot residue test. Viust argues, once again, that the police had lacked probable cause when they arrested him for the Mandela Circle shooting and, as a result, evidence taken while Viust was under arrest for that crime was inadmissible as the fruit of an illegal arrest. In reviewing Viust’s motion to suppress, both the District Court and the Territorial Court concluded that, “taken in their totality, the facts and circumstances known to the arresting officer at the time Viust was arrested were sufficient to warrant a prudent person to believe that Viust had committed an offense in connection with the Mandela Circle shooting.” App. at 18. See also Merkle v. Upper Dublin School District, 211 F.3d 782, 789 (3d Cir., 2000) (Probable cause to arrest exists where “[at the time] the arrest [is] made ... the facts and circumstances within the arresting officer’s knowledge and of which they had reasonably trustworthy information were sufficient to warrant a prudent man in believing that” the arrestee had violated the law). After a thorough review of the record, we affirm the rejection of Viust’s motion to suppress the gunshot residue evidence for substantially the same reasons stated by the Territorial Court. We write further on this subject simply to note that this Court has previously concluded that the “knowledge of a credible report from a [single] credible eyewitness” can be sufficient to demonstrate probable cause for a warrantless arrest. Id., at 790. The statements of several of the eyewitnesses to the Mandela Circle shooting identifying Viust, along with Detective Christopher’s prior knowledge of Viust’s affiliations and recent gang-related violence, were more than enough to meet this Circuit’s standard for probable cause. We next address Viust’s contention that the Territorial Court abused its discretion in denying his Rule 33 motion for a new trial that was based upon the allegedly newly discovered evidence, namely the identity and affidavit of “Danny.” In denying Viust’s motion, the Territorial Court noted that the defense had in its possession, at least six months prior to trial, Guzman’s statement that he was with a friend, also named “Danny,” on the night of the shooting. The Court further reasoned that: Defendant Viust could easily have discovered Williams’ identity. The mention of “Danny” in the presence of Guzman on the night of the crimes would [have] implicate[d] Williams, a good friend of both Guzman and Viust, as a plausible choice. Viust knew Guzman was coming to testify against him; therefore, all of Guzman’s statements warranted intense scrutiny for purposes of cross-examination. Thus, the information was available to Viust. Knowing Williams’ identity, how long would it take for someone to find “a good friend of many years” on St. Thomas? App. at 867. Accordingly, the Territorial Court held that Viust had failed to meet his burden for obtaining a new trial based on newly discovered evidence. On appeal, the District Court determined that the record clearly supported the trial court’s finding that Viust’s counsel was served by mail with Guzman’s statements at least six months before trial, and that the defense had ample opportunity to discover the identity of “Danny.” The Court further reasoned that, even assuming that defense counsel did not realize Danny’s identity and significance until Guzman testified at trial, nothing in the record showed that defense counsel either requested or were denied any additional time to locate this supposedly key eyewitness prior to the end of trial. Therefore, the District Court concluded that “given the facts [that were] before the [Territorial Court], we can easily conclude that the trial judge did not abuse his discretion.” App. at 31. We find the analysis of this issue by both the Territorial and the District Court to be well-reasoned and persuasive and we therefore affirm substantially for the reasons stated by each. V In conclusion, we now affirm the decision of the District Court, Appellate Division, for the reasons stated herein. . Fed. R. Crim. P. 33 states, in relevant part: “On a defendant's motion, the court may grant a new trial to that defendant if the interests of justice require. ... A motion for new trial based on newly discovered evidence may be made only within three years after the verdict or finding of guilty.”

3671751-7438

OPINION OF THE COURT FUENTES, Circuit Judge: Percy Dillon appeals the District Court’s partial denial of his motion to reduce his sentence ’ pursuant to 18 U.S.C. § 3582(c)(2). In 2008, the United States Sentencing Commission amended the United States Sentencing Guidelines (“Guidelines”), retroactively reducing the base offense level for crack cocaine offenses. The District Court subsequently entered an order reducing Dillon’s sentence by two-levels, but held that it lacked authority to reduce Dillon’s sentence further. Dillon argues that the District Court erred in failing to recognize that United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005) gave it such authority. For the reasons that follow, we will affirm. I. If Booker did apply in proceedings pursuant to § 3582, Dillon would likely be an ideal candidate for a non-Guidelines sentence. In 1993, Dillon was convicted of conspiracy to distribute more than 500 grams of cocaine and more than 50 grams of cocaine base in violation of 21 U.S.C. § 846; use of a firearm during a drug trafficking crime in violation of 18 U.S.C. § 924(c)(1); and possession with intent to distribute more than 500 grams of cocaine in violation of 18 U.S.C. § 841(a)(1). At the time, the District Court calculated Dillon’s offense level to be 38 and his criminal history category to be II. Dillon received two criminal history points; one for misdemeanor marijuana possession and one for misdemeanor resisting arrest. Thus, Dillon’s Guidelines Range was 322 to 387 months. The District Court sentenced Dillon to the bottom of the Guidelines Range, 322 months. However, the District Court repeatedly stated that it was constrained by the Guidelines to impose what it believed to be an unreasonable sentence. At Dillon’s original sentencing hearing, the District Court noted: “I personally don’t believe that you should be serving 322 months[, b]ut I feel I am bound by those Guidelines ...” App. at 99. The District Court continued: “I don’t say to you that these penalties are fair. I don’t think they are fair. I think they are entirely too high for the crime you have committed even though it is a serious crime.” Id. The District Court also noted that it believed Dillon’s sentence to be unreasonable in its Statement of Reasons: “[T]he guidelines range is unfair to the defendant. The Court, however, is bound by the guidelines range.” App. at 5. Following the change in the crack cocaine offense level, Dillon filed a pro se motion for a sentence reduction. The District Court recalculated Dillon’s offense level to be 36 and reduced Dillon’s sentence to 270 months. Dillon argued that the District Court should apply Booker in resentencing him, but the District Court found that Booker did not apply and that it lacked jurisdiction to do grant more than a 2-level sentence reduction. II. A court generally may not modify a term of imprisonment once it has become final. 18 U.S.C. § 3582(c). However, 18 U.S.C. § 3582(c)(2) provides that: in the ease of a defendant who has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission pursuant to 28 U.S.C. 994(o) ... the court may reduce the term of imprisonment, after considering the factors set forth in section 3553(a) to the extent that they are applicable, if such a reduction is consistent with applicable policy statements issued by the Sentencing Commission. In Booker, the Supreme Court concluded that the Sixth Amendment requires a jury to find the facts that establish a mandatory floor on a defendant’s sentence. 543 U.S. at 229, 244, 125 S.Ct. 738. Following Booker, a sentencing court must calculate a defendant’s Guidelines range, but may only use that range as a starting point for determining a reasonable sentence based on an individualized assessment of the factors set forth at 18 U.S.C. § 3553(a). Gall v. United States, 552 U.S. 38, 128 S.Ct. 586, 596-97, 169 L.Ed.2d 445 (2007). Dillon argues that a district court adjusting a sentence pursuant to § 3582(c) must also treat the amended Guidelines range as advisory, and impose a sentence based on the procedures set forth in the Booker line of cases. We have held that Booker does not effect eligibility for a § 3582(c) sentence reduction. See, e.g., United States v. Doe, 564 F.3d 305 (3d Cir.2009) (holding that defendants’ who received substantial assistance departures below the statutory man datory minimum were not eligible for reduction); United States v. Mateo, 560 F.3d 152, 155 (3d Cir.2009) (holding that defendant sentenced based on career offender Guidelines Range was not eligible for reduction as a result of the crack cocaine amendment). Though, we have not yet written precedentially on whether Booker gives a district court authority to give a defendant who is eligible for a sentence reduction under § 3582 an additional reduction, our reasoning in the eligibility cases also applies in this context. In the context of eligibility for a § 3582 sentence reduction we explained that: Nowhere in Booker did the Supreme Court mention § 3582(c)(2). Because § 3582(c)(2) proceedings may only reduce a defendant’s sentence and not increase it, the constitutional holding in Booker does not apply to § 3582(c)(2). See Booker, 543 U.S. at 244, 125 S.Ct. 738. Additionally, the remedial holding in Booker invalidated only 18 U.S.C. § 3553(b)(1), which made the Sentencing Guidelines mandatory for full sentencings, and § 3742(e), which directed appellate courts to apply a de novo standard of review to departures from the Guidelines. Therefore, Booker applies to full sentencing hearings-whether in an initial sentencing or in a resentencing where the original sentence is vacated for error, but not to sentence modification proceedings under § 3582(c)(2). Not only are sentence modification proceedings sanctioned under a different section of the statute than those at issue in Booker, but the Booker court held that “[w]ith these two sections excised (and statutory cross-references to the two sections consequently invalidated), the remainder of the Act satisfies the Court’s constitutional requirements.” Booker, 543 U.S. at 259, 125 S.Ct. 738. Section 3582(c)(2) contains no cross-reference to § 3553(b) and therefore was not affected by Booker. Nor is there anything else in Booker that directly addresses § 3582(c) proceedings. Nothing in Booker purported to obviate the congressional directive in § 3582(c)(2) that a sentence reduction pursuant to that section be consistent with Sentencing Commission policy statements. The language of § 3582(c)(2) could not be clearer: the statute predicates authority to reduce a defendant’s sentence on consistency] with the policy statement, and the policy statement provides that a reduction is not consistent if the amendment does not have the effect of lowering the defendant’s applicable Guideline range. The Guidelines are no longer mandatory, but that does not render optional statutory directives. Because U.S.S.G. § 1B1.10 is binding on the District Court pursuant to § 3582(c)(2), the District Court correctly concluded that it lacked the authority to further reduce the Appellants’ sentences. Doe, 564 F.3d at 312-14 (internal citations and quotation marks omitted). For the same reasons, we conclude that Booker does not apply to the size of a sentence reduction that may be granted under § 3582(c)(2).

12272037-16087

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AS ' TO GENERICNESS AND ABANDONMENT AFFIRMATIVE DEFENSES AND COUNTERCLAIMS [DOC. 470] BRUCE D. BLACK, SENIOR UNITED STATES DISTRICT JUDGE Plaintiffs, the Navajo Nation, the Navajo Arts and Crafts Enterprise, and the Diñé Development Company (collectively, “Plaintiffs” or “the Nation”) move for dismissal by summary judgment of Defendants Urban Outfitters, Inc.; Urban Outfitters Wholesale, Inc.; Free People of PA, LLC; and Anthropologie, Inc.’s (collectively, “Defendants”) fifth and sixth affirmative defenses, and, in part, their first, third, and fourth counterclaims. [Doc. 470]. These affirmative defenses and, in part, the counterclaims are predicated on the theories that the “Navajo” trademark has become generic or that Plaintiffs have abandoned that mark. Even viewing the evidence in the light most favorable to Defendants, the Court finds there is no admissible evidence in the record to support such affirmative defenses or counterclaims. I. Relevant Facts Defendants contend that the term “Navajo” is now “a generic name or designation for a fashion style or design,” because Plaintiffs have allowed a multitude of third-parties to use that term. [Doc. 499] at 1. According to Defendants, the unauthorized third-party use of the term “Navajo” has caused it to cease to function as an indicator of a single source, and Plaintiffs have, thus, abandoned any rights they may have once had in that term. Id. For example, as to online commerce, Defendants argue, “Of the many dozens of Internet websites cited by Defendants, Plaintiffs can identify only 8 retailers who allegedly used the ‘Navajo’ mark with authorization.” Id. at 6. While only ten trademarks are at issue in this case, Plaintiffs have presented evidence that they currently have over 100 active registered trademarks. D. Harrison Tsosie Deck, [Doc. 246] at ¶¶ 10, 18-22; [Doc. 246-2], Defendants do not challenge the fact that the United States Patent and Trademark Office (“PTO”) approved the registrations at issue without any proof of secondary meaning. [Doc. 295-1]; Michael Licata Deck, [Doc. 320] at ¶ 4. An agency of the federal government, the Indian Arts and Crafts Board (“IACB”), initially filed many of these registrations on behalf of the Nation prior to the passage of the Lanham Act. See [Docs. 182-2, 182-3, 182-4]; Tsosie Deck, [Doc. 246] at ¶ 10; [Doc. 470] at 25. Indeed, in 1980, Congress amended the Lanham Act to specifically provide, “The Indian Arts and Crafts Board will not be charged any fee to register Government trademarks of genuineness and quality for Indian products or for products of particular Indian tribes and groups.” 15 U.S.C. § 1113(b); Lanham Act-Amendments, Pub. L. No. 96-517 (HR 6933), § 5, 94 Stat. 3015 (1980). Among other things, the Indian Arts and Crafts Act (“LACA”) designated the ICAB to police and enforce the Navajo Nation’s trademarks. The LACA, 'thus, effectively became a statute to protect the trademarks of Indian tribes. Congress was concerned enough about the infringement of Indian insignia and trademarks that in 1998 it commissioned the PTO to investigate whether current legal protections were sufficient. 4 McCarthy on Trademarks and Unfair Competition, § 25:67.50 (4th ed.). Acknowledging that there are 500 federally recognized tribes, the PTO issued a 1999 report which concluded inter alia: The IACB (Indian Arts and Crafts Board) should continue its ongoing efforts to publicize the Indian Arts and Crafts Act, as amended in 1990, to inform both Native American tribes and the public of the precise scope, including limitations, of the IACB’s statutory mandate. [AND] In the case of Indian arts and crafts products, existing agencies [DOJ and FBI] already possess legal authority to take enforcement action on behalf of tribes for violations of the Indian Arts and Crafts Act. Id. II. Defendants have failed to Produce Admissible Evidence that “Navajo” is perceived as Generic Defendants have presented no evidence contesting the Plaintiffs’ registrations of the “Navajo” trademark. Indeed, the expert tendered by Defendants, Robert Frank, acknowledged that his very cursory search of the PTO records turned up 35-40 such registrations. [Doc. 706] at 11, 62. While the registration of a trademark does not make it immune to a generic challenge, it does create a substantial barrier for the challenger. If, as in this case, the PTO does not require proof of secondary meaning, a mark is presumed distinctive and valid. 15 U.S.C. § 1115(b) (“To the extent that the right to use the registered mark has become incontestable under section 1065 of this title, the registration shall be conclusive evidence of the validity of the registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce.”); Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964, 976 (10th Cir.2002). Inherently distinctive marks are not generic as a matter of law. Beer Nuts, Inc., 711 F.2d at 939-40. “A mark is generic if it is a common description of products ... and refers to the genus of which the particular product ... is a species.” Donchez v. Coors Brewing Co., 392 F.3d 1211, 1216 (10th Cir.2004) (quoting Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 344 (2d Cir.1999)). “Because a generic mark refers to a general class of goods, it does not indicate the particular source of an item. Consequently, such a mark receives no legal protection and may not be registered alone as a trademark.” Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 939 (10th Cir.1983). See also In re Steelbuilding.com, 415 F.3d 1293 (Fed. Cir.2005) (“A generic term, by definition, identifies a type of product, not the source of the product.”). Rather than arguing “Navajo” represents a particular genus of good of which the particular good at issue here is a species, Defendants contend “the evidence and opinions contained within the Golda-per Expert Report ... demonstrate that the term ‘Navajo’ has become a standalone synonym in the fashion industry to designate a trend or fashion style, a print or color.” [Doc. 499] at 22-23 (internal quotation marks omitted). A “trend or fashion style, a print or color” is not a genus of goods. Moreover, Defendants’ employees and corporate representatives acknowledged that Plaintiffs’ “Navajo” marks are valid trademarks. Defendant Anthropolo-gie, Inc.’s corporate representative also testified that Anthropologie, Inc. personnel knew they had to stop using “Navajo” and they took it off the website. Denise Al-bright Depo., [Doc. 471-1] at 138:15-18. The representative further noted, “They [knew] it’s a trademark. That is very clear.” Id. See also Steven Hartman Depo., [Doc. 243-7] at 526:23-527:3; David Alexander Hayne Depo., [Doc. 471-2] at 210:6-15; Charles Kessler Depo., [Doc. 471-3] at 56:6-9. Defendants’ employees and Fed. R. Civ. P. 30(b)(6) witnesses further testified that “Navajo” is not the primary signifier for a genus of goods, but if anything is a geographic designation. Albright Depo., [Doc. 243-8] at 216:23-218:11 (use random tribe names to describe “Indian” or southwestern style); Kate Brunner Depo., [Doc. 243-9] at 64:14-65:8 (use tribe name “to describe generic southwestern motif.”); Jed Paulson Depo., [Doc. 243-10] at 163:2-8 (tribe name refers to southwestern origin or pattern). As Judge Posner noted, “To determine that a trademark is generic and thus pitch it into the public domain is a fateful step.” Ty Inc. v. Softbelly’s Inc., 353 F.3d 528, 531 (7th Cir.2003). Strong proof is, therefore, required to prove a previously protected mark has become generic. Berner Intern. Corp. v. Mars Sales Co., 987 F.2d 975, 982-83 (3d Cir.1993); V & V Food Products, Inc. v. Cacique Cheese Co., Inc., 683 F.Supp. 662, 669 (N.D.Ill.1988); E.I. DuPont de Nemours & Co. v. Yoshida Intern., Inc., 393 F.Supp. 502, 523-24 (E.D.N.Y.1975). A strict construction of trademark forfeiture is especially appropriate given the origin of the “Navajo” mark and the fiduciary duty the United States owes the Indian Tribes. United States v. Mitchell, 463 U.S. 206, 225, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (discussing fiduciary duty to Indian Tribes). The NCAB, at the direction of the IACA, registered the Nation’s first federal trademarks. Even today, the NCAB continues to police the Nation’s trademarks. In 2013, •for example, Pendleton Woolen Mills, a prominent national purveyor of blankets and jackets, ceased representing products as tribally sourced, and began including an IACA disclaimer, as a result of a settlement with the IACB. See [Doc.182-1], Indeed, the IACB has specifically warned Defendant Free People of PA, LLC in 2012 about its prior use of Indian tribe names without legal authority. [Doc. 181-1]. Defendants rely on Mr. Frank as their expert to create a fact question on whether the Navajo mark has become generic. Mr. Frank created a company to conduct internet and trademark searches in order to advise clients whether a given trademark is available. He is qualified to do that, but the same methodology is ineffective to determine whether a previously registered trademark has become generic. Charrette Corp. v. Bowater Communication Papers Inc., 13 U.S.P.Q.2d 2040, 1989 WL 274417, at *3 (T.T.A.B.1989) (appearance of mark in cases and media articles as evidenced by LEXIS/NEXIS database search report is not proof that third-parties use mark or what impact mark may have on customers in marketplace). Mr. Frank testified that he initially searched the Internet for the terms “Navajo” and “Navaho.” After finding 42 million references to the word “Navajo,” he modified the search to discover whether there is “a fashion trend out there, a Navajo trend, a Navajo style....” [Doc. 706] at 52. “Navajo style” and “Navajo trend” are two of the terms Defendants rely on as the basis for their argument that the “Navajo” brand has become generic. Initially, it must be noted that any attempt to look for “Navajo style” or “Navajo trend” would likely produce acknowledged knock-offs rather than goods similar to Defendants’ which were simply advertised as “Navajo,” e.g., a “Navajo bracelet” or “Navajo cuff.” This indeed was Mr. Frank’s result. Searching publications, he found, for instance, a 1981 Neiman Marcus advertisement referring to a product as “Navajo inspired.” Id. at 53. This description is clearly different than representing an item as a “Navajo” produced product. Mr. Frank then used the Wayback Machine to locate 39 products with “Navajo” in the name during the 2004-2012 time-frame. Id. at 53-54. He further found over 1,000 products with “Navajo” in advertisements for collectibles, jewelry, motors, clothing, and accessories. Id. at 56. From this, Mr. Frank concluded that the Navajo mark had been “diluted and weakened.” He was, however, not willing to say that the term “Navajo” no longer represents an exclusive source for jewelry but reached that conclusion for clothing. Id. at 67-68. Mr. Frank’s use of this technique lacks probative value for deciding whether a name has become generic. The standard to determine whether a name is a generic is not whether the relevant public identifies a trademark with a particular source of a product, but is, instead, whether in the mind of the relevant public the primary significance of the mark is that it is identified with a class of products regardless of the source. Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118, 59 S.Ct. 109, 83 L.Ed. 73 (1938) (plaintiff “must show that the primary significance of the term in the minds of the consuming public is not the product but the producer.”); Creative Gifts, Inc. v. UFO, 235 F.3d 540, 544-45 (10th Cir.2000) (“determinations of gener-icness are resolved under the statutory ‘primary significance’ test” under 15 U.S.C. § 1064(3)). Competitors, therefore, generally do not comprise the relevant public for purposes of determining gener-icness. Park ’N Fly, Inc. v. Dollar Park and Fly, Inc., 718 F.2d 327, 330 (9th Cir.1983), cert. granted, 465 U.S. 1078, 104 S.Ct. 1438, 79 L.Ed.2d 760 (1984) and judgment rev’d on other grounds, 469 U.S. 189, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985), on remand to 782 F.2d 1508 (9th Cir.1986). Mr. Frank’s broad search for “Navajo style” or “Navajo trend” simply does not address whether the relevant public believes that the primary significance of “Navajo,” standing alone, indicates a class of products or a source. Defendants further argue many fashion magazines have frequently referred to “Navajo styles,” “Navajo patterns,” and “dusty Navajo prints.” Basic information found in trade journals is, however, irrelevant to the question of ge-nericness, because that information only indicates what a term means to the producer, not to the consuming public. Community of Christ Copyright Corp. v. Devon Park Restoration Branch of Jesus Christ’s Church, 634 F.3d 1005, 1011-12 (8th Cir.2011) (quoting Anheuser-Busch, Inc. v. Stroh Brewery Co., 750 F.2d 631, 638 (8th Cir.1984)). The genericness test asks what the mark signifies to the relevant public not to industry insiders. Berner Intern. Corp., 987 F.2d at 983; Magic Wand, Inc. v. RDB, Inc., 940 F.2d 638, 641 (Fed.Cir.1991). Moreover, “[a] mixture of uses,” some generic, some not, is insufficient to prove that a term is widely used as a generic name since, again, it is not proof of the public perception of the meaning of the term. Baroness Small Estates, Inc. v. American Wine Trade, Inc., 104 U.S.P.Q.2d 1224, 1228, 2012 WL 4763149, at *5 (T.T.A.B.2012). See also Magic Wand, Inc., 940 F.2d at 641. In sum, Defendants have not produced admissible evidence that the primary significance of the “Navajo” mark to relevant consumers is a class of products like a type of clothing. To the contrary, Defendants’ own executives recognize “Navajo” as a trademark. Summary judgment is, therefore, appropriate as to the genericness affirmative defenses and counterclaims. Argo v. Blue Cross and Blue Shield of Kansas, Inc., 452 F.3d 1193, 1199 (10th Cir.2006) (summary judgment warranted if evidence shows no genuine dispute of material fact and moving party entitled to judgment as matter of law); Sanchez v. BNSF Ry. Co., 976 F.Supp.2d 1265, 1269 (D.N.M.2013) (“There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.”). III. Defendants have failed to Produce Admissible Evidence that Plaintiffs Abandoned the Navajo Mark A defendant may plead abandonment as a defense even against the owner of an “incontestable” federally registered mark. 15 U.S.C. § 1115(b)(2). The Lanham Act defines “abandonment” of a trademark to include its transformation from a distinctive mark into a generic word, if the trademark owner caused or aggravated that transformation by acts or omissions. 15 U.S.C. § 1127. In other words, a mark is abandoned only when all trademark significance is lost. Leatherwood Scopes v. James M. Leatherwood, 63 U.S.P.Q.2d 1699, 2002 WL 257394, at **4-5 (T.T.A.B.2002). As in the determination of genericness, the critical inquiry does not involve the actions of the seller, but the meaning of the usage to the public. DuPont Cellophane Co. v. Waxed Products Co., 85 F.2d 75, 76 (2d Cir.1936), cert. denied, 299 U.S. 601, 57 S.Ct. 194, 81 L.Ed. 443. A defendant asserting abandonment must strictly prove abandonment by clear and convincing evidence. Doeblers’ Pennsylvania Hybrids, Inc. v. Doebler, 442 F.3d 812, 822, (3d Cir.2006), as amended, May 5, 2006 (must “strictly” prove abandonment); Cash Processing Services v. Ambient Entertainment, Inc., 418 F.Supp.2d 1227, 1231-1232, (D.Nev.2006) (Ninth Circuit defines “strictly proved” as requiring clear and convincing evidence). C.f. Standard Oil Co. v. Standard Oil Co., 252 F.2d 65, 78 (10th Cir.1958) (“[Defendants could not excuse their wrongful acts on the ground that another had committed a similar wrong.”).

3604176-19591

DECISION AND ORDER ON MOTION FOR PRELIMINARY INJUNCTION D. BROCK HORNBY, District Judge. Kelly Services, Inc. (“Kelly Services”), an international staffing agency, is attempting to enforce an employment agreement containing non-compete and confidentiality clauses. This case is presented on Kelly Services’ motion for a preliminary injunction against its former employee Erin E. Greene (“Greene”). After analyzing the motion through the familiar four-factor framework, I conclude that Kelly Services falls short of satisfying its burden. The motion for a preliminary injunction is Denied. Procedural Background On January 24, 2008, Kelly Services filed a Verified Complaint claiming this Court’s diversity jurisdiction. The Verified Complaint alleges breach of contract, breach of fiduciary duty, and misappropriation of trade secrets under the Michigan Uniform Trade Secrets Act (“MUTSA”). Verified Compl. ¶¶ 33-56 (Docket Item 1). On that same date, Kelly Services filed a motion for a temporary restraining order and preliminary injunction. PL Kelly Services, Inc.’s Mot. for TRO and Prelim. Inj. (Docket Item 4). The parties subsequently agreed with the United States Magistrate Judge for the matter to pro ceed as a motion for preliminary injunction under Fed.R.Civ.P. 65(a) and to be decided on the papers. (Docket Item 8). Factual Background Kelly Services is a staffing services company incorporated in Delaware, headquartered in Troy, Michigan, and with branches in Maine. Verified Compl. ¶¶ 2, 6, 8. It provides a range of employment staffing and consulting services, including outsourcing, recruitment, and temporary staffing. Id. ¶ 6. Its “customers” or “clients” are companies with employment needs; and it recruits “candidates” to fill those needs. Greene is 24 years old. Aff. of Erin E. Greene, ¶ 1 (Docket Item 11-3), attached to Def. Erin E. Greene’s Opp’n to Pl.’s Mot. for TRO and Prelim. Inj. (“Def.’s Opp’n”) (Docket Item 11). She began working for Kelly Services six months after graduating from college. Id. ¶ 2. She was employed by Kelly Services for more than two years, from the end of 2005 to December 7, 2007, as a “Staffing Supervisor.” Verified Compl. ¶¶ 7-8; Answer and Affirmative Defenses of the Def. Erin E. Greene (“Answer”) ¶¶ 7-8 (Docket Item 10); Greene Aff. ¶¶ 4, 6,14. As a staffing supervisor, Greene serviced and maintained relationships with customers, developed new business, and recruited candidates throughout Cumberland and York Counties in Maine. Verified Compl. ¶¶ 8, 16; Answer ¶¶ 8, 16. Greene’s responsibilities at Kelly Services involved primarily “recruiting white collar office and clerical workers for customers in the insurance and financial industries, as well as smaller local companies needing office staff.” Greene Aff. ¶¶ 7-9. Approximately 75 percent of her work with Kelly Services involved recruiting activities for Anthem Blue Cross/Blue Shield, Unum, and Citigroup Financial — including spending one full year on site at Unum. Id. 118. During this time, Greene “acquired intimate knowledge concerning Kelly’s employees, employee lists, contact information, and training materials.” Verified Compl. ¶ 18; Answer ¶ 18. At the beginning of her employment, Greene signed an agreement containing both non-compete and confidentiality clauses. See Verified Compl., Ex. A. The pertinent parts of the agreement state: (1) Unless required by my job at Kelly, I will never disclose, use, copy, or retain any confidential business information or trade secrets belonging to Kelly, Kelly’s customers, or Kelly’s suppliers. This includes customer and employee lists; sales, service, recruiting and training techniques and manuals; sales and marketing strategies; computer programs; financial data and other similar information. (2) While I am working for Kelly, I will not solicit any of Kelly’s customers or employees for a competing business, and I will not compete against Kelly or associate myself with any Kelly competitor as an employee, owner, partner.... These same limitations apply for one year after I leave Kelly in any market area in which I worked or had responsibility during the past five years of my employment with Kelly. (7) This Agreement will be interpreted and enforced under Michigan Law.... Id. Greene voluntarily resigned from Kelly Services on December 7, 2007. Verified Compl. ¶ 21; Answer ¶ 21; Greene Aff. ¶ 14. At least part of the reason for her resignation were the repeated statements of possible layoffs made by a supervisor at Kelly Services, Scott Miller. See Greene Aff. ¶¶ 11-13. Upon her resignation, Greene informed Kelly Services that she had accepted a job with Maine Staffing Group (“Maine Staffing”). Verified Compl. ¶ 23; Answer ¶ 23; Greene Aff. ¶17. During her employment at Kelly Services, Greene used a variety of proprietary programs and databases that contained confidential information regarding clients, candidates, pricing, and business strategies. Verified Compl. ¶¶ 14-15; Answer ¶¶ 14-15; Aff. of Scott Miller, ¶ 12 (Docket Item 13-3), attached to Pl.’s Reply Br. However, when she left Kelly Services, Greene “retained no document, file or other item that would fall into any of the categories of confidential information” as described in the confidentiality agreement. Greene Aff. ¶ 28. Greene began work for the Portland (Maine) office of Maine Staffing on December 13, 2007, with the title of Staffing Specialist. Id. ¶ 24; Aff. of Mark Burns, ¶ 4 (Docket Item 11-4), attached to Def.’s Opp’n. The Portland office of Maine Staffing “recruits blue collar positions for the construction and trade industries”; it “does not recruit for clients seeking to fill office or clerical positions.” Burns Aff. ¶ 7. Greene’s duties at Maine Staffing “are primarily clerical in nature.” Greene Aff. ¶ 25; Burns Aff. ¶ 5. While employed at Maine Staffing, Greene does not seek new accounts or customers, Burns Aff. ¶ 6, and she has not solicited any business involving white collar (or clerical) personnel or any Kelly Services customer, Greene Aff. ¶¶ 25-27. Greene does not perform any work for Maine Staffing that is related to “recruiting for the financial, insurance or health care industries.” Id. ¶ 29. Greene has not used any protected information from Kelly Services in her position at Maine Staffing. Id. ¶ 28. Preliminary Injunction Analysis A preliminary injunction is “an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997) (quoting 11A Charles A. Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure § 2948 (1995)). As the party requesting the preliminary injunction, Kelly Services must demonstrate each of the following four factors: (1) it will likely succeed on the merits; (2) it will suffer irreparable harm if the injunction is denied; (3) the harm it will suffer outweighs any harm to Greene that would be caused by injunctive relief; and (4) the effect on the public interest weighs in its favor. See Esso Standard Oil Co. v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir.2006); Gorman v. Coogan, 273 F.Supp.2d 131, 133-34 (D.Me.2003). The first two factors — likelihood of success on the merits and a cognizable threat of irreparable harm — are “essential prerequisite[s] for issuance of a preliminary injunction.” See Bl(a)ck Tea Soc’y v. City of Boston, 378 F.3d 8, 15 (1st Cir.2004); Ralph v. Lucent Technologies, Inc., 135 F.3d 166, 170 (1st Cir.1998). (1) Likelihood of Success on the Merits Kelly Services’ motion for a preliminary injunction is premised on its claims for breach of the agreement’s non-compete and confidentiality clauses and violation of the MUTSA. Each of these claims must be addressed in determining the likelihood of success on the merits. The agreement’s choice-of-law clause states that Michigan law applies. Greene does not object to the use of Michigan law, either as to interpretation of the contract or as to application of the MUTSA. See Def.’s Opp’n at 8-12. Thus it is not necessary to make any determination on the choice-of-law issues. (a) Breach of Non-Compete Clause The relevant portion of the non-compete clause applies for one year after Greene left Kelly Services, prohibiting her from associating with any competitor of Kelly Services within the market area that she served while employed by Kelly Services. See Verified Compl., Ex. A. The questions are whether the non-compete clause is enforceable against Greene; and if so, whether Greene breached its terms. Michigan law allows enforcement of non-compete clauses pursuant to statute: An employer may obtain from an employee an agreement or covenant which protects an employer’s reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination of employment if the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business. To the extent any such agreement or covenant is found to be unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement as limited. Mich. Comp. Laws Ann. § 445.774a (West 2008). The enforceability of a non-compete agreement under the Michigan statute depends on whether: (1) it “is reasonably drawn as to its duration, geographical scope, and line of business; and (2) it protects the legitimate business interest of the party seeking its enforcement.” Kelly Servs., Inc. v. Noretto, 495 F.Supp.2d 645, 657 (E.D.Mich.2007). In two separate cases, federal courts in Michigan recently enforced non-compete clauses by Kelly Services identical to the one here. See Kelly Servs., Inc. v. Eidnes, 530 F.Supp.2d 940 (E.D.Mich.2008); Noretto, 495 F.Supp.2d 645. In both Eidnes and Noretto a former high-level Kelly Services employee accepted a comparable position with a competitor in the same market area. The non-eompete clauses were reasonably limited temporally to one year and geographically to the market areas served by the employee during the last five years of employment with Kelly Services. Eidnes, 530 F.Supp.2d at 950-51; Noretto, 495 F.Supp.2d at 657. The non-compete clauses were found enforceable because “Kelly [Services] has a legitimate business interest in restricting its former employee from soliciting its customers and in protecting confidential and proprietary information such as customer lists, profit margins, corporate strategies, and pricing schemes.” Noretto, 495 F.Supp.2d at 657; see Eidnes, 530 F.Supp.2d at 950-51. Even though those two cases enforced identical non-compete clauses, that does not necessarily determine the enforceability of the clause as it applies to Greene. Whether the scope of Greene’s non-compete clause is reasonable must be analyzed not in the abstract, but rather in the specific context of Kelly Services’ legitimate business interests and Greene’s particular knowledge and function. See Whirlpool Corp. v. Bums, 457 F.Supp.2d 806, 812 (W.D.Mich.2006). Greene does not challenge the reasonableness of the temporal or geographic limitations in her non-compete clause. Rather Greene distinguishes her case from Eidnes and Noretto by arguing that Kelly Services has no legitimate interest in preventing her from performing strictly clerical duties for a competitor. Greene argues the non-compete clause should be ruled unenforceable here, because it is overly broad, prohibiting her from working in the staffing industry in any capacity. See Def.’s Opp’n at 11-12. Under Michigan law, “[a] covenant not to compete may not be read to extend beyond an employer’s reasonable competitive business interests.” Whirlpool Corp., 457 F.Supp.2d at 812 (internal quotation marks omitted). Thus, a non-compete agreement may be overly broad if it prohibits an employee from working for a competitor in any capacity. See Ram Prod. Co., Inc. v. Chauncey, 967 F.Supp. 1071, 1092 (N.D.Ind.1997) (applying Michigan law and concluding that a non-compete clause was unreasonable because it prevented a former employee from working “for any business in any capacity if the business competes with [the former employer]”); Superior Consulting Co., Inc. v. Walling, 851 F.Supp. 839, 847 (E.D.Mich.1994) (“A limitation on working in any capacity for a competitor of a former employer is too broad to be enforceable.”); Robert Half Int’l, Inc. v. Van Steenis, 784 F.Supp. 1263, 1273 (E.D.Mich.1991). Greene worked at Kelly Services for approximately two years as a Staffing Supervisor. In that capacity Greene had direct contact with clients and candidates, along with access to a wide array of confidential information. Therefore, Kelly Services has a legitimate interest in preventing Greene from soliciting clients or recruiting candidates in competition with Kelly Services. But the Portland office of Maine Staffing primarily targets clients in different industries than Kelly Services. Greene does not solicit clients in her current position at Maine Staffing. And Greene does not participate in any recruiting of white collar or clerical personnel, which was the market she served while employed by Kelly Services. It is difficult, therefore, to identify any legiti mate business interest that Kelly Services has in preventing Greene from working for Maine Staffing in a clerical/administrative role where she does not solicit any clients or recruit candidates in competition with Kelly Services. See generally Follmer, Rudzewiez & Co. v. Kosco, 420 Mich. 394, 362 N.W.2d 676, 680 n. 4 (1984) (“It has been uniformly held that general knowledge, skill, or facility acquired through training or experience while working for an employer appertain exclusively to the employee.”) (quoting Harlan M. Blake, Employee Agreements Not To Compete, 73 Harv. L.Rev. 625, 652 (1960)). I conclude that Kelly Services has not shown sufficient likelihood that the non-compete clause will be enforceable against Greene. (b) Breach of Confidentiality Clause The confidentiality clause states that Greene will “never disclose, use, copy, or retain any confidential business information or trade secrets belonging to Kelly, Kelly’s customers, or Kelly’s suppliers.” Verified Compl., Ex. A. Kelly Services has presented no evidence that Greene has actually used any of its trade secrets or confidential business information during her employment with Maine Staffing. It has information only about her computer activity while still at Kelly Services (specifically, the transfer of files to a USB drive). See Miller Aff. ¶27 & Ex. L. But its conclusion that Greene took the USB drive to Maine Staffing and used it improperly is pure speculation. It is directly contradicted by Greene’s own sworn statements that she did not retain any protected information from Kelly Services. See Greene Aff. ¶28. Kelly Services has not shown a likelihood of success on its claim that Greene breached the confidentiality clause. (c) Violation of Michigan Uniform Trade Secrets Act The Michigan Uniform Trade Secrets Act, Mich. Comp. Laws Ann. § 445.1901 et seq. (West 2008), allows for an injunction against “[ajctual or threatened misappropriation” of a trade secret. Id. § 445.1903(1). It defines “misappropriation”: “Misappropriation” means either of the following: (i) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means. (ii) Disclosure or use of a trade secret of another without express or implied consent by a person who did [one] or more of the following: (A) Used improper means to acquire knowledge of the trade secret. (B) At the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was derived from or through a person who had utilized improper means to acquire it, acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or derived from or through a person who owed a duty to the person to maintain its secrecy or limit its use. (C) Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. Id. § 445.1902(b). A “trade secret” exists under the MUTSA if the “information de-rivets] independent economic value from not being generally known to others; and ... the employer [took] reasonable steps to protect the confidentiality of the information.” Eidnes, 530 F.Supp.2d at 950-51; Mich. Comp. Laws Ann. § 445.1902(d). An employer’s “pricing schemes, the details of its customer contacts, its markups, [and] employee information” are examples of possible “trade secrets” under the MUTSA. See Eidnes, 530 F.Supp.2d at 951-52. I assume that Greene had access to Kelly Services’ trade secrets. As stated in the preceding section, however, Kelly Services fails to allege any actual misappropriation by Greene. Instead, Kelly Services claims “threatened” misappropriation under the inevitable disclosure theory. See PL’s Mem. at 16-18. Kelly Services relies upon a Seventh Circuit case interpreting Illinois law for this inevitable disclosure theory. Id. at 16 (citing PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir.1995)). Under the inevitable disclosure theory, “a plaintiff may prove a claim of trade secret misappropriation by demonstrating that the defendant’s new employment will inevitably lead him to rely on the plaintiffs trade secrets.” PepsiCo, 54 F.3d at 1269. Kelly Services does not cite any Michigan case adopting the inevitable disclosure theory and does not mention that subsequent to the Seventh Circuit’s decision in PepsiCo, two Michigan courts have limited the inevitable disclosure theory under the MUTSA. In CMI Int’l, Inc. v. Internet Int’l Corp., a Michigan appellate court considered PepsiCo under the MUTSA and concluded: “for a party to make a claim of threatened misappropriation, whether under a theory of inevitable disclosure or otherwise, the party must establish more than the existence of generalized trade secrets and a competitor’s employment of the party’s former employee who has knowledge of trade secrets.” 251 Mich.App. 125, 649 N.W.2d 808, 813 (2002) (suggesting the need for evidence of duplicity beyond simply employment by a competitor). Most recently, a federal court in Michigan shed an even more skeptical light on the inevitable disclosure theory under the MUTSA: the inevitable disclosure “doctrine has never been adopted in Michigan and, even where it has been discussed, it has only been suggested to be applicable to high executives and key designers of the company’s strategic plans and operations.” Degussa Admixtures, Inc. v. Burnett, 471 F.Supp.2d 848, 856 (W.D.Mich.2007). Given that Greene was a fairly junior employee at Kelly Services (and currently serves in a clerical role at Maine Staffing), and Kelly Services’ failure to allege any specific acts of actual or threatened misappropriation, I conclude that Kelly Services has not shown a likelihood of success on its MUTSA claim. (2) Irreparable Harm Kelly Services argues that. Greene should be enjoined because otherwise it could suffer irreparable harm through the loss of “clients and customers, confidential, proprietary and trade secret information, the goodwill and referral business of its clients and customers, and revenues in an amount that cannot be readily ascertained.” Pl.’s Mem. at 8.

1689866-22063

HENLEY, Senior Circuit Judge. Ben Johnson appeals from judgment entered against him by the United States District Court for the Eastern District of Arkansas. Johnson sued Legal Services of Arkansas, Inc. (LSA), Gil Glover, its Executive Director, and the members of LSA’s Board of Directors for race, handicap and retaliatory discrimination under 29 U.S.C. § 794 and 42 U.S.C. §§ 1981, 1983 and 2000e. Johnson’s complaint also included a pendent state claim for intentional infliction of emotional distress. Following a bench trial, the court found in favor of the defendants on all claims. On appeal Johnson contends that the district court made numerous factual and legal errors in considering his claims. We affirm in part and reverse and remand in part with directions. Johnson, a blind black attorney, began working for LSA on July 18,1983 as directing attorney for the Monticello branch office. As will be seen, Johnson’s tenure with LSA was stormy. On March 19, 1984 appellee Gil Glover, the Executive Director of LSA, issued three reprimands to Johnson. Johnson filed charges of discrimination with the EEOC on March 22, 1984. On April 27, 1984, Glover began an investigation of Johnson’s unauthorized handling of cases he retained from private practice. Johnson filed a charge of retaliation with the EEOC on May 2, 1984. On May 8, 1984, Glover terminated Johnson for failure to rid himself of his private cases and for unauthorized representation of non-LSA clients in violation of his employment contract and LSA policy. The Personnel Committee reinstated Johnson at a hearing on May 12,1984, and they gave him sixty days from May 23, 1984 to rid himself of his private cases. Johnson was terminated again on January 12, 1985 when the Personnel Committee determined that he had not complied with the condition of his reinstatement. Johnson subsequently filed another retaliation charge with the EEOC. I. DISCRIMINATION CLAIMS. The three-step burden shifting presentation of proof procedure used in Title VII cases is by now all too familiar. The plaintiff must first prove a prima facie case of discrimination by a preponderance of the evidence. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-58, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973). If the plaintiff succeeds, it then becomes the burden of the defendant to show a legitimate, nondiscriminatory reason for the adverse employment action. Burdine, 450 U.S. at 253, 101 S.Ct. at 1093; Green, 411 U.S. at 802, 93 S.Ct. at 1824. Finally, if the defendant succeeds, the plaintiff must prove by a preponderance of the evidence that the reason given by the defendant for the challenged employment action was pretextual. Burdine, 450 U.S. at 253, 101 S.Ct. at 1093; Green, 411 U.S. at 804, 93 S.Ct. at 1825. A prima facie case of discrimination consists of proof that the plaintiff is a member of a protected class, and that an adverse employment action was taken against the plaintiff in circumstances from which an inference of unlawful discrimination arises. See Burdine, 450 U.S. at 253, 101 S.Ct. at 1093; Green, 411 U.S. at 802, 93 S.Ct. at 1824. An inference of discrimination is commonly raised in these cases by proving disparate treatment. A plaintiff proves disparate treatment by showing that he was treated less favorably than similarly situated employees who are not in plaintiffs protected class. See Boner v. Board of Commissioners, 674 F.2d 693, 696-97 (8th Cir.1982). The same procedure for the order and allocation of proof is used for claims brought under 42 U.S.C. § 1981, Kenyatta v. Bookey Packing Co., 649 F.2d 552, 554 (8th Cir.1981), and for claims brought under 29 U.S.C. § 794 when the defendant has denied considering handicap in an employment action, Norcross v. Sneed, 755 F.2d 113, 116-17 (8th Cir.1985). In reviewing the decision of the district court, we are bound by the “clearly erroneous” standard of Fed.R.Civ.P. 52(a). We cannot hold the district court’s findings of fact to be clearly erroneous unless we are “ ‘left with the definite and firm conviction that a mistake has been committed.’ ” Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541, 92 L.Ed. 746 (1948)). Johnson challenges three adverse employment actions: (1) the three reprimands given to him by Gil Glover; (2) his first termination by Gil Glover; and (3) his final termination by the Personnel Committee. We will review these three actions separately. In a memo dated March 19, 1984 Gil Glover reprimanded Johnson for being sexist, for poor management, particularly with respect to case acceptance, and for insubordination. Johnson contends that these reprimands were groundless and that they were motivated by his race and handicap. The court found that regardless of the merits of the reprimands, there was no evidence in the record to show that they were discriminatorily motivated by Johnson’s race or handicap. We agree. Johnson completely failed to show that with these reprimands he was being treated less favorably in circumstances from which discrimination could be inferred. These reprimands were the product of a bitter dispute between Johnson and Gil Glover in which each party was probably partially right and partially wrong. Disputes generally arise out of mutual misunderstanding, misinterpretation and overreaction, and without more, such disputes do not give rise to an inference of discrimination. Johnson’s only disparate treatment evidence relating to the reprimands goes to the charge that he was a sexist. Johnson contends that David Manley, a sighted white male LSA employee was similarly situated. Michal Garland, a former female LSA employee, reported to Gil Glover that Manley had sexually harassed her, and in addition she filed charges with the EEOC as a result of Manley’s conduct. We agree that Manley appears to have been a sighted non-minority LSA employee similarly situated to Johnson, but Johnson failed to show that Manley was treated more favorably. Indeed, the record contains no evidence of what action, if any, was taken against Manley. Garland testified that she did not know if any action was taken against Manley. Absent proof that Manley was treated more favorably, Johnson has failed to show disparate treatment. While it appears that the three reprimands were somewhat the result of overreaction on Glover’s part and that they may have been inartfully written and a bit overblown, they were not groundless, as claimed by Johnson. In the fall of 1983 two female employees in the Monticello office complained of Johnson’s conduct towards them. These complaints were related to Glover by Barbara Smith, Glover’s Executive Assistant, and by Kay Allen. Although Glover thought that Johnson’s reported conduct was sexist, he chose not to take any action at that time. The problems in the Monticello office were later worked out, and the two female employees stated that they thought the situation was the result of their difficulty in adjusting to Johnson’s handicap. Glover was not immediately informed that these problems had been resolved. When he later concluded that Johnson’s attitude toward women played a part in a late February, 1984 conflict with Jean Turner Carter, a female Little Rock staff attorney, Glover reprimanded Johnson for being sexist. While it was perhaps a bit strong, this reprimand did have some basis in fact. The poor management reprimand dealt mostly with Johnson’s case acceptance practices. Glover reprimanded Johnson for failure to abide by LSA case acceptance policies and for using his own subjective criteria to accept or reject cases. The conflict over case acceptance was well documented in various memoranda, and both Glover and Johnson were probably partially wrong and partially right. This reprimand was not without factual basis. The insubordination reprimand was based on language used by Johnson in several memoranda which Glover perceived to be attacks on himself and LSA. Past memoranda from Johnson had at least insinuated that Glover and LSA were not committed to helping poor blacks. Johnson’s memoranda of late February and early March, 1984 contained accusations that Glover was not treating him fairly. Glover interpreted these memoranda as accusing him of discrimination. While Glover’s reprimand may have been an overreaction to Johnson’s memoranda, it was not groundless. The memoranda showed that Johnson did not take orders or criticism well, and he often used strong language and accusations when he became defensive. He often vehemently challenged Glover’s administrative decisions and was insubordinate. There is no evidence in the record regarding these three reprimands from which an inference of discrimination can be drawn. Thus, we conclude that Johnson failed to make a prima facie case of either race or handicap discrimination with regard to the reprimands, and we find no error of fact or law in the district court’s decision to that effect. As a result of the reprimands, Johnson filed charges of discrimination with the EEOC on March 22, 1984. On May 8, 1984 Glover terminated Johnson for unauthorized representation of non-LSA clients and for failure to rid himself of his cases carried over from private practice. Other grounds stated for the action were Johnson’s failure to cooperate in the investigation of his unauthorized private practice and his past conduct and warnings. Johnson claims that this termination was discriminatorily motivated by his race and handicap. He also contends that Glover terminated him in retaliation for the EEOC charge of March 22. To some extent LSA is governed by federal statutes and regulations. 42 U.S.C. § 2996f(a)(4) states: With respect to grants or contracts in connection with the provision of legal assistance to eligible clients under this subchapter, the Corporation shall— (4) insure that attorneys employed full time in legal assistance activities supported in major part by the Corporation refrain from (A) any compensated outside practice of law, and (B) any uncompensated outside practice of law except as authorized in guidelines promulgated by the Corporation];.] 45 C.F.R. § 1604.3 states: No attorney shall engage in any outside practice of law if the director ... has determined that such practice is inconsistent with the attorney’s full time responsibilities. Section 1604.4 states: A recipient may permit an attorney to engage in the outside practice of law for compensation if § 1604.3 is satisfied, and (a) The attorney is newly employed and has a professional responsibility to close cases from a previous law practice, and does so as expeditiously as possible];.] Section 1604.5 states: A recipient may permit an attorney to engage in uncompensated outside practice of law if 1604.3 is satisfied, and the attorney is acting [on behalf of]: (b) A close friend or family member[.] When Johnson began work for LSA on July 18, 1983 he had forty-six active cases in his private practice. In his employment agreement, Johnson was given three months to dispose of his private cases. Johnson was later given a three-week extension on this deadline, but he failed to rid himself of his private cases. He offered two explanations for his failure to meet the initial deadline. First, Johnson said that his private secretary who was helping him on the cases found other employment. Second, he stated that he had worked out a plan with another attorney, Julius Kearney, whereby Kearney would take over Johnson’s private cases by October 18, 1983. He claimed that Kearney’s acceptance of another job made this arrangement impossible. Kearney testified that he did not remember any arrangement with Johnson, and he further stated that had such an arrangement involving that many cases been discussed, he would remember. In the months following the expiration of Johnson’s three-week deadline extension, he properly requested and received permission from Glover to take particular action in one or two of his cases. On April 23, 1984 Johnson went to Pine Bluff without Glover’s knowledge to try one of his private cases. Glover discovered this unauthorized conduct and in a letter dated April 27, 1984 he informed Johnson that he was going to investigate the matter. A meeting on May 1, 1984 between Glover and Johnson ended in anger before it ever got started, and Johnson was instructed to respond in writing regarding the April 23 trial. On May 2, 1984 Johnson responded in writing to Glover’s investigation and also filed a charge of retaliation with the EEOC. On May 8, 1984 Johnson was terminated. The district court found that Johnson failed to establish a prima facie case of discrimination with respect to this first termination. In the context of race and handicap discrimination, we agree. Johnson claims that throughout his tenure Glover knew that he still had private cases. The record indicates that after the original extended deadline, Johnson requested permission to take particular action in only one or two cases. This was hardly enough to indicate to Glover that Johnson still retained a massive private caseload in violation of his employment agreement and LSA policy. It was only when Johnson violated LSA policy by trying a case for a non-LSA client without permission that Glover discovered Johnson’s continued substantial private practice. Johnson contends that Sam Pope, Larry Dunklin and Jan Scussel were similarly situated LSA employees who were not terminated for representing non-LSA clients. The district court found that these three were not similarly situated to Johnson, and we agree. As stated in his employment contract, Pope was governed by the same rules as was Johnson. Pope had a very small private caseload when he joined LSA. He obeyed all rules in requesting permission from the Director when time away from work was needed for private practice, and he disposed of his private cases very shortly after joining LSA. Larry Dunklin asked for and received permission to represent a close personal friend in a Title VII case in order to save his friend legal fees. Section 1604.5 expressly covers this situation. Scussel had between five and ten private cases when she joined LSA in May of 1984. She had enlisted joint counsel in all but one case. Three months later, in August of 1984, she was asked to submit a report on her private cases. She listed two cases in which she was actively involved, and they were cases in which she was only attempting to collect legal fees. Johnson failed to show that with his May 8, 1984 termination he was treated less favorably than similarly situated employees who were not members of his protected class. He failed to raise in any way an inference of race or handicap discrimination, and he therefore failed to establish a prima facie case of race or handicap discrimination with respect to his first termination. Johnson’s charge of retaliation in connection with his first termination is a more troublesome issue. In order to establish a prima facie case of retaliation under 42 U.S.C. § 2000e-3(a), Johnson needed to show: “(1) statutorily protected participation [in Title VII proceedings]; (2) adverse employment action; and (3) a causal connection between the two.” Womack v. Munson, 619 F.2d 1292, 1296 (8th Cir.1980), cert. denied, 450 U.S. 979, 101 S.Ct. 1513, 67 L.Ed.2d 814 (1981). In testimony that is somewhat unclear, on cross-examination Glover in effect may have admitted that he considered Johnson’s EEOC charges as one factor in making his decision to terminate Johnson. While this admission may have tended to establish a prima facie case of retaliation, the trial court did find that Johnson’s continued private practice was a legitimate, nondiscriminatory, nonpretextual reason for his termination. We find no error in this determination. The district court’s finding that the record contained no evidence of retaliation was, however, in error. Although on direct examination Glover denied discrimination on account of EEOC charges, litigation, race or handicap, in light of his cross-examination Glover may have presented a classic mixed motive case in which an unlawfully discriminatory consideration was a discernible factor in an employment decision. In Womack, we adopted a “same decision” test in mixed motive retaliation cases, but we indicated that the discriminatory consideration had to be a substantial factor in the employment decision before the mixed motive analysis applied. Id. at 1297. Under the Womack test, the employer completely escaped liability if he could show that the same decision would have been made absent the discriminatory consideration. Id. We have since decided Bibbs v. Block, 778 F.2d 1318 (8th Cir.1985) (en banc), in which the “same decision” test was modified for Title VII mixed motive situations. Bibbs can be factually distinguished but its holdings are applicable here. Under Bibbs, in a mixed motive case once a plaintiff establishes that a discriminatory consideration played some part in an employment decision adverse to a claimant, he has established a Title VII violation and is entitled to limited relief, including, as may be appropriate, declaratory or injunctive relief and partial attorney’s fees. Id. at 1323-24. The employer, however, may avoid reinstatement and backpay if he can prove by a preponderance of the evidence that the same decision would have been made absent the discriminatory consideration. Id. at 1324. The district court did not have the benefit of Bibbs when this case was decided nor do its findings adequately and completely cover the Bibbs problem. We therefore remand Johnson’s retaliation claim arising from his May 8, 1984 termination for further consideration. In applying Bibbs to this claim, the court should address Glover’s deposition testimony in which he may have agreed that he had taken Johnson’s EEOC claim into consideration. The court, however, is not bound to accept this testi mony, and, in fact, good reasons exist to doubt its value. Should the court find that retaliation played some invidious part in the May 8, 1984 termination, a violation of Title VII will be established under Bibbs and Johnson will be entitled to limited relief. In that event, the district court should determine whether LSA established by a preponderance of the evidence that the same decision would have been made absent the retaliatory factor. The record contains strong evidence that the same decision would have been made, and in fact later was made, absent consideration of the EEOC charges. Should the court determine that LSA failed to carry this burden, Johnson will be entitled to an appropriate award under the full array of Title VII relief. The court should note that Johnson was reinstated by the Personnel Committee very shortly after this first termination, and any relief awarded in all probability should be minimal. Although no new hearings or evidence appear to be needed for the findings required by this remand, such proceedings are not prohibited. As indicated, Johnson appealed his May 8, 1984 termination to the Personnel Committee. Following a hearing on May 12,1984, the Committee reinstated Johnson conditioned upon his ridding himself of his private cases within sixty days from May 23, 1984. The Personnel Committee was made up of one black female, one black male and one white male. In early June the LSA Board set up a Management Committee to oversee Johnson in order to create a buffer between Glover and him. The Management Committee consisted of one black male and one white male. Johnson attempted to enlist attorney Don Glover as joint counsel on some of his cases, but he still failed to dispose of all of his private cases. As of May 23, 1984 Johnson was sole attorney in ten cases. On July 30, 1984 Johnson reported to the Personnel Committee that he was attempting joint entry with Don Glover on several of the cases. He stated, however, that he still wanted to be active in most of these cases due to Don Glover’s inexperience with Title VII matters. At a hearing on January 12, 1985, almost six months past the sixty-day deadline, the Personnel Committee determined that to a limited extent Johnson was still active in private litigation. They therefore terminated Johnson for failure to comply with the condition of his reinstatement. We have already upheld the district court’s finding that Johnson’s private practice constituted a legitimate, nondiscriminatory, and nonpretextual reason for his termination. Johnson argues that he tried several times to get responses and clarifications from the Personnel Committee, but was unsuccessful. He contends that he did not know that the Committee’s sixty-day deadline was rigid and final. These arguments defy logic. Even though Johnson may have had trouble communicating with the Committee, no one ever told him that he was relieved from the deadline. A conditional reinstatement is very serious, and Johnson violated the condition at his peril. We agree with the district court that Johnson failed to establish a prima facie case of race, handicap or retaliatory discrimination with respect to his final termination. He was given a second chance to comply with LSA policy and he was treated fairly by the Personnel Committee. No inference of unlawful discrimination can be drawn from these circumstances. II. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS. We turn to Johnson’s pendent state claim for intentional infliction of emo tional distress. The district court found that since there was no basis for Johnson’s discrimination claims, there was no support in the record for his claim of intentional infliction of emotional distress. Although to a degree it appears that the court may have used phraseology that unnecessarily tied the discrimination and emotional distress claims together, the result was correct.

3936480-7158

Opinion ROBERT N. OPEL, II, Bankruptcy Judge. Presently before this Court are the Motion of United States Trustee for Summary Judgment and the Motion of John C. Rose for Summary Judgment. For the reasons stated herein, both Motions for Summary Judgment are denied and the matter will proceed to trial. I. Jurisdiction The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and § 157(B)(1) & (2)(a)(b). This is a core proceeding under 28 U.S.C. § 157(b)(2)(J). II. Facts On January 21, 2008, the Debtor, John C. Rose (“Rose”), filed for relief under chapter 7 of the Bankruptcy Code. Prior to the petition date, Rose entered into a series of transactions that are the basis for the United States Trustee’s (“UST”) objection to discharge. Beginning in 2003, Rose began borrowing monies from family, friends and business associates that continued up to September 2007. (Debtor’s Uncontested Statement of Facts, ¶ 18; Response of United States Trustee, ¶ 18). During this time period, Rose operated a branch of Sunset Mortgage which later became Eagle National Bank, and his annual gross income ranged between $35,000.00 and $40,000.00. (Debtor’s Uncontested Statement of Facts, ¶¶ 15, 16, and 19; Response of United States Trustee, ¶¶ 15, 16, and 19). Rose began borrowing to cover losses relating to business expenses and had incurred a substantial amount of personal debt by July 2005. (Rose Tr. p. 103, June 10, 2008). By the time that Rose filed his chapter 7 petition, Rose owed $873,503.00 in unsecured debt to a total of thirty-three creditors. (Debt- or’s Uncontested Statement of Facts ¶ 2; Response of United States Trustee ¶ 2). III. Summary Judgment Standard Summary judgment is governed by Federal Rule of Civil Procedure 56(c) which is made applicable to bankruptcy adversary proceedings by Federal Rule of Bankruptcy Procedure 7056. Summary judgment is appropriate “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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (citing Fed.R.Civ.P. 56(e)). The moving party has the burden of demonstrating that a genuine issue of material fact is absent. Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548. “In evaluating the evidence, ‘a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party’s favor.’ ” Abramson v. William Paterson College of New Jersey, 260 F.3d 265, 276 (3d Cir.2001) (citing Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir.2000)). “[A]t the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Determinations regarding issues of credibility and weighing of evidence are not functions suitable for summary disposition. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505. (“Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict.”). IV. Discussion The complaint in this adversary proceeding was filed pursuant to 11 U.S.C. § 727(a)(2)(A) and is seeking the denial of Rose’s chapter 7 discharge. Section 727(a)(2) allows for a denial of discharge when: 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 transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated or concealed— (A) property of the debtor, within one year before the date of the filing of the petition; or ... (emphasis added) Several elements are required to justify a denial of discharge under § 727(a)(2)(A) including that the debtor “(1) transferred or concealed property; (2) belonging to him; (3) within one year of the bankruptcy filing or after the petition was filed; and (4) with intent to hinder, delay, or defraud a creditor.” In re DiLoreto, 266 Fed.Appx. 140, 144 (3d Cir.2008) (citing In re Dawley, 312 B.R. 765, 782 (Bankr.E.D.Pa.2004)). The elements must be shown by a preponderance of the evidence by the party opposing discharge. In re Zimmerman, 320 B.R. 800, 806 (Bankr.M.D.Pa.2005) (citing Grogan v. Garner, 498 U.S. 279, 289-90, 111 S.Ct. 654, 660, 112 L.Ed.2d 755 (1991)). The intent necessary for a denial of discharge may be found from “inferences drawn from a course of conduct.” Zimmerman, 320 B.R. at 806. Such inferences can be made by considering “badges of fraud.” In re DiLoreto, 266 Fed.Appx. at 144 (referencing In re Watman, 301 F.3d 3, 8 (1st Cir.2002)). Those indicia [of fraudulent intent] include: “ (1) insider relationships between the parties; (2) the retention of possession, benefit or use of the property in question; (3) the lack or inadequacy of consideration for the transfer; (4) the financial condition of the party sought to be charged both before and after the transaction at issue; (5) the existence or cumulative effect of the pattern or series of transactions or course of conduct after the incurring of debt, onset of financial difficulties, or pendency or threat of suits by creditors; (6) the general chro nology of the events and transactions under inquiry; and (7) an attempt by debtor to keep the transfer a secret; ...” In re Watman, 301 F.3d 3, 8 (1st Cir.2002) (citations omitted). In support of his Motion for Summary Judgment, Rose filed affidavits from fifteen unsecured creditors who had made loans to him. (Rose Br. in Supp. of Summ. J., Attach. 1). The affidavits have similar language stating that the creditors were aware that Rose was in financial trouble at the time that the loans were made and that at no time did the lender believe that he or she was “investing in a business enterprise or buying a piece of a ‘for profit’ business or real estate development.” (Rose Br. in Supp. of Summ. J., Attach. 1). Some of the affidavits also included a provision that the creditors were “aware that at least some if not all of the money that [the creditor] was lending would be used to pay other obligations of John C. Rose.” (Rose Br. in Supp. of Summ. J., Attach. 1). In addition, Rose attached a proof of claim and accompanying letter from a creditor, Mary Dean, to further support his Motion. The UST filed an affidavit from Rebecca Plesic, a paralegal, in support of its Motion for Summary Judgment. The affidavit contains numerous factual assumptions and legal conclusions, which ultimately should be determined by the fact finder. In addition, the UST attached spreadsheets categorizing and organizing the transactions in each of Rose’s bank accounts. The UST also provided copies of the “notes” documenting the unsecured loans to Rose. V. Conclusion

3572349-17131

OPINION CHRISTOPHER S. SONTCHI, Bankruptcy Judge. INTRODUCTION Before the Court is an action to avoid and to recover transfers made by the Debtors on behalf of David Huffman, a former employee of the Debtors. The Liquidating Trust initiated this adversary proceeding to recover approximately $330,000 in taxes paid by the Debtors on behalf of Mr. Huffman on the grounds that: (i) the payment of taxes on Mr. Huffman’s behalf was a fraudulent transfer under the Bankruptcy Code and California law; (ii) Mr. Huffman’s failure to reimburse the Debtors was a breach of contract; and (iii) Mr. Huffman was unjustly enriched. The parties have filed cross motions for summary judgment. For the reasons set forth below, there is a genuine issue of material fact as to whether the Debtors actually paid taxes on behalf of Mr. Huffman, which precludes the entry of summary judgment. JURISDICTION This Court has subject matter jurisdiction under 28 U.S.C. § 1334(b). Venue is proper in this district under 28 U.S.C. §§ 1408 and 1409(a). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (E), (H) and (O). PROCEDURAL AND FACTUAL BACKGROUND On August 29, 2001 (“Petition Date”), U.S. Wireless Company (“U.S.Wireless”) and two of its affiliates (collectively, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Under the confirmed plan in these cases, the assets and liabilities of the Debtors were consolidated and transferred to the Liquidating Trust of U.S. Wireless Corporation, Inc., Wireless Location Technologies, Inc., and Wireless Location Services, Inc. (the “Liquidating Trust” or “Plaintiff’). Executive Sounding Board Associates Inc. was appointed as Liquidating Agent (“Liquidating Agent”) for the Liquidating Trust and given the power to object to, liquidate, classify and satisfy all claims against the Debtors’ estates and to prosecute all causes of action on behalf of the Debtors’ estates. Mr. Huffman is a former employee of a subsidiary of the Debtors. Prior to the Petition Date, the Debtors entered into incentive agreements with various employees under which the employees could acquire equity in the Debtors as additional compensation. Mr. Huffman entered into such an agreement (the “Incentive Agreement”) with the Debtors under which he was given stock options and restricted shares. In 1999, Huffman exercised 66,667 of his stock options and received $25,000 in shares, which caused him to earn $925,691.20 in additional compensation, triggering additional aggregate tax obligations of $334,778.64 (the “Additional Taxes”). Mr. Huffman did not pay the Additional Taxes, notwithstanding that he was responsible for the payment under the terms of the Incentive Agreement. The Internal Revenue Code (“IRC”) requires that each employer establish a special “941 account” to hold payments made by employers to satisfy employees’ withholding obligations. The amounts paid into a “941 account” must be regularly reported to the IRS, which are then harmonized with each employee’s W-2. Initially, the Debtors failed to include extra earnings caused by the exercise of stock options on the employees’ W-2 forms. Following an audit, however, the Debtors were advised to file an amended IRS Form 941 (Support Statement to Correct Information) and to set aside the additional withholding taxes in a 941 account. On the eve of the Petition Date, the Debtors transferred a lump sum of $1,453,055.41 to a 941 bank account to reflect the adjusted necessary tax obligations owed to the IRS on behalf of numerous key employees. Included on the Debtors’ submitted list of the key employees was Mr. Huffman. Shortly thereafter, in November, 2001, the Debtors sent a letter to Mr. Huffman notifying him that he was ultimately responsible for the full tax obligations arising from his exercise of stock options, regardless of the Debtors’ previous failure to report the extra income on Mr. Huffman’s 1999 W-2 form. In December, 2001, the IRS notified the Debtors that the Debtors had overpaid $652,228.14 into the Debtors’ 941 account. Subsequently, the Debtors requested that this overpaid amount be applied to satisfy the additional withholding tax obligations resulting from the amended W-2s and 941 forms related to the exercise of stock option, among the subject of which was Mr. Huffman. In August, 2003, the Liquidating Trust commenced this action against Mr. Huffman through which it seeks to avoid and recover $334,778.64 made as fraudulent transfers made to and/or on behalf of Mr. Huffman. Following a protracted series of procedural delays, in October, 2007, Mr. Huffman filed a Motion for Summary Judgment. In response, the Liquidating Trust filed its Cross-Motion for Summary Judgment. Briefing is complete and this matter is ready for disposition. LEGAL DISCUSSION I. Summary Judgment Standard Rule 56(c) of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Rule 7056 of the Federal Rules of Bankruptcy Procedure, directs that summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Summary judgment is designed “to avoid trial or extensive discovery if facts are settled and dispute turns on issue of law.” Its purpose is “to pierce the boilerplate of the pleadings and assay the parties’ proof in order to determine whether trial is actually required.” Furthermore, summary judgment’s operative goal is “to isolate and dispose of factually unsupported claims or defenses” in order to avert “full-dress trials in unwinnable cases, thereby freeing courts to utilize scarce judicial resources in more beneficial ways.” When requesting summary judgment, the moving party must “put the ball in play, averring an absence of evidence to support the nonmoving party’s case.” In order to continue, the burden shifts to the nonmovant to identify “some factual disagreement sufficient to deflect brevis disposition.” Not every discrepancy in the proof, however, is enough to forestall a properly supported motion for summary judgment; the “disagreement must relate to some genuine issue of material fact.” In other words, the summary judgment standard “provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.” In order to demonstrate the existence of a genuine issue of material fact in a jury trial, the nonmovant must supply sufficient evidence (not mere allegations) for a reasonable jury to find for the nonmovant. The same principles apply in a bench trial where the judge is the ultimate trier of fact; the nonmovant must obviate an adequate showing to the judge to find for the nonmovant. At the summary judgment stage, the court does not “weigh the evi dence and determine the truth of the matter;” rather, the court determines “whether there is a genuine issue for trial.” A material fact is one which “could alter the outcome” of the case. It is genuine when it is “triable,” that is, when reasonable minds could disagree on the result. Importantly, all reasonable inferences must be drawn in favor of the nonmoving party and any doubt must be read in favor of the nonmovant. The requirement that the movant supply sufficient evidence carries a significant corollary: the burden of proof is switched to the non-movant who “must present definite, competent evidence to rebut the motion.” Such evidence “cannot be conjectural or problematic; it must have substance in the sense that it limns differing versions of the truth which a factfinder must resolve at an ensuing trial.” Furthermore, evidence that “is merely colorable or is not significantly probative” cannot deter summary judgment. In response, “the non-moving party must adduce more than a mere scintilla of evidence in its favor;” it cannot simply reassert factually unsupported allegations contained in its pleadings. In other words, the non-moving party must do more than “simply show that there is some metaphysical doubt as to the material facts.” Conversely, in a situation where there is a complete failure of proof concerning an essential element of the nonmoving party’s case, Rule 56(c) necessarily renders all other facts immaterial and mandates a ruling in favor of the moving party. Finally, the standards under which to grant or deny summary judgment do not change because cross-motions are filed. Each party still bears the initial burden of establishing a lack of genuine issues of material fact. When faced with cross-motions for summary judgment, the court must consider each motion independently. Moreover, although it maybe implied from the filing of a cross-motion that the parties agree that no material issues of fact exist, “the court is not bound by this implicit agreement and is not required to enter a judgment for either party.” II. Mr. Huffman’s Motion for Summary Judgment Must Be Denied Mr. Huffman argues that summary judgment should be entered in his favor because there is no proof that the Debtors paid the Additional Taxes on his behalf. Mr. Huffman refers to the issue of whether the Debtors paid the Additional Taxes on his behalf as the “lynchpin” of this adversary proceeding. He further argues that the Liquidating Trust can, at best, establish that a) Mr. Huffman was one of the many employees of the Debtors that received restricted stock or stock options; and b) the Debtors transferred a bulk amount of money to the IRS. Mr. Huffman’s argument relies on the proposition that since an essential element of the Liquidating Trust’s case in chief is missing, summary judgment must be entered on Mr. Huffman’s behalf. He further argues that the documents upon which the Liquidating Trust attempts to rely to meet that burden are inadmissible hearsay. Huffman’s argument fails because there is a genuine issue of fact which needs to be resolved, namely, whether the Liquidating Trust, in fact, paid the Additional Taxes on Huffman’s behalf. The Liquidating Trust has produced sufficient evidence to signal the Additional Taxes may have been paid by the Liquidating Trust on behalf of Mr. Huffman. The documents produced in discovery and in response to Mr. Huffman’s motion demonstrate that the nominal burden at the summary judgment stage has been met by the Liquidating Trust. The documents list Mr. Huffman among the individuals who exercised stock options and, at least by inference, that the sum of money paid to the IRS may have included payment on behalf of Mr. Huffman. It is important to note that the ultimate factual issue is not before the Court at this point. As long as there remains a factual doubt, such doubt must be read in favor of the Liquidating Trust. Thus, the Court duly gives credence to the Liquidating Trust’s documentary proffer. Since Mr. Huffman has not shown a complete lack of proof, the case does not rest solely on a determination of a legal issue; therefore, Huffman’s motion for summary judgment must be denied. III. The Liquidating Trust’s Motion for Summary Judgment Must Be Denied In response to Mr. Huffman’s motion, the Liquidating Trust rebuts that Mr. Huffman “merely attempts to create the illusion that there are factual issues in dispute via ipse dixit assertions” and that “Huffman cannot even submit a ‘mere scintilla of evidence’ supporting his position.” In contrast, the Liquidating Trust argues that it has produced “irrefutable” evidence that the Debtors paid the Additional Taxes on Mr. Huffman’s behalf. Furthermore, relying on Orson, Inc. v. Miramax Film Corp., the Liquidating Trust argues that Mr. Huffman must proffer some evidence in support of his position, which he has not done; hence, summary judgment should be entered in favor of the Liquidating Trust. The Liquidating Trust’s arguments are not convincing. The evidence produced by the Liquidating Trust may be significant, but it is not irrefutable. In order to conclude that Huffman has, in fact, benefited from the Liquidating Trust’s payment to the IRS, an inference would have to be drawn to link two fairly distinctive facts. Just because Huffman is on a list of people who exercised stock options that triggered additional tax obligations and the Liquidating Trust paid money to the IRS does not mean that a transfer has been made by the Debtors for Mr. Huffman’s particular benefit. On the basis of the record before the Court at this stage, it would be inappropriate on a motion for summary judgment for the Court, in effect, to hypothesize that the Debtors paid the Additional Taxes on Mr. Huffman’s behalf. The factual gap is too wide. Moreover, there is lack of specificity as to the exact amounts owed by Mr. Huffman to the IRS and paid by the Debtors into the special 941 account for each particular individual. It is vital to separate the alleged payment on Mr. Huffman’s behalf from the payments on behalf of the many other individuals on the list. After all, documents indicate one bulk payment to the IRS and nothing that would otherwise unambiguously show that it was the specific objective of the Liquidating Trust to satisfy Mr. Huffman’s particular tax obligation triggered by his exercise of stock options. Additionally, the Liquidating Trust does not sufficiently credit Mr. Huffman’s argument; Mr. Huffman has presented considerably more than a scintilla of evidence to support his position. His allegations are serious because unless the Liquidating Trust is able to prove all essential elements of the case, including the specific payment of the Additional Taxes on Mr. Huffman’s behalf, the Liquidating Trust cannot prevail. Importantly, Mr. Huffman’s proposition is duly entitled to the Court’s credence on summary judgment and any doubts must be read in his favor. Therefore, genuine factual issues remain for the Court to determine at trial. For these reasons, summary judgment in the Liquidating Trust’s favor is also improper. CONCLUSION For the foregoing reasons, there is a genuine issue of material fact as to whether the Debtors actually paid taxes on behalf of Mr. Huffman, which precludes the entry of summary judgment on behalf of either party. ORDER For the reasons set forth in the Court’s opinion of this date, the Defendant’s Motion for Summary Judgment [D.I. 67] and the Liquidating Trust’s Cross Motion for Summary Judgment [D.I. 69] are DENIED. . This Opinion constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. . More specifically, the Additional Withholding Taxes consist of $260,867.94 in federal income tax, $4,501.20 for social security, $13,509.23 for Medicare, and $55,900.27 in California income tax. . IRC § 941. . Fed.R.Civ.P. 56. . 11-56 Moore’s Federal Practice, § 56.02 (Matthew Bender 3d ed.). . Mesnick v. General Electric Co., 950 F.2d 816, 822 (1st Cir.1991), cert. denied, 504 U.S. 985, 112 S.Ct. 2965, 119 L.Ed.2d 586 (1992) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)). . Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). . Mesnick, 950 F.2d at 822. . Celotex Corp., 477 U.S. at 325, 106 S.Ct. 2548. . Mesnick, 950 F.2d at 822. . Id. . Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). . United States v. Jamas Day Care Ctr. Corp., 152 Fed.Appx. 171, 173 (3d Cir.2005) (quoting Olson v. GE Astrospace, 101 F.3d 947, 950 (3d Cir.1996) (citing Coolspring Stone Supply, Inc. v. American States Life Ins. Co., 10 F.3d 144, 148 (3d Cir.1993))). See also Mesnick, 950 F.2d at 822. ("... 'genuine' means that the evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party [and] 'material' means that the fact is one that might affect the outcome of the suit under the governing law”). . Leonard v. General Motors Corp. (In re Headquarters Dodge), 13 F.3d 674, 679 (3d Cir.1993) ("A fact is material if it might affect the outcome of the case, and an issue is genuine if the evidence is such that a reasonable factfinder [sic] could return a verdict in favor of the nonmovant.”). See also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ("Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial”). . Argus Mgmt. Group v. GAB Robins, Inc. (In re CVEO Corp.), 327 B.R. 210, 214 (Bankr.D.Del.2005) (quoting Anderson, 477 U.S. at 249, 106 S.Ct. 2505). . Id. at 210 (citing Horowitz v. Federal Kemper Life Assurance Co., 57 F.3d 300, 301 (3d Cir.1995)). . UPMC Health Sys. v. Metro. Life Ins. Co., 391 F.3d 497, 502 (3d Cir.2004) (citing Suders v. Easton, 325 F.3d 432, 435 n. 2 (3d Cir.2003)). See also Interim Investors Comm. v. Jacoby, 90 B.R. 777, 780 (W.D.N.C.1988), aff'd, 914 F.2d 1491 (4th Cir.1990); In re Holzinger, 89 B.R. 529, 530 (Bankr.E.D.Pa.1988); and In re Pashi, 88 B.R. 456, 457 (Bankr.N.D.Ga.1988).

11710029-9649

PER CURIAM: Paul A. Bilzerian appeals the district court’s order applying collateral estoppel in the Securities and Exchange Commission’s (SEC) action to except a debt from discharge in bankruptcy. The district court found that Bilzerian’s previous criminal conviction for securities fraud, combined with a civil judgment requiring Bilzerian to disgorge fraudulently obtained profits, satisfied the requirements for application of 11 U.S.C. § 523(a)(2)(A), which excepts from discharge in bankruptcy debts for money obtained by fraud. Bilzerian also raises a constitutional challenge to the grant of exception from discharge. We affirm. FACTS Bilzerian was convicted of federal securities fraud for his failure to properly report his stock transactions with two corporations, Cluett, Peabody & Company, Inc. (Cluett) and Hammermill Paper Company (Hammer-mill). The securities laws require investors who commence a tender offer of a publicly traded company to make certain disclosures to the SEC in order to inform investors about any potential takeover attempt. Bilze-rian did not file the required disclosures in a timely fashion, and his disclosures were misleading because he listed as “personal funds” money he had actually borrowed. He also failed to disclose that he had entered into an accumulation agreement with a broker. As a result of Bilzerian’s misleading disclosures, Cluett and Hammermill believed that Bilzeri-an posed a credible threat to mount a hostile takeover, and they sought the aid of friendly “white knights,” who eventually outbid Bilze-rian. Bilzerian then sold his shares in Cluett and Hammermill for a substantial profit. In 1989, Bilzerian was convicted of nine counts of. securities fraud for violations of § 10(b) of the Securities Exchange Act of 1934, which is the general anti-fraud provision of the securities laws. Subsequently, the SEC brought civil proceedings against Bilzerian to force him to disgorge his fraudulently obtained profits. The district court for the District of Columbia found that, on the basis of his criminal conviction, Bilzerian was collaterally estopped from challenging the civil action and ordered Bilzerian to disgorge approximately $33 million plus interest. The D.C. Circuit Court upheld the civil judgment. During the litigation in the district court, Bilzerian filed for bankruptcy. After the disgorgement award was upheld, the SEC sought to except the disgorgement award from discharge in bankruptcy under § 523(a)(2)(A) on the ground that it was a debt for money obtained by fraud. The SEC argued that the doctrine of collateral estop-pel compelled a decision in their favor. The bankruptcy court disagreed, holding that the SEC did not have standing to pursue a § 523(a)(2)(A) claim, and that the complaint failed to state a claim because obtaining illegal profits was not part of § 523(a)(2)(A). The district court reversed, holding that because Bilzerian owed the SEC money, it had standing to pursue exception from discharge. On remand, the bankruptcy court granted summary judgment for Bilzerian, holding that the previous judgments against Bilzeri-an did not meet the loss and reliance requirements of § 523(a)(2)(A). The district court again reversed, finding all elements of collateral estoppel well established in the record. Bilzerian appeals the district court’s order reversing the bankruptcy court. DISCUSSION This court reviews the bankruptcy court’s order independently of the district court, reviewing conclusions of law de novo and factual findings under a clearly erroneous standard. The bankruptcy court found that “this Court is satisfied that there are no genuine issues of material fact, and now the only remaining question is whether the SEC is entitled to a judgment as a matter of law based on the undisputed facts.” Section 523(a)(2)(A) of the Bankruptcy Code excepts from discharge in bankruptcy any debt “for money ... to the extent obtained by ... false pretenses, a false representation, or actual fraud.” We agree with the district court that Bilzerian’s debt is one for money, and that the disgorgement judgment was designed to remedy fraudulent behavior. Bilzerian owes the SEC a judgment in the form of money. It is well established that the term “debt” in the Bankruptcy Code encompasses a “right to payment,” and that this includes a money judgment entered by a court of competent jurisdiction. The question in this case is whether a criminal conviction for securities fraud, combined with a civil disgorgement judgment in favor of the SEC, satisfies the requirements of collateral estoppel for determining “fraud” under § 523(a)(2)(A). Collateral estoppel requires that: (1) the issue be identical in both the prior and current action; (2) the issue was actually litigated; (3) the determination of the issue was critical and necessary to the judgment in the prior action; and (4) the burden of persuasion in the subsequent action not be significantly heavier. Because discharge under § 523(a)(2)(A) only requires proof by a preponderance of the evidence standard, only the first three elements are disputed in this ease. Courts have generally interpreted § 523(a)(2)(A) to require the traditional elements of common law fraud. A creditor must prove that: (1) the debtor made a false representation to deceive the creditor, (2) the creditor relied on the misrepresentation, (3) the reliance was justified, and (4) the creditor sustained a loss as a result of the misrepresentation. Elements one and three are eas- fly met, because Bilzerian’s criminal conviction for securities fraud established that he made a false statement on which a reasonable investor would have relied. The District of Columbia district court found that Bilzerian had violated the reporting requirements of the securities laws, specifically, “Exchange Act § 10(b) by engaging in fraudulent activity with respect to the purchases and sales of Cluett and Hammermill securities.” The issues in this case, then, are whether the other two elements, loss and actual reliance, were critical to the previous litigation and resolved in favor of the SEC. Common law fraud and securities fraud have traditionally had related but distinct causation requirements. Whereas common law fraud requires proof of loss and reliance, securities fraud has substituted the concept of “materiality.” Rule 10b-5 makes it unlawful to “employ any device, scheme, or artifice to defraud ... make any untrue statement of a material fact” or “engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.” As the district court recognized, courts require proof of causation and. loss as elements of a private cause of action based on violations of Rule 10b-5. While some courts have not required proof of actual reliance in SEC enforcement actions, we nevertheless believe that the causation requirement of “materiality” in Rule 10b(5) satisfies the requirement for actual reliance necessary to apply collateral estoppel in a § 523(A)(2)(A) case. Any other decision would conflict with the general principles behind § 523(a)(2)(A). This court has taken an expansive view of “debts obtained by fraud” because “the malefic debtor may not hoist the Bankruptcy Code as protection from the full consequences of fraudulent conduct.” . In appealing the disgorgement award, Bil-zerian' argued that disgorgement was not proper because no one was injured by his fraudulent schemes. Although the D.C. Circuit Court stated that whether his actions injured others was irrelevant, the court found that “others were injured by Bilzerian’s deceptions — investors paid Bilzerian an inflated price for his stocks because of his illegal actions.” The injured parties are identifiable — the “white knights” West Point Peppe-rell and International Paper Company. We affirm the district court’s holding that collateral estoppel prevents Bilzerian from challenging the SEC’s action to except the discharge of his debt in bankruptcy. Bilzerian also raises constitutional objections, claiming that an order holding the disgorgement judgment nondisehargeable would violate the Double Jeopardy Clause and would constitute an excessive fine in violation of the Eighth Amendment. These constitutional claims are groundless. A civil remedy following criminal conviction only constitutes “punishment” for purposes of the Double Jeopardy Clause when it is so severe or so unrelated to remedial goals that it amounts to a second criminal punishment. While the fraud exception to discharge does have a deterrent goal, it is clearly not “punitive,” because Bilzerian’s disgorgement was explicitly limited to profits resulting from illegal conduct. Moreover, exception from discharge in bankruptcy is not an excessive fine because it is not disproportionate to the wrongful conduct it was designed to remedy. The district court’s ruling is AFFIRMED. . United States v. Bilzerian, 926 F.2d 1285 (2d Cir.), cert. denied, 502 U.S. 813, 112 S.Ct. 63, 116 L.Ed.2d 39 (1991). . SEC v. Bilzerian, 29 F.3d 689 (D.C.Cir.1994). . In re Bilzerian, 196 B.R. 907 (Bankr.M.D.Fla.1996). . In re Bilzerian, 1996 WL 885850 (M.D. Fla. Oct 22, 1996). . In re Bush, 62 F.3d 1319, 1322 (11th Cir.1995). . In re Bilzerian, 196 B.R. at 910. . 11 U.S.C. § 523(a)(2)(A). . Cohen v. de la Cruz, — U.S. -, -, 118 S.Ct. 1212, 1216, 140 L.Ed.2d 341 (1998). . See St. Laurent, II v. Ambrose, 991 F.2d 672, 678-79 (11th Cir.1993). . In re Bilzerian, 100 F.3d 886, 892 (11th Cir.1996), cert. denied, - U.S. -, 118 S.Ct. 1559, 140 L.Ed.2d 791 (1998).

12271179-18880

MEMORANDUM & ORDER GORTON, Judge. This case arises from a dispute concerning a mortgage on property located at 89 Pimlico Pond in Mashpee, Massachusetts (“the property”). A motion to dismiss filed by defendants Ditech Financial, LLC, f/k/a Green Tree Servicing, LLC (“Ditech”), Mortgage Electronic Registration Systems, Inc. (“MERS”) and the Bank of New York Mellon, f/k/a the Bank of New York as Trustee for the Certificate Holders of CWABS, Inc. Asset-Backed Certificates, Series 2005-17 (“BNY Mellon”) is pending before the Court. For the reasons that follow, the motion will be allowed. I. Background Thomas Harry, Jr. and Gretchen Harry (collectively, “plaintiffs”) took title to the mortgaged property in 2002. In November, 2005, plaintiffs refinanced their property with a loan of approximately $245,000 from Countrywide Home Loans, Inc. (“Countrywide”) that was secured by a mortgage in favor of MERS. Bank of America, N.A. (“BANA”) was the original servicer of the loan. In October, 2011, MERS assigned the mortgage to BNY Mellon which then retained Ditech to service the loan. - In plaintiffs’ view, Countrywide engaged in “predatory table funding lending” by using “bait [and] switch” tactics. Plaintiffs claim that Countrywide “induce[d] them into an alleged loan that they couldn’t afford”,- charged “excessive” fees and never notified them of their right to' rescind. They also allege that the “title documents” do not match “what actually happened on Wall Street’s secondary market”. Plaintiffs further assert that the mortgage is void because, while the note and mortgage list the lender as “Countrywide Home Loans, Inc.”, the United States Department of Housing and Urban Development Settlement Statement (“HUD Statement”) describes the lender as “Countrywide Home Loans Corporation”. As does the mortgage, the HUD Statement dates back to November, 2005 and is signed by plaintiffs. They also contest the assignment of the mortgage from MERS to BNY Mellon, contending that signatures by “illegal robo-signer[s]” render it void. Plaintiffs admit that they made payments on the note only from January, 2006 through November, 2009. In August, 2011, plaintiffs received a letter from Harmon Law Offices (“Harmon”) stating that Harmon had been instructed to foreclose on their property on behalf of BNY Mellon. In November, 2011 Harmon filed a complaint on behalf of BNY Mellon in the Massachusetts Land Court Department of the Trial Court. By December 23, 2011, plaintiffs had retained counsel who disputed the foreclosure. In February, 2014, Ditech provided plaintiffs with a notice of default and in March, 2015, Harmon again notified plaintiffs that it was going to foreclose on the property on behalf of BNY Mellon and Ditech. Plaintiffs responded by sending a notice of rescission under the Truth in Lending Act, 15 U.S.C. § 1635 (“TILA”). Ditech, in turn, sent plaintiffs copies of various mortgage-related documents, including an unsigned loan application for $257,000. Plaintiffs assert that they did not complete that application and that it was part of a scheme to defraud them. Thereafter, in September, 2015, Harmon yet again served plaintiffs with a notice of foreclosure, and in March, 2016, plaintiffs filed a complaint in Massachusetts Superi- or Court seeking, inter alia, quiet title, to have the note declared null and void, to have the mortgage “released”, to have their TILA rescission enforced and to recover damages. The Massachusetts Superi- or Court allowed an ex parte motion for the recording of a lis pendens that same month. In April, 2016 defendants BANA, Countrywide and Bank of America Corporation removed the case to this Court on the basis of federal question jurisdiction. In October, 2016, plaintiffs moved to enjoin BNY Mellon and Ditech from foreclosing on the property. After a hearing on that motion, this Court denied it. Defendants Ditech, MERS and BNY Mellon (collectively, “defendants”) have now moved to dismiss plaintiffs’ claims pursuant to Fed. R. Civ. P. 12(b)(6). That motion is the subject of this memorandum and order. IV. Defendants Ditech, MERS and BNY Mellon’s Motion to Dismiss A. Legal Standard To survive a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), a complaint must contain “sufficient factual matter” to state a claim for relief that is actionable as a matter of law and “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 667, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible if, after accepting as true all non-conclusory factual allegations, the court can draw the reasonable inference that the defendant is liable for the misconduct alleged. Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011). A court may not disregard properly pled factual allegations even if actual proof of those facts is improbable. Id. Rather, the relevant inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw. Id. at 13. When rendering that determination, a court may not look beyond the facts alleged in the complaint, documents incorporated by reference therein and facts susceptible to judicial notice. Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011). B. Application Throughout their complaint, plaintiffs assert that their mortgage is void, the unsigned loan application for $257,000 proves that defendants committed fraud and the assignment of their mortgage contains signatures from illegal “robo-sign-ers”. Plaintiffs’ complaint also includes 11 specific counts based on 1) the Racketeer Influenced and Corrupt Organization Act (“RICO”), 18 U.S.C. §§ 1961-1965, et seq., 2) expiration of the statute of limitations, 3) the Massachusetts Consumer Protection Act, M.G.L. ch. 93A (“Chapter 93A”), 4) the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., 5) the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., 6) submitting false statements with respect to a loan application. in violation of 18 U.S.C. § 1014, 7) TILA, 15 U.S.C. § 1601, et seq., 8) slander of title, 9) fraud in the concealment, 10) rescission enforcement and quiet title and 11) lack of standing. According to plaintiffs, the statutes of limitations should be equitably tolled with respect to all of their claims and therefore defendants are equitably estopped from raising statute of limitations defenses. Defendants respond that, with the exception of the FDCPA and enforceability claims, all of plaintiffs’ claims are time barred and that plaintiffs have failed plau-siblyto allege equitable tolling or estoppel. In defendants’ view, the FDCPA claim and enforceability claims also fail as a matter of law. 1. General Allegations Based on the HUD Statement, the Second Loan Application and Robo-Signing First, plaintiffs claim that, because their HUD Statement mistakenly identified the lender as “Countrywide Home Loan Corporation”, when the lender’s correct name, as reflected on the note and mortgage, is “Countrywide Home Loans, Inc.” the mortgage is void. This contention is ludicrous. First of all, defendants are attempting to enforce the mortgage, not the HUD Statement. Second, clerical errors in forms tangential to a mortgage do not nullify the forms or the mortgage. See Kassner v. Chase Home Fin., LLC, No. 11-cv-10643-RWZ, 2012 WL 260392, at *4, *10 (D. Mass. Jan. 27, 2012) (finding a notice of the right to cancel form valid even though it listed a different address than the one on the mortgage). Third, the HUD Statement is signed by plaintiffs and dated November 22, 2005. Accordingly, as addressed below, the statute of limitations has expired for any claims based upon the HUD Statement. Plaintiffs’ claim that Countrywide cannot issue loans in Massachusetts is untenable as well. See, e.g., Frappier v. Countrywide Home Loans, Inc., No. 09-cv-11006-DJC, 2013 WL 1308602, at *1 (D. Mass. Mar. 31, 2013), aff'd, 750 F.3d 91 (1st Cir. 2014) (finding that a mortgage that Countrywide issued in Massachusetts was enforceable). Plaintiffs’ complaint also repeatedly refers to a second loan application for $257,000 that was completed but never signed. Defendant Ditech sent that loan application, along with other information, to plaintiffs in March, 2015. Plaintiffs allege that the unsigned application shows that defendants committed fraud but that application is irrelevant to plaintiffs’ attempt to prevent the foreclosure on the valid $245,000 mortgage. As explained below, even if it were relevant, claims based upon the $257,000 loan application are also time-barred because it dates back" to November, 2005. Moreover, assuming arguendo, that the $257,000 loan application was somehow pertinent to plaintiffs’ claims, they have failed plausibly to allege equitable tolling because equitable tolling is applicable only where the prospective plaintiff did not have, and could not have had with due diligence, the information essential to bringing suit. Protective Life Ins. Co. v. Sullivan, 425 Mass. 615, 635, 682 N.E.2d 624 (1997). Plaintiffs have been represented by counsel since December, 2011, and there is no evidence that defendants concealed the loan application. Indeed, they sent it to plaintiffs of their own accord. To obtain the application plaintiffs simply needed to exercise “due diligence” in requesting the documents related to their mortgage. They failed to do so and, consequently, the statute of limitations is not equitably tolled based on the second loan application. The second loan application is, nevertheless, troubling.. It is unclear whence it came or why it existed. Yet plaintiffs must state a plausible claim upon which relief can be granted to survive a motion to dismiss and they have failed to do so with respect to the $257,000 loan application. The last general allegation involves recurring references to “illegal robo-sign-ers” throughout the complaint. Plaintiffs make the conclusory assertion that such signatures render the assignment of the note to BNY Mellon void. As the First Circuit Court of Appeals has determined, “the bare allegation of ‘robo-signing’ does nothing to undermine the validity of [an] Assignment_” Wilson v. HSBC Mortg. Servs., Inc., 744 F.3d 1, 14 (1st Cir. 2014). Thus, the allegations of robo-signing also fail to state a claim upon which relief can be granted. 2. Counts I Through XI Taking the claims seriatim, defendants’ contention that plaintiffs have failed to state claims upon which relief can be granted is correct. First, plaintiffs RICO claim has expired. The statute of limitations for a claim pursuant to RICO is four years after the plaintiff discovers or should have discovered the injury. In re Celexa & Lexapro Mktg. & Sales Practices Litig., 65 F.Supp.3d 283, 289 (D. Mass. 2014). The basis of plaintiffs’ claims is the mortgage that they granted in November, 2005, more than ten years before plaintiffs filed suit. For that reason, Count I fails to state a claim upon which relief may be granted, Second, plaintiffs’ allegation that the statute of limitations has expired for defendants to foreclose on the mortgage is frivolous. Pursuant to the plain language of M.G.L. c. 260 § 33, the right to foreclose expires five years after the mortgage matures. Accordingly, because the mortgage had a 30-year term, the statute of limitations for enforcing it does not expire until 2040. Plaintiffs’ third claim is that defendants’ acts violated M.G.L. c. 183C, 266 and 268, thus giving rise to a claim pursuant to Chapter 93A. The purported violations of M.G.L. c. 266 and 268 fail to state a claim because those are criminal statutes and do not support civil causes of action. See M.G.L. c. 266, 268; Urbon v. JPMorgan Chase Bank, N.A., No. 12-cv-10303-RWZ, 2013 WL 1144917, at *4 (D. Mass. Mar. 18, 2013). Furthermore, any claim pursuant to Chapter 93A is time-barred because the statute of limitations for such claims is four years. A decade has elapsed since plaintiffs signed the mortgage. Latson v. Plaza Home Mortg., Inc., 708 F.3d 324, 326-27 (1st Cir. 2013). In Count IV, plaintiffs allege that defendants BAÑA, BNY Mellon and Di-tech violated- the FDCPA, 15 U.S.C. § 1692 but plaintiffs have failed to state a claim with respect to the FDCPA for two reasons. First, that statute covers debt collection, not the enforcement of a security interest such as a mortgage. Speleos v. BAC Home Loans Servicing, L.P., 824 F.Supp.2d 226, 232-33 (D. Mass. 2011). Second, the statute of limitations for an FDCPA claim is one year so any claim based on that statute has long since expired. Brown v. Bank of America, Nat. Ass’n., 67 F.Supp.3d 508, 518-19 (D. Mass. 2014). Plaintiffs’ fifth and sixth claims allege violations of RESPA, 12 U.S.C. § 2601, and 18 U.S.C. § 1014. Although those claims are brought against only defendant Countrywide, because defendants Ditech, MERS and BNY Mellon briefly address them in their motion to dismiss, the Court will deal with them as well. Plaintiffs’ RESPA claim is time-barred because claims under that statute expire after either one or three years. 12 U.S.C. § 2614; McDermott v. Mortg. Elec. Registration Sys., Inc., No. 08-cv-12121-GAO, 2009 WL 1298346, at *3 (D. Mass. May 11, 2009). Plaintiffs have not stated a viable civil claim pursuant to 18 U.S.C. § 1014 because that is a criminal statute. 18 U.S.C. § 1014; see also Savini Constr. Co. v. Crooks Bros. Constr. Co., 540 F.2d 1355, 1358 (9th Cir. 1974). Counts VII and X allege violations of TILA, 15 U.S.C. § 1601. Pursuant to TILA, a borrower may rescind a loan within three years of 'its issuance if his principal dwelling provides the collateral and the lender fails to make specified disclosures. In re Sheedy, 801 F.3d 12, 19 (1st Cir. 2015). Assuming, arguendo, that the lender failed to make the disclosures required by TILA, the right to rescind terminated three years after the transaction and thus seven years before plaintiffs filed suit. Id. at 19-20. Plaintiffs’ contention that their attempted TILA rescission automatically voided the contract is also erroneous. Large v. Conseco Fin. Servicing Corp., 292 F.3d 49, 54 (1st Cir. 2002) (“Neither the [TILA] statute nor the regulation establishes that a borrower’s mere assertion of the right of rescission has the automatic effect of voiding the contract.”). Plaintiffs also allege slander of title, Count VIII, and fraud in the concealment, Count IX. According to plaintiffs, the slander of title first occurred when the mortgage was recorded and recurred when the 2011 assignment was signed by “illegal robo-signers”. The statute of limitations for a slander claim is three years, and thus, even if the claim arose in connection with the assignment, it has expired. See Harrington v. Costello, 467 Mass. 720, 724-25, 7 N.E.3d 449 (2014). With .respect to fraud in the concealment, that doctrine does not provide an independent cause, of action. Rather, it tolls the statute of limitations if the wrongdoer ... concealed the existence of a cause of action through some affirmative act done with intent to deceive[.] Abdallah v. Bain Capital LLC, 752 F.3d 114, 119-20 (1st Cir. 2014) (quoting Massa chusetts Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 239 (1st Cir.2005)); see also M.G.L. c. 260 § 12. The plaintiffs have alleged no active deception. On the contrary, defendants willingly communicated with plaintiffs throughout the many years that elapsed between the purported misconduct and the filing of the complaint. Furthermore, the doctrine of fraudulent concealment does not toll the statute of limitations if “the plaintiff has actual knowledge of the facts giving rise to his cause of action.” Abdallah, 752 F.3d at 119-20 (quoting QLT, 412 F.3d at 239). Plaintiffs had knowledge of the facts giving rise to their cause of action when they entered into the mortgage in November, 2005. Furthermore, they retained counsel to represent them with respect to the mortgage by December, 2011. Accordingly, the doctrine of fraudulent concealment does not toll the statute of limitations for plaintiffs’ claims. Whether plaintiffs attempted to allege an independent count of fraud is unclear. To the extent they did so, it is time-barred because fraud claims expire after three years in Massachusetts. Stolzoff v. Waste Sys. Int’l, Inc., 58 Mass.App.Ct. 747, 755, 792 N.E.2d 1031 (2003). Moreover, a fraud claim requires a showing that defendants 1) falsely represented material information, 2) did so knowingly, 3) with the intention of inducing reliance and 4) plaintiffs detrimentally relied upon it. Cumis Ins. Soc’y, Inc. v. BJ’s Wholesale Club, Inc., 455 Mass. 458, 471, 918 N.E.2d 36 (2009). Plaintiffs have not plausibly alleged that they relied to their detriment upon the mortgage, the loan application for $257,000 or the incorrect name in the HUD Statement. Finally, Count XI asserts that defendants do not have standing to create a loan, collect money from plaintiffs or foreclose on the property because they committed fraud and the mortgage is void. As reiterated above, plaintiffs have failed to state a viable fraud claim and the mortgage is not void. Accordingly, Count XI fails to state a claim. 3. Purported Tolling of Statutes of Limitations Plaintiffs contend that the various statutes of limitations applicable to their claims are equitably tolled and that their claims are subject to equitable estoppel. Plaintiffs are mistaken. With respect to their Massachusetts claims, the Commonwealth recognizes the doctrine of equitable tolling only if the plaintiff could not have procured the information necessary for filing a claim with “due diligence.” Sullivan, 425 Mass. at 635, 682 N.E.2d 624. A plaintiff who wishes to rely on equitable tolling “will be held to a duty of reasonable inquiry.” Id. Plaintiffs have failed to meet those requirements. They were represented by counsel as of December, 2011 demonstrating that, at the very latest, they were then aware of possible claims. Plaintiffs should have exercised due diligence by asking defendants for documents related to the mortgage at that time. They didn’t, and furthermore, they delayed filing any claim until March, 2016, more than five years after they retained counsel and ten years after they granted the mortgage at issue. Accordingly, equitable tolling does not apply to plaintiffs’ claims. As for the federal claims, the First Circuit Court of Appeals considers five factors for equitable tolling: (1) lack of actual notice of the filing requirement; (2) lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one’s rights; (4) absence of prejudice to the defendant; and (5) a plaintiff’s reasonableness in remaining ignorant of the filing requirement.

7412943-7825

OPINION OF THE COURT ROTH, Circuit Judge: Theodore Sabarese was sentenced to a term of imprisonment by the United States District Court for the District of New Jersey after being sentenced to a term of probation by the United States District Court for the Eastern District of Pennsylvania. He now challenges the New Jersey prison sentence claiming that, pursuant to the United States Sentencing Guidelines, a subsequent sentence for a related offense must be imposed concurrently. He argues that the New Jersey district court was constrained by § 5G1.3 of the Guidelines, read in conjunction with 18 U.S.C. § 3564(b), to impose either a probationary term or a prison sentence of no longer than 30 days. Finding no merit in Sabarese’s challenge, we will affirm the New Jersey district court’s sentence. I. Sabarese played a key role in a scheme to defraud financial institutions by obtaining loans that exceeded the market value of the boats and airplanes financed. Sabarese was convicted after a trial in Pennsylvania on a two-count indictment charging him with making false statements on loan applications in order to obtain financing for nonexistent yachts. Thereafter in Pennsylvania, Sa-barese entered a guilty plea on a one-count indictment that had been returned against him in Connecticut. The Connecticut case had been transferred to the Eastern District of Pennsylvania where the judge sentenced Sabarese on the two Pennsylvania counts and the one Connecticut count. Under the Sentencing Guidelines, Sa-barese could have been sentenced by the Pennsylvania court to a prison term of 24 to 30 months. The presentence investigation report (“PSI”) noted Sabarese’s involvement in the “related” New Jersey scheme. The district court in Pennsylvania agreed that the conduct in New Jersey was related, which allowed the judge to elevate the offense conduct level by two points. Upon motion of the Government, however, the judge granted a substantial downward departure and sentenced Sabarese to concurrent five-year probationary terms, conditioned on three months house arrest and a payment of restitution in the amount of $1,170,511. Before being sentenced in Pennsylvania, Sabarese pled guilty to the charges brought against him in New Jersey. The New Jersey indictment charged Sabarese with a total of thirty counts: one count of conspiracy, six counts of bank fraud, and twenty-three counts of wire fraud. These counts stemmed from a conspiracy to obtain financing for airplanes. The New Jersey judge concluded that the airplane fraud was not related to the boat fraud in Pennsylvania. Under the Sentencing Guidelines, Sa-barese could have been sentenced to prison for a term of 24 to 30 months for the New Jersey convictions. However, because of Sa-barese’s substantial assistance, the Government again moved for a downward departure. The New Jersey district court granted the Government’s motion, sentencing Sa- barese to sixteen months imprisonment, three years supervised release, and restitution totalling $439,000. II. Sabarese’s principal argument is that the language of § 561.3 of the Guidelines required the district court in New Jersey to impose a sentence that would run concurrently with the sentence imposed in the Eastern District of Pennsylvania. The parties agree that the 1988 version of the Guidelines applies in this case. In 1988, § 5G1.3 provided: If at the time of sentencing, the defendant is already serving one or more unexpired sentences, then the sentences for the instant offense(s) shall run consecutively to such unexpired sentences, unless one or more of the instant offense(s) arose out of the same transactions or occurrences as the unexpired sentences. In the latter case, such instant sentences and the unexpired sentences shall run concurrently, except to the extent otherwise required by law. U.S.S.G. § 5G1.3 (Oct.1987). Sabarese claims that the district court in New Jersey was' bound by the finding in the Eastern District of Pennsylvania that the fraud schemes were “relevant and related.” He argues that the term “relevant and related” is defined in § 1B1.3 of the Guidelines and should be construed as being synonymous with the phrase “a[rising] out of the same transactions or occurrences” of § 5G1.3. He then contends that the “relevant and related” finding in the Eastern District of Pennsylvania, taken together with the language of § 5G1.3, mandates a sentence that would run concurrently with Sabarese’s unexpired Pennsylvania probationary term. Sabarese next turns to 18 U.S.C. § 3564(b) and argues that the only type of sentence which can run currently with a sentence of probation is a sentence of imprisonment for less than thirty days or a sentence of probation. Section 3564(b) provides in pertinent part: “A term of probation does not run while the defendant is imprisoned in connection with a conviction for a Federal, State, or local crime unless the imprisonment is for a period of less than thirty consecutive days.” 18 U.S.C. 3564(b). Combining this language with his § 5G1.3 argument, Sabarese concludes that the district judge was constrained by the Guidelines and § 3564(b) to impose a sentence of imprisonment of less than thirty days imprisonment or a sentence of a concurrent probationary term. We disagree. We hold that the district judge in New Jersey was not so confined in imposing sentence by the provisions of § 3564(b). This section merely clarifies that a term of probation will run only during a concurrent term of probation or during a sentence of imprisonment of less than 30 consecutive days. Section 3564(b) does not require that a subsequently imposed sentence be of any certain term or of any particular type, such as a sentence of incarceration, of a fine, of community confinement, or of probation. There is no reason to believe that either Congress or the Sentencing Commission intended § 5G1.3 and § 3564(b) to be read in a conjunctive or restrictive manner. Moreover, the use of the term “sentence” in § 5G1.3 clearly refers to a sentence of imprisonment. Otherwise, the language of § 5G1.3 would make no sense. A sentence imposing a fine cannot run concurrently or consecutively with a sentence of 12 months imprisonment. Moreover, even if the Pennsylvania and the New Jersey offenses were considered to arise from the same transaction or occurrence, the Guidelines provision in § 5G1.3 could not trump the statutoiy provision of § 3564(b). See United States v. Nottingham, 898 F.2d 390, 393 (3d Cir.1990). Indeed, even if the offenses did arise from the same transaction or occurrence, the “except to the extent otherwise required by law” language of § 5G1.3 would incorporate by reference into § 5G1.3 the provision of § 3564(b) that a term of probation may not run concurrently with a sentence of imprisonment (unless that sentence of imprisonment' is for less than 30 consecutive days). If the term of imprisonment cannot run concurrently with the sentence of probation, the terms of imprisonment and of probation will have to run consecutively. It is distorted logic to interpret § 3564(b) to permit a sentence, imposed pursuant to a two-count indictment, to limit a sentence, imposed on the basis of a thirty-count indictment, simply because the two-count indictment was tried first. We reach this conclusion whether the offenses are “related” or not. We conclude, therefore, that the sentence of the sixteen month term of imprisonment was properly imposed by the district court in New Jersey and that Sabarese must serve that term; his sentence to three years of supervised release will then run concurrently with the five-year probationary term imposed in the Eastern District of Pennsylvania. III. For the foregoing reasons, the judgment of sentence imposed on Sabarese by the New Jersey district court will be affirmed.

4241554-20410

McLAUGHLIN, District Judge. The defendant is being prosecuted under Title 18, U.S.C., Paragraph 284. That paragraph reads as follows: “Whoever, having been employed in any agency of the United States, including commissioned officers assigned to duty in such agency, within two years after the time when such employment or service has ceased, prosecutes or acts as counsel, attorney, or agent for prosecuting, any claims against the United States involving any subject matter directly connected with which such person was so employed or performed duty, shall be fined not more than $10,000 or imprisoned not more than one year, or both. June 25, 1948, c. 645, 62 Stat. 698, amended May 24, 1949, c. 139, § 7, 63 Stat. 90.” The indictment consists of 2 Counts. - The charges in the indictment are that on two occasions, both within two years after the time- defendant’s employment in the Department of Justice had ceased defendant had violated the above statute in that on both occasions he “acted as counsel” for certain named companies “for prosecuting a claim against the United States involving a subject matter directly connected with which” the defendant “had been employed and performed duty while employed in the Department of Justice,” as aforesaid. In the First Count the following allegation is set forth: “That is to say that said Herbert A. Bergson, at the time and place aforesaid pursuant to an established procedure of the Department of Justice, acting as counsel for The Minnesota' Mining and Manufacturing Company and The Carborundum Company, by oral and written representations and arguments, sought to obtain from the said Department of Justice on behalf of The Minnesota Mining and Manufacturing Company and The Carborundum Company the issuance by said Department of an antitrust merger clearance letter which would state in substance that should the Minnesota, Mining and Manufacturing Company acquire the assets of The Carborundum Company the Department of Justice would not take any action pursuant to the established procedures of the antitrust laws to test the legality of the acquisition if it were consummated, in the manner outlined to the Department .of Justice by the Minnesota Mining and Manufacturing Company and The Carborundum Company.” In the Secound Count the following allegation is set forth: “That is to say that said Herbert A. Bergson at the time and place aforesaid pursuant to an established procedure of the Department of Justice, acting as counsel for the United States Pipe Line Company, by oral and written representations and arguments, sought to obtain from the said Department of Justice on behalf of the United States Pipe Line Company the issuance by said Department of an antitrust clearance letter (variously known as a ‘Railway release letter1 and a ‘Railroad release letter’) which would state in substance that should the United States Pipe Line Company effectuate a proposed plan for -the construction and operation of certain pipe lines, the Department of Justice would not institute criminal proceedings against the United States Pipe Line Company under the antitrust laws if it were effectuated in the manner outlined to the Department of Justice by said Company.” The Motion of judgment for Acquittal foy defendant filed pursuant to Rule 29 of the Federal Rules of Criminal Procedure, 18 U.S.C.A., involves two main grounds — 1) that the conduct charged against defendant and the evidence in support of that charge do not involve claims against the United States or the prosecution of claims against the United States, and 2) that the conduct charged .and the evidence in support thereof was not conduct involving a subject matter directly connected with the defendant’s former government employment. The questions posed in this motion are: 1. What is the meaning of the term “claims against the United States” as used in Title 18 U.S.C. § 284. 2. What is meant by the term “any subject matter directly connected with which such person (that is a person who had ceased employment in any agency of the Government within 2 years) was so employed or performed duty” as used In said Title 18 U.S.C. § 284. 3. Does or does not the evidence establish that the defendant acted as counsel for the prosecution of claims against the United States in violation of the foregoing statutory provision? It is hornbook in connection ■with this motion that the evidence and all implications thereof are to be construed most strongly against movant. The general rule likewise applies that penal statutes are to be construed strictly. It is the province of the Court, and the duty and responsibility of the Court to construe this Statute and in doing so it is further the province, duty and responsibility of the Court to determine the meanings of the words used in the Statute. That duty does not involve the task of determining such meanings as an abstract matter. The Court is not called upon to conduct an experiment or solve a problem in clinical linguistics or semantical metaphysics. We are dealing with a concrete law which states things which a person is prohibited, under penalty of punishment from doing. The Court’s duty is to determine word meanings realistically; to determine the meaning of the words, not as words standing alone, but the meaning of words as used in the Statute which the Court is called upon to interpret and construe in order that the Court may in turn so interpret and construe the meaning of the Statute. This is not only the law. It is as well plain common sense — and in saying this the Court does not by any means wish to be understood to suggest that there is any difference or distinction between what is the law and what is common sense. In any event the construction of statutes is not a contest, a game to be played. Especially is this true as to Criminal Statutes, upon the determination of the meaning of which depends what acts are prohibited to be done by living persons. Both the public, that is society at large — those potentially chargeable with a violation of law, and those actually charged therewith are vitally interested in the question as to just what the law, the statute, means. The general rule or criterion which the Court should apply in determining the meaning of a statute are set out in the opinion of the Supreme Court in the case of United States v. American Trucking Associations, 310 U.S. 534, 60 S.Ct. 1059, 1063, 84 L.Ed. 1345. The Court speaking through Justice Reed stated: “In the interpretation of statutes, the function of the courts is easily stated. It is to construe the language so as to give effect to the intent of Congress. There is no invariable rule for the discovery of that intention. To take a few words from their context and with them thus isolated to attempt to determine their meaning, certainly would not contribute greatly to the discovery of the purpose of the draftsmen of a statute, particularly in a law drawn to meet many needs of a major occupation. “There is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes. Often these words are sufficient in and of themselves to determine the purpose of the legislation. In such cases we have followed their plain meaning. When that meaning has led to absurd or futile results, however, this Court has looked beyond the words to the purpose of the act. Frequently, however, even when the plain meaning did not produce absurd results but merely an unreasonable one 'plainly at variance with the policy of the legislation as a whole’ this Court has followed that purpose, rather than the literal words. When aid to construction of the meaning of words, as , used in the statute, is available, there certainly can be no ‘rule of law’ which forbids its use, however clear the words may appear on ‘superficial examination.’ The interpretation of the meaning of statutes, as applied to justiciable controversies, is exclusively a judicial function. This duty requires one body of public servants, the judges, to construe the meaning of what another body, the legislators, has said. Obviously there is danger that the courts’ conclusion as to legislative purpose will be unconsciously influenced by the judges’ own views or by factors not considered by the enacting body. A lively appreciation of the danger is the best assurance of escape from its threat but hardly justifies an acceptance of a literal interpretation dogma which withholds from the courts available information for reaching a correct conclusion. Emphasis should be laid, too, upon the necessity for appraisal of the purposes as a whole of Congress in analyzing the meaning of clauses or sections of general acts. A few words of general connotation appearing in the text of statutes should not be given a wide meaning, contrary to a settled policy, ‘excepting as a different purpose is plainly shown.’ ” Passing the salient statement of the Court that in the interpretation of Statutes there is no more persuasive evidence of the purpose of the Statute than the words by which the legislature undertook to give expression to its wishes, as well as that in which the Court states that often these words are sufficient in and of themselves to determine the purpose of the legislation, this Court goes on to comply with the Supreme Court’s injunction, upon which the opinion states emphasis should be laid, to the appraising the purposes as a whole of Congress, or in other words, to look to legislative intent. No judicial construction of the applicable section having been brought to the Court’s attention, the Court turns to the legislative history of the Act. Defendant has been indicted under Section 284 of Title 18 U.S.C. This section prohibits former Government employees from prosecuting claims against the United States which involve subject matter with which such persons were employed or performed duty. This section in connection with Sections 281 and 283, the same title, and Section 99 of Title 5 U.S.C.A., constitute what are generally known as the conflict of interests statutes. Sections 281 and 283 of Title 18, mentioned above, date back much farther than Section 284. The earliest of these was enacted in 1853, 10 Stat. 170. It is from this Act that the present Section 283 was derived. This Section prohibits officers and employees of the United States from prosecuting any claim against the United States, or from aiding or assisting in the prosecution of such claim. It appears to cover claims regardless of where they are brought, that is to say whether they be brought in executive, administrative and judicial proceedings. The origin of Section 281 dates back to 1864, 13 Stat. 123. Section, 281 prohibits Members of Congress, officers and employees of any department or agency from receiving compensation for services rendered in “relation to any proceeding, contract, claim, controversy, charge, accusation, arrest, or other matter in which the United States is a party * * * before any department, agency, court martial, officer, or any civil, military or naval commission”. This section appears to limit the activities of these persons before administrative and executive proceedings, but does not appear to limit their activities in court proceedings. Attention is called to the fact that both Sections 281 and 283 only limit the activities of present employees, while 284 refers to former employees. Section 99 of Title 5 prohibits former officers and employees of the United States from prosecuting any claim against the United States if such claim was pending in the department while they were employed there. This section had its origin in the Post Office Appropriation Bill of June 1, 1872, 17 Stat. 202, Rev.Stat. § 190. The section is similar to Section 284 of Title 18 in that it refers to former employees and officers. However, there is a difference, in that Section 284 prohibits prosecuting any claims, whilé Section 99 refers only to claims in Departments. Thus, Section 284 is a broader prohibition than Section 99 only so far as concerns place of prosecution. Former Section 100 of Title 5 was a section of the Act of July 11, 1919, which was the Army Appropriation Bill of that year. This section prohibited any former commissioned officer or employee of the United States, who had been employed in procuring supplies for the Military Establishment, from soliciting or accepting employment in the presentation of claims against the Government arising out of any contracts or agreements for such supplies. This action was limited in time of application to persons who served in such capacities between April 6, 1917 and July 11, 1919. The War Department during World War II recommended to Congress that persons employed on a temporary or intermittent basis be exempted from the prohibition of Section 109 (now 283) and 113 (281) of the Criminal Code, and Section 99 of Title 5 U.S.C. It appears that this recommendation stemmed from the shortage of available help during the war years. It was believed that if these prohibitions were removed, qualified practitioners (not only lawyers, but accountants and other professional men) might be induced to work on a part time basis. The result of this recommendation was that Congress provided in subsection (j) of the Act entitled “Renegotiation of War Contracts”— “Nothing in sections 109 and 113 of the Criminal Code or in section 190 of the Revised Statutes (5 U. S.C. § 99) shall be deemed to prevent any person appointed * * * for intermittent and temporary employment * * * from acting as counsel, agent, or attorney for prosecuting any claim against the United States: Provided, That such person shall not prosecute any claim against the United States (1) which arises from any matter directly connected with which such person is employed, or (2) during the period such person is engaged in intermittent and temporary employment in a department.” 50 U.S. C.A.Appendix, § 1191. Subsection (j) of the Renegotiation of War Contracts Act, 56 Stat. 985, thus excepted persons employed by the Government on a temporary or intermittent basis from the prohibition against prosecuting claims against the Government, provided the claims presented were unrelated to their Federal employment. During the consideration of the “Contracts Settlement Act” in 1944, an amendment to repeal subsection (j) was offered by a Congressman who believed that this subsection of the 1942 Act had weakened 5 U.S.C.A. § 99. The purpose of this amendment was to restore the older law. Subsection 19(e) of the Act of July 1, 1944, 58 Stat. 667, evolved from this amendment. Subsection 19(e) provided that any person employed in a Government agency was prohibited from prosecuting any claim against the United States, when such claim involved subject matter with which such person was employed or performed duty, during the time of his employment, or for a period of two years thereafter. When codified this subsection of the 1944 Act became 41,U.S.C.A. § 119. This section was an enlarged version of the 1919 Act in that it' ap-' plied to any person employed by the United States, and had no time limitation. Although the subject matter of' the Act was the settlement and termination of war contracts, this subsection does not appear to limit its application to claims arising under such contracts. In the revision of Title 18 U.S.C. in 1948 the revisors consolidated 5 U.S.C.A. § 100 and 41 U.S.C.A. § 119, 1940 ed. The result was Section 284, the section upon which this case is based. The earlier acts from which Section 284 has evolved were limited in their prohibition to “claims” in the strict sense of the word, i. e. the demand of an interest in money or property adverse to the interest of the United States, in Section 281 Congress has prohibited several actions in addition to the prosecution of claims. As a result of the expanse of the prohibitions -of Section 281 it is evident that when broader prohibitions were intended, appropriate language was used to set them out. When Congress specifies claims only, we must assume that it said what it intended to say. From its study of the legislative history of Section 284, including consideration of its genesis and of its predecessors or precursors and' of the provision contained in the amendment to subsection (j) of the Act of' October 21, 1942, 56 Stat. 985, excluding certain temporary employees from the prohibition against prosecuting claims against the United States contained in Sections 109 and 113 of the Criminal Code (U.S. C. 18 Sections 198 and 203) and in Section 190- of the Revised Statutes, U.S. C.A. Title 5, Section 99, the Court is unable to find anything to indicate that it was the intention of Congress that the term “claims against the United States” was intended to cover or embrace anything other than claims against the United States Government for money or for property. As a consequence the Court is not persuaded that to construe the term “claims against the United States” in Section 284 as including solely claims for money and property would, to paraphrase the words of the Supreme Court in Justice Reed’s opinion in the American Trucking case, supra, lead to absurd results. The Court’s view is to the contrary. The Court is further persuaded of the correctness of its position by resort to reference, to administrative interpretations of four Government agencies to the same effect, namely, The Treasury Department, Memorandum of February 16, 1952; National Production Authority, August 27, 1951; Defense Department, Memorandum entitled “Scope and Applicability of Conflict of Interest Statutes”; Judge Advocate General of the Army, Opinion No. 210-85, dated December 19, 1928; and Judge Advocate General of the Navy Opinion No. 1952-112, dated July 12, 1952^ The Attorney General’s Memo No. 40, dated August 27, 1958, entitled “Construction of 18 U.S.C. 284 — Disqualifications of Former Officers and Employees in Matters Connected with Former Duties,” states that the legislative history throws little light on the meaning of the statute, and the Court feels justified in assuming that the 'Memorandum is based upon that predicate. This Court has concluded, as aforestated in its foregoing analysis, that the legislative history of Section 284 is such as to persuade the Court that the term “claims against the United States” as used in said Section is intended by Congress to be limited, and consequently that such term is limited to demands against the Government for money or for property. In connection with this conclusion, the Court feels the following excerpts from Supreme Court opinions are pertinent : In the case of U. S. v. Universal C. I. T. Credit Corp., 344 U.S. 218, at page 221, 73 S.Ct. 227, 229, 97 L.Ed. 260, the Court stated: “Not that penal statutes are not subject to the basic consideration that legislation like all other writings should be given, insofar as the language permits, a commonsensical meaning. But when choice has to be made between two readings of what conduct Congress has made a crime, it is appropriate, before we choose the harsher alternative to require that Congress should have spoken in language that is clear and definite. We should not derive criminal outlawry from some ambiguous implication.” Again in U. S. v. Alpers, 338 U.S. 680, at page 681, 70 S.Ct. 352, 353, 94 L.Ed. 457 the following appears: “We are aware that this is a criminal statute and must be strictly construed. This means that no offense may be created except, by the words of Congress used in their usual and ordinary sense. There are no constructive offenses. (Citing cases.) The most important thing to be determined is the intent' of Congress. The language of the statute may not be distorted under the guise of construction, or so limited by construction as to defeat the manifest intent of Congress.” In Winters v. People of State of New York, 333 U.S. 507, at page 515, 68 S.Ct. 665, 670, 92 L.Ed. 840, the Court stated: “The standards of certainty in statutes punishing for offenses is higher than in those depending primarily upon civil sanction for enforcement. The crime ‘must be defined with appropriate definiteness.’ (Citing cases.) There must be ascertainable standard of guilt. Men of common intelligence cannot be required to guess at the meaning of the enactment.”

8969661-26102

Affirmed by published opinion. Senior Judge HAMILTON wrote the opinion, in which Judge WIDENER and Judge MOTZ joined. OPINION HAMILTON, Senior Circuit Judge. On appeal, Lynell Lynnie Taylor (Taylor) claims, inter alia, that he had a Sixth Amendment right to effective assistance of in connection with the government’s post-conviction, post-direct appeal motion to reduce his sentence pursuant to Federal Rule of Criminal Procedure 35(b), and that such right was violated when the district court ruled on the government’s Rule 35(b) motion without him having the benefit of counsel. Taylor’s claim raises the following issue of first impression in our circuit: Does a criminal defendant have a federal constitutional right to effective assistance of counsel with regard to a post-conviction, post-direct appeal motion for reduction of sentence made by the government pursuant to Federal Rule of Criminal Procedure 35(b)? We answer this question in the negative. We also find no merit to Taylor’s remaining assignments of error. Accordingly, we affirm. I. On March 27, 2000, a federal grand jury in the Eastern District of Virginia indicted Taylor in a multi-count, multi-defendant indictment. Count One charged Taylor and other named defendants with conspiracy to intentionally and knowingly possess with the intent to distribute and to distribute fifty grams or more of cocaine base (crack) in violation of 21 U.S.C. § 846. As part of the overt acts listed in Count One, the indictment charged that “[i]n or about July 1998, at Burnt Ordinary Apartments, James City County, in the Eastern District of Virginia, LYNELL LYNNIE TAYLOR, while armed with a ,9mm semi-automatic pistol, distributed quantities of ‘crack’ cocaine.” (J.A. 31). The indictment charged Taylor in. seven other counts regarding individual instances of crack dealing in violation of 21 U.S.C. § 841(a)(1). On June 7, 2000, Taylor pled guilty to Count One, the conspiracy count, in exchange for the government’s oral promise to drop the remaining counts. Taylor expressly acknowledged at his guilty plea hearing that the only promise the government made in return for his guilty plea on Count One was to drop the remaining counts. The presentence report (PSR) calculated Taylor’s total offense level under the United States Sentencing Guidelines at thirty-six (base offense level of thirty-six based upon drug quantity, plus two levels for possession of a dangerous weapon, minus two levels for acceptance of responsibility) and his criminal history category at III, producing a sentencing range of 235 to 293 months’ imprisonment. On October 30, 2000, the district court sentenced Taylor to 235 months’ imprisonment. At that time, Taylor did not attempt to ' challenge his conviction or sentence on direct appeal. Just less than one year after the district court sentenced Taylor, on October 15, 2001, the government moved to reduce Taylor’s . sentence pursuant to Federal Rule of Criminal Procedure 35(b)(1) (the government’s Rule 35(b) Motion). The government’s Rule 35(b) Motion sought to reduce Taylor’s sentence based upon his substantial assistance to the government in investigating drug trafficking in the eastern Virginia area, but requested the district court to hold the motion “in abeyance until all of Mr. Taylor’s cooperation is complete, after which the United States will file a supplement advising the court of the remainder of his cooperation.” (J.A. 137). Attached to the government’s Rule 35(b) Motion was a certificate of service providing that a copy of the motion was mailed to Taylor’s attorney, J. Ashton Wray, Jr., at “10-B W. Queens Way, P.O. Box 547, Hampton, VA 23669, and to U.S. Probation Officer Teresa R.' Hutcheson, Room 300, Post Office Bldg., 101 W. 25th, Newport News, VA 23607.” (J.A. at 138). On October 17, 2001, the district court entered an order taking the government’s Rule 35(b) Motion under advisement for six .months “to permit defendant’s complete cooperation with the government.” (J.A. 139). The order directed the Clerk of Court to send a copy of it to Taylor, Taylor’s counsel, and the government. On April 30, 2002, the government filed its “SUPPLEMENT TO MOTION FOR SENTENCE REDUCTION BASED UPON SUBSTANTIAL ASSISTANCE” with a certificate of service providing that a copy was mailed to the same parties at the same addresses as the government’s Rule 35(b) Motion filed on October 15, 2001. On May 17, 2002, the district court granted the government’s Rule 35(b) Motion, reducing Taylor’s sentence by forty-percent to 141 months’ imprisonment. The district court effectuated its granting of the government’s Rule 35(b) Motion by entering a written order (the May 17, 2002 Order) providing as follows: “The court GRANTS the mdtion[ ] and ORDERS the sentence of Lynell Lynnie Taylor as to Count 1 reduced from two hundred thirty-five ' (235) months imprisonment to one hundred forty-one (141)' months imprisonment. In all other respects, the sentence as originally imposed on October 30, 2000, remains the same.” (J.A. 143). , Docket entry number thirty-eight on the district court’s docket sheet describes the -May 17; 2002 Order as “AMENDED JUDGMENT ORDER: Lynell Lynnie Taylor (4) count(s) 1: 141 MONTHS IMPRISONMENT. IN ALL OTHER RESPECTS, THE SENTENCE AS ORIGINALLY IMPOSED ON 10/30/00 REMAINS THE SAME.” (J.A. 9). One of Taylor’s complaints in the present, appeal is that the district court ruled upon the government’s Rule 35(b) Motion without giving him notice and an opportunity to be heard on the motion. On August 7, 2002, Taylor filed an untimely pro se notice of appeal in which he sought to challenge the district court’s forty-percent reduction in his sentence as insufficient. In his handwritten notice of appeal, Taylor explained that he was unhappy with his new 141-month sentence for two reasons: (1) his lawyer had previously told him that his sentence would be reduced to at least 120 months’ impi-isonment; and (2) there were “a number of things that were not mentioned that was suppose to be mentioned.” (J.A. 144). Taylor also explained that one of his “main reasons” for appealing was that his attorney was incarcerated at the time the district court considered the government’s Rule 35(b) Motion. Id. After appointing counsel to represent Taylor on appeal, on January 13, 2003, we dismissed his appeal as untimely. Taylor subsequently filed a § 2255 motion (Taylor’s § 2255 Motion), see 28 U.S.C. § 2255, attacking his new sentence on two grounds. First, Taylor claimed that he was denied effective assistance of counsel in regard to the government’s Rule 35(b) Motion. Second, Taylor claimed that he was unable to note a timely appeal from resentencing pursuant to the government’s Rule 35(b). Motion because his attorney was unavailable due to counsel’s incarceration. On March 7, 2003, the district court dismissed Taylor’s § 2255 Motion for several reasons. First, the district court reasoned that because it did not conduct a hearing on the government’s Rule 35(b) Motion nor request any response to the motion, Taylor’s counsel missed no opportunity to appear or respond. Second, citing United States v. Pridgen, 64 F.3d 147 (4th Cir.1995), the district court held that even a timely appeal would have been fruitless because reductions of sentences and/or denials of motions for reductions of sentences pursuant to Rule 35(b) are not appealable. Finally, the .district court pointed out that Taylor had been appointed counsel for purposes of his appeal from the district court’s resentencing. Taylor timely appealed the district court’s dismissal of his § 2255 Motion. We subsequently granted Taylor a certificate of appealability and issued an unpublished opinion, United States v. Taylor (Taylor I), 81 Fed.Appx. 776 (4th Cir.2003), in which we vacated the district court’s dismissal of Taylor’s § 2255 Motion and remanded the case to the district court for reconsideration in light of United States v. Peak, 992 F.2d 39 (4th Cix.1993) and Roe v. Flores-Ortega, 528 U.S. 470, 478-80, 120 S.Ct. 1029, 145 L.Ed.2d 985 (2000). In Taylor I, we explained: In Peak, this court held that counsel’s failure to pursue an appeal requested by a defendant constitutes ineffective assistance of counsel regardless of the likelihood of success on the merits. Id. at 42. Moreover, even if a defendant does not specifically instruct counsel to file an appeal, counsel may still have a duty to consult with his client about an appeal. Roe v. Flores-Ortega, 528 U.S. 470, 478-80, 120 S.Ct. 1029, 145 L.Ed.2d 985 (2000). Taylor I, 81 Fed.Appx. 776. On remand, the district court granted Taylor relief on his § 2255 Motion. Specifically, the district court reinstated Taylor’s “right of appeal” with respect to the district court’s resentencing of him pursuant to the government’s Rule 35(b) Motion. (District Court Order filed January 22, 2004). The district court effectuated such reinstatement by vacating Taylor’s judgment of conviction and immediately reentering it without change. The joint appendix contains a copy of the judgment of conviction with the October 30, 2000 “FILED” date crossed through, a date of “1/22/04” handwritten just below the crossed-through date, and the change initialed. (J.A. 158). Just below the handwritten change, the following typed notation appears: “SEE ORDER OF 1/22/04 VACATING and RE-ENTERING THIS JUDGMENT ON 1/22/04.” (J.A. 158). Taylor filed a timely notice of appeal from the reentered judgment of conviction. Taylor is represented in this appeal by appointed counsel. In the present appeal, Taylor asserts several assignments of error. He claims that the district court violated his Fifth Amendment Due Process rights by ruling on the government’s Rule 35(b) Motion without providing him notice of the motion and an opportunity to respond. Interestingly, he qualifies this claim by stating that “[it] is unclear whether [he] or his attorney received notice of the government’s [Rule 35(b) Motion].” (Taylor’s Br. at 32). Taylor also claims that he had a Sixth Amendment right to effective assistance of counsel in connection with the government’s Rule 35(b) Motion, which right was denied due to his counsel’s incarceration. Finally, he asserts a Booker claim, see United States v. Booker, — U.S. -, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), with respect to the district ■ court’s reliance upon facts not found by a jury in initially sentencing him on October 30, 2000. H. As a threshold matter, we need to address the parties’ confusion regarding the nature of the judgment vacated and reentered by the district court on January 22, 2004. The parties are concerned that the reentered judgment actually reinstates Taylor’s original 235-month sentence. If such is the case, the government requests that we vacate such judgment and let the 141 month sentence stand. Taylor would also request that we vacate such judgment, but would urge us to vacate the district court’s order granting the government’s Rule 35(b) Motion and remand the case to allow for his full participation in the district court’s proceedings on the government’s Rule 35(b) Motion with the benefit of effective assistance of counsel. The parties’ confusion squarely raises the question of whether the judgment vacated and reentered by the district court on January 22, 2004 sentences Taylor to 235 months’ imprisonment or 141 months’ imprisonment. In answering this question, we are mindful that “[t]he intent of the sentencing court must guide any retrospective inquiry into the term and nature of a sentence.” United States v. Taylor, 47 F.3d 508, 511 (2d Cir.1995) (internal quotation marks and citation omit ted). “Thus, to the extent that, there is an ambiguity in the sentence, we properly may consider the. sentencing judge’s subjective intent.” Fenner v. United States Parole Comm’n, 251 F.3d 782, 786 (9th Cir.2001). “As a general rule, [i]n determining the terms of a sentence, it is the intent of the sentencing judgé which controls and that intent is to be determined by reference to the entire record.” United States v. Bull, 214 F.3d 1275, 1279 (11th Cir.2000) (internal quotation marks omitted) (alteration in original). To be sure, the district court could have been clearer regarding the precise nature and effect of its resentencing of Taylor pursuant to the government’s Rule 35(b) Motion and following our remand of Taylor’s § 2255 Motion. Nonetheless, our review of the entire record leaves us with the firm conviction that the district court amended the original judgment from 235 months’ imprisonment to 141 months’ imprisonment when it ruled on the merits of the government’s Rule 35(b) Motion, and, therefore, when the district court granted Taylor relief on his § 2255 Motion by vacating and reentering Taylor’s judgment of conviction, such judgment was the amended version sentencing Taylor to 141 months’ imprisonment. The 235-month version of the judgment no longer existed. While the district court did not expressly use the phrase “amend judgment” or “the judgment is amended” in its May 17, 2002 Order granting the government’s Rule 35(b) Motion and ordering Taylor’s sentence i-educed from 235 months’ imprisonment to 141 months’ imprisonment, all record evidence supports the conclusion that the district court intended for such order to amend the judgment in this manner. First, the May 17, 2002 Order was entered on the district court’s docket sheet as “AMENDED JUDGMENT ORDER: Lynell Lynnie Taylor (4) count(s) 1: 141 MONTHS -IMPRISONMENT. IN ALL OTHER RESPECTS, THE SENTENCE AS ORIGINALLY IMPOSED ON 10/30/00 REMAINS THE SAME.” (J.A. 9) (emphasis added). Second, this docket entry existed at the time the district court granted Taylor relief on his § 2255 Motion. Third, the relief the district court granted Taylor on his § 2255 Motion (ie., the reinstatement of Taylor’s right to appeal from the district court’s final ruling on the government’s Rule 35(b) Motion “by VACATING his judgment of conviction and REENTERING the same judgment effective this date”) only makes sense if the judgment of conviction referenced in. the district court’s January 22, 2004 Order sentences Taylor to 141 months’ imprisonment. We have no doubt that the district court, as we instructed, reconsidered Taylor’s § 2255 Motion on remand in light of Peak and Roe and, based upon such consideration, determined that Taylor was entitled to remedial relief under Title 28, United States Code § 2255, which provides, in relevant part: [i]f the court finds that the judgment was rendered without jurisdiction, or that the sentence imposed was not authorized by law or otherwise open to collateral attack, or that there has been such a denial or infringement of the constitutional rights of the prisoner as to render the judgment vulnerable to collateral attack, the court shall vacate and set the judgment aside and shall discharge the prisoner or resentence him or grant a new trial or correct the sentence as may appear appropriate, (emphasis added). We have held on more than one occasion that this bolded language “confers a broad and flexible power to the district courts to fashion an appropriate remedy:” United States v.. Hillary, 106 F.3d 1170, 1171 (4th Cir.1997) (internal quotation marks omitted). Here, the district court’s chosen remedy returned Taylor to the position he would have been in had the alleged constitutional error of which he complained (i.e., denial of effective assistance of counsel in pursuing an appeal from the district court’s amended judgment based upon the government’s Rule 35(b) Motion) not occurred. Thus, it is inescapable that the district court simply restarted the appeal clock. Fourth, the district court judge who granted Taylor’s § 2255 Motion was the same judge who originally-sentenced him and granted the government’s Rule 35(b) Motion. Therefore, such judge was in an excellent position to interpret the state of the record. See United States v. O’Brien, 789 F.2d 1344, 1347 n. 2. (9th Cir.1986). In sum, all probative 'evidence in the record points to the conclusion that the judgment vacated and reentered by the district court on January' 22, 2004 sentences Taylor to 141 months’ imprisonment. Accordingly, we hold that the judgment of conviction challenged by Taylor in the present appeal sentences him to 141 months’ imprisonment. III. We now turn to Taylor’s Booker claim. See Booker, 125 S.Ct. at 738. According to Taylor, when the district court originally sentenced him on October 30, 2000 to 235 months’ imprisonment, the district court violated his Sixth Amendment right to a jury trial in determining his sentence by relying upon facts not found by a jury or admitted by him. Taylor is foreclosed from asserting a Booker claim in the present appeal because the original judgment of conviction entered on October 30, 2000 is not before us. The only judgment of conviction before us is the amended -judgment reentered by the district court on January 22, 2004, which amended judgment sentences Taylor to 141 months’ imprisonment based upon the government’s Rule 35(b) Motion. Moreover, the record is undisputed that Taylor did not pursue a direct appeal from his original judgment of conviction. Accordingly, his right to challenge on direct appeal any action or ruling by the district court in connection with the district court’s sentencing of him on October 30, 2000 has long since expired. IV. We next address Taylor’s claim to a Sixth Amendment right to effective assistance of counsel with respect to the government’s Rule 35(b) Motion, which right he claims was violated when the district court ruled on the government’s Rule 35(b) Motion without his having the benefit of counsel to represent him in the matter. He also states the record is insufficient to determine whether he was actually or constructively denied his alleged Sixth Amendment right to effective assistance of counsel with respect to the government’s Rule 35(b) Motion because whether his counsel was actually incarcerated “during the relevant time is unknown.... ” (Taylor’s Br. at 21). Accordingly, he requests that we remand this case for an evidentia-ry hearing to determine whether his counsel was in fact incarcerated or otherwise unavailable to him during the time the district court considered the government’s Rule 35(b) Motion. Taylor’s Sixth Amendment right-to-counsel claim is without merit. The Sixth Amendment-provides that “the accused shall enjoy the right ... to have the Assistance of Counsel for his defence.” U.S. CONST, amend. VI. This language entitles a criminal defendant to effective assistance of counsel at each critical stage of his prosecution, Kirby v. Illinois, 406 U.S. 682, 690, 92 S.Ct. 1877, 32 L.Ed.2d 411 (1972), including sentencing, Mempa v. Rhay, 389 U.S. 128, 134-37, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967). Moreover, the law is well-settled that, in order to satisfy federal due process and equal protection guarantees, a criminal defendant enjoys, the right to effective assistance of counsel on direct appeal, when such direct appeal is provided- as a matter . of right. See Coleman v. Thompson, 501 U.S. 722, 755-56, 111 S.Ct. 2546, 115 L.Ed.2d 640 (1991); Pennsylvania v. Finley, 481 U.S. 551, 555, 107 S.Ct. 1990, 95 L.Ed.2d 539 (1987); Ross v. Moffitt, 417 U.S. 600, 611-615, 94 S.Ct. 2437, 41 L.Ed.2d 341 (1974). Finally, “in some exceptional -cases due process does mandate the appointment of counsel for certain post-conviction proceedings,” United States v. Legree, 205 F.3d 724, 730 (4th Cir.2000), in'which fundamental fairness requires the assistance of a trained advocate. Cf. Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973) (establishing a case-by-case determination for whether due process requires appointment of counsel at a probation revocation proceeding). Taylor. .argues that the government’s Rule 35(b) Motion constitutes. a critical stage of his prosecution and, therefore, the Sixth Amendment guarantees him the, right to effective assistance of counsel in responding to the motion. Taylor’s argument initially misses the mark because a Rule 35(b) motion is not a trial-related proceeding and, therefore, the Sixth Amendment cannot serve as a source of his claimed right to counsel. United States v. Palomo, 80 F.3d 138, 142 (5th Cir.1996); see also United States v. Gouveia, 467 U.S. 180, 188-89, 104 S.Ct. 2292, 81 L.Ed.2d 146 (1984) (recognizing that “core purpose of the [Sixth Amendment] counsel guarantee is to assure aid at trial, when the accused is confronted with both the intricacies of .the law and the advocacy of the public prosecutor”) (internal cita* tions, .quotation marks, and alterations omitted). Rather, the source of any right to effective assistance of counsel at the post-conviction, post-direct appeal stage must be the United States Constitution’s equal protection or due process guarantees. Palomo, 80 F.3d at 142. For reasons we explain as follows, we hold that neither the Constitution’s equal protection guarantees nor due process guarantees provide criminal defendants a right to effective assistance of counsel with respect to a motion by the government pursuant to Rule 35(b). The Supreme Court has squarely rejected suggestions that such guarantees support a federal constitutional right to counsel on direct discretionary appeals, Wainwright v. Torna, 455 U.S. 586, 587-88,102 S.Ct. 1300, 71 L.Ed.2d 475 (1982); Ross, 417 U.S. at 610, 94 S.Ct. 2437, as opposed to direct appeals provided the criminal defendant as a matter of right. As the Fifth Circuit has cogently reasoned, “[i]f the right to counsel does not attach to discretionary proceedings challenging the legality of a sentence or conviction, in which the defendant and the Government are clearly engaged in an adversarial relationship, there appears little to justify holding that a convicted inmate has a right to counsel with respect to proceedings brought by the [government for the purpose of requesting the sentencing court to reduce that inmate’s sentence as compensation for the provision of information useful to an ongoing government investigation or prosecution.” Palomo, 80 F.3d at 142. In other words, because a defendant has no federal constitutional right to counsel when pursuing a discretionary appeal on direct review of his conviction, a fortiori, he has no such right when the government makes- a motion which can only benefit him by reducing his already final sentence. . - • Moreover, our rejection of Taylor’s right-to-counsel claim in the present case is compelled by our rejection of the right-to-counsel claim pressed by the defendant in Legree. In Legree, the federal defendant appealed from the district court’s denial of his post-conviction, post-appeal motion brought pursuant to 18 U.S.C. § 3582(c)(2), which statutory section permits a district court to reduce a sentence “in the case of a defendant who has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission,” id. at § 3582(c)(2). Legree, 205 F.3d at 726. The defendant in Legree argued on appeal that the district court denied him federal constitutional due process by not appointing counsel to represent him on his § 3582(c)(2) motion. Legree, 205 F.3d at 729. We rejected this argument on the basis that, because a motion pursuant to § 3582(c) “is not a do-over of an original sentencing proceeding where a defendant is cloaked in rights mandated by statutory law and the Constitution,” the defendant’s motion for a reduction of sentence did not fit into the category of exceptional cases warranting appointment of counsel in a post-conviction, post-appeal proceeding. Id. at 730 (internal quotation marks omitted). For purposes of right-to-counsel analysis, the government’s Rule 35(b) Motion for a reduction in Taylor’s sentence is indistinguishable from the defendant’s § 3582(c)(2) motion in Legree. Both motions could only benefit the defendant by reducing his sentence which had already become final, and neither motion is “a do-over of an original sentencing proceeding where a defendant is cloaked in rights mandated by statutory law and the Constitution.” Legree, 205 F.3d at 730 (internal quotation marks omitted). In sum, we hold that Taylor possessed no federal constitutional right to counsel with respect to the government’s Rule 35(b) Motion. Palomo, 80 F.3d at 142 (no federal constitutional right to counsel attaches at Rule 35(b) stage). See also United States v. Kimberlin, 898 F.2d 1262, 1265 (7th Cir.1990) (citing Finley, 481 U.S. at 551, 107 S.Ct. 1990, for proposition that “[ajlthough a mistake in taking a direct appeal from a conviction would be ineffective assistance of counsel, giving the defendant another opportunity to appeal without need for a formal extension of time from the district court, a blunder in prosecuting post-conviction motions under Rule 35 does not authorize a similar deferred appeal, because there is no right to effective assistance of counsel after the direct appeal”). Accordingly, even assuming arguendo that Taylor did not have access to effective assistance of counsel in connection with the government’s Rule 35(b) Motion, the district court committed no constitutional violation by ruling on such motion under the existing circumstances. V. Taylor next contends that his Fifth Amendment Right to Procedural Due Process was violated because neither he nor his counsel ever received notice of the government’s Rule 35(b) Motion, and, therefore, he did not have an opportunity to respond at an evidentiary hearing or in writing. He asserts, without any detail or citation to the record, “that he has information detailing his assistance in addition to that presented by the government ... but that “given the state of the record, it is unclear what information [he]. possesses.” (Taylor’s Br. at 31). As relief, Taylor seeks a reversal of the district court’s final judgment of conviction and a remand to allow him to present evidence and otherwise comment on the government’s Rule 35(b) Motion.

2183879-11729

JAMESON, District Judge. Petitioner seeks to enforce its order of August 13, 1967, finding that respondents, C & C Plywood Corporation and Veneers, Inc., violated Section 8(a) (5) and (1) of the National Labor Relations Act by refusing to recognize and bargain collectively with Plywood, Lumber and Sawmill Workers Local Union No. 2405, AFL-CIO, and requiring the companies, upon request, to bargain collectively with the union. This court has jurisdiction by virtue of Section 10(e) of the National Labor Relations Act, 29 U.S.C. § 160(e). Following a representation election on July 6, 1962, the union on August 28, 1962, was certified as the bargaining agent of both employers. The companies and union executed a collective bargaining agreement on May 1, 1963, effective to October 31, 1963, and from year to year thereafter unless either party notified the other of a desire to change or terminate the agreement. The contract contained a wage clause, providing in part: “A. A classified wage scale has been agreed upon by the Employer and the Union, and has been signed by the parties and hereby made a part of the written Agreement. The Employer reserves the right to pay a premium rate over and above the contractual classified wage rate to reward any particular employee for some special fitness, skill, aptitude or the like •x- * *>:♦ ” Relying upon this clause, C & C Plywood on May 20, 1963, without prior notice to the union, posted a notice announcing that effective immediately and for the ensuing two months, all members of the glue spreader crews would receive premium pay, provided they met certain production standards. The union contended that this was not “premium pay within the meaning (of the wage clause quoted), but rather a change in wages made dependent upon a production basis rather than hourly rates agreed upon with the Union”. The union was unsuccessful in its efforts to get the company to rescind the premium pay plan and on July 31, 1963, filed an unfair labor charge on the ground that the employer had refused to bargain in violation of Section 8(a) (5) and (1) by unilaterally establishing the premium pay plan. A trial examiner of the Board found that no unfair labor practice had been committed and recommended that the complaint be dismissed. On October 24, 1964 the Board reversed the trial examiner and found that C & C Plywood Corporation had unlawfully refused to bargain by the unilateral introduction of the premium pay plan for the glue spreader crews. This court denied enforcement of the Board’s order in N.L.R.B. v. C & C Plywood Corporation, 351 F.2d 224, decided September 10, 1965. The Supreme Court reversed, with directions to enforce the Board’s order. N.L.R.B. v. C & C Plywood Corporation, (decided January 9, 1967) 385 U.S. 421, 87 S.Ct. 559, 17 L. Ed.2d 486, reh. denied (February 20, 1967) 386 U.S. 939, 87 S.Ct. 951, 17 L. Ed. 812. On August 31, 1967, a decree was entered in this court pursuant to the mandate of the Supreme Court. On August 27, 1963, the companies gave the union notice of their desire to terminate the agreement as of October 31, 1963, and filed with the Board’s regional director a petition for an election, claiming good faith doubt as to the majority status of the union. The union, on August 29, 1963, gave the employer a 60 day notice of its desire to make changes in the contract and offered to meet with the companies for bargaining purposes. The regional director dismissed the representation petition on September 26, 1963, because of the pending unfair labor practice proceedings. The Board affirmed on December 3, 1963. On January 30, 1964, the employer filed another petition seeking a representation election. This was denied by the regional director on February 18, 1964, and on appeal the Board, on April 2, 1964, affirmed. On August 26, 1964, the employer declined further recognition of the union as the collective bargaining agent of its employees. On November 5, 1964, the union filed an unfair labor charge alleging that the employer’s refusal to deal with the union constituted a violation of Section 8(a) (1) and (5) of the National Labor Relations Act. The companies admitted that they refused to recognize the union for any purpose after August 26, 1964, but contended that they had a good faith doubt as to the union’s majority status, and that the union no longer represented a majority of the employees in April, 1964, and thereafter. The trial examiner, in a decision dated September 7, 1965, concluded that (1) the evidence was insufficient to warrant a finding that the employer had reasonable ground for believing the union had lost its majority status since its certification ; but (2) with respect to the premium pay unfair labor practice, there was no allegation or finding of bad faith on the part of C & C Plywood and the then pending unfair labor practice should not bar the employer from questioning the union’s majority status. The decision of the Board, dated April 13, 1967, affirmed the decision of the examiner “for different reasons”, holding that the “prior unfair labor practice was of such a character and effect as to preclude respondents from thereafter questioning the Union’s majority status in good faith. It is well settled that for a period of one year from the date of certification, the employer, absent “unusual circumstances”, must bargain in good faith and may not challenge the union’s majority status. Brooks v. N.L.R.B., 1954, 348 U.S. 96, 75 S.Ct. 176, 99 L.Ed. 125, 42 A.L.R.2d 1405; N.L.R.B. v. Holly-General Co., 9 Cir. 1962, 305 F.2d 670. When there has been a refusal to bargain in good faith, it may be “reasonable and proper” to extend the certification year. N.L.R.B. v. Burnett Construction Co., 10 Cir. 1965, 350 F.2d 57, 60. There must, however, be a “factual basis for the Board’s application of the extension principle”. N.L.R.B. v. Gebhardt-Vogel Tanning Co., 7 Cir. 1968, 389 F.2d 71, 75. The Board found that regardless of the employer’s good faith belief that its action was proper under the contract, the effect of the unilateral granting of a wage increase three weeks after the execution of the collective bargaining agreement was to “undermine the union’s authority among the employees whose interest it was obligated to represent * * *” and that “there was a distinct probability that the employee disaffection with their bargaining representative relied upon by * * * (the companies) as ground for their refusal to" bargain with the union was caused by the prior unfair labor practice.” The Supreme Court in holding that the Board was correct in finding an unfair labor practice added that “* * * the real injury in this case is to the union’s status as bargaining representative”. 385 U.S. at 429, n. 15, 87 S.Ct., at 564. The charge of an unfair labor practice having been sustained, the Board had “power to take appropriate steps to the end that the effect of those practices will be dissipated. That necessarily involves an exercise of discretion on the part of the Board — discretion involving an expert judgment as to ways and means of protecting the freedom of choice guaranteed to the employees by the Act. It is for the Board, not the courts, to determine how the ef- feet of prior unfair labor practices may be expunged.” International Assoc. of Machinists v. N.L.R.B., 1940, 311 U.S. 72, 82, 61 S.Ct. 83, 85 L.Ed. 50, reh. denied 311 U.S. 729, 61 S.Ct. 314, 85 L.Ed. 474. Only when the Board’s discretion has been abused is the court permitted to deny enforcement and order an alternative remedy. N.L.R.B. v. H & H Plastics Manufacturing Co., 6 Cir. 1968, 389 F.2d 678, 684. In support of their contentions that under the facts here presented the Board either lacked power to apply the extension principle or abused its discretion in doing so, respondents argue that (1) there was an inexcusable delay in the Board’s final action; (2) the extension principle should not be applied in a case where a collective bargaining agreement was in fact negotiated, and the employer dealt with the union except on the matter of premium pay for the glue spreaders; (3) there was no substantial evidence to show that the loss of a majority status was caused by or connected with the premium pay unfair labor practice; and (4) the unfair labor practice was “highly speculative, and of a minor nature”. It is true that the delay in the various proceedings and particularly in the final decision of the Board was substantial. This in itself, however, does not afford a basis for denying enforcement of the order. “Inordinate delay in any case is regrettable, but Congress has introduced no time limitation into the Act except that in § 10(b)”. N.L.R.B. v. Katz, 1962, 369 U.S. 736, 748, n. 16, 82 S.Ct. 1107, 8 L.Ed.2d 230. While in most cases involving the extension principle the parties had not agreed upon a contract, the duty to bargain collectively with the designated union does not cease with the execution of the collective bargaining agreement. * * [T]he duty to bargain unquestionably extends beyond the period of contract negotiations and applies to labor-management relations during the term of an agreement.” N.L.R.B. v. Acme Industrial Co., 1967, 385 U.S. 432, 436, 87 S.Ct. 565, 17 L.Ed.2d 495. The mere fact that a contract has been negotiated does not preclude the entry and enforcement of a bargaining order. As noted supra, the Board found that the effect of the unfair labor practice was to undermine the union’s authority among its members and that there was a distinct probability that any employee dissatisfaction with the union was caused by the unfair labor practice. Particularly in view of the decision of the Supreme Court in N.L.R.B. v. C & C Plywood Corp., supra, we conclude that there was substantial evidence to support the Board’s findings, and that the Board did not abuse its discretion in making the bargaining order. Conse quently, even though the factors upon which respondents rely might lead the court to enter a different type of order, we may not substitute our judgment for that of the Board. Enforcement of the Board’s order is granted. . C & C Plywood Corporation is engaged in the manufacture of plywood panels at Kalispell, Montana. Veneers, Incorporated, is engaged in the production of green veneer in an adjoining plant, approximately 95 per cent of which is sold to O & C Plywood. The companies have common officers, share common top management and the use of offices and shop facilities. . The preamble to the agreement defined “employer” as “C & C Plywood Corporation and Veneers, Inc., both of Kalispell, Montana”. . Veneers, Inc., was not a party to that proceeding. . The companies had filed exceptions to the trial examiner’s decision, limited to the finding that there was not adequate evidence to support their good faith belief that the union had lost its majority status. Neither the union nor general counsel filed exceptions. The Board did not pass upon the issue raised by the companies, deeming this unnecessary in view of its holding on the second issue. . See also, N.L.R.B. v. Commerce Co., 5 Cir. 1964, 328 F.2d 600, 601, cert. denied 379 U.S. 817, 85 S.Ct. 32, 13 L.Ed.2d 28; N.L.R.B. v. Miami Coca Cola Bottling Co., 5 Cir. 1967, 382 F.2d 921, 924; MAR-JAC Poultry Co., Inc., 136 N.L.R.B. 785. . The present charge was filed November 5, 1964, the trial examiner’s decision was dated September 7, 1965, and the Board’s decision was dated April 13, 1967 — more than 19 months following the trial examiner’s decision. The action involving the unfair labor practice, however, was pending in court during most of that period, rehearing having been denied by the Supreme Court on February 20, 1967.

10525871-26609

BOYCE F. MARTIN, Jr., Circuit Judge. Nino Homes and Michele Lochirco appeal the judgment entered by the district court in favor of Robert R. Jones Associates, Inc. The district court held that Nino Homes and Lochirco had violated the Copyright Act of 1976, 17 U.S.C. § 101 et seq., by copying Jones Associates’ registered architectural drawings and by using those unauthorized copies to construct several houses, and the district court awarded Jones Associates actual damages, attorneys’ fees, and prejudgment interest, 686 F.Supp. 160. This appeal presents a rather unusual question: whether the damages recoverable because of the infringement of copyrighted architectural drawings include, not only the losses attributable to the infringer’s unauthorized reproduction of the copyrighted article, but also the losses suffered as a result of the infringer’s subsequent use of the infringing copies. We affirm the finding of unlawful copying and subsequent use, but we reverse as to attorneys’ fees and prejudgment interest. Robert R. Jones Associates, Inc. designs, builds, and- sells custom-made houses. Nino Homes also constructs and sells new houses. Michele Lochirco is the principal shareholder and president of Nino Homes, and he is also the company’s chief executive and operating officer. In 1980, Jones Associates hired an architect to prepare a complete set of architectural drawings, including floor plans and elevations, for a house which was eventually called the “Aspen”. These plans were based on design concepts generated by Robert R. Jones, the sole shareholder of Jones Associates. After receiving the completed plans from the architect, Jones Associates constructed two model houses in accordance with the Aspen plans, one in the Grosse Pines subdivision in Rochester, Michigan, the other in the Maplewood North subdivision in West Bloomfield, Michigan. In order to promote sales of its houses in those two subdivisions, Jones Associates distributed to potential buyers brochures which contained abridged floor plans of the Aspen. In June 1983, one of those potential customers informed Robert Jones that a competing developer was constructing houses that were very similar to the Aspen. Jones subsequently investigated this tip, and, while driving through Nino Homes’ Clinton River Valley subdivision, a development less than three miles from Jones Associates’ Grosse Pines subdivision, he recognized one of the houses as being nearly identical to his design. Jones then checked the building permit at the construction site, and from the information contained on the permit, Jones was able to locate the building plans filed by Nino Homes with the Rochester Hills Township. After examining these plans, Jones concluded that his Aspen plans had been copied, so he promptly registered the complete architectural drawings and the abridged floor plans. Immediately thereafter, Jones sent a letter to Nino Homes demanding that construction of the allegedly identical house cease. When Nino Homes denied that its house, which it called the “Riverside”, was a copy of the Aspen, Jones Associates commenced this action. During the trial which followed, Jones Associates offered evidence that Nino Homes had unlawfully copied its Aspen plans. The record shows that Nino Homes had hired an architectural firm called Die-bele-Ginter to design a house. Before construction of the house initially designed by Diebele-Ginter had begun, however, Lo-chirco apparently gave Clifford Ginter, one of the two partners in the architectural firm, a photocopy of the Aspen abridged floor plans contained in the promotional brochure. According to the testimony of Richard J. Deibele, Ginter’s partner, Lo-chirco instructed Ginter to copy these plans for use by Nino Homes. The photocopy allegedly given by Lochirco to Ginter, who died before the case went to trial, was subsequently discovered in Diebele-Gin-ter’s files and introduced into evidence by Jones Associates. On the basis of this evidence, and other documents which showed that the Riverside design was virtually identical to the Aspen design, the district court concluded that Nino Homes and Diebele-Ginter had infringed upon Jones Associates’ copyright. The court then found that, had Nino Homes not sold seven houses which were built according to the infringing copies, Jones Associates would have sold seven additional houses. Therefore, the court awarded actual damages in the amount of $298,870: $212,550 for presumed profits not earned by Jones Associates because of Nino Homes’ infringement, and $86,320 for the profits earned by Nino Homes from the sale of the houses built pursuant to the infringing plans. The district court also awarded attorneys’ fees to Jones Associates, but the court limited this award to Aths of the fees incurred because two of the seven houses were completed before Jones Associates’ copyrights were registered. The district court subsequently amended its judgment to include prejudgment interest. Lochirco and Nino Homes now appeal, challenging the district court’s decision in several respects. At the outset, Lochirco and Nino Homes contest the court’s liability finding. They contend that the district court erred in admitting Diebele’s testimony concerning what he was told by his partner about the photocopy which was found in Diebele-Ginter’s files. Lochirco and Nino Homes argue that this inadmissible hearsay testimony is the only evidence of their access to the copyrighted work. Therefore, they maintain, they cannot be held liable for copyright infringement. This argument is unavailing for two reasons. First, we believe Diebele’s testimony was properly admitted. The district court held that the challenged testimony, that Ginter told Diebele that Lochirco had given him the photocopy of the Aspen floor plans and had instructed him to duplicate them, was admissible under Fed.R.Evid. 801(d)(2)(D). This subsection provides that a statement is not hearsay if it is offered against a party and is “a statement by the party’s agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship.” Without question, the statement is being offered against a party; both Lochir-co and Nino Homes were named as defendants. And it was made by their “agent”; Ginter was hired by Lochirco to design a house for his company, Nino Homes. Finally, Ginter’s statement to Diebele about the origin of the photocopy concerns the very essence of his employment relationship with Lochirco and Nino Homes, and the statement was made during the existence of that relationship. Therefore, the court properly admitted the testimony. Lochirco and Nino Homes’ liability argument also fails for a second reason. They maintain that proof of their access to the copyrighted material is a prerequisite to finding them liable for copyright infringement, and they claim that the arguably inadmissible testimony is the only evidence of such access. Therefore, they continue, the court erred in finding them liable. This argument is fundamentally flawed. In order to establish copyright infringement, the owner of a valid copyright must prove that the defendant or the person who composed the allegedly-infringing work copied the copyrighted material. Ferguson v. National Broadcasting Co., Inc., 584 F.2d 111, 113 (5th Cir.1978). Because rarely is there direct evidence of unauthorized duplication, the copyright hólder frequently proves copying by showing that the defendant or the person who composed the defendant’s work had access to the copyrighted material and that the defendant’s work is substantially similar to the protected work. Id. In short, in order to prove copying indirectly, the copyright holder need not necessarily prove access on the part of the alleged infringer, so long as there is proof that the person who composed the allegedly-infrining work had access to the copyrighted material. Here, Jones Associates has clearly proven that Diebele-Ginter, the architectural firm that designed Nino Homes’ allegedly infringing plans, had access to the copyrighted work. Access merely means an opportunity to view the protected material. 3 M. Nimmer on Copyright § 13.02[A] (1988). The photocopy found in the firm’s files clearly shows that the architects had an opportunity to view Jones Associates’ design. Diebele's challenged testimony, which shows how the architects obtained that access, was not vital to the success of Jones Associates’ claim. This testimony, which we believe was properly admitted, merely helped the court to apportion relative responsibility for the unlawful conduct. Because Jones Associates has proven that the drafter of the allegedly infringing plans had access to its copyrighted work, because Lochirco admitted during the trial that he made several copies of Diebele-Ginter’s infringing plans, and because Lochirco and Nino Homes in this appeal have not challenged the court’s finding that their Riverside plans are substantially similar to the Aspen plans, we affirm the court’s conclusion that Lochirco and Nino Homes have infringed upon Jones Associates’ copyright. With respect to the amount of actual damages awarded to Jones Associates, however, we must modify the district court’s decision. While we do not adopt the position advanced by Nino Homes, we believe the court’s award is excessive. Nino Homes contends that the district court used an improper standard to compute the damages it awarded to Jones Associates. The court held that Jones Associates was entitled to recover the profits it would have earned on the sale of additional houses had Nino Homes not used infringing copies of the Aspen plans to build houses which it sold. Nino Homes maintains that this “lost profits” standard is not the appropriate measure of damages in an action for copyright infringement where the protected work is architectural plans. Rather, Nino Homes argues, the proper standard is the fair market value of the architectural plans at the time of the infringement. We disagree. But to appreciate fully the legal issue posed by this seemingly straightforward argument, one must understand the fundamental differences between copyright and patent laws. Under 17 U.S.C. § 102(a) (1982), “original works of authorship fixed in any tangible medium of expression” are eligible for copyright protection. A copyright, if awarded, gives its owner, among other things, the exclusive right “to reproduce the copyrighted work” and “to prepare derivative works based upon the copyrighted work.” Id. at § 106. This power to prevent unauthorized reproduction, though, is inherently limited; 17 U.S.C. § 102(b) provides that “[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” “It is a fundamental maxim of copyright law, [therefore], that a copyright protects ‘only the work’s particular expression of an idea, not the idea itself.’” Demetriades v. Kaufmann, 680 F.Supp. 658, 662 (S.D.N.Y.1988) (quoting Eden Toys, Inc. v. Marshall Field & Co., 675 F.2d 498, 500 (2d Cir.1982)). The protection of innovative ideas, on the other hand, is the province of patent law. In order to encourage technological advancement, patent law deems “new and useful” ideas as deserving of certain, specific protections. 35 U.S.C. § 101 (1982). Generally, patents are awarded ,to novel inventions and unique designs. But while a copyright merely confers on its owner an exclusive right to reproduce the original work, a patent gives its owner a far broader right: “the right to exclude others from making, using, or selling the invention” for a specific period of time. Id. at § 154. In order to be eligible for this right to exclusive use, though, the applicant for a patent must show that the idea is novel. In contrast, the applicant for a copyright need only establish that the creative work is original. See generally 1 Nimmer at § 2.01[A], Because their work can rarely, if ever, satisfy the more rigorous novelty standard applied to patent applications, architects generally look to copyright law for protection of their creative works. And, although the Copyright Act does not expressly refer to architectural plans, the statute does afford protection to “pictorial, graphic, and sculptural works,” 17 U.S.C. § 102(a)(5), which are defined as including “technical drawings, diagrams, and models.” Id. at § 101. “Consistent with explicit congressional intent, these sections have be.en interpreted to include architectural drawings.” Demetriades v. Kaufmann, 680 F.Supp. at 663 n. 6. Architectural plans, however, “are subject to certain qualifications peculiar to this form of work.” 1 Nimmer § 2.08[D][2][a] at 2-105. The copyright statute “does not afford, to the owner of a copyright in a work that portrays a useful article as such, any greater or lesser rights with respect to the making, distribution, or display of the useful article so portrayed than those afforded to such works under the law ... in effect on December 31, 1977.” 17 U.S.C. § 113(b). A “useful article” is one which has “an intrinsic utilitarian function.” Id. at § 1.01. Because any building or house undoubtedly falls within this definition, architectural plans necessarily depict a useful article and are subject to this restriction. Therefore, the owner of a copyright in architectural plans has statutory copyright protection in the building depicted in those plans only to the extent that such protection was recognized by the law prior to January 1, 1978. The limitations of this protection were initially set by the Supreme Court in Baker v. Selden, 101 U.S. (11 Otto) 99, 25 L.Ed. 841 (1879). In Baker, the plaintiff sought copyright protection for a book which the author claimed explained a new bookkeeping system. In addition to material explaining the system, the book included blank forms specifically designed for use with this system. The defendant in the case subsequently published a book with similar forms. The plaintiff then brought suit claiming that, because the defendant’s work embodied an accounting system similar to the system explained in the plaintiff’s book, the defendant’s work infringed on plaintiff’s copyright. The Supreme Court rejected the plaintiff’s Claim. The Court essentially held that, “although copyright protection extends to the particular explanation of an art or work, it does not protect use of the art or work described by the copyrighted publication.” Demetriades v. Kaufmann, 680 F.Supp. at 663 (emphasis in original). The distinction the Court drew between “explanation” and “use” stems from the fundamental differences between the kind of protection afforded by a copyright and the protection afforded by a patent. The Court reasoned that “[t]o give the author of the book an exclusive property to the art described therein, when no examination of its novelty has ever been officially made, would be a surprise and a fraud upon the public. That is the province of letters-patent, not of copyright.” Baker v. Selden, 101 U.S. at 102. In essence, the plaintiff in Baker could prevent the unauthorized reproduction of the actual book, but, unless he had a patent, the plaintiff could not prevent others from using the accounting forms, the useful article embodied in the book. The doctrine enunciated in Baker v. Selden is particularly problematic where architectural plans are the copyrighted items because the principal value of such creative works lies in their use in constructing a building. If Baker is applied strictly, and the Copyright Act is interpreted as merely prohibiting others from selling copyrighted plans and not from using the plans to construct other buildings, then the statute may not afford the kind of protection necessary to give architects adequate incentive to create new architectural designs. Conversely, giving the owner of a copyright in architectural plans the right to prevent others from constructing buildings substantially similar to the one depicted in the copyrighted plans, without requiring the architect to show that the design is novel as opposed to merely original, would give architects unwarranted monopoly powers with the result that the costs of houses and other buildings would rise unnecessarily. Other courts have also struggled to balance these competing concerns — to remain faithful to Baker, yet afford architects the protection Congress clearly intended to provide them. This court addressed the issue in Scholz Homes, Inc. v. Maddox, 379 F.2d 84 (6th Cir.1967). In that case, the plaintiff had a valid copyright in plans for a split-level house. In order to advertise the house, the developer distributed a copyrighted booklet which contained a drawing of the house. The defendant allegedly took this publicized sketch to an architect so that the architect could prepare plans essentially identical to plaintiffs design. The defendant then used the architect’s plans to build his house. The court in Scholz Homes recognized the dilemma caused by Baker v. Selden in such cases. The court stated that, if read most literally, “Baker would seem to permit the making of [duplicate] plans as well as the construction of [identical] buildings.” Id. at 86. In order to give architects some protection, however, the court suggested that Baker could be interpreted as protecting solely against the selling of infringing plans, but not against their unauthorized use. Id. Finally, the court stated that, to give architects even greater protection, Baker could be followed only to the extent of holding that the possession of the copyright in the plans gives no exclusive right to construct the depicted building; accordingly, more extensive protection would “be provided by declaring the making of unauthorized copies [and the construction of a building according to the infringing copies] of the plans to be an infringement.” Id. The Scholz Homes court, however, avoided this difficult issue. The court concluded that the brochure which contained the drawing “was copyrighted to preserve its value as an advertising medium and not to give Scholz the exclusive right to copy the plans depicted therein.” Id. at 87. Therefore, the court reasoned, the district court had correctly concluded that there was insufficient evidence to support a claim of infringement. Id. Other courts, however, have tackled the fundamental issue head-on. In Imperial Homes Corp. v. Lamont, 458 F.2d 895 (5th Cir.1972), a builder advertised its houses by distributing brochures which contained a copy of the floor plan from the complete set of copyrighted architectural drawings. After visiting one of the builder’s houses and obtaining one of the brochures, a potential customer proceeded to develop a set of drawings for a house which was to be substantially similar to the builder’s design. The builder brought an action for copyright infringement and sought to enjoin the customer from using the allegedly infringing plans. The court in Imperial Homes recognized that the Baker decision warned against extending a copyright into a patent. The court reasoned that “no copyrighted architectural plans ... may clothe their author with the exclusive right to reproduce the dwelling pictured.” Id. at 899. The court, though, then stated that nothing in Baker v. Selden “prevents such a copyright from vesting the law’s grant of an exclusive right to make copies of the copyrighted plans so as to instruct a would-be builder on how to proceed to construct the dwelling pictured.” Id. Therefore, although the court expressly did “not hold that the [defendants] were in anywise restricted by the existence of Imperial’s copyright from reproducing a substantially identical residential dwelling,” the court held that, “if copyrighted architectural drawings of the originator of such plans are imitated or transcribed in whole or in part, infringement occurs.” Id. The court in Herman Frankel Organization v. Tegman, 367 F.Supp. 1051 (E.D.Mich.1973), reached a similar conclusion. In Tegman, a residential builder brought an action for copyright infringement against a competing contractor who admitted copying copyrighted abridged floor plans. In holding the defendant liable for copyright infringement, the court interpreted Baker v. Selden as implicitly drawing an important distinction: “A person cannot, by copyrighting plans, prevent the building of a house similar to that taught by the copyrighted plans.... A person should, however, be able to prevent another from copying copyrighted houseplans and using them to build the house.” Id. at 1053 (emphasis added). The Tegman court concluded that “[t]his result protects against copying of copyrighted material, yet does not change the copyright act into a patent act and give the person holding the copyright a monopoly on the ideas there expressed.” Id. at 1054. Another federal district court recently addressed a similar issue. In Demetriades v. Kaufmann, supra, a real estate developer brought a copyright infringement action to enjoin another developer from completing construction of a house which the defendant conceded was being built pursuant to plans which were merely tracings of the plaintiff’s copyrighted plans. The court recognized that, under Baker v. Selden, although the plaintiff may have a valid copyright in the architectural plans that served as the basis for its uniquely designed house, that copyright “protection simply does not extend to the design or the house itself absent a design patent.” Demetriades v. Kaufmann, 680 F.Supp. at 665. The court held, however, “that the unauthorized reproduction of copyrighted architectural plans constitutes infringement.” Id. Accordingly, although the court refused to enjoin construction of the defendant’s substantially similar house, the court enjoined the defendants from further, unauthorized copying of plaintiff’s architectural plans, and, of greater significance in the matter before us, the court “further enjoined [the defendants] from relying on any infringing copies of those plans.” Id. at 666. The rule which emerges from these cases is that one may construct a house which is identical to a house depicted in copyrighted architectural plans, but one may not directly copy those plans and then use the infringing copy to construct the house. As a logical extension of this rule, we hold that, where someone makes infringing copies of another’s copyrighted architectural plans, the damages recoverable by the copyright owner include the losses suffered as a result of the infringer’s subsequent use of the infringing copies. Ac cordingly, the measure of damages in this case is the profits Jones Associates would have made on houses it would have sold but for Nino Homes’ unauthorized duplication of the Aspen plans and Nino Homes’ use of its infringing copies to build its Riverside houses. Therefore, the district court’s decision to award Jones Associates $212,550 for profits it would have earned but for Nino Homes’ sale of seven houses built pursuant to the infringing plans is correct. In a copyright infringement action, the copyright owner is also entitled to recover “any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” 17 U.S.C. § 504(b) (emphasis added). Here, however, where the infringer’s profit per house is less than the copyright owner’s profit margin, and where all of the infringer’s sales were counted as sales lost by the copyright owner, all of the infringer’s profits attributable to the infringement were already taken into account in the actual damages awarded to the copyright owner. Therefore, the district court’s decision to add Nino Homes’ profits of $86,320 to the award of Jones Associates’ lost profits constitutes the kind of double recovery clearly precluded by the statute. Accordingly, that aspect of the district court’s decision is reversed. We also believe the district court’s decision to award attorneys’ fees was improper. In addition to damages, the district court “may also award a reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. Under section 412(2) of Title 17, however, the court may not award attorneys’ fees for “[a]ny 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.” The promotional brochure was first published in July 1981, but Jones Associates did not register its copyrights in the drawings and the floor plans until June 1983. Finding that construction of two of the seven houses was completed after July 1981, yet prior to when the registrations became .effective in June 1983, the district court limited the award of attorneys’ fees to %ths of the fees incurred. This proportional limitation, however, is fundamentally at odds with our analysis of Baker v. Selden and its progeny. Here, we have held that, although the owner of copyright in architectural plans cannot prevent the building of a duplicate structure, the copyright owner is entitled to recover lost profits if the alleged infringer uses infringing copies of the copyrighted plans to construct the substantially similar building. Critical to our conclusion that this Holding is consistent with Baker is the fact that Nino Homes copied the Aspen plans before building its houses pursuant to the infringing copies. Conceptually, therefore using those infringing copies to build seven houses did not constitute seven discrete acts of infringement. Rather, the infringing act was the making of infringing plans, and the construction of the houses according to those infringing copies merely multiplied the damages attributable to the infringing act. Moreover, this conclusion advances the statute’s goal of encouraging prompt registration, and it is consistent with the decisions of other courts that have addressed the same issue in other contexts. See, e.g., Whelan Assoc., Inc. v. Jaslow Dental Laboratory, 609 F.Supp. 1325 (E.D.Pa.1985), and Johnson v. University of Virginia, 606 F.Supp. 321 (W.D.Va.1985). Thus, because the copying of the plans, the infringing act, occurred in March 1983, after the copyrighted plans’ first publication but before the registrations became effective, the court erred in awarding attorneys’ fees.

1768039-20883

JOHNSON, Circuit Judge: This case is about the Calhoun County Commission and whether an at-large chairperson would violate the Voting Rights Act of 1965, in particular Section 2 as amended in 1982. Plaintiffs in this case originally brought suit against nine county governments in Alabama. Six of the counties reached full settlement by the time of the district court’s final order. The United States District Court for the Middle District of Alabama approved in part and modified in part the election schemes separately proposed by the remaining three counties. Dillard v. Crenshaw County, 649 F.Supp. 289 (M.D.Ala.1986). Calhoun County, the only county pursuing appeal, contests the district court’s modification of its five-commissioner and one-chairperson proposal. I. BACKGROUND The governing commission for Calhoun County was established by a local act in 1939. The 1939 Act provided for a three-member commission of two associate commissioners and a chairperson, all elected at-large from the whole county. The Act did not specify the duties of the chairperson, but provided that the chairperson would receive twice the salary of the associate commissioners. All three members had full and equal voting power. From that general statutory scheme, the Calhoun County Commission evolved into a body that met twice monthly. The position of the chairperson became a full-time commitment with administrative duties in addition to the full legislative powers. There has never been a black county commissioner in Calhoun County. The black population of Calhoun County is 17.6% overall, and 15.9% of the voting population. As found by the district court, blacks in the county are on average educationally and economically less advanced than whites. The black community is politically cohesive and geographically insular. Voting is racially polarized. Black plaintiffs, claiming that at-large commissioner elections in conjunction with racially polarized settings resulted in barriers to black participation in the political process, brought this case to force compliance with the Voting Rights Act of 1965. The district court granted a preliminary injunction against the at-large county governments, Dillard v. Crenshaw County, 640 F.Supp. 1347 (M.D.Ala.1986), resting the opinion on an extensively documented history in Alabama government of racial discrimination and on continued adverse impact of that discrimination. All parties in the litigation subsequently agreed and stipulated that the present over-all form of county government, which includes election of associate commissioners and a commission chairman at-large, currently results in dilution of black voting strength in violation of Section 2 of the Voting Rights Act of 1965, as amended, 42 U.S.C. § 1973. The district court invited constitutional alternatives from each county. Calhoun County responded with a one-page proposal to increase the membership of its county commission but to retain the position of an at-large chairperson. The new commission would have five associate commissioners, each elected by a single district. One of . the five single-member districts would have a 65% voting majority of blacks, allowing a likely result of one black associate commissioner on the full commission. The proposal did not specify the respective duties and powers of the associate commissioners and the chairperson. The Calhoun County proposal received preclearance by the United States Attorney General, as authorized by Section 5 of the Voting Rights Act. The district court then reviewed the proposal and concluded that [a]n at-large elected member would increase the voting membership of the county commission, would participate as a member of the commission, and would exercise enhanced powers enjoyed by no other member of the commission. To that extent, the members elected by a racially fair district election method would have their voting strength and influence diluted. Dillard v. Crenshaw County, 649 F.Supp. at 296. The district judge rejected the at-large chair position, and in its place enjoined the county to rotate the chair amongst the five associate commissioners. Calhoun County requests this Court to reinstate its original provision for a chairperson chosen at large. The issue before this Court is whether the at-large position, as proposed by Calhoun County and regulated by state law, in combination with the racial facts and history of Calhoun County, fails to correct the original violation of amended Section 2 of the Voting Rights Act of 1965. This is a case where on review this Court must consider if any findings below were clearly erroneous. Rogers v. Lodge, 458 U.S. 613, 102 S.Ct. 3272, 73 L.Ed.2d 1012 (1982). It is also a case where the district court is vested with broad equitable powers. United States v. Paradise, — U.S.-, 107 S.Ct. 1053, 94 L.Ed.2d 203 (1987). These two factors in combination call for considerable deference to the election plan mandated by the district court. However, this is also a case where the remedy must be narrowly tailored only to include measures necessary to cure the defect. Upham v. Seamon, 456 U.S. 37, 42-43, 102 S.Ct. 1518, 1521-22, 71 L.Ed.2d 725 (1982). To the extent that a Section 2 claim must undergo fact-intensive review, Thornburg v. Gingles, — U.S.-, 106 S.Ct. 2752, 2764, 92 L.Ed.2d 25 (1986), this case requires a careful look at the contentious elements of the proposed plan. II. ANALYSIS To evaluate the at-large provision in the Calhoun County proposal we begin with the language of Section 2: (a) No voting qualification or prerequisite to voting or standard, practice, or procedure shall be imposed or applied by any State or political subdivision in a manner which results in a denial or abridgement of the right of any citizen of the United States to vote on account of race or color____ (b) A violation of subsection (a) of this section is established if, based on the totality of circumstances, it is shown that the political processes leading to nomination or election in the State or political subdivision are not equally open to participation by members of a class of citizens protected by subsection (a) of this section in that its members have less opportunity than other members of the electorate to participate in the political process and to elect representatives of their choice. 42 U.S.C.A. § 1973 (West Supp.1986). Congress amended Section 2 explicitly to overrule City of Mobile v. Bolden, 446 U.S. 55, 100 S.Ct. 1490, 64 L.Ed.2d 47 (1980), in which the Supreme Court extended application of the discriminatory intent requirement for equal protection violations to a challenge under the Voting Rights Act. Thirty pages of legislative history make eminently clear that Congress did not want the high burden of proof for discriminatory intent to govern violations under Section 2. Reverting the standard to its original intent and application, Congress explicitly incorporated a “result” standard into Section 2: If as a result of the challenged practice or structure plaintiffs do not have an equal opportunity to participate in the political processes and to elect candidates of their choice, there is a violation of this section. To establish a violation, plaintiffs could show a variety of factors____ S.Rep. No. 417, 97th Cong., 2d Sess. 28, reprinted in 1982 U.S.Code Cong. & Admin.News 177, 206 [hereinafter 1982 U.S. Code Cong.]. Congress listed nine typical factors to consider. Id. With that imprimatur, the district court in this case looked to the Congressional list and made seven findings that together and separately “reach[ed] not only the at-large commissioner but the chairperson position as well”: 1) the history of open and unabashed discrimination in Alabama politics, 2) the lower socioeconomic status of blacks and the corresponding lack of effectiveness in politics, 3) the majority-vote plus numbered-post requirements that together with an at-large election created an insurmountable barrier to electing black candidates, 4) the insularity of the black community, 5) strong racial polarization in voting, 6) appeals to racial prejudice in election campaigns, and 7) the failure of blacks to be elected to office in Calhoun County. 649 F.Supp. at 294-95. The district court concluded that “the evidence before the court establishes that the presence of the at-large chairperson violates Sections 2’s results test.” Id. at 294. It is clear that any proposal to remedy a Section 2 violation must itself conform with Section 2. Edge v. Sumter County School Dist., 775 F.2d 1509, 1510 (11th Cir.1985). In making the remedy evaluation, the district court again relied on the Congressional list of factors. In essence, the court took the findings that made the original electoral system infirm and transcribed them to the new electoral system. In effect, the court held that once the election of a chair at-large was found unacceptable, no combination of factors would make it acceptable. 649 F.Supp. at 297. However, such a transcription does not end the evaluation. The evidence showing a violation in an existing election scheme may not be completely coextensive with a proposed alternative. The nine factors suggested by Congress rely to a significant degree on a review of the history as tainted by the infirm election procedure. Additionally, a number of these factors are circumstantial, not direct, evidence of a lack of openness in the political process. Thus, at-large procedures that are discriminatory in the context of one election scheme are not necessarily discriminatory under another scheme. The Supreme Court has repeatedly said that at-large procedures are not unconstitutional per se. Rogers v. Lodge, 458 U.S. 613, 617, 102 S.Ct. 3272, 3275, 73 L.Ed.2d 1012 (1982); Fortson v. Dorsey, 379 U.S. 433, 439, 85 S.Ct. 498, 499, 13 L.Ed.2d 401 (1965). To find a violation of Section 2, there must be evidence that the new plan denies equal access to the political process. Whitcomb v. Chavis, 403 U.S. 124, 149, 91 S.Ct. 1858, 1872, 29 L.Ed.2d 363 (1971). But this is not to be confused with equal participation: “[Njothing in this section establishes a right to have members of a protected class elected in numbers equal to their proportion in the population.” 42 U.S.C.A. § 1973(b). The clearest statement by Congress was the adoption of a test developed and applied by the federal court system in nearly two dozen cases prior to the amendment: The court should exercise its traditional equitable powers to fashion the relief so that it completely remedies the prior dilution of minority voting strength and fully provides equal opportunity for minority citizens to participate and to elect candidates of their choice. 1982 U.S.Code Cong, at 208 (emphasis added). Beyond general maxims, there is very little specific guidance in the legislative history as to the proper evaluation of remedial schemes for violations under amended Section 2. This Court holds that the district court was not clearly erroneous in finding the seven factors it listed as proof of Section 2 violations. But the five-member, one-chair commission proposal for Calhoun County must be assessed in “the totality of the circumstances.” § 1973(b). We must evaluate the new system in part measured by the historical record, in part measured by difference from the old system, and in part measured by prediction. The district court transferred the historical record but incompletely assessed the differences between the new and old proposals. Calhoun County distinguishes the new chairperson from the old chairperson as different in role and power. Although unspecified in the official proposal, Calhoun County has since emphasized that the commission chairperson would have only a limited legislative role. The chairperson would preside over the commission meetings, but would have no vote except in the case of a tie. Calhoun County emphasizes that the major function of the chairperson would be as county administrator. The implication is that legislative positions are subject to Section 2, but administrative positions are not. Calhoun County argues this distinction without basing it in the language and meaning of Section 2. As it is, the distinction has no direct roots in the legislation. Nowhere in the language of Section 2 nor in the legislative history does Con gress condition the applicability of Section 2 on the function performed by an elected official. The language is only and uncompromisingly premised on the fact of nomination or election. Thus, on the face of Section 2, it is irrelevant that the chairperson performs only administrative and executive duties. It is only relevant that Calhoun County has expressed an interest in retaining the post as an electoral position. Once a post is opened to the electorate, and if it is shown that the context of that election creates a discriminatory but corrigible election practice, it must be open in a way that allows racial groups to participate equally. However, the election of the chairperson should not be assessed in a vacuum, but rather in its full context. Therefore, we go beyond the plain reading of the statute to substantiate the infirmity of the chair position proposed by Calhoun County. By underscoring the administrative functions of the new chairperson, Calhoun County argues additionally that the new chair position is a single-member office not subject to proportional representation issues. As administrator, the chairperson is likened to sheriffs, probate judges, and tax collectors. For these positions, at-large, non-proportional elections are inherent to their nature as single-person officers elected by direct vote. Butts v. City of New York, 779 F.2d 141, 148-49 (2d Cir.1985). Such single offices are most commonly limited to non-legislative functionaries. To the extent that the proposed chair position is not purely executive or judicial, Calhoun County further cites the examples of lieutenant governors and vice presidents. These, too, are single-office positions, and although the offices are executive, they include the authority to preside over legislative bodies and break tie votes. Calhoun County contends that the chairperson of the county commission would be indistinguishable in role and, therefore, would not be subject to vote dilution concerns. Calhoun County draws the analogy to other single-member offices too tightly. Both historically and practically, the overlap between the roles of the commission and the chairperson do not allow us to consider this office as a separate, single-office position. The comparison with lieutenant governors and vice presidents is inapposite to the extent that the chairperson is more directly tied to the work of the county commission than any vice president or lieutenant governor is tied to the work of the legislature. As one indicator, the county chairperson has broad discretion in appointments for carrying out the prescribed work of the county, including services and construction projects. Even in the executive tasks, the chairperson would have greater discretion and power vis-á-vis the legislative body than is typical for lieutenant governors or vice presidents. Our concern with the scope of the chairperson’s duties goes further. Close scrutiny of the proposed duties of the chairperson raises doubt as to the legislative/administrative distinction Calhoun County makes with fervor. The following duties of the chairperson appear in the record: —resolving citizens’ complaints about county services, —representing the county on various local and state boards, —lobbying the county’s interests to the legislature, —overseeing county construction projects, —liaising with military installations in the county, and —assuring the execution of commission policies by other county officers. The administrative duties of the new chairperson are intended to be a continuation of the administrative duties of the original chairperson. There is no formal enumeration of duties, and this crucial aspect of the proposal comes only from testimony by a member of the current government as a report on the duties of the chairperson from the original three-member commission. County commissions typically join legislative and executive responsibilities. The original commission did not separate legislative tasks. The historical role of the chairperson did not turn on a legislative/executive distinction, and it is doubtful that an unambiguous and fully adhered to line can be drawn. Although many of the functions of the chairperson may be administrative, there is a fine line between legislative and administrative duties. A search for a definition of what constitutes legislative and what constitutes executive activity in government invariably leads to the conclusion that there is no bright line between the two realms. Even as stated in the record, some of the chairperson’s duties verge on and possibly over the line. Were this not the crux to keep the chair position within constitutional bounds, this true line would not be so crucial. As it is, however, the ambiguity is more likely fatal. This Court cannot authorize an element of an election proposal that will not with certitude completely remedy the Section 2 violation. The history that brought this case to this Court is a commission which over time skewed power heavily into the hands of the chairperson. Enough of the elements remain to allow anew unacceptable gravitation of power to the chairperson. The full-time/part-time difference between the chairperson and associate commissioners makes significant influence of the chairperson over legislative decisions— even without a vote — inherent to the practice of the commission. The fact that there is no legislative or judicial source that controls the authority of the commission over the chairperson in this electoral scheme, and no local or state statute to fill the gap, compels our decision. In the absence of a judicially approved itemization of chairperson duties and mandated delimits, the proposal from Calhoun County requires a leap of faith by this Court that is simply not buoyed by the history of the Calhoun County Commission. III. CONCLUSION The district court was not clearly erroneous in the seven factors it found to substantiate a Section 2 violation in the original county commission. The district court appropriately considered those same factors in evaluating the proposed county commission. We have reconsidered the an ticipated role of the new chairperson. Although the extent of the chairperson’s legislative power is said by Calhoun County to be minimal, we are not satisfied that the chairperson will be sufficiently uninfluential in the activities initiated and in the decisions made by the commission proper to be evaluated as a single-member office. Furthermore, amended Section 2 does not distinguish between roles within a commission. Given that the chairperson would be elected and would work directly within the context of the elected body of associate commissioners, we agree with the district court that “the members elected by a racially fair district election method would have their voting strength and influence diluted.” 649 F.Supp. at 296. The district court was correct to reject the at-large chair position as proposed by Calhoun County. However, several alternatives remain, including the rotating system leading to this appeal, the option of a hired executive, or perhaps a clearly delimited job description along with other safeguards that would guarantee no infringement on the work of the associate commissioners. In keeping with the appropriate role of the district court to fashion a narrowly and well tailored remedy, Wyche v. Madison Parish Police Jury, 635 F.2d 1151, 1163 (5th Cir. Unit A Feb. 1981), the district court may consider proposals made in light of this opinion. We REMAND either for reaffirmation of the rotating chairperson system or for approval of a proposed alternative that fully preserves the elected integrity of the body of associate commissioners. . Congress passed the Voting Rights Act pursuant to the enforcement clauses of the Fourteenth and Fifteenth Amendments. See United States v. Marengo County Comm'n, 731 F.2d 1546 (11th Cir.1984). . The nine counties are Calhoun, Coffee, Crenshaw, Escambia, Etowah, Lawrence, Lee, Pick-ens, and Talledega counties. . The United States filed amicus briefs in support of Calhoun County's position. . Despite the at-large election, each associate commissioner was resident in and representative of one of two districts created by the 1939 Act. . 649 F.Supp. 289, 292-95. . Calhoun County explicitly reserved the right to try to show "full and equal access to the political process by remedial election plans that may contain a chair, administrator or county executive elected at-large by voters of the entire county.”

3652319-10680

MEMORANDUM OPINION BRYANT, Judge. Plaintiffs seek a judgment declaring certain provisions of the Northeast Rail Service Act of 1981 (NRSA) unconstitutional, enjoining the defendant Conrail from further “implementing the terms of the [allegedly] unconstitutional portions” of NRSA and awarding damages for losses of income resulting from implementation of the allegedly unconstitutional provisions. The matter is before the court on the parties’ cross-motions for summary judgment. The plaintiffs contend that NRSA was not intended to preempt an Indiana statute which affects their employment; and that if it was so intended, it violates the fifth, ninth, tenth, and thirteenth amendments. Defendant Conrail and the defendant-intervenors argue that Congress specifically intended to preempt state minimum crew laws, including Indiana’s, and that Congress validly exercised its power. For the reasons stated below, the court grants summary judgment for the defendants. I. Background The Indiana Minimum Crew Law of 1937 provided for minimum crews on trains operating in Indiana according to the size and type of train. A passenger train, for example, was to be manned by a fireman, conductor, and flagman if the train had four cars, with a brakeman required on longer trains. A freight train required a fireman, conductor, flagman, and brakeman, plus a second brakeman on trains of 70 cars or more. Ind.Code Ann. §§ 8-9-2-2 — 8-9-2-4 (Burns 1973). In 1972 the Indiana statute was amended to permit exceptions to the minimum crew requirements. Under the amendment, the Indiana Public Service Commission (PSC) approved the use of smaller crews as provided for in collective bargaining agreements,, if the crew size was “adequate for safety of operation” and employees with seniority as of February 16, 1972 were guaranteed continued employment. Id. § 8-9-2-10. The PSC approved two agreements of relevance here: the Fireman Manning Agreement of 1972 and the Crew Consist Agreement of 1978. The Fireman Manning Agreement required Conrail to employ firemen on passenger trains, giving preference to employees with seniority as of the agreement date, and to employ firemen on freight trains to the extent that senior firemen remained available after passenger service positions were filled. The Crew Consist Agreement similarly provided for the use of brakemen: brakeman positions were to be filled according to seniority, with second and third brakeman slots to be filled if senior brakemen lay claim to them. These agreements, in short, reduced train crews, but only where the employment needs of senior firemen and brakemen had already been accommodated. When Congress passed NRSA it perceived the employment of excess firemen and brakemen as a major source of Conrail’s continuing financial inviability. See United Transportation Union v. Consolidated Rail Corp. (“Cannon ”), 535 F.Supp. 697, 704-05, cert. denied, 457 U.S. 1133, 102 S.Ct. 2969, 73 L.Ed.2d 1350 (1982). Accordingly § 702 permits Conrail to terminate excess firemen and brakemen upon payment of a cash allowance; open fireman positions which result must be eliminated, and open second brakeman positions which result may be eliminated at Conrail’s discretion. 45 U.S.C. § 797a. Conrail and the National Railroad Passenger Corporation (Amtrak), which contracts out its passenger operations in Indiana to Conrail, have begun to implement § 702 without seeking PSC approval. The steps they have taken include unilateral elimination of positions and an agreement with the United Transportation Union to reduce crews on certain maintenance and freight operations. Conrail expects to eliminate 600 positions in Indiana, at a savings of $15.1 million in labor costs; its systemwide goal is to reduce the prevailing crew size to one conductor and one brakeman, retaining fireman positions solely to fulfill training and seasonal employment demands. The plaintiffs, to whom the seniority provisions of the Indiana statute apply, assert that implementation of § 702 is barred by the Indiana statute. The defendants claim that the Indiana Minimum Crew Law was preempted by § 1168(b) of NRSA, which reads as follows: The operation of trains by Conrail shall not be subject to the requirement of any State or local law which specifies the minimum number of crew members which must be employed in connection with the operation of such trains. [45 U.S.C. § 1116(b).] In addition, the defendants rely on § 711 of the Regional Rail Reorganization Act of 1973 (the 3R Act) as amended by NRSA: No State may adopt or continue in force any law, rule, regulation, order, or standard requiring the Corporation, the National Railroad Passenger Corporation, or the Amtrak Commuter Services Corporation to employ any specified number of persons to perform any particular task, function, or operation, or requiring the Corporation to pay protective benefits to employees, and no State in the Region may adopt or continue in force any such law, rule, regulation, order, or standard with respect to any railroad in the Region. [45 U.S.C. § 797j.] In an unrelated matter the PSC recently held that this section indeed preempts the Indiana Full Crew Law. II. Discussion The initial question in deciding whether a federal statute preempts a state statute is whether Congress intended preemption. Shaw v. Delta Air Lines, Inc., — U.S. —, 103 S.Ct. 2890, 2899, 77 L.Ed.2d 490 (1983). In this case, Congress’ intent to preempt certain state statutes is express. Moreover, the Indiana statute fits squarely within the descriptions of the statutes affected. Section 711 refers to state laws which require the use of “any specified number of persons to perform any particular task, function, or operations”. The Indiana statute, which states minimum crew sizes required for the operation of any train or locomotive, is just such a law. The Indiana PSC may approve crew sizes below the statutory minimum for individual railroads, but in such cases those railroads are held to minimum crew sizes by regulatory decree rather than by statute — an insignificant distinction under the express terms of § 711. Likewise, the Indiana statute and the rulings of the PSC thereunder “specif[y] the minimum number of crew members which must be employed in connection with the operation of [trains by Conrail]” within § 1168(b). Any doubt that Congress intended to preempt all state minimum crew laws is dispelled by the legislative history of NRSA, including the following passage in the House Report on a predecessor bill: Section 711 preempts any State law, rule, or regulation requiring Conrail, Amtrak, or their commuter subsidiaries to hire specified numbers of persons for particular tasks. The Committee specifically intends to preempt any State full crew laws which require crews to contain certain numbers or certain positions, and any State laws which phase out such requirements. Given the dire circumstances of these rail transportation corporations, such a preemption is necessary. [H.Rep. No. 153, 97th Cong., 1st Sess. 30 (1981) (reporting H.R. 3559, Rail Service Improvement Act of 1981).] Congress plainly intended to insure that neither collective bargaining agreements nor state minimum crew laws would stand in the way of the NRSA workforce scheme. See Cannon, 535 F.Supp. at 704. The plaintiffs’ chief argument that Congress did not intend to preempt the Indiana Minimum Crew Law is that the Indiana law was a safety measure, whereas NRSA addressed economic issues only. But on its face the Indiana statute is not solely concerned with safety. Under § 8-9-2-10 the Indiana PSC may not approve the use of smaller crews unless the jobs of senior employees are protected, even where the smaller crews are “adequate for safety of operations.” PSC approval, in other words, is contingent on findings relating to safety and employment protection. More important, whatever the purposes of the Indiana statute, Congress evidently saw no legitimate safety reasons for Conrail to employ the numbers of firemen and brakemen required under Indiana law. Congress specifically intended to permit Conrail to eliminate 4600 fireman and brakeman positions, S.Rep. No. 139, 97th Cong., 1st Sess. 331 (1981), U.S.Code Cong. & Admin.News 1981, p. 396; it is pursuant to this goal that Conrail is acting in Indiana, see Lindquist Affidavit, II 3. Congress was aware of studies indicating that elimination of positions on that scale would not create safety risks. Union representatives, moreover, pressed job security rather than safety concerns at the legislative subcommittee hearings. In short, Congress enacted § 702 with the full expectation that Conrail would do exactly what it is doing in Indiana, without reason to believe that a safety hazard would ensue, and with ample reason to believe that safety was not threatened at all. Against this background it is simply implausible that §§ 1168(b) and 711 contemplate an exception for Indiana on the ground that the Indiana legislature of 1937 enacted its minimum crew law “to promote the safety of employees and of travelers upon railroads,” 1937 Ind.Acts Ch. 58, Sec. 1 (title of Act). Sections 1168(b) and 711, then, were intended to preempt the Indiana Minimum Crew Law. The constitutional question is whether those sections are valid exercises of the commerce power, to be given effect under the Supremacy Clause. The general rule is that the commerce power is “a grant of plenary authority to Congress ... ‘acknowledging] no limitations, other than are prescribed in the constitution.’ ” Hodel v. Virginia Surface Mining & Reclamation Association, 452 U.S. 264, 276, 101 S.Ct. 2352, 2360, 69 L.Ed.2d 1 (1981) (quoting Gibbons v. Ogden, 9 Wheat. 1, 196, 6 L.Ed. 23 (1824)). The plaintiffs allege that “limitations ... prescribed in the constitution” are present in this case. First, the plaintiffs argue that preemption of the Indiana law violates “fundamental personal rights” protected by the ninth amendment, quoting Griswold v. Connecticut, 381 U.S. 479, 496, 85 S.Ct. 1678, 1688, 14 L.Ed.2d 510 (1965) (Goldberg, J., concurring). But courts have been reluctant to find support in the ninth amendment for “fundamental personal rights” beyond the right of privacy. See, e.g., Township of Long Beach v. City of New York, 445 F.Supp. 1203, 1212 (D.N.J.1978); Gasper v. Louisiana Stadium and Exposition District, 418 F.Supp. 716, 721-22 (D.La.1976), aff'd, 577 F.2d 897 (5th Cir.1978). Moreover, there is no authority for the proposition that the right to a safe workplace was one of the rights “retained by the people” at the time of the Bill of Rights. The ninth amendment claim therefore must be rejected.

179571-18381

HANSEN, Circuit Judge. Frank Skomiak appeals from the final judgment entered by the.district court on his conditional pleas of guilty to one drag count and one money laundering count. Skorniak contends that the district court erred in denying several of his pretrial motions and in determining his sentence. We affirm. I. Skorniak and Ted Luetticke were charged in a twelve-count second superseding indictment with various drag and money-laundering offenses. The indictment also contained a count seeking criminal forfeiture of certain items of real and personal property that Skorniak allegedly used to facilitate the charged substantive offenses. The district court severed the defendants’ trials. Luettieke later pleaded guilty to one count of the indictment, and Skomiak proceeded to trial (pro se with standby counsel) after the district court denied several of his pretrial motions. After completing approximately two and one-half weeks of trial to the court, Skomiak entered a conditional plea of guilty to two counts of the indictment. Skorniak pleaded guilty to conspiracy to distribute and possession with intent to distribute five or more kilograms of cocaine in violation of 21 U.S.C. §§ 841(a)(1) and 846 (Count I), and money laundering involving drag proceeds in violation of 18 U.S.C. § 1956(a)(l)(B)(i) (Count X). The plea agreement specifically preserved Skomiak’s right to appeal the district court’s adverse rulings on his pretrial motions. At sentencing, Skorniak challenged the quantity of cocaine attributed to him and the recommendation in the Presentence Report (PSR) for an upward adjustment to his base offense level for his role in the offense. Skomiak also requested a two-level reduction for acceptance of responsibility. The district court held an evidentiary hearing, made findings of fact, and determined a base offense level of 32, added a three-level upward adjustment for Skorniak’s role in the offense, and denied Skomiak’s requested two-level reduction for acceptance of responsibility. The resulting total offense level of 35, combined with Skorniak’s criminal history category of V, resulted in a Guidelines range of 262-327 months. The court then sentenced Skomiak at the bottom of the identified Guidelines range to 262 months of imprisonment on Count I, a concurrent term of imprisonment of 240 months on Count X, and a 5-year term of supervised release. Skorniak appeals. II. A Motion to Suppress Skomiak argues that the district court erred in failing to sustain his motion to suppress evidence. On July 7, 1992, Special Agent Lori K. Parsons of the Federal Bureau of Investigation (FBI) submitted an affidavit to a United States magistrate judge in support of an application for warrants to search Skorniak’s condominium residence and its associated storage locker, the corpo rate headquarters of Skomiak Enterprises, Inc., and a business known as Quality Merchandise. In the affidavit, Parsons relied upon information from five confidential informants who provided information concerning Skomiak’s alleged criminal activities from 1986 through 1992. After the magistrate judge found probable cause to do so, the warrants were issued. Skomiak attacks the affidavit as insufficient to establish probable cause because it set forth no factual allegations indicating that any of the informants had previously supplied reliable information, it failed to show that the information provided by the informants was verified by independent investigation, and much of the information attributed to the confidential informants was set forth without disclosing their basis of knowledge. The district court, adopting the report and recommendation of the magistrate judge, held that the affidavits supported a finding of probable cause for the issuance of the warrants and denied Skomiak’s motion to suppress. We decline to address the probable cause issue, however, because we hold that the objective good-faith exception to the exclusionary rule applies here. See United States v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984). See also United States v. Wellman, 33 F.3d 944, 946 (8th Cir.1994) (‘We note that it is appropriate for us to apply Leon’s standards to the facts developed in the District Court, even though that court did not pass on the issue”), cert. denied, — U.S. -, 115 S.Ct. 1722, 131 L.Ed.2d 580 (1995). Under Leon, evidence which is seized pursuant to a warrant which is later determined to be invalid will not be suppressed if the executing officers’ reliance upon the warrant is objectively reasonable. United States v. Frangenberg, 15 F.3d 100, 102 (8th Cir.), cert. denied, — U.S. -, 115 S.Ct. 161, 130 L.Ed.2d 99 (1994). Parsons’ affidavit outlines the following: Skomiak and Skomiak Enterprises, Inc. (of which Skomiak was the president) had been the targets of a joint task force investigation involving the FBI, the Internal Revenue Service (IRS), and the Omaha, Nebraska, Police Department for three years. Skomiak’s criminal history includes charges of possession of marijuana and possession of drug paraphernalia. The affidavit provides detailed information derived from confidential informants regarding Skorniak’s involvement in numerous drag transactions and money laundering activities, along with his possession of various weapons. Additionally, Skomiak did not file tax returns in 1985, 1986, or 1988, and his returns filed in 1987, 1989, and 1990 indicated a nominal income ($265, $7992, and $573 respectively). Since 1987, he had only one known source of employment, as a real estate agent beginning in 1991, and company records indicated that he received only one sales commission during this time, in the amount of $740.88 for a $60,000 sale of real estate to Skorniak Enterprises, Inc. A $12,000 check drawn on the Skomiak Enterprises, Inc. account for the purchase bore Skorniak’s name (Skorniak’s signature was the only one authorized for the corporate accounts). Skorniak Enterprises, Inc. deposited in excess of $172,000 in its corporate bank accounts from August 31, 1990 to April 30,1992 but reported a total income of $343 in 1990. Skomiak maintained at least nine personal bank accounts at various institutions in which deposits in excess of $88,000 were made since 1987. He also purchased a motorcycle with $4000 cash (paying primarily in $100 bills) and $9800 in platinum from an investment company in California. Parsons’ “affidavit related the results of an extensive investigation and ... provided evidence sufficient to create disagreement among thoughtful and competent judges as to the existence of probable cause.” Leon, 468 U.S. at 926, 104 S.Ct. at 3422. Skorniak does not contend, in either his initial brief or his reply brief, that the officers executing the search warrant did not act in a reasonable good-faith manner in relying on the warrant. “[G]iven the details included in the affidavit, its length, and [Skorniak’s] failure to direct us to any material misstatements or omissions in the affidavit, [the executing officers’] reliance on the magistrate’s probable cause determination was objectively reasonable.” United States v. Livesay, 983 F.2d 135, 138 (8th Cir.1993). Thus, the principles of Leon are satisfied, and the district court’s denial of Skomiak’s motion to suppress can be affirmed. B. Psychological Examination of Witness Skorniak next contends that the district court abused its discretion by refusing to order a psychological or psychiatric evaluation for his brother, Robert Skorniak, who testified on behalf of the government at the uncompleted trial. He argues that Robert Skorniak was not mentally competent to testify and offers several incidents to support this proposition: statements that Robert Skorniak allegedly made to FBI Agents in July of 1985 and June of 1990, his hospitalization for mental health problems as a child, and his alleged act of ingesting a large amount of cocaine. “[T]he decision to order [a psychological] examination [of a witness] is entrusted to the sound discretion of the trial judge in light of the particular facts.” United States v. Riley, 657 F.2d 1377, 1387 (8th Cir.1981) (internal quotations omitted). In Riley, we rejected an argument identical to that which Skorniak presently makes. In Riley, the defendant argued that the district court erred in denying his motion for a psychiatric examination of the government’s chief witness because the denial impaired his ability to effectively cross-examine the witness and to prepare an adequate defense. Id. at 1387. We observed that “[ordering a witness to undergo a psychological examination is a drastic measure.” Id. (internal quotations omitted). We went on to hold that the district court did not abuse its discretion in declining to order the witness to undergo such an examination because the defendant’s showing of the need for such an examination, based only on defense counsel’s affidavit detailing the witness’s drug and alcohol abuse, was insufficient, and further, the defendant was not prejudiced because he was allowed to cross-examine the witness concerning these matters. Id. See also United States v. Ramirez, 871 F.2d 582, 584 (6th Cir.) (noting that “the court cannot order a non-party witness to be examined by a psychiatrist. The most the court could do is condition such witness’s testimony on a prior examination,” and that such measures should be taken only in the most unusual circumstances), cert. denied, 493 U.S. 841, 110 S.Ct. 127, 107 L.Ed.2d 88 (1989). Skorniak has not offered any reason why the results of any such examination of his brother was critical to his defense, other than the bare assertion that “Robert Skorniak was not competent to testify due to his mental state.” (Appellant’s Br. at 14.) This is insufficient to overcome the presumption embodied in Federal Rule of Evidence 601 that all witnesses are presumed competent to testify. See United States v. Devin, 918 F.2d 280, 291 (1st Cir.1990). Furthermore, Skorniak was allowed to cross-examine Robert Skorniak concerning his psychological problems as well as his history of drug and alcohol abuse. The issues Skorniak raises more appropriately go to Robert Skorniak’s credibility, not his competency to testify. Given the wide latitude we afford the district courts in this area, the district court did not abuse its discretion in refusing to order a psychiatric evaluation of Robert Skorniak. C. Application for Subpoena of Medical Records Skorniak next makes the related argument that the district court erred in denying his application to subpoena Robert Skomiak’s medical records. Specifically, Skorniak sought “[a]ll medical records regarding all services, tests, test results, and any other notes, reports, charts and other documents prepared as a result of psychological or psychiatric testing or behavioral observation of Robert Skorniak during any stay at the facility.” Skorniak contends that the district court’s denial of this application was a violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), because he had a legitimate interest in the disclosure of these documents and was prejudiced because he could not effectively impeach Robert Skorniak on cross-examination without them. Here, Skorniak has made no showing that the records he sought were in the possession of the government. In Riley, we stated that “[w]hile Brady requires the Government to tender to the defense all exculpatory evidence in its possession, it establishes no obligation on the Government to seek out such evidence.” Riley, 657 F.2d at 1386 (internal quotations omitted). Also, as noted above, Skorniak was afforded the opportunity to fully cross-examine Robert Skorniak concerning Robert’s mental condition. The denial of access to a witness’s medical records does not impair a defendant’s ability to cross-examine so long as the defendant “was not restricted in cross-examination and was able to put before the jury [the witness’s] psychological and behavior problems, drug and alcohol abuse, hospitalization,” and other relevant information. Id. at 1386-87. The district court found that “[t]here is absolutely nothing — the record reflects that he left the hospital without being seen, so there are no findings in there with respect to it ... no tests were run ... there are no diagnoses or findings of any kind.” (Trial. Tr. at 1272.) We conclude that the district court committed no error on this point. D. Forfeiture Issue Skorniak next argues that the district court erred in failing to adequately inform him of the elements of the criminal forfeiture count at his change of plea hearing before he entered what he says is the functional equivalent of a plea of guilty to that count. Count XII of the indictment sought forfeiture of certain items of real and personal property owned by Skorniak, which he allegedly used to facilitate the drug and money laundering crimes. Under the terms of the plea agreement, Skorniak pleaded guilty to Counts I and X of the indictment, and the government agreed to dismiss the remaining counts at sentencing. The plea agreement further provided the government 30 days to effectuate civil forfeiture proceedings regarding the property listed in Count XII. (Trial Tr. at 1182.) Consistent with this agreement, the court dismissed all of the remaining counts, including Count XII, when it imposed sentence on Skorniak. Skorniak, who chose to be represented by separate retained counsel with respect to the forfeiture issues, negotiated with the government, entered into a stipulation with the government concerning what and how much was to be forfeited, and agreed to the entry of an order of forfeiture. Skorniak argues that he effectively pled guilty to the criminal forfeiture count because the government had thirty days to commence civil forfeiture proceedings and, therefore, the district court committed reversible error because it failed to adhere to the requirements of Federal Rule of Criminal Procedure 11(c)(1) with respect to this count. We disagree. We have not previously determined whether Rule 11(c)(1) applies to criminal forfeiture actions and do not now hold that it does but, assuming for the purposes of the instant case that it does apply, we determine that it has no applicability to the instant facts. Rule 11(c)(1) explicitly requires the court to inform the defendant of “the nature of the charge to which the plea is offered.” Fed.R.Crim.Proc. 11(c)(1). Skorniak did not enter a plea of guilty to the criminal forfeiture count, and the provision under the plea agreement allowing the government to institute a civil forfeiture action within 30 days is not the functional equivalent of a guilty plea. Pursuant to the terms of the plea agreement, the district court dismissed the criminal forfeiture count. The district court committed no error in failing to strictly adhere to the requirements of Rule 11(c)(1) with respect to the forfeiture count. E. Sentencing Issues Finally, Skorniak raises several issues concerning his sentence. First, he contends that the district court erred in assessing a three-level upward adjustment pursuant to U.S.S.G. § 3Bl.l(b) for his role in the offense after the court determined that he was a manager or supervisor of the conspiracy. The district court stated that “[t]he role of organizer or leader of this conspiracy appears to be more properly assigned to [unindieted co-conspirator] David Baratta and possibly to [unindicted co-conspirator] Mark Mora than to defendant.” (R. at 14.) However, the court imposed the three-level upward adjustment after finding that Skorniak served as a funding source for other members of the conspiracy to purchase and distribute cocaine. (Id. at 14r-15.) Skorniak argues that insufficient evidence exists showing that he played an aggravating role in the offense, such as recruiting accomplices or exercising control over other members of the conspiracy. A sentencing court’s determination of a participant’s role in the offense pursuant to U.S.S.G. § 3B1.1 is a factual finding that we review under the clearly erroneous standard. United States v. Maxwell, 25 F.3d 1389, 1399 (8th Cir.), cert. denied, — U.S. -, 115 S.Ct. 610, 130 L.Ed.2d 519 (1994). Section 3B1.1(b) of the Guidelines provides for a three-level upward adjustment in a defendant’s base offense level if he “was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants.” U.S.S.G. § 3B1.1(b). Factors the district court should consider in making a determination under § 3B1.1 include “the nature of defendant’s role in the offense, the recruitment of accomplices, [and] the degree of participation in planning or organizing the offense.” United States v. Ortiz-Martinez, 1 F.3d 662, 677 (8th Cir.), cert. denied, — U.S. -, 114 S.Ct. 355, 126 L.Ed.2d 319 (1993). “[W]e have noted that an individual can occupy a leadership role without having directly controlled his co-conspirators.” Id. Skorniak does not dispute that there were five or more participants in the offense. The PSR sets forth numerous drug transactions that Skorniak arranged for other members of the conspiracy. Additionally, Skomiak introduced Robert Skorniak to a relative who could supply additional cocaine as well as instructing him to discontinue dealing with Luettieke. Finally, the evidence indicates that Skorniak loaned funds to other members of the conspiracy for additional cocaine purchases and for business operations. Therefore, the district court’s factual determination that Skorniak was a manager or supervisor under § 3Bl.l(b) is not clearly erroneous. Skorniak next argues that the district court erred in failing to grant him a two-level reduction for acceptance of responsibility under U.S.S.G. § 3E1.1. Skorniak emphasizes that he accepted responsibility as evidenced by his guilty plea (albeit after over two weeks of trial) and his statement in the PSR: “I truly regret being involved in any and all. illegal activities. I am veiy remorseful for my actions and accept full responsibility for my involvement.” (PSR at para. 25.) The district court declined to grant Skorniak a reduction for acceptance of responsibility because he did not “demonstrate an acceptance of all of the relevant conduct involved in the crime charged, particularly his role in the offense.” (R. at 16.)

7638479-14748

LYNCH, Circuit Judge. This ease requires us to determine whether section 440(a) of the Antiterrorism and Effective Death Penalty Act (AEDPA), enacted after this petition was filed, applies here. Alfredo Kolster, an alien under deportation order, argues that if it does apply, it is unconstitutional. Section 440(a) of AEDPA, which was signed into law on April 24, 1996, prohibits judicial review of deportation orders issued against aliens who have committed certain types of crimes. Kolster had previously pled guilty to such a crime. In a petition filed with this court on February 28,1996, Kolster seeks review of a Board of Immigration Appeals (BIA) decision that he is ineligible, under the BIA’s interpretation ‘of the Immigration and Nationality Act (INA), for discretionary relief from deportation. He argues that the BIA erroneously interpreted the statute to require seven years of lawful permanent residence by the alien to be eligible for the relief from deportation afforded by section 212(c) of the INA The Immigration and Naturalization Service (INS) has moved to dismiss this action, arguing that section 440(a) of AEDPA operates immediately to divest this court of jurisdiction to hear this petition for review. Kol-ster responds that section 440(a) does not apply to cases pending on the date of AED-PA’s enactment, and that, if the statute applies, its preclusion of judicial review violates the Due Process Clause and Article III of the Constitution. We find that section 440(a) does apply to petitions, like Kolster’s, which were pending on the date of AEDPA’s enactment. Because at least the habeas corpus review provided by the Constitution remains available to aliens covered by section 440(a), we find that the prohibition of judicial review in section 440(a) does not offend the Constitution. Accordingly, we dismiss Kolster’s petition for review under the Immigration and Nationality Act for lack of jurisdiction. I. Alfredo Kolster, a Venezuelan citizen, first entered the United States in 1980 to attend high school in New York. He remained in the United States through high school and college, earning a B.S. from Boston University in September, 1988. During this time, Kolster had a F-l, or foreign student, visa. On September 11, 1988, after a brief visit to Venezuela, Kolster re-entered the United States as a member of the immediate family of an employee of an international organization. His mother worked for the Pan-American Health Organization. On- August 24, 1989, Kolster became a lawful permanent resident of the United States. From 1989 to 1991, Kolster lived in the Boston area and worked at various sales jobs. In 1991, Kolster was indicted in federal court in Massachusetts for conspiracy to possess cocaine with intent to distribute. He later pled guilty and was sentenced to twenty-four months’ imprisonment. The sentencing judge recommended that Kolster not be deported upon his release from custody. Nonetheless, while Kolster was incarcerated, the INS ordered him to show cause why he should not be deported. The INS charged that Kolster was deportable pursuant to section 241(a)(2)(B)(i) of the INA, which applies to aliens convicted of controlled substance offenses, and pursuant to section 241(a)(2)(A)(iii), which applies to aliens convicted of aggravated felonies. See 8 U.S.C. § 1251(a). On April 5, 1994, Kolster had a hearing before an Immigration Judge. At that hearing, Kolster, through counsel, conceded de-portability on the grounds charged by the INS. However, he also requested a continuance in order to apply for a waiver of depor tation pursuant to section 212(c) of the INA. Section 212(c) gives the Attorney General the discretionary authority to waive the exclusion of otherwise excludable aliens, see 8 U.S.C. § 1182(e). A longstanding interpretation of that section extends the Attorney General’s discretion to otherwise deportable aliens. See, e.g., Joseph v. INS, 909 F.2d 605, 606 n. 1 (1st Cir.1990). The Immigration Judge found “based on [Kolster’s] admission, his concession of de-portability through counsel, and the documentary evidence of record that deportability has been established by clear, convincing and unequivocal evidence.” As to Kolster’s request for a. continuance, the Immigration Judge found that Kolster did not have statutory eligibility for section 212(c) relief, and therefore pretermitted his application for a waiver of deportation. Accordingly, she ordered Kolster deported to Venezuela. On January 30,1996, the BIA affirmed the order of deportation. The Board agreed with the decision to pretermit Kolster’s application for a section 212(c) waiver because Kolster had “not been a lawful permanent resident of the United States for seven years as is required.” Kolster filed a petition for review with this court on February 28, 1996. At that time, 8 U.S.C. § 1105a(a) provided for judicial review of final orders of deportation. Kolster argued that the BIA has erred in interpreting section 212(e)’s requirement of seven years of “lawful unrelinquished domicile” to mean seven years of “lawful permanent residence.” Kolster points to a circuit split on this statutory issue, noting that some courts of appeals have rejected the BIA’s construction of section 212(c). See, e.g, Lok v. INS, 548 F.2d 37 (2d Cir.1977). On April 24, 1996, while this petition was pending, President Clinton signed into law the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), Pub.L. No. 104-132, 110 Stat. 1214. Section 440(a) of AED-PA, which amends Section 106(a)(10) of the INA, 8 U.S.C. § 1105(a)(10), provides: Any final order of deportation against an alien who is deportable by reason of having committed [certain crimes, including aggravated felonies and controlled substance offenses] shall not be subject to- review by any court. On June 10, 1996, the INS moved to dismiss this petition for review, arguing that, in light of section 440(a), this court lacked subject matter jurisdiction to hear this case. Kol-ster responds that AEDPA does not specify an effective date for section 440(a), and that statutes are generally presumed not to have retroactive effect. Additionally, he contends that preclusion of judicial review violates the Due Process Clause and Article III. II. A. Section 110(a)’s Applicability to Pending Petitions The Supreme Court’s decision in Landgraf v. USI Film Products, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994), provides a framework for determining whether a statute should be applied to cases pending at the time of enactment. This is initially a question of legislative intent, not a constitutional question. First, the court must look at the statutory text and determine whether it “manifests an intent” that the statute should be applied to pending cases. Id. at -, 114 S.Ct. at 1492. If the court determines that Congress did not.“expressly prescribe[ ] the statute’s proper reach,” the court presumes that Congress acts consistently with a series of “judicial default rules.” Id. at -, 114 S.Ct. at 1505. In applying these rules, the court must: determine whether the new statute would have retroactive effect, i.e., whether it would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed. Id. For jurisdictional statutes, the presumption is in favor of immediate application, because “[ajpplieation of a new jurisdictional rule usually ‘takes away no substantive right but simply changes the tribunal that is to hear the case’” and because “jurisdictional statutes ‘speak to the power of the court rather than to the rights or obligations of the parties.’” Id. at -, 114 S.Ct. at 1502 (quoting Hallowell v. Commons, 239 U.S. 506, 508, 36 S.Ct. 202, 203, 60 L.Ed. 409 (1916) and Republic Nat’l Bank v. United States, 506 U.S. 80, 100, 113 S.Ct. 554, 565, 121 L.Ed.2d 474 (1992) (Thomas, J., concurring)). The first inquiry is thus whether Congress has expressed a clear intent as to whether section 440(a) applies to cases pending on the date of enactment. There is no explicit textual reference to an effective date for section 440(a). Effective dates are provided for some other sections of the AEDPA, including section 440(e), which adds offenses to the INA definition of “aggravated felony.” See 8 U.S.C. § 1101 note. However, those sections are “unrelated to jurisdiction, [and] are too far removed from judicial review under 8 U.S.C. § 1105a(a) to impute an effective date for section 440(a).” Duldulao v. INS, 90 F.3d 396, 398 n. 2 (9th Cir.1996). Accordingly, we find that Congress has not expressly addressed the issue of section 440(a)’s applicability to pending cases. The next inquiry under the “judicial default rule” approach to determining congressional intent is whether 440(a) has a retroactive effect upon petitioner’s substantive rights, duties, or obligations. Landgraf, 511 U.S. at -, 114 S.Ct. at 1505. If it does not, then we apply the rule that jurisdictional statutes apply to pending cases. Id. If the statute would have such retroactive effects, it will not be applied, “absent clear congressional intent favoring such a result.” Id. Kolster argues that Landgraf assumes that jurisdictional statutes only effect a change in the tribunal that will hear the case, and that the presumption in favor of immediate application is therefore inapposite where the statute’s effect is to deprive a party of access to any judicial review at all. It is true that Landgraf speaks of jurisdictional statutes as usually “ ‘simply changing] the tribunal that is to hear the case.’ ” Landgraf, 511 U.S. at -, 114 S.Ct. at 1502 (quoting Hallowell, 239 U.S. at 508, 36 S.Ct. at 203). However, as the INS points out, Land-graf’s explicit reliance on Hallowell is instructive here. In Hallowell, the Supreme Court approved the application to pending cases of a statute that deprived the federal district courts of jurisdiction over certain Indian probate disputes and vested “final and conclusive” authority in the Secretary of the Interior. 239 U.S. at 508, 36 S.Ct. at 203. Section 440(a) similarly vests final authority in an administrative tribunal, the BIA. Landgraf’s citation to Hallowell makes us doubtful, absent more guidance from the Supreme Court, that a jurisdictional change from an Article III court to an administrative decisionmaker, in itself, affects the retroac-tivity analysis, whatever its effect on the ultimate constitutional analysis. See Hincapie-Nieto v. INS, 92 F.3d 27, 29 (2nd Cir.1996). Our inquiry must' therefore focus on the facts concerning whether Kolster’s substantive rights or obligations or duties have been changed by the deprivation of judicial review. Kolster suggests that his guilty plea and concession of deportability were made with the expectation that he could apply for a section 212(c) waiver of deportation. The Seventh Circuit gave credence, on different facts, to a similar argument in Reyes-Hernandez v. INS, 89 F.3d 490, 492 (7th Cir.1996). There, the BIA had affirmed the denial of petitioner’s application for section 212(e) relief, and the petitioner sought judicial review.. The Seventh Circuit found that, when petitioner conceded deportability, he knew that, if the immigration judge and the BIA. turned down his request for section 212(c) relief, he “could have a go at” judicial review. Id. at 492. Had petitioner known that judicial review would be foreclosed, “he might have contested deportability.” Id. The immediate application of section 440(a) would thus “attach a new legal consequence to the concession” of deportability. Id. at 492-93. Accordingly, the Seventh Circuit held that section 440(a) did not apply to cases in which deportability was conceded prior to AEDPA’s enactment, “provided that the applicant for discretionary relief would have had at least a colorable defense to deportability.” Id. In contrast to the Seventh Circuit, it is unclear to us that deportability, which is a largely mechanical determination based on facts which may often be objectively ascertained, would realistically be conceded because of the availability of discretionary relief or of judicial review of the denial of such relief. See Hincapie-Nieto, 92 F.3d at 30 (“It is far more likely that deportability is conceded because there is no conceivable defense available.”). . In any case, here the Immigration Judge explicitly based her finding of deportability on the documentary evidence of Kolster’s drug offense conviction, as well as on his concession. Tellingly, Kolster does not argue that he in fact had a colorable defense to deportability. As to his guilty plea, we have no reason to think it was induced by reliance on discretionary relief under section 212(c). By Kol-ster’s own calculations, his “lawful domicile” for section 212(c) purposes only dates back to September 11, 1988. Thus, even under the interpretation of section 212(c) that he urges, as of September 2, 1992, the date of his guilty plea, Kolster had only accrued four years of lawful domicile. He was, as a result, three years away from being eligible for section 212(c) relief, rendering it highly unlikely that his guilty plea was predicated on the availability of such relief. Moreover, this court and others have previously found that aliens do not have a cognizable reliance interest in the availábility of discretionary section 212(c) relief. See, e.g., Scheidemann v. INS, 83 F.3d 1517, 1523 (3d Cir.1996); Campos v. INS, 16 F.3d 118 (6th Cir.1994); Barreiro v. INS, 989 F.2d 62 (1st Cir.1993). At issue in those cases was an amendment to section 212(c) which made aliens who had served at least five years’ imprisonment for an aggravated felony ineligible for discretionary relief. See, e.g, Barreiro, 989 F.2d at 62. In Barreiro, this court found that the amendment’s application to prisoners whose convictions and prison terms predated its enactment did not violate the presumption against retroactivity. Id. at 64. “The presumption against a retroactive interpretation is to give fair warning so that a party may avoid consequences. This is scarcely a situation calling for any such warning.” Id. Similar logic applies here. As the Third Circuit said in Schiedemann, petitioner’s “conduct clearly subjected him to deportation as well as criminal sanctions, and ... [section] 212(c), as it then existed, offered relief from the former only at the unfettered discretion of the Attorney General....” Scheidemann, 83 F.3d at 1523. The availability of purely discretionary relief does not create substantive rights in otherwise deport-able criminal aliens, nor does the availability of judicial review of denial of that discretionary relief.

7405671-22907

HISTORY, FINDINGS OF FACT, CONCLUSIONS OF LAW, OPINION AND ORDER SIMMONS, District Judge. HISTORY 1. The federal grand jury sitting in the United States District Court for the Western District of Pennsylvania returned a true bill against the defendant on September 24, 1986, charging the defendant Samuel L. Gardner with two counts of unlawful distribution and possession with intent to distribute a quantity of cocaine, a Schedule II narcotic drug controlled substance, in violation of Title 21 U.S.C. 841(a)(1). Alleged offenses occurred on July 10, 1986, and on July 18, 1986, respectively. 2. Defendant thereafter was arraigned and entered a plea of not guilty. 3. Defendant’s original counsel was permitted to withdraw and the Office of the Federal Public Defender was appointed to represent him. An extension of time in which to file motions was granted by this Court to the Federal Public Defender’s Office. 4. Among the motions that the defendant filed was a timely Motion to Dismiss based on the defendant’s assertion that the government violated his due process rights, with a citation of authorities. 5. The Court ordered that the parties brief this issue. 6. A hearing on this motion was held on December 5, 1986, and December 8, 1986. 7. At this hearing, the defendant presented three witnesses: Charise Thrasher, Othneil Lineberg and James Hill. The Court also heard the defendant testify pursuant to Rule 104 of the Fed.R.Evid. 8. The Government elected not to present any evidence of any kind in its behalf. FINDINGS OF FACT Based on the defendant’s motion and the admissions made by the government in its response to that motion, and the government’s brief as well as the testimony of the witnesses, the Court makes the following findings of fact and conclusions of law: 9. Sometime in the summer of 1986, Mr. Earl Heintzinger agreed to act as an informant for the United States Postal Inspectors. The Postal Inspectors assisted him in obtaining an 89 day temporary appointment as a postal worker for the purpose of facilitating their narcotics investigation at the Pittsburgh General Mail Facility (Paragraph 4 of Government’s Response to Defendant’s Motion to Dismiss Indictment and Memorandum of Law filed December 3, 1986). (H.T. 81, 82) 10. Throughout the time when Mr. Heint-zinger dealt with the defendant Gardner, he was an agent of the government. See Sherman v. United States, 356 U.S. 369, 78 S.Ct. 819, 2 L.Ed.2d 848 (1958). H.T. 82, 89) 11. During the month of June, 1986, Earl Heintzinger a/k/a Big Bob, a/k/a Big Robb, while working at the General Mail Facility on the North Side of the City of Pittsburgh continually asked Sam Gardner to obtain drugs for him, specifically cocaine. (H.T. 7, 9, 15) 12. On at least four occasions Heintzinger went out drinking with Mr. Gardner and flashed large amounts of money in front of Mr. Gardner. On several occasions, Mr. Heintzinger suggested they go to the Diamond Cafe in Market Square after they finished their work at the post office at approximately 6:30 A.M. (H.T. 7, 9, 11) 13. Heintzinger told Gardner that he had another job where he worked on city vehicles. Mr. Gardner at that time owned a 1974 automobile that needed considerable body work done on it including replacing the doors. Mr. Heintzinger told him that he would assist him in finding replacement doors and installing them if Mr. Gardner would assist him in acquiring drugs. (H.T. 7, 8, 9) 14. Gardner had no prior record and had never sold any drugs before. (H.T. 25,101) 15. Gardner was reluctant to become involved and told Heintzinger that he did not know where to get any cocaine. (H.T. 9, 15) 16. Near the end of June, many of the casual employees employed by the post of fice at the General Mail Facility on the North Side of the City of Pittsburgh, aware that their employment at the postal facility was coming to an end, planned a party. H.T. 12, 15, 34) 17. After finishing their work on June 28, 1986, at about 6:30 A.M., many of the casual employees as well as some of the permanent employees met at the Stone Front Bar near the General Mail Facility. Heint-zinger sat with Gardner and Lineberg, who had also just finished work at the post office that morning. Lineberg overheard Heintzinger ask Gardner if he could get some cocaine but he did not hear any response from Gardner. (H.T. 12, 13,15, 37) 18. Because the waitress refused to serve Heintzinger any more drinks, and the party was breaking up, Gardner and Lineberg decided to continue the celebration elsewhere. Gardner, Lineberg and Heintzinger left the Stone Front Bar and proceeded to James Hill’s house who lives a short distance from the Stone Front Bar. (H.T. 15, 16, 17, 18) 19. James Hill is also employed at the General Mail Facility on the North Side. Mr. Gardner and Hill are close friends. When Mr. Gardner, Lineberg and Heint-zinger arrived at Hill’s apartment, a great number of people were milling about because the landlord was changing the locks on all the doors. Mr. Gardner and Mr. Lineberg had alcoholic beverages with them and when they entered the apartment a number of people from the other apartments joined them. After admitting Gardner and the others, Hill only stayed a few minutes in the apartment’s living room before retiring to the bedroom. After having a few drinks, Mr. Lineberg left to pick up Charise Thrasher. Upon his return with Ms. Thrasher, Lineberg heard Heintzinger again ask Gardner to see if he could get him some cocaine. Gardner began asking people at the party if they had any cocaine and eventually found someone who had cocaine with him. Gardner gave cocaine to Heintzinger and Heintzinger gave money to Gardner for the Cocaine. Heintzinger then laid the cocaine out in lines and “snorted” the entire amount of cocaine and he did thereby violate the laws of the United States. He then asked Gardner to get him some more which Gardner did and Heintzinger paid for that also. Each time Gardner merely acted as a go-between for the party having the cocaine and Heintzinger. (H.T. 19, 20, 21, 23, 24, 25, 26) 20. At this time, Ms. Thrasher stated, out of the hearing of Heintzinger, that she believed that they should get him out of Mr. Hill’s apartment. The reason for this was that Heintzinger was becoming boisterous. Gardner told Heintzinger that he, Lineberg and Ms. Thrasher were leaving the party and because they had brought him, they would take him home. (H.T. 22, 23, 61, 62) 21. Heintzinger got into the back seat of Gardner’s car next to Mr. Lineberg. Gardner drove the car and Ms. Thrasher sat in the passenger seat. (H.T. 23, 28, 44, 63, 70) 22. During the drive to Mr. Heiritzinger’s home on the South Side of the City of Pittsburgh, Heintzinger snorted the second baggie of cocaine he had acquired through Gardner, and Heintzinger for the second time violated the laws of the United States. (H.T. 23, 24, 29, 44, 63, 70, 71) 23. Lineberg, Thrasher and Gardner returned to James Hill’s house and the party went on until Ms. Thrasher became ill, and at which time Gardner, Thrasher and Line-berg left. (H.T. 30, 64) 24. During the early part of July, 1986, Heintzinger persisted in asking Gardner to get him cocaine. Eventually Gardner consented to do so and went to several jitney stations in his neighborhood until he found where some cocaine was available. He was informed that an eighth of an ounce of cocaine would cost $350. He reported this to Heintzinger who gave him the $350. On July 10, 1986, Gardner delivered the eighth of an ounce of cocaine to Mr. Heintzinger at the postal facility. Mr. Gardner made no profit on this transaction. (H.T. 24, 27, 28, 39, 40) 25. Near the middle of July, Heintzinger gave Mr. Gardner $1,000 in U.S. currency and told him to attempt to get cocaine for him. Mr. Gardner reported within two days that he could not find any cocaine and offered to give the money back to Heint- zinger. Heintzinger told him to keep it and keep trying. Gardner finally acquired some cocaine for $165, and a quantity of what he understood to be opium for $200, which he delivered to Heintzinger at the General Mail Facility on or about July 18, 1986. Gardner returned $635 to Heintzinger. (H.T. 28, 41) 26. The defendant Gardner has no prior criminal felony record. He has served seven years in the United States Marine Corp and received an honorable discharge. He has worked seven years for the United States Post Office. He is married and has four minor children. (H.T. 3, 4, 25) 27. Gardner had no prior involvement with drugs until Earl Heintzinger requested that Gardner get cocaine for him; the Government was Gardner’s only customer. (H.T. 25) 28. Heintzinger undeniably badgered, cajoled, induced, inveigled and utilized his position as a postal employee to acquire Gardner’s friendship and utilized promises of assisting him in repairing his car to induce Gardner’s cooperation in obtaining Heintzinger drugs for his personal use. (H.T. 7, 9, 10) 29. The Government moved to strike off the record all of Mr. Heintzinger’s testimony and refused to allow Heintzinger to be cross-examined by the defendant’s attorney and offered no other evidence. CONCLUSIONS OF LAW 1. This Court has jurisdiction for this case pursuant to Title 18 U.S.C. § 3231. Defendant’s rights under the Due Process Clause have been violated by virtue of the fact that he was badgered, implored, inveigled and purposely set up by an agent of the Government in order to allow the government to prosecute and convict him. 2. Defendant Gardner had no previous predisposition of any kind to violate the law. Defendant had no prior criminal record. He was honorably discharged from the Marines and he had been gainfully employed for seven years in the United States Post Office. 3. The Court is shocked by the lack of supervision exercised by by the Postal Inspectors over its informant and the allowing of the psychological coercion of Gardner by informant Heintzinger to acquire drugs for him. The government here through its informant created crime rather than uncovered crime and as such engineered and directed the criminal enterprise from start to finish. See United States v. Ramirez, 710 F.2d 535, 539 (9th Cir.1983). 4. I find that the government initiated and was actively involved in the criminal enterprise itself. See United States v. Twigg, 588 F.2d 373 (3rd Cir.1978) 5. Although the government did not supply the drugs in the case, it supplied the other necessary ingredients, the money to ferment criminal activity. See Twigg, supra. 6. Just as a defendant’s lack of prior criminal involvement is relevant to an entrapment defense, so is it relevant to a claim of outrageous government conduct. See Green v. United States, 454 F.2d 783 (9th Cir.1971; United States v. Batres-Santolino, 521 F.Supp. 744 (M.D.Calif.1981) 7. The Defendant in this case has met for the four prong test for overturning a conviction on due process grounds set forth in United States v. Bogart, 783 F.2d 1428, footnote 7 at page 1435 (9th Cir.1986) as follows: (a) This Court finds that the crime alleged by the Government in the indictment in the above-captioned case would not have occurred but for the Government’s assistance in manufacturing the crime; and further, this Court finds that up to the time of the inception of the alleged crime now before this Court, the Defendant was not involved in any prior ongoing criminal activity of any kind. (b) It is clear beyond doubt and it is not contested by the Government and this Court finds that the Government’s Agent committed at least two Federal crimes during the course of this defendant’s alleged criminal activity and of great importance is the fact that the Government was the one and only customer of the Defendant Gardner. (c) Again, it is clear beyond doubt and it is not contested by the Government and this Court finds that the Government Agent persisted over a period of time in inducing and pursuading the Defendant to commit the crime in question with sole motive and intention of overcoming the obvious reluctance of the Defendant to commit the alleged crime in question. (d) The Government does not deny that its sole motive and the motive of the Government Agent Heintzinger was to obtain a conviction and in fact the Government is attempting to obtain a conviction of the defendant in this case and this Court so finds that the above described actions of the Government and the Government’s Agent in this case was solely and entirely motivated by a desire to convict the defendant of a crime that was encouraged and supported by criminal activities of the said Government Agent since the Government was the one and only customer of the Defendant Gardner. 8. The defendant is entitled to the granting of his Motion to Dismiss the Indictment against him since the Court finds that the conduct of the law enforcement officials is so outrageous that due process of law principles would bar the government from securing a conviction. See United States v. Russell, 411 U.S. 423, 431-32, 93 S.Ct. 1637, 1642-43, 36 L.Ed.2d 366 (1973); United States v. Jannotti, 673 F.2d 578, 606 (3rd Cir.1982); United States v. Twigg, 588 F.2d 373, 379 (3rd Cir.1978). 9. This Court has exercised scrupulous restraint before [denouncing] this law enforcement conduct as constitutionally impermissible. Janotti, 673 F.2d at 607. This judicial restraint is particularly appropriate in the narcotics-prosecution context. However, the undisputed facts spell out outrageous governmental conduct in this case which shocks the conscience of this Court. This Court is particularly pursuad-ed to come to this conclusion by the Government’s action in asking this Court to strike off the record all of its evidence and by the Government’s refusal to submit its agent Heintzinger to the defendant’s cross-examination. 10. However, in United States v. Ward, 793 F.2d 551, 554 (3rd Cir.1986), our Court of Appeals, as late as June of last year, stated “[t]hus far the precise nature of the Twigg defense remains unclear” citing United States v. Janotti, 673 F.2d 578, 606 (3rd Cir.) (en banc) cert. den., 457 U.S. 1106, 102 S.Ct. 2906, 73 L.Ed.2d 1315 (1982). It is the legal conclusion of this Court that the undisputed conduct of the Government Agent in this case reached a demonstrable level of outrageousness which compels this Court to grant the Defendant’s Motion to Dismiss the indictment. OPINION This is not an entrapment case. The question here is whether—regardless of the Defendant’s predisposition to commit a crime—the governmental agents have acted in such a way as is likely to instigate or create a criminal offense. See United States v. Russell, 411 U.S. 423, 431, 432, 93 S.Ct. 1637, 1642, 1643, 36 L.Ed.2d 366 (1973). Thus, the focus of this approach is not on the propensities and predisposition of the specific defendant, but on “whether the police conduct revealed in the particular case falls below standards, to which common feelings respond, for the proper use of governmental power.” See Sherman v. United States, 356 U.S. 369, 382, 78 S.Ct. 819, 825, 2 L.Ed.2d 848 (1958). Under this approach, the determination of the lawfulness of the government’s conduct must be made—as it is on all questions involving the legality of law enforcement methods— by the trial judge, not the jury. In the instant case, regardless of whether the subjective or objective approach is used, it is clear that Mr. Gardner’s rights were violated. There has not been a scintilla of evidence submitted by the government that shows any predisposition on the part of Mr. Gardner, the Defendant in this case. Rather, what is clearly shown is that Defendant Gardner repeatedly told Heintzinger, the Government Agent, that he did not know where to get cocaine and, in fact, tried to return money given him by Heintzinger which Heintzinger refused. Defendant Gardner has no pri- or criminal record. He was honorably dis- Subsequent to Twigg, in United States v. Beverly, 723 F.2d 11 (3rd Cir.1983) (per curiam), the Court stated that it was not prepared to conclude that the police conduct in that case “shocked the conscience” so as to mandate acquittal to protect the Constitution. However, Beverly is clearly distinguishable from the instant case. There, the defendant had boasted to a federal agent that he was an experienced arsonist and the agent offered him $3,000 to bum a building. There are no such indications present in this instance, and as Twigg has never been overruled in this Circuit, dismissal of the indictment under the outrageous and shocking circumstances presented here is appropriate. The Court of Appeals for the Ninth Circuit has outlined the test for the defense of violation of due process. In U.S. v. Bogart, 783 F.2d 1428 (9th Cir.1986), the Court of Appeals reviewed the law on the due process defense and concluded: We have not accepted the view that this highly discreet group of extreme cases of police brutality defines the limits of unconstitutional outrageous governmental conduct. We have held that law enforcement conduct also becomes constitutionally unacceptable ‘where government agents engineer and direct the criminal enterprise from start to finish,’ ... or when governmental conduct constitutes ‘in effect, the generation by police of new crimes merely for the sake of pressing criminal charges against the defendant.’_ our view, shared by Justice Brandéis, that a crime manufactured by the government ‘from whole cloth’ would constitute outrageous conduct also has a firm jurisprudential basis.... where the police control and manufacture a victimless crime, it is difficult to see how anyone is actually harmed, and thus punishment ceases to be a response, but becomes an end in itself—to secure the conviction of a private criminal- under such circumstances, the criminal justice systems infringes upon personal liberty and violates due process”. The Bogart court notes in footnote 7 at page 1435 that the Court of Appeals has suggested a four factor test for overturning a conviction on due process grounds: (1) Whether the crime would not have occurred but for the government’s assistance in manufacturing the crime or whether the defendant were already involved in ongoing criminal activity; (2) Whether the government’s agents committed crimes or otherwise acted improperly; (3) Whether the government’s agents persisted with their inducements to overcome the defendant’s reluctance to commit the crime; and (4) Whether the government’s agents sole motive was to obtain a conviction. See People v. Isaacson, 44 N.Y.2d 511, 521, 406 N.Y.S.2d 714, 719, 378 N.E.2d 78, 83 (1978). See also U.S. v. Batres-Santolino, 521 F.Supp. 744 (N.D.Cal.1981), where the District Court dismissed the case on due process grounds noting that the crime could not have nor would have been committed except for the fact that the informant inveigled the defendant into it; See U.S. v. Valdovinois-Valdovinois, 588 F.Supp. 551 (N.D.Cal.1984) where the District Court found due process violation where the INS set up an undercover telephone and disseminated the number in Mexico and advised Mexican nationals to violate U.S. law, because this action of the INS placed law enforcement agents squarely in the middle of the creative act. This Court in the case at bar has applied the four factor Bogart test to the undisputed facts and has determined as a matter of law that the Defendant Gardner has satisfied each prong of said test and this Court has concluded as a matter of law that Defendant’s “due process defense” has been charged from the Marines, and has been gainfully employed for seven years by the United States Post Office. The testimony presented at the hearing oh this matter almost entirely goes to the shocking conduct of the government in creating a crime just for the sake of obtaining the conviction of an otherwise innocent individual. The Government refused to offer direct evidence or rebuttal evidence. A number of courts have analyzed the conduct of the government in determining whether such conduct constituted a due process violation. In Hampton v. United States, 425 U.S. 484, 96 S.Ct. 1646, 48 L.Ed.2d 113 (1976), a majority of the court recognized the potential availability of an outrageous police conduct defense no matter what the defendant’s criminal disposition. Id. at 497, 96 S.Ct. at 1653. The Eighth Circuit Court of Appeals in United States v. Lard, 734 F.2d 1290 (8th Cir.1984) noted, in reversing the defendant’s convictions on the ground that they may have been entrapped as a matter of law, observed: “Finally, we should add that, apart from the entrapment defense, Agent Anderson’s overinvolvement in conceiving and contriving the crimes here approached being ‘so outrageous that due process principles should bar the government from invoking judicial process to obtain a conviction.’ See United States v. Russell supra [411 U.S.] at 431-32 [93 S.Ct. at 1642-43]; United States v. Twigg supra at 379; United States v. McCaghren, 666 F.2d 1227, 1230-31 (8th Cir.1981). Anderson’s conduct was not aimed at facilitating discovery or suppression of ongoing illicit dealings in unregistered firearms. Rather, it was aimed at creating new crimes for the sake of bringing criminal charges against Lard, who before being induced, was lawfully and peacefully minding his own affairs. See United States v. Twigg, supra. The government’s agents’ overzealous efforts to instigate crime also involved rather extreme and questionable measures, including smoking of marijuana to gain Lard’s confidence and lure him into committing a crime he was not otherwise ready and willing to commit. Concepts of fundamental fairness preclude us from putting our imprimature on law enforcement overreaching conduct designed to instigate “a criminal act by persons ‘otherwise innocent in order to lure them to its commission and to punish them.’ ” Russell, 411 U.S. 428-9 [93 S.Ct. at 1641] ... Id. at 1296-97.” The history of the “due process defense" begins with U.S. v. Russell, 411 U.S. 423 at 431-32, 93 S.Ct. 1637 at 1642-43, 36 L.Ed.2d 366. There the Court did not set forth a definitive outline of this defense but noted that a court could be presented with a situation in which “the conduct of law enforcement is so outrageous that due process principles would absolutely bar the government from invoking judicial process to obtain a conviction.” The Court of Appeals for the Third Circuit in U.S. v. Twigg, 588 F.2d 373 (3rd Cir.1978), said “... This egregious conduct on the part of government agents generated new crimes by the defendant merely for the sake of pressing criminal charges against him when, as far as the record reveals, he was lawfully and peacefully minding his own affairs. Fundamental fairness does not permit us to countenance such actions by law enforcement officials and prosecution for a crime so fomented by them will be barred.”

12517083-14344

Rovner, Circuit Judge. On June 24, 2015, a grand jury indicted Julius Peterson on two counts of financial institution fraud, one count of making a false statement to a financial institution, and one count of bankruptcy fraud. Specifically, Counts One and Two alleged a violation of 18 U.S.C. § 1344 by submitting false documents in relation to his sale of 7931 S. Union Avenue and 6821 S. Dante Avenue in Chicago, Illinois, Count Three alleged a violation of 18 U.S.C. § 1014 by making a false statement to a financial institution that influenced a mortgage loan for one of those properties, and Count Four alleged that he violated 18 U.S.C. § 152(3) by making false statements in his bankruptcy petition. Peterson pled guilty to one count of financial institution fraud and one count of bankruptcy fraud. The district court sentenced him to 24 months' imprisonment, as well as five years of supervised release, and ordered him to pay restitution in the amount of $166,936. On appeal, Peterson raises two challenges to that sentence. First, he asserts that the district court erred in imposing a two-level enhancement under U.S.S.G. § 2B1.1(b)(10)(C) because Peterson used "sophisticated means." Second, he argues that the district court erred in failing to provide reasons for the imposition of the terms of supervised release. We consider these issues in turn. The sophisticated means enhancement was imposed by the district court based on the nature of the offense. The facts underlying the offense were set forth in the PSR and were not objected to by Peterson. The conduct at issue in this case concerned a scheme to defraud financial institutions by false representations surrounding the sale of property. The sale of the property at 7931 S. Union Avenue is illustrative. Peterson sold property to the buyer, Victoria Nyarko, who obtained an FHA-insured loan for the property from a financial institution. In obtaining the loan, Nyarko submitted paperwork indicating that the downpayment was a gift from her aunt, Felicia Thomas, and included a "gift letter" in the application that had a signature purportedly of Thomas. Thomas, however, was not Nyarko's aunt, but instead was a friend of Peterson, and the signature was not hers. Peterson provided money to Thomas, and Thomas then provided a cashier's check to Nyarko with Thomas as the remitter. That money was deposited in Nyarko's account, and Nyarko then provided the downpayment with a cashier's check drawn on her account with her name as remitter. In that way, a financial institution examining the origin of the money for the downpayment would trace it as originating with Thomas, who was identified as the one gifting the downpayment. Peterson attended the closing and signed documents indicating that he had not paid or reimbursed Nyarko for any part of the cash downpayment and that Nyarko was providing those funds herself. Following the sale, Peterson deposited the approximately $169,433 proceeds of the sale in a bank account in the name of Niya's Trucking and Transporting, a company controlled by Peterson. He then paid Thomas with a portion of the proceeds, and used $30,000 of those funds to purchase a cashier's check payable to a company controlled by Nyarko, Victory Development Group. The account for that entity had only $100 in it prior to that $30,000 deposit. When Nyarko defaulted on that FHA-insured loan, the Department of Housing and Urban Development paid out approximately $214,075. Peterson argues that the district court erred in imposing a two-level enhancement for the use of sophisticated means, because the facts demonstrated only a garden-variety mortgage fraud scheme. He points to the language of the enhancement and the Application Note to that provision. Guideline § 2B1.1(b)(10)(C) provides for a two-level enhancement "[i]f the offense otherwise involved sophisticated means," and Application Note 9(B) states that sophisticated means includes especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. For example, in a telemarketing scheme, locating the main office of the scheme in one jurisdiction but locating soliciting operations in another jurisdiction ordinarily indicates sophisticated means. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts also ordinarily indicates sophisticated means. Peterson contends that the conduct in this case does not fall within that definition. He argues that a "genuine U.S. corporate account" was used to undertake the relevant transactions, and therefore this case is not equivalent to the illustrative items such as fictitious entities, corporate shells, or offshore accounts. According to Peterson, the district court erred in crediting the government's argument that the conduct involved hidden transactions. Peterson contends that the district court was required to make findings that established that his offense conduct involved something akin to the use of fictitious entities, corporate shells, or other offshore accounts. That argument fails to appreciate that sophisticated means can vary based on the nature of the offense. It will not always involve means as elaborate as offshore accounts or corporate shells. The examples in the Application Note are merely illustrative of the type of conduct that could demonstrate sophisticated means. We have consistently recognized that "[a]pplication of the enhancement is proper 'when the conduct shows a greater level of planning or concealment than the typical fraud of its kind.' " United States v. DeMarco , 784 F.3d 388, 397 (7th Cir. 2015), quoting United States v. Knox , 624 F.3d 865, 871 (7th Cir. 2010) ; United States v. Sheneman , 682 F.3d 623, 631-32 (7th Cir. 2012). For instance, in Sheneman , the defendant argued that the sophisticated means enhancement should not apply because the offense was a garden variety home flipping scam. Id. at 632. We upheld the district court's imposition of the enhancement, holding that the offense conduct went beyond a simple scam and included the utilization of powers of attorney to conceal the activity, misrepresentations to buyers, falsification of loan documents, concealment of the source of down payments and closing costs, and artificial inflation of buyers' bank accounts. Id. We noted that we had upheld the enhancement in similar mortgage fraud schemes such as in Knox , 624 F.3d at 871-72 and United States v. Green , 648 F.3d 569, 576-77 (7th Cir. 2011). In Knox , we affirmed the enhancement where the defendant used fraudulent appraisals and false promises to buyers, and falsified loan applications to convince mortgage lenders to finance. The enhancement was also deemed applicable in Green where the defendants purchased seventy properties using fraudulent loan applications and fabricated documents to obtain the mortgages. Similarly, in United States v. Anobah , 734 F.3d 733, 739 (7th Cir. 2013), we rejected the defendant's argument that the offense did not involve a greater level of planning or concealment than a typical fraud of its kind. The district court found that the scheme involved property in two states, the use of straw buyers, false loan applications and other supporting documents, and the use of multiple people to aid in the scheme. Id. We held that the court did not clearly err in determining that the sophisticated means enhancement was applicable on those facts. Id. The present case involves similar allegations of planning and concealment, exceeding that of the "garden variety" mortgage fraud scheme. The conduct in this case went beyond that of a simple mortgage fraud case in which the defendant might provide funds to the buyer for the downpayment and forward a kickback to the buyer after the sale. In this case, the defendant engaged in significant efforts to conceal the source of the downpayment and the kickbacks paid. The downpayment was made through a friend of the defendant, Thomas, who was falsely identified as the aunt of the buyer, Nyarko. Money was not transferred directly from the defendant to Nyarko, but instead was deposited in Thomas' account, and Thomas then provided a cashier's check to Nyarko from her account, thus concealing the source of the funds. In furtherance of those efforts, a fraudulent document was provided identifying Thomas as Nyarko's aunt and the source of the downpayment funds. Efforts were also made to conceal the kickback paid to Nyarko. The proceeds of the sale were deposited in a bank account in the name of Niya's Trucking & Transporting, and a portion of those proceeds was paid to Nyarko by a cashier's check payable to Victory Development Group. As the district court pointed out, that company, Victory Development Group, had no interest or activity with respect to the real estate transaction for which the payment was made. The only reason for the payment to that business instead of directly to Nyarko was for concealment of the criminal activity. This case therefore involves significant actions to conceal the trail of money and to obscure the identity of the provider and recipient of funds, thus distinguishing it from the typical mortgage fraud and supporting the imposition of the sophisticated means enhancement. The district court did not err in applying the enhancement in this case. Peterson's remaining claim is that the district court erred in failing to provide any justification for the eleven discretionary supervised release conditions relating them to the applicable § 3553(a) factors in the sentencing hearing. He alleges that the court merely read the discretionary conditions into the record, and the failure to link the conditions as a whole to the § 3553(a) factors and provide findings was a procedural error necessitating resentencing. See United States v. Aslan , 644 F.3d 526, 531 (7th Cir. 2011) ("[p]rocedural errors include, among other things, failing to calculate or incorrectly calculating the guidelines range, treating the guidelines as mandatory, failing to consider the § 3553(a) factors, or failing to explain adequately the chosen sentence, including an explanation for any deviation from the guidelines range") citing Gall v. United States , 552 U.S. 38, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007). Following the acceptance of Peterson's guilty plea, the Presentence Investigation Report ("PSR") was prepared and distributed to the parties. Defense counsel filed two documents in response to the PSR, Defendant Peterson's Objections to the Government's Version of the Offense and the PSR challenging certain portions of the PSR, and Defendant Peterson's Sentencing Recommendation arguing for a sentence of only one day time served and probation with home confinement, and addressing the appropriate application of the § 3553(a) factors. Peterson did not challenge the proposed supervised release conditions in either document, nor did he argue that the conditions were without justification. In the district court, once again no objection to the supervised release conditions was raised. The district court judge read each discretionary condition into the record, reading directly from the PSR and even citing the pages as he went. The judge did not discuss the § 3553(a) factors at that time, but in the sentencing hearing he explicitly adopted the PSR and its findings. The PSR recommended the conditions which the district court imposed, and included a statement of reasons identifying the § 3553(a) factors which supported imposition of the conditions. The PSR explained that the conditions were recommended to comport with § 3553(a) concerns of affording adequate deterrence, protecting the public from further crimes, and providing the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner. It additionally declared that the conditions were necessary to keep the probation officer informed of Peterson's conduct, condition and compliance, to target interventions to, and factors that are proven to, reduce the risk of re-offending. Finally, the PSR declared that the conditions would assist the defendant to engage in responsible fiscal behavior while complying with the need to repay victims. The connection between those reasons and the conditions is obvious for many of the conditions, and the defendant acknowledges that most supervised release conditions can be justified. Whether one could argue that the reasons are inadequate to justify a particular discretionary condition is not before us, because as will be seen Peterson's challenge is broader than that. Immediately after identifying the supervised release conditions, the district court sequentially asked the probation officer, each of Peterson's attorneys, and the prosecutor the following question: "from your standpoint, have I missed anything?" Sent. Tr. Doc. 63 at 38-39. When individually queried, each one responded no. Nevertheless, Peterson now argues that the court in fact missed something-an articulation of its application of the § 3553(a) factors in imposing the supervised release conditions. In general, when a defendant fails to raise an objection at trial despite being provided the opportunity to do so, we review the claim only for plain error. Under that standard, the defendant must demonstrate an error that is clear or obvious, which affected the defendant's substantial rights, and which seriously impugns the fairness, integrity or public reputation of the judicial proceeding. United States v. Bickart , 825 F.3d 832, 837 (7th Cir. 2016). A defendant has the burden to show that the standard is met, see United States v. Vonn , 535 U.S. 55, 62-63, 122 S.Ct. 1043, 152 L.Ed.2d 90 (2002) and Peterson did not argue injury at all in his opening brief. See United States v. Lewis , 823 F.3d 1075, 1083-84 (7th Cir. 2016) (noting that even if the responses to the court's inquiries were not enough to demonstrate waiver, the failure to object in response to an invitation would amount to forfeiture and "[w]here the issue is the sufficiency of an explanation or findings, a meager explanation of an otherwise permissible decision does not call into question the fairness, integrity, or public reputation of the proceedings.")

6052629-26396

E. GRADY JOLLY, Circuit Judge: This court authorized James Lee Henderson, a Texas death row inmate, to file a successive federal habeas petition to assert a claim that he is mentally retarded and thus ineligible for execution under Atkins v. Virginia, 536 U.S. 304, 122 S.Ct. 2242, 153 L.Ed.2d 335 (2002). In our order authorizing the filing, we noted that, unless the doctrine of equitable tolling applies, Henderson’s successive petition is time-barred. In re Henderson, 462 F.3d 413, 417 (5th Cir.2006). We left “it for the district court to decide whether Henderson’s case presents the ‘rare and exceptional circumstances’ that would entitle him to the benefit of equitable tolling.” Id. The district court held that Henderson is not entitled to equitable tolling and did not reach the question whether the state court unreasonably determined that Henderson is not mentally retarded. The district court granted a certificate of appealability (COA) for two issues that are now before us for resolution: (1) whether Henderson’s mental retardation claim is time-barred because he is not entitled to equitable tolling; and (2) whether the court nevertheless should reach the merits of Henderson’s mental retardation claim because he is “innocent” of the death penalty. I. Henderson was convicted and sentenced to death for the October 1993 capital murder of Martha Lennox in Clarksville, Texas. His conviction and sentence were affirmed on direct appeal. Henderson v. State, No. 71,928 (Tex.Crim.App.1996) (unpublished). He did not file a petition for a writ of certiorari. On March 5, 1997, the trial court appointed Pamela Campbell to represent Henderson in state habeas proceedings. In Henderson’s first state habeas application, filed on August 28, 1997, he raised claims of ineffective assistance of counsel. On July 8, 1998, the Texas Court of Criminal Appeals denied relief. Ex parte Henderson, No. 37,658-01 (Tex.Crim.App. July 8, 1998), cert. denied, 525 U.S. 1004, 119 S.Ct. 516, 142 L.Ed.2d 428 (1998). On August 7, 1998, Henderson filed a motion for appointment of counsel in federal district court. The district court granted the motion on August 24, appointing Clifton Holmes and Eric Albritton (who currently represents Henderson on his Atkins claim) to represent Henderson. On October 27, 1998, the district court entered a scheduling order setting a deadline of January 4, 1999, for Henderson to file his federal habeas petition. The district court also stayed Henderson’s execution, which was set for December 2, 1998. In December 1998, Henderson’s federal habeas counsel’s investigator obtained a series of sworn statements from Deon Williams, who had testified against Henderson at trial, in which Williams recanted much of his trial testimony. On December 31, 1998, Henderson filed a motion in federal court to vacate the scheduling order. That same day, he filed a successive state habeas application in the trial court, raising claims of perjured testimony based on Williams’s recantation. The state habeas application was prepared by Clifton Holmes and Eric Albritton, the same attorneys the district court had appointed to represent Henderson in the federal habeas proceedings. On January 12, 1999, the district court entered an order granting Henderson’s motion to vacate the scheduling order. In that order, the court stated that it expected Henderson to inform the court of the status of his state habeas application (which at that time was pending before the Texas Court of Criminal Appeals) by January 27,1999. Henderson complied by filing his federal habeas petition on January 27, 1999. It was held in abeyance pending the Texas court’s ruling on Henderson’s successive state habeas application. On October 27, 1999, the Texas Court of Criminal Appeals dismissed Henderson’s second state habeas application as an abuse of the writ. Henderson next filed an amended federal habeas petition on March 1, 2000, asserting the claims regarding Deon Williams’s recantation, that he had exhausted in his second state habeas application. The district court conducted an evidentiary hearing in March 2001, and denied Henderson’s petition for federal habeas relief that September. It granted a certifi cate of appealability on November 30, 2001. On June 20, 2002, while Henderson’s appeal of the district court’s denial of habeas relief was pending in this court, the Supreme Court of the United States issued its opinion in Atkins, barring execution of mentally retarded prisoners. On June 9, 2003, this court affirmed the district court’s denial of habeas relief and denied Henderson’s request to expand the COA. Henderson v. Cockrell, 333 F.3d 592 (5th Cir.2003). Henderson filed a petition for rehearing en banc on June 30, which this court denied on July 15, 2003. The Supreme Court denied Henderson’s petition for a writ of certiorari on January 26, 2004. Henderson v. Dretke, 540 U.S. 1163, 124 S.Ct. 1170, 157 L.Ed.2d 1208 (2004). On January 16, 2004, ten days before the Supreme Court denied certiorari, Henderson was evaluated by a psychologist, Dr. Susana Rosin. Dr. Rosin completed her report on March 19, 2004. Five days later, on March 24 (fifty-seven days after the Supreme Court denied certiorari), Henderson filed a third state habeas application in which he presented his Atkins claim. On April 24, 2004, the Texas Court of Criminal Appeals remanded the case to the trial court, finding that Henderson had presented facts which, if true, might entitle him to relief. Ex parte Henderson, No. 37,658-03 (Tex.Crim.App.2004) (unpublished). On remand, the trial court conducted a hearing and entered findings of fact and conclusions of law, recommending that Henderson’s Atkins claim be denied. On January 25, 2006, the Texas Court of Criminal Appeals denied relief, holding that Henderson had failed to show by a preponderance of the evidence that he is mentally retarded. Ex parte Henderson, No. WR-37,658-03 (Tex.Crim.App. Jan. 25, 2006) (unpublished). About forty days later, on March 6, 2006, Henderson filed with this court a motion for authorization to file a successive habeas petition, attaching a copy of the proposed petition. On August 23, 2006, this court granted Henderson’s motion to file a successive habeas petition. In re Henderson, 462 F.3d 413. In our order granting the motion, we noted that neither party had presented us with a complete transcript of the testimony presented at the state habeas evidentiary hearing. Id. at 416 n. 3. We concluded, based on the limited materials available to us, that Henderson had made a prima facie showing of mental retardation. Id. at 417. We noted that, unless equitable tolling applies, Henderson’s successive habeas petition is time-barred. Id. We left “it for the district court to decide whether Henderson’s case presents the ‘rare and exceptional circumstances’ that would entitle him to the benefit of equitable tolling.” Id. Henderson filed his successive federal habeas petition in the district court the following day, August 24, 2006. On March 31, 2008, the district court denied relief, holding that Henderson’s petition is barred by the statute of limitations. Henderson v. Quarterman, No. 1:06-CV-507, 2008 WL 906259 (E.D.Tex.2008). The district court assumed that the Texas “two-forum rule” presented a rare and exceptional circumstance for the purposes of equitable tolling. The court concluded, however, that Henderson did not pursue his claim diligently and was not entitled to equitable tolling because (1) fifty-seven days passed between the denial of certiorari (which ended the two-forum rule impediment to filing) and the filing of his state Atkins petition, (2) Henderson did not file anything in federal court while his state petition was pending, even after the two-forum rule was modified; and (3) forty days passed between the Court of Criminal Appeals denying the state Atkins writ and Henderson’s filing of the motion for authorization to file a successive federal habeas petition. The district court granted a COA for two issues: (1) whether Henderson’s Atkins claim is time-barred because he is not entitled to equitable tolling; and (2) whether the court should reach the merits of Henderson’s Atkins claim because he is “innocent” of the death penalty. We heard oral argument on these issues in November 2009. At that time, the parties noted that the Supreme Court had granted certiorari in Holland v. Florida, 539 F.3d 1334 (11th Cir.2008), cert. granted, — U.S. -, 130 S.Ct. 398, 175 L.Ed.2d 267 (2009). We held this case in abeyance, pending the Supreme Court’s decision in Holland, which was handed down on June 14. — U.S.-, 130 S.Ct. 2549, 177 L.Ed.2d 130 (2010). At our direction, the parties filed supplemental letter briefs addressing the application of Holland to the facts of Henderson’s case. We now turn to address Henderson’s argument that he is entitled to equitable tolling. II. A. The Antiterrorism and Effective Death Penalty Act (AEDPA) provides a one-year limitations period for filing habeas applications. 28 U.S.C. § 2244(d)(1). In cases such as Henderson’s, the one-year period commences on “the date on which the constitutional right asserted was ... newly recognized by the Supreme Court and made retroactively applicable to cases on collateral review.” 28 U.S.C. § 2244(d)(1)(C). The constitutional right asserted by Henderson was recognized by the Supreme Court in Atkins, which was decided on June 20, 2002. The limitations period commenced on that date and expired on June 20, 2003. Henderson did not file his Atkins petition until August 24, 2006. Accordingly, unless equitable tolling applies, it plainly is time-barred. At the time the district court ruled on Henderson’s equitable tolling claim, the Supreme Court had not decided whether the AEDPA limitations period may be equitably tolled. In Lawrence v. Florida, 549 U.S. 327, 336, 127 S.Ct. 1079, 166 L.Ed.2d 924 (2007), the Court assumed without deciding that equitable tolling is available. The Court stated that, to be entitled to equitable tolling, the petitioner “must show (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way and prevented timely filing.” Id. (internal quotation marks and citation omitted); see also Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S.Ct. 1807, 161 L.Ed.2d 669 (2005) (same). In Lawrence, a death penalty case, the petitioner argued that his attorney’s mistake in calculating the limitations period entitled him to equitable tolling. 549 U.S. at 336, 127 S.Ct. 1079. The Supreme Court rejected that contention, noting that, “[i]f credited, this argument would essentially equitably toll limitations periods for every person whose attorney missed a deadline.” Id. The Court stated that “[ajttorney miscalculation is simply not sufficient to warrant equitable tolling, particularly in the post-conviction context where prisoners have no constitutional right to counsel.” Id. at 336-37, 127 S.Ct. 1079. In Holland, the Supreme Court held specifically for the first time that AED-PA’s statute of limitations “is subject to equitable tolling in appropriate cases.” 130 S.Ct. at 2560. In doing so, the Court reiterated the requirements for equitable tolling that it had stated in Lavrrence and Pace: “[A] petitioner is entitled to equitable tolling only if he shows (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way and prevented timely filing.” Id. at 2562 (internal quotation marks and citations omitted). The Court stated that “[t]he diligence required for equitable tolling purposes is reasonable diligence, not maximum feasible diligence.” Id. at 2565 (internal quotation marks and citations omitted). The Court held that the district court’s conclusion, which rested on a finding of a lack of diligence, was incorrect, because: Holland not only wrote his attorney numerous letters seeking crucial information and providing direction; he also repeatedly contacted the state courts, their clerks, and the Florida State Bar Association in an effort to have [his attorney] — the central impediment to the pursuit of his legal remedy — removed from his case. And, the very day that Holland discovered that his AEDPA clock had expired due to [his attorney’s] failings, Holland prepared his own habeas petition pro se and promptly filed it with the District Court. Id. With respect to the extraordinary circumstances prong, the Court rejected as “too rigid” the standard applied by the Eleventh Circuit, which had held that “even attorney conduct that is ‘grossly negligent’ can never warrant tolling absent ‘bad faith, dishonesty, divided loyalty, mental impairment or so forth on the lawyer’s part.’” Id. at 2563 (quoting Holland, 539 F.3d at 1339). The Supreme Court explained that the Eleventh Circuit’s rule failed “to recognize that, at least sometimes, professional misconduct that fails to meet the Eleventh Circuit’s standard could nonetheless amount to egregious behavior and create an extraordinary circumstance that warrants equitable tolling.” Id. The Court reiterated that “a garden variety claim of excusable neglect” would not be sufficient to warrant equitable tolling. Id. at 2564 (internal quotation marks and citation omitted). The Court emphasized that its precedent requires that a court of equity exercise its powers on a case-by-case basis: [Cjourts of equity can and do draw upon decisions made in other similar cases for guidance. Such courts exercise judgment in light of prior precedent, but with awareness of the fact that specific circumstances, often hard to predict in advance, could warrant special treatment in an appropriate case. Id. at 2563. Because the district court in Holland incorrectly found a lack of diligence and the Eleventh Circuit “erroneously relied on a overly rigid per se approach” in considering whether there were extraordinary circumstances, the Supreme Court observed that “no lower court has yet considered in detail the facts of this case to determine whether they indeed constitute extraordinary circumstances sufficient to warrant equitable relief.” Id. at 2565. The Court also “recognize[d] the prudence, when faced with an equitable, often fact-intensive inquiry, of allowing the lower courts to undertake it in the first instance.” Id. (internal quotation marks and citation omitted). Accordingly, the Court left “it to the Court of Appeals to determine whether the facts in this record entitle Holland to equitable tolling, or whether further proceedings, including an evidentiary hearing, might indicate that [the State] should prevail.” Id. With respect to the case now before us, the district court assumed that the Texas two-forum rule constituted an extraordinary circumstance, but concluded that Henderson is not entitled to equitable tolling because he did not pursue his Atkins claim diligently. The district court based this ruling on the facts that (1) fifty-seven days passed between the denial of certiorari (which ended the two-forum rule impediment to filing) and the filing of his state Atkins petition; (2) Henderson did not file any Atkins related document or pleading in federal court while his state petition was pending, even though he certainly could have after the Texas Court of Criminal Appeals abandoned the two-forum rule; and (3) forty days passed between the Court of Criminal Appeals denying the state Atkins writ and Henderson’s filing of his motion for authorization to file a successive federal habeas petition. In his supplemental letter brief, Henderson challenges this holding of the district court by arguing that it erroneously applied a “maximum feasible diligence” standard rather than the “reasonable diligence” standard that the Supreme Court announced in Holland. The State counters in its supplemental letter brief that Holland does nothing more than reaffirm this court’s prior equitable tolling jurisprudence. Henderson also argues for a de novo standard of review. However, review of a district court’s decision not to apply equitable tolling is controlled by our precedent, which requires that we review the district court’s decision for abuse of discretion. Flores v. Quarterman, 467 F.3d 484, 485 (5th Cir.2006); Fisher v. Johnson, 174 F.3d 710, 713 (5th Cir.1999). Because the decision to apply equitable tolling is discretionary, and because the district court has not had an opportunity to exercise its discretion in the light of Holland, we conclude that it is appropriate here to vacate the district court’s judgment and remand this case to the district court to allow it to consider, in the first instance, whether the facts of this case warrant equitable tolling under the Holland standards. See Jones v. Thaler, 383 Fed.Appx. 380 (5th Cir.2010) (unpublished) (vacating and remanding “[i]n order to permit the district court first consideration of Jones’s petition in light of the Court’s holding in Holland”). B. We now turn to consider the second issue presented in this appeal: whether the merits of Henderson’s mental retardation claim must be considered because he is actually innocent of the death penalty. The district court granted a COA for Henderson’s alternative claim that, irrespective of any procedural bar, the court should reach the merits of his Atkins claim because he is actually innocent of the death penalty. Thus, Henderson argues that, irrespective of equitable tolling, the court must address the merits of his mental retardation claim because failing to do so would constitute a fundamental miscarriage of justice. In support of this claim, Henderson relies on Sawyer v. Whitley, 505 U.S. 333, 346-47, 112 S.Ct. 2514, 120 L.Ed.2d 269 (1992), to argue that such a miscarriage of justice would occur in a case in which the petitioner is actually innocent of the death penalty because he is mentally retarded and thus, under the Eighth Amendment of the Constitution, ineligible for capital punishment. He acknowledges that the Fifth Circuit has not so held, but cites for support Souter v. Jones, 395 F.3d 577 (6th Cir.2005). In Souter, the Sixth Circuit held that “where an otherwise time-barred habeas petitioner can demonstrate that it is more likely than not that no reasonable juror would have found him guilty beyond a reasonable doubt, the petitioner should be allowed to pass through the gateway and argue the merits of his underlying constitutional claims.” Id. at 602. Henderson contends that, under this exception, the district court should have reached the merits of his Atkins claim and granted relief. The State contends that Henderson’s reliance on Souter is misplaced, because the actual innocence exception addressed in that case is factual innocence of the charged crime itself, and not legal innocence of the death penalty. Even if the court were to establish such an exception to the AEDPA statute of limitations, the State argues, Henderson cannot show by clear and convincing evidence that no reasonable juror could find that he is not mentally retarded. The State contends further that, in this circuit, a claim of actual innocence does not constitute a rare and exceptional circumstance permitting equitable tolling. See Felder v. Johnson, 204 F.3d 168, 171 (5th Cir.2000) (holding that a claim of actual innocence “does not constitute a ‘rare and exceptional’ circumstance [permitting equitable tolling], given that many prisoners maintain they are innocent.”); Cousin v. Lensing, 310 F.3d 843, 849 (5th Cir.2002) (same). Henderson replies that Felder recognized that a showing, as opposed to a mere claim, of actual innocence would be sufficient to justify equitable tolling. See Felder, 204 F.3d at 171 n. 8 (“Felder has not made a showing of actual innocence, as the district court noted.”). In Flanders v. Graves, 299 F.3d 974, 977 (8th Cir.2002), the Eighth Circuit rejected, “as a broad concept,” the contention that actual innocence could be used to excuse a habeas petitioner’s failure to file his petition within the limitations period. The court explained: It is our duty to apply statutes as written. The statute fixes a one-year period of limitations, and says nothing about actual innocence, even though other parts of AEDPA, enacted at the same time, do refer to this doctrine. It is not our place to engraft an additional judge-made exception onto congressional language that is clear on its face. Id. (citations omitted). The court said that “[f]or such a claim to be viable, ... a petitioner would have to show some action or inaction on the part of the respondent that prevented him from discovering the relevant facts in a timely fashion, or, at the very least, that a reasonably diligent petitioner could not have discovered these facts in time to file a petition within the period of limitations.” Id. at 978. The Ninth Circuit recently decided, likewise, that there is not “an actual innocence exception that serves as a gateway through the AEDPA statute of limitations to the merits of a petitioner’s claims.” Lee v. Lampert, 610 F.3d 1125, 1133, 1136 (9th Cir.2010). Henderson has not cited any authority holding that there is an “actual innocence of the death penalty” exception to the AEDPA statute of limitations. We decline to create such an exception. C. The district court did not reach the merits of Henderson’s mental retardation claim and did not grant a COA for it. The State asserts that this court may nevertheless affirm on any basis supported by the record and argues that, even assuming that Henderson is entitled to equitable tolling, Henderson’s claim fails on the merits, because he has failed to show by clear and convincing evidence that he is mentally retarded. In the light of our decision to remand to the district court for a determination of whether Henderson is entitled to equitable tolling under the standards announced in Holland, and also in the light of the fact that the district court has not addressed the merits of Henderson’s mental retardation claim, we think it is premature for us to consider that claim at this stage of the proceedings. Because there is no special exception from the AEDPA statute of limitations based on actual innocence of the death penalty, it is only if the district court finds that, in the light of Holland, these facts justify the tolling of the AEDPA limitations period, that the district court would need to address the merits of Henderson’s Atkins claim. III. For the foregoing reasons, the judgment of the district court is AFFIRMED with respect to its holding that there is no actual innocence exception to the AEDPA statute of limitations. The district court’s holding that Henderson is not entitled to equitable tolling is VACATED, and the case is remanded to the district court for further consideration of that holding in the light of Holland v. Florida. If the district court finds that Henderson is entitled to equitable tolling, it will need to address the merits of his Atkins claim. AFFIRMED in part; VACATED in part; and REMANDED. . Between 1972 and February 2004, Texas courts applied the "two-forum rule” to dismiss state habeas applications filed while federal habeas applications challenging the same conviction were pending. See Ex parte Powers, 487 S.W.2d 101 (Tex.Crim.App.1972). The two-forum rule was modified on February 11, 2004, in Ex parte Soffar, 143 S.W.3d 804, 806-07 (Tex.Crim.App.2004). Under the modified rule, the Texas Court of Criminal Appeals will "permit consideration of the merits of a subsequent writ ... if the federal court having jurisdiction over a parallel writ enters an order staying all of its proceedings for the applicant to return to the appropriate Texas court to exhaust his state remedies.” Id. at 807. . Unlike the dissent, the majority opinion addresses the arguments that Henderson has made and the issue for which the district court granted a COA. Henderson has never argued that the AEDPA statute of limitations does not apply to Atkins claims. In his brief, he acknowledges the applicability of the statute of limitations: Mr. Henderson’s petition is based on Atkins v. Virginia, 536 U.S. 304, 122 S.Ct. 2242, 153 L.Ed.2d 335 (2002), which was decided on June 20, 2002. Thus, the limitations period commenced on June 20, 2002 and expired June 20, 2003. Brief of Appellant, August 22, 2008, at p. 13. In his request for a COA from the district court, Henderson stated: The district court failed to reach the alternative basis for overcoming the statute of limitations bar, that is, it would be a fundamental miscarriage of justice not to reach the merits because Mr. Henderson is ineligible for the death penalty because he is mentally retarded. See Sawyer v. Whitley, 505 U.S. 333, 112 S.Ct. 2514, 120 L.Ed.2d 269 (1992). Jurists of reason would find it debatable whether the district court was correct in its procedural ruling in light of the fact that Mr. Henderson has established that he is innocent of the death penalty. (Emphasis added.) In its order granting the COA requested by Henderson, the district court stated: Henderson contends that the Court failed to consider whether it would be a fundamental miscarriage of justice not to reach the merits of his claim because his status as a mentally retarded individual makes him ineligible for the death penalty under Atkins. Put another way, Henderson asserts that because he is mentally retarded he is innocent of the death penalty .... Acknowledging that the Fifth Circuit has not so held, Henderson argues that there is an actual innocence exception to the AED-PA’s one-year statute of limitations, citing Souter v. Jones, 395 F.3d 577, 599 (6th Cir.2005) .... While Souter deals with actual innocence of the crime, the Court is convinced that the issue of an actual innocence exception to the AEDPA's statute of limitations is debatable among jurists of reason or, at the very least, adequate to deserve encouragement to proceed further .... Henderson v. Quarterman, Order on Certificate of Appealability, p. 2 (E.D.Tex. May 28, 2008) (emphasis added). Henderson devotes only one paragraph of his brief to his argument that his claim falls within an exception to the statute of limitations. It states, in full: II. THE DISTRICT COURT ERRED BY FAILING TO REACH THE MERITS OF MR. HENDERSON’S ATKINS CLAIM BECAUSE HE IS “INNOCENT” OF THE DEATH PENALTY.

3331777-18052

OPINION OF THE COURT RENDELL, Circuit Judge. The question presented by this appeal is whether appellant John Burkey’s release from Bureau of Prisons (“BOP”) custody caused his pending habeas corpus petition — which challenged the BOP’s failure to grant him early release — to be moot because it no longer presented a case or controversy under Article III, § 2, of the Constitution. We agree with the District Court that Burkey’s petition is moot because his assertion of “collateral consequences” is insufficient. We will therefore affirm. BACKGROUND In 1996, Burkey was serving a sentence for federal controlled substances convictions at the Federal Correctional Institution at McKean in Bradford, Pennsylvania. The BOP determined that he was eligible for early release pursuant to 18 U.S.C. § 3621(e)(2)(B), because he had completed a residential drug treatment program. Burkey received his early release credit, and was released to serve his term of supervised release. While on supervised release, Burkey committed new controlled substances crimes and was rearrested. In July of 2003, he was sentenced in United States District Court for the Northern District of Ohio to a term of imprisonment of 57 months, to be followed by 3 years of supervised release. A few weeks later, the sentencing court imposed a three-month supervised release violator term, to be served concurrent with the 57-month term of imprisonment. Burkey returned to prison and participated once again in the drug treatment program, expecting to again qualify for early release. However, the BOP, relying on a recently adopted rule, namely, Paragraph 5(c) of Program Statement 5331.01, determined that he was ineligible for early release because he had previously received an early release credit under the statute. Burkey pursued his administrative remedies through the BOP, attempting at first to raise an ex post facto argument. The Warden denied him relief and he lost his appeal at the Regional level. Upon denial of that appeal, he filed a Central Office Administrative Remedy Appeal, arguing for the first time that Paragraph 5(c) of Program Statement 5331.01 was issued in violation of the Administrative Procedures Act and thus was invalid. In March of 2006, Burkey’s Central Office Administrative Remedy Appeal was denied on the basis that his ex post facto claim had no merit. The APA claim was not addressed. In May of 2006, Burkey filed a pro se petition for writ of habeas corpus, 28 U.S.C. § 2241, in United States District Court for the Western District of Pennsylvania, where he was confined. He challenged the BOP’s determination that he was not eligible for early release under 18 U.S.C. § 3621(e)(2)(B), urging that Paragraph 5(c) of Program Statement 5331.01 was promulgated in violation of the Administrative Procedures Act, 5 U.S.C. § 553, and was, therefore, invalid. Burkey asked to be released from detention. The Federal Public Defender was appointed to represent him. In August of 2007, the Magistrate Judge issued a thorough Report and Recommendation, concluding that the BOP had violated the APA. The APA provides that an agency may not adopt a rule without providing prior notice through publication in the Federal Register and comment. 5 U.S.C. § 553(b), (c). The Magistrate Judge reasoned that Paragraph 5(c) of Program Statement 5331.01 was neither an exempt “interpretative rule” nor an exempt general statement of policy. See Dia Navigation Co., Ltd. v. Pomeroy, 34 F.3d 1255, 1264 (3d Cir.1994). It was instead a legislative rule, see id., subject to the APA, and the BOP could not avoid the APA’s requirements by placing a legislative rule in a Program Statement, instead of first publishing it in the Federal Register. The Magistrate Judge recommended that Bur-key’s request for habeas corpus relief be granted because he had completed the residential drug treatment program. On September 7, 2007, the BOP released Burkey from custody, nine days before his statutory release date of September 16, 2007. It then filed in this ease a Notice of Suggestion of Mootness, contending that, because Burkey had, through his release, achieved the object of his habeas corpus petition, his case was moot. Burkey filed a written response, and urged that his petition was not moot because, if the District Court would issue an order approving and adopting the Magistrate Judge’s Report and Recommendation, he then would be able to argue to the sentencing court in Ohio that his supervised release term should be shortened in light of his having been improperly denied early release from prison. The District Court dismissed Burkey’s habeas corpus petition as moot. The court observed that, to avoid a finding of mootness, Burkey would have to demonstrate that the delayed commencement of his supervised release term was likely to be redressed by a favorable judicial decision, Spencer v. Kemna, 523 U.S. 1, 7, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998). The court concluded that it was “pure speculation that a favorable decision from this Court would ‘likely’ result in [Burkey’s] sentencing court reducing or terminating his supervised release term under Section 3583(e).” Burkey v. Lappin, 2007 WL 4480188, at * 2 (W.D.Pa. December 14, 2007). The District Court did not believe it could predict what the sentencing court would do in Burkey’s case, and thus it could not conclude that the relief sought likely would be granted. The District Court rejected precedent in the Second and Ninth Circuits, Levine v. Apker, 455 F.3d 71 (2d Cir.2006), and Mujahid v. Daniels, 413 F.3d 991 (9th Cir.2005), which permit a case to continue when there is only a “possibility” that a court might modify a term of supervised release, and concluded that more is required to maintain a case or controversy under Article III. The District Court also referred to the view expressed by the Supreme Court in United States v. Johnson, 529 U.S. 53, 120 S.Ct. 1114, 146 L.Ed.2d 39 (2000), that incarceration and supervised release serve distinct objectives and are not to be viewed as interchangeable punitive measures. Burkey, 2007 WL 4480188, at * 2 (citing Johnson, 529 U.S. at 57-58, 120 S.Ct. 1114). This, the District Court reasoned, detracted from the likelihood that the sentencing court would modify Burkey’s term of supervised release based on his having been in prison longer than he perhaps should have been as a result of the BOP’s APA violation. Burkey appeals. We have jurisdiction pursuant to 28 U.S.C. § 1291. United States v. Cepero, 224 F.3d 256, 264-65 (3d Cir.2000) (certificate of appeal-ability not required to appeal from denial of section 2241 petition). The standard of review over the District Court’s mootness determination is plenary. United States v. Gov’t of Virgin Islands, 363 F.3d 276, 284 (3d Cir.2004). Insofar as Burkey was in BOP custody when he filed his habeas corpus petition under 28 U.S.C. § 2241, he has satisfied the “in custody” jurisdictional requirement, Carafas v. LaVallee, 391 U.S. 234, 238, 88 S.Ct. 1556, 20 L.Ed.2d 554 (1968), and he appropriately filed his habe-as corpus petition in the district of confinement and named the Warden as the respondent, Rumsfeld v. Padilla, 542 U.S. 426, 443, 124 S.Ct. 2711, 159 L.Ed.2d 513 (2004). DISCUSSION A challenge to the BOP’s execution of a sentence is properly brought under 28 U.S.C. § 2241. Woodall v. Federal Bureau of Prisons, 432 F.3d at 235, 241-43 (3d Cir.2005); Coady v. Vaughn, 251 F.3d 480, 485 (3d Cir.2001). The BOP waived any exhaustion of administrative remedies argument it might have had concerning the APA claim insofar as 28 C.F.R. § 542.15 prohibits an inmate from raising on appeal an issue that was not raised at the initial and intermediate levels of the administrative remedy process. Burkey’s habeas corpus petition sought release from prison based on the invalidity under the APA of the Program Statement denying him early release. That relief was afforded him when, on the Magistrate Judge’s recommendation, the BOP released him in September of 2007 to begin serving his 3-year term of supervised release. Given this, is a case or controversy still presented? We conclude the answer is no, and, therefore, Burkey’s habeas corpus petition is moot. Under Article III of the Constitution, a federal court may adjudicate “only actual, ongoing eases or controversies.” Lewis v. Continental Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990). “To invoke the jurisdiction of a federal court, a litigant must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision.” Id. (citing Allen v. Wright, 468 U.S. 737, 750-751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 471-473, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982)). Article III denies the District Court the power to decide questions that cannot affect the rights of litigants before it, and confines it to resolving live controversies “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.” Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 81 L.Ed. 617 (1937). The case or controversy requirement continues through all stages of federal judicial proceedings, trial and appellate, and requires that parties have a personal stake in the outcome. Lewis, 494 U.S. at 477-478, 110 S.Ct. 1249. “This means that, throughout the litigation, the plaintiff ‘must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision.’ ” Spencer, 523 U.S. at 7, 118 S.Ct. 978 (quoting Lewis, 494 U.S. at 477, 110 S.Ct. 1249). Incarceration satisfies the case or controversy requirement; it is a concrete injury caused by a conviction and is likely to be redressed by invalidation of the conviction. Id. Once a sentence has expired, however, some continuing injury, also referred to as a collateral consequence, must exist for the action to continue. Id. Following Sibron v. New York, 392 U.S. 40, 88 S.Ct. 1889, 20 L.Ed.2d 917 (1968), the Supreme Court “abandoned all inquiry into the actual existence of collateral consequences,” id. at 55, 88 S.Ct. 1889, and “proceeded to accept the most generalized and hypothetical of consequences as sufficient to avoid mootness” in a challenge to a conviction. Spencer, 523 U.S. at 10, 118 S.Ct. 978. In Lane v. Williams, 455 U.S. 624, 102 S.Ct. 1322, 71 L.Ed.2d 508 (1982), the Court declined to extend the presumption of collateral consequences in the context of a challenge to a mandatory parole violator term when, during the pendency of the litigation, the term had expired. Id. at 632-33, 102 S.Ct. 1322. Most recently in Spencer, the Court “decline[d] to presume that collateral consequences adequate to meet Article Ill’s injury-in-fact requirement resulted from petitioner’s parole revocation,” Spencer, 523 U.S. at 14, 118 S.Ct. 978, once that term had expired. As in Lane, the fact that the parolee was not challenging the validity of his convic tion factored heavily in the decision not to presume collateral consequences. Thus, collateral consequences will be presumed when the defendant is attacking his conviction while still serving the sentence imposed for that conviction, but we also have held that they will be presumed where the defendant is attacking that portion of his sentence that is still being served. See, e.g., United States v. Jackson, 523 F.3d 234, 242 (3d Cir.2008). In Jackson, we held that collateral consequences are presumed where the appellant was still serving a term of supervised release and her challenge was to the reasonableness of the supervised release term. Id. Where, however, the appellant is attacking a sentence that has already been served, collateral consequences will not be presumed, but must be proven. See United States v. Cottman, 142 F.3d 160, 165 (3d Cir.1998). Burkey has served his sentence but remains subject to a 3-year term of supervised release. However, he did not challenge the validity or reasonableness of that term in his habeas corpus petition, as did the appellant in Jackson. His challenge was more remote, attacking only what the BOP had done, and urging it as the basis for the sentencing court to now afford him relief against an indisputably valid term of supervised release. In such circumstances, he must demonstrate that collateral consequences exist; they will not be presumed. Cf. Jackson, 523 F.3d at 241 (Cottman held that collateral consequences will not be presumed when “[a] defendant who is serving a term of supervised release ... challenges only his completed sentence of imprisonment”). Even though collateral consequences are not presumed, a petitioner may still avoid a finding of mootness if he can show a continuing injury, or collateral consequence, that is sufficient. Spencer, 523 U.S. at 14, 118 S.Ct. 978. The delayed commencement of Burkey’s validly imposed term of supervised release is, he alleges, his “continuing injury,” but this is insufficient for mootness purposes in his case, given his release from BOP custody. We reach this conclusion because the Supreme Court, in Lewis and Spencer, addressed the issue of collateral consequences in terms of the “likelihood” that a favorable decision would redress the injury or wrong. In fact, in Spencer, the Court rejected numerous collateral consequences proffered by the petitioner because they were no more than “a possibility rather than a certainty or even a probability,” or pure speculation. 523 U.S. at 14-16, 118 S.Ct. 978. The “likely” outcome here is not that the District Court’s order will cause the sentencing court in Ohio to reduce Burkey’s term of supervised release. Quite apart from the instant petition, Burkey has the right to file in the sentencing court a motion for termination of his term of supervised release pursuant to 18 U.S.C. § 3583(e), because he has served one year of his term. Under 18 U.S.C. § 3583(e)(1), a defendant who has completed one year of his supervised release term may file a motion, and the sentencing court has the authority to terminate a defendant’s supervised release obligations “at any time after the expiration of one year ... if it is satisfied that such action is warranted by the conduct of the defendant released and the interest of justice.” 18 U.S.C. § 3583(e)(1). However, the District Court reasoned that Burkey’s ability to obtain modification under the supervised release statute turns on a discretionary decision of the sentencing court, which must consider many factors pursuant to 18 U.S.C. § 3553(a), including those which bear directly on the objectives of supervised release. From a practical, and legal, standpoint, we too doubt whether a sentencing judge, having imposed a specific term of imprisonment and supervised release, would alter his view as to the propriety of that sentence because the BOP required the defendant to serve it. The concept of interchangeability of supervised release for incarceration was specifically rejected by the Supreme Court in Johnson, 529 U.S. at 59-60, 120 S.Ct. 1114, as the District Court noted. The probability that the sentencing court here would reduce Burkey’s term of supervised release — especially given his past recidivism — as an equalizer for his incarceration, has not been established. As the applicable § 3553(a) factors indicate, a decision under § 3583(e) generally is more directly influenced by the particular defendant and the underlying conduct that formed the basis for the term of supervised release. Cf. Lane, 455 U.S. at 632-33, 102 S.Ct. 1322 (observing that discretionary decisions made by sentencing court “are more directly influenced by [] the underlying conduct that formed the basis for the parole violation”). The possibility that the sentencing court will use its discretion to modify the length of Burkey’s term of supervised release under 18 U.S.C. 3583(e), which it may do as long as the reason for doing so is not to offset excess prison time, Johnson, 529 U.S. at 57-60, 120 S.Ct. 1114, is so speculative that any decision on the merits by the District Court would be merely advisory and not in keeping with Article Ill’s restriction of power. See Flast v. Cohen, 392 U.S. 83, 96 n. 14, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) (noting long established rule against advisory opinions). The District Court may not render an advisory opinion in Burkey’s case, because “[t]he duty of [the] court ... is to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it,” Mills v. Green, 159 U.S. 651, 653, 16 S.Ct. 132, 40 L.Ed. 293 (1895). While our sister courts of appeals have found a live case or controversy where a “possibility” exists that a court would reduce a term of supervised release in situations similar to this, see, e.g., Levine, 455 F.3d 71, and Mujahid, 413 F.3d 991, we are unwilling to do so. We do not believe the reasoning of these case is supportable, given the Supreme Court’s directives in Lewis and Spencer. In Cott-man, we concluded that the defendant’s challenge to his sentence, if successful, would “likely” have resulted in a reduced guideline range and a credit — given by the same court which originally sentenced him incorrectly — against his term of supervised release. 142 F.3d at 165. We thus adhere to the requirement that the injury must be “likely” to be redressed by the judicial decision. A “possibility” of redress, which is all that Levine and Mujahid require, is not adequate to survive a mootness challenge. Here, we cannot say that the injury to Burkey will “likely” be redressed by the District Court’s grant of his habeas corpus petition.

1173854-13131

ORDER K. MICHAEL MOORE, District Judge. THIS CAUSE is before the Court upon Appellant’s Notice of Bankruptcy Appeal (DE# 1). UPON CONSIDERATION of the Appeal, the Responses, and the pertinent portions of the record, and being otherwise fully advised in the premises, the Court enters the following Order. BACKGROUND Appellant, The United States of America (the “United States” or “Appellant”) commenced an action in the United States District Court for the Southern District of Florida against Appellee Stanley M. Spiwak (“Appellee” or “Spiwak” or “Debtor”), his wife Grethe Aarnes Spiwak, the Grethe Aarnes Trust, and Shaw Realty, Inc. entitled United States of America v. Stanley M. Spiwak, et al., Case no. 93-7001-dV-GONZALEZ. Following trial, on July 24, 1995, the District Court entered judgment against the Spiwaks in the amount of $456,344.50, for the Spiwaks’ unpaid income tax liabilities for the years 1977-79, 1981-83, and 1986. The District Court also entered an Order of Foreclosure, finding that the federal tax liens against the Spiwaks applied to their home at 3100 N.E. 47th Court, # 302, Fort Lauderdale, Florida (the “condominium”) and authorizing the United States to foreclose its liens. The condominium was nominally owned by the Grethe Aarnes Trust and encumbered by a Shaw Realty mortgage held to be null and void. On June 14, 1996, three days before the scheduled foreclosure sale of the condominium, Spiwak filed his bankruptcy petition. Spiwak commenced an adversary proceeding seeking a judgment that his income tax liabilities were dischargeable. The United States filed a motion to dismiss on the grounds that the income tax liabilities were nondischargeable under 11 U.S.C. § 523(a)(1)(C). The Bankruptcy Court treated the motion to dismiss as a motion for judgment on the pleadings, and subsequently denied the motion. On July 7,1997, the issue of whether the income tax liabilities were dischargeable under 11 U.S.C. § 523(a)(1)(C) was tried before the Bankruptcy Court. Stating its findings of fact and conclusions of law on the record, the Bankruptcy Court entered judgment in Spiwaks’ favor. That same day, the Bankruptcy Court entered its Final Judgment Discharging Income Tax Liability, discharging Spiwaks’ income tax liabilities for the years 1977-1979, 1981-1983, and 1986. The United States now appeals the Final Judgment Discharging Income Tax Liability dated July 10, 1997 and the Memorandum Decision Denying Motion to Dismiss by United States of America and Denying Ore Tenus Motion to Render a Judgment on the Pleadings as to Count I dated March 26, 1997. The United States presents the following issues on appeal: 1. Whether the Bankruptcy Court erred in denying the United States’ Motion for Judgment on the Pleadings. 2. Whether the Bankruptcy Court erred in concluding that the debtor did not have the wherewithal to pay his tax liabilities. 3. Whether the Bankruptcy Court erred in concluding that the United States had not met its burden of proving that the debtor had willfully attempted in any manner to evade or defeat his tax liabilities. DISCUSSION A. Standard of Review A district court reviewing a bankruptcy appeal is not authorized to make independent factual findings; that is the function of the bankruptcy court. In re Sublett, 895 F.2d 1381, 1383-84 (11th Cir.1990). Factual findings made by the bankruptcy court are subject to a clearly erroneous standard. Continental Nat. Bank of Miami v. Sanchez (In re Toledo), 170 F.3d 1340, 1344 (11th Cir.1999). Conclusions of law are subject to de novo review. In re Calvert, 907 F.2d 1069, 1070 (11th Cir.1990). Equitable determinations are reviewed for abuse of discretion. In re Red Carpet Corp. of Panama City Beach, 902 F.2d 883 (11th Cir.1990). B. The Bankruptcy Court’s Denial of the United States’ Motion for Judgment on the Pleadings The United States asserts that it was error for the Bankruptcy Court to deny its Motion for Judgment on the Pleadings as (1) the District Court’s finding that Spiwak had established a sham corporation necessarily rested on the premise that Spiwak acted a fraud upon the government, (2) Debtor’s recording of his transactions does not validate them, and (3) fraudulent intent should be presumed. Appellee asserts that the District Court’s Order subjecting the Spiwak trust property to foreclosure by the Internal Revenue Service was based on two distinct theories, both of which did not concern fraudulent transactions. First, Ms. Spiwak had a present beneficial interest in the trust and Spiwak had a future interest in the trust. Therefore, the tax liens would attach to their beneficial interest as a matter of federal law. Second, the District Court noted that the trust was a sham, and that the trust held the property at issue as a “nominee” of the Spiwaks. The District Court found that the trust was properly classified as a sham, as it granted “almost total control to the beneficiaries, the Spiwaks. The trust’s only asset serves as the personal residence of the defendants Stanley and Grethe A. Spiwak. . .The taxpayers have exercised complete control over the trust’s sole asset since its acquisition, even to the extent of having a controlled corporation ostensibly hold a mortgage on the property and institute a foreclosure proceeding against the property.” Appellee argues that the application of the nominee doctrine does not involve an inquiry into the existence of a fraudulent conveyance or the Debtor’s intentions to evade or defeat the tax at issue. Appellant asserts that had the Court not found fraud to exist, then the federal tax hens would have attached only to whatever limited interest the Spiwaks retained under the trust terms, and that the mortgage held by Shaw Realty would have held priority over the tax lien of the United States. In support of its argument, the United States refers to Dallas Nat’l Bank v. United States, 167 F.2d 468 (5th Cir.1948). In Dallas Nat’l Bank, the Fifth Circuit found that a federal lien for income taxes would attach to the taxpayer’s equitable interest in the corpus of the trust estate, although provisions existed preventing its sale or alienation. Id. at 469. Appellant avers that this case stands for the proposition that had the Spiwak transaction not been fraudulent, then the federal tax lien would only have attached to the interest the Spiwaks retained in the condominium. The Court does not find that this case clarifies the issue at hand. Rather, Dallas Nat’l Bank simply holds that a federal tax lien may be enforced against a taxpayer’s income from trust property. The Court did not discuss how the lien would otherwise be enforced in the absence of fraud, nor did it discuss this differentiation. Similarly, Appellant cites United States v. McCombs, 928 F.Supp. 261, 267-72 (W.D.N.Y.1995) for the proposition that absent a fraudulent transaction, the mortgage held by Shaw Realty would have held priority over the tax lien asserted by the United States. The undersigned finds this case to be instructive, as the Court did not allow the government to enforce a 1984 tax lien against a property because the government did not carry its burden of dem onstrating that the conveyance was fraudulent. Id. at 277-278. The District Court allowed the lien against the mortgage held by Shaw Realty, and therefore necessarily found that fraud tainted the transaction. Appellee argues that fraudulent conveyance issues are separate causes of action from inquiries into the application of the nominee doctrine. Appellee’s authority, the case Libutti v. United States, 894 F.Supp. 589, 598 (N.D.N.Y.1995), does not hold that nominee inquiries cannot and do not involve determinations of the existence of fraud in transactions. In addition, the fact that typical nominee inquiries do not involve liability determinations of civil tax fraud or criminal tax fraud does not preclude the District Court’s finding that fraud necessarily permeated the trust transaction. The Court finds it instructive that the District Court, rather than simply stating that the trust property was held as a nominee of the Spiwaks, called the trust a “sham.” Nominee inquiries generally address the manner in which a taxpayer treats a property, while fraudulent conveyance questions concern the validity of a trust upon its creation. The District Court’s identification of the trust property as a sham indicates that the Court considered the validity of the trust in conjunction with the manner in which Spiwak treated the instrument of his creation See In re Richards, 231 B.R. 571, 579 (E.D.Pa.1999). Appellant asserts that under the doctrine of collateral estoppel, the issue of Spiwak’s fraudulent transaction has been established and cannot be relitigated. Collateral estoppel is appropriate when the following three elements are present: (1) the issue at stake must be identical to the one involved in the prior litigation; (2) the issue must have been actually litigated in the prior litigation; and (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in that litigation. In re Halpern, 810 F.2d 1061, 1064 (11th Cir.1987) (citing In re Held, 734 F.2d 628, 629 (11th Cir.1984)). The undersigned finds that the Bankruptcy Court, while relying on the status of the trust as a sham in its ruling, did not specifically rule on the dischargeability of the Debtor’s debt. Bankruptcy Judge Raymond B. Ray stated in his Memorandum Order that the Bankruptcy Court did not find that the issue of the dischargeability of Debtor’s debt had been litigated before the District Court for the purposes of application of the collateral estoppel doctrine. The Court agrees with Appellant that the District Court’s allowance of the federal tax lien to take priority over the Shaw Realty mortgage may imply a finding of fraud. However, the Bankruptcy Court is to make a factual determination as to whether evidence of a willful attempt to evade taxes exists upon an examination of the totality of the circumstances. C. Debtor’s Ability to Pay His Tax Liabilities The Bankruptcy Court’s factual determination that Debtor was unable to pay his tax liabilities is renewable by this Court under a clearly erroneous standard. Toledo, 170 F.3d at 1344. Appellant states that the finding that the Debtor did not have the means to pay his liabilities is contrary to the evidence. Appellee asserts that there is no evidence of income on behalf of Spiwak after 1983. The Honorable Francis G. Conrad, a visiting Judge of the United States Bankruptcy Court, stated at trial on July 7, 1997 that the Internal Revenue Service and the United States failed to provide any evidence concerning Debtor’s ability to pay. However, the Debtor’s 1986 tax return reported a $40,523.75 tax liability. This is in direct conflict to the Bankruptcy Court’s and Appellee’s assertion that Debtor did not earn income after 1983. The United States asserts that Debtor did have the ability to pay, as evidenced by his use of the sham trust, his participation in tax shelters, and his receipt of money from friends. Spiwak asserts that the tax shelters did not provide him with income and that he used the money given to him for personal expenses. Under the holding of In re Haas, 48 F.3d 1153, 1156 (11th Cir.1995) this -does not preclude a debtor’s access to discharge of his liabilities. The undersigned holds that the Bankruptcy Court’s finding that Debtor did not have the wherewithal to pay his tax liabilities is clearly erroneous in light of Debt- or’s reported liability in 1986. D. Dischargeability of Spiwak’s Income Tax Liabilities The United States asserts that Spiwak’s income tax liabilities were not dischargeable pursuant to 11 U.S.C. § 523(a)(1)(C). This section of the Bankruptcy Code provides, in relevant part: (a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual 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; 11 U.S.C. § 523(a)(1)(C). The Eleventh Circuit, in In re Haas, 48 F.3d 1153 (11th Cir.1995) found that a knowing failure to discharge one’s tax obligations does not qualify as a willful attempt “in any manner to evade or defeat such tax” pursuant to 11 U.S.C. § 523(a)(1)(C). Therefore, a failure to pay a tax liability does not preclude the dischargeability of such debt upon a declaration of bankruptcy. However, in In re Griffith, 206 F.3d 1389 (11th Cir.2000) (en banc), cert. denied, 531 U.S. 826, 121 S.Ct. 73, 148 L.Ed.2d 37 (2000), the Eleventh Circuit abrogated in part the Haas decision. In Griffith, the Eleventh Circuit reaffirmed that the mere nonpayment of taxes, without more, does not constitute a willful attempt to evade or defeat taxes. Id. at 1395. However, the Eleventh Circuit held that a tax liability is nondischargeable under 11 U.S.C. § 523(a)(1)(C) when a debtor engages in affirmative acts seeking to evade or defeat collection of taxes. Id. at 1395.

914422-24648

MEMORANDUM AND ORDER KOPF, District Judge. This matter is before the court on the Magistrate Judge’s Report and Recommendation (filing 50) and the objections to the Recommendation (filing 51), filed as allowed by 28 U.S.C. § 636(b)(1)(C) and NELR 72.4. I have conducted, pursuant to 28 U.S.C. § 636(b)(1) and NELR 72.4, a de novo review of the portions of the Report and Recommendation to which objections have been made. Inasmuch as Judge Piester has fully, carefully, and correctly found the facts and applied the law, I need only state that the Recommendation (filing 50) should be adopted, the defendant’s objections to the Recommendation (filing 51) should be denied, and the defendant’s motion to dismiss the indictment due to an illegally constituted grand jury (filing 19) should be denied. IT IS ORDERED: 1. the Magistrate Judge’s Recommendation (filing 50) is adopted; 2. the defendant’s objections to the Recommendation (filing 51) are denied; and 3. the defendant’s motion to dismiss the indictment due to an illegally constituted grand jury (filing 19) is denied. REPORT AND RECOMMENDATION . PIESTER, United States Magistrate Judge. Pending before the court are the consolidated motions of the defendants to dismiss their indictments for illegal drug trafficking, on the ground .that the court’s system for randomly selecting grand jurors is flawed. In particular, defendants, both of whom are Hispanic, argue that this district’s method of compiling its jury pool by means of voter registration lists results in the systematic underrepresentation of Hispanics in the jury pool. Upon consideration of the extensive documents and testimony adduced at an extensive evidentiary hearing in this matter, I shall recommend that the motions for dismissal of the indictments be denied. It is true that persons of Hispanic origin typically register to vote at a lower rate than nonhispanics; however, even if every reasonable factual dispute is resolved in favor of the defendants, the impact is too small to sustain a constitutional challenge. BACKGROUND This court has long used voter registration as the means of forming its jury pool, and this practice is specifically contemplated by 28 U.S.C. § 1863, which governs plans for random jury selection. Discrimination based on race, color, religion, sex, national origin, or economic status is prohibited. 28 U.S.C. § 1862. Voter registration is used because the lists automatically screen out many of those who are ineligible to vote (for instance, convicted felons or those under age eighteen) while it helps to provide a “random selection of a fair cross section of persons residing in the community.” 18 U.S.C.§ 1863(b)(3); see United States v. Garcia, 991 F.2d 489, 491 (8th Cir.1993). If an additional source such as driver’s licenses were used, the cost of administering the jury selection system would increase substantially because screening these lists would create significant administrative burdens. (See Testimony of Gary McFarland, Transcript of the Sanchez/Alvarez hearing in Omaha and Ex. 1.) The present system has been implemented as follows: The court’s docket is informally divided into three “subdistricts” centered around the communities of Omaha, Lincoln, and North Platte. For each of the three subdistricts a master jury wheel is compiled using voter registration within each individual subdistrict. Thus, voters who reside within the North Platte subdistrict may be drawn as prospective jurors for cases tried in North Platte; voters who reside in the Omaha sub-district may be drawn as prospective jurors for cases tried in Omaha; and voters who reside in the Lincoln subdistrict may be drawn as prospective jurors for cases tried in Lincoln. (See McFarland testimony at the Sanchez/Alvarez hearing.) During each presidential election lists of prospective jurors are formed for each of the subdistricts, by calculating the number of jurors likely to be needed and mailing out the appropriate number of juror questionnaires. Thereafter, each month court officials estimate the number of petit jurors likely to be needed, and the names of prospective jurors are selected at random from the list and placed into the jury wheel. Unlike petit jurors, grand jurors are called from the entire state on a pro rata basis. Normally, at least one hundred names of prospective grand jurors are drawn, and from that number, twenty-three are selected for service. (Id.) Among the information requested in the jury questionnaires is the race of the voter. (Sanchez/Alvarez Ex. 2.) Five racial categories are listed on the questionnaires: “Black,” “White,” “American Indian,” “Asian,” and “Other (specify).” The words “Other (specify)” are followed by a blank in which a description can be written. The questionnaire also asks, “Are you Hispanic? Yes/No.” While this question is designed to invoke a response regardless of which race the prospective juror indicates, no instruction advises prospective jurors that they are expected to both check a racial category and answer the question regarding Hispanic: origin. (Id.) As a result, 16,680 persons failed to answer the question of whether they were hispanic. Thus, it is uncertain exactly how many persons of each race requested actually occur in the master jury wheels. The office of the Clerk of the Court has dealt with this problem by counting as nonhispanic all of the persons who did not answer the question. Consequently, the number of nonhispanics in the jury wheels almost certainly is overestimated in the district’s statistics, because it is highly likely some prospective jurors of Hispanic origin became confused by the poorly drafted questionnaire and failed to answer the question of whether they were Hispanic. Moreover, as noted by defense expert Professor Miguel A. Carranza, for varying reasons some Hispanics do not want to be identified as hispanic and will either refuse to answer the question or answer it in the negative. As a result, the data exists in the light most favorable to the defendants, because it exaggerates to an unknown degree the number of nonhispanics in the pool and deflates to an unknown degree the number of Hispanics in the pool. While the parties disagree on the amount of underrepresentation of Hispanics in the jury pool, the difference between their calculations is relatively minor. According to the defendant’s calculations, the relevant proportions for the entire district are as follows: Census Population Compared with Representation of Jury Wheels (State of Nebraska by Race) Race % of Jury Wheels % of Population White 95.90% 94.30% Black 2.10% 3.10% Hispanic 0.92% 1.60% Others 1.10% 1.00% (Ex. 26.) By defendants’ calculation, when corrected for age, the absolute disparity between the number of Hispanics that reside in the state and the number of Hispanics included in the jury wheel is 0.75%. Absolute disparity measures the difference between the percent of Hispanics in the population as opposed to the percent of Hispanics in the jury wheel. When corrected for age, the comparative disparity between the number of Hispanics that reside in the state and the number of Hispanics included in the jury wheel is 47.77%. Comparative disparity purports to measure the percentage by which the probability of serving as a juror is reduced for people in a cognizable class. It is important to note that the U.S. Census data does not reflect those persons in each racial category who are ineligible to serve on a jury because they cannot speak or read English or have been convicted of a felony. See 28 U.S.C. § 1865(b)(5). For this reason the absolute and comparative disparities of both parties are likely skewed in an unknown direction. Further, the comparative disparity only measures the probability of being selected for a venire panel; in the context of petit juries, it does not account for such factors as attorney questioning during voir dire. Thus, it does not accurately depict the actual reduction of the chance that a specific Hispanic person will actually sit on any particular jury, as compared to the number of persons of Hispanic origin who reside in the community. According to the government’s calculations, the relevant proportions for the Lincoln subdistriet are as follows: Census Population Compared with Representation of Jury Wheels (State of Nebraska by Race) Race % of Jury Wheels % of Population White 97.92% 97.52% Black 0.55% 0.86% Hispanic 0.75% 0.96% Others 0.80% 0.66% (Ex. 106.) Lincoln has a lower minority population than Omaha and thus a lower proportion than the overall district. (See Sanchez/Alvarez exhibits.) By the government’s calculation, when corrected for age, the absolute disparity between the number of Hispanics that reside in the Lincoln subdistriet and the number of Hispanics included in the jury wheel is 0.22%. The government’s absolute disparity calculation for the entire district was 0.66%. When corrected for age, the comparative disparity between the number of Hispanics that reside in the Lincoln subdistrict and the number of Hispanics included in the jury wheel is 22.59%. The government’s comparative disparity calculation for the entire district was 42.13%. Thus, the government’s figures reflect lower degrees of disparity than the defense. In addition to the disparity calculations, the government’s expert, University of Nebraska Statistics Professor Dan Nettleson, also calculated the “substantial impact” of using voter registration lists. According to his calculations, in a randomly selected group of 200 prospective jurors from the entire district, 1.4 less persons of Hispanic origin would appear in the group than if a random group of 200 persons were drawn from the adjusted Census data. Moreover, in a randomly selected group of 200 persons from the Lincoln subdistrict, there would be 0.7 less persons of Hispanic origin than appear in the adjusted Census data. Therefore, the government argues that in real terms the actual impact of selecting jurors from voter registration lists is slight. Professor Nettleson also prepared the following indices using both defense and government data: (Gov’s Brief at 5, summarizing Exhs. 104 and 109.) This chart is perhaps the most helpful means of comparing the specific figures used by the parties in this case. Abs. Abs. Comp. Comp. Sub. Sub. Dis. Dis. Dis. • Dis. Imp. Imp. Gov. Def. Gov. Def._Gov. Def. Nebraska .66 .75 42.3% 47.9% 1.3/200 1.4/200 Omaha .69 .69 45.6% 45.6% 1.4/200 1.4/200 Lincoln .22 .34 22.6% 35.2% 0.4/200 0.7/200 N.Platte 1.13 1.51 38.4% 50.3% 2.3/200 3.0/200 DISCUSSION Defendants seek to dismiss their indictments, claiming that forming the jury wheels from voter registration lists violates the Sixth Amendment right to a fair jury, the Fourteenth Amendment’s right to equal protection, as well as the Jury Selection and Service Act, 28 U.S.C. § 1861 et. seq. The elements of a Sixth Amendment challenge and a challenge brought under the federal statute are the same. United States v. Miller, 771 F.2d 1219, 1227 (9th Cir.1985); United States v. Clifford, 640 F.2d 150, 155 (8th Cir.1981). In order to demonstrate a prima facie violation of the Sixth Amendment and of the Jury Selection Act, defendants must demonstrate that (1) the group alleged to be excluded is a “distinctive group” in the community, (2) the representation of this group in venires from which juries are selected is not “fair and reasonable” in relation to the number of persons in the community, and (3) the underrepresentation is due to “systematic exclusion of the group in the jury-selection process.” Duren v. Missouri, 439 U.S. 357, 364, 99 S.Ct. 664, 668, 58 L.Ed.2d 579 (1979). In order to prove an equal protection violation, the defendants must also prove that the underrepresentation occurred pursuant to a “discriminatory purpose.” Id. at 368 n. 26, 99 S.Ct. at 670 n. 26. (1) Distinctive Group Although testimony presented at the evidentiary hearing demonstrates that the question is more problematic than it initially appears, I conclude for purposes of this motion that Hispanics constitute a distinct racial group in the community. See Castaneda v. Partida, 430 U.S. 482, 97 S.Ct. 1272, 51 L.Ed.2d 498 (1977) (finding that “Mexican-Americans” were a distinctive group in a Texas community); United States v. Garcia, 991 F.2d 489 (8th Cir.1993) (finding it “clear” that Hispanics are a “distinctive group in the community”). While persons in this group can have different cultural and linguistic traditions as well as different skin tones and even continents of origin, defendant’s expert, University of Nebraska Sociology Professor Miguel A. Carranza, testified that those outside the group usually perceive Hispanics as belonging to one racial group and fail to distinguish between cultural and geographic differences among its members. Moreover, this is true for any racial/ethnic group. For example, different subgroups' of AmerieanIndians were and are distinct geographically, culturally, and linguistically, but are commonly perceived by outsiders as constituting one racial/ethnic group. Likewise, whites originate from a variety of linguistic and cultural backgrounds; they range from third or fourth generation immigrants from England to newly arrived immigrants from the reaches of the former Soviet Union. Thus, the argument that the traditions and geographic origins of Hispanics are too divergent to constitute a distinctive group is a red herring. “A group of people is distinct when they have a shared attribute that defines or limits their membership, and when they share a community interest.” United States v. Black Bear, 878 F.2d 213, 214 (8th Cir.1989). Hispanics have a common attribute in their South American, Mexican, and Spanish origins and often possess distinguishing physical features. In addition, while cultural and linguistic traditions may vary some between regions of geographic origin, those traditions and languages are much more similar to each other than to the traditions and languages of other groups in America. Professor Carranza also testified that Hispanies share similar concerns in the community. In sum, common cultural, linguistic, and physical traits exist; people in the community view Hispanies as a distinct group; and many Hispanies view themselves as being a distinct group. Thus, it is reasonable that they should be treated as such for purposes of the Sixth Amendment. See Garcia, 991 F.2d at 491. I therefore conclude that defendants have met the first element of the Duren test. (2) Fair Representation The second prong of Duren requires defendants to demonstrate that the representation of Hispanies in the jury pool is not “fair and reasonable” in relation to the number of Hispanies in the community. 439 U.S. at 364, 99 S.Ct. at 668. The relevant community consists of those Hispanies presumptively eligible to vote who reside in the District of Nebraska. See Taylor v. Louisiana, 419 U.S. 522, 538, 95 S.Ct. 692, 701-02, 42 L.Ed.2d 690 (1975) (comparing the population “eligible for jury service”); United States ex rel. Barksdale v. Blackburn, 639 F.2d 1115, 1124 (5th Cir.), cert. denied, 454 U.S. 1056, 102 S.Ct. 603, 70 L.Ed.2d 593 (1981) (the relevant comparison is to the number of citizens of the community that are eligible to serve); United States v. Haley, 521 F.Supp. 290, 292 (D.Ga.1981) (“eligible population is preferable and provides a more accurate picture of representation”). Cf. African American Voting Rights Legal Defense Fund, Inc. v. Villa, 54 F.3d 1345, 1352-53 (8th Cir.1995) (relevant population for Voting Rights Act was “voting age population,” not total population). I conclude that defendants have failed to prove this element of their challenge to the grand jury system. In order for a constitutional claim to lie, the underrepresentation of the group must be both continual and substantial. Garcia, 991 F.2d at 492. “Neither the jury roll nor the venire need be a perfect mirror of the community or accurately reflect the proportionate strength of every identifiable group.” Swain v. Alabama, 380 U.S. 202, 208, 85 S.Ct. 824, 830, 13 L.Ed.2d 759 (1965). In Swain, the Court held that an absolute disparity of ten percent between blacks in the jury pool and those in the community did not constitute an unfair cross-section of the community. Id. at 208, 85 S.Ct. at 829-30. Furthermore, in Garcia, the Eighth Circuit ruled that an absolute disparity of less than 1% was insufficient to support a constitutional violation. See also United States v. Clifford, 640 F.2d 150 (8th Cir.1981) (absolute disparity of Native Americans of 7.2% did not violate the constitution). In this case, if the entire district is considered, the absolute disparity is either 0.66% or 0.75% depending on whose numbers are used. The disparity in the Lincoln community is even less, 0.22% or 0.34%. Quite obviously, this degree of disparity is well below the level of disparity in both Swain and Garcia. To escape this difficulty defendants focus on the comparative disparity figures (22.6% to 35.2% for Lincoln; 42.3% to 47.9% for the district as a whole). Comparative disparity measures the reduced likelihood of a juror of a specific class appearing in the pool. I note, however, that it is clear from Swain and Garcia that absolute disparity rather than comparative disparity is the decisive measure for constitutional purposes. In addition, comparative disparity has been criticized because by its nature it shows “a greater degree of underrepresentation in situations in which the defendant’s chances [of receiving an underrepreseuative jury] have been affected to a lesser degree ...” Petre A. Detre, Note, A Proposal for Measuring Underrepresentation in the Jury Wheel, 103 Yale L.J.1913, 1914 (1994). See, e.g., United States v. Hafen, 726 F.2d 21, 24 (1st Cir.1984) (use of comparative disparity is inappropriate because it distorts the degree of underrepresentation of small groups). When the percentages in this case are viewed in context, it becomes apparent that the actual significance of underrepresentation on jury panels is low. The district typically calls two hundred persons for jury service every month. According to Census data, in this number three persons of His-panic origin should typically appear; by using voter registration one or two will typically appear. Furthermore, only a portion of these persons will actually serve as jurors. Under present Law, the difference between three persons in a venire of two hundred and one or two persons in a venire of two hundred is too insignificant to result in a constitutional violation. United States v. Sanchez, 8:CR96-083, slip. op. at 26 (D.Neb. April 4, 1997). See also Garcia, supra; United States v. Jenkins, 496 F.2d 57 (2d Cir.1974), cert. denied, 420 U.S. 925, 95 S.Ct. 1119 43 L.Ed.2d 394 (1975). For these reasons, defendants motion for dismissal fails on the second prong of the Duren text. (3) Systematic Exclusion Although defendants have failed to establish that the degree of representation of Hispanies on the jury pool is constitutionally significant, I shall briefly discuss their argument that jurors are systematically excluded. First, it is important to point out that in this ease there is absolutely no evidence of purposeful discrimination in forming the master wheels. Second, the degree of absolute disparity in this case, especially that in the Lincoln subdistrict, is so small that no inference of systematic exclusion can arise. Garcia, 991 F.2d at 492 (no inference of systematic exclusion where absolute disparity was less than 1%): Third, as stated by Judge Jaudezmis, “the decision of eligible persons not to register to vote, whatever their race or ethnicity, is not evidence of this district’s systematic exclusion of those persons from its juries.” United States v. Sanchez, 8:CR96-083, slip. op. at 29 (D.Neb. April 4,1997). See United States v. Test, 550 F.2d 577, 587 n. 10 (10th Cir.1976) (all eligible citizens have equal access to vote and to sit on federal juries); United States v. Freeman, 514 F.2d 171, 173 (8th Cir.1975) (by using voter registration lists Congress intended to provide a “relatively large and easily accessible source of names” of prospective jurors). CONCLUSION In summary, even ignoring the noted problems with the statistical information, and even if every reasonable factual dispute is resolved in favor of defendants, any resulting underrepresentation in the system is simply too slight to have constitutional significance, and there is no evidence of systematic exclusion of Hispanic jurors. IT THEREFORE HEREBY IS RECOMMENDED to the Honorable Richard G. Kopf, United States District Judge, pursuant to 28 U.S.C. § 636(b)(1)(B), that the Defendant Salvadore K. Coronell-Leon’s motion to dismiss, (filing 19), be denied. FURTHER, IT THEREFORE HEREBY IS RECOMMENDED to the Honorable Warren K. Urbom, United States Senior District Judge, pursuant to 28 U.S.C. § 636(b)(1)(B), that Defendant Isidro PerezCoronel’s motion to dismiss, (filing 12), be denied. The parties are notified that unless objection is made within ten days after being served with a copy of this recommendation, they may be held to have waived any right they may have to appeal the court’s order adopting this recommendation. June 17, 1997 . The current plan was adopted by the district on February 18, 1989 and subsequently approved by the Judicial Council of the Eighth Circuit Court of Appeals on March 10, 1989. Under some circumstances 28 U.S.C. § 1863 authorizes the use of other lists to augment voter lists. . Moreover, supplemental lists have often proven ineffective in increasing minority representation in jury pools. John P. Bueker, Note, Jury Source Lists: Does Supplementation Really Work?, 82 Cornell L.Rev. 390 (1997) (examining data from the sixteen federal districts which have enacted supplementation programs and concluding that supplementation is not only ineffective but also quite costly). . The transcript and exhibits of another hearing challenging the system were entered into evidence upon stipulation of the parties in this case. (United States v. Gilberto Sanchez, 8:cr96:083, and United States v. Flores Alvarez, 8:cr96-001.) . The wheels are refilled at this time because voter registration typically increases during presidential elections. . This information is collected for statistical purposes and is not considered in forming the wheels. . This included 7,816 persons in the Omaha sub-district, 1,907 persons in the North Platte subdistrict, and 6,957 persons in the Lincoln subdistrict. . The defendants did not submit their raw percentages as to each individual subdistrict. . I note that the numbers which appear in some of defendants’ exhibits conflict with their other exhibits. For example, the percentage of persons in the jury wheels is slightly different between exhibit 26 and exhibit 25. Moreover, with respect to the number of Hispanics in the population at large, only exhibit 26 has been corrected for age. Only the numbers that have been adjusted for age are relevant because citizens must be at least eighteen years of age to serve on a jury. See 18 U.S.C. § 1865(b) (7 ); United States v. Brummitt, 665 F.2d 521, 529 (5th Cir.1981). The number of Hispanics in the population swells substantially if age is disregarded, which undoubtedly explains why defendants’ exhibits often reflect those numbers instead of the corrected numbers. (See, e.g., ex 28.) If age is disregarded, the disparity is much greater than if the numbers are adjusted. Thus, to compare "apples with apples" I have focused on only the adjusted data. .Absolute disparity is calculated by subtracting the smaller percentage from the large percentage. These numbers were calculated by the defendants’ expert, Professor Steven L. Wise. I note, however, that they do not quite correspond with the data as it appears in defendant’s exhibits. . Comparative disparity is calculated by dividing the absolute disparity by the percentage population of the group. . The government broke the numbers into each of the subdistricts, but did not submit raw percentages for the entire district. It did prepare such a table using defense numbers, (Ex. 108), and it did make its own calculations of absolute disparity. .For the sake of simplicity I have rounded these numbers to the nearest hundredth of a percent. . Defendants also allege a violation of the Fifth Amendment’s right to indictment by grand jury; however, as they fail to explain in their brief how that is so, this claim has been abandoned and need not be discussed further. See NELR 7.1(a).

11901630-25355

JACOBS, Circuit Judge: A Chapter 11 debtor in bankruptcy, Santi-ni Brothers, Inc. (“Santini”), ceased doing business in 1991 and laid off its employees, thereby incurring statutory “withdrawal liability” to the Teamster Local 814 Pension Fund, an ERISA multi-employer pension plan. See 29 U.S.C. §§ 1381-1405. Santini and the parent company that owns 100% of its stock — MacDonald Moving Services, Inc. (“MacDonald”) — undertook in Santini’s confirmed Plan of Reorganization to pay to the Fund, on specified terms, the amount of withdrawal liability that was estimated in the Fund’s Proof of Claim; and the Plan of Reorganization discharged the parent as well as Santini in respect of the withdrawal obligation. Prior to the June 1992 confirmation of the Plan of Reorganization, the amount of the withdrawal liability was recalculated and found to be substantially greater, but no amended Proof of Claim was filed. Nothing has been paid to the Fund by Santini or MacDonald. In this lawsuit, the trustees and fiduciaries of the Fund sued MacDonald to collect the full, recalculated amount of the withdrawal liability. In October 1996, the United States District Court for the Eastern District of New York (Amon, J.) denied the Trustees’ motion for summary judgment, and granted MacDonald’s summary judgment motion on the ground of res judicata, thereby limiting MacDonald’s withdrawal obligation to the undertakings in the Plan of Reorganization. The Trustees appeal, raising much the same issues they raised before the district court. We affirm. BACKGROUND I. Factual Background The facts are undisputed. Santini and Teamsters Local 814 (“Local 814”) were parties to collective bargaining agreements under which Santini made periodic contributions to the ERISA Fund, a multi-employer plan within the meaning of 29 U.S.C. §§ 1002(37) and 1301(a)(3). The Fund was formed pursuant to an Agreement and Declaration of Trust between Local 814 and several employers of the participants; its purpose is to collect and invest employer contributions in order to provide employee benefits. Appellants Robert Corbett, Alexander Roca, Peter Furtado, and Dennis Farrell are the trustees and fiduciaries of the Fund (collectively, the “Trustees”), as well as the sponsors of the pension plan established and maintained by the Fund. Appellee MacDonald is a corporation that has at all relevant times owned 100% of Santini’s stock. MacDonald and Santini are therefore under common control within the meaning of I.R.C. §§ 414 and 1563, 26 U.S.C. §§ 414 and 1563, and constitute a single employer pursuant to 29 U.S.C. § 1301(b)(1). On April 15, 1991, Santini filed a voluntary petition in bankruptcy under Chapter 11, 11 U.S.C. § 1101 et seq., in the United States Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”) (Chapter 11 Case No. 91-22419). On September 1, 1991, Santini began laying off employees who were represented by Local 814, and the Trustees soon thereafter determined that Santini had permanently ceased all covered operations under the Fund. In accordance with the procedures in the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29 U.S.C. §§ 1101-1461 (amending ERISA), the Trustees calculated Santini’s withdrawal liability, and on October 22, 1991 (nine days before the specified bar date) filed a general unsecured claim with the bankruptcy court in the amount of $138,985, representing Santi-ni’s as-then-calculated withdrawal liability. In February 1992, the Trustees sent letters to MacDonald and Santini, advising of their determination that Santini had permanently ceased all covered operations under the Fund on or about December 27, 1991, stating that MacDonald and Santini were under common control, and demanding that the withdrawal liability be paid in full by April 1, 1992. The letters computed the withdrawal liability at $138,985, but added that the amount was subject to recalculation: [t]he withdrawal liability was calculated based upon the latest actuarial valuation available at the time of Santini’s withdrawal. The Trustees reserve the right to redetermine the company’s liability upon completion of the July 1, 1991 actuarial valuation, and adjust the company’s liability accordingly. MacDonald timely received that letter. On March 5, 1992, Santini’s bankruptcy counsel responded to both letters, acknowledged that Santini and MacDonald were under common control and were therefore jointly responsible for each other’s withdrawal liability, and stated that the joint liability would be taken care of in the Plan of Reorganization: Santini is sensitive to the fact that it will be responsible for payment of withdrawal liability to the Fund. Accordingly, it would like to provide for same within its Plan of Reorganization rather than burden MacDonald with payment of the entire amount. Santini’s Plan of Reorganization concentrates on both the Santini and MacDonald operations and is relying on the excess cash flow produced by both businesses to fund the Plan. With regard to the Fund, the Plan would provide for payment of the amount due in equal monthly installments, with interest, termed out over sixty (60) months. With the exception of providing for the Fund, Santini’s Plan of Reorganization is ready to file. Therefore, we would like to resolve this matter as quickly and as efficiently as possible so that we can make provisions for the Fund and file the Plan with the Bankruptcy Court. On March 25,1992, the Trustees sent San-tini and MacDonald written demand for payment of recalculated withdrawal liability in the amount of $308,815, to be paid in five quarterly installments beginning on May 1, but no amended Proof of Claim was submitted to the Bankruptcy Court. It appears that neither Santini nor MacDonald ever responded to the Trustees’ demands, or initiated ERISA arbitration pursuant to 29 U.S.C. § 1401(a)(1). On June 19, 1992, the Trustees sent out another pair of letters, noting that the May 1 payment had not been received. On June 25, 1992, the Bankruptcy Court entered its Order confirming the Plan of Reorganization filed by Santini (the “Reorganization Plan” or the “Santini Plan”). The Santini Plan includes a provision that the withdrawal liability claim will be paid out of the “combined excess cash flow” of both San-tini and MacDonald. Reorg. Plan § 4.8. Section 13.2 indicates that the Plan discharges all debts and claims against Santini and its affiliates; § 14.16 effects the release of all claims against Santini and its affiliates. The Trustees took no appeal from the Bankruptcy Court’s confirmation order. About eight months after confirmation of the Reorganization Plan, in March 1993, the Trustees sent for filing in the Bankruptcy Court a “First Amended Proof of Claim” reflecting a withdrawal liability in the amount of $308,815. To date, neither Santini nor MacDonald has made any withdrawal liability payments. II. Procedural Background The complaint in this action seeks to recover Santini’s withdrawal liability from MacDonald, its now-dissolved parent company, MacDonald Moving & Storage, Inc., and Pa squale Santini. The action was filed on October 28, 1992 — three months after the Santini plan was confirmed and over four months before the Trustees filed their amended Proof of Claim. On June 1, 1993, the Trustees moved for summary judgment against MacDonald in the amount of $308,315, plus interest, liquidated damages, and attorney’s fees and costs. The Trustees argued that because neither MacDonald nor Santini initiated arbitration after the Trustees assessed the amount owed for withdrawal liability, MacDonald had waived its right to challenge the revised withdrawal liability. MacDonald cross-moved for summary judgment limiting its liability to the terms set forth in the Reorganization Plan. MacDonald argued that the Trustees’ claim was barred because the Plan discharged MacDonald’s liability as well as Santini’s, and because the Trustees did not challenge the bankruptcy court’s power to foreclose their claim against MacDonald. In opposition, the Trustees argued, inter alia, that the Santini Plan did not purport to discharge creditors’ claims against MacDonald, and that even if and to the extent that the Plan did purport to do so, the Order of Confirmation lacks res judicata effect, because: 1) bankruptcy courts lack jurisdiction to discharge third-party nondebtors; 2) ERISA claims are outside Bankruptcy Court jurisdiction because they are not “core” proceedings under 28 U.S.C. § 157(b); 3) the amount of the claim was unascertainable, and therefore the claim was not ripe for adjudication until after the confirmation; and 4) the public policy interests served by ERISA and the Bankruptcy Code outweigh the finality interest served by the doctrine of res judicata. On October 23, 1996, Judge Amon entered a judgment granting MacDonald’s motion for summary judgment and denying the Trustees’ motion. DISCUSSION It is uncontested that under the common control doctrine, MacDonald is jointly and severally liable for Santini’s withdrawal liability. By virtue of 29 U.S.C. § 1301(b)(1) of ERISA and applicable regulations at 26 C.F.R. §§ 1.414(c)-l through 1.414(c)-5, all businesses under common control are treated as a single employer for purposes of collecting withdrawal liability, and each is liable for the withdrawal liability of another. The result in this case therefore turns on whether the Santini Plan purported to discharge the Trustees’ claim for withdrawal liability against MacDonald, and if so, whether such discharge has res judicata effect. I. Discharge of Withdrawal Liability Under the Terms of the Plan The Trustees’ claim in bankruptcy is referenced in the Santini Plan as the “Local 814 Claim.” Section 2.2(g) of the Plan designates the “Local 814 Claim” as a creditor class, and § 4.8 provides that the “Local 814 Claim is to be paid in equal monthly installments over a 60-month period from the combined excess cash flow of Santini and MacDonald[ ].” Because the Trustees had filed a Proof of Claim totalling $138,985 prior to the specified bar date (October 31,1991), and no one had objected, the Local 814 claim was an “Allowed Claim” for that amount. Reorg. Plan § 1.3, 1.4. Section 13.2 of the Santini Plan effectively included MacDonald in the scope of the bankruptcy discharge by providing that confirmation of the Plan operate[s] as a discharge, pursuant to Bankruptcy Code Section 1141(d)(1) ..., of any and all debts or Claims against the Debtor, present and former officers and directors of the Debtor and against any Person which/who is an Insider or Affiliate of the Debtor that arose at any time before Confirmation ... whether accrued before, on, or after the Filing Date. On the Effective Date, as to every discharged debt and Claim, the Creditor that held such debt or Claim shall be precluded from asserting against New Santini [the reorganized company] or against New Santini’s assets or properties, any other or further Claim based upon any ... activity ... that occurred prior to the Confirmation Date. (Emphasis added.) The Trustees focus on the second quoted sentence, and argue that the preclusionary effect of § 13.2 is limited to claims against the post-reorganization corporation designated “New Santini.” But that reading ignores the prior sentence, which provides that confirmation of the Plan operates as a discharge of (inter alia) pre-Con-firmation “claims” against an “Affiliate of the Debtor.” The Code defines an “affiliate” as an “entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor.... ”11 U.S.C. § 101(2)(A). MacDonald is therefore an Affiliate, and is in the class of persons that § 13.2 purports to discharge. Section 14.16 of the Santini Plan recites the terms of release: [The rights afforded to claimholders] shall be in exchange for, and in complete release, satisfaction, and discharge of, all Claims against the Debtor and against any person which/who is an insider or affiliate of the Debtor, and acceptance of such distributions under the Plan shall be deemed irrevocably to release any and all Claims of any type, kind or nature against the Debtor and any of its respective ... Affiliates____ Creditors deemed to have released Claims ... shall be forever precluded from asserting against the Debtor, Reorganized Debtor and any of the Persons enumerated above in this Section ... or their Assets, any Claim of the type released or deemed released herein. (Emphasis added.) The Trustees argue that under the language of § 14.16, there was no release of their claims because, although the Trustees gained rights in the Santini Plan, no distributions have been made in respect of the Local 814 Claim. Having received nothing, and therefore “accepted” nothing, the Trustees argue that they cannot be deemed to have released their claim. We disagree for the reasons adduced by the district court. The acceptance of distributions is one circumstance effecting a release of the Debtor and its Affiliates; but the grant of rights to claimholders under the Santini Plan is another. The Trustees’ reading would allow “creditors [to] frustrate the bankruptcy proceedings and defeat a confirmed Plan by simply refusing to accept their allotted distributions.” Dist. Ct. Op. at 11. Moreover, a reading that conditions the release on acceptance of distributions is inconsistent with the terms of discharge under § 13.2, which contains no such condition. Id. The Trustees also argue, as they did in the district court, that the terms of the Santini Plan must be read in light of 11 U.S.C. § 524(e), which provides that “discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.” The Trustees cite a number of eases for the proposition that § 524(e) prevents a third-party nondebtor from claiming the benefits of a general discharge granted to a debtor, see, e.g., Teamsters Joint Council No. 83 v. CenTra, Inc., 947 F.2d 115 (4th Cir.1991); McDonald v. Centra, Inc., 946 F.2d 1059 (4th Cir.1991), and argue that any discharge of MacDonald would exceed the Bankruptcy Court’s power. To the extent that the Trustees are arguing that in light of the Centra and other cases, the Bankruptcy Court could not have intended to discharge MacDonald, the plain language of the Plan says otherwise. To the extent that the Trustees are attempting to challenge the Bankruptcy Court’s power to discharge MacDonald, this argument must also fail, because we agree with the district court that res judicata ultimately bars the Trustees’ challenge to the terms of the Santini Plan, including its discharge of MacDonald. See generally Republic Supply Co. v. Shoaf 815 F.2d 1046 (5th Cir.1987). II. Res Judicata Effect of the Bankruptcy’s Court’s Discharge To determine whether the doctrine of res judicata bars a subsequent action, we consider whether 1) the prior decision was a final judgment on the merits, 2) the litigants were the same parties, 3) the prior court was of competent jurisdiction, and 4) the causes of action were the same. In re Teltronics Sens., Inc., 762 F.2d 185, 190 (2d Cir.1985). In the bankruptcy context, we ask as well whether an independent judgment in a separate proceeding would “impair, destroy, challenge, or invalidate the enforceability or effectiveness” of the reorganization plan. Sure-Snap Corp. v. State Street Bank and Trust Co., 948 F.2d 869, 875-76 (2d Cir.1991). This last inquiry may also, be viewed as an aspect of the test for identity of the causes of action. See Herendeen v. Champion Int’l Corp., 525 F.2d 130, 133 (2d Cir.1975). The Trustees do not contest that the confirmation by the bankruptcy court resulted in a final judgment on the merits, and that the litigants are the same parties. We address the remaining questions in order. A. Court of Competent Jurisdiction The district court assumed arguendo that the bankruptcy court lacked the power to release a third-party nondebtor under § 524(e), and concluded that the judgment was entitled to res judicata effect nevertheless. The district court began with the general rule that any party to a cause of action may challenge a federal court’s subject matter jurisdiction at any stage of the proceedings, including of course on direct appeal. See Dist Ct. Op. at 15 (citing Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701-02, 102 S.Ct. 2099, 2103-04, 72 L.Ed.2d 492 (1982)). However, because the Trustees raised no jurisdictional challenge during the bankruptcy proceedings, and took no appeal from the bankruptcy court’s order discharging MacDonald, the present action is a collateral attack on Bankruptcy Court’s jurisdiction. As the district court concluded, [c]ollateral attacks on a court’s subject matter jurisdiction are barred by the doctrine of res judicata. See Stoll [v. Gottlieb, 305 U.S. 165, 172, 59 S.Ct. 134, 137, 83 L.Ed. 104 (1938) ] (after prior court ruled on subject matter jurisdiction, a subsequent court where res judicata is pleaded as to previous court’s jurisdiction [is] preclude[d] ... from revisiting the issue); Durfee v. Duke, 375 U.S. 106, 116, 84 S.Ct. 242, 247-48, 11 L.Ed.2d 186 (where defendant explicitly challenges state court’s subject matter jurisdiction over land dispute, finding that land was in state and thus under court’s jurisdiction was unassailable by collateral attack). Dist. Ct. Op. at 16. The Trustees contend that res judi-cata can never foreclose the question of subject matter jurisdiction. We disagree. “Every court in rendering a judgment tacitly, if not expressly, determines its jurisdiction over the parties and the subject matter.” Stoll v. Gottlieb, 305 U.S. 165, 171-72, 59 S.Ct. 134, 137, 83 L.Ed. 104 (1938). Moreover, “[a]fter a Federal court has decided the question of the jurisdiction over the parties as a contested issue, the court in which the plea of res judicata is made has not the power to inquire again into that jurisdictional fact.” Id. at 172, 59 S.Ct. at 137. In subsequent cases, the Supreme Court has extended the rule of Stoll beyond instances in which the question of subject matter jurisdiction was contested and decided in the prior proceeding. In Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 377-78, 60 S.Ct. 317, 320, 84 L.Ed. 329 (1940), the jurisdictional issue had not been raised in district court (sitting in bankruptcy) during the first proceeding; the district court’s judgment commanded res judicata effect nonetheless, because there could “be no doubt that if the question ... had actually been raised and decided ... that determination would have been final save as it was open to direct review on appeal.” The governing principle is well settled: A party that has had an opportunity to litigate the question of subject-matter jur isdiction may not ... reopen that question in a collateral attack upon an adverse judgment. It has long been the rule that principles of res judicata apply to jurisdictional determinations — both subject matter and personal. Compagnie des Bauxites, 456 U.S. at 702 n. 9, 102 S.Ct. at 2104 n. 9 (emphasis added). Relying on Stoll, other Courts of Appeals have concluded that creditors may not collaterally attack bankruptcy subject matter jurisdiction. See Trulis v. Barton, 107 F.3d 685, 691 (9th Cir.1995) (“Creditors who do not wish to release third party debtors pursuant to the principal debtor’s plan of reorganization should object to confirmation of the plan on the ground that such a plan provision is violative of section 524 and not within the power, even jurisdiction, of the bankruptcy court.... The point is that only a direct attack is available and collateral attack is unavailable.”) (quoting 5 Collier on Bankruptcy ¶ 1141.01[1] (15th ed.1995)); Shoaf, 815 F.2d at 1052-53 (even if 524(e) precluded bankruptcy court from releasing guarantor, confirmation order is still res judicata where creditor neither objected to nor appealed from confirmation of bankruptcy plan). See also 18 Wright and Miller § 4428, at 282 (1981 ed.) (“[I]t seems clear that federal court judgments are binding notwithstanding a simple lack of subject matter jurisdiction, without regard to whether the jurisdictional question was litigated.”). When a bankruptcy court approves a plan of reorganization involving persons over whom the court has personal jurisdiction, and adjusts the debts and obligations among the debtor, the debtor’s parent companies, and its creditors, all persons present and having an opportunity to challenge the bankruptcy court’s jurisdiction to approve or implement each component of the plan must raise subject matter jurisdiction at that time or on direct appeal or not at all. The Trustees had that opportunity, and they could make no credible representation to the contrary. The Trustees contend that the district court’s reasoning (which we have adopted) creates a circularity problem: if the bankruptcy court potentially lacked subject matter jurisdiction to discharge MacDonald, then how can one determine that the bankruptcy court was a “court of competent jurisdiction” for purposes of res judicata without considering the merits of the jurisdictional challenge? There may be circumstances in which a bankruptcy court lacks competent jurisdiction, such as where it acts as a traffic court or a court of domestic relations. But we are not faced with a situation in which a bankruptcy court has expunged the points on a debtor’s driver’s license or annulled her marriage, nor are we evaluating a question of jurisdiction over a person or a res. Here, the bankruptcy court exercised powers that are within its competent jurisdiction: e.g., confirm a plan of reorganization, 11 U.S.C. § 1129; classify claims, id. § 1123(a)(1); discharge claims, id. § 523; and provide the means for implementing a reorganization plan, id. § 1123(a)(5). The bankruptcy court may or may not have had subject matter jurisdiction to discharge MacDonald; but even if it did not, the bankruptcy court was competent to confirm a plan of reorganization, and the aggrieved party was free to appeal. B. Identity of Causes of Action To determine whether the causes of action are the same, we examine whether the same transaction, evidence, and factual issues are involved in both cases. Sure-Snap, 948 F.2d at 874; NLRB v. United Technologies Corp., 706 F.2d 1254, 1260 (2d Cir.1983). The three elements are satisfied in this ease. The Local 814 Claim and the Trustees’ cause of action here involve the same transaction: the payment of Santini’s withdrawal liability. The same evidence— the actuarial valuations and financial proofs — is necessary for both claims. And there are no differences in the factual issues. The Trustees made two arguments before the district court, which they press again on appeal, to show that the claims were not identical: 1) the withdrawal liability claim cannot be deemed to have been litigated in the bankruptcy court, because it was a non-core proceeding that could not have been litigated there; 2) the Trustees’ full claim could not have been brought before the bankruptcy court, because only a portion of the Trustees’ claim against MacDonald was ripe at the time of the Santini Plan’s confirmation. Neither argument prevails. 1. Non-Core Proceedings The Trustees argue that the withdrawal liability claim could not have been litigated in bankruptcy court because it was not a “core proceeding” under 28 U.S.C. § 157(b). A bankruptcy judge may hear proceedings that are not core proceedings, but that are “otherwise related to a case under title 11.” 28 U.S.C. § 157(c)(1). In that situation, the bankruptcy judge submits proposed findings of fact and conclusions of law to the district court, which then reviews any objections to the proposed findings de novo and enters a final judgment. Id. At least in the first instance, the decision as to whether a claim is “core” is “reserved for the bankruptcy judge to determine.” Sure-Snap, 948 F.2d at 873 (claims at issue were barred by res judicata, even if they were not core proceedings) (citing § 157(b)(3)). The bankruptcy court evidently concluded that the withdrawal liability claim was a core claim. (The record does not reflect that the bankruptcy court submitted proposed findings of fact and conclusions of law to the district court, as would have been necessary for resolution of a non-core proceeding by the bankruptcy court. See 28 U.S.C. § 157(c)(1).) The Santini plan expressly resolves the question of MacDonald’s liability for the withdrawal liability claim: “the Local 814 Claim will be paid over sixty (60) months in equal monthly installments from the combined excess cash flow of Santini and MacDonald [ ].” Reorg. Plan § 4.8 (emphasis added). This statement, combined with the definition of “Excess Cash Flow” (fifty percent of Santini’s cash flow, plus MacDonald’s, minus the amounts previously paid to unsecured creditors, Reorg. Plan § 1.39), makes clear that MacDonald was made liable on stated terms and conditions for payment of the Local 814 Claim. Moreover, §§ 14.16 and 13.2 of the Santini Plan operate to release and preclude further claims against MacDonald (as discussed in part I).

137546-6323

ORDER AND JUDGMENT TACHA, Circuit Judge. After examining the briefs and appellate record, this panel has determined unani mously that oral argument would not materially assist the determination of this appeal. See Fed.R.App.P. 34(a)(2); 10th Cir.R. 34.1(G). The case is therefore ordered submitted without oral argument. On October 25, 1994, petitioner John J. Pappert was convicted by a jury of three counts of mail fraud, four counts of wire fraud, and two counts of submitting false documents to a federally insured financial institution. See 18 U.S.C. §§ 1341, 1343, 1014. He was sentenced by the Honorable Kathryn H. Vratil on February 21,1995, to sixty months’ imprisonment on one of those counts and ninety-seven months’ imprisonment on each of the remaining eight counts. No fine was imposed, but petitioner was ordered to pay his numerous victims a total of several million dollars in restitution. His conviction and sentence were affirmed on appeal. See United States v. Pappert, 112 F.3d 1073 (10th Cir.1997). After his appeal was decided, petitioner filed a motion for new trial. While the case was on direct appeal, Judge Vratil learned that her staff member who was responsible for screening her cases for conflicts from investments in an IRA had not been doing so. Judge Vratil surveyed her pending and closed cases for previously unknown conflicts. Judge Vra-til immediately divested herself of the stock in her IRA and transferred the money to mutual funds, eliminating any conflict. Petitioner moved to amend his motion for new trial to include the argument that Judge Vratil should have recused in this case pursuant to 28 U.S.C. § 455 because of her financial interest in a company related to one of the corporate victims that would be paid restitution under his sentence. Judge Vratil denied petitioner’s motion for a new trial, rejecting his argument that she should recuse. Petitioner did not appeal this ruling. See R. Doc. 125. Petitioner then filed this motion for habeas relief under 28 U.S.C. § 2255, arguing again that Judge Vratil should re-cuse and raising several other issues. Judge Vratil denied habeas relief, but granted a certificate of appealability (COA) on petitioner’s argument that she should disqualify herself under § 455. See R. Doc. 151. We have jurisdiction over the appeal under 28 U.S.C. § 2253(a). The denial of a motion to recuse under § 455(a) or (b) is reviewed for abuse of discretion. See United States v. Bailey, 175 F.3d 966, 968 (11th Cir.1999). “A judge has a continuing duty to recuse under § 455(a) if sufficient factual grounds exist to cause a reasonable, objective person, knowing all the relevant facts, to question the judge’s impartiality.” United States v. Pearson, 203 F.3d 1243, 1277 (10th Cir.), cert. denied, 530 U.S. 1264, 120 S. Ct. 2734, 147 L.Ed.2d 995 (2000). “[Section] 455(a) expands the protection of § 455(b), but duplicates some of its protection as well.” Liteky v. United States, 510 U.S. 540, 552, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994). However, where the language of § 455 specifically limits the requirements of recusal, the specific language limits the scope of § 455(a). See id. at 552-53. There are two questions before us. First, whether petitioner is entitled to a new trial because Judge Vratil should have recused herself. Second, whether Judge Vratil should have recused herself from the proceeding that followed the discovery of her conflict. We conclude that a new trial is not required and that Judge Vratil did not need to recuse herself after her discovery of her conflict. Judge Vratil acknowledged that at the time of petitioner’s sentencing, she owned shares in General Electric Company, a corporate relative of General Electric Capital Leasing, one of petitioner’s victims. See R. Doc. 151, at 3. Thus, she concluded that she arguably had a financial interest in the subject matter of petitioner’s criminal proceeding within the meaning of § 455(b)(4). See id. She said that she did not know that she owned those shares at the time of petitioner’s trial and sentencing, however, and that she had divested herself of them by the time petitioner raised the issue in a motion for new trial filed after his direct appeal was decided against him. See id. at 2, 3 & n. 1. Judge Vratil was not obligated to recuse herself when she was unaware of her conflict. Section 455(b)(4) mandates that the judge have knowledge of the financial interest before she is obliged to recuse herself. See Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 859, 108 S.Ct. 2194, 100 L.Ed.2d 855 (1988) (section 455(b)(4) requires scienter). Petitioner is not entitled to a new trial when the judge was unaware of the conflict at the time. See Union Carbide Corp. v. U.S. Cutting Serv., Inc., 782 F.2d 710, 714 (7th Cir. 1986). By the time the motion for new trial and the section 2255 motion came before Judge Vratil, she had divested herself of the stock that created the conflict. Therefore, § 455(b)(4) no longer applied. Judge Vratil’s prompt divestment prevented her from having to recuse. This is supported by 28 U.S.C. § 455(f), which provides that if a judge, after substantial judicial time had been devoted to a matter, discovers or is apprised that she has a financial interest in a party (other than an interest that could be substantially affected by the outcome), disqualification is not required if the judge divests herself of that financial interest. United States v. O’Keefe, 169 F.3d 281, 284 n. 3 (5th Cir.1999); see also Baldwin Hardware Corp. v. Franksu Enterorise Corp., 78 F.3d 550, 556 (Fed.Cir.1996). Thus, even if Judge Vratil’s shares had been in a party, recusal was not necessary because she divested herself of her shares. Petitioner has not shown that Judge Vra-til’s interest in General Electric Company could have been substantially affected by the restitution order in favor of General Electric Capital Leasing. Judge Vratil therefore did not abuse her discretion in declining to recuse. Petitioner has moved for leave to raise issues outside the scope of the grant of COA. We agree with the district court that none of his issues rise to the level of constitutional error, see 28 U.S .C. § 2253(c)(2), and we affirm the district court’s denial of COA on these issues. Petitioner’s motion is denied.

3836184-21931

MEMORANDUM OPINION SAVAGE, District Judge. This action brought under the Family and Medical Leave Act (“FMLA”) presents the question whether a parent of a special needs child is entitled to FMLA leave to make suitable arrangements for the care of her child. We conclude that she is. Plaintiff, Rachel Wegelin, contends that defendant, the Reading Hospital and Medical Center (“Reading Hospital”), violated the FMLA by refusing to grant her leave to find alternative daycare arrangements for her daughter, who suffers from pervasive developmental disorder (“PDD”) and congenital blindness in one eye. Wegelin argues that due to a change in her job conditions, she needed time off work to arrange for a transfer of her daughter, who cannot be left unsupervised, to a different daycare that could accommodate the change in her work schedule. Reading Hospital moved for summary judgment. It contends that Wegelin was not entitled to FMLA leave because her daughter did not suffer from a “serious health condition” and Wegelin was not “needed to care for” her daughter. We denied summary judgment because there are genuine issues of fact regarding whether Wegelin’s daughter, Carolyn, had a “serious health condition,” as defined in the FMLA and regulations promulgated under it, and whether Wegelin “needed to care for” her daughter when she had to make arrangements to transfer her to another daycare. We now explain our rationale. Facts and Procedural Background Wegelin was employed at the Reading Hospital as a technician assistant since 1997. She was terminated on January 25, 2010, after she failed to report for duty. In 2003, Wegelin gave birth to Carolyn, who suffers from PDD and congenital blindness in one eye. PDD is an autism spectrum disorder, “characterized by impaired social interaction and communication, repetitive stereotyped patterns of behavior, and uneven intellectual development often with mental retardation.” After Carolyn’s birth, Wegelin returned to work full-time, Monday through Friday, from 8:30 a.m. to 5:00 p.m. She enrolled Carolyn in the Bowmansville Mennonite Church Before and After School Program. The daycare’s hours are 8:00 a.m. to 5:30 p.m. Reading Hospital provides each employee a parking space in one of its garages or parking lots based on various criteria, including seniority, department location, and shift. Wegelin was assigned to the Spruce Street parking garage, which was within walking distance to her job location. After she used a purloined parking pass to park at a parking garage that was closer to her department location, Wegelin was disciplined, resulting in the reassignment of her parking space to a remote parking lot, which required her to take a shuttle. .Due to the additional,time needed to get to her car, she contends that she was unable to get to Bowmansville to pick up her daughter before the daycare closed. Thus, Wegelin needed to change Carolyn’s daycare center to one that would be open until 6:00 p.m. On January 18, 2010, Wegelin had a scheduled day off. She did not report to work the rest of the week because she was looking for a daycare center that could take care of Carolyn with her special needs. It is undisputed that she notified her supervisor that she needed time off to find a new daycare. On January 21, 2010, Wegelin was told that she would be allowed to utilize her paid time off for the week of January 18 through 22, 2010, but she was expected to return to work on January 25, 2010. When Wegelin did not report to work on January 25, Reading Hospital terminated her employment. Summary Judgment Summary judgment is appropriate if the movant shows “that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Judgment will be entered against a party who fails to sufficiently establish any element essential to that party’s case and who bears the ultimate burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In examining the motion, we must draw all reasonable inferences in the nonmovant’s favor. InterVest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 159-60 (3d Cir.2003). The initial burden of demonstrating there are no genuine issues of material fact falls on the moving party. Fed. R.Civ.P. 56(a). Once the moving party has met its burden, the nonmoving party must counter with “ ‘specific facts showing that there is a genuine issue for trial.’ ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and emphasis omitted). Thus, “[wjhere the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ ” Id. (citation omitted). Discussion The FMLA is intended to balance the demands of the workplace with the needs of employees to take reasonable leave for eligible medical conditions and compelling family reasons. 29 U.S.C. § 2601(b)(1) and (2); Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 146 (3d Cir.2004). Congress enacted the FMLA in recognition of the growth of “single-parent households and two-parent households in which the single parent or both parents work,” the importance of parental participation “in early childrearing” and “care of family members who have serious health conditions,” the lack of “employment policies to accommodate working parents,” and the inadequacy of “job security for employees who have serious health conditions.” 29 U.S.C. § 2601; Churchill v. Star Enters., 183 F.3d 184, 192 (3d Cir.1999). Under the FMLA, an eligible employee is entitled to a total of twelve workweeks of leave during any twelve month period “[i]n order to care for the spouse, or a son, daughter, or parent of the employee, if such spouse, son, daughter, or parent has a serious health condition.” 29 U.S.C. § 2612(a)(1)(C). After returning from an FMLA leave, the employee must be reinstated to his or her former position, or an equivalent one. 29 U.S.C. § 2614(a)(1). An employer may not interfere with an employee’s exercise of an FMLA right, nor may an employer discriminate against an employee for exercising or attempting to exercise this right. 29 U.S.C. § 2615. “Interference” includes refusing to allow qualified FMLA leave. 29 C.F.R. § 825.220. An employer is liable on an “interference” claim if the employer denied FMLA leave that should have been allowed. See Sommer v. Vanguard Grp., 461 F.3d 397, 399 (3d Cir.2006) (holding that the employee need only show that he was entitled to benefits under the FMLA and the employer denied such benefits); Strickland v. Water Works & Sewer Bd. of Birmingham, 239 F.3d 1199, 1206-07 (11th Cir.2001) (holding that “[t]o state a claim of interference with a substantive right, an employee need only demonstrate ... that he was entitled to the benefit denied”). The FMLA prohibits employers from discharging an employee for exercising his or her rights under the FMLA- 29 U.S.C. § 2615; 29 C.F.R. § 825.220; Sommer, 461 F.3d at 399. To prevail on an FMLA interference claim, Wegelin must prove that she was entitled to benefits under the FMLA, and that Reading Hospital denied her those benefits. Sarnowski v. Air Brooke Limousine, Inc., 510 F.3d 398, 401 (3d Cir.2007) (citing Callison v. City of Phila., 430 F.3d 117, 119 (3d Cir.2005)). To prove entitlement, Wegelin must prove the following elements: (1) Carolyn’s health condition was a “serious health condition,” as defined in the statute and the regulations promulgated under it; (2) Wegelin gave appropriate notice of her need to be absent from work; and (3) Reading Hospital interfered with her right to unpaid leave. 29 C.F.R. § 825.303; Sarnowski, 510 F.3d at 401-02. The burden is on the plaintiff to prove the existence of an FMLA-eligible condition. Schaar v. Lehigh Valley Health Servs., Inc., 598 F.3d 156, 158 (3d Cir. 2010). An employee is entitled to FMLA leave to care for a child who has a serious health condition. 29 U.S.C. § 2612(a)(1)(C). A “serious health condition” is defined in the FMLA as an “illness, injury, impairment, or physical or mental condition” that involves “inpatient care in a hospital, hospice, or residential medical cafe facility” or “continuing treatment by a health care provider.” 29 U.S.C. § 2611(11). This case does not concern inpatient care. Rather; it presents a case where the parent of a child who is unable to perform regular life activities as a result of an impairment is entitled to FMLA leave in order to make appropriate arrangements for care of her special needs child. The FMLA does not define what constitutes “continuing treatment” by a health care provider. The statutory language narrowly defines “serious health condition.” But, the regulations amplify the definition, expanding it beyond the literal reading of the term. The FMLA regulations describe conditions that constitute a qualifying “serious health condition.” 29 C.F.R. § 825.115. The definition includes “any period of incapacity” due to a “chronic serious health condition” or “a period of incapacity” which is “permanent or long-term due to a condition for which treatment may not be effective.” 29 C.F.R. § 825.115(c) and (d). “Incapacity” is defined as an “inability to work, attend school or perform other regular daily activities due to the serious health condition, treatment therefore or recovery therefrom.” 29 C.F.R. § 825.113(b). A “chronic serious health condition” is “[a]ny period of incapacity” that (a) “[Requires periodic visits ... for treatment by a health care provider, or by a nurse under direct supervision of a health care provider;” (b) “[cjontinues over an extended period of time;” and (c) may “cause episodic rather than a continuing period of incapacity (e.g., asthma, diabetes, epilepsy, etc.).” 29 C.F.R. § 825.115(c). In summary, relevant to this case, a “serious health condition” includes any period of incapacity (an inability to attend school or inability to perform other regular activities) due to a chronic condition, which has continued over an extended period of time and requires “periodic visits” for treatment or evaluation with a doctor, nurse practitioner, or clinical social worker, or a nurse under the direct supervision of a doctor, nurse practitioner or clinical social worker. 29 C.F.R. §§ 825.113; 825.115; 825.125. Significantly, medical treatment need not have taken place immediately before or during the FMLA leave because “[a]bsences attributable to incapacity [due to a chronic serious health condition] ... qualify for FMLA leave even though the employee or the covered family member does not receive treatment from a health care provider during the absence ....” 29 C.F.R. § 825.115(f). In this case, Carolyn was born with pervasive developmental disorder, which is manifested by delays in social and emotional functioning, sensory integration difficulties, and attention deficit. She is blind in her left eye. Due to her condition, she cannot be left unattended. She requires constant supervision, both in school, daycare, and at home. It is undisputed that Carolyn is never left unattended. Wegelin drops her off at the Bowmansville Mennonite Church Before and After School Program on the way to work. The daycare transports Carolyn to and from the New Holland Elementary School. At school, she is in a full-time emotional support program under the supervision of teachers and a personal care assistant. After school, she is returned to the daycare until her mother picks her up after work. As Dr. Pamela Jordan, a licensed psychologist, found, Carolyn is extremely disruptive at school, and exhibits anxiety and “affective dysregulation when demands [a]re placed on her.” She crawls on the floor and wraps her legs around a chair in effort not to comply. She also throws items and books, and strikes adults who place demands on her. Carolyn has twenty-to-thirty minute temper tantrums at home and at school, multiple times a day. She often has to be removed from the classroom. She also has difficulties with attention, executive functioning, and socializing. Significantly in the context of this case, she becomes extremely anxious around people. She has poor environmental and safety awareness. Thus, a reasonable jury could find that she cannot be left alone. As a result of her behavioral issues, Carolyn has not adjusted to the school environment. In November 2009, for example, approximately two months prior to Wegelin’s FMLA leave request, Carolyn was transferred to Brecknock Elementary School. Because she exhibited significant attentional and executive functioning deficits, she could not remain in regular classes. She was assigned a personal care assistant for sixty percent of her day. As of February 2011, Carolyn was at the New Holland Elementary School in a full-time emotional support program under constant supervision. Considering Carolyn’s mental and emotional conditions, and her developmental history, a jury could find that she has a chronic serious health condition that causes an impairment. It would then have to determine whether the impairment caused incapacity. The statute defines incapacity as the inability to attend school or perform other regular daily activities due to the serious health condition. The FMLA and the regulations do not define “other daily activities.” The ADA definition of “major life activities,” although not controlling, is informative. 29 C.F.R. § 1630.2(i); Navarro v. Pfizer Corp., 261 F.3d 90, 97 (1st Cir. 2001). Under the ADA, major life activities include, but are not limited to: Caring for oneself, performing manual tasks* seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working .... 29 C.F.R. § 1630.2(i). Due to her condition, Carolyn is unable to perform many of these life activities. Although she attends school, she requires constant supervision and her behavior is unpredictable and disruptive. She is blind in her left eye. This condition causes her head to “abnormally turn or tilt to compensate for the eye muscle weakness.” The psychological evaluation report analyzes various behaviors that demonstrate Carolyn’s overall difficulty with integration and interaction with peers. As a result of her disabilities, Carolyn requires constant care and she cannot attend school without significant disruption in daily activities, including extensive behavioral support and specialized attention. Additionally, Carolyn’s global assessment of functioning score indicates “severe impairment with daily life.” As a working parent, Wegelin was able to arrange for proper care of her daughter by enrolling her in the Bowmansville Church Before and After School daycare. Wegelin testified that she would drop off her daughter at daycare shortly before 8:00 a.m. and pick her up by 5:30 p.m. With her Spruce Street parking garage assignment, she had sufficient time to leave work to get to the daycare by that time. In January 2010, her parking assignment changed to a different parking lot, resulting in her inability to arrive in time to pick up Carolyn at daycare. The new parking lot was not within walking distance from her department location. She had to take a shuttle. As a result, “there was absolutely no way [she] would make it to that daycare at 5:30 p.m.” Wegelin notified her supervisor that she would have trouble reaching her daughter on time. Nonetheless, she was told that her work hours were strictly until 5:00 p.m. Therefore, Carolyn’s daycare arrangements, specifically her pick up time, had to be modified. Although Wegelin’s employment conditions changed, the Bowmansville daycare operating hours did not. The program started at 8:00 a.m. and ended “promptly at 5:30 p.m. and children not picked up by then [were] charged a late fee.” Wegelin testified that unless there were circumstances beyond her control, the daycare expected her to pick up Carolyn by 5:30 p.m. Barring emergency situations, Wegelin had never been late. She testified that although the daycare accommodated emergencies, it does not tolerate late pick-ups on a daily basis. In short, because Wegelin’s new parking assignment delayed her departure from her work site, she was unable to get to Carolyn’s daycare on time. The daycare could not accommodate the time change. As a result, Wegelin had to find a new daycare center that had hours that could meet her new work schedule. Wegelin started to look for a new daycare center promptly after learning of the new parking arrangement. She testified that she attempted to find one that both could take care of a child with special needs and was open until at least 6:00 p.m. Wegelin did not have time to find a suitable daycare while she was at work. She testified that her work schedule was Monday through Friday, 8:30 a.m. to 5:00 p.m. She received a thirty-minute lunch and a short break in the morning and afternoon. The breaks “were allowed if [employees] obviously had to use the restroom or to get a drink.” Reading Hospital also did not permit employees to use cell phones in the hospital. Nor did it allow employees to make personal phone calls. In other words, there was no opportunity for her to make calls and visit daycare centers while she was working full-time. Indeed, at Wegelin’s deposition, when asked why she needed time off work to find a new daycare as opposed to using the phone, Wegelin testified that she had to find one who could care for her daughter’s special needs. Wegelin unsuccessfully attempted to visit a daycare on the afternoon of January 18. her scheduled day off work. That daycare, however, did not bus to the Lancaster County School District, where Carolyn went to school. Wegelin also made phone calls throughout that week to different locations. She called different day-cares in the area, as well as schools and churches, in an attempt “to figure out who would be able to take care of [her] child.” She also called Carolyn’s school to ask if there was any other daycare “that could take care of her with bus service to and from their school.” Wegelin learned that Bowmansville was the only center that bused to and from Carolyn’s school. Wegelin then started calling area churches “to find out if there was anyone that was able to take care [of] a child with special needs.” She hoped to find one that provided transportation. According to Wegelin, she called about six locations to find an alternative arrangement for Carolyn’s daycare. She was waiting to hear back from some of them because they had to check with others “who would be able to provide the care.” Wegelin summarized her predicament at her deposition: I was either calling on the phone, the places that I did know of, or trying to figure out where my daughter could be placed. She can’t be left alone at home. I’m being forced to basically be put in a situation here that — I feel I had a compelling and it’s — that’s just nature to do what I did here. I couldn’t report back to work. I let the hospital know. I asked for the time. And they didn’t grant it for me. My daughter needed somebody at home. And I was the only one there. Wegelin needed time to find a daycare center that could handle her child’s impairments and would accept the responsibility. Reading Hospital refused to grant her such time. Reading Hospital contends that Wegelin’s attempts to find alternative daycare arrangements do not constitute a “need to care for” Carolyn due to her medical condition. As the language of the statute and the regulations make clear, FMLA does not provide qualified leave to cover every family emergency. FMLA leave is only available when an employee is “needed to care for” a family member. 29 U.S.C. § 2612(a)(1)(C). Although the FMLA does not define the phrase, the regulations describe it as follows: [Whether an employee is “needed to care for” a family member] encompasses both physical and psychological care. It includes situations where, for example, because of a serious health condition, the family member is unable to care for his or her own basic medical, hygienic, or nutritional needs or safety .... The term also includes providing psychological comfort and reassurance which would be beneficial to a child, spouse or parent with a serious health condition who is receiving inpatient or home care .... The term also includes situations where the employee may be needed to substitute for others who normally care for the family member ... or to make arrangements for changes in care, such as transfer to a nursing home. 29 C.F.R. § 825.124 (emphasis added). Reading Hospital argues that Wegelin’s sole criterion for a change in daycare was finding a daycare that would be open after 5:30 p.m. It contends she has failed to demonstrate a nexus between Carolyn’s health condition and the need to find an alternative daycare. However, Wegelin testified that she was trying to find a daycare that would be qualified to care for Carolyn and her special needs as well as one that could meet her work schedule. Making arrangements for “changes in care” is expressly covered by the regulations. Significantly, the regulations are silent on whether the facility needs to be one that provides medical treatment. The fact that Carolyn’s daycare is not a specialized facility is not dispositive. What is relevant is that Carolyn has a chronic serious health condition resulting in an inability to perform regular daily activities and Wegelin had to make arrangements to find a suitable daycare that could care for her. Bowmansville daycare center was suitable, but no longer available. Therefore, when Reading Hospital changed Wegelin’s parking assignment, she had to make arrangements for a change in Carolyn’s care, entitling Wegelin to FMLA leave. Conclusion

7395229-4811

MEMORANDUM OPINION JOHN H. PRATT, District Judge. This matter is before us on plaintiff’s application for a preliminary injunction which seeks to prohibit defendants from continuing to violate the Trade Secrets Act. The matter has been fully briefed and argued. Background In July 1967, defendant U.S. Government and plaintiff entered into a License Agreement, which in exchange for a lump sum payment and the payment of royalties, gave the defendant the right to use Colt patents and trade secrets to manufacture, or to have manufactured, the M16 rifle and spare and repair parts. For almost eighteen years, the provisions of the License Agreement were carried out without incident. In May 1985, however, a United States District Court issued a decision which challenged the validity of plaintiffs patents and trade secrets. Christianson v. Colt Industries Operating Corp., 609 F.Supp. 1174 (C.D.Ill.1985). Because of this decision, the defendant by letter dated September 24, 1985 notified plaintiff that it no longer would make payments under the License Agreement pending the outcome of the litigation. Subsequently, plaintiff executed a number of modifications under which plaintiff, in effect, agreed to the withholding of royalties pending final adjudication of the Christianson litigation. The District Court’s decision was reversed by the Seventh Circuit Court of Appeals on March 22, 1989. Christianson v. Colt Industries Operating Corp., 870 F.2d 1292 (7th Cir.1989). It is agreed that the withheld payments of at least $1.4 million are still unpaid. On October 7, 1988, plaintiff submitted an invoice to defendant for the payment of royalties from the period January 1, 1985 through June 30, 1988, i.e., $1,410,521.26. On October 11, 1988, plaintiff notified defendant that its failure to make further payments under the License Agreement constituted a repudiation and breach of the License Agreement and that, pursuant to Paragraph XX of the Agreement, the License Agreement was terminated. Despite the foregoing, plaintiff on October 14, 1988 advised defendant that it was certifying its claim for payment pursuant to the Contract Disputes Act of 1978 (CDA). 41 U.S.C. § 601, et seq. Subsequent exchanges between the parties indicated no change in position by either plaintiff or defendant. Plaintiff claims the License Agreement has been terminated because of defendant’s alleged breaches, including withholding of payments. Defendant denies that it has breached the Agreement and asserts that the same is in full force and effect. This suit followed. In its complaint filed May 26,1989, plaintiff seeks declaratory and injunctive relief in four counts, all of which are predicated on plaintiff’s claim that defendant by repudiating and breaching the License Agreement through the non-payment of royalties, lost the right to disclose to, or permit the use by others of, plaintiff’s trade secrets (Count I); more specifically through the sale of repair parts to Indonesia (Count II); Through the improper transfer of M16s to non-Department of Defense (DOD) agencies such as the Border Patrol (Count III); and through the disclosure of trade secrets to Dynamint Nobel and defendant’s failure to notify plaintiff of the M2 bolt improvement (Count IV). Plaintiff’s Complaint, pp. 16-20. In its application for a preliminary injunction, filed pursuant to Rule 65, Fed.R.Civ.P., plaintiff seeks to prohibit defendant “from disclosing or otherwise using or permitting the use of plaintiff’s proprietary know-how, technical data, and trade secrets for manufacture/procurement of the M16, M16A1, and M16A2 rifles, or repair parts for said rifles, from sources other than plaintiff. Plaintiff’s Motion for a Preliminary Injunction, p. 1. Discussion Plaintiff’s counsel has conceded during oral argument that, if the License Agreement is still in existence, the four separate claims for relief would not be proper claims. Transcript at 7. He also agreed that the basic issue is whether there is a contract or whether the contract has effectively been terminated because of defendant’s alleged breaches. Transcript at 7-8. It is defendant’s basic contention that the License Agreement is still in existence and that plaintiff’s claim of subject matter jurisdiction is in reality based on the License Agreement and, therefore, is within the exclusive jurisdiction of the United States Claims Court or the Armed Services Board of Contract Appeals under the CDA. 41 U.S.C. §§ 609(a), 606. We agree. When Congress enacted the CDA in 1978, it provided a comprehensive scheme of remedies to resolve all disputes arising from government contracts. It specifically abolished the jurisdiction of the federal district courts to hear claims on any express or implied contract with the United States subject to the CDA.

1059824-7762

KERNER, Circuit Judge. Defendant appeals from an order denying, its motion for a temporary restraining order.’ On June 29, 1938 plaintiff sued the Mercoid Corporation for infringement of patent No. 1,958,482 issued May 15, 1934. On July 20, 1938 the defendant filed its answer, dénying validity and infringement. On August 4, 1938 it filed its motion for a temporary injunction restraining plaintiff from prosecuting this suit pending the final determination of defendant’s petition for a declaratory decree under the Federal Declaratory Judgment Act, Sec. 274d, Judicial Code, 28 U.S.C.A. § 400, pending in the Eastern District of Wisconsin, en titled The Mercoid Corporation v. Milwaukee Gas Specialty Company. It appears that on June 13, 1938 the Mercoid Corporation filed in the Eastern District of Wisconsin its petition for declaratory decree, alleging that the Milwaukee Gas Specialty Company had wrongfully charged the Mercoid Corporation with infringement of the patent involved in the instant case and prayed the court to decide whether the patent was valid, and, if so, whether it was infringed by the Mercoid Corporation. It further appears that the defendant’s predecessors in business began the use of “Mercoid” as a trade-mark for thermostatic circuit controlling devices on September 20, 1921 and that on January 1, 1932 the defendant published a bulletin entitled “Announcing Mercoid Sensatherm”; that prior to July 28, 1932 over 1200 Mercoid Sensatherms had been made and sold by defendant; that up to July 21, 1938 over 140,000 had been manufactured and sold, and on July 21, 1938 defendant had orders for 15,000 Sensatherms; that an application for the patent in controversy in the instant case was filed on July 28, 1932; that between February 12, 1932 and March 23, 1934, plaintiff was placed on the mailing list of defendant; that in February, March and May of 1934, Mercoid Installation Instructions, illustrating Mer-coid Sensatherm, were published by defendant, and in 1936 and 1937 catalogues illustrating Mercoid Sensatherm had also been published. It further appears that on March 16, 1938 plaintiff wrote defendant that defendant’s catalogue sheet of August 1935 showed a Mercoid Sensatherm, which was an infringement of plaintiff’s patent No. 1,958,482 and that unless it discontinued its manufacture, suit would be commenced, and on June 11, 1938 plaintiff notified defendant that unless defendant accepted a license, suit would be brought within ten days. On August 5, 1938 plaintiff filed its answer in the cause pending in the Eastern District of Wisconsin, including a counterclaim, alleging infringement and praying for an injunction and an accounting. It also appears that the Wisconsin court has restrained plaintiff from prosecuting the instant case pending the determination of the petition for a declaratory decree. The issues in the declaratory judgment proceedings and the instant infringement suit are the same, except as to the claim for damages claimed by plaintiff, and the question that presents itself is whether the petition filed under the Declaratory Judgment Act in the Eastern District of Wisconsin takes precedence over the suit for infringement in the instant case. It is clear that plaintiff claims that defendant’s Mercoid Sensatherms infringe a patent which it owns and which it claims is valid. The defendant denies the validity of the patent and that its product infringes and by its petition in the declaratory judgment proceedings so notified the plaintiff. Under such circumstances they stand opposed to each other in respect to legal rights and obligations and a case is presented that is appropriate for judicial determination. Aetna Life Insurance v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000, and E. W. Bliss Co. v. Cold Metal Process Co., 6 Cir., 102 F.2d 105. But that controversy, says the plaintiff, must be determined in the instant case, otherwise it would be deprived of its statutory right to prosecute infringers. With this contention, under the facts in this case, we cannot agree. In Aetna Life Insurance Co. v. Haworth, supra, 300 U.S. at page 240, 57 S.Ct. at page 463, 81 L.Ed. 617, 108 A.L.R. 1000, it was said: “In providing remedies and defining procedure in relation to cases and controversies in the constitutional sense the Congress is. acting within its delegated power over the jurisdiction of the federal courts which the Congress is authorized to establish. * * * Exercising this control of practice and procedure the Congress is not confined to traditional forms or traditional remedies. * * * In dealing with methods within its sphere of remedial action the Congress may create and improve as well as abolish or restrict. The Declaratory Judgment Act must be deemed to fall within this ambit of congressional power, so far as it authorizes relief which is consonant with the exercise of the judicial function in the determination of controversies to which under the Constitution the judicial power extends.” In E. Edelmann & Co. v. Triple-A Specialty Co., 7 Cir., 88 F.2d 852, the court said, page 854: “The Declaratory Judgment Act merely introduced additional remedies. It modi fied the law only as to procedure and, though the right to such relief has been in some cases inherent, the statute extended greatly the situations under which such relief may be claimed. It was the congressional intent to avoid accrual of avoidable damages to one not certain of his rights and to afford him an early adjudication without waiting until his adversary should see fit to begin suit, after damage had accrued. But the controversy is the same as previously. Heretofore the owner of the patent, might sue to enjoin infringement; now the alleged infringer may sue. But the controversy between the parties as to whether' a patent is valid, and whether infringement exists is in either instance essentially one arising under the patent laws of the United States. It is of no moment, in the determination of the character of the relief sought, that the 'suit is brought by the alleged infringer instead of by the owner.” We are of the opinion, therefore, that a petition under the Declaratory Judgment Act seeking the judgment of the court whether the respondent’s patent was valid, and, if so, whether it was infringed by petitioner is a suit under the patent laws, and that the district court in the Eastern District of Wisconsin had jurisdiction. There now remains the question whether the district court for the Eastern District of Wisconsin obtained complete jurisdiction to the exclusion of the district court- for the Northern District of Illinois, Eastern Division. Defendant argues “that the court first taking jurisdiction over a controversy shall retain that jurisdiction when a suit is later filed in another jurisdiction involving the same parties and the same issue.” To the argument plaintiff replies that the Illinois district court must be permitted to retain jurisdiction of the case, because that court was the first court “seized of the issues identical with the issues in the declaratory judgment case.” Plaintiff bases its argument upon the fact that defendant’s answer in the instant case was filed on July 20, 1938 and thereby the court became seized of the issues common to both suits as of that date, whereas the Wisconsin district court did not become seized of the issues in that case until August 5, 1938, this being the date of the filing by plaintiff of its answer and counterclaim. We find no- merit in this contention for the reason that the settled rule is that the jurisdiction becomes effective from the filing of the complaint. Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189, 196, 55 S.Ct. 386, 79 L.Ed. 850.

1404563-10809

MILLER, Associate Justice. Humphrey R. Wagar, who resided, and was domiciled, in Michigan, died in 1916. His will, which was executed in 1908, designated trustees to hold and manage his estate, in the name of “H. R. Wagar Estate,” until the death of all his children named in the will; whereupon it was to be distributed to his four grandchildren, Portia W. Wagar, H. R. Wagar, Jr., Marion W. Page and Wellington Cass Page. The trust terminated in October, 1939. Wellington Cass Page died in 1915, a year before the death of the testator. The question of this case is what disposition should be made of the share which was designated for him in the will of his grandfather. The answer depends upon the interpretation of the following provisions of the will: “It is my will to have the principal sum of my estate kept together and held intact until the death of the survivor of my children, Fred L. Wagar, Ernest E. Wagar and Nellie W. Peterson; that my wife, children, and grandchildren shall have the rents from my property as herein specified, and that the estate' with such increased value as shall accumulate thereon by reason of the increase in property and rents, shall go to my grandchildren, Portia W. Wagar, H. R. Wagar, Jr., Marion W. Page, and Wellington Cass Page, at the death of the survivor of my said children, * *. 7th. Subject to the life estate of my beloved wife, and the children above named, I give, devise and bequeath to my grandchildren, Portia W. Wagar, H. R. Wagar, Jr., Marion W. Page and Wellington Cass Page, sons and "daughters of my said children, all the remainder of my real estate and personal property, and all that may remain thereof and be accumulated by my trustees, whether said property is in the name of Humphrey R. Wagar or H. R. Wagar Estate, or in whatever name it may be held, or wherever situated, to have and to hold the same to themselves, their heirs and assigns forever, and to be divided between them share and share alike. This devise, however, always subject to this condition; that in case of the death of any of said grandchildren, prior to the time of the decease of the survivor of my children, then and in such case, the share or slmres of the said deceased grandchild shall be divided among the legal heirs of said grandchild share and share alike.” [Italics supplied.] The question is complicated, also, by the following facts: Wellington’s mother was Nellie Wagar, a daughter of the testator. She married Rufus Lee Page, and Wellington was one of the children of that marriage. Thereafter Nellie Wagar and Rufus Lee Page were divorced; the latter then married again. A son was born of that marriage, Rufus Lee Page, Jr., who is, consequently, a half brother of Wellington, but not a grandchild of the testator. Part of the property of the estate was located in Michigan, part in Washington, D. C. Upon the testator’s death, in 1916, his will was admitted to probate in Michigan. Following a series of trials and appeals the Michigan courts decided that the one-fourth share of the residue of the estate of Humphrey R. Wagar, deceased, which would have gone to Wellington Cass Page had he survived the last of the children of Humphrey R. Wagar, by the terms of the devise contained in the will, goes to and is to be divided among the legal heirs of Wellington Cass Page share and share alike; that the legal heirs of Wellington Cass Page are to be determined as of the date of the death of Ernest E. Wagar, who was the last surviving child of the testator, namely, October 6, 1939; and that the legal heirs of Wellington Cass Page, as of that date, were Marion W. Page Ross Greenwood, a full sister, and Rufus Lee Page, Jr., a half brother. In order to secure distribution of that portion of the residue which was located in Washington, D. G, a suit was filed in the District Court for partition, to remove a cloud upon title, for appointment of a re ceiver, and for a declaratory judgment as to the rights of the parties. Following a trial, the District Court decided the principal question as follows: “That the legal heirs of Wellington Cass Page are to be determined as of the date of death of Ernest R. [E.] Wagar, the last life tenant, namely, October 6, 1939; That in accordance with the laws of the District of Columbia as of October 6, 1939, the legal heirs of Wellington Cass Page were his sister Marion W. Page Ross Greenwood and his half brother Rufus Lee Page, and they are therefore entitled to the portion of the estate of the said Humphrey R. Wagar devised to the said Wellington Cass Page in regard to the property in the District of Columbia, one-half (%) each, share and share alike; * From the judgment of the District Court, Mell R. Wilkinson noted an appeal, upon the ground that the devise to the four grandchildren was a class devise, but abandoned it in this court. (No. 8367) Wilkinson and Clorinda A. Wagar joined in attacking the judgment upon the following grounds: (Nos. 8367, 8368) (1) Because of the death of Wellington Cass Page prior to the death of the testator, his share of the estate became intestate property and passed to the heirs-at-law and next-of-kin of the testator; (2) By the terms of the will, all testator’s personal estate was to be sold and the proceeds invested in Washington, D. C. real estate; with the result that such personal property must be considered as real estate under the doctrine of equitable conversion and subject to partition in the District. Our decision, as will appear later, makes discussion of the second point academic, for the property will go to the same persons whether distributed as personalty in Michigan or realty in the District of Columbia. Without further commitment, it is sufficient to say that the point is of doubtful merit. Concerning the contention that the death of Wellington Cass Page prior to testator’s death caused his share of the estate to become intestate property, the rule is that a valid provision making a specific gift over, in case the first beneficiary dies before the testator, prevents a lapse. From the judgment of the District Court, Marion W. Page Ross Greenwood appealed, (No. 8366) contending here that Rufus Lee Page, Jr., the half brother, is not entitled to participate in the distribution of the District of Columbia property and that, instead, she is the only heir of Wellington Cass Page. The theory of her contention is that (1) the devolution of title and the determination of heirship are controlled by the laws of the District of Columbia, where the land is situated; (2) the controlling law is that of the District, in force at the time of the testator’s death in 1916, from which time the will speaks; (3) in 1916, by the law of the District, half bloods were not heirs when a full blood was living, unless the property came from a common parent; (4) to hold otherwise would violate the intention of the testator who is presumed to have had in mind the law as it stood in his lifetime; (5) the devise to her as substituted devisee became vested upon the testator’s death in 1916, and cannot be divested by subsequent legislation; (6) that interpretation of a will is favored which prefers family and kindred over strangers; (7) although the determination of heirship must be made as of the 6th day of October, 1939, such determination can include only those who by the laws of the District of Columbia in force at the time of the testator’s death are so related as to be heirs of Wellington Cass Page. The general rule, applicable in the District of Columbia, is that the law of the situs of real property governs not only its descent, alienation and transfer, but the effect and construction of wills and other conveyances. Consequently, the decisions of the Michigan courts were not res judicata in the present case. On the contrary, jurisdiction to decide it is possesssed, exclusively, by the courts of the District. But, in deciding such a case, the courts of the District must observe, among others, the two following rules: First, that the intent of the testator is paramount in all interpretations of wills; and, second, that in discovering the testator’s intent, from words used by him in his will, the controlling meanings of such words are, generally, those declared by the law of the testator’s domicile. The rationale of this latter rule is that, since the testator is presumed to be most familiar with the law of his domicile and with the language used there, in the absence of controlling circumstances which persuade to the contrary, the meaning which should be ascribed to words which he uses, is the meaning which prevails at the place of his domicile. The vital words which require interpretation in the present case are “the legal heirs of said grandchild,” used in the seventh item of testator’s will, and particularly the word heirs. The law of Michigan — testator’s domicile — has so defined the words as to include half bloods, at all times involved here. If, therefore, that definition is controlling, under the rule stated, it is decisive of the case. Some testamentary words, it is true, may express a particular purpose in such technical language as to require that they be given a definite operative effect, without regard to the intention of the testator; and in such instances, when used in the disposition of land, their operative effect is determined by the law of the situs. But even if words are used which sometimes, or usually, are of technical connotation, nevertheless, if they are so used as clearly to indicate that a nontechnical meaning was intended, or if there are explanatory and qualifying expressions from which it appears that the import of the technical language is contrary to the clear and plain intent of the testator, the latter will prevail. Thus, when the word heir is used as one of limitation, it must be given that effect, but the contrary is true if its use in context clearly indicates that it is intended to constitute a disposition by purchase. In the present case the word heirs, as used in the seventh item of testator’s will, describes, merely, the class of beneficiaries which is to take — it is obviously a word of purchase. Consequently, the Michigan interpretation must be adopted as expressing the intention of the testator. This being true, appellants’ contentions fail and the determination made by the District Court is correct. Affirmed. In re Wagar’s Estate, 292 Mich. 452, 456, 290 N.W. 865, 866; In re Wagar’s Estate, 295 Mich. 463, 295 N.W. 227; In re Wagar’s Estate, 302 Mich. 243, 4 N.W. 2d 535. See Restatement, Conflict of Laws (1934) § 306, comment f; 2 Beale, Conflict of Laws (1935) § 306.6. 4 Page, Wills (3d ed. 1941) § 1420; In re Piffard’s Estate, 111 N.Y. 410, 18 N.E. 718, 2 L.R.A. 193; Rivers v. Rivers, 36 S.C. 302, 15 S.E. 137.

4243394-18686

MEMORANDUM ALETA A. TRAUGER, District Judge. Pending before the court is a Motion to Dismiss Plaintiffs ADEA Claims (Docket No. 8) filed by the defendants State of Tennessee (“Tennessee”), Tennessee Department of Human Services (“DHS”), and Tennessee Department of Human Services: Disability Determination Services (“DDS”). The plaintiff has submitted a response in opposition (Docket No. 10), and the defendants have filed a reply in support (Docket No. 13). For the reasons discussed herein, the defendants’ motion will be granted. BACKGROUND Plaintiff James Hornberger, Jr. is a resident of Davidson County, Tennessee. The plaintiff is a retired former employee of defendant DHS, which is an executive agency of defendant Tennessee. For the final 22 years of his tenure with DHS, he worked with DDS, most recently as a disability claims examiner. On August 31, 2009, he retired from DHS after nearly 30 years of service, at the age of 54. The plaintiff alleges that he was effectively forced to retire. He claims that, in January 2006, DDS switched to a new computerized document manager system, the simultaneous development and implementation of which impaired DDS employees from keeping up with their caseloads. In or around August 2006, the plaintiff began working under a new supervisor, who began warning him that he was not keeping up with his caseload and commenting that he was “slow” and “always needing help from others.” (Docket No. 1 at 3.) The plaintiff was orally warned that was he not keeping up with his caseload in May 2007, made to undergo an internal review in June 2007, and given a written warning regarding his caseload in July 2007. The plaintiff alleges that, during this period, his performance was at least on par with examiners in his department and that his review indicated that his work “quality was good and on-target for the department.” (Id.) In December 2007, the plaintiff was approved for leave under the Family and Medical Leave Act of 1993 (“FMLA”) to care for his ailing father. He took off one day per week for six weeks, but he was forced to stop using FMLA leave because his caseload “increased dramatically.” (Id. at 4.) Shortly after his return to full-time work, he was suspended for poor caseload management and for having unpaid travel vouchers. The latter, to the plaintiffs knowledge, had never previously been cited as a basis for suspension. The plaintiff alleges that, by October 2008, DDS had decided to terminate him. In July 2009, the Regional Director asked the plaintiff to sign a “Do Not Hire” notice, which the plaintiff alleges would preclude him from being employed in any department within the State of Tennessee. The plaintiff refused to sign. At this point, the plaintiff considered his job to be “truly in jeopardy.” (Id.) On August 31, 2009, he chose to retire to preserve retirement benefits that would be lost if he were terminated. The plaintiff alleges that this constituted a constructive discharge. The plaintiff believes that, shortly after his departure from DDS, his position was filled by a person under 40 years of age. The plaintiff filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging discrimination. EEOC issued the plaintiff a Right to Sue letter on August 10, 2010. (Docket No. 1, Ex. 1.) On November 8, 2010, the plaintiff filed the Complaint in this action. The plaintiff asserts two claims: (1) that the defendants discriminated against him on the basis of age in violation of the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. § 621 et seq., and (2) that he was suspended in retaliation for taking FMLA leave. The defendants have jointly moved to dismiss the plaintiffs ADEA claim, pursuant to Federal Rule of Civil Procedure 12(b)(1). (Docket No. 8.) The defendants argue that they are immune from suit with respect to that claim under the Eleventh Amendment and related principles of sovereign immunity. (Id.; see Docket No. 15 (clarifying that the motion was filed on behalf of all defendants).) ANALYSIS I. Standard of Review Federal Rule of Civil Procedure 12(b)(1) governs dismissal of lawsuits for lack of subject matter jurisdiction. “Rule 12(b)(1) motions to dismiss ... generally come in two- varieties: a facial attack or a factual attack.” Gentek Bldg. Prod., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir.2007). A state’s assertion of sovereign immunity constitutes a factual attack. See Dunn v. Spivey, No. 2:09-0007, 2009 WL 1322600, at *3 (M.D.Tenn. May 11, 2009). When “considering a factual attack upon the court’s jurisdiction, no presumption of truth applies to the plaintiffs factual allegations, and the court is free to weigh the evidence and resolve factual disputes so as to satisfy itself as to the existence of its power to hear the case.” Id. (internal citation and quotation marks omitted). “In its review, the district court has wide discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve jurisdictional facts.” Gentek, 491 F.3d at 330. “The entity asserting [sovereign] immunity has the burden to show that it is entitled to immunity, i.e., that it is an arm of the state.” Gragg v. Ky. Cabinet for Workplace Dev., 289 F.3d 958, 963 (6th Cir.2002). II. Sovereign Immunity The defendants argue that they are immune from the plaintiffs ADEA claim. (See Docket No. 13 at 1-2.) Each of the states possesses certain immunities from suit that “flow from the nature of sovereignty itself as well as the Tenth and Eleventh Amendments.” Ernst v. Rising, 427 F.3d 351, 358 (6th Cir.2005) (en banc). Consequently, a state may not be sued in federal court by a private individual unless it consents to suit or unless its sovereign immunity has been validly abrogated by Congress. Id. at 358-59. The Supreme Court has made clear that “arm[s] of the state” enjoy this same immunity but that “political subdivisions” do not. Id. (citing Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977)). For the reasons discussed below, the court finds the DHS is an “arm of the state” that receives immunity and that DDS is not legally distinct from DHS for the purposes of suit in federal court. A. Whether the defendants are either the state or “arms of the state” The plaintiff does not appear to dispute that the State of Tennessee, a named defendant in this suit, has sovereign immunity and that it may only be subject to suit in federal court if it has consented to suit or if its immunity has been validly abrogated. See Ernst, 427 F.3d at 359. However, the plaintiff argues that defendants DHS and DDS have failed to meet their burden to demonstrate their entitlement to sovereign immunity under Gragg, 289 F.3d at 963. (Docket No. 11 at 6.) The Sixth Circuit, sitting en banc, has identified a four-factor test to determine whether an entity is an “arm of the state” for purposes of sovereign immunity: (1) the State’s potential liability for a judgment against the entity; (2) the language by which state statutes and state courts refer to the entity and the degree of state control and veto power over the entity’s actions; (3) whether state or local officials appoint the board members of the entity; and (4) whether the entity’s functions fall within the traditional purview of state or local government. Ernst, 427 F.3d at 359 (internal citations and quotation marks omitted). The first factor is “generally the most important factor ... but not the sole criterion for determining whether an agency is a state entity for sovereign immunity purposes.” Pucci v. Nineteenth Dist. Court, 628 F.3d 752, 761 (6th Cir.2010) (internal citation and quotation marks omitted). The court will analyze separately whether DHS and DDS may be sued for a violation of the ADEA consistent with state sovereign immunity. 1. DHS is an “arm of the state” of Tennessee As an initial matter, the court notes that other courts have consistently concluded that DHS is an “arm of the state” without explicitly applying the substance of the four-factor test. See, e.g., Giorgio v. Tenn. Dep’t of Human Servs., No. 95-6327, 1996 WL 447656, at *1 (6th Cir. Aug. 7, 1996); Bowen v. Tennessee, No. 03-2883-D/P, 2004 U.S. Dist. LEXIS 30509, at *5 (W.D.Tenn. Feb. 4, 2004) (concluding that DHS and DDS were immune from suit because of Tennessee’s sovereign immunity); Moss v. Tenn. Dep’t of Human Servs., Civil No. 2:07-0012, 2008 WL 4552421, at *10 (M.D.Tenn. Oct. 7, 2008) (accepting the magistrate’s report, which concluded that DHS’s sovereign immunity was one of several legal grounds that required dismissal of the complaint). With respect to DHS, the plaintiffs sole “arm of the state” argument appears to be a request that DHS’s claim of sovereign immunity be analyzed using the Sixth Circuit’s four-factor test. (See Docket No. 11 at 5-6 (suggesting that DHS’s argument in the defendants’ motion amounts to “asking the court to ‘just believe’ we ... are agents of the state” without the plaintiff making any particularized argument for any factor).) Consistent with its “broad discretion” in making factual determinations to resolve factual attacks made in Rule 12(b)(1) motions, Gentek, 491 F.3d at 330, and after reviewing relevant sections of the Tennessee Code, the affidavit of DHS’s Assistant Commissioner (Docket No. 14), and other documents filed with the court, the court finds that DHS is, in fact, an “arm of the state” for purposes of sovereign immunity under the Ernst factors. The first factor supports a finding of immunity because it appears that Tennessee would be liable for any judgment against DHS. See Ernst, 427 F.3d at 359-60. The State of Tennessee has represented to the court that it is the “real party in interest,” that “[a]ny judgment entered against [DHS] would ultimately be paid by the State of Tennessee,” and that DDS is not legally distinct from DHS. (Docket No. 15 at 1.) The plaintiff has made no argument to the contrary. The second factor supports a finding of immunity because the operation of DHS is controlled by the state. See Ernst, 427 F.3d at 360. DHS was created by the state legislature, see Giorgio, 1996 WL 447656, *1 (citing Tenn.Code Ann. § 4-3-1201), and DHS is identified by the Tennessee Code, the courts of the State of Tennessee, and Tennessee’s executive branch as an executive administrative agency of the state of Tennessee, see Tenn. Code Ann. § 4-3-101 (recognizing DHS as one of the state’s twenty-four executive administrative agencies); Gallaher v. Elam, 104 S.W.3d 455, 464-65 (Tenn.2003) (same); (Docket No. 15 (representation by current Tennessee Attorney General that DHS is “an arm of the state”).) Under Tennessee law, DHS is ultimately under the control of the Governor. See § 4-3-1202 (explaining that DHS is “under the charge and general supervision of the commissioner of human services”); State ex rel. Comm’r of Transp. v. Medicine Bird Black Bear White Eagle, 63 S.W.3d 734, 768 n. 52 (Tenn.Ct.App.2001) (explaining that, except for four certain agencies under the control of “constitutional officers,” all other agencies, including DHS, remain the governor’s “ultimate resonsib[ility]”); (Docket No. 14 Ex. 2 at 2 (former Gov. Alexander indicating he has authority over DHS under both the Tennessee Code and the state constitution).) Additionally, the State controls the means by which DHS may receive funding, including the extent to which it may accept federal funds. See, e.g., Tenn.Code Ann. §§ 4-4-116 (“Federal Grant Programs”), 9-1-116 (“Programs and Services Limited to the Extent Funds Available”). The plaintiff has not made any argument to the contrary with respect to any of these points. In fact, the plaintiff indicates that he receives retirement benefits from the State of Tennessee by virtue of his former employment at DHS. (Docket No. 1 at 4, 6.) The third factor supports a finding of immunity because DHS’s Commissioner and officers are appointed by state officials. See Ernst, 427 F.3d at 360-61; Tenn.Code Ann. §§ 4-3-112 (explaining that the Commissioner is gubernatorial appointee who serves at the pleasure of the Governor); 4-4-106 (noting that, generally, DHS “officers, assistants and employees as may be necessary to carry on the work of [the] department of the state government shall be appointed by the commissioner” of DHS). Finally, the fourth factor, which examines whether the entity performs a state or local function, is the closest, but it ultimately supports a finding of immunity. See Ernst, 427 F.3d at 361. Essentially, the DHS is administering a “cooperative federalism” program in which states agree to provide benefits and services to their residents up to federal standards as a condition for receiving federal funds. See generally Strickland v. Shalala, 123 F.3d 863, 864 (6th Cir.1997) (explaining the concept of “cooperative federalism” in the context of administration of Social Security Act programs). However, the Sixth Circuit has made clear that this function “cannot be characterized neatly as completely within the traditional purview of either local or state government.” Lowe v. Hamilton County Dep’t of Job & Family Servs., 610 F.3d 321, 331-32 (6th Cir.2010) (finding that this factor did not favor sovereign immunity where Ohio law required creation of county departments to administrate its federal responsibilities). In these circumstances, the Sixth Circuit has indicated that courts should look to the scope of the entity’s jurisdiction, the source of the entity’s authority, and whether the funding comes predominantly from local or state government. See id. (citing Ernst, 427 F.3d at 361). DHS is a single entity with statewide jurisdiction whose function is to “administer all functions to be established in this state under the federal Social Security Act,” unless otherwise expressly delegated by state or federal law. Tenn.Code Ann. § 4-3-1203 (emphasis added); see also Bowen, 2004 U.S. Dist. LEXIS 30509, at *5 (concluding that DHS was entitled to state sovereign immunity as a “statewide agenc[y]”). There is no indication in the contract between the state and the federal government that local funds are used at all. (See Docket No. 14, Ex. 1). Consequently, the court finds that this factor, as well as the other three factors, support a determination that DHS is an arm of the state. Thus, DHS cannot be sued unless its sovereign immunity is validly abrogated or waived. 2. DDS is not an entity distinct from DHS that can be sued in its own right The plaintiff makes two arguments with respect to why DDS is not entitled to sovereign immunity: (1) the defendants have not provided evidence that DDS is an arm of the state in its own right (Docket No. 11 at 6); and (2) because DDS receives federal funding and administers a federal program, it is not an arm of the state (id. at 6-7). Because the court concludes that DDS is not an entity distinct from DHS, it will not address the plaintiffs second argument. The parties disagree about whether DDS is an entity distinct from DHS, with the capacity to be sued in its own right. (See Docket No, 13 at 2.) This question is preliminary to the issue of whether DDS partakes in the state’s sovereign immunity. See Peirick v. IUPUI Athletics Dep’t, 510 F.3d 681, 694 (7th Cir.2007) (dismissing the plaintiffs ADEA claim against the athletics department of the university before subjecting the claim against the university and its board to Eleventh Amendment analysis, because “the [a]thleties [department is not a legal entity apart from the [u]niversity ... [that] is capable of being sued” in its own right). Federal Rule of Civil Procedure 17 provides that the capacity of a non-individual to be sued is determined by state law. Fed.R.Civ.P. 17(b)-(c); see also Haines v. Metro. Gov’t of Davidson County, 32 F.Supp.2d 991, 994-5 (M.D.Tenn.1998). The affidavit of DHS’s Assistant Commissioner (Docket No. 14.) and the accompanying executive order of former Gov. Alexander (Docket No. 14, Ex. 2) support the defendants’ position that DDS is a mere subdivision of DHS. (See Docket No. 13 at 2.) The plaintiff has offered no support for a contrary proposition; rather, this is consonant with, the plaintiffs characterization of the facts of this case, particularly that he worked for DDS while he was employed by DHS. (See Docket No. 11 at 1.) Consequently, the court concludes that DDS is a subdivision of DHS. The “normal rule is that a government entity may choose the level at which it will pursue and defend all law suits against it.” Haines, 32 F.Supp.2d at 994-95. DDS is never specifically mentioned in the Tennessee Code; thus, if it has the capacity to be sued, that capacity could only have been conferred by the executive or recognized by the judiciary of Tennessee. But DHS appears to have been specifically precluded from imbuing its subcomponents with the authority to sue or be sued, because DHS only has those powers which have been expressly delegated to it, and not those expressly reserved to other departments. See Tenn.Code Ann. §§ 4-3-103, 4-3-1203 (generally limiting its authority to the administration of the state’s Social Security Act functions); cf. § 4-3-1503 (identifying the Tennessee Attorney General’s office as the state agency which may institute suits on behalf of the state and defend the various departments from civil suit). There is no indication that Tennessee courts have ever recognized DDS’s capacity to be sued in its own right. Because the court finds that DDS is not an entity independent from DHS, there is no need to separately apply the Ernst factors to DDS. B. Whether Congress has validly abrogated the DHS’s sovereign immunity The plaintiff argues that the court should find that DDS’s sovereign immunity has been “abrogated” with respect to all claims against DDS because DDS “administers the Social Security Disability Program and [is] primarily federally funded.” (Docket No. 10 at 1.) This argument is perhaps better understood as an argument for constructive consent to suit. See generally Parden v. Terminal Ry. of Ala. Docks Dept., 377 U.S. 184, 192, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964) (holding that, by “operating a railroad in interstate commerce [after the passage of Federal Employee Liability’s Act,] Alabama must be taken ... to have consented to suit”); but see College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 680, 119 S.Ct. 2219, 144 L.Ed.2d 605 (1999) (“Whatever may remain of our decision in Parden is expressly overruled.”). The court will treat this argument as if made against DHS, as it is not legally distinct from its subcomponent DDS.

10547314-26195

ALVIN B. RUBIN, Circuit Judge: In Buchanan v. Kentucky, the Supreme Court held that when a criminal defendant has introduced psychological testimony concerning his mental state, he may not then invoke the privilege against self-incrimination to bar the prosecution from rebutting his evidence with statements he made during an examination by a court-appointed psychiatrist. In this case, the defendant in a state court trial for aggravated robbery offered testimony, at the sentencing phase of the trial, from drug treatment and rehabilitation counselors who opined that the defendant was capable of rehabilitation. In rebuttal, the State then called a court-appointed psychiatrist who had earlier examined the defendant at the defendant’s request to determine his competency. The psychiatrist testified that he believed, based on his examination, that the defendant was a sociopath without prospect of rehabilitation. The jury sentenced the defendant to serve 75 years. The defendant seeks habeas corpus relief, contending that Buchanan does not apply when a defendant has not introduced expert mental health testimony from a psychiatrist or psychologist. We find no significant difference, however, between the opinions offered by these rehabilitation counselors and expert opinions from a mental health professional, and we therefore affirm the district court judgment denying Schneider’s petition. I. Michael Schneider was charged with two counts of aggravated robbery for the holdup of two Dallas drugstores in February and March, 1979. In each robbery, an armed man had entered the pharmacy, pointed his gun at an employee, demanded narcotics, and then fled without taking any drugs, although the gunman in the first hold-up did steal $77. In each case, drugstore employees positively identified Schneider as the gunman. Before trial, Schneider’s court-appointed counsel moved for a psychiatric examination to determine Schneider’s competency to stand trial. Counsel stated that, although he did not believe Schneider was incompetent to stand trial or had been insane at the time of the offenses, he had filed the motion at Schneider’s request. The court appointed Dr. James Grigson, a Dallas psychiatrist who specializes in examining persons accused of criminal offenses and in evaluating their competency and sanity. Dr. Grigson determined that Schneider was both sane and competent to stand trial. At the guilt phase of his trial, Schneider presented no evidence but argued that the eyewitness testimony was inconsistent and insufficient to prove the elements of the offenses. The jury convicted him on both counts. At the punishment phase, the State introduced a Texas Department of Corrections “penitentiary packet” bearing Schneider’s name to prove that Schneider had a prior felony conviction, a factor that could enhance the sentence under Texas law. Schneider then presented three witnesses — a drug abuse counselor, an employee in a rehabilitation program at the jail where Schneider had been held pending his trial, and a jail chaplain — all of whom testified, based on their personal observations of Schneider and his participation in rehabilitation and drug counseling programs at the jail, that Schneider had been a drug addict but sincerely wanted to overcome his habit and was capable of rehabilitation. Schneider’s first witness, Lou Detwiler, was a counselor with the Palmer Drug Abuse Program, a drug rehabilitation program similar to Alcoholics Anonymous. Detwiler described the Palmer program, for which he had worked six months, as the largest and most effective of its kind in Dallas. He testified that he had met with Schneider for an hour every week for two months and had concluded, after some initial doubts, that Schneider sincerely wanted to overcome his drug addiction and could be cured. Among other things, Detwiler testified, Schneider had been a “real positive influence” in Detwiler’s weekly class, had offered to help counsel young people against taking drugs, and wanted to keep working with Detwiler even after being sent to prison. On cross-examination, Detwiler admitted that he had based his opinion entirely on what Schneider had told him, that he had never conducted any psychological tests on Schneider or asked detailed questions about his background, and that he was not familiar with the details of Schneider’s pri- or criminal record. Detwiler also admitted that, although he was acquainted, from his work, with the concept of a “sociopath,” he could not offer a “clear definition” of the term. Schneider then called Andrew Tubbs, a 24-year-old employed by the Dallas County Education Rehabilitation Program to teach college-credit courses to inmates at the county jail. Tubbs, who had a B.S. degree in corrections, testified that one goal of the teaching program was to rehabilitate inmates by “preparing them to go back into society” and “sustain themselves.” Schneider, he said, had enrolled in several courses, was receiving A’s in all of them, and was active in class discussions. Tubbs testified that he believed Schneider was capable of rehabilitation and that previous attempts at reform had failed because Schneider’s drug counselor and parole officer had not devoted sufficient effort to helping him. On cross-examination, Tubbs also admitted that he had based his opinion entirely on what Schneider had told him and that he had learned of Schneider’s drug addiction only two and a half weeks earlier. In response to the State’s questioning, Tubbs described a sociopath generally as a person who was “manipulative,” lacking in “social conscience,” and “unable to adjust in our society today,” but he added that sociopaths could be reformed “if they’re willing to be helped.” Finally, Schneider called Wilma Mae Sumlin, a chaplain at the county jail hired through the Turnpike Church of Christ in Grand Prairie, Texas. Sumlin, an assistant pastor at the church, had served as a chaplain for two years, and also testified that she had “somewhat of a background” in rehabilitation counseling in Ohio. Sumlin testified she believed Schneider had undergone a sincere religious conversion and was not “trying to do this just to get out.” She said that other inmates had tried to “con” her and that Schneider’s attitude was different because, for example, he had offered to help other inmates with their problems. On cross-examination, Sumlin described her belief in Schneider’s sincerity as an “innate feeling” based on conversations and “a difference in his behavior” over several weeks, but she admitted that she knew nothing of Schneider’s background. Schneider also sought a postponement to call two other jail chaplains who were unavailable at the time, but the trial court refused this request, and Schneider rested. The State then called Dr. Grigson, over Schneider’s objection. Dr. Grigson testified that his practice was primarily in “criminal legal psychiatry,” evaluating whether defendants were, for example, competent, sane, or likely to make probation. In twelve years of private practice, Dr. Grigson estimated, he had examined almost 9,000 persons charged with felonies and several hundred charged with misdemeanors. Indeed, issues involving testimony by Dr. Grigson for the prosecution have come before us on several occasions. His qualifications include board certification, a status he testified was held by less than half of practicing psychiatrists; four and a half years of teaching medical school full-time; and consulting work with several hospitals and state and local health departments. Dr. Grigson described his examination of Schneider in some detail. It involved evaluation of five categories: Schneider’s general physical appearance and behavior; the manner in which he spoke; facial expressions reflecting his emotional state; his ability to express thoughts, including descriptions by Schneider of his background, medical history, and activity around the time of the alleged offense, as well as indications of any hallucinations or delusions; and his orientation as to time, place, and person. Based on this examination, especially his evaluation of Schneider’s expressions of emotion, Dr. Grigson testified that Schneider had a “sociopathic personality disorder” and had no conscience, that is, he experienced no feelings of guilt or remorse from criminal behavior. Dr. Grigson added that such persons “con, manipulate, use people. They’re only interested in their own self-pleasure, their own self-gratification.” He stated that “[t]he average person probably would not be able to identify these individuals other than by the fact that they repeatedly break the rules.” Because of Schneider’s inability to feel guilt, Dr. Grigson concluded, there was no prospect of rehabilitating him. Although some sociopaths could be reformed if treated at a very early age, the psychiatrist testified, “if you’re talking about Mr. Schneider, in this particular case there is no way that any change is going to take place.... I mean[] to state absolutely that there is no form of rehabilitation or any type of treatment that is in any way at all going to modify or change his prior behavior; it will go ahead and continue as it has in the past. That’s not a ‘may,’ it’s absolute.” Defense counsel’s cross-examination of Dr. Grigson was limited primarily to eliciting that the psychiatrist had occasionally erred in his past diagnoses. In his argument to the jury, Schneider’s counsel admitted that Dr. Grigson’s credentials were more impressive than those of Schneider’s witnesses. He added, however, that the rehabilitation counselors “have on a day-to-day basis dealt with this kind of man” and that “they were used to people being incarcerated coming up to them and trying to con them and playing the con game as Ms. Sumlin said, exactly as Dr. Grigson told you.” The prosecutor, in his closing statement, argued that Dr. Grigson was “the real expert” and “best [knew] what this individual is like inside,” and that Schneider had initiated contact with the social workers solely to obtain favorable testimony for his approaching trial. State law allowed a sentence of 15 to 99 years or life in prison on each count; the jury returned a sentence of 75 years on each. The sentences were imposed concurrently. After exhausting direct appeals and state habeas corpus proceedings, Schneider sought habeas corpus relief in federal court. He relied on Estelle v. Smith, in which the Supreme Court held that the Fifth and Sixth Amendments barred the prosecution from using the results of a court-ordered psychiatric examination against the defendant when the defendant neither requested the examination nor introduced psychiatric testimony. On referral from the district court, the U.S. magistrate recommended denying the petition. The magistrate observed that all of Schneider’s witnesses testified to his changed mental attitude and positive prospects for rehabilitation based on their personal observations of him, and he concluded that the State was entitled to rebut this evidence with testimony based on similar observations. The magistrate also rejected Schneider’s claim that his right to counsel had been violated, since Schneider and his attorney had notice of the psychiatric examination and Schneider had no right to have his attorney present during the examination. Finally, the magistrate found all of Schneider’s other claims for relief groundless. The district court adopted these findings and recommendations, but also found it significant that Schneider himself had requested the examination, whereas in Estelle v. Smith the trial court had ordered the examination on its own motion. The district court therefore rejected all of Schneider’s claims for relief. II. Schneider’s primary contention is that the State’s use of testimony based on the psychiatric examination violated his Fifth Amendment privilege against self- incrimination because he had not been informed before the examination that he had a right to remain silent and that any statement he made could be used against him at his trial. This contention requires us to determine which of two Supreme Court decisions governs this case. The first is Estelle v. Smith, in which the Court held that a capital defendant’s Fifth and Sixth Amendment rights were violated when the psychiatrist (the same Dr. Grigson) testified, based on a competency examination of the defendant ordered sua sponte by the trial court, that he believed the defendant was a severe sociopath whose condition could not be remedied by future treatment. Smith’s counsel had not requested the examination and was apparently unaware of its scope and, perhaps, even its existence; he had never put at issue Smith’s competency to stand trial or his sanity nor had he ever indicated that he might do so. The psychiatrist’s testimony was directly relevant to the issue of future dangerousness, a factor that the State was required, under Texas law, to prove beyond a reasonable doubt in order to impose the death penalty. The Court first noted that the privilege against self-incrimination applies to capital-sentencing hearings, and that it applied to the psychiatrist’s testimony because he had described Smith’s statements and had not merely reported his own observations of Smith’s behavior. It then held that a defendant “who neither initiates a psychiatric evaluation nor attempts to introduce any psychiatric evidence[ ] may not be compelled to respond to a psychiatrist if his statements can be used against him at a capital sentencing proceeding.” The State could not use Smith’s statements to the psychiatrist without having warned him of his right to remain silent and the possible use of his statements, as required by Miranda v. Arizona. The Court wrote narrowly in Smith, however, laying special emphasis on the fact that the defendant had neither requested the examination nor offered psy-cholgical evidence and therefore had no indication that the results of the examination would emerge as crucial evidence against him. The limits of Smith became clear last term in Buchanan v. Kentucky. In that case, the defendant, charged with murder, requested and underwent an examination to determine whether he should be hospitalized for psychiatric treatment. At his trial, he attempted to establish a defense of “extreme emotional disturbance,” relying on several reports from psychologists concerning his mental condition. In response, the State introduced the psychological report from the examination Buchanan had requested. The Supreme Court rejected Buchanan’s contention that the State’s use of the psychological evaluation violated his Fifth and Sixth Amendment rights. Noting that Smith had been based on the “distinct circumstances” involved there, the Court held that “if a defendant requests such an evaluation or presents psychological evidence, then, at the very least, the prosecution may rebut this presentation with evidence from the reports of the examination that the defendant requested.... The introduction of such a report for this limited rebuttal purpose does not constitute a Fifth Amendment violation.” The Court also expressed concern that the “entire defense strategy” had been to establish the defendant’s extreme mental disturbance, and that, because the defendant had not taken the stand and the psychologists whose reports the defense introduced were not available for cross-examination, the prosecution could not effectively respond to this defense without presenting other psychological evidence. III. The State first contends that the exclusionary rule of Estelle v. Smith is inapplicable to issues, such as enhancement factors in a non-capital sentencing proceeding, on which the state does not bear the burden of proof. We need not address this broad argument, however, for even if Smith applies to non-capital sentencing proceedings, this case is governed by Buchanan, not Smith. We have described the principle approved in Buchanan — a defendant who puts his mental state at issue with psychological evidence may not then use the Fifth Amendment to bar the state from rebutting in kind — as involving a “waiver” of Fifth Amendment rights, although the Supreme Court did not use that term in Buchanan and although at least one Justice has strongly criticized such a charac terization as “at best a fiction.” Whatever the label, the principle reflects the courts’ attempts to maintain a “fair state-individual balance,” a value underlying the Fifth Amendment privilege itself. It is unfair and improper to allow a defendant to introduce favorable psychological testimony and then prevent the prosecution from resorting to the most effective and in most instances the only means of rebuttal: other psychological testimony. The principle also rests on “the need to prevent fraudulent mental defenses.” In this case, Schneider clearly put his mental state at issue. The defense witnesses, however, were not psychiatrists or psychologists, but social workers and counselors, and Schneider argues that, accordingly, his interest in excluding the prosecution’s psychiatric testimony outweighs the State’s need to present it. He points out that in Buchanan the Supreme Court repeatedly referred to the defendant’s use of “psychological evidence,” and he argues that such evidence, “with its inherent credibility and scientific aura,” is a far cry from the opinion of a chaplain or recovering drug addict that Schneider was sincerely trying to pull his life back together. The fact that Schneider first raised the issue on which Dr. Grigson testified— Schneider’s sincerity and capacity for rehabilitation — is insufficient to overcome Schneider’s privilege. As the Supreme Court recognized in Ake v. Oklahoma, “Testimony emanating from the depth and scope of specialized knowledge is very impressive to a jury. The same testimony from another source can have less effect.” Moreover, “[ujnlike lay witnesses, who can merely describe symptoms they believe might be relevant to the defendant’s mental state, ... psychiatrists can identify the ‘elusive and often deceptive’ symptoms of insanity, ... and tell the jury why their observations are relevant.” If, for example, Schneider had called his family or friends to testify that he was a good fellow and could be reformed, he would not have opened the door to the use of the psychiatrist’s expert testimony against him. In general, the defendant must introduce mental-status evidence that may fairly be characterized as expert testimony before the prosecution may respond with the results of a psychiatric examination. Schneider’s witnesses, however, offered far more than simple lay or character testimony. Although they were not formally qualified as experts under Rule 702 of the Federal Rules of Evidence, their backgrounds comported with the spirit of that rule, which permits a witness to be qualified as an expert by “knowledge, skill, [or] experience” as well as “training [or] education.” Rule 702 “does not rank academic training over demonstrated practical experience.” While constitutional values may differ from those underlying evidentiary rules, the experience of Schneider’s witnesses rendered their testimony analogous to the expert psychological evidence that the defendant introduced in Buchanan. Schneider presented his witnesses as possessing experience that enhanced their credibility on the central issue at the sentencing phase — Schneider’s sincerity in wanting to reform. This issue was less technical than the questions of competency or sanity to which psychological evidence typically is directed, and Schneider’s counsel elicited the practical experience of each witness in dealing with drug addicts and jail inmates. In his summation, Schneider’s attorney argued to the jury that the counselors “have on a day-to-day basis dealt with this kind of man,” and that they “were used to people being incarcerated coming up to them and playing the con game.... They were used to that and yet they say Michael Schneider is different.” Schneider’s witnesses also evinced familiarity with the technical term “sociopath,” later employed by Dr. Grigson, and one of them, Tubbs, offered the opinion that some sociopaths could be rehabilitated. In addition, in this case, as in Buchanan, the State’s only effective means of countering Schneider’s defense was independent psychological testimony. As in Buchanan, the defendant did not take the stand. Schneider’s witnesses, unlike the psychologists whose reports were presented in Buchanan, were available for cross-examination; the value of such cross-examination, however, is limited. As then-Judge Scalia said in United States v. Byers, cross-examination might effectively counter expert psychological testimony only if psychiatry were as exact a science as physics, so that, assuming the defense psychiatrist precisely described the data (consisting of his interview with the defendant), the error of his analysis could be demonstrated. It is, however, far from that. Ordinarily the only effective rebuttal of psychiatric opinion testimony is contradictory opinion testimony. The rehabilitation counselors’ experienced judgments concerning Schneider’s sincerity were similarly difficult to attack on cross-examination, for rehabilitation of offenders is likewise an inexact science. Schneider suggests other means with which the State might have countered his evidence. These, however, would likewise be available to rebut a defense psychiatrist’s testimony, and therefore, Buchanan disposes of any claim that the prosecution must content itself with these alternatives. Finally, Schneider requested the competency examination. Before Buchanan, we held that this fact “[did] not obviate the necessity for giving the Miranda warnings” when the examination extended beyond the subject of competency. The Court in Buchanan, however, regarded such a request as militating against the defendant’s assertion of the privilege, for it stated that “if a defendant requests such an evaluation or presents psychiatric evidence, then, at the very least, the prosecution may rebut this presentation with evidence from the reports of the examination that the defendant requested.” Although the Court’s use of the disjunctive might even suggest that the defendant’s request is sufficient by itself to constitute forfeiture of the privilege, the rest of the sentence and the opinion as a whole strongly imply that the defendant must have gone further and actually introduced psychological evidence. Schneider’s request is relevant, in any case. Taking into account the request and the other factors, we reject his Fifth Amendment claim. IV. Schneider argues that the psychiatric examination violated his Sixth Amendment right to the assistance of counsel. The Supreme Court, however, rejected the same argument in Buchanan. The Sixth Amendment guarantees consultation with counsel, which Schneider undoubtedly had, since he requested the examination through counsel. Schneider also received advance notice of who would conduct the examination, and he received the results before trial. Schneider contends that, although he agreed to the examination, he had no idea it would be used for more than the limited purpose of determining competency. Given our rejection of Schneider’s Fifth Amendment claim, however, his Sixth Amendment objection may not succeed either. In Williams v. Lynaugh, we treated both Fifth and Sixth Amendment objections as waived when the prosecution’s psychiatric evidence was properly limited to rebuttal of the defendant’s mental-status evidence. Nothing in Buchanan undercuts this treatment. Schneider cannot complain of the mere fact that the examination extended beyond the subject of competency. He can only object to the use of that broadened examination against him; and he is held, as a matter of policy if not of “knowing and intelligent” waiver, to have invited that use by introducing mental-status testimony of his own. If maintenance of a “fair state-individual balance” requires this conclusion under the Fifth Amendment, Schneider may not circumvent this policy through the Sixth Amendment. V. Schneider contends that his prior conviction for marijuana possession, which was used to enhance his punishment for aggravated robbery, was void because the indictment for possession was defective and he was sentenced for a different offense than the one to which he had pled guilty. These contentions are interrelated. Because of a change in the Texas possession statutes that occurred after Schneider committed the offense, it appears, the judgment against him specified that he was guilty of possessing more than four ounces of marijuana; the indictment, however, had not recited the quantity, because it was not necessary to do so under the old code. The magistrate and the district court correctly found that this was an error “of form rather than substance.” The judgment in the possession case unequivocally reflects that Schneider pled guilty to possession of marijuana as alleged in the indictment. Finally, Schneider contends that he was denied effective assistance of counsel at his state trial, alleging that counsel failed to raise various claims. To succeed on this ground for relief, however, Schneider must show that his counsel’s failures prejudiced his case. Schneider raises his counsel's failure to challenge the date of a previous conviction for robbery; the State, however, abandoned reliance on that conviction as a basis for enhancement of sentence. Schneider also claims his counsel was ineffective for failing to raise a constitutional objection to the use of psychiatric testimony and for failing to challenge or investigate the validity of the prior indictment. Schneider has suffered no prejudice, however, since his contentions on these issues do not justify relief in any event and he has received full consideration of his arguments. For these reasons, the judgment of the district court is AFFIRMED. . — U.S.-, 107 S.Ct. 2906, 97 L.Ed.2d 336 (1987). . See Tex.Code Crim.Proc.Ann. art. 46.02, § 3(a) (Vernon’s 1979). . Tex.Penal Code § 12.42(c) (Vernon’s 1974 & Supp.1987).

7856487-8632

MEMORANDUM AND ORDER WEINSTEIN, Chief Judge: In this action on a surety contract, plaintiff Itri Brick and Concrete Corp. moves to strike the affirmative defense that the summons and complaint were improperly served. The motion is granted. Service was properly made. FACTS Itri is a New York supplier and installer of building materials. Defendant Indemnity Insurance Company of North America (IINA) is incorporated in New York and licensed by the New York State Insurance Department. It maintains what is apparently its main office in Livingston, New Jersey. Together with three other insurance companies, the defendant as a co-surety executed a payment bond for an Army Corps of Engineers construction project in Amity-ville, New York. Itri claims that it provided labor and materials to the project and that it was never paid. Availing itself of rights under the Miller Act, it sues on the surety contract. 40 U.S.C. § 270b (1982). On July 23, 1985, Itri mailed a copy of the summons and complaint, together with two copies of a notice of acknowledgement conforming to the federal pattern, to the IINA office in New Jersey. See Form 18-A, Fed.R.Civ.P., App. To date defendant has not formally acknowledged receipt of this mailing. Based upon the oral argument and the record the court finds that the mailing was received by defendant. After twenty days had elapsed without answer from defendant, plaintiff employed a process server to deliver the summons and complaint to an individual at the New Jersey office. The process server’s affidavit that he served one Rudy Whipplehauser, a “managing agent authorized to accept service,” on August 21, 1985 is not contested; the court finds that delivery was made as claimed. Defendant nevertheless argues that even if plaintiff properly mailed the first copy of the summons and complaint and delivered a copy to a responsible managing agent at defendant’s principal place of business, service was insufficient to give this court personal jurisdiction over IINA. LAW Rule 4 of the Federal Rules of Civil Procedure, as substantially amended in 1983, is the key instruction on the commencement of a federal action. To begin a law suit, a plaintiff chooses one of two categories of service significant for our purposes. The plaintiff may serve the summons and complaint pursuant to the law of the state in which the district court is located. Fed.R.Civ.P. 4(c)(2)(C)(i). In the alternative, plaintiff may follow the method prescribed in Rule 4(c)(2)(C)(ii), the mailing provision, which reads in part: A summons and complaint may be served upon a defendant ... by mailing a copy ... to the person to be served, together with two copies of a notice and acknowledgement conforming substantially to form 18-A and a return envelope, postage prepaid, addressed to the sender. When there is no acknowledgement of receipt service may be completed in the manner prescribed in subdivision (d): If no acknowledgement of service under this subdivision of this rule is received by the sender within 20 days after the date of mailing, service of such summons and complaint shall be made under subparagraph (A) or (B) of this paragraph in the manner prescribed by subdivision (d)(1) or (d)(3). Fed.R.Civ.P. 4(c)(2)(C)(ii) (emphasis added). The plaintiff who mails a summons and complaint with the Form 18-A acknowledgement, then awaits the defendant’s response. Subdivisions (d)(1) and (d)(3) provide guidance for the plaintiff who receives no acknowledgement. Subdivision (d)(1) applies to service on individuals; (d)(3) details the manner of service on a corporation: [Service may be made upon] a domestic or foreign corporation ... by delivering a copy of the summons and of the complaint to an officer [or] a managing or general agent____ Fed.R.Civ.P. 4(d)(3) (emphasis added). Subdivision (d)(3) describes only the manner of service. There is no reference to the place of service, and no separate longarm provision. Service on a party not within the state is governed by Rule 4(e), which instructs that the law of extraterritorial service of the state in which the district court is located may be used. New York law provides for extraterritorial service of domiciliaries by physical delivery to defendant outside the state. C.P.L.R. 313. In addition, New York allows a plaintiff to serve a domestic corporation or a foreign corporation licensed to do business in New York by delivery to the Secretary of State. N.Y. Bus.Corp.L. § 306(b). Insurance companies may also be sued through delivery to the Superintendent of Insurance. N.Y. Ins.Law § 1212(b). APPLICATION OF LAW TO FACTS Plaintiff’s method of service tracked the provisions of Rule 4(c)(2)(C)(ii). It complied with the requirement of mailing the summons and complaint with a Form 18-A acknowledgement. When defendant failed to acknowledge receipt, plaintiff followed the Rule 4(c)(2)(C)(ii) road map to Rule 4(d)(3) and delivered the summons and complaint to a managing agent in New Jersey. Defendant objects to delivery to its managing agent in New Jersey, citing case law holding that when a mailing according to Rule 4(c)(2)(C)(ii) is not acknowledged plaintiff cannot elect state service under Rule 4(c)(2)(C)(i). It may be assumed for the purpose of this memorandum — without conceding the accuracy of the proposition— that an election of federal service by mail precludes a switch to state service in mid-course. See, e.g., Armco, Inc. v. Penrod-Stauffer Building Systems, Inc., 733 F.2d 1087, 1089 (4th Cir.1984); Billy v. Ashland Oil, Inc., 102 F.R.D. 230, 233 (W.D.Pa.1984); Federal Deposit Insurance Corp. v. Sims, 100 F.R.D. 792 (N.D.Ala.1984); see also Siegel, Practice Commentary on Amendment of Federal Rule 4, reprinted in 28 U.S.C.A. (West Supp.1985) at 64-65. No such switch took place here. Plaintiff remained within the confines of Rule 4(c)(2)(C)(ii) throughout. Defendant would hold plaintiff to an absurd statutory construction. It argues that plaintiff’s service was “contrary to the statute” because the service was extraterritorial, even though that statute speaks only to the method and not the place of service. There is no justification for reading (d)(1) and (d)(3) as the sole instructions on service under the federal rules. The Federal Rules of Civil Procedure operate as a unified apparatus in the context of a complex milieu of the constitutional and statutory state and federal jurisdictional law. No subdivision or subparagraph of the rules alone describes all the options and requirements of acquiring jurisdiction. Rule 4 does not control the question of basis of jurisdiction. It merely sets out the mechanical methods of acquiring that jurisdiction by notifying defendant of the suit. The rules on service must be liberally construed in accordance with Rule 1 of the Federal Rules of Civil Procedure “to secure the just, speedy, and inexpensive determination of every action.” See Elmer v. Trans Mediterranean Airways, 107 F.R.D. 55, 59 (E.D.N.Y.1985). Plaintiffs method of service accorded with subdivision (d)(3). It is uncontested that defendant’s employee, Rudy Whipplehauser, was a managing agent. That Mr. Whipplehauser was located in New Jersey is of no moment under (d)(3). The question of place of service is governed by general principles of jurisdiction imported by implication into Rules 4(e) and 4(f). Rule 4(e) incorporates the extraterritorial service provisions of the state in which the district court is held. Service outside the state can “be made under the circumstances and in the manner prescribed in the [state] statute or rule.” Fed.R.Civ.P. 4(e). Since Rule 4(e) explicitly allows service outside the state on a party not an inhabitant or found within the state, a fortiori it authorizes service on a person already inside the state over whom longarm jurisdiction is not required. The Federal Rules express no preference for in-state service when a plaintiff appears to have a choice between places to serve in two states. Here plaintiff searched for a New York address and found only the Livingston, New Jersey headquarters. It was then appropriate to serve in New Jersey at defendant’s headquarters since this was a method highly likely to notify defendant of the suit’s pendency. Defendant correctly states that a domestic or foreign insurance company doing business in New York may be sued by serving the Superintendent of Insurance, or the Secretary of State. N.Y.Ins.Law § 1212; N.Y.Bus.Corp.Law § 306(b). These are options, not limitations. CONCLUSION Plaintiff’s motion to dismiss defendant’s second affirmative defense of lack of personal jurisdiction is granted.

6442232-10194

MEMORANDUM OPINION MICHAEL, District Judge. This matter comes before the court upon an appeal of an Order of the United States Bankruptcy Court for the Western District of Virginia, Lynchburg Division, Judge William E. Anderson, granting the United States Trustee’s motion to convert the appellant’s Chapter 11 petition into a Chapter 7 petition, pursuant to 11 U.S.C. § 1112, where the appellant had failed to comply with several orders of the bankruptcy court that the appellant effectuate a plan of reorganization. The question before this court is whether the bankruptcy court abused its discretion in so ordering. I. On October 6, 1994, the appellant and debtor, Frederick H. Quarles, filed his petition in bankruptcy, pursuant to Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 1101, et seq. On March 2, 1995, the appellant filed a Motion to Extend the time for filing his Disclosure Statement until April 5, 1995. The Trustee did not object, and the bankruptcy court granted the motion. On April 5, 1995, the appellant filed another Motion to Extend such time until April 25, 1995, and, again, the Trustee did not object, and the bankruptcy court granted the motion. The appellant failed to file his Disclosure Statement by April 25, 1995. On May 11, 1995, the Trustee filed a “Motion for a Show Cause Order” requiring the appellant to show cause why his case should not be converted into a case pursuant to Chapter 7 of the Bankruptcy Code. The Trustee claimed as grounds the appellant’s failure to file his Disclosure Statement and a Plan of Reorganization. A hearing on the motion was held on May 22, 1995, and then continued until June 19,1995. At the June 19,1995 hearing, the appellant advised the bankruptcy court that he had failed to file a Plan of Reorganization because of litigation pending both in federal court and in South Carolina state courts. Nonetheless, the bankruptcy court ordered the appellant to file a Plan of Reorganization by July 17, 1995. On June 20, 1995, the bankruptcy court entered an Order compelling the appellant to Show Cause on July 17, 1995, why the case should not be converted to a petition pursuant to Chapter 7 for the appellant’s failure to file a Plan and a Disclosure Statement. The bankruptcy court subsequently continued the Show Cause hearing to August 21, 1995, and then again to September 13, 1995. On September 18, 1995, the bankruptcy court ruled that unless the appellant voluntarily dismissed the case within ten days, the bankruptcy court would convert the case to a Chapter 7 case. On September 28, 1995, the appellant moved the bankruptcy court to reconsider the September 18, 1995 Order requiring the appellant to elect either dismissal or conversion. The Trustee objected to the motion for reconsideration. On October 28, 1995, a hearing was held on the appellant’s motion and the Trustee’s motion to convert. On October 26, 1995, the bankruptcy court entered its Order converting the case to one pursuant to Chapter 7. The appellant appeals the October 26,1995 Order. II. The district court reviews findings of fact by the bankruptcy court pursuant to a clearly erroneous standard and reviews the conclusions of law de novo, In re Tudor Assocs., Inc. II, 20 F.3d 115, 119 (4th Cir. 1994); In re Morris Communications NC, Inc., 914 F.2d 458, 467 (4th Cir.1990); Lowe’s of Virginia, Inc. v. Thomas, 60 B.R. 418, 419 (W.D.Va.1986). A bankruptcy court’s decision to convert or to dismiss a Chapter 11 bankruptcy case is reviewed only for abuse of discretion. In re Abijoe Realty Corp., 943 F.2d 121, 128 (1st Cir.1991); Humble Place Joint Venture v. Fory, 936 F.2d 814, 816 (5th Cir.1991); Hall v. Vance, 887 F.2d 1041, 1044 (10th Cir.1989). Title 11, United States Code, Section 1112(b) provides the rules and procedure governing the dismissal and conversion of Chapter 11 cases: (b) Except as provided in subsection (c) of this section[ ] on request of a party in interest or the United States trustee or bankruptcy administrator, and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 7 of this title or may dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, for cause, including— (1) continuing loss to or diminution of the estate and absence of a reasonable likelihood or rehabilitation; (2) inability to effectuate a plan; (3) unreasonable delay by the debtor that is prejudicial to creditors; (4) failure to propose a plan under section 1121 of this title within any time fixed by the court.... 11 U.S.C. § 1112(b) (1996) (emphasis added). The factors in § 1112(b) are non-exclusive, and a bankruptcy court may consider additional grounds in determining “cause.” See, e.g., First Jersey Nat’l Bank v. Brown, 951 F.2d 564, 572 (3rd Cir.1991); In re Great American Pyramid Joint Venture, 144 B.R. 780, 790 (Bankr.W.D.Tenn.1992); In re Berryhill, 127 B.R. 427, 430 (Bankr.N.D.Ind.1991). Whether “cause” exists “for a conversion or dismissal of a chapter 11 case under section 1112(b) is subject to judicial discretion under the particular circumstances of each case.” In re Great American Pyramid Joint Venture, 144 B.R. at 790; In re Berryhill, 127 B.R. at 430. Upon a determination of “cause,” the bankruptcy court “is statutorily authorized to convert a chapter 11 case to a chapter 7 liquidation case or to dismiss the case, whichever is in the best interest of creditors and the estate.” Id. The appellant urges this court to conclude that the bankruptcy court erred in converting the case to a Chapter 7 ease because the bankruptcy court failed to consider the detrimental effect of liquidation upon the claims of unsecured creditors. The appellant claims also that outcome of pending litigation favorable to him could likely provide assets which would more than satisfy all creditors, secured and unsecured. The Trustee rejoins that the bankruptcy court did not clearly abuse its discretion in ordering conversion because the appellant had repeatedly failed to comply with the bankruptcy court’s orders to file a Disclosure Statement and a Plan of Reorganization. Additionally, the Trustee argues that the bankruptcy court was justified in concluding that the appellant did not have a likelihood of success in pending litigation. To be sure, the appellant has received an unfavorable ruling from this court on a related matter which is pending before the United States Court of Appeals for the Fourth Circuit. This court agrees with the Trustee and, accordingly, will affirm the decision of the bankruptcy court. The court cannot conclude that the bankruptcy judge committed clear error in converting the appellant’s Chapter 11 case into a Chapter 7 case. First, the appellant repeatedly failed to file a Plan of Reorganization, which failure, standing alone, could justify a finding of “cause.” In In re Funk, 146 B.R. 118, 124 (D.N.J. 1992), the court held that “[d]ebtor’s have failed to demonstrate, even at the minimal level of making a prima facie case, that ‘they have the ability to propose a plan within a reasonable period of time’ or that there is ‘some reasonable prospect of reorganization in Chapter 11.’ ” See also In re Great American Pyramid Joint Venture, 144 B.R. at 791 (explaining that “[t]he ‘unreasonable delay1 standard in section 1112(b)(3) must be read in conjunction with section 1112(b)(2) which merits dismissal or conversion based upon inability to effectuate a plan and section 1112(b)(4) which permits conversion or dismissal based upon the failure to propose a plan.”). Whether the period during which a debtor fails to file constitutes a “reasonable period of time” will depend upon the unique circumstances of each case. In In re Rentclub, Inc., 141 B.R. 235 (Bankr.M.D.Fla.1992), the court held that a dismissal for the debtor’s inability to effectuate a plan was not justified in a Chapter 11 cases which was in its “embryonic” stage. However, in In re Rentclub, unlike the instant case, the debtor corporation had experienced positive monthly cash flow during several of the months while in bankruptcy, and the court concluded that the debtor should be given a reasonable chance to reorganize pursuant to Chapter 11. In the instant case, the appellant has not demonstrated a likelihood of reorganization. The evidence suggests that the appellant has continued to experience negative monthly cash flow, and the appellant’s premise that outcomes in pending litigation favorable to him will cure his financial ills is pure speculation. Therefore, under the unique circumstances of this case, the court cannot conclude that the bankruptcy court erred in finding that the appellant was likely unable to effectuate a viable plan of reorganization within a reasonable period of time, given the appellant’s complete failure to propose such a plan despite repeated requests by and orders of the bankruptcy court that he do so. Secondly, the appellant has repeatedly failed to file a Disclosure Statement. In In re Roma Group, Inc., 165 B.R. 779, 780 (S.D.N.Y.1994), the court held that the debt- or’s “failure to file monthly operating statements as required by the Local Rules of the Bankruptcy Court and the United States Trustee’s Operating Guidelines, whether based on inability to do so or otherwise, undermines the Chapter 11 process and constitutes cause for dismissal or conversion of Chapter 11 proceedings.” See also In re Berryhill, 127 B.R. at 433; In re Cohoes Indus. Terminal Inc., 65 B.R. 918, 921-22 (Bankr.S.D.N.Y.1986); In re NuGelt, Inc., 142 B.R. 661, 666-67 (D.Del.1992); In re Cloisters of Brevard, Inc., 117 B.R. 722, 723 (Bankr.M.D.Fla.1990). The Disclosure Statement is an integral component to any petition for the protections afforded pursuant to the Bankruptcy Code. See In re Berryhill, 127 B.R. at 433 (“Timely and accurate financial disclosure is the life blood of the Chapter 11 process.”). The appellant’s failure to file a Disclosure Statement as requested by the bankruptcy court clearly undermines the Chapter 11 process, and this court cannot say that the bankruptcy court erred in citing such failure as a ground for finding “cause” pursuant to § 1112(b).

9052285-15274

LUCERO, Circuit Judge. Plaintiff Inger Winsor appeals the district court’s judgment on her sexual harassment claim, brought pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e through 2000e-17. Although we conclude that plaintiff was subjected to sexual harassment which created a hostile work environment, we affirm the judgment because the district court did not clearly err in finding that plaintiff was not constructively discharged. I. The uncontradicted evidence shows that plaintiff began working for Hinckley Dodge as a salesperson in March 1988. At that time, she was the only woman in the sales force. Plaintiff was successful in her position, and soon became one of the top salespersons. From the beginning of her employment, plaintiff experienced difficulties with her coworkers. During the first week, a dispute arose about apportionment of a sales commission between plaintiff and a fellow salesman. As a result, the salesman pushed plaintiff against a wall, placed his knee between her legs, and stated “if you ever, you fing bitch, talk to my clients again I’ll fix you.” Although plaintiff reported this incident to the sales manager, the salesman was . not disciplined. Plaintiff testified that throughout 1988, she was called various names including “floor whore” and “curb whore” by her eoworkers. Although the manager told several salesmen that such language was inappropriate, they treated it as a laughing matter, and the name-calling continued throughout plaintiff’s employment at the dealership. Another employee testified that the salesmen would regularly call plaintiff a “curb side cunt” and “floor whore” behind her back, and would state that “its not who you know but who you blow” in reference to plaintiff. A third employee testified that the other salespeople commonly called plaintiff a “bitch.” There was also evidence that, in the early months, the other men made comments to plaintiff that a woman had no place in a car dealership, and that at a sales meeting, the president of the dealership asked the salesmen “you’re not going to let a woman beat you in sales, are you?” Beginning at the end of 1988, plaintiff’s desk was invaded frequently, its contents dumped on the floor, and her awards thrown in the trash. In 1989, plaintiff began receiving notes and pictures, including pictures of gorillas and pigs with the words “bitch,” “whore,” and “floor whore,” written on them, and a cartoon of a woman pulling up her skirt and spreading her legs. Plaintiff testified that she received more than a dozen pictures or notes in 1989 and 1990. Plaintiff was also subjected to physical mistreatment by her coworkers. In mid-1988, she and a salesman had a dispute in front of a customer in which the salesman pushed her and yelled profanities. The salesman was fired for this behavior. Also in 1988, the salesmen blocked the doors on several occasions, preventing plaintiffs access to customers. In 1989, plaintiffs arms were slammed repeatedly in a door by a salesman, and later that year, her soft drink was spiked with Everclear, resulting in a hospital visit. In early 1990, an automobile hood was slammed on plaintiffs fingers. Finally, beginning in 1990, there were consistent rumors that plaintiff was having an affair with the sales manager, that the only way she could sell cars was by sleeping with the management, and that plaintiff sold cars by pulling up her skirt. The rumors circulated throughout the dealership, and were reported to customers as well. In November 1990, the sales manager was terminated for theft. Although plaintiff applied for the job, a former saleman was hired to fill the position. Plaintiff testified that when the new manager took over, he referred to her as “honey” and “baby” in a denigrating manner, and that this became constant after plaintiff asked him to stop. At the end of November 1990, plaintiff and her former sales manager were caught in a sexual relationship by his wife. This information soon became public knowledge at the dealership. After a dispute with the new manager about her hours, and a dispute about her commission on a fleet of vehicles, plaintiff resigned on January 3,1991. Plaintiff brought this action against Hinck-ley Dodge and several of its employees in the United States District Court for the District of Utah. Eventually, the claims against the individual employees were dismissed, and the remaining claim against Hinckley Dodge was tried to the court. At trial, the dealership presented evidence that plaintiff was mistreated for reasons other than her gender. Witnesses testified that- plaintiff was very aggressive, that she took more than her share of customers and became involved in other people’s sales, and that she had a special relationship with the sales manager which resulted in preferential treatment and unearned .commissions at the expense of others. The district court found that the incidents described above occurred, but concluded that they were not sexual harassment because the mistreatment occurred for reasons unrelated to gender. Specifically, the court found that the mistreatment was motivated by jealousy, dislike of plaintiff, and anger at the perceived preferential treatment plaintiff received based on her special relationship with the sales manager. Because the motivation behind the mistreatment of plaintiff was gender neutral, the court found that plaintiff had not been sexually harassed. The court also found that the dealership took adequate remedial action, that plaintiff was not constructively discharged, and that she failed to mitigate her damages. II. We review the district court’s findings of no sexual harassment, adequate remedial measures, and no constructive discharge, under a clearly erroneous standard. Hicks v. Gates Rubber Co., 928 F.2d 966, 971 (10th Cir.1991)(“District court fact findings in a ... sexual harassment ease are examined for clear error.”); Hirschfeld v. New Mexico Corrections Dep’t, 916 F.2d 572, 578 (10th Cir.1990)(reviewing findings of adequate remedial action and no constructive discharge for clear error). “[A] finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985)(quotations omitted). “Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous.” Id. at 574, 105 S.Ct. at 1511. Sexual harassment under Title VII can be shown under one of two principal theories: quid pro quo discrimination or hostile work environment. Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 65-66, 106 S.Ct. 2399, 2404-05, 91 L.Ed.2d 49 (1986). This case involves the second theory. A hostile work environment exists when a plaintiff is subjected to sexual harassment “sufficiently severe or pervasive ‘to alter the conditions of the victim’s employment and create an abusive working environment.’ ” Id. at 67, 106 S.Ct. at 2405 (citation omitted). Sexual harassment is behavior “ ‘that would not occur but for the sex of the employee’.... ‘If the nature of an employee’s environment, however unpleasant, is not due to her gender, she has not been the victim of sex discrimination.’ ” Gross v. Burggraf Constr. Co., 53 F.3d 1531, 1537 (10th Cir.1995) (citations omitted). Plaintiff argues that many of the incidents described above were inherently sexual in nature, and that, therefore, the district court erred in finding no sexual harassment. We agree. Although some of the incidents were gender neutral, i.e., the invasion of plaintiffs desk, the blocking of the doors, the door slamming, the hood slamming, and the spiked drink, the other incidents occurred only because plaintiff was a woman. That is, even if the motivation behind plaintiffs mistreatment was gender neutral, as found by the district court, the manner in which her coworkers expressed their anger and jealousy was not. Rather, plaintiffs coworkers often chose sexually harassing behavior to express their dislike of plaintiff, conduct which would not have occurred if she were not a woman. It is beyond dispute that the incident with the salesman during plaintiffs first week was overtly sexual. A man’s act of pushing a woman against a wall, placing his knee between her legs, and calling her a “fing bitch,” can be nothing other than sexual harassment. So too, the cartoon directed at plaintiff, depicting a woman pulling up her skirt and spreading her legs, was overtly sexual and harassing. The names plaintiff was called, both verbally and in the form of notes, were also sexual in nature. “It is beyond dispute that evidence that a woman was subjected to a steady stream of vulgar and offensive epithets because of her gender would be sufficient to establish a claim under Title VII....” Gross, 53 F.3d at 1539; see also Katz v. Dole, 709 F.2d 251, 254 (4th Cir.1983)(holding that sexual harassment includes the use of “extremely vulgar and offensive sexually related epithets addressed to and employed about [plaintiff]”). Such words are recognized as “intensely degrading, deriving their power to wound not only from their meaning but also from ‘the disgust and violence they express phonetically.’ ” Id. (citation omitted). Over the course of her employment, plaintiff was called a “whore,” “floor whore,” “curb whore,” “curb side cunt,” and “bitch,” on a consistent basis. These sexual epithets have been identified as “‘intensely degrading’ to women.” Jenson v. Eveleth Taconite Co., 824 F.Supp. 847, 883 (D.Minn.1993)(quoting Katz, 709 F.2d at 254); see Burns v. McGregor Electronic Indus., Inc., 989 F.2d 959, 964 (8th Cir.1993)(noting that use of “bitch,” “slut,” and “cunt,” to woman was harassment based on her sex); Huddleston v. Roger Dean Chevrolet, Inc., 845 F.2d 900, 902 (11th Cir.1988)(detailing incidents of sexual harassment, including comments by other salesmen calling plaintiff a “bitch” and a “whore”); EEOC v. A Sam & Sons Produce Co., 872 F.Supp. 29, 35-36 (W.D.N.Y.1994)(holding that “the term ‘whore’ is usually gender-specific and is certainly more offensive when directed at a woman,” and noting that “a man calling a woman a “whore’ — thereby reducing her to an illicit sexual being — is a direct affront to her self-respect rather than a simple vulgarity that might offend her sensibilities”)(footnote omitted). The words “honey” and “baby,” although not overtly sexual, may be sexual in nature if their use occurs based only on the recipient’s gender. See Hicks, 928 F.2d at 971; Jenson, 824 F.Supp. at 880 (holding that “pet names” and terms that persons in romantic relationships might use such as “honey” and “babe” are sexual in nature). We express no opinion whether the use of such terms, in and of themselves, could create a hostile work environment. In this case, however, we are constrained to view the new manager’s use of “honey” and “baby” as part of the pattern of sexually derogatory names directed at plaintiff. The fact that plaintiffs abuse was motivated by gender neutral reasons is irrelevant. The Ninth Circuit faced a similar situation in Steiner v. Showboat Operating Co., 25 F.3d 1459 (9th Cir.1994), cert. denied, - U.S. -, 115 S.Ct. 733, 130 L.Ed.2d 636 (1995), where plaintiffs supervisor called her sexually explicit names and publicly suggested that she perform a sexual act with customers. Id. at 1461. The district court held that the supervisor’s conduct was not sexual harassment because he was consistently abusive to both men and women, and therefore the behavior was not based on plaintiffs gender. The appellate court reversed, holding that although the supervisor abused both men and women, the abuse of women was different because it “relied on sexual epithets, offensive, explicit references to women’s bodies and sexual conduct.” Id. at 1463. Noting that “[i]t is one thing to call a woman “worthless,’ and another to call her a ‘worthless broad,’ ” the court held that the supervisor’s abuse of plaintiff centered on the fact that she was female. Id. at 1464; see also Burns, 989 F.2d at 965 (rejecting claim that verbal abuse was gender neutral because it was motivated by dislike of plaintiff, noting that dislike of plaintiff did not excuse subjecting her to a “steady stream of sexual harassment”). Testimony by defendant’s former manager that “floor whore” is an industry term does not negate its sexually derogatory character. Just as we would not sanction an industry term that is facially derogatory to a particular racial or ethnic group, we cannot accept the argument that industry use of an inherently sex-related term neutralizes its detrimental effect on women. Moreover, there is no evidence that the term was directed at any other salesperson during plaintiffs employment. Defendant and the trial court appear to believe that plaintiffs involvement with the sales manager somehow “invited” the other salesmen’s conduct. However, “[a] person’s private and consensual sexual activities do not constitute a waiver of his or her legal protections against unwelcome and unsolicited sexual harassment.” Katz, 709 F.2d at 254 n. 3. While plaintiffs coworkers may have been angry at the perceived special treatment she received as a result of her relationship, this did not give them license to sexually harass her. We conclude that the district court clearly erred in finding no sexual harassment, in light of the sexually explicit statements, pictures, and notes directed at plaintiff, and the sexually offensive physical contact to which plaintiff was subjected by one of her coworkers. We also. conclude that the incidents were sufficiently pervasive as to create a hostile work environment. See Harris v. Forklift Sys., Inc., - U.S. -, -, 114 S.Ct. 367, 371, 126 L.Ed.2d 295 (1993)(identifying factors to be considered in determining whether environment is hostile). The uncontradicted evidence demonstrates “an environment that a reasonable person would find hostile or abusive.” Id. at -, 114 S.Ct. at 370. Finally, we conclude that the district court clearly erred in finding that the dealership took adequate remedial action. The record is clear that despite plaintiffs numerous complaints, the management of Hinckley Dodge took no action to remedy the situation with the sole exception of terminating a salesman who abused plaintiff in front of customers. When plaintiff complained to her manager, he told her that it was a tough business, that she was working with a lot of men who were unhappy with her success, and that she should simply “grit her teeth and hang in there.” None of the salesmen who sexually harassed plaintiff were reprimanded or disciplined in any way. Compare Hirschfeld, 916 F.2d at 578 & n. 6 (noting that remedial steps may include reprimand, brief suspension, demotion, or discharge, and holding department’s placement of offender on administrative leave and subsequent demotion were “expeditious and effective”). Further, as it is undisputed that the name-calling, pictures, and notes continued throughout plaintiffs employment, the dealership’s actions were plainly ineffective. III.

6465711-8115

LUCERO, Circuit Judge. We review this case to determine whether the doctrine of “unique circumstances” saves Home & Family, Inc. (HFI) from the district court’s dismissal of its bankruptcy appeal. The doctrine permits an untimely appeal to go forward “where a party has performed an act which, if properly done, would postpone the deadline for filing an appeal and has received specific assurance by a judicial officer that this act has been properly done.” Osterneck v. Ernst & Whinney, 489 U.S. 169, 179, 109 S.Ct. 987, 993, 103 L.Ed.2d 146 (1989). -We agree with the district court that the doctrine does not apply here and affirm. I HFI sought a declaration from the bankruptcy court that it held rights in intellectual property claimed by appellees. On November 2, 1994 the bankruptcy court entered an order granting summary judgment against HFI. On November 14, HFI filed a “Motion for Additional Time to Reconsider Court’s Order of November 2,1994.” HFI asked the bankruptcy court to extend the time to file a motion to reconsider or a notice of appeal through December 1. A clerk’s minute order was entered on November 16 granting the motion. On that same day, the United States Trustee (not a party to this appeal) filed an objection to HFI’s motion. The Trustee argued that motions to reconsider are properly characterized as motions to amend or alter judgment under Fed. R.Bankr.P. 9023, and that extensions of time to file such motions are prohibited by Fed. R.Bankr.P. 9006(b)(2). In support of these contentions, the Trustee cited In re Antell, 155 B.R. 921 (Bankr.E.D.Pa.1992). On December 1, 1994 HFI filed a “Motion to Reconsider and Amend Order Granting Defendants’ Motion for Summary Judgment.” HFI does not dispute the characterization of this motion as one filed under Fed.R.Bankr.P. 9023. On December 6, the bankruptcy court vacated its order granting HFI additional time to file that motion, concluding that it had no authority to grant that extension in the first instance. Eight days later, HFI filed a Motion to Amend asking the bankruptcy court to grant it an additional ten days to file an appeal, on the basis of the doctrine of unique circumstances. On that same day, HFI filed a Notice of Appeal with the district court. The bankruptcy court denied the Motion to Amend. Although HFI’s appeal was untimely, the district court noted that the “unique circumstances” exception might permit it to be heard. See Senjuro v. Murray, 943 F.2d 36, 37 (10th Cir.1991) (per curiam). The court surveyed the case law, and concluded that this Circuit has applied the doctrine “somewhat inconsistently.” Thus, the court turned for guidance to Pinion v. Dow Chemical, U.S.A, 928 F.2d 1522 (11th Cir.), cert. denied, 502 U.S. 968, 112 S.Ct. 438, 116 L.Ed.2d 457 (1991). In Pinion, the Eleventh Circuit held that attorneys are presumed to be familiar with the rules of the courts in which they practice, and therefore, represented parties may not invoke the “unique circumstances” exception to permit them to rely on an order that a lower court had no authority to enter. 928 F.2d at 1533 and n. 11. The district court applied Pinion and held that HFI could not reasonably rely on the bankruptcy court’s extension of time to file its Rule 9023 motion because that extension was specifically prohibited by the Rules. Further, the district court noted that the trustee’s objection put HFI on notice that the bankruptcy court had no authority to grant that extension. The district court found that unique circumstances were not present and dismissed the appeal. II We recognize that courts and counsel have faced difficulties trying to tune into one band the discordant signals emanating from our “unique circumstances” jurisprudence. Some background may prove helpful. The doctrine traces its origin to three Supreme Court cases. In the first, the Court reinstat ed an untimely appeal when the appellant reasonably relied on the district court’s initial finding that an extension under Fed.R.Civ.P. 73(a) was justified due to counsel’s excusable neglect. Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215, 217, 83 S.Ct. 283, 285, 9 L.Ed.2d 261 (1962) (per curiam). The scope of the doctrine was expanded, over vigorous dissent, in two subsequent Supreme Court opinions. See Wolfsohn v. Hankin, 376 U.S. 203, 84 S.Ct. 699, 11 L.Ed.2d 636 (1964) (per curiam); Thompson v. Immigration and Naturalization Serv., 375 U.S. 384, 84 S.Ct. 397, 11 L.Ed.2d 404 (1964) (per curiam). In Wolfsohn, the Supreme Court reversed the dismissal of an appeal as untimely in a one sentence opinion citing Harris Truck Lines and Thompson. Four Justices dissented in an opinion written by a member of the Harris Truck Lines majority, arguing that Harris Truck Lines should be confined to its facts — the situation where a party reasonably relies on the district court’s finding of “excusable neglect” under Fed.R.Civ.P. 73(a). Wolfsohn, 376 U.S. at 203, 84 S.Ct. at 699 (Clark, J., dissenting). In the dissenters’ view, Thompson and Wolfsohn represented an unwarranted extension of Harris Truck Lines because those opinions gave district judges “de facto power to grant extensions of time, directly contra to the definite requirements” of Fed. R.Civ.P. 6, 52 and 59. Id. at 204, 84 S.Ct. at 699. See also Thompson, 375 U.S. at 389, 84 S.Ct. at 399 (Clark, J., dissenting) (Harris Truck Lines is distinguishable because Fed. R.Civ.P. 73(a) permits extensions of time). Since Wolfsohn, the Supreme Court has not invoked the doctrine to permit an appeal to go forward, but neither has it repudiated the doctrine. See Osterneck, 489 U.S. at 179, 109 S.Ct. at 993. In light of intervening Supreme Court opinions emphasizing the jurisdictional nature of filing deadlines, see, e.g., Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982); Browder v. Director, Dep’t of Corrections of Illinois, 434 U.S. 257, 98 S.Ct. 556, 54 L.Ed.2d 521 (1978), the trend among the circuits is toward restricting application of the “unique circumstances” doctrine. Several of our sister circuits hold that, because attorneys are presumed to be familiar with the Federal Rules, reliance on an order purporting to grant additional time pursuant to a rule that does not permit an extension is unreasonable. See, e.g., Pinion, 928 F.2d at 1533 and n. 11; Kraus v. Consolidated Rail Corp., 899 F.2d 1360, 1365-66 (3d Cir.1990). This Circuit was one of the first to adopt this approach. We found that an appellant’s reliance on an order enlarging time to appeal was not reasonable because counsel are charged with knowledge that Fed.R.App.P. 4(a)(5) does not permit extensions of time in excess of ten days. Certain Underwriters at Lloyds of London v. Evans, 896 F.2d 1255, 1258 (10th Cir.1990). The problem is that Certain Underwriters seems to conflict with a prior Tenth Circuit opinion that permitted an appeal to go forward when the district court improperly extended the time to file a motion under Fed. R.Civ.P. 59(e). Stauber v. Kieser, 810 F.2d 1, 1-2 (10th Cir.1982) (per curiam). Apparently, the Stauber panel found “unique circumstances” to be present without evaluating the reasonableness of appellants’ reliance. Id. Stauber is not a mere aberration. It was cited in a post-Certain Underwriters case that permitted a bankruptcy creditor to proceed with an untimely complaint when a bankruptcy court improperly extended the time to file such complaints. Themy v. Yu (In re Themy), 6 F.3d 688, 690 (10th Cir. 1993). We held there the bankruptcy court’s equitable power to rectify its own mistakes in the interest of justice permitted it to entertain the complaint. Id. at 689-90. In re Themy cited Stauber for the proposition that the jurisdictional nature of filing deadlines did not preclude the complaint from going forward. Id. at 690. See also Collard v. United States, 10 F.3d 718, 721 (10th Cir. 1993) (Holloway, Ch. J., dissenting) (Stauber was “emphatically reaffirmed” in In re The-my and allows an appeal to proceed when district court extended time to file Rule 59(e) motion).

1218224-29202

CORNELIA G. KENNEDY, Circuit Judge. Defendant-appellant Fernando Francis appeals his conviction by a jury of possessing five grams of heroin with intent to distribute, in violation of 21 U.S.C. § 841(a)(1). In addition, Francis and his mother, Clara Francis, appeal the District Court’s ruling that neither established a claim to lawful possession of approximately $20,000 seized from a room in her home during a search by Drug Enforcement Administration (DEA) agents. Defendant owned and operated “Poncho’s Barbershop” on West McNichols in Detroit, Michigan. He received mail and occasionally spent a night at his mother’s home on Klinger Street, also in Detroit. On September 29,1978, DEA agents learned that within the preceding 24 hours an informant had observed heroin at Poncho’s barbershop and at Mrs. Francis’ home. Based on the informant’s observations the agents obtained warrants to search both locations. After the warrants were issued but before they were executed the agents, through further contact with the informant, learned that he/she had very recently purchased heroin from defendant at the shop. The agents concluded that this new information coupled with the informant’s earlier observations gave them probable cause to arrest defendant before searching his shop. They placed the barbershop under surveillance on the evening of September 29. When defendant exited the agents followed and arrested him. They took him to a nearby parking lot where they searched him and interrogated him concerning drug activities. The search of defendant turned up two large rings of keys which included keys to the shop. The agents informed defendant when they arrested him that they had a search warrant for the barbershop. The agents returned to the barbershop, both entrances of which were protected by an outer iron gate and an inner wooden door. They struggled with the keys for about five minutes in the presence of defendant before they successfully opened the iron gate at the front entrance. The District Court found that defendant gave them no assistance in effecting entry. The DEA agents had knowledge that some persons remained inside. Fearing that evidence of heroin trafficking was being destroyed, they did not further delay to find the key to the wooden inner door, but instead forced the door with a battering ram. At no time did they announce their purpose to the occupants or request their permission to enter. The agents proceeded to search the barbershop. They discovered one small package of heroin in the public, haircutting portion of the shop, more heroin in the office of the shop, and assorted other items commonly used in the narcotics trade. Upon completing the search of the barbershop the agents proceeded to the home on Klinger, again in the company of defendant. The agents stationed themselves at the front and side entrances to the home. The District Court found that the agents knocked but did not announce their authority or purpose, and battered the door down without giving the occupants an opportunity to respond. The agents searched the home and discovered a bedroom which contained more evidence of drug trafficking, several guns, and a safe. Inside the safe was approximately $20,000 in cash (the subject of the motion for return of property), drug paraphernalia, and several receipts addressed to the defendant at the Klinger home. Defendant was indicted on November 17, 1978. An evidentiary hearing was held at which defendant challenged the admissibility of the evidence seized on the ground that the searches were illegally executed because the agents made unannounced, forcible entries of both buildings, and the evidence was the fruit of the illegal searches. Relying on the Supreme Court’s opinion in Rakas v. Illinois, 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978), the District Court ruled sua sponte that defendant lacked standing to challenge the legality of the search at Klinger because he had no expectation of privacy in his mother’s house. The District Judge also sustained the search of the barbershop, finding that the circumstances justified the officers’ failure to knock and announce their presence before executing a search warrant. As the Government introduced its evidence at trial the judge was persuaded that defendant did have an expectation of privacy in one room of his mother’s house, so had standing to challenge the search. At the close of the evidence he ruled that the agents’ unjustified forcible entry invalidated the search of the Klinger premises. He excluded the evidence seized there, directing the jury to disregard all testimony relating to the items seized on Klinger. The jury returned a guilty verdict. The defendant was sentenced to three years imprisonment plus a three-year special parole term. On appeal he raises issues as to the search of each premise, the sufficiency of the affidavit for the search warrants, the denial of a motion for mistrial, and the sufficiency of the evidence. I. The Search of the Barbershop Defendant contended before the trial court and argues again here that the search of the barbershop violated 18 U.S.C. § 3109 and therefore that the items seized there should have been suppressed. § 3109 provides that [An] officer may break open any outer or inner door or window of a house, or any part of a house, or anything therein, to execute a search warrant, if, after notice of his authority and purpose, he is refused admittance or when necessary to liberate himself or a person aiding him in the execution of a warrant. (Emphasis added) The Government, conceding noncompliance with § 3109, argues that it applies only to dwellings, and is thus inapplicable. Alternatively, it claims that exigent circumstances justified noncompliance, as the agents had word that the occupants knew of their presence and the agents had a reasonable belief that the occupants would destroy evidence. The Government also claims that because defendant, the owner of the shop, was informed that the agents had a search warrant and was present when they attempted to enter it notice of their authority and purpose would have been a useless gesture. Finally, the Government claims that because defendant was present while the agents were entering and the District Court found that he did not aid their entry, he has waived any protection that § 3109 offers. The District Court held that § 3109 does not apply to the search of a business. However, it ruled that because § 3109 codifies “the common law of the fourth amendment” as to unannounced and forcible entry of a building, the legality of the search was governed by the standard set out in § 3109. It concluded that the circumstances confronting the agents in their effort to execute the search warrant justified noncompliance with the knock and announce requirement under both § 3109 and the fourth amendment. By its terms § 3109 applies only to “houses.” However, the courts of appeal are divided on whether it protects only dwellings. The Seventh and the Ninth Circuits have applied it to nondwellings. United States v. Phillips, 497 F.2d 1131, 1133-1134 (9th Cir. 1974); United States v. Case, 435 F.2d 766, 770 n.1 (7th Cir. 1970). Other circuits have come to the opposite conclusion. United States v. Agrusa, 541 F.2d 690, 700 (8th Cir. 1976), cert. denied, 429 U.S. 1045, 97 S.Ct. 751, 50 L.Ed.2d 759 (1977); United States v. Johns, 466 F.2d 1364, 1365 (5th Cir. 1972); Fields v. United States, 355 F.2d 543 (5th Cir.), cert. dismissed, 384 U.S. 935, 86 S.Ct. 1452, 16 L.Ed.2d 536 (1966); United States v. Has-sell, 336 F.2d 684, 686 (6th Cir. 1964), cert. denied, 380 U.S. 965, 85 S.Ct. 1111, 14 L.Ed.2d 155 (1965). Hassell was decided without discussion of the § 3109 issue and on alternative grounds. In view of this and the split in the circuits which has arisen since Hassell, we feel compelled to reexamine the issue. The Supreme Court recognized in Sabbath v. United States, 391 U.S. 585, 589, 88 S.Ct. 1755, 1757, 20 L.Ed.2d 828 (1968), that § 3109 is a codification of the common law of unannounced entry. Section 3109 was passed relatively recently, in 1958, but it was based on a provision in the Espionage Acts of 1917, 40 Stat. 229; that provision was in turn based on a New York statute which derived from the common law rule. Blakey, “The Rule of Announcement and Unlawful Entry: Miller v. United States and Ker v. California,” 112 U.Pa.L.Rev. 499, 513 (1964). Thus, § 3109 is subject to the exceptions and limitations that existed at common law. The rule against unannounced forcible entry into a dwelling has existed at common law at least since Semayne’s Case, 5 Coke Co.Rep. 91a, in 1603. 112 U.Pa. at 500. The original rule applied only to dwellings. Id. at 501. Unannounced forcible entry into other structures was uniformly upheld at common law (e. g., an unannounced entry into a barn was held lawful in Penton v. Brown in 1664), a rule that is still established beyond question in England. Id. Early American law permitted forcible and unannounced entry into stores, warehouses, and nondwellings so long as they were not located within the area immediately surrounding a dwelling. Burton v. Wilkinson, 18 Vt. 186 (1846); 112 U.Pa. at 505. Thus the history of unannounced entry at common law makes it clear that § 3109 does not prohibit the unannounced and forcible search of defendant’s barbershop. Phillips, supra, and Case, supra, do not persuade us to reach the opposite result. In Phillips, the Ninth Circuit found that the same policies underlying the application of § 3109 to dwellings — reducing the potential for violence, preventing physical destruction of property, and protecting the right of privacy — apply with only slightly diminished force to unannounced entries of occupied businesses. Thus, that Court felt compelled to include such businesses within § 3109’s definition of a “house.” Although some of the same concerns exist in both situations, there are significant differences also. As the Eighth Circuit recognized in Agrusa, 541 F.2d at 700, the courts have consistently afforded the home considerably more protection than other premises, based on the precept that “a man’s home is his castle.” Further, it is not the place of the courts to extend a statute’s application to all situations where a similar policy might be desirable. In Case the Seventh Circuit relied on two decisions to support its statement that § 3109 applies to nondwellings as well as dwellings: Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920) and United States v. Muffin, 329 F.2d 295 (4th Cir. 1964). Silverthorne does not even mention § 3109; it is a fourth amendment case and does not deal with an unannounced or a forcible entry. Mullin applied § 3109 to a nondwelling, but only after finding that the building was a part of the curtilage, so at common law was entitled to the same protection as is a house proper. Thus, we continue to restrict the application of § 3109 to dwellings and buildings within the curtilage, the extent of the rule as it existed at common law. A barbershop is not a “house” by any definition of which we are aware. Defendant introduced evidence that he kept a bed and television in the barbershop, and that he lived there on occasion. By this evidence he seeks to turn his barbershop into a “dwelling” so as to come within § 3109. The District Court stated that its conclusion that § 3109 was inapplicable to the search would not be changed if defendant were in fact living there, as a barbershop is still not a house. We agree. It would place an unreasonable burden on officers executing search warrants for the application of § 3109’s knock and announce requirements to turn on the actual status of a building as a dwelling or a nondwelling, where to all outward indications it is a nondwelling. In Wong Sun v. United States, 371 U.S. 471, 479-484, 83 S.Ct. 407, 412-415, 9 L.Ed.2d 441 (1963) the Supreme Court applied § 3109 to the entry of a laundry in which the owner and his family lived, where there were facts which would put the searching officer on notice that the building was used as a dwelling. Wong Sun indi cates that the important privacy interests protected by § 3109 require a searching officer to err on the side of caution where the facts raise a reasonable suspicion that a “business” is actually a dwelling. There were no such facts in this case. The barbershop was labeled as such and was on a block with other businesses. There is no suggestion that the DEA agents knew or had reason to know prior to entry that defendant was living there. The District Court correctly ruled that § 3109 did not control the legality of the search. We next consider whether applicable fourth amendment principles invalidate the search of the barbershop. The Supreme Court has not ruled whether the fourth amendment requires police officers executing a search warrant to knock, announce their purpose, and be refused admittance before they may break down the door of a building to enter it. The leading case on the constitutionality of an unannounced entry is Ker v. California, 374 U.S. 23, 83 S.Ct. 1623, 10 L.Ed.2d 726 (1963). The four-justice plurality did not reach the question whether the Constitution forbids unannounced entry into a dwelling. It held only that because California law forbade unannounced entry, announcement became a necessary element of a reasonable search. However, the Court held that it was reasonable on the facts before it for the officers to believe that the Kers were expecting them, and because narcotics were involved to believe that knocking would enable the Kers to destroy the evidence. Thus, their compliance with the California knock and announce rule was excused. Id. at 40, 83 S.Ct. at 1633. Justice Brennan authored a strong four-justice dissent in Ker which did reach the constitutional issue, expressing the opinion that our fundamental liberties included protection against unannounced police entry long before the adoption of the fourth amendment. Justice Brennan therefore felt that this protection is a part of the fourth amendment, and the officers’ conduct was not excused on these facts. Id. at 47-64 , 83 S.Ct. at 1636-1645. Justice Marshall indicated that the constitutional question was still open in Sabbath, 391 U.S. at 591 n.8, 88 S.Ct. at 1759, when he said that “[ejxceptions to any possible constitutional rule relating to announcement and entry have been recognized [by the dissent in Ker],” and § 3109 embodies those exceptions. (Emphasis added) Although the Supreme Court has not addressed the issue many federal courts have, including this Circuit. In some cases the discussion is dictum. In others, the opinion relies on Justice Brennan’s dissent in Ker, which the Supreme Court itself has never adopted. Though each case by itself is less than compelling, their conclusion has been unanimous: the fourth amendment forbids the unannounced, forcible entry of a dwelling in the absence of exigent circumstances. However, in this case we are confronted with the unannounced entry of a business, not a dwelling. The fourth amendment has been held to apply to some extent to business establishments, Mancusi v. DeForte, 392 U.S. 364, 367, 88 S.Ct. 2120, 2123, 20 L.Ed.2d 1154 (1968); Silverthorne Lumber Co. v. United States, supra, although the Supreme Court has not yet delimited its full scope in the commercial context. Of the three interests served by the rule against unannounced entry — preventing violence, preventing the destruction of property, and protecting privacy — the courts have shown the most concern for protecting individual privacy. See Sabbath, supra; Miller v. United States, 357 U.S. 301, 313, 78 S.Ct. 1190, 1197, 2 L.Ed.2d 1332 (1967). There is much less of a privacy interest in business premises than exists in a private home. As the Court recently reiterated in Payton v. New York, 445 U.S. 573, 585, 100 S.Ct. 1371, 1379, 63 L.Ed.2d 639 (1980), “physical entry of the home is the chief evil against which the working of the fourth amendment is directed.” In United States v. Agrusa, supra, the Eighth Circuit ruled that business premises are not entitled to the same fourth amendment protection afforded a home. In United States v. Clayborne, 584 F.2d 346, 350-351 (10th Cir. 1978), the court held that warrantless use of a beeper to monitor the location of a drum of chemical was permissible where the drum was located in a commercial establishment, though it would not have been had the drum been located in a residence. Further, as noted above the common law in this country gave no protection against the unannounced and forcible entry of a business. Thus, any fourth amendment rule against unannounced entry that exists for private dwellings will have less force when applied to businesses. Assuming some fourth amendment rule of announcement for a business, we do not need to decide the full extent of such a rule here. Even Justice Brennan’s dissent in Ker recognized exceptions to the constitutional rule in the case of entry into a dwelling where: (1) the persons within already know of the officers’ authority and purpose; (2) the officers have a justified belief that someone within is in imminent peril of bodily harm; or (3) the officers have a justified belief that those within are aware of their presence and are engaged in escape or the destruction of evidence. 374 U.S. at 47, 83 S.Ct. at 1636. The lesser privacy interest in a business implies that the exigencies required to justify an unannounced, forceful entry there are correspondingly less. We come then to the facts of this case. Francis, the owner of the premises searched and thus the person with the greatest privacy and property interest at stake, knew of the DEA agents’ authority for the search and intent to carry it out before the agents came to the barbershop. Thus, an announcement could not have told him much. He accompanied the agents to the entrance, but the District Court found that he did not materially aid their entry, so to a significant extent he waived his property interest. Because evidence of heroin distribution is easily destroyed it was necessary for the agents to move quickly, but because of the iron gate they consumed several minutes attempting to gain access to the shop. While they were attempting to open the iron gate the agents rang the doorbell, but received no response. They feared that evidence was being destroyed. These are extenuating circumstances. To the extent the fourth amendment protects the occupants of business premises from the potential violence of an unannounced forcible entry, no rights of defendant were implicated since he was not inside. Therefore he may not assert the occupants’ interest in support of his motion to suppress. Rawlings v. Kentucky, 448 U.S. 98, 100 S.Ct. 2556, 65 L.Ed.2d 633 (1980); Rakas v. Illinois, supra. Thus, the District Court finding that the circumstances justified noncompliance with any fourth amendment knock and announce requirements that exist for a business is not erroneous. See also Agrusa, 541 F.2d at 696-698. The evidence from the barbershop was properly admitted at trial. II. Existence of Probable Cause Defendant’s next claim is that the DEA agents lacked probable cause to arrest him. He suggests that if they had probable cause for his arrest they would have secured an arrest warrant at the time they got the search warrants. He asserts that the real reason he was arrested was so the agents could use his keys to the barbershop to facilitate their entry through the iron gate. Since the arrest was not based on probable cause, several incriminating items that were seized from his person pursuant to the arrest, including a pistol and a sizeable sum of cash, should not have been admitted as evidence against him. “The standard for arrest is probable cause, defined in terms of facts and circumstances ‘sufficient to warrant a prudent man in believing that the [suspect] had committed or was committing an offense.’ ” Gerstein v. Pugh, 420 U.S. 103, 111, 95 S.Ct. 854, 861, 43 L.Ed.2d 54 (1975). Congress has specifically authorized the warrantless arrest of a narcotics suspect when probable cause to believe that he has committed a felony exists. 21 U.S.C. § 878(3). The search warrant for the barbershop was based on an affidavit signed by one of the DEA agents involved in the case. The affidavit averred that a reliable informant had within the 24 hours immediately preceding observed several ounces of a brown powdery substance that defendant represented to the informant was heroin, and that from the informant’s experience appeared to be heroin. The affidavit included a partial and accurate description of the premises. The informant’s reliability was supported by statements that over a four-year relationship with DEA agents the informant had repeatedly provided tips that proved to be accurate, and had never been false or misleading. After a search warrant was secured on the basis of these statements, but before it was executed, the DEA agents received another communication from the same informant to the effect that he/she had just purchased some of the brown powdery substance believed to be heroin from “Poncho Francis” at Poncho’s Barbershop. The informant’s information met the two-pronged test required by Aguilar v. Texas, 378 U.S. 108, 114, 84 S.Ct. 1509, 1513, 12 L.Ed.2d 723 (1964). The affidavit for the warrant disclosed both the underlying basis of the informant’s knowledge and established the informant’s reliability. The informant’s combined observations were more than sufficient to give the agents probable cause to arrest defendant, even under the strict standard by which this Circuit scrutinizes warrantless arrests. United States v. Carriger, 541 F.2d 545, 553 (6th Cir. 1976). Defendant’s argument that even with probable cause the agents were required to get a warrant for his arrest, since they had time to do so, is without merit. United States v. Watson, 423 U.S. 411, 423-424, 96 S.Ct. 820, 827-828, 46 L.Ed.2d 598 (1976). Defendant also argues that even though probable cause to arrest existed the arrest here was pretextual and illegal, since it was made in the hope of finding keys on defendant which would make it easier to execute the search warrant at the barbershop. However, this is not the type of pretextual arrest forbidden by the fourth amendment. Carriger and the cases cited in it proscribe the use of an arrest to enable the arresting officers to search the surrounding area without first securing a warrant issued by a neutral magistrate. In sharp contrast the DEA agents in this case had a lawful right to search defendant’s barbershop since they possessed a warrant authorizing the search. There is no constitutional infirmity in arresting a defendant where probable cause to make the arrest exists and the purpose of the arrest is to facilitate an otherwise lawful search. The fruits of the arrest were properly admitted at trial. III. Defendant’s Motion to Suppress Evidence at Trial Evidence presented during the trial caused the District Judge to doubt the correctness of his rulings on the pretrial suppression motion that defendant lacked standing to challenge the legality of the search at Klinger and that the search of the barbershop complied with the requirements of § 3109. To insure fairness he reopened the hearing with respect to the legality of the execution of both searches. Defendant sought to expand this hearing to reconsider also the question whether there was probable cause to issue the search warrants. The District Court denied defendant’s attempt as untimely. Defendant urges us to find that the denial was an abuse of discretion. Fed.R.Crim.P. 12(b) requires that a motion to suppress be made before trial. Only in a case of the most flagrant abuse will a court of appeals review a trial court’s discretionary denial of a motion to suppress as untimely. United States v. Maloney, 402 F.2d 448, 449 (1st Cir. 1968) cert. denied, 394 U.S. 947, 89 S.Ct. 1283, 22 L.Ed.2d 481 (1969). Defendant fully aired the question of probable cause in the pretrial evidentiary hearing. Defendant’s trial motion was grounded on the claim that the material allegations in the affidavit leading to the search warrant were false. A careful reading of the trial transcript discloses that all of the testimony that defendant relied on to challenge the affidavit relates to a buy of narcotics made after the search warrant was procured but before it was executed. Whether the testimony relating to this buy is true or false can have no possible bearing on the adequacy of the affidavit that led to the search warrant. Defendant has adduced no other evidence to show that the affidavit was false, or that the information on which the search warrant was based was presented to the magistrate by the affiant with knowledge of or reckless disregard for its falsity. He thus has failed to meet the test of Franks v. Delaware, 438 U.S. 154, 171, 98 S.Ct. 2674, 2684, 57 L.Ed.2d 667 (1978), for quashing a search warrant before trial. The able trial judge was very careful to preserve defendant’s rights. There was no abuse of discretion in reopening the suppression hearing only with respect to the legality of the execution of the search warrants. IV. Denial of Defendant’s Motion for Mistrial In the pretrial suppression hearing defendant challenged the admissibility of the evidence seized from Klinger on the theory that the search violated § 3109. On the basis of the evidence presented at the hearing the District Judge ruled sua sponte that defendant had no reasonable expectation of privacy in the house on Klinger, so lacked standing to challenge the legality of the search under Rakas v. Illinois, supra. Defendant did not ask for reconsideration of this ruling at any time before trial. As the Government introduced its evidence at trial, it became clear that its case depended in part on the theory that defendant had the use of one bedroom of his mother’s house. In support the Government introduced several receipts addressed to defendant at Klinger along with other items seized from Klinger that allegedly belonged to defendant. Defendant made no objection to the testimony identifying the Government’s exhibits until they were all before the jury, although he had a list of proposed exhibits before trial. Defendant then objected to their admission on the ground that the evidence showed that defendant had an expectation of privacy in the bedroom on Klinger, and so had standing to challenge the search. The trial judge agreed that on the record then before him that defendant did have standing. Because he earlier found that defendant lacked standing the judge had never decided whether the warrant was executed in a lawful manner. The judge and the attorneys for defendant and the Government entered into a discussion about the proper procedure to follow. The judge suggested that he reserve a ruling on the admissibility of this evidence until the close of all proofs. Defendant’s counsel not only agreed, but argued in favor of this procedure. Delaying the decision until the close of proofs enabled defendant to present to the jury the testimony of his mother and a family friend, both of whom were inside the Klinger home when the DEA agents entered. They were sympathetic witnesses whose testimony was favorable to defendant. After the close of all of the evidence the District Judge ruled that the search warrant was improperly executed in that the agents failed to announce their purpose to the occupants of the house and that the evidence seized from Klinger was therefore not admissible. He instructed the jury to disregard that evidence. Defendant moved for a mistrial on the ground that having the evidence before the jury during the trial so prejudiced him as to deny him a fair trial. The District Judge denied the motion, pointing out that it was largely because of defendant’s deliberate choice that the evidence remained before the jury. Our consideration of the record convinces us that defendant’s counsel made a tactical decision that defendant would be helped more than hurt by postponing a decision on the admissibility of the evidence from Klinger until after all the evidence was in. Defendant, therefore, waived any objection to the fact that the evidence remained before the jury during trial, and cannot now predicate a motion for mistrial on any supposed prejudice that resulted. See United States v. Sanders, 462 F.2d 122, 124 (6th Cir. 1972). Defendant also claims that he was denied the effective assistance of counsel. The only supporting evidence is that at one point in the trial the judge asked counsel to keep his temper when counsel became overzealous in his efforts to persuade the judge to reconsider his refusal to excuse the jury so a record could be made on a question that had already been asked and answered. Whether this is viewed as evidence of ineffective assistance of counsel, or more properly as a claim that the judge’s attitude denied defendant the right to counsel, defendant’s claim is baseless. V. Sufficiency of the Evidence

174465-27333

WEICK, Circuit Judge. These appeals deal with complicated issues of appropriate relief in an employment discrimination action. Plaintiffs filed a class action in the District Court alleging that defendants East Texas Motor Freight (Company), Teamsters Local 667 (Union), Southern Conference of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America violated Title VII of the 1964 Civil Rights Act by discriminatory practices occurring at the company’s Memphis Terminal. The District Court granted motions to dismiss Southern Conference of Teamsters and the International Brotherhood of Teamsters, with the result that the case proceeded against only the company and the local union. No error has been assigned with respect to that order. The company employs both city drivers and over-the-road drivers who operate between different states. Both types of drivers operate basically the same kind of equipment, namely, tractors and trailers. Road drivers work much longer hours and spend more time away from home. Road drivers earn about $16,500 per year, while city drivers earn $12,500 per year. At the time of trial the company employed at its Memphis terminal 105 road drivers (all white), and 131 city drivers (of whom 43 were black). The two kinds of drivers were covered by sepa rate collective bargaining agreements and were on separate seniority lists. From 1954 to 1972 it was company policy not to permit transfers from the position of city driver to road driver. Beginning in January, 1972, the company changed its policy, and permitted transfers to road positions by city drivers, but those city drivers who transferred lost their seniority for bidding and layoff purposes, but retained their seniority for compensation and fringe benefits, such as pension, vacation, and welfare purposes. The District Court found that the past policy of no transfer, although the policy affected whites and blacks alike, was racially motivated and was not justified entirely by business necessity. The company had hired no blacks as road drivers. As a result the District Court found a violation of Title VII, and entered an order specifying relief. In regard to seniority the Court ordered that black city drivers who specifically requested a transfer or who filed a charge with Equal Employment Opportunity Commission (EEOC) were entitled, upon transfer to a road position, to have their seniority commence from six months after the date of their request but not earlier than January 2, 1966. Black city drivers who made no prior request to transfer were held, upon later transfer, to have their seniority in the road position to be considered from eighteen months after the time such black city driver had qualified to be a road driver, but no earlier than July 1, 1970. After two years of city driving an employee was presumed to be qualified for a road position. The District Court also granted back pay relief to those black drivers who could show economic loss for discriminatory failure to grant a transfer request. The period for such claims was limited to a time period beginning January 1, 1966, and ending January 1, 1972. The District Court referred to a Magistrate the determination of the amount of back pay or seniority rights due to specific blacks. The District Court ordered the company to rescind its no-transfer rule and enjoined it and the union from engaging in discriminatory acts and practices at the Memphis terminal. The Court assessed attorneys’ fees against the company and the union, and relieved nine union members from payment of dues for a certain period of time, and relieved other minority union members from sharing in legal expenses and costs. The plaintiffs appealed, asserting that the remedies granted were insufficient. The union cross-appealed. EEOC, as amicus curiae, filed a timely brief, supporting plaintiffs’ claims of inadequacy of relief. Plaintiffs filed a non-timely brief adopting the brief of EEOC. SENIORITY EEOC urges that the District Court should have granted a full seniority carry-over for transferees. It contends that transfers without full seniority carry-over place a burden on those transferring and thus perpetuate past discrimination. We reject EEOC’s argument. We think the wisest course lies in following the reasoning of Bing v. Roadway Express, Inc., 485 F.2d 441 (5th Cir. 1973), which case involved a factual situation much like the one in the case at bar. In Bing the Fifth Circuit followed the “rightful place” theory enunicated in its prior decision in Local 189, United Papermakers, etc., AFL-CIO v. United States, 416 F.2d 980 (5th Cir. 1969). Under this theory the black city drivers would be given opportunity to move into positions they would have occupied but for the wrongful discrimination against them. As far as seniority is concerned, the “rightful place” theory requires the giving of enough seniority to insure that a black city driver will achieve the advancement and bidding rights that he otherwise would have enjoyed, and also that those discriminated against will have the protection against layoff which they would have were it not for discrimination. The position urged by EEOC is inconsistent with the “rightful place” theory when applied to our case. The approach suggested by EEOC would give to those who transfer to road positions more seniority than they would have had in the absence of discrimination. In the present case a city driver was presumed to be qualified to be a road driver after he operated, as a city driver, equipment similar to the road equipment, for two years (absent a showing to the Magistrate of earlier qualification). If city drivers were not qualified to be road drivers until they had worked for two years on a city position, their job seniority in the road line positions should not be dated any time prior to the fulfillment of the two year period of qualification. As the Court said in Bing: Before that date [of qualification] discrimination could not have blocked their employment as road drivers. (Id. at 451). Having rejected EEOC’s claim, we must still evaluate the propriety of the seniority relief given by the District Court. That relief gave to those drivers who requested a transfer or who filed an EEOC charge, a seniority date of six months after the time of request or charge. Those drivers who did not so register an indication of dissatisfaction were given seniority from a time eighteen months after a time when they were determined to be qualified. This seniority relief is different than that granted in Bing where all drivers, regardless of whether they had requested transfer or made complaints, were given the same seniority rights dating from the time they possessed the experience necessary for them to qualify for a road job. The theory justifying such relief was that it would have been futile to make a request for transfer. Action which is futile ought not to be required as a prerequisite to recovery. Jones v. Leeway Motor Freight, Inc., 431 F.2d 245, 247 (10th Cir. 1970); United States v. Sheet Metal Workers, Local 36, 416 F.2d 123, 132 (8th Cir. 1969); Lea v. Cone Mills Corp., 301 F.Supp. 97, 102 (M.D.N.C.1969), aff’d in pertinent part, 438 F.2d 86 (4th Cir. 1971); Cypress v. Newport News Gen. & Nonsectarian Hosp. Ass’n, 375 F.2d 648, 653 (4th Cir. 1967). In the present case it is clear that attempted transfers were refused automatically until January 1, 1972; however, unlike Bing, a transfer request was not the only mechanism by which the District Court decided to measure seniority. The filing of a charge with EEOC also would establish a commencement date for seniority purposes. We cannot say that such a filing and following it with court action was a futile gesture, especially when the suit turns out to be successful. The District Court stated that one of its reasons for determining earlier seniority for those drivers who actively sought an end to the company’s no-transfer policy, was that such persons should benefit more “than those who were merely passive and indicated no particular desire to transfer or made no effort to bring about . an end to this restrictive policy.” (Memorandum Opinion, Dec. 28, 1972, at p. 7). We also think there is something to be said for rewarding those drivers who protest and help to bring rights to a group of employees who have been the victims of discrimination. Such a decision by the District Court can hardly be considered an abuse of discretion, which must be shown before remedial relief of a court can be overturned. Moreover, in Bing there was only one charge filed with EEOC. In the case at bar twenty-one city drivers of both races filed charges with EEOC. The controversy involved both labor relations and a racial dispute. Given the large number of charges filed, we think the District Court was entirely within its discretion in not granting seniority relief like that granted in a case where silence and futility of protest was the norm. It may be impossible to put persons in their rightful place in a factual situation such as this where only an approxi mation may be possible. For example, we do not think the seniority relief granted in Bing is a strict application of the “rightful place” theory. An employee might have become qualified to be a road driver on a given date, but he may have had absolutely no desire on that date to become a road driver. Yet the Bing decision gave that employee a seniority date as of the time of his qualification. The rationale in Bing was that silence might be caused by a belief in the futility of a transfer request. That may be true, but also it may be caused by no desire to transfer. The District Judge is in the best position to determine this issue. On the facts of this case we cannot say that the District Court erred in finding that the “rightful place” theory could be best implemented by looking to time of application for transfer or time of filing of charge. The only remaining question on seniority is whether the seniority date of those black city drivers who requested transfer or who filed a complaint, should be delayed six months from the date of request. We think that this was a discretionary matter with the District Court, and we can find no abuse of discretion. The dissent recognizes the difficulties confronting the District Judge in fashioning appropriate relief under the facts peculiar to this case, which are not the facts present in other cases cited. The jobs of city and road drivers were treated as separate units and were covered by separate collective bargaining agreements. The company had never permitted transfers of either blacks or whites from city to road driver jobs, so it cannot be said that this policy was aimed at blacks only. Furthermore, the Court found that no black driver had ever applied “off the street” for an over-the-road job. In determining seniority the District Court had to be very careful not to dislodge existing over-the-road drivers who rightfully held their jobs and were properly performing them. The legislative history of Title VII, as pointed out in the dissent, shows a clear Congressional intent to lodge wide discretionary powers in District Judges in fashioning remedies. In our judgment the District Judge did not abuse his discretion in fashioning the remedy in this case. BACK PAY The District Court allowed back pay relief to those black city drivers who were qualified and desirous of transfer and who could show economic loss as a result of failure to be transferred. The Court limited the period of the back pay award form January 1, 1966 to January 1, 1972. The District Court referred the case to a Magistrate who was to determine the amounts due to given individuals. EEOC challenges various portions of the guidelines given to the Magistrate by the District Court. Before discussing the various claims raised by EEOC it is important to establish our standard of review over this question. In Head v. Timken Roller Bearing Co., 486 F.2d 870 (6th Cir. 1973), this Court held: Congress evidently intended that the award of back pay should rest within the sound discretion of the trial judge. (Id. at 876). This holding establishes that whether back pay should be awarded at all is a matter of discretion. Likewise we feel that after the decision to award back pay has been made, the formula of computation and the determination of recipients are also matters within the discretion of the District Court. The District Court limited back pay relief to those drivers who had indicated a desire to transfer to over-the-road positions. EEOC urges that all black city drivers who have transferred or who are interested in transferring, should be entitled to make a claim for back pay, irrespective of any previous desire to assume a road position. The District Court was of the view that a driver’s past expression of interest in a road position served as a good criteria to determine who was actually injured by the no-transfer rule. EEOC contends that such a futile act should not be determinative of back pay eligibility. We think the District Court action may be supported on several grounds. First, the order of the District Court did not make back pay relief awardable only to those employees who had formally requested transfer or who had filed complaints, but to those drivers who had indicated a desire to transfer. This provides a flexible standard for the Magistrate to apply, which standard will make allowances for informal indications of interest. Second, there was a large number of black and white city drivers who protested against the no-transfer rule. This case was a far cry from many reported cases wherein the clear futility of an action led to a general lack of protest. Third, the prospect of a large back pay award invalidates present intention as an accurate indication of past intention. An employee who may not have wanted on-the-road employment in the late 1960’s because of the increased number of hours of work and time away from home, might well change his mind now if the prospect of a large back pay windfall is present. We do not think that the District Court abused its discretion in finding that past actions and indications are more accurate indicators of past intention than present actions. In its order granting relief the District Court allowed to employees who qualified and who desired transfer, back pay relief for a time period commencing January 1, 1966, and ending January 1, 1972. EEOC contends that the commencement date should be July 2, 1965, the effective date of Title VII and the 1964 Civil Rights Act. The impact of the six-months delay is minor since only two road drivers were hired between the effective date of the Act and December 31, 1965. EEOC further contends that the ending date should be extended to the date when the Court makes a final award of damages. In our opinion, these issues likewise involve matters within the sound discretion of the District Court. We find no abuse of discretion. INTERIM EARNINGS The District Court ordered that back pay was to be reduced by the claimants’ earnings during the relevant time period. There is no specific mention in the District Court’s opinion of whether moonlight earnings will be deducted. EEOC contends that moonlight earnings should not be deducted. This position is contrary to the holding of the Fifth Circuit in Bing (at page 454) that moonlight earnings were “interim earnings” within the meaning of 42 U.S.C. § 2000e-5(g). That Court pointed out that the road driver who works from sixty to one hundred hours per week is unable to moonlight. The city driver who works fewer hours on his regualr job is able to moonlight and earn more than the road driver. In our opinion the Fifth Circuit, in ordering the deduction from the damage claim of the amount of moonlight earnings, correctly applied the statute and reached a just and equitable re- ' suit. NOTICE In its order of December 28, 1972, the District Court gave to any affected party sixty days within which to file a written claim, generally stating the basis of his claim. On January 15, 1973 the company sent to members of the class a copy of the District Court’s order. The company’s cover letter stated that the order was attached and instructed the recipent: Read the enclosed carefully and take such action as may be necessary to protect your interest, if any. EEOC challenges the form of this notice, not the legality of the District Court’s requirement that the class members make a response of some kind. EEOC urges that the notice was defective in that the company’s cover letter failed to inform recipients that certain action on their part was required to protect their rights. EEOC relies heavily on the notice in Bing, supra, where the cover letter itself told the employees what they were required to do to preserve their rights. See Bing supra, n. 3 for the precise notice sent. EEOC argues that in the case at bar the cover letter gave no indication of how to proceed but merely referred the recipients to the order, one paragraph of which told them exactly how to protect their rights. EEOC contends that such notice is insufficient since the recipients are not sophisticated litigants and the steps they were required to follow were buried in the back of a technical, complex order. The company contends that the notice was sufficient since it was written in clear, understandable language. In our opinion the District Court had authority to require a response to the notice. It was not claimed that these truck drivers could not read or write. The plaintiffs were represented by counsel who did render assistance in providing names. Paragraph seven of the District Court’s order gave plaintiffs a right to participate in the wording of the notice: Plaintiff’s counsel will also, and E. E.O.C. may, assist in providing names of those to whom notice will be sent and content of the notice in order that such persons may pursue their claim for relief or remedy under the terms hereof. EEOC claims it was never given an opportunity to review the notice. Even so, there has been no violation of the District Court’s order. Only the plaintiffs’ counsel had a right to participate. EEOC made no request to participate in the preparation of the notice, and its participation was not mandatory under the order of the Court. There has been no claim that plaintiffs’ counsel failed to take part in preparation of the notice. He did co-operate in providing names and addresses. Never did he object to the form of the notice. EEOC, as amicus curiae, has no independent standing by which it can avoid facing the effects of any actions by plaintiffs’ counsel. UNION’S APPEAL The local union has cross-appealed. It does not challenge the seniority relief given, but it protests an assessment of attorneys’ fees against itself. It also challenges the District Court’s action in relieving certain plaintiffs from payment of union dues for a given time and in relieving minority union members of their obligation to participate in the sharing of the cost and expense of this litigation. Finally, it challenges the District Court’s order enjoining the union from engaging in acts of discrimination. The union contends that the District Court had no jurisdiction because none of the plaintiffs filed a charge with EEOC. Such a charge is essential to jurisdiction. LeBeau v. Libbey-Owens-Ford Co., 484 F.2d 798 (7th Cir. 1973), and Miller v. International Paper Co., 408 F.2d 283 (5th Cir. 1969). When Thornton and the other plaintiffs first filed charges with EEOC in 1966 the company was the only named respondent. Fragmentary records of EEOC indicate that Thornton and some others of the plaintiffs filed charges with EEOC in 1968 against both the company and the union. There was testimony by certain employees that they had not filed EEOC charges against the union. Plaintiff Rector so testified and the records confirmed that Rector had not filed a charge against the union. However, an affidavit was filed by Director Dixon of the Memphis office of EEOC, which affidavit stated that Thornton and eight other persons had filed charges against both the company and the union in 1968, but that these charges had been lost. This officer did indicate that the “Charge Control Action Memos” kept on each charge in the regular course of the business were the only-existing evidence of the filing of these charges. Since the charges have been lost, we can only infer that they may have related to the same matter as the previous charges against the company. There is no dispute that in 1969 Thornton and eight other plaintiffs received from EEOC right-to-sue letters, in which the local union was named along with the company. The union argues that even if charges were filed, it never received notice of them. The District Court considered the issue of jurisdiction over the union and found that the union had participated in conciliation discussions before EEOC, and clearly knew of the charges of discrimination. The District Court also expressed the view that individual plaintiffs should not be penalized for administrative laxity or ineptness on the part of EEOC. We are of the opinion that the District Court had adequate basis to assert jurisdiction over the union. The law is clear that there are only two requirements that plaintiffs have to meet in order to give the District Court jurisdiction over the union: 1- There must be a filing of a charge with EEOC naming the respondent; and 2- There must be a suit filed in Federal Court within thirty days of receiving the right-to-sue letter. Local 179, United Textile Workers, AFL-CIO v. Federal Paper Stock Co., 461 F.2d 849, 850, 851 (8th Cir. 1972); Beverly v. Lone Star Lead Const. Corp., 437 F.2d 1136, 1140 (5th Cir. 1971); Dent v. St. Louis-San Francisco Ry., 406 F.2d 399, 403 (5th Cir. 1969). In addition, service of the EEOC charge upon the named defendants is not a jurisdictional prerequisite to institution of an action in the District Court. John v. ITT-Thompson Indus., Inc., 323 F.Supp. 1258, 1260 (N.D.Miss.1971); Logan v. General Fireproofing Co., 309 F.Supp. 1096, 1099 (W.D.N.C.1969); Holliday v. Railway Express Co., 306 F.Supp. 898 (N.D.Ga.1969). The basic rationale relied on in these opinions is stated clearly in Quarles v. Philip Morris, Inc., 271 F.Supp. 842 (E.D.Va.1967): The plaintiff is not responsible for the acts or omissions of the Commission. He, and the members of his class, should not be denied judicial relief because of circumstances over which they have no control. {Id. at 846-847). There is no doubt that the right-to-sue letters were received and that the suit was timely filed. The only dispute is whether a charge was filed against the union. The control cards clearly show that the union was named as a respondent in an EEOC charge. These cards, combined with union participation in conciliation discussions, are sufficient to support jurisdiction. UNION DISCRIMINATION The District Court made the following finding with respect to union discrimination : Under all circumstances, we conclude that the defendant union acquiesced in the “no transfer” rule in question probably because of the fear of offending its white road driver members, despite the fact that both black and white city drivers complained about this policy. (Emphasis added). The union contends that this finding is not supported by substantial evidence and is clearly erroneous. It is noteworthy that there is no evidence or finding that the union connived or conspired with the company, or with anyone else, to discriminate against the plaintiffs. As we will point out, it is indeed very questionable whether the union ever acquiesced, let alone acquiesced for fear of offending its white driver-members, who were just as much interested in eliminating the no-transfer rule as were the black drivers. The District Court further found that no black person had ever applied to the company “off the street” for a road job. The gist of the plaintiffs’ case was that the no-transfer rule of the company was discriminatory as to blacks. The fact is, however, that the no-transfer rule was applied by the company indiscriminately against both white and black drivers since the rule was adopted in 1954 and until the rule was eliminated in 1972. It is argued that the rule nevertheless perpetuated past discrimination against blacks. But this was discrimination by the company against blacks, and not by the union. The employment of drivers for city and for over-the-road driving was a management function exercised exclusively by the company and without interference by the union. Traditionally, from the inception of collective bargaining, city and over-the-road drivers have been placed in separate units for collective bargaining purposes. The National Labor Relations Board has long held that this separation was appropriate. In Re Georgia Highway Express, 150 NLRB 1649 at 1651 (1965). Separate collective bargaining agreements cover each unit. There was no proof that the race of the persons involved ever had anything to do with the establishment or maintenance of these separate units. The company contended that it had a legitimate business purpose for the adoption of its no-transfer rule. Although the equipment operated by drivers in the two units was substantially the same, the duties of the drivers and the driving conditions were much different. The company offered proof of its accident rating as a result of its rule, which rating was only slightly higher than one-half of the national average accident rating in the trucking industry. The District Court said: No doubt the company has good business reasons for maintaining separate rosters for these drivers for some purposes, but it is abundantly clear also that many black city drivers have been absolutely denied an opportunity to gain the much better paying road driver positions by reason of this policy until 1972. The same could be said, with equal force, concerning white city drivers who were not permitted to transfer. It should be pointed out further that the collective bargaining agreements which were entered into between the Southern Conference, the International Brotherhood of Teamsters, and the company, contained no provision prohibiting transfers. These agreements were submitted to and approved by the union membership in 1964, 1967, and 1970. There is proof, however, that in 1967 the local union submitted to the bargaining committee a proposal to eliminate the no-transfer rule, but the company declined to accede thereto. The Southern Conference and the International Brotherhood of Teamsters, which are responsible for entering into the collective bargaining agreements, have been dismissed from this case. The local union ought not to be held liable for any act or dereliction on their part. None of the plaintiffs ever filed a grievance against the company on account of its no-transfer rule, nor did the plaintiffs or any union member ever request the union to process a grievance against the company. This would indicate rather clearly that the union members, including the plaintiffs, were well satisfied with the collective bargaining agreements.

3999242-20050

MEMORANDUM AND ORDER CORCORAN, Senior District Judge. I This is an action for award of attorney’s fees under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. resulting from the successful resolution at the administrative level of a complaint of discrimination. On March 25, 1977, plaintiff, a black employee of the Department of the Navy filed a formal administrative complaint with defendant alleging race and age discrimination in that he had been denied promotion to certain supervisory positions. On August 18, 1977, defendant found that plaintiff had been “discriminated against on the basis of race in the selection process for the position of Utilities System Operator Leader WL-5406-9.” It awarded him a retroactive promotion with back pay. Further, and importantly to this case, the defendant acknowledged that plaintiff was “the prevailing party in this proceeding and, if (he) is entitled to a reasonable attorney’s fee, it shall be in the amount of $780. >> Plaintiff filed this action on October 5, 1977. He seeks attorney’s fees for services both at the administrative level, and in maintaining this action. On January 6, 1978, he filed a Motion for Summary Judgment. Defendant sought, and obtained, an extension of time until February 13, 1978, in which to respond to plaintiff’s motion. On that date, defendant filed a “Motion to Hold in Abeyance and Stay Proceedings” pending decision as to whether the government would appeal Smith v. Califano, C.A. 76-2311, 446 F.Supp. 530 (D.D.C. January 28, 1978, as amended January 31, 1978). This Court denied defendant’s motion for stay on March 9, 1978, and ordered defendant to respond to plaintiff’s motion within ten (10) days. No response has been filed. Accordingly, we move to consider plaintiff’s uncontested motion for summary judgment. II Agency Authority to Award Fees The issues before us can be simply stated viz., (1) whether Title VII authorizes an award of attorney’s fees to a party who prevails in his complaint of discrimination at the administrative level and, if so, (2) whether the discriminating agency is authorized to award such fees. Though the issues are easily stated, their resolution is considerably more difficult. A. Prior Case Law We begin with Fischer v. U. S. Dep’t of Transportation, 430 F.Supp. 1349 (D.Mass. 1977). In Fischer plaintiff prevailed in her discrimination claim before the Civil Service Commission which awarded her retroactive promotion and back pay. She then sued in district court seeking interest and an award of attorney’s fees. Citing the holdings of Alyeska Pipeline Co. v. Wilderness Society and United States v. Testan, to the effect that “attorney’s fees are not recoverable in a federal action absent ‘specific and explicit provisions’ for their allowance” and that “a waiver of [sovereign] immunity must be ‘unequivocally expressed;’ Fischer held that '42 U.S.C. § 2000e-16(b) does not specifically or explicitly provide that the Commission may award attorney’s fees. The court also rejected plaintiff’s argument that 42 U.S.C. § 2000e-5(k), which authorizes a district court to award attorney’s fees “In any action or proceeding under this subchapter . ,” allows a district court to award attorney’s fees for services performed at the administrative level. As to this latter argument, the Court specifically held that the word “proceeding” did not include administrative proceeding, but rather referred only to “actions or proceedings in which the court participates.” Fischer, supra at 1352. Subsequent to Fischer, our Court of Appeals decided Parker v. Califano, 182 U.S. App.D.C. 322, 561 F.2d 320 (1977). In Parker, the Court faced the issue of “whether in a suit brought by a federal employee under Title VII of the Civil Rights Act of 1964 — in which the employee is the ‘prevailing party’ — a federal District Court has discretion to award attorney’s fees that include compensation for legal services performed in connection with related administrative proceedings.” (emphasis supplied) (footnotes omitted). Parker, supra, 182 U.S.App.D.C. at 323, 561 F.2d at 321. The Court of Appeals concluded that 42 U.S.C. § 2000e-5(k) as made applicable by 42 U.S.C. § 2000e-16(d) did in fact authorize district courts to make awards for attorney’s fees which included compensation for work done at both judicial and administrative levels. Parker, supra, 182 U.S.App. D.C. at 326, 561 F.2d at 324. A similar result was reached by the Fourth Circuit in Johnson v. United States, 554 F.2d 632 (4th Cir. 1977). In reaching this common result, both Circuit Courts specifically indicated that they were expressing no opinion as to the situation which now confronts us viz., whether a prevailing party would be entitled to attorney’s fees for representation in an administrative proceeding which took place entirely independently of, or prior to, an action in the district court. However, despite this limitation on their holdings both courts suggested, by innuendo, how they might resolve this issue. In Johnson, the Court, after indicating it was expressing no opinion on the issue just delineated, cited to Fitzgerald v. United States Civil Service Commission, 180 U.S. App.D.C. 327, 554 F.2d 1186 (1977). That case held that section 14 of the Veterans Preference Act of 1944 which inter alia directs the agency guilty of the wrongful discharge to “take corrective action that the Commission finally recommends” did not include the requisite express waiver of sovereign immunity nor the express Congressional intent to allow attorney’s fees. Accordingly, the Court reasoned, the language did not authorize the Civil Service Commission to award attorney’s fees for parties prevailing at the administrative level. In citing to Fitzgerald, the Johnson Court would seem to suggest that a similar conclusion might be the appropriate disposition of the issue which we now confront. The Parker court, in a footnote, addressed itself to an anomaly posed by the appellant if the court were to hold that in Title VII suits district courts could award fees for services performed at the administrative and judicial level, but that such fees could not be awarded for services performed at the administrative level alone. The appellant pointed out the possibility that a plaintiff who was unsuccessful at the administrative level but later successful in court might be able to recoup attorney’s fees for all legal services rendered, while, on the other hand, a plaintiff who was successful at the administrative level and, accordingly, had no reason to go to court, might not be able to recoup any fees. While not deciding whether such anomaly would, in fact, result the Court alluded to two suggestions offered by appellee as providing a possible resolution: The first possibility is to allow the plaintiff to come to court on the single issue of whether, and in what amount, attorneys’ fees are to be awarded. The second is for the agency itself to award fees pursuant to its authority under § 717(b), 42 U.S.C. § 2000e-16(b), to ‘enforce the provisions [prohibiting employment discrimination] through appropriate remedies, including reinstatement or hiring of employees with or without back pay, as will effectuate the policies of this section . . . .’ Parker, supra, 182 U.S.App.D.C. at 331, n. 24, 561 F.2d at 329 n. 24. The Court appeared to accord further weight to these suggestions in Foster v. Boorstin, 182 U.S.App.D.C. 342, 561 F.2d 340 (1977) when it noted “For reasons stated in Parker v. Califano, 182 U.S.App.D.C. 331, at n. 24, 561 F.2d 329, at n. 24, we believe this potential anomaly is far from inevitable.” Id., 182 U.S.App.D.C. at 345, 561 F.2d at 343 n. 8. With Fischer, Johnson and Parker in the background, a U.S. District Court for the District of Columbia faced the anomaly raised in Parker. In Taylor v. Claytor, 15 EPD § 7854 (D.D.C.1977), the Court resolved that anomaly by adopting the first alternative suggested by Parker, supra. It directed the defendant agency to reimburse the plaintiff for fees incurred at the administrative level as well as those incurred in the suit to obtain such fees. Subsequent to the Taylor decision, a different D.C. District Court in Smith, supra adopted the second alternative suggested by the Parker appellee and held that § 2000e-16(b) authorized the award of attorney’s fees by the defendant agency to a party who prevails in his complaint of discrimination at the administrative level and without subsequent court action. While acknowledging that “Title VII does not expressly state that an agency may award attorney’s fees . . . ,” the Court noted that “it does state that the agency is to enforce the Act ‘through appropriate remedies ... as will effectuate the policies of this section . . . .’ 42 U.S.C. § 2000e-16(b) (Supp. V 1975).” Finding that “one of the central policies of Title VII is to make whole the person who has been subjected to discrimination,” the Court held that § 2000e-16(b) “can be read to permit the agency to award attorney’s fees . . . On the issue of whether § 2000e-16(b) constitutes a waiver of sovereign immunity, the Court in Smith cited Parker as authority for the proposition that Title VII contains an express waiver of sovereign immunity in authorizing the award of attorney’s fees and that, to the extent Fischer was contrary, Parker was controlling We agree with Smith insofar as it holds that Title VII authorizes the award of attorney’s fees to a complainant who prevails at the administrative level and, we acknowledge considerable appeal in the practicality of allowing agencies as such to award such fees. However, we do not find in either the language or the legislative history of § 2000e-16(b) the express congressional intent required to authorize agencies to award attorney’s, fees. Rather we deem Congress to have vested such authority only in the courts. B. The Statutory Language of 2000e-16(b) The precise language of § 2000e-16(b) which Smith found to have authorized an agency’s award of fees reads: the Civil Service Commission shall have authority to enforce the [prohibition against discrimination in federal employment] through appropriate remedies, including reinstatement or hiring of employees with or without back pay, as will effectuate the policies of this section . . (emphasis supplied). We note at the outset that it is the Civil Service Commission which is charged with the responsibility of eliminating the effect of discrimination in federal employment through appropriate remedies. The section includes no language which specifically authorizes an agency, sua sponte, to devise and enforce remedial action. Accordingly, to find the requisite authority in § 2000e-16(b) for agencies to award attorney’s fees requires (1) an initial finding that the language authorizes the Commission to award such fees (2) that the statute authorizes the Commission to delegate that authority and (3) that the Commission has, in fact, delegated its authority. As to the power of the Commission, we note that the Commission is authorized to eliminate discrimination “through appropriate remedies, including reinstatement or hiring of employees with or without back pay . . . .” While acknowledging that this language is not to be construed as making reinstatement and back pay the exclusive remedies available to the Commission, we are of the opinion that if Congress had intended to authorize a remedy as significant as the awarding of attorney’s fees it would, as it did with back pay, have specifically enumerated such remedy. As to delegation, assuming arguendo the Commission is authorized to award attorney’s fees, logically it can be argued that its ability under § 2000e-16(b) to “issue such rules, regulations, orders, and instructions as it deems necessary and appropriate to carry out its responsibilities under this section . . . ” provides authority to delegate its power to the agencies to award such fees. However, in reviewing the regulation by which the Commission has delegated to agencies its authority to take remedial action, we find an even more specific enumeration of available remedies and again the awarding of attorney’s fees is conspicuously absent from that list. We conclude, accordingly, from the language of 2000e-16(b) and the Commission regulations that the awarding of attorney’s fees by agencies was neither intended by the Congress in writing the legislation nor by the Commission in interpreting it — and the legislative history of the section, in our opinion, bolsters that conclusion. C. Legislative History of § 2000e-16(b) The legislative history of § 2000e-16(b) offers no guidance as to whether “appropriate remedies” was intended to include the award of fees. As noted by Senator Williams, there was virtually no debate on the section. It is significant to us that there is a complete absence of any discussion of a concept so novel as the authorization to an administrative agency to award attorney’s fees. The significance of such absence is heightened when viewed in the light of a proposed Amendment No. 833 to the Senate bill (S. 2525) on Title VII. This proposed amendment was discussed in the context of a debate over whether to grant the Equal Employment Opportunity Commission (EEOC) the independent authority to issue cease and desist orders and read in part: In any action or proceeding under this title the [Equal Employment Opportunity] Commission or Court, as the case may be, may allow the prevailing party . a reasonable attorney’s fee as part of the costs. The proposed amendment also specified who would be eligible to receive fees and it set limits on the amounts which could be awarded. Debate on the proposed amendment was considerable. The Senate ultimately rejected the grant of cease and desist authority to the EEOC and the Conference Committee deleted the fee award language. However, the text of the amendment and the debate concerning it would suggest that if the Congress intended § 2000e-16(b) to authorize CSC or the independent agencies to make fee awards, it knew how to accomplish that purpose, and the Congressional intent to do so would have been more clearly reflected in the legislative history and in the ultimate language of § 2000e-16(b). III. Court Authority to Award Fees Under § 2000e-5(k) Having rejected the proposition that the CSC and agencies are authorized to award attorney’s fees under § 2000e-16(b), we move on to consider the other alternative suggested by the appellees in Parker, i. e., that § 2000e-5(k) authorizes a district court to award attorney’s fees to a party who has prevailed in his discrimination complaint at the agency rather than at the judicial level. Despite the fact that the Parker court expressed no opinion on this suggestion, we view the Parker holding as compelling its approval. For if, as Parker holds, a party losing at the administrative level but prevailing at the judicial level is entitled to reimbursement for legal services rendered at the administrative level, it would be unjust to deny legal fees to the party who was successful at the administrative level and hence had no need for recourse to the courts. It is a well established principle of statutory construction that Congress will not be presumed to have intended such an unjust result. See, e. g., Pennsylvania v. Nelson, 350 U.S. 497, 509-510, 76 S.Ct. 477, 100 L.Ed. 640 (1956); Consumers Union v. Sawhill, 512 F.2d 1112, 1118 (Em.App.1975). Section 20002-5(k) provides that: In any action or proceeding under this subchapter the Court, in its discretion, may allow the prevailing party . a reasonable attorney’s fee as part of the costs, and the Commission and the United States shall be liable for costs the same as a private person.' In interpreting this section, the Court in Parker made it clear that “proceeding” was intended to include an administrative proceeding and that a district court could award fees incurred in such proceeding. Parker, supra, 182 U.S.App.D.C. at 326-331, 561 F.2d at 324-329. Accordingly, the determination that a district court can award fees under the circumstances with which we are here concerned requires consideration of only one additional matter viz., does Title VII provide a jurisdictional basis for a party prevailing at the administrative level to bring suit in district court solely for attorney’s fees. We think such basis can be founded on either of two theories. First, 42 U.S.C. § 2000e-16(c) authorizes a federal employee to bring suit in district court “if aggrieved by the final disposition of his complaint.” In our opinion, a party who has prevailed in his discrimination complaint at the agency level but has not been awarded fees remains an aggrieved party under this section. Secondly, jurisdiction can also be founded directly in 2000e-5(k) when that section is viewed in terms of the integrated administrative-judicial enforcement scheme which Congress created in Title VII. Brown v. G. S. A., 425 U.S. 820, 829-833, 96 S.Ct. 1961, 48 L.Ed.2d 402 (1976); Parker, supra, 182 U.S.App.D.C. at 330-331, 561 F.2d at 328-329. Under that scheme, the administrative “proceeding” under § 2000e-5(k) can be viewed as “part and parcel of the same litigation for which an attorney’s fee is now sought.” Parker, supra, 182 U.S.App.D.C. at 331, 561 F.2d at 329 citing Johnson, supra at 633. Under this analysis a district court’s awarding of fees is but the final phase of the administrative proceeding. In concluding that a party who has prevailed in his discrimination complaint at the administrative level must, in every instance, come to the district court for an award of fees, we are not unmindful of the additional burden that is imposed upon the courts. However, although there might appear to be considerable practical appeal in allowing agencies to award such fees directly, we cannot approve such a procedure in the absence of an express congressional mandate. IV. Conclusion In view of the foregoing, and having found no genuine issues as to any material fact, we deny plaintiff’s motion for Summary Judgment insofar as it seeks a declaratory judgment that the defendant agency is authorized to award him attorney’s fees. As to plaintiff’s claim under § 2000e-5(k) for attorney’s fees and costs incurred for work performed at the administrative level and in prosecuting this action, plaintiff’s Motion for Summary Judgment should be, and the same hereby is granted. Absent objection from defendant, this Court will deem seven hundred eighty dollars ($780), the amount previously stipulated by the parties, as being a reasonable fee for work performed at the administrative level. Regarding plaintiff’s claim for attorney’s fees and costs incurred in connection with the prosecution of this action, plaintiff shall submit a petition itemizing such costs, with copy to defendant, within ten (10) days of the date on which this Memorandum and Order is filed. It is SO ORDERED this 13th day of April, 1978. . Plaintiffs Motion for Summary Judgment, Attachment 3. . Id. . In Smith, the Court held that Title VII permits an agency to award attorney’s fees to g party who prevails in his complaint of discrimination at the administrative level. Defendant filed a notice of appeal in Smith on March 30, 1977. . 421 U.S. 240, 260, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). . 424 U.S. 392, 399, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976). . 430 F.Supp. at 1352. . Id. . This section authorizes the Commission to enforce the antidiscrimination provisions of § 2000e-16(a) “through appropriate remedies including reinstatement or hiring of employees with or without back pay as will effectuate the policies of this section . . . .” . An appeal from the district court decision in Fischer is currently pending in the First Circuit. See Fischer v. Adams, No. 77-1264. . 182 U.S.App.D.C. at 331-332 n. 24, 561 F.2d at 329-330 n. 24. . This alternative was also adopted by the Court in Patton v. Andrus, C.A. 77-1730 (D.D.C. February 28, 1978). . Slip Op. at 6. . Id. . Id. . Id.

3383519-21912

ROVNER, Circuit Judge. A jury convicted Vernon Thornton of possessing ammunition after having been previously convicted of a felony in violation of 18 U.S.C. § 922(g)(1), attempting to possess with intent to distribute marijuana in violation of 21 U.S.C. §§ 841(a)(1) and 846, and possessing with intent to distribute marijuana in violation of 21 U.S.C. § 841(a)(1). The district court sentenced Thornton to twenty-one months of imprisonment on each count, to run concurrently. Thornton appeals his convictions and we affirm. I. On February 26, 2009, several agents of the Dane County Narcotics and Gang Task Force executed a search warrant on a package that had been flagged by FedEx as suspicious. The agents examined the package and determined that it contained marijuana. The packaging itself was very distinct. The marijuana had been encased in layers of plastic wrap with a colored fluid between some of the layers. That assembly was surrounded by foam packing chips. Lining the inside of the box were linoleum floor tiles. After resealing the package, the agents delivered it to the address listed. Although it was addressed to “Joanne Anderson,” a woman named Kim Carrillo took delivery of the package, and the agents then sought her cooperation. She told the agents that she had agreed to accept the parcel for a friend named Staci Amato in exchange for $100. Carrillo claimed not to know what the package contained, and she showed the agents where Amato lived. Amato had asked her long-time friend to accept the package because she had previously received two other boxes of marijuana at her home and did not wish to draw further attention to herself. Amato knew the three packages contained marijuana and she had agreed to accept them in exchange for cash. After receiving shipments, Amato had twice before delivered marijuana to a man she knew by the name of “Black.” Amato vividly recalled the first delivery, shortly before Christmas of 2008, because she was unemployed and needed the money. Delivering marijuana made her nervous and she wrapped the parcel like a Christmas present to avoid suspicion. The supplier had offered her a pound of marijuana as payment, but she preferred cash and so Black sold the pound for her and gave her $350 in cash. Amato received a similar package in February 2009, approximately one week before her arrest. As she had done before, she delivered the package to Black. On each occasion, Black paid her for the marijuana and she then wired the money to a person in Texas. Several days after delivering the first package, Black paid her $9,000. For the second package, he paid her between $2,000 and $3,000. She also received payment for taking delivery of the marijuana and passing it along to Black. At least some of the marijuana in the third package was intended for Black. On February 26, 2009, the agents arrested Amato as she was on her way to Carrillo’s apartment to pick up the package. Amato agreed to cooperate with the agents and set up a meeting with Black to deliver the latest shipment to him. Black did not want the entire package and he requested that Amato deliver only two pounds to him. The package contained more than nine pounds of marijuana. After making a series of phone calls to Black monitored by the drug task force agents, Amato and the agents proceeded to the agreed-upon meeting place, a nearby Dollar Tree store. Other agents went to Black’s home and followed him to the Dollar Tree store. When Black arrived and pulled up alongside Amato’s car, they arrested him. In court, Amato identified Thornton as the man she knew as “Black.” Thornton was driving a pickup truck at the time of his arrest. From the bed of the pickup truck, the agents recovered a second box which also contained foam packing chips and what appeared to be marijuana residue. The agents noted that, like the box Amato was delivering that day, the box in the truck bed was lined with linoleum tiles. Thornton agreed to talk to the agents and the conversation was recorded. Excerpts were later played for the jury. Thornton admitted in that conversation that he had more marijuana and also ammunition in his home. The agents then executed a search warrant at Thornton’s home where they recovered a duffle bag containing ten separate packages of marijuana weighing between 12.24 grams and 38.01 grams, for a total of approximately eight and a half ounces. They found a digital scale near the packets of marijuana. They also recovered three different calibers of ammunition. Thornton was charged with being a felon in possession of ammunition, possessing with intent to distribute the marijuana found in his home, and attempting to possess with intent to distribute the marijuana that Amato was trying to deliver to him on the day of his arrest. A magistrate judge handled all pre-trial proceedings. When Thornton’s lawyer filed a motion for disclosure of any experts the government intended to present at trial, the magistrate granted the motion but set no deadline for the disclosure. See Fed.R.Crim.P. 16(a)(1)(G). Approximately ten days before the start of the trial, the prosecutor, who had overlooked the court’s disclosure order, sent the curriculum, vitae (“CV”) of its drug expert to defense counsel, along with a note stating that she was providing the CV even though defense counsel had not requested expert witness disclosures. She also provided copies of expert reports from the government’s drug expert, and from the firearms expert who was to testify about the ammunition found in Thornton’s home. The prosecutor was incorrect, of course, as she candidly admitted in the district court, in the government’s brief on appeal, and during oral argument. The defense had in fact requested expert disclosures and the court had ordered them provided, but defense counsel chose not to correct the prosecutor’s misimpression. He believed (correctly) that it was not his duty to remind the government of its obligations under the court’s orders. By the day the trial was scheduled to begin, defense counsel had seen the reports from the drug and firearms experts and the CV of one of the experts. The magistrate conducted jury selection proceedings and the trial began the next day in the district court. At the start of trial, Thornton moved to exclude all of the government’s expert witnesses. Defense counsel argued that even in the case of the government’s drug expert, David Hannon, whose CV and report were provided before the trial, the CV and report were too thin to establish the witness’s expertise. The court offered to delay the trial so that the government could provide adequate disclosures of any law enforcement officers it intended to present as experts. The government decided to forego presenting any experts other than Hannon and ATF Agent William Baudhuin. Baudhuin’s report had already been provided and the government provided his CV to defense counsel on the morning of trial. The court allowed a long lunch break for the defense to review the materials, and also allowed defense counsel to conduct voir dire of Baudhuin during his testimony. The court overruled Thornton’s objections to the adequacy of the materials presented by the government, and asked defense counsel to submit in writing the case law on which he was relying for the proposition that the CVs or reports were inadequate. Defense counsel did not submit anything in writing but continued to make oral objections which the court overruled. Hannon testified that the substances found in Thornton’s home and in the package that Amato was delivering were in fact marijuana. Hannon described for the jury the various tests that were performed to make that determination. He also testified regarding the weight of the marijuana found at Thornton’s home and the weight of the marijuana in the package Amato was delivering to Thornton on the day of his arrest. Baudhuin then testified that the ammunition found in Thornton’s home was manufactured outside the state of Wisconsin. He based this testimony on the markings on the boxes of ammunition as well as on the ammunition itself, personal experience with ammunition, and catalogs produced by the manufacturers and maintained by the ATF. Thornton objected to Baudhuin’s testimony in part because it relied on documents that could be considered hearsay. The court overruled the objection. The government presented other law enforcement officers as fact witnesses only, and also presented the testimony of Carrillo and Amato. During cross-examination of Amato, defense counsel sought to question Amato about the extent of her involvement in selling marijuana to persons other than Thornton. The court sustained the government’s objections to this line of questioning as irrelevant to the charges. The jury convicted Thornton on all three counts and the court sentenced him to three concurrent terms of twenty-one months’ imprisonment. Thornton appeals. II. On appeal, Thornton contends that the court abused its discretion when it limited his cross-examination of Staci Amato. He maintains that the court erred in allowing the testimony of Hannon and Baudhuin as experts because their CVs and reports were too thin to qualify them as experts. He also argues that the court erred in allowing the expert testimony of ATF Agent Baudhuin because the court failed to apply the Daubert framework to his testimony and allowed him to rely on hearsay documents that were created for the purposes of prosecution rather than for scientific study. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). A. Thornton’s counsel wished to question Amato about her full involvement with a drug conspiracy based in Texas, the supplier of the marijuana in this case. He sought to demonstrate that Thornton was not Amato’s only buyer of marijuana, that only a portion of the third shipment was intended for Thornton, and that Amato was much more involved in the conspiracy than the government was portraying her to be. Thornton also wished to show that Amato had a motive to lie about how much marijuana she delivered to him. The main issue on the drug counts, Thornton contends, was whether he intended to distribute the marijuana or whether he simply possessed personal use amounts. Amato was allowed to testify that this was her third delivery to Thornton in a relatively short period of time. The amount of money that exchanged hands was indicative of substantial amounts of marijuana in each delivery. Thornton wished to show that Amato was motivated to lie about making multiple, large deliveries to Thornton in order to protect her larger customers who were actually engaged in the distribution of marijuana. The government objected to these questions based on relevance. Thornton, the government contended, was not charged with conspiracy; he was charged only with attempt to possess with intent to distribute two pounds of marijuana, and with possession with intent to distribute the marijuana in his home. On the monitored calls with Amato, Thornton was heard asking for “two books,” a term that Amato explained meant two pounds of marijuana. The government never claimed that the entire third package was destined for Thornton, only that he had requested two pounds of the latest shipment. The court ruled that Amato’s relative culpability as well as her other sales or deliveries were irrelevant to the charges against Thornton and refused to allow defense counsel to pursue the topic on cross-examination of Amato. We review the court’s decision to admit or exclude evidence for abuse of discretion. United States v. Boone, 628 F.3d 927, 932 (7th Cir.2010); United States v. Cooper, 591 F.3d 582, 590 (7th Cir.), cert. denied, — U.S. -, 130 S.Ct. 3530, 177 L.Ed.2d 1110 (2010); United States v. Wescott, 576 F.3d 347, 355 (7th Cir.2009), cert. denied, — U.S. -, 130 S.Ct. 1546, 176 L.Ed.2d 116 (2010). We will reverse and order a new trial only if any evidentiary errors are not harmless. Boone, 628 F.3d at 932; Cooper, 591 F.3d at 590; Fed.R.Crim.P. 52(a). Thornton argues on appeal that the evidence was relevant to demonstrate that Amato lied about her level of involvement with the conspiracy and, as previously noted, fingered Thornton as a major buyer in order to protect her other customers. Thornton contends that he purchased only personal use quantities of marijuana, and Amato’s testimony made it appear that he had purchased distribution level quantities on three occasions during a three-month period. Although we understand Thornton’s reason on appeal for wishing to explore Amato’s full involvement in the drug distribution conspiracy, at trial, Thornton’s explanation in defense of this line of questioning was considerably more murky. On appeal, counsel makes clear that Thornton wished to demonstrate that Amato had a motive to lie about the size and frequency of her deliveries to Thornton in order to protect customers who were truly purchasing distribution level quantities of marijuana from her. But at trial, Thornton simply argued that this line of questioning was relevant to Amato’s general credibility. Thornton also argued at trial that he wanted to demonstrate that the idea that the entire third package was destined for him was a fallacy. Finally, he wanted to establish that Amato was not an “innocent duped woman” but rather was a drug-dealing middle man, “knee deep” in the conspiracy and a much more culpable player than Thornton. R. 18-2, Tr. at 55-56. At trial, defense counsel never told the court that he wanted to show that Amato was lying about the size and frequency of deliveries to Thornton in order to protect others who were larger purchasers. He did not tell the court that he was attempting to demonstrate that Thornton purchased only user level quantities and that Amato lied about selling him more. His explanation in support of this line of questioning instead appeared limited to the third package. The court was correct that the government had already conceded that only two of the nine pounds in the package were destined for Thornton. Thus the government had already conceded the point that Thornton claimed he wished to make with his cross-examination. The jury was well aware that not all of the marijuana was destined for Thornton and could easily infer that Amato must have had other ways to dispose of the additional seven pounds. Thus the evidence already demonstrated the points Thornton wished to establish. Without Thornton providing a clearer explanation of the relevance of that line of questioning, we cannot say that the district court abused its discretion in limiting Amato’s cross-examination. Had Thornton explained that he was also attacking Amato’s credibility on the other two deliveries, then his proposed questioning of Amato regarding other customers or the scope of her involvement in the conspiracy may well have been relevant. But even if the court had abused its discretion in limiting this cross-examination, any error would have been harmless. In determining whether an evidentiary error is harmless, we consider whether, in the mind of the average juror, the prosecution’s case would have been significantly less persuasive had the improper evidence been excluded. Cooper, 591 F.3d at 590; United States v. Emerson, 501 F.3d 804, 813 (7th Cir.2007); United States v. Owens, 424 F.3d 649, 656 (7th Cir.2005); United States v. Eskridge, 164 F.3d 1042, 1044 (7th Cir.1998). The prosecution’s ease for Thornton’s intent to distribute was quite strong. With at least one of the other two packages, there was strong physical evidence that Thornton had taken delivery of another box of marijuana from Amato: the oddly lined box that was found in the bed of Thornton’s truck was very similar to the box Amato was seeking to deliver to him on the day of his arrest. In light of that second box, the two pounds that Thornton wanted from the third package, and the individually packaged eight and a half ounces found at his home next to a scale, his defense of personal use was dubious at best. Any error in limiting the cross-examination thus would have been harmless. On appeal, Thornton also claims that the court’s limitations on his cross-examination of Amato violated his Confrontation Clause rights. He did not, however, raise his Confrontation Clause concerns in the district court and so we review this forfeited argument for plain error. United States v. James, 464 F.3d 699, 709 (7th Cir.2006), cert. denied, — U.S. -, 129 S.Ct. 2035, 173 L.Ed.2d 1121 (2009); United States v. Stephenson, 557 F.3d 449 (7th Cir.2009). Before we will reverse for plain error based on an argument not made at trial, we must find (1) that there is error, (2) that it is plain, and (3) that it affects substantial rights. James, 464 F.3d at 709. “Once these three conditions have been met, we may exercise our discretion to correct the error if it seriously affects the fairness, integrity, or public reputation of judicial proceedings.” James, 464 F.3d at 709. The defendant bears the burden of establishing that the error affected substantial rights by demonstrating that the outcome probably would have been different without the error. Id. We have already determined that the court’s decision to exclude this line of questioning was not an abuse of discretion and likely would have been harmless even if Thornton had made clear the nature of his claim of relevance. Without a cogent explanation to the district court regarding the true relevance of this evidence to his defense that he possessed only personal use amounts of marijuana, the district court did not err in barring the line of questioning. And given that the exclusion of this line of questioning was harmless, Thornton falls far short of the standard for plain error in any case. The court therefore did not err in limiting the cross-examination of Amato. B. We next consider whether the court erred in allowing the expert testimony of the drug expert David Hannon and ATF Agent Baudhuin. Thornton continues to argue that the CVs and reports that the government provided for these witnesses were inadequate. Thornton also contends that the court failed to apply the Daubert framework to Agent Baudhuin’s testimony and allowed him to rely on hearsay documents that were created for the purposes of prosecution rather than for scientific study. According to Thornton, Baudhuin’s reliance on documents maintained by the ATF for the purposes of prosecution violated Daubert and prevented him from conducting an adequate cross-examination. Thornton frames this claim as a violation of the Confrontation Clause. We note first that, after the district court overruled Thornton’s oral objections to the adequacy of the government’s Rule 16(a)(1)(G) submissions, the district judge directed Thornton to “write out the case law” on which he was basing his objection so that she could review it. R. 18-2, Tr. at 66-67. Thornton did not respond to the district court’s request. He now contends that the court erred by simply overruling his objections to the Rule 16 materials without assessing under Daubert whether Hannon or Baudhuin qualified as experts. Thornton did not include the allegedly objectionable Rule 16 materials in the record on appeal. And his argument on appeal is undeveloped as was the objection he made in the district court. Undeveloped and unsupported arguments may be deemed waived. Wescott, 576 F.3d at 356; United States v. Tockes, 530 F.3d 628, 633 (7th Cir.2008). However, even were we to address the argument on its merits, we would conclude that the district court did not abuse its discretion in overruling the objection to the Rule 16 materials. We will assume for the sake of argument that the government’s disclosures were inadequate even though the state of the record does not allow us to assess the disclosures. Even if the disclosures were inadequate, Thornton would still be required to establish that any Rule 16 violation hampered his opportunity to prepare a defense or that the violation substantially influenced the jury. United States v. White, 582 F.3d 787, 804 (7th Cir.2009), cert. denied, — U.S. -, 130 S.Ct. 1542, 176 L.Ed.2d 136 (2010). See also United States v. Stevens, 380 F.3d 1021, 1026 (7th Cir.2004) (holding that a Rule 16 error will be reversed only for abuse of discretion that is prejudicial to the substantial rights of the defendant). Thornton has not even attempted to establish prejudice from the court’s decision to overrule his Rule 16 objections. Thornton has not demonstrated, for example, that he was unduly surprised or lacked an adequate opportunity to prepare a defense. Stevens, 380 F.3d at 1026. Moreover, when the government violates Rule 16, the remedy is not necessarily the exclusion of the expert evidence. Id. Instead, the district court may adopt a number of different remedies, including granting a continuance. Id. The court offered a continuance at one point in the discussion and Thornton did not accept the court’s offer, instead apparently choosing to go forward with the information provided. We turn finally to Thornton’s claim that Agent Baudhuin’s testimony violated the Confrontation Clause because he was allowed to testify that the ammunition was manufactured outside of Wisconsin based on materials kept by the ATF for the purposes of prosecution. We review evidentiary rulings implicating the defendant’s Sixth Amendment confrontation rights de novo. United States v. Turner, 591 F.3d 928, 932 (7th Cir.2010). If any error is found, an otherwise valid conviction should not be set aside if the constitutional error was harmless beyond a reasonable doubt. Id. Thornton’s main objection is that Agent Baudhuin’s testimony was based on written materials kept by the ATF for the purposes of prosecution, not on information generally relied upon by experts in the field.

6733506-7929

TOWNSEND, District Judge. This hearing was had upon a motion for a preliminary injunction restraining defendants from infringing certain claims of patent No. 496,443, granted April 11, 1893, to the Thomson-Houston Electric Company, assignees of the administrators of Charles J. Van Depoele, the validity of which have been sustained in this court, upon final hearing, in Thomson-Houston Electric Co. v. Winchester Ave. R. Co., 71 Fed. 192. The affidavits show that the defendants, respectively, make and sell certain trolley stands, adapted to be used with the pole and wheel of the overhead, underrunning, trolley system; that they have advertised the same for sale to the general public, and have sold them to jobbers in the open market. In some instances, defendants have sold said stands to repair or replace other stands purchased from the G-eneral Electric Company, which is alleged to control this complainant; and in the case of the Norwalk Street-Railway Company, equipped by said General Electric Company and this complainant, defendants sold their trolley stands, by reason of certain advantages in their construction, to replace those of the General Electric Company. It further appears that defendants have used a trolley pole, in connection with their stands, in their show room; and that they sold to one Hammer, representing himself to be an electrical contractor, one of said stands, equipped with a pole, harp, and wheels, which they had theretofore used in their experiments in their shop. The following facts, also shown, have a bearing upon the questions to be hereafter discussed: The entrance of defendants into the field as dealers in this class of electrical apparatus is recent, and with notice of the claims of said patent. Said trolley stands are adapted only for electric railways, and can only be used to effectuate the construction covered by the patent in suit. The advertisements thereof contained no limitation to sales for repairs, or to persons having the right to use said invention, and it may fairly be inferred from the affidavits that sales have been made to persons not having such right. The trolley stand is probably the most substantial, if not the chief, element in the patented combination. It does not appear that it wears out quickly, or breaks frequently, as do poles, wheels, and harps,— other elements in said combination. The bill charges defendants with actual infringement and threats to infringe. Such infringement, if any, is contributory only, inasmuch as defendants only deal in a part of the patented combination. Contributory infringement has been well defined as' “the intentional aiding of one person by another in the unlawful making or selling or using of the patented invention.” Howson, Contrib. Infringe. Pat. p. 1. Counsel for defendants rightly claim that the burden of proof is on complainant to show an intention on the part of defendants to aid others in such infringement. Coolidge v. McCone, 1 Ban. & A. 78, Fed. Cas. No. 3,186; Saxe v. Hammond, 1 Ban. & A. 629, Fed. Cas. No. 12,411; Snyder v. Bunnell, 29 Fed. 47. The question, however, as to what evidence is sufficient to prove such intention, has been considered in several cases where the facts were somewhat similar' to those herein presented. Thus, in Wallace v. Holmes, 9 Blatchf. 65, Fed. Cas. No. 17,100, the court said: “The complainants having a patent for an improved burner in combination with a chimney, the defendants have manufactured extensively the burner; leaving the purchasers to supply the chimney, without which such burner is useless. They have done this for the express purpose of assisting, and making profit by assisting, in a gross infringement of the complainants’ patent. They have exhibited their burner furnished with a chimney, using it in their sales rooms to recommend it to customers and prove its superiority, and therefore as a means of inducing the unlawful use of the complainants’ invention.” In Richardson v. Noyes, 2 Ban. & A. 398, Fed. Cas. No. 11,792, it is said that the defendants “Make only the standards for children’s carriages; but it is admitted that they are made and sold to the carriage builders for the express use to which they are put, — that is, for children’s carriages, — and it is not denied that this makes them, in law, infringers, if their standards, when combined with the carriages in the mode in which they are designed to be combined, infringe the patent.” To the same effect is Renwick v. Pond, 10 Blatchf. 39, Fed. Cas. No. 11,702, where Judge Blatchford held that the defendant would be an infringer if he sold an arm capable of being, and designed to be, used to effect the result of the patent by the means specified in its claims. It seems to me that this case falls within the rule as stated by Judge Wallace in Travers v. Beyer, 26 Fed. 450, where the court said: “Defendants cannot escape liability for infringement. They are making, and putting upon the market, an article which, of necessity, to their knowledge, is to be used for the purpose of infringing the complainant’s patent. They thereby concert with those to whom they sell the blocks to invade the complainant’s rights. They are intentional promoters of the ultimate act of infringement” In this latter case the defendants were manufacturers of blocks, and not makers of the hammocks, and merely sold the blocks to dealers in hammocks, who resold the blocks with or without the hammocks, at the option of the purchasers. Defendants further contend that the right to replace these stands was a part of the invention transferred to the purchaser when he bought the equipment. This argument might be applied to the wheels, the life of which continues only about four weeks, because, as was said by Mr. Justice Brown in Morgan Envelope Co. v. Albany Perforated Wrapping Paper Co., 152 U. S. 425, 14 Sup. Ct. 627: “Tbe right of tbe assignee to replace tbe cutter knives is not because tbey are perishable materials, but because the inventor of tbe machine has so arranged them, as a part of his combination, that the machine could not be continued in use without a succession of knives at short intervals. Unless they were replaced, the invention would have been of little use to the inventor or to pthers.” But, for reasons already shown, it would not apply to said trolley stands. Defendants further suggest that their trolley stand is capable of a lawful as well as an unlawful use, by way of reparation or restoration of a patented device, and that the presumption must be that this is the purpose for which it is to be used. As already shown, it does not appear, by advertisements or sales, that its use is to be confined to such purpose. Inasmuch as the defendants make and thus sell stands which are useful only for the purpose of performing functions involved in the operation of the patent, it raises a presumption that they intend their stands should be so used.' A suit for infringement cannot be defeated by merely showing that such devices could be used for some other purposes. Walk. Pat. (3d Ed.) 331. In view of these considerations, it seems to me that the complainant has sustained the burden of proof, and that, as was said by Judge Woodruff in Wallace v. Holmes, supra, “the actual concert with others is a certain inference from the nature of the case.” It is further claimed that to enjoin the sale of a single element only of the combination would give the patent a scope not covered by its claims. But, as was said by Judge Putnam in Davis Electrical Works v. Edison Electric Light Co., 8 C. C. A. 615, 60 Fed. 276: “Nor is the course of the law to be turned aside because the practical result may be to give a patentee, for the time being, more than the patent office contemplated; nor is the patentee to be deprived of his just rights because, under some circumstances, he gets incidental advantages beyond what he expressly bargained for.”

3720302-9666

DECISION AND ORDER LASKER, District Judge. Pursuant to Rule 54(d), Federal Rules of Civil Procedure, plaintiffs moved for a review of the taxation of costs by the clerk of this court and for an order disallowing costs in toto. The defendant cross-moved, pursuant to Rule 54(d), for an order allowing certain items in defendant’s bill of costs which were disallowed by the clerk of this court. This action arose under Sections 10 (b), 14(d) (1) and 14(e) of the Securities Act of 1934. It was commenced on August 27, 1968, at which time plaintiffs sought to enjoin consummation of defendant’s then pending tender offer and to require defendant to return all shares which had been tendered to it. Judge Wyatt denied a motion for a temporary restraining order, and on September 12, 1968, after a three-day evidentiary hearing, Judge McLean denied plaintiffs' motion for a preliminary injunction. On November 12, 1968, a twelve-day hearing commenced on a motion by plaintiffs to enjoin defendant, International Controls Corp. (“ICC”), from voting its Electronic Specialty Co. (“ELS”) stock at any regular or special meeting of the stockholders of ELS, or to divest defendant of its ELS common stock and deben tures, and on defendant’s motion for summary judgment. While denying plaintiffs’ request for divestiture or for an injunction against the voting of ELS stock, the District Court did find violations of the Act and issued a preliminary injunction against defendant’s violating the 1934 Act in the future in connection with any tender offer for securities of Electronic Specialty Co. It also granted summary judgment against one of the plaintiffs. Both parties then appealed to the Court of Appeals for a review of the decision. On January 24, 1969, that Court affirmed the District Court’s denial of the relief sought by plaintiffs, but reversed the District Court’s order granting the preliminary injunction against future violations of the Act with directions to dismiss the complaint. (409 F.2d 937 (2d Cir., Jan. 24, 1969)). I. PLAINTIFFS’ MOTION FOR DIS-ALLOWANCE OF COSTS IN TOTO Under Rule 54(d), the prevailing party is generally allowed costs. The plaintiffs, while admitting that the defendant is the prevailing party, nevertheless request the court to exercise its discretion and not to follow the general rule. Although the court has discretionary authority to deny costs to the prevailing party, the facts here do not warrant the exercise of that discretion. There is no doubt that the plaintiffs brought this action in good faith, but this alone will not alter the general rule, especially where the losing party is financially able to bear the costs of the litigation. The cases cited by plaintiffs involve culpable actions by the prevailing party which justify the “penalty” of the denial of costs. No such actions are present here. Ledge Hill Farms, Inc. v. W. R. Grace & Co., 230 F.Supp. 638 (SDNY, 1964), is also distinguishable from the present case. There, the defendant was found to have violated Section 2(e) of the Robinson-Patman Act, but was held to be the prevailing party when thé plaintiff was found to have suffered no damages. No such violation by the prevailing party was present here. In their moving papers, the plaintiffs express concern that if the defendant is awarded costs, it will not seek to collect the proportionate share from Electronic Specialty Co. Since defendant now owns a controlling interest in ELS, it is in the interest of justice for defendant to seek no more than one-third of the awarded costs from each plaintiff, despite the general rule that where there are several plaintiffs who join together each is individually liable for all the costs and not merely for his pro rata share. The plaintiffs’ motion is therefore denied, subject to the above allocation provision. II. DEFENDANT’S MOTION FOR ALLOWANCE OF CERTAIN COSTS DISALLOWED BY THE CLERK A. TRANSCRIPTS OF HEARINGS Defendant claimed $21.90 and $291.95 for the cost of transcripts of hearings before Judges Wyatt and McLean, respectively, and $3,179.50 for the transcript of hearing before the present Judge. The clerk of the court disallowed the first two, and reduced the third figure to $2,470.80, based on the regular rate for an original plus one copy. The cost of transcripts of testimony taken at trial (hearings here) may be taxed against the losing party when, in the court’s judgment, such transcripts are necessary for use in the case. Title 28 U.S.C. § 1920(2) specifically authorizes the taxation of such costs, stating that the judge or clerk may tax as costs "“fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case.” The major consideration, therefore, is whether the transcript was “necessarily obtained for use in the case.” Berner v. British Commonwealth Pacific Airlines, 362 F.2d 799 (2d Cir., 1966); Bank of America v. Loew’s International Corp., 163 F.Supp. 924 (SDNY, 1958). The taxation of costs for the transcript of the hearing before Judge McLean is proper, since it was necessary for “use in the case.” Portions of the transcript were freely introduced into the later hearing. The transcript of the hearing before the present Judge was, in a similar manner, “necessarily obtained for use in the case.” The hearing was a lengthy and complex one, and its complexity could reasonably have been anticipated before the hearing commenced. Berner v. British Commonwealth Pacific Airlines, supra. Witnesses were often questioned regarding testimony previously given on matters of a specialized and detailed nature. The transcript was also made necessary by the fact that the parties were required to submit proposed findings of fact and conclusions of law at the close of the hearing. The above factors demonstrate that the transcript was necessary to an effective performance of counsel and not merely for their convenience. Bennett Chemical Co. v. Atlantic Commodities, Ltd., 24 F.R.D. 200 (SDNY, 1959). The court found the transcript helpful during the hearing, as well as after the hearing ended. Prashker v. Beech Aircraft Corp., 24 F.R.D. 305 (D. Del., 1959). The court further concludes that the costs for the transcripts of the hearings should be assessed at the daily rate, since time was of the essence throughout this litigation because of the impending stockholders’ meeting of ELS (December 30, 1968) and the desire of the parties to expedite appeal. Therefore, costs of the two hearing transcripts of $291.95 and $3,179.50 are taxed in full in favor of the prevailing party, for a total of $3,471.45. B. FEES AND DISBURSEMENTS OF WITNESSES Witness fees are properly includable as costs of trial, pursuant to Title 28 U.S.C. § 1920(3). Defendant claims costs for the appearance of two witnesses, consisting of $8.00 each for witness fees ($4.00 per day for two days), $16.00 each for daily subsistence ($8.00 per day. for two days), and travel expense of $336.00 and $36.80. The clerk of the court allowed the costs for witness fees and daily subsistence, pursuant to Title 28 U.S.C. § 1821, but limited the travel expenses to $16.00 for each witness (8 cents per mile each way), applying the “100-mile limit rule.” The rule which limits costs for a witness’ travel to 100 miles each way does not stand as a rigid boundary to taxation of costs. Farmer v. Arabian American Oil Co., 379 U.S. 227, 85 S.Ct. 411, 13 L.Ed.2d 248 (1964). In that case the Second Circuit, although it did not compel abandonment of the 100-mile rule, suggests the appropriateness of its abandonment in 324 F.2d 359, 363: “As this case well illustrates, a 100-mile limitation is an anachronism in a day when the facility of world-wide travel and the development of international business make the attendance at trial of witnesses from far off places almost a matter of course.” The 100-mile rule has been disregarded where the witness’ testimony is relevant and material, reasonably necessary, and bears on essential issues of the case. Bank of America v. Loew’s International Corp., supra; Mailer v. RKO Teleradio Pictures, Inc., 332 F.2d 747 (2d Cir., 1964); Maresco v. Flota Mercante Grancolombiana, 167 F.Supp. 845 (ED NY, 1958); Bennett Chemical Co. v. Atlantic Commodities, Ltd., supra. The two witnesses in question were directors and officers of defendant ICC, and their testimony fell within the above guidelines. The expenses of directors and officers can be allowed, even though they are testifying on behalf of their corporations, so long as their . interest in the litigation is no more than a natural concern for the welfare of the corporation as opposed to actual participation in the litigation to the extent that they become identifiable as a party in interest. Perlman v. Feldmann, 116 F.Supp. 102 (D.Conn., 1953); Modick v. Carvel Stores of New York, Inc., 209 F.Supp. 361 (SDNY, 1962). 6 Moore’s Federal Practice, § 54.77(5). The two witnesses in the instant case (Pershing and Thorpe) have not assumed the roles of a party in interest. Further the costs for these witnesses is not out of proportion to the amount of money involved in the litigation. Farmer v. Arabian American Oil Co., 31 F.R.D. 191 (SDNY, 1962). One of the witnesses came to New York from California, a round trip distance of 6040 miles. Rather than asking for 8 cents per mile, the defendant is claiming the cost of his actual air fare ($336.00). The court concludes that travel expenses of $336.00 and $36.80 should be allowed, in addition to the amount of $24.00 each allowed by the clerk for witness fees and daily subsistence, for a total of $420.80. C. COSTS OF TAKING DEPOSITIONS

4220726-24721

SULLIVAN, District Judge. . This is a civil action under the Declaratory Judgment Act of June 14, 1934, 28 U.S.C.A. § 400, brought by the United States against Montgomery Ward & Company, Incorporated, and sixteen of its officers. This court has jurisdiction of this suit by virtue of Section 24(1) of the Judicial Code, 28 U.S.C.A. § 41(1), and under Section 274(d) of the Judicial Code, 28 U.S.C.A. § 400. The cause was submitted to the court on the pleadings, affidavits and briefs, and counsel agreed that the hearing was on the merits as well as on the motions for temporary and permanent injunctions and declaratory judgment. Under authority alleged to have been derived from Section 3 of the War Labor Disputes Act, known as the Smith-Connally Act, 50 U.S.C.A.Appendix § 1503, the President of the United States, by Executive Order No. 9508, dated December 27, 1944, directed the Secretary of War to take possession of and operate the plants and facilities of Montgomery Ward & Company located at Jamaica, New York; Detroit, Dearborn and Royal Oak, Michigan; Chicago, Illinois; St. Paul, Minnesota ; Denver, Colorado; San Rafael, California; and Portland, Oregon. On December 28, 1944, the Secretary of War took possession of the plants and facilities described in the Executive Order, and is now in possession thereof. Simultaneously, on December 28, 1944, the complaint herein was filed, wherein the Government asks for a declaratory judgment and decree of this court declaring the rights and status of plaintiff, and more particularly declaring that under the Executive Order of the • President issued on December 27, 1944, the Government is in lawful possession of the plants and facilities of the defendant. The complaint also asks that the court enjoin defendants from interfering with plaintiff’s possession of such plants and facilities. In 1940-1941 with the greatly expanded war production program the number of strikes in the country increased rapidly. To meet this situation and to provide for the peaceful settlement of labor disputes while at the same time maintaining the production of material and equipment essential to National defense, the President, on March 19, 1941, by Executive Order No. 8716 established the National Defense Mediation Board with jurisdiction to hear and make recommendations in labor controversies or disputes which might interfere with war production. The National Defense Mediation Board functioned until December, 1941, when it seemed expedient and advisable that it be given additional power. On December 17, 1941, ten days after Pearl Harbor, the President convened at Washington a conference of representative leaders of labor, industry and the public to discuss a national wartime labor policy. It was there agreed and recommended that for the duration of the war there should be no strikes or lock-outs, but that all labor disputes should be peacefully settled by a Board to be established for the adjustment of such disputes. Accordingly, the President, on January 12, 1942, by Executive Order No. 9017, 50 U.S.C.A.Appendix § 1507 note, established the National War Labor Board, authorized to take jurisdiction, either as a result of certification from the Labor Department or from its own investigation, over such labor disputes as might lead to substantial interference with the war effort; and which could not be settled by collective bargaining or conciliation. The complaint herein sets out that Montgomery Ward has had a long history of labor disputes which it has refused to settle peacefully by the procedures provided in Executive Order No. 9017 and the War Labor Disputes Act; and the Government insists this course of action interferes with or threatens to interfere with and delay the effective prosecution of the war. Defendant has filed its answer to the complaint, alleging that the President issued Executive Order No. 9508 on December 27, 1944, for the purpose of enforcing the orders of the War Labor Board, which are only advisory. That the order of the President in this case is illegal and void, and the seizure made pursuant thereto is in violation of the Constitution of the United States. Defendant further urges that no Act of Congress and no power conferred upon him by the Constitution authorizes the President to enforce the orders of the War Labor Board by seizure of its plants and properties. Plaintiff and defendant have both filed numerous affidavits in support of their respective positions; the case has been argued at length and exhaustive briefs have been furnished to the court. Montgomery Ward is admittedly one of the largest merchandising organizations in the world. Its business is nation-wide in scope. It sells approximately $600,000,000 worth of merchandise annually to approximately 30,000,000 customers, a large percentage of whom are farmers or live in rural areas. It operates 640 department stores, 190 catalogue mail order offices and 9 mail order houses. Its general administrative offices and a warehouse as well as a mail order division and a retail store, are located at Chicago. It sells building materials, farm machinery, heating apparatus, plumbing supplies, electrical and automobile supplies, repair parts, clothing, shoes, drugs, furniture, hardware, home furnishings, dry goods and parts for military aircraft. At various times it has secured from Government agencies preferences and priorities permitting it to obtain essential materials. It operates three factories, one located at'Chicago Heights, which manufactures paints and varnishes. One located at Fort Madison, Iowa, where fencing and fence materials are manufactured; and the Hummer plant-at Springfield, Illinois, which ordinarily manufactures farm equipment, but which is presently partly engaged in manufacturing carburetors, propellers and gun mounts to be incorporated in military aircraft, which plant has been in the possession of and operated by the Government since May 21, 1944. None of these factories are covered by the Executive Order. It is admitted that the manufacturing activities carried on by Montgomery Ward are minor compared to its entire business. It is principally engaged in a retail mail order business, selling the wide variety of goods and merchandise set out in the complaint. The business is managed, controlled and directed from the administrative offices in Chicago. The Government contends that for more than two years Montgomery Ward has refused to adjust labor disputes with its employees on the basis of the directive orders issued by the War Labor Board. That these disputes have many of them resulted in strikes, which have interrupted operations in some of Ward’s plants and facilities, and that they threaten to stop operations in others, which conditions may spread to other industries which are essential to the war effort, all of which will impede and delay the successful prosecution of the war. Because of this situation the Government insists that the seizure of the plants and facilities of Montgomery Ward was justified under the provisions of Section 3 of the War Labor Disputes Act. The Government further contends, that in the event the court does not find this true, the President is authorized under his general war powers to make such seizure. The first question for this court to decide is whether the President, under Section 3 of the War Labor Disputes Act, had power to take over and operate the plants and facilities of Montgomery Ward & Company. That section, 50 U.S.C.A.Appendix § 1503, provides: “Sec. 1503. Power of President to take possession of plants; amendment of section 309 of this Appendix "Section 9 of the Selective Training and Service Act of 1940 (section 309 of this Appendix) is hereby amended by adding at the end thereof the following new paragraph : “The power of the President under the foregoing provisions of this section to take immediate possession of any plant upon a failure to comply with any such provisions, and the authority granted by this section for the use and operation by the United States or in its interests of any plant of which possession is so taken, shall also apply as hereinafter provided to any plant, mine, or facility equipped for the manufacture, production, or mining of any articles or materials which may be required for the war effort or which may be useful in connection therewith. Such power and authority may be exercised by the President through such department or agency of the Government as he may designate, and may be exercised with respect to any such plant, mine, or facility whenever the President finds, , after investigation, and proclaims that there is an interruption of the operation of such plant, mine, or facility as a result of a strike or other labor disturbance, that the war effort will be unduly impeded or delayed by such interruption, and that the exercise of such power and authority is necessary to insure the operation of such plant, mine, or facility in the interest of the war effort.” While in a majority of the cases arising after the establishment of the War Labor Board the parties to labor disputes adjusted their differences on the basis of the decisions rendered by the Board, nevertheless labor disputes and disturbances arose which frequently resulted in strikes. Everyone agrees that strikes in time of war are a serious menace, but more especially if they affect industries engaged in manufacturing or producing goods which are useful or necessary for carrying on the war. Legislation directed solely against strikes would tend only to leave labor at the mercy of employers without solving the labor problem, therefore it seemed imperative that some method be provided for settling war labor disputes in an orderly manner which would be fair to everyone concerned. Apparently, to meet this situation, Congress, on June 25, 1943, enacted the War Labor Disputes Act, under which the War Labor Board previously created by Executive Order of the President, and composed of representatives of employers, employees and the public, was authorized to hear and decide all labor disputes which might ultimately lead to substantial interference or threatened interference with the prosecution of the war. It appears that during the past two and one-half years the War Labor Board has considered numerous labor disputes between Montgomery Ward and its employees, and has issued directives which the Company, in practically every instance, has refused to obey, consequently resulting in strikes. The Board has no power to enforce its decisions and there is no statutory authorization for review of its orders. Employers Group of Motor Freight Carriers, Inc., v. National War Labor Board, App.D.C., 143 F.2d 145, 147, where the court said: “No one threatens, and no one could maintain, either judicial or administrative proceedings against the appellants upon the authority of the Board’s order.” The Court of Appeals in this case concluded its opinion by saying that action of the Board would be “informatory and ‘at most, advisory.’ ” The Supreme Court denied certiorari in this case. 65 S.Ct. 72. The War Labor Disputes Act, however, provides that the President may take possession of “any plant, mine, or facility equipped for the manufacture, production, or mining of any articles or materials which may be required for the war effort or which may be useful in connection therewith,” after he has investigated and found that there is “an interruption of the operation of such plant, mine, or facility as the result of a strike or other labor disturbance, that the war effort will be unduly impeded or delayed by such interruption, and that the exercise of such power and authority is necessary to insure the operation of such plant, mine, or facility in the interest of the war effort.” I have carefully considered the War Labor Disputes Act, and applying all of the standards by which its constitutionality may be tested, I am of the opinion that it is constitutional. Under the Act the President is authorized to take over any mine, plant or facility which is equipped for the manufacture, mining or production of any article or material necessary or useful in the war effort, providing the conditions of the statute are met. The question which now confronts me is whether the President is given power under this statute to take possession of an establishment which is engaged solely in retail selling and distribution. “Production” and “distribution” are not synonymous terms. The Appleton Century Dictionary, edition of 1933, defines the noun “production” as “The act of producing, or the state of being produced; creation; manufacture.” And the verb “produce” is defined as “to bring forth, bear or yield, as young, or natural products; give forth, furnish, or supply, as a mine producing silver; to bring into existence, give rise to, cause or make, (as to produce steam, heat, a result, or a noise); make by working upon raw material, or manufacture.” Webster’s New International Dictionary, Merriam’s Edition of 1941, defines “production” as “act or process of producing, bringing forth, or exhibiting to view; as the production of commodities.” “Produce” is defined as “to bring forth, as young, or as a natural product or growth; to give birth to; to bear; generate; yield; furnish, as the earth produces grass; trees produce fruit.” “To give being or form to; to manufacture; make; as he produces excellent pottery.” In any dictionary I have consulted I have not found “production” defined so as to include "distributionThe Government has cited cases which it contends indicate that the term "production” has a broader significance than that' customarily given to it, defining it as “to make available,” but it seems to me that none of those cases justify the application of the term to facilities whose sole business is that of retail sale and distribution. Seizure of plants and facilities of all kinds is not authorized by the Act. Under its provisions possession may be taken only of “plants and facilities which are equipped for the mining, manufacture or production of articles or materials which may be required for the war effort or which may be useful in connection therewith.” In support of its contention the Government cites the cases of Manufacturers’ Land & Imp. Co. v. United States Shipping Board Emergency Fleet Corporation, 264 U.S. 250, 44 S.Ct. 314, 68 L.Ed. 664, and Briggs Mfg. Co. v. United States, D.C., 30 F.2d 962. In the case of Manufacturers’ Land & Imp. Co. v. United States Shipping Board Emergency Fleet Corporation, the court held, quoting from the syllabus: “The Act of March 1, 1918, * * * empowering the United States Shipping Board Emergency Fleet Corporation to requisition land for the construction thereon of houses for employees, and the families of employees, of shipyards in which ships were being constructed for the United States, and to construct on such land for their use houses ‘and all other necessary or convenient facilities’, etc., authorized the taking of land for an electric railway terminal, for the purpose of providing convenient transportation for employees of a nearby shipyard, and their families, for whom housing was being provided under the act on other land in close proximity.” In Briggs Manufacturing Co. v. United States, the court held, quoting again from the syllabus: “Articles produced by cotton mill held to have contributed to prosecution of war, and enumerated facilities of such mills, including tenement houses for additional help, icehouse and furnace for head weaver’s house, were for production of articles' contributing to prosecution of war, within Revenue Act of 1918 * * relative to deduction in computing income for amortization of cost of acquired war facilities.” Both of these cases involved facilities the operation of which were held to be necessary or useful in the war effort, and might be applicable here if the War Labor Disputes Act authorized the President to take over facilities the operation of which are necessary or useful in the war effort, where that operation is being interrupted by a labor dispute. But that is not the question involved in the instant case. The War Labor Disputes Act authorizes the President to seize a plant or facility only when it is equipped to produce articles necessary or useful in the war effort. The Government further urges that the Act taken in its entirety authorizes the President to seize the plants and facilities of Montgomery Ward & Company. The War Labor Disputes Act is not an integrated piece of legislation. It covers five distinct subjects all related, but each separate and distinct. Section 3 is the plant seizure section. It is referred to as an amendment to section 9 of the Selective Training and Service Act. Section 9 of the latter Act, 50 U.S.C.A.Appendix § 309, provides for the seizure of property where the Government had placed an order for the manufacture and production of munitions of war and there had been a refusal on the part of a contractor to comply with the order. The placing of the order and the refusal to deliver war materials were definitely prerequisites to seizure. Section 3 of the War Labor Disputes Act enlarges upon Section 9 of the Selective Training and Service Act by providing that the President may seize “any plant, mine, or facility equipped for the manufacture, production, or mining of any articles or materials which may he required for the war effort or which may be useful in connection therewith.” The placing of an order and refusal upon the part of a contractor to fulfil such order are not prerequisites to seizure under Section 3. Sections 4, 5 and 6 of the Act, 50 U.S.C.A.Appendix §§ 1504-1506, refer to conditions of employment in plants seized under Section 3 and provide penalties for interference with the operations of the plant while under Government control. Section 7 of the Act, 50 U.S.C.A.Appendix § 1507, deals with the functions and duties of the National War Labor Board. This is the section which for the first time gave statutory recognition to this Board. It clothed the Board with certain authority, including subpoena power. Specifically, Congress required that the Board in its decisions conform to the provisions of the Fair Labor Standards Act, the National Labor Relations Act, 29 U.S.C.A. § 201 and 151 et seq., and the Emergency Price Control Act, 50 U.S.C.A.Appendix § 901 et seq. Section 8 of the Act, 50 U.S.C.A.Appendix § 1508, provides for the thirty day “cooling off” period before a strike shall begin. It also provides for notices of contemplated strike and for secret elections. Section 9, 50 U.S.C.A.Appendix § 1509, amends the Corrupt Practices Act and forbids labor organizations from soliciting contributions in connection with Federal elections. The most severe part of the Act is the plant seizure section. It is inconceivable that Congress would exercise so much care in clarifying Section 8 and leave Section 3 (the plant seizure section) to conjecture. It is obvious that Congress had but one reason for not enlarging upon the terms “plant, mine, or facility equipped for the manufacture, production, or mining of any articles or materials” which may be required for the war effort, and that is that the language is too clear to require definition. Nor was any provision made for enforcing the orders of the War Labor Board, Congress apparently believing, and so saying, that seizure would be necessary only in cases where the employer’s facilities were equipped for manufacturing, mining or producing. Section 8 provides for the “cooling off” period and applies to controversies which seriously threaten to interrupt the war production, but I do not believe that the language used in Section 8 warrants my construing Section 3 as if the the same terms were used ip both. I have carefully read the entire legislative history of the Act and from it I cannot draw the conclusion that the terms “equipped to manufacture, mine or produce,” also include the term “distribution” or that Congress intended by the Act to grant to the President the power to seize a plant or facility engaged solely in retail “distribution.” In the case of Ex parte Mitsuye Endo, 65 S.Ct. 208, 217, the court said: “We must assume that the Chief Executive and members of Congress, as well as the courts, are sensative to and respectful of the liberties of the citizen. In interpreting a war-time measure we must assume that their purpose was to allow for the greatest possible accommodation between those liberties and the exigencies of war. We must assume, when asked to find implied powers in a grant of legislative or executive authority, that the lawmakers intended to place no greater restraint on the citizen than was clearly and unmistakably indicated by the language they used.” I am of the opinion that the War Labor Disputes Act did not confer upon the President power to seize the plants and facilities of Montgomery Ward & Company, a retail establishment engaged solely in distribution. On April 25, 1944, a dispute then being in existence between Montgomery Ward and a local Union at its Chicago plants and facilities, the President issued an Executive Order authorizing the Secretary of Commerce to take possession of and operate Ward’s Chicago facilities. Application was made by plaintiff for a restraining order followed by a motion for a temporary injunction. The case was heard and taken under advisement by the Court, but was dismissed because the Government surrendered possession of the Ward property. I come now to the second question : Whether the President independently of action by Congress has inherent power under the Constitution which authorizes him to make such a seizure as the one here in question. Article II, Section 2, of the Constitution provides: “The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States.” As Commander in Chief the President directs the activities of the armed forces. He has extensive authority over persons and property in the field of military operations. It is his responsibility to see that the armed forces are moved, housed, clothed and fed, and furnished with arms, supplies, and all implements of war; and there is no doubt but what in emergency he may seize arms, supplies, food, clothing, transportation facilities and all implements of war to the extent of the needs of the armed forces. In military crisis, when Congress is not in session, the President has power to do many things found necessary for the preservation of the Government. When Congress is in session, but when the emergency is so great that the national safety would be imperiled before Congress could act, the power resides in the President, as a function of his military office, to do the things necessary to preserve the Government, but which it would not be lawful for him to do except for the emergency. An illustration of the use of this power is the seizure under Executive Order of the President of the bituminous coal mines during the strike in 1943; and the seizure of railroads and telegraph lines by President Lincoln after Fort Sumter was fired upon at the opening of the Civil War. The military necessity for action taken in the theatre of war will not ordinarily be inquired into by the courts, but outside the theatre of war the President, as Commander in Chief, does not have unlimited power over the persons and property of citizens. He may not seize privdte property just because it might be useful or beneficial to the armed forces. In a war emergency he may seize a particular railroad when military necessity requires its use for the movement of the naval or military forces of the United States and their supplies and equipment; but he may not, without authority from Congress, lawfully seize all of the railroads of the country immediately war is declared. If Montgomery Ward’s plants and facilities were located within the actual theatre of military operations, and its goods were necessary and essential for the use of the naval or military forces, then the Commander in Chief might lawfully take possession of them. But the armed forces, so far as we know, being adequately supplied and equipped, and Montgomery Ward’s plants and facilities being far removed from the scene of actual military activities, those plants and facilities may not be seized by the President simply because at some future time, on account of the existence of a labor dispute between it and its employees, Montgomery Ward may not be able to deliver supplies deemed necessary or useful to the war effort.

1736224-11074

COFFEY, Circuit Judge. Robert A. Hoag, Jr. appeals from his conviction on three counts of knowingly making false statements for the purpose of obtaining mortgages insured by the Department of Housing and Urban Development (HUD) in violation of 18 U.S.C. § 1010. Hoag is a real estate investor whose allegedly false statements involved the amount of earnest money received from each of three buyers in connection with a HUD insured residential loan. After being found guilty by a jury, he was subsequently fined $100 for each violation. On appeal, Hoag contends first that because “materiality” is an element of 18 U.S.C. § 1010, the trial court erred both in denying his pre-trial motion to dismiss for failure to include an allegation of materiality in the superseding indictment and in refusing to instruct the jury that the false statements he made must be as to a material fact. Second, Hoag insists that because “specific intent” is an element of section 1010, the trial court should have granted his motion to dismiss for failing to include “specific intent” in the indictment. Finally, he claims that the trial court committed error in receiving in evidence documentary exhibits without requiring that the Government establish a proper evidentiary foundation. Finding no merit in these assertions, we affirm his conviction. I. Hoag, Jr. is a manager and broker for the Robert Hoag Company, a real estate company which sells residential properties requiring rehabilitation. Hoag is the son of the owner of the company, Robert W. Hoag, whom we shall refer to as “Hoag, Sr.” Hoag, Sr. was also named as a co-defendant in the superseding indictment. From 1980 to 1984, ninety percent of these homes were financed with mortgages insured by HUD and the Fair Housing Administration (FHA). The FHA is a division of HUD. FHA has a loan guarantee program well known to the public whereby it grants mortgage insurance to a lender-mortgagee who is thereby insured against loss if the mortgagor fails to pay off the loan. The mortgage insurance guarantee referred to here was obtained in a two-step procedure. Initially the mortgagor-buyer was required to apply to the FHA for an appraisal of the property; this step is called the conditional commitment process and relates to the value of the property. The second step was the mortgagee’s application for approval of the mortgagor’s credit — the firm commitment process. Here, the mortgagee was required to provide the necessary financial information to the lender on a “Form 2900” including a verification of employment, a credit report, and the like. FHA relies on the lender for truth and accuracy as to the information contained in the application. Upon review and subsequent approval, the FHA endorses the insurance. To be eligible for an insured loan, the borrower must have sufficient assets to be able to make a minimum downpayment of three percent of the acquisition costs of the first $25,000 and five percent of all amounts above $25,000. The FHA also requires that a settlement statement issued at the closing include full disclosure of all earnest money deposited with the broker. The borrower must list all amounts paid by or on behalf of the borrower including any money given or loaned from persons other than the buyer. This money may not come from anyone with an interest in the sale of the property, e.g., the broker. If it is discovered that a borrower knowingly made a false statement concerning the downpayment (the required minimum investment), the application for insurance must be rejected by HUD. Evidence was introduced at trial establishing that Hoag’s employees knew about the FHA minimum downpayment requirement. Salesperson Millie Thompson stated that the company occasionally would assist buyers who had less than the required downpayment by paying the remainder by company check. The company did not require repayment at closing time. The owner, Hoag, Sr., told his salespersons that this practice was legitimate. The realty company would subsequently send letters regarding the amount of down-payment to the lenders. These letters, however, did not reflect that when necessary because of the buyer’s inability to make the downpayment, the required deposit was advanced from the company’s general fund. Hoag challenges the admission on hearsay grounds of three letters to the Grootemaat Corporation, a lender, wherein the company had made a partial payment of the required downpayment. These letters comprised the exhibits used to convict Hoag of the three counts of violating section 1010. At trial, each buyer testified as to the falsity of the statements appearing in the settlement statements. Rosie Cooper indicated that the statement contained in her letter — that the company had received $700.00 in earnest money from her — was false since she had only made a $370.00 downpayment. Laverne Kubsack reviewed her challenged letter and testified that its statement that she had paid $1,700.00 in earnest money was false; she had only paid $300.00 before closing. Finally, Rita Rolaff stated that the statement in her letter that the company had received $1,000.00 in earnest money from her and her husband was not true. II. A. Materiality under Section 1010 Hoag asserts that both the indictment and jury instructions in this case were defective for failing to include materiality as an element of an offense under section 1010. Materiality, however, appears nowhere in the text of section 1010. See United States v. Hermon, 817 F.2d 1300, 1301 (7th Cir.1987) (construing section 1010). This is in contrast to the required materiality element of section 1001, which this Circuit has consistently emphasized as being a requirement for a conviction when one is found guilty of violating this section. See, e.g., United States v. Kwiat, 817 F.2d 440, 445 (7th Cir.1987); United States v. Brantley, 786 F.2d 1322, 1326 (7th Cir.1986); United States v. Malsom, 779 F.2d 1228, 1235 (7th Cir.1985); United States v. Brack, 747 F.2d 1142, 1147 (7th Cir.1984); United States v. Dick, 744 F.2d 546, 553 (7th Cir.1984). Hoag fails to cite any caselaw establishing that materiality is a requirement for conviction under section 1010. The most analogous case to bolster Hoag’s argument is Gevinson v. United States, 358 F.2d 761 (5th Cir.1966), cert. denied, 385 U.S. 823, 87 S.Ct. 51, 17 L.Ed.2d 60 (1967), which while not holding that materiality was an element in a section 1010 case, held that an indictment under the statute would be sufficient if materiality were alleged in substance; the particular word “material” need not be included in the indictment. In analyzing the sufficiency of the indictment, we need to consider what is alleged in the indictment when read in its entirety. United States v. Esposito, 771 F.2d 283 (7th Cir.1985), cert. denied, — U.S.-, 106 S.Ct. 1187, 89 L.Ed.2d 302 (1986). In the context of a section 1001 case, we held that the test for materiality was “whether the false statement has a tendency to influence or is capable of influencing a federal agency.” Brack, 747 F.2d at 1147; see also Kwiat, 817 F.2d 440, 445. The indictment in Brack was upheld because it adequately informed the defendant of the charges against him. In this case, the indictment alleged that Hoag as sales manager for the company caused false statements to be made to obtain HUD insured loans. The word “material” was not used in the indictment. Yet, even if materiality was an element of a section 1010 offense and not specifically recited in the indictment, the indictment was sufficient because as in Gevinson, materiality was alleged in substance. Clearly, in order for his clients to obtain a loan, Hoag would have to know that the Government would eventually rely on his statements, even though a false statement may be deemed material without such reliance. Dick, 744 F.2d at 553. We also reject Hoag’s assertion that the jury instructions heeded to contain a materiality element. In those false statement statutes that require materiality as an essential element, the “question of materiality is one of law to be decided by a judge.” United States v. Brantley, 786 F.2d at 1327. Because materiality is not a requirement for a conviction under section 1010, an instruction on materiality need not be submitted to the jury. B. Specific Intent under Section 1010 Hoag next in a rather superficial manner contends that because the indictment against him failed to allege that he acted with “specific intent,” the indictment should have been dismissed. Arguing that because every essential element of a crime must be alleged in an indictment, United States v. Gironda, 758 F.2d 1201, 1209 (7th Cir.1985), and that specific intent is an element of section 1010, Gevinson v. United States, 358 F.2d at 765, Hoag claims that the Government’s failure to include the magic words “specific intent” in its indictment is sufficient ground for dismissal of the indictment. We do not agree with Hoag’s contention, and the case law he cites fails to support his claim. We read section 1010 as requiring that the prosecution establish that a defendant intended that HUD rely on his false representations. To comport with the statute, the indictment need only allege that Hoag knowingly made a false statement for the purpose of obtaining a loan to influence HUD. The government was required and did establish that Hoag also intended that the loan be offered to and accepted for insurance by HUD. A reading of the superseding indictment reveals that the mental state required by section 1010 was sufficiently alleged. The indictment clearly stated that Hoag, Jr. “caused the making, passing, uttering, and publication of a statement, knowing that statement to be false, for the purpose of obtaining a loan from the lending institutions and with the intent that such loan be offered to and accepted by HUD for insurance and for the purpose of influencing the actions of HUD.” We do not accept Hoag’s assertion that “specific intent” is an element of section 1010. C. Admission of Letters Hoag’s final claim is that the letters admitted at trial as exhibits were not properly admitted as business records. Fed.R. Evid. 803(6). Each of the letters were transcribed on paper bearing the company letterhead, each one had the signature of Robert Hoag, Jr. inscribed thereon, and each contained the false statements made to the lending companies regarding the amounts of money held by the Hoag company for the purchase of each property. Over objection by Hoag, the district court admitted the letters, finding that “if it’s in FHA files, it’s in the business records of the FHA.” Although we agree with Hoag’s contention that the letters were not business records, because the letters were not hearsay, we affirm the trial court's ruling for admission of the evidence, United States v. Moore, 748 F.2d 246, 248 (5th Cir.1984), without discussing whether the foundations for admission under the business records exception were all met. See, e.g., United States v. Keplinger, 776 F.2d 678, 692 (7th Cir.1985).

1251529-27601

MANSFIELD, Circuit Judge: Defendant, Koppers Company, Inc. (“Koppers”), appeals from a judgment of conviction entered on August 28, 1980, by Judge Ellen Bree Burns of the United States District Court for the District of Connecticut after a jury had found Koppers guilty of a felony violation of § 1 of the Sherman Act, 15 U.S.C. § l. The indictment under which Koppers was convicted charged that “[bjeginning sometime prior to January 1970 and continuing until at least March 1975” Koppers and Dosch-King Company, Inc. (“Dosch-King”), had engaged in a conspiracy to rig bids and allocate territories in the sale of road tar to the State of Connecticut and its subdivisions. Dosch-King pleaded nolo contendere, cooperated with the government, and was fined $40,000; Koppers stood trial, was convicted, and was fined $400,000. We affirm. Since the jury was justified in finding that Koppers’ conspiratorial conduct constituted a per se violation of § 1 of the Sherman Act, there was no requirement that the jury go on to find that that conduct also resulted in an unreasonable restraint of trade. In each year of the early 1970s the State of Connecticut solicited bids on an annual basis for the sale and application of road tar, a substance used to resurface and repair its secondary roads. Any contracts eventually awarded for the purchase of road tar by the 169 towns and four state road maintenance districts in Connecticut had to be based on these bids. During the period covered by the indictment, Koppers and Dosch-King were the only participants in the road tar bidding. Koppers, a producer of road tar, had its plant in Kearney, N.J., and distributed its product in Connecticut from a storage facility in Portland, Connecticut, located in the eastern part of the state and owned by Mystic Bituminous Products Co. Dosch-King at all relevant times had its distribution points in Newton and New Haven, located in western Connecticut. Koppers produced all of the road tar which it sold in Connecticut. Prior to 1973 Dosch-King purchased most of its road tar from Reilly Tar and Chemical Corporation, occasionally making purchases from Koppers. Beginning in 1973, Dosch-King started buying all of its road tar from Kop-pers, and it continued to do so throughout the remaining period of the indictment. Nevertheless, Dosch-King’s bids at all times reflected transportation costs measured from its facilities in the eastern part of Connecticut. Arthur Schuck, Koppers’ manager of its eastern road materials district, made a proposal to Dosch-King in 1967 that the two firms divide the state between them so that Dosch-King would be the low bidder in the western part of Connecticut, where its activities were concentrated, and Koppers would be the low bidder in the eastern part, where its storage facility and distribution point were located. To accomplish this, Koppers would communicate its plant-side price and its estimated application cost to Dosch-King prior to the bidding deadline, so that both companies could use these confidential figures as the basis for their bids. Since the two firms were based at opposite ends of the state, the use of a common base price and application cost would have the effect of making each company the low bidder in its half of the state, because of the increasing transportation costs each would incur as they bid on deliveries further and further from home. The companies would, however, continue to submit bids in all 169 Connecticut towns and all four maintenance districts, which would give the impression that they were in direct competition for the state’s business even though they would know in advance which of their bids would be successful. After examining Schuck’s proposal to make sure that it would in fact result in the approximately even division of the state’s road tar business which Schuck had promised, Dosch-King agreed to the proposal. With minor variations not relevant here, the two parties followed the same basic pattern in making bids each year from 1968 to 1975. Each January Schuck would meet with Dosch-King officials to give them Kop-pers’ plant-side base price and to assure them that Koppers was planning to adhere to the conspiracy. On the day before bids were due, Schuck would meet with Dosch-King personnel in Hartford. At these meetings, Schuck would give Dosch-King the bids which Koppers was going to make on the four maintenance districts, as well as the application rate which Koppers would be using in its town bids. With these figures in hand, Dosch-King was able to calculate exactly how much Koppers would be bidding in each town and maintenance district. In 1968, Dosch-King’s bids were based on the formula worked out with Schuck. In later years Dosch-King simply calculated Koppers’ bid for each town, and then adjusted its own bids so that it would win in the west and lose in the east. The result was that from 1968 through 1974 Koppers and Dosch-King succeeded in covertly dividing up the Connecticut road tar business on a roughly 50-50 basis. In January, 1975, the companies once again submitted their bids in the normal manner but the State of Connecticut rejected them and called for a second round of bidding. When Dosch-King personnel contacted Schuck prior to the second round in order to get Koppers’ base price, Schuck gave it to them, but informed them that the price would also be made available to the public. When Schuck was asked by Dosch-King whether this meant that “the deal we have had is over,” he confirmed that it did. This second round of bidding, untainted by the Koppers/Dosch-King conspiracy, resulted in a notably different pattern of awards: Koppers ended up winning no awards at all, while Dosch-King’s bids were somewhat lower than the ones it had submitted in January. DISCUSSION On this appeal Koppers’ principal challenge is to the charge given by Judge Burns on the question of per se violations of the Sherman Act: “The Sherman Act is violated only by ‘unreasonable’ restraints of trade. Not all restraints of trade are unreasonable; however, certain types of conduct are regarded as unreasonable per se. This means that the mere doing of the act itself constitutes an unreasonable restraint on commerce and it is not necessary to consider why the acts were committed or what effect it had on the industry. Agreements among competitors to rig bids or allocate customers are such per se unreasonable restraints of trade and illegal. “In this case, members of the jury, if you find beyond a reasonable doubt that the defendant was a competitor of Dosch-King Company in the submission of bids to the State of Connecticut for road tar and became party to the conspiracy charged in the indictment, then you do not have to decide whether such conspiracy was reasonable or unreasonable because as I have just explained, an agreement among competitors to allocate customers and territories and not to compete for customers by submitting collusive bids is a per se violation of the Sherman Act.” Koppers argues that this charge improperly withdrew the question of reasonableness from the jury by the use of a conclusive presumption, namely, that bid rigging and customer allocation are unreasonable per se. This argument asks us in effect to overrule the Supreme Court’s decisions in United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), and in United States v. Topco Associates, Inc., 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972). We decline the invitation, not only because we lack the power but also because the record here reveals the wisdom and applicability to this case of the per se rule established in those decisions. In Socony-Vacuum, which was a criminal case, the Court held that an agreement among competitors to purchase surplus gasoline on the spot market in order to check the then current rapid decline in prices violated § 1 of the Sherman Act, 15 U.S.C. § 1, which, without using the term “unreasonable,” declares unlawful “[ejvery contract, combination ... or conspiracy, in restraint of trade or commerce.” Although the Supreme Court had earlier interpreted this language as limited by the rule of reason, Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911); American Tobacco Co. v. United States, 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663 (1911), it concluded in Socony-Vacuum that certain types of conduct, including price-fixing, are so patently anticompetitive that they violate the Act without proof of unreasonableness in each case and accordingly held that “[ujnder the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se,” 310 U.S. at 223, 60 S.Ct. at 844. The Court, applying the principle adopted by it in United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700 (1927), explained the reasoning behind the per se rule: “Ruinous competition, financial disaster, evils of price cutting and the like appear throughout our history as ostensible justifications for price-fixing. If the so-called competitive abuses were to be appraised here, the reasonableness of prices would necessarily become an issue in every price-fixing case. In that event the Sherman Act would soon be emasculated; its philosophy would be supplanted by one which is wholly alien to a system of free competition; it would not be the charter of freedom which its framers intended. “The reasonableness of prices has no constancy due to the dynamic quality of business facts underlying price structures. Those who fixed reasonable prices today would perpetuate unreasonable prices tomorrow, since those prices would not be subject to continuous administrative supervision and readjustment in light of changed conditions. Those who controlled the prices would control or effectively dominate the market. And those who were in that strategic position would have it in their power to destroy or drastically impair the competitive system.” 310 U.S. at 221, 60 S.Ct. at 843. Thus the Supreme Court declared what must automatically be treated as unreasonable within the meaning of its earlier judicially-created rule of reason. As Professor Bork has written: “Behavior is illegal per se when the plaintiff need prove only that it occurred in order to win his case, there being no other elements to the offense and no allowable defense.” R. Bork, The Antitrust Paradox 18 (1978). In United States v. Topco Associates, Inc., supra, the per se rule was held applicable to allocation of market territories between horizontal competitors in order to minimize competition between them, as occurred here between Koppers and Dosch-King from 1967 to 1973. The Court stated: “One of the classic examples of a per se violation of § 1 is an agreement between competitors at the same level of the market structure to allocate territories in order to minimize competition. Such concerted action is usually termed a ‘horizontal’ restraint, in contradistinction to combinations of persons at different levels of the market structure, e. g., manufacturers and distributors, which are termed ‘vertical’ restraints. This Court has reiterated time and time again that ‘[h]ori-zontal territorial limitations ... are naked restraints of trade with no purpose except stifling of competition.’ White Motor Co. v. United States, 372 U.S. 253, 263 [83 S.Ct. 696, 702, 9 L.Ed.2d 738] (1963). Such limitations are per se violations of the Sherman Act.” 405 U.S. at 608, 92 S.Ct. at 1133. In cases involving behavior such as bid rigging, which has been classified by courts as a per se violation, the Sherman Act will be read as simply saying: “ ‘An agreement among competitors to rig bids is illegal.’ ” United States v. Brighton Building & Maintenance Co., 598 F.2d 1101, 1106 (7th Cir.), cert. denied, 444 U.S. 840, 100 S.Ct. 79, 62 L.Ed.2d 52 (1979). Since the Sherman Act does not make “unreasonableness” part of the offense, it cannot be said that the judicially-created per se mechanism relieves the government of its duty of proving each element of a criminal offense under the Act. We note that every other circuit court which has confronted this issue has arrived at the same conclusion. United States v. Society of Independent Gasoline Marketers, 624 F.2d 461 (4th Cir. 1980), cert. denied, 449 U.S. 1078, 101 S.Ct. 859, 66 L.Ed.2d 801 (1981); United States v. Continental Group, Inc., 603 F.2d 444 (3d Cir. 1979), cert. denied, 444 U.S. 1032, 100 S.Ct. 703, 62 L.Ed.2d 668 (1980); United States v. Gillen, 599 F.2d 541 (3d Cir.), cert. denied, 444 U.S. 866, 100 S.Ct. 137, 62 L.Ed.2d 89 (1979); United States v. Brighton Building & Maintenance Co., supra. Notwithstanding this settled law, which is rationally based and consistent with the language of the Act, Koppers argues that other Supreme Court decisions, Morissette v. United States, 342 U.S. 246, 72 S.Ct. 240, 96 L.Ed. 288 (1952); United States v. United States Gypsum Co., 438 U.S. 422, 98 S.Ct. 2864, 57 L.Ed.2d 854 (1978); Sandstrom v. Montana, 442 U.S. 510, 99 S.Ct. 2450, 61 L.Ed.2d 39 (1979), have in effect put an end to criminal prosecutions for per se violations. We disagree. The decisions relied upon by Koppers are clearly distinguishable from Socony-Vacu-um and the present case. United States v. United States Gypsum Co., supra, grew out of an indictment charging six major manufacturers of gypsum board with fixing prices by exchanging price information in violation of the Sherman Act. The defendants argued that their actions were undertaken for the purpose of complying with the “meeting competition” provision of the Robinson-Patman Act. 15 U.S.C. § 13. The jury was not required by the district court to find that the defendants intended to fix prices. The jury was simply instructed that it could convict the defendants if it found that “ ‘the effect of the exchanges of pricing information [had been] to raise, fix, maintain, and stabilize prices.’ ” Id. 430 U.S. at 430, 98 S.Ct. at 2869 (emphasis supplied). The Supreme Court held that the instruction was erroneous, because it did not require the jury to find that the defendants, in exchanging the pricing information, had intended to fix prices. In reaching its decision, the Court was careful to note that proof of intent was necessary because the conduct in cases like Gypsum was “often difficult to distinguish from the gray zone of socially acceptable and economically justifiable business conduct” which the Court did not want to inhibit unduly. Id. at 441, 98 S.Ct. at 2875. The Court contrasted the conduct in Gypsum with “conduct regarded as per se illegal because of its unquestionably anticompeti-tive effects, see, e. g., United States v. Socony-Vacuum Oil Co., 310 U.S. 150 [60 S.Ct. 811, 84 L.Ed. 1129] (1940).” Id. at 440, 98 S.Ct. at 2875. Thus the Court clearly indicated that if the jury had properly been instructed that to convict it must find an intent to fix prices the conviction would have been upheld without proof that the prices were unreasonable. Here Judge Burns did properly instruct the jury in unequivocal terms that an essential element of the crime was a conscious agreement between the defendants to submit collusive, rigged bids to Connecticut towns for sale and application of road tar, which meant that they must be found to have acted “voluntarily and intentionally.” The evidence was undisputed that the defendants conspired to bid according to agreed-upon prices. For the same reasons appellant’s reliance on Morissette v. United States, supra (holding that intent is an essential element of the crime of embezzlement, 18 U.S.C. § 641, which must be charged to the jury) and Sandstrom v. Montana, supra (declaring erroneous, where intent was an essential element, an instruction that “[t]he law presumes that a person intends the ordinary consequences of his voluntary acts”) is misplaced. Here the jury was properly instructed that to convict it must find an intent to rig prices. Since an agreement to fix prices is by its very nature a restraint on competition within the meaning of § 1 of the Sherman Act and lacks “any redeeming virtue,” Northern Pacific Railway v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958), there was no need for the government to prove that the prices fixed were unreasonable. The government proved every fact necessary to constitute the crime alleged. In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). Since we are persuaded that the behavior found to exist in this case fell into the per se category, we conclude that the district court did not err in not requiring the jury, once an agreement to rig prices was established, to find that the restraint on trade caused by the Koppers/Dosch-King conspiracy was unreasonable. In addition to arguing that the charge given by the district court improperly withdrew the issue of reasonableness from the jury by the use of a conclusive presumption, Koppers also contends that the charge denied the jury the opportunity to find that the conspiracy in which Koppers was involved was not a horizontal conspiracy to rig bids or allocate customers but was instead a vertical allocation of territories or customers, which would properly be subject to the rule of reason. In making this argument, Koppers points to the fact that by 1973 Dosch-King was buying all of its road tar from Koppers, and that therefore their relationship was a vertical one, similar to the manufacturer-distributor relationship found to be subject to the rule of reason in Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977). The issue posed in the Continental T.V. case was whether a manufacturer’s policy of limiting the number of franchises granted and requiring each franchisee to sell its products only from the location at which it was franchised constituted a per se violation of the Sherman Act. After noting that vertical restrictions of this type can often be expected to increase both intrabrand and interbrand competition, the Court concluded that a blanket per se rule applicable to all vertical restraints should not be laid down, because such restraints have not been shown to have the consistently “pernicious effect on competition” which previous decisions of the Court have required as a predicate for the imposition of a per se rule. Id. at 58, 97 S.Ct. at 2561. See Northern Pacific Railway v. United States, supra. The Court then went on to deal with the problems which may arise in classifying cases as vertical or horizontal in nature: “There may be occasional problems in differentiating vertical restrictions from horizontal restrictions originating in agreements among the retailers. There is no doubt that restrictions in the latter category would be illegal per se, see, e. g., United States v. General Motors Corp., 384 U.S. 127 [86 S.Ct. 1321, 16 L.Ed.2d 415] (1966); United States v. Topco Associates, Inc., supra, but we do not regard the problems of proof as sufficiently great to justify a per se rule.” 433 U.S. at 58 n.28, 97 S.Ct. at 2561 n.28. There was no foundation in the evidence in this case to support Koppers’ theory that its behavior was the sort that Continental T.V. sought to protect. The district court did not, therefore, err in refusing to give the requested charge based on Continental T.V. The decision in Continental T.V. not to impose a per se rule was based on the Court’s determination that the kind of vertical restraint under consideration there held out at least some possibility of increased competition, both intraband and in-terbrand. No such possibility exists here. Koppers’ obvious and only motive for maintaining Dosch-King as a supplier and bidder in Connecticut was not to promote competition but to raise prices and deceive state and local officials into the belief that Kop- pers and Dosch-King were bona fide competitors when in fact, as the evidence conclusively showed, they were not. The sole purpose of the allocation was to enable Koppers and Dosch-King to fix higher prices while maintaining the pretense of price-based competition. For a relationship to qualify for rule-of-reason treatment under Continental T.V., it is not enough that it be shown to be vertical; there must also be some “redeeming virtue,” some possibility that the terms of the relationship hold out the prospect for being pro-competitive. Since the scheme entered into by Koppers and Dosch-King could not have had any effect except an anti-competitive one, Northern Pacific Railway v. United States, supra, 356 U.S. at 5, 78 S.Ct. at 518, the rule laid down in Continental T.V. is not applicable. The historical development of the relationship between Koppers and Dosch-King lends further support to the conclusion that a per se approach was properly applied below. The basic bid rigging agreement between Koppers and Dosch-King arrived at in late 1967 and early 1968 was clearly unlawful as a per se violation, since at that time the two firms were indisputably horizontal competitors. United States v. Socony-Vacuum, supra; United States v. Topco Associates, Inc., supra. The terms of the agreement and the strategy for its implementation remained essentially unchanged from 1968 until the conspiracy’s dissolution in 1975. While it is true that in 1973 Dosch-King began buying all of its road tar from Koppers, there is no evidence whatsoever that this change in supply patterns had any effect on the basic non-competitive relationship between the companies. The theme of Continental T.V. is that economic realities, including the possibility of pro-competitive activities, rather than legal formalisms should control. 433 U.S. at 46-47, 97 S.Ct. at 2555-2556. In this case, in light of the total absence of evidence that any material aspect of the Koppers/Dosch-King anti-competitive relationship was altered when Dosch-King became a purchaser of Koppers road tar, one must conclude that this technical change in the two companies’ relationship had no legal significance in antitrust terms. As the Supreme Court pointed out in Continental T. V., there is no doubt that “horizontal restrictions originating in agreements among . . . retailers .. . would be illegal per se.” 433 U.S. at 58 n.28, 97 S.Ct. at 2561 n.28 (emphasis supplied). Since the conspiracy between Koppers and Dosch-King to rig bids originated as an agreement among competing retailers and was not automatically transformed into something different at the moment when its vertical elements, which always existed to some degree, became more prominent, we are convinced that it should be treated throughout as a per se violation of the Sherman Act. It is true that on two occasions during its charge the district court gave instructions to the effect that “[w]hat the Government must prove beyond a reasonable doubt is that the defendant knowingly entered into an agreement to rig bids or allocate customers or territories” (emphasis supplied). While in our view it would have been more nearly in the spirit of Continental T.V. to have made the charge in the conjunctive rather than the disjunctive, we do not consider this lapse to be material. In the first place, the district court went on to conclude its charge on the per se rule by making the following summary: “In this case, members of the jury, if you find beyond a reasonable doubt that the defendant was a competitor of Dosch-King Company in the submission of bids to the State of Connecticut for road tar and became party to the conspiracy charged in the indictment, then you do not have to decide whether such conspiracy was reasonable or unreasonable because as I have just explained, an agreement among competitors to allocate customers and territories and not to compete for customers by submitting collusive bids is a per se violation of the Sherman Act.” (Emphasis supplied). Thus, any confusion in the minds of the jury caused by the court’s prior use of the disjunctive was cured. But even if it was not, the court’s use of the disjunctive did not amount to reversible error in the context of this case. We are not here dealing with a case where Koppers’ “allocation” of customers in the western part of the state to Dosch-King was a practice that could be treated as separate and apart from the conspiracy to fix prices by rigging bids and thus possibly found to be not unreasonable within the purview of Continental T.V. Here, if the evidence with respect to the bid rigging and customer allocation practices on the part of Koppers and Dosch-King was accepted by the jury as credible, as surely appears to have been the case, the two practices were inextricably intertwined. The court’s instruction could not, therefore, have resulted in a conviction based on customer allocation simpliciter. Koppers’ remaining assignments of error may be disposed of more briefly. We find no merit in its claim that the district court supplied the jury with the wrong standard for deciding when a company can be held criminally liable for the acts of its employees. The court charged that a corporation could be held criminally liable for the acts of its managerial agents “done on behalf of and to the benefit of the corporation and directly related to the performance of the duties the employee has authority to perform.... By a managerial agent I mean an officer of the corporation or an agent of the corporation having duties of such responsibility that his conduct may fairly be assumed to represent the corporation.” Koppers would have us find that liability can only be extended to the action of “high managerial agents,” meaning those “having duties of such responsibility that [their] conduct may fairly be assumed to represent the policy of the corporation” (emphasis supplied). We decline the invitation. The standard for imputation of liability given by the court below is amply supported. See, e. g., Hydrolevel Corp. v. American Society of Mechanical Engineers, Inc., 635 F.2d 118, 127 (2d Cir. 1980), cert. granted, - U.S. -, 101 S.Ct. 3078, 68 L.Ed.2d 951 (1981); United States v. Hilton Hotels Corp., 467 F.2d 1000, 1004-07 (9th Cir. 1972), cert. denied, 409 U.S. 1125, 93 S.Ct. 938, 35 L.Ed.2d 256 (1973); United States v. American Radiator & Standard Sanitary Corp., 433 F.2d 174, 204-05 (3d Cir. 1970), cert. denied, 401 U.S. 948, 91 S.Ct. 929, 28 L.Ed.2d 231 (1971). Nothing in the Supreme Court’s decision in the Gypsum case altered this standard. Nor does the Model Penal Code support Koppers’ positions. In fact, on all issues relevant to this case the Code’s suggested standard of imputed liability in antitrust cases is precisely the one followed by the district court. See Model Penal Code § 2.07(l)(a) (1962); Developments in the Law — Corporate Crime, 92 Harv.L.Rev. 1227, 1251-52 (1979). Finally, Koppers’ assertion that in the area of punitive damages a stricter standard for imputation prevails is irrelevant. To recover punitive damages, a plaintiff must demonstrate that “the defendant has acted wantonly, or oppressively, or with . . . malice.... ” Lake Shore and Michigan Southern Railway v. Prentice, 147 U.S. 101, 107, 13 S.Ct. 261, 263, 37 L.Ed. 97 (1893). By contrast, even after Gypsum the intent element of a criminal antitrust violation does not include any finding of malice; nothing more is required than a showing that the defendant intentionally engaged in conduct that is a per se violation of the Sherman Act, which was proven here.

11477432-7432

STROM, Senior District Judge: Jernard Akins (“Akins”) appeals from the district court’s judgment dismissing his motion to vacate or modify his sentence pursuant to 28 U.S.C. § 2255. Akins claims the district court erred in finding that his motion was untimely filed. We affirm. Background On December 12, 1991, Akins entered a plea of guilty to distribution of cocaine base in violation of 21 U.S.C. § 841(a)(1). On February 19, 1992, he was sentenced by the district court to a term of imprisonment of two hundred sixty-four (264) months, followed by supervised release. No appeal was taken from his conviction or sentence. On May 11, 1994, pursuant to a Rule 35(b) motion filed by the government, Akins’ sentence was reduced to two hundred four (204) months. On January 28, 1996, the court, on its own motion, reviewed defendant’s sentence because of the 1995 amendment to the Federal Sentencing Guidelines, which made retroactive the 1994 amendment changing the top level of the drug quantity table from forty-two to thirty-eight. Upon a review, the court concluded that the defendant’s sentence fell within the guideline range under the amended guidelines, and thus no further reduction would be made. The defendant filed an appeal of that order to the Eleventh Circuit Court of Appeals. This appeal was dismissed when the defendant failed to pay the applicable docket and filing fees. On September 28, 1997, the defendant prepared and signed a motion to vacate, set aside or correct his sentence pursuant to 28 U.S.C. § 2255. This motion was filed on October 2, 1997. In his motion, he raised three claims: (1) ineffective assistance of counsel; (2) the district court’s use of relevant conduct at sentencing; and (3) the district court’s lack of jurisdiction in prosecuting him. On February 17, 1998, the magistrate judge filed a report and recommendation that defendant’s § 2255 motion be dismissed as time barred under the 1996 amendments to § 2255. On April 2, 1998, the district court entered an order adopting the report and recommendation of the magistrate judge and dismissed defendant’s § 2255 motion. The defendant subsequently moved for a certificate of appeal-ability and on May 22, 1998, the district court granted the certificate of appealability but only as to the statute of limitations issue and denied it with respect to the other claims raised in his § 2255 motion. Accordingly, the only issue before the court is the issue of whether the defendant timely filed his § 2255 motion. Discussion On April 24, 1996, Section 105 of the Antiterrorism and Effective Death Penalty Act (AEDPA) took effect. That section amended 28 U.S.C. § 2255, establishing a one-year “period of limitation” for motions filed pursuant to § 2255, The one-year period runs from-the latest of the following: (1) the date on which the judgment of conviction becomes final; (2) the date on which the impediment to making a motion created by governmental action in violation of the Constitution or laws of the United States is removed, if the movant was prevented from making a motion by such governmental action; (3) the date on which the right asserted was initially recognized by the Supreme Court, if that right has been newly recognized by the Supreme Court and made retroactively applicable to cases on collateral review; or (4) the date on which the facts supporting the claim or claims presented could have been discovered through the exercise of due diligence. 28 U.S.C. § 2255. However, this Court held in Goodman v. United States, 151 F.3d 1335, 1337-38 (11th Cir.1998), that federal prisoners whose conviction became final prior to April 24, 1996, would have one year from the enactment of § 105 of the AEDPA, or until April 23, 1997, in which to file their § 2255 motions. Akins’ conviction became final before April 24, 1996. Akins’ § 2255 motion, however, was filed well after the April 23, 1997, deadline. Therefore, his motion is untimely unless he is entitled to equitable tolling or he was prevented from timely filing his § 2255 motion by an unconstitutional impediment. A. Equitable Tolling This Court has previously held that the statute of limitations set forth in 28 U.S.C. § 2255, as amended, is subject to equitable tolling. Sandvik v. United States, 177 F.3d 1269, 1271 (11th Cir.1999). In Sandvik, the Court stated that “[e]qui-table tolling is appropriate when a movant untimely files because of extraordinary circumstances that are both beyond his control and unavoidable even with diligence.” Sandvik, 177 F.3d at 1271. As grounds for equitable tolling, Akins claims that two events prevented a timely filing of his § 2255 motion: (1) lock-downs, occurring in October of 1996 until late March of 1997, and again from April 2, 1997, until April 28, 1997; and (2) misplaced legal papers, which were returned to him in August 1997. According to the record, defendant had over five (5) years to obtain' the necessary transcript, research the legal issues forming the basis for his § 2255 motion, and to prepare and file his motion. While for a portion of that time he was in lockdown, he had over four years before Congress adopted the AED-PA one-year period of limitation, at least seven months after he obtained the sentencing hearing transcript, and at least six months after the effective date of the AEDPA. No explanation is given as to why he could not have prepared and filed his motion before October, 1996. On the basis of this record, we find that Akins failed to- demonstrate that the untimely filing of his motion was due to extraordinary circumstances that were both beyond his control and unavoidable even with diligence. B. Unconstitutional Impediment Apart from equitable tolling, as adopted by the courts, the one-year limitation on a 28 U.S.C. § 2255 motion can run not only from the date of the final conviction, but also from “the date on which the impediment to making a -motion created by governmental action in violation of the Constitution or laws of the United States is removed, if the movant was prevented from making a motion by such governmental action.” Akins alleges that he was denied access to the courts by being placed in lockdown because he was unable to use the law library to prepare his motion. Although it is well established that prisoners have a constitutional right of access to the courts, the Supreme Court has clarified its decision in Bounds v. Smith, 430 U.S. 817, 825, 97 S.Ct. 1491, 52 L.Ed.2d 72 (1977), stating that access to the law libraries is not required of prisons, but rather is one way of assuring- the constitutional right of access to the courts. Lewis v. Casey, 518 U.S. 343, 351, 116 S.Ct. 2174, 135 L.Ed.2d 606 (1996). The mere inability of a prisoner to access the law library is not, in itself, an unconstitutional impediment. The inmate must show that this inability caused an actual harm, or in other words, unconstitutionally prevented him from exercising that fundamental right of access to the courts in order to attack his sentence or to challenge the conditions of his confinement. Lewis, 518 U.S. at 355. Akins’ failure to explain his inability to file the motion prior to lockdown, as discussed above, is also fatal to his claim of an unconstitutional impediment. The réc-ord does not support a finding of actual injury when Akins fails to explain why the seven months prior to lockdown were inadequate to complete and file his motion.

5897832-16053

DECISION AND ORDER ROSS W. KRUMM, Bankruptcy Judge. The matter before the Court is the Motion for Summary Judgment filed by Garland T. Harvey (the “Debtor”) in response to the United States Trustee’s Motion to Dismiss Chapter 7 Case Pursuant to 11 U.S.C. § 707(b)(1). The U.S. Trustee seeks dismissal of the Debtor’s Chapter 7 case for abuse and alleges that the presumption of abuse arises under 11 U.S.C. § 707(b)(2). The Debtor argues that the motion to dismiss should be dismissed on the grounds that he correctly deducted debts secured by collateral that he intends to surrender and therefore no presumption of abuse arises. JURISDICTION This Court has subject matter jurisdiction to consider this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. FACTS The facts in this matter are not in dispute. The Debtor filed a voluntary Chapter 7 petition on September 2, 2008. The Debtor included with his petition the Chapter 7 Individual Debtor’s Statement of Intention and Official Form 22A (the “Chapter 7 Statement of Current Monthly Income and Means-Test Calculation”). On Form 22A, the Debtor calculates his current monthly income to be $5,342.00. To reach his monthly disposable income, the Debtor deducts from his current monthly income, among other expenses, the monthly payments owed to the two creditors secured by the Debtor’s real property at 445 Liberty Via, Christians- burg, Virginia (the “Secured Debt”). The monthly payments on the Secured Debt average $1,526.77 per month over the sixty months from the petition date. On Line 50 of Form 22A, the Debtor determines that his monthly disposable income under § 707(b)(2) is negative $539.25. The Debt- or properly listed the Secured Debt on Schedule D. The § 341(a) meeting of the creditors was held on September 30, 2008. On November 11, 2008, the U.S. Trustee moved to dismiss the Debtor’s Chapter 7 case pursuant to 11 U.S.C. § 707(b)(1). The U.S. Trustee argues that the presumption of abuse arises under § 707(b)(2) because the Debtor incorrectly deducted payments on the Secured Debt to determine his net disposable income. The U.S. Trustee asserts that, when calculated properly, the Debtor’s net disposable income is over $800 per month, which is sufficient to fund at least a $48,000 plan of reorganization over sixty months. The Debtor objected to the U.S. Trustee’s motion to dismiss and statement of presumed abuse on March 25, 2009. The Debtor asserts that no presumption of abuse arises in this case because the Debtor is entitled to deduct payments on the Secured Debt. DISCUSSION The bankruptcy court may dismiss an individual Chapter 7 debtor’s case for abuse. 11 U.S.C.A. § 707(b)(1) (West 2009). The presumption of abuse arises if the debtor’s net disposable income over sixty months exceeds the lesser of: (1) twenty-five percent of the debtor’s nonpri-ority unsecured claims or $6,575, whichever is greater; or (2) $10,950. Id. § 707(b)(2)(A). To calculate a debtor’s net disposable income, the debtor’s current monthly income must be reduced by his (1) monthly expenses; (2) average payments on secured debts over the sixty months following the petition date; and (3) average payments on priority claims over the sixty months following the petition date. Id. The debtor’s current monthly income is the average of his or her income in the six months immediately preceding the petition date. Id. §§ 101(10A)(A), 707(b)(l)(A)(I). The issue here is whether a debtor may deduct average payments on debts secured by property that he or she intends to surrender, as indicated on the Statement of Intention. Section 707(b)(2)(A)(iii) provides: The debtor’s average monthly payments ■ on account of secured debts shall be calculated as the sum of— (I) the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition; and (II) any additional payments to secured creditors necessary for the debtor, in filing a plan under chapter 13 of this title, to maintain possession of the debtor’s primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor’s dependents, that serves as collateral for secured debts; divided by 60. Id. § 707(b)(2)(A)(iii). “[W]hen the statute’s language is plain, the sole function of the courts — at least where the disposition required by the text is not absurd — is to enforce it according to its terms.” Lamie v. U.S. Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 1030, 157 L.Ed.2d 1024 (2004) (internal quotation marks and citations omitted). There are two narrow exceptions to the Plain Meaning Rule: (1) “when literal application of the statutory language at issue results in an outcome that can truly be characterized as absurd”; and (2) “when literal application of the statutory language at issue produces an outcome that is demonstrably at odds with clearly expressed congressional intent.” RCI Tech. Corp. v. Sunter-ra Corp. (In re Sunterra Corp.), 361 F.3d 257, 265 (4th Cir.2004) (citations omitted). When determining a statute’s plain meaning, “courts should disfavor interpretations of statutes that render language superfluous.” Id. at 278 (internal quotation marks omitted) (quoting Witt v. United Cos. Lending Corp. (In re Witt), 113 F.3d 508, 512 (4th Cir.1997) (quoting Conn. Natl Bank v. Germain, 503 U.S. 249, 253, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992))). Also, “identical words and phrases within the same statute should normally be given the same meaning.” Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224, 232, 127 S.Ct. 2411, 2417, 168 L.Ed.2d 112 (2007). The U.S. Trustee argues that a debtor may not deduct payments on debts secured by property that the debtor intends to surrender under § 707(b)(2)(A)(iii)(I). First, the U.S. Trustee stresses that the plain language of the expense allowance for payments on secured debt in § 707(b)(2)(A)(iii)(I) is forward-looking. The U.S. Trustee contends that had Congress intended that debtors deduct all “contractually due” payments on secured debt, it would have omitted “scheduled as,” permitting debtors to deduct “all amounts contractually due to secured creditors.” Also, the U.S. Trustee argues that the phrase “scheduled as” should impart the same meaning as it does in § 1111(a), which provides that a “proof of claim or interest is deemed filed under section 501 of this title for any claim or interest that appears in the schedules ... except a claim or interest that is scheduled as disputed, contingent, or unliquidated.” 11 U.S.C.A. § 1111(a) (West 2009) (emphasis added). Because identical words used in different parts of a statute should be given the same meaning, “all amounts scheduled as contractually due” in § 707(b)(2)(A)(iii)(I) should refer to only those obligations on secured debts properly listed on a bankruptcy schedule. The later phrase, “following the date of the petition,” limits the allowed deduction of payments on secured debts to only those post-petition payments that the debtor will actually make in accordance with his or her Statement of Intention. Second, the U.S. Trustee compares § 707(b)(2)(A)(iii)(I) with its conjunctive partner § 707(b)(2)(A)(iii)(II). Section 707(b)(2)(A)(iii)(II) allows deduction of cure payments on encumbered property, but only property that is “the debtor’s primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor’s dependents.” 11 U.S.C.A. § 707(b)(2)(A)(iii)(II) (West 2009). This requires a forward-looking analysis of the debtor’s needs. The U.S. Trustee concludes that the § 707(b)(2)(A)(iii)(I) must be forward-looking to remain consistent with its conjunctive partner, § 707(b) (2) (A) (iii) (II). The Debtor responds that the plain language of § 707(b)(A)(iii)(I) requires a debt- or to deduct from his or her net disposable income all payments on secured debts regardless of whether the debtors intends to surrender the encumbered property. The Debtor argues that “schedule” refers to either a plan indicating the time and sequence of each operation, or bankruptcy schedules A through J. An amount “scheduled” is one included on a schedule of either kind. If the first definition applies, the debtor should deduct any payment on a secured debt that is contractually due as of the petition date. The automatic stay in bankruptcy does not nullify the existence of a contract; it merely prohibits actions to collect on the underlying debt. Likewise, a bankruptcy discharge only discharges the debtor’s personal liability; it does not extinguish the debt. The Debtor therefore reasons that debts secured by property that the debtor intends to surrender are “scheduled as contractually due” despite the debtor’s stated intention. If the second definition of “schedule” applies, a debtor should deduct from his net disposable income payments on debts shown on bankruptcy schedules A through J. The Debtor notes that the Statement of Intention is not a bankruptcy schedule and does not change the treatment of a scheduled debt. The Debtor therefore urges that under either definition of “schedule,” a debtor may deduct payments on debts secured by property that the he or she intends to surrender. The Fourth Circuit has not yet spoken to the issue presented in this case, and the lower courts are not in agreement. The majority of courts within this circuit hold that a debtor may deduct payments on debts secured by property that he or she intends to surrender. See Lynch v. Haenke (In re Lynch), 395 B.R. 346, 349 (E.D.N.C.2008); In re Crawley, 2009 WL 902359, at *3 (Bankr.E.D.Va. Feb.23, 2009); In re Daniels-Brown, 2008 WL 4379152, at *2 (Bankr.D.Md. Sept.23, 2008); In re Quigley, 391 B.R. 294, 304 (Bankr.N.D.W.Va.2008). The Quigley court interpreted the phrase “scheduled as contractually due” to mean “those payments that the debtor will be required to make on certain dates in the future under the contract.” 391 B.R. at 302 (quoting In re Walker, No. 05-15010, 2006 WL 1314125, at *3 (Bankr.N.D.Ga. May 1, 2006)). The act of surrendering encumbered property does not abrogate the debtor’s obligation to make payments on the secured debt. Id. (citing In re Hayes, 376 B.R. 55, 62 (Bankr.D.Mass.2007)). The Quigley court concluded that § 707(b)(2)(A)(iii)(I) is best understood as requiring a “ ‘snapshot’ of a debtor’s liabilities as of the petition date” to be consistent with its conjunctive partner, § 707(b)(2)(A)(ii)(I). Id. at 303. The Lynch court agreed with Quigley, finding that “a plain, ordinary reading of the subsection supports the bankruptcy court’s finding that it applies to payments the debtor is under contract to make.” 395 B.R. at 349. Because the Chapter 7 debt- or remained contractually bound to make future payments on debts secured by collateral that he intended to surrender, the Lynch court held that “the statute allows such deductions to be made for the purposes of the means test.” Id. One bankruptcy court in this circuit, however, held that debtors may not deduct such payments. See In re Ray, 362 B.R. 680, 685 (Bankr.D.S.C.2007). In Ray, the court found that the meaning of § 707(b)(2)(A)(iii)(I) was not plain, as evidenced by the contrary positions taken by various courts. 362 B.R. at 683. The Ray court disagreed with the majority position because “they come to the same conclusion about the meaning of the statute as would result if the words ‘scheduled as’ were not present.” Id. The Ray court believed the words “60 months following the date of the petition” in § 707(b)(2)(A)(iii)(I) “contemplate a forward-looking calculation.” Id. at 685. To the Ray court, the “better construction of ‘scheduled as contractually due’ would consider the debtors’ intention to surrender the collateral and make no future payments to the creditor.” Id. This Court finds the majority interpretation persuasive. First, a plain reading of the statute suggests that debtors are permitted to deduct all payments on secured debts that he or she is contractually bound to make. See Lynch, 395 B.R. at 348-49. A payment on a secured debt is still “contractually due” regardless of the debtor’s intent to surrender the encumbered property. Morse v. Rudder (In re Rudler), 388 B.R. 433, 438 (1st Cir. BAP 2008). This Court agrees with the Debtor that the phrase “scheduled as” could mean either “appears on a bankruptcy schedule” or “appears on a plan indicating the time and sequence of each operation.” Strong arguments are made for each interpretation. The choice has no bearing on this case, however. The Debtor’s payments on the Secured Debt are contractually due following the petition date, and the Secured Debt appears on his bankruptcy schedules. Therefore, under either interpretation the Debtor’s payments on the Secured Debt are “scheduled as contractually due.” Further, interpreting § 707(b)(2)(A)(iii) to require a forward-looking analysis of the debtor’s actual anticipated payments on secured debts is inconsistent with the backward-looking nature for determining a debtor’s current monthly income and other monthly expenses. Crawley, 2009 WL 902359, at *4. If Congress desired to prohibit deduction of payments on debts secured by surrendered property, it would have said so explicitly. Quigley, 391 B.R. at 303. Finally, literal application of the statute does not produce an absurd result or one demonstrably at odds with the drafters’ intent. Rudler, 388 B.R. at 439. “Congress’ intent in adding the means test was to create a more objective standard for establishing a presumption of abuse and to reduce judicial discretion in the process.” Id. (citing In re Randle, 358 B.R. 360, 363 (Bankr.N.D.Ill.2006)). Allowing debtors to simply deduct all payments on secured debts is consistent with this desire. In this case, the Debtor properly deducted the $1,526.77 for his monthly payments on the Secured Debt from his current monthly income of $5,342.00 to reach a monthly disposable income of negative $539.25. As the Debtor’s sixty-month disposable income is less than $6,575.00, the presumption of abuse does not arise and the Debtor is entitled to summary judgment as a matter of law. CONCLUSION This Court holds that a debtor may deduct all payments on secured debts pursuant to § 707(b) (2) (A) (iii) (I) regardless of whether the debtor exhibits an intent to surrender the property on the Statement of Intention. Here, the Debtor properly deducted payments secured by a home that he intends to surrender. The presumption of abuse under § 707(b)(2) therefore does not arise. Accordingly, it is ORDERED: That the Debtors’ Motion for Summary Judgment is hereby GRANTED. It is FURTHER ORDERED: That the U.S. Trustee’s motion to extend the bar date is hereby GRANTED and the U.S. Trastee shall have until August Ik, 2009 to file either a complaint objecting to the Debtor’s discharge under § 727 or a motion to dismiss under § 707(b)(3). Copies of this Order are directed to be sent to counsel for the Debtors, William J. Charboneau, Esq.; to Joseph A. Guzinski, Esq., Office of the U.S. Trustee; and to the Chapter 7 Trustee, Roy V. Creasy, Esq. . The court in In re Ray, 362 B.R. 680 (Bankr. D.S.C.2007), succinctly described the application of § 707(b)(2)(A): More simply stated, if, after all appropriate deductions from the debtors' current monthly income, the debtors have less than [$109.58] per month in monthly net income (i.e., less than [$6,575] to fund a 60-month plan), the filing is not presumed abusive. If the debtors have monthly net income of [$182.50] or more (i.e., at least [$10,950] to fund a 60-month plan), the filing is presumed abusive. Finally, if the debtors' monthly income is more than [$109.58] but less than [$182.50], the case will be presumed abusive if the income, when multiplied by 60, will pay 25% or more of the debtors' non-priority unsecured debts. Id. at 681-82 (alterations reflect 2009 inflation-adjusted amounts).

508152-16220

SWAIM, Circuit Judge. These are appeals from a judgment of the District Court which found both of the defendants, John Williams and Nick Rogulich, guilty of receiving and possessing property stolen from interstate shipments in violation of 18 U.S.C.A. § 659. Each of the defendants was sentenced to serve two' years in the penitentiary on each of the two counts of the indictment, the sentences to run concurrently. The first count of the indictment charged these defendants with possessing property which they knew was stolen and the second charged them, together with Charles S. Kraw and Michael J. Diorio, with receiving the stolen property. Kraw was granted a severance and tried later. The Government dismissed the charge against Diorio. The property involved was described in the indictment as being: “1 Carrier Automatic Ice Cube Maker, Serial No. 01009 and Storage Bin,” which were stolen from the platform or dock of the Dakota Transfer and Storage Company in Chicago, Illinois. There was sufficient evidence to support the finding of the following facts: On Friday, January 13, 1950, goods, including the ice cube maker and storage bin, shipped by the Carrier Corporation from New York, New York, to Rapid City, South Dakota, were unloaded for transfer on the Dakota Transfer and Storage Company’s freight dock at 25th and Southwest Streets in Chicago, Illinois. The Dakota Transfer Company and the Indiana Motor Express Company occupied and used the same warehouse building and dock. The dock was separated only by a partition for the use of the two companies. - On the night of Saturday, January 14, 1950, at about 11:00 p. m., two unknown, masked men seized and blindfolded the night watchman who was on duty guarding the building and docks of these two transfer companies. After the watchman was so bound and blindfolded he was left in a washroom of the building. He could not see what the men did nor identify them. He remained so bound and blindfolded for about two hours. The next morning, January 15th, the Indiana Motor Express Company discovered that some radio and television sets and television tubes had been taken from its dock and that someone had also stolen its pick-up truck* which was abandoned in a private driveway at 8035 South Central Avenue in Oak Lawn, Illinois, about 2:00 or 2:30 a. m. the same night. On Monday morning, January 16th, an inventory taken by the Dakota Transfer Company of the goods on its docks revealed the fact that the ice cube maker and storage bin had also been stolen. On Friday, January 13, 1950, the defendant Williams went to the home of James Cashman at 7725 South Newcastle in Oak Lawn, Illinois, and rented the garage attached to Cashman’s house, saying that he had some “stuff” he wanted to store there for a while. Cashman’s house was located two miles distant from 8035 South Central Avenue where the Indiana Motor Express Company’s pick-up truck was abandoned. The next night, Saturday, the 14th “around midnight,” the same night the goods were stolen, Williams, accompanied by Rogulich and two or three other men, returned to Cashman’s home and unloaded about fifty boxes and cartons into the Cashman garage from a truck. Cashman helped them with the unloading and remembered seeing something in one box that looked like glass or a bowl, but he was unable to identify it positively — he said it could have been a lamp or a television tube or anything. During the ensuing weeks Williams and Rogulich visited the garage several times, each time removing some of the boxes. No other boxes or cartons were brought to the garage. Most, if not all, of their visits to the garage were made after dark. The last time the defendants came was on February 7, 1950, when it was just turning dark. At that time the defendants were accompanied by Diorio and Kraw who took away the last of the boxes in a trailer attached to their automobile. Cashman had known Williams and Rogulich for two or three years before Williams rented the garage. He knew that Williams was in the slot machine business and said that the boxes and cartons stored in the garage were of such a size that they might have contained slot machines. The principal witness for the Government was Michael J. Diorio, a confessed accomplice of the defendants. He was to have been tried separately from these two defendants and from Charles S. Kraw but, after the conviction of Kraw, Williams and Rogulich, the Government dismissed the case against Diorio. During January and February 1950, Diorio, with his partner, Charles S. Kraw, owned and operated the Miami Lounge, a tavern located at 2822 West 55th Street in Chicago. During this time they arranged with Williams to buy the ice cube maker and storage bin, paying $400 for it. The retail price of this new machine was more than twice that amount. After the arrangements for the purchase had been made, Kraw, on February 7th, rented a trailer and, with Diorio and the two defendants, went to Cashman’s house and picked up the last of the boxes from the rented garage. The stolen ice cube maker and storage bin were in these boxes. The ice cube maker and storage bin were taken from Cashman’s garage to the Miami Lounge. Later, on February 22nd, the ice cube machine was hooked up for operation in the kitchen of the Miami Lounge. Diorio paid part of the purchase price to Williams in two checks on the funds of the Miami Lounge. One check was made out to “Cash” and the other was made out by Diorio to himself and then endorsed. This was done at the suggestion of Williams. The endorsement of Williams did not appear on either of these checks. Evidence in this case and in the later Kraw case disclosed how the stolen ice cube maker was discovered. U. S. v. Kraw, 7 Cir., 194 F.2d 78. In May 1950, Kraw called in a repair man to work on the beer cooler in the kitchen of the Miami Lounge. This man noticed that the ice cube maker situated next to the cooler was not working properly and he suggested that he could get a man from the Carrier Corporation to repair it. Kraw asked him to do so. The Carrier repairman reported the number of the machine to- the Carrier Corporation which, in turn, reported it to the Dakota Transfer Company from whose dock it had been taken. The President of the Dakota Transfer Company visited Kraw in june and told him that the machine had been stolen and that the Dakota Company had paid the Carrier Corporation $519.13 for the loss. Kraw was permitted to keep the machine on his payment of this amount to the Dakota Transfer Company. By this time Diorio had sold his interest in the Miami Lounge to Kraw’s former wife. Diorio’s testimony was conflicting on some points. He said that there was no gambling in the Miami Lounge, but later he admitted that there had been gambling there and that he had bought at least one slot machine from Williams. Williams testified in his own defense. He said that he was in the business of selling slot machines and that the boxes and cartons stored in the garage contained these machines. The defendants in their brief admit that there was sufficient evidence to sustain a finding that the ice cube maker was stolen from an interstate shipment but they insist that there was not sufficient evidence to show that they, with knowledge that it was stolen, were either in possession of or received the stolen property. The defendants also insist that the trial court erred in admitting evidence of the theft of other property from the Indiana Motor Express Company. And they contend that the testimony of Diorio, an admitted accomplice, “should have been subjected to close scrutiny, minute examination, and weighed with great caution.” First, as to the conviction of the defendants upon the uncorroborated testimony of Diorio the accomplice. The defendants “do not question the general rule of law that a defendant may be convicted upon the uncorroborated testimony of an admitted accomplice,” but they insist that Diorio’s testimony here should have been scrutinized closely and weighed with great caution, and that this testimony was doubly suspect because of the subsequent dismissal of the charges against Diorio. The scrutiny of evidence, the weighing of testimony and the determination as to the credibility of witnesses are, of course, peculiarly the function of the trier of the facts, here the trial judge. In this case the fact that Diorio was an accomplice was brought out in the trial court. The trial judge saw him and listened to him testify. We find nothing to indicate that the trial judge did not carefully scrutinize and weigh his testimony. The trial judge was necessarily aware of certain inconsistencies in Diorio’s testimony and yet he chose to believe the essential parts of Diorio’s testimony rather than to believe the defendant Williams and some of the other witnesses. In view of the entire record in this case we cannot say that the trial judge abused his discretion by accepting and believing Diorio’s testimony. Diorio’s testimony, together with the other evidence in this case, furnished the trial judge a reasonable basis for inferring that the defendants, Williams and Rogulich, received and had possession of these goods with knowledge that they had been stolen. The defendants admit that there was sufficient evidence to sustain a finding that the goods were stolen. It is also admitted that after the theft the ice cube maker was located in the Miami Lounge operated by the partners, Diorio and Kraw. Diorio’s testimony that the stolen property was brought to the Miami Lounge from Cashman’s garage on the night of February 7, 1950, is supported by the testimony of Cashman who said that the only delivery of boxes to his garage was by Williams and Rogulich on the night of January 14, 1950, the night the goods were stolen, and that the last boxes were taken from his garage by Williams and Rogulich on the night of February 7th, the night of their delivery to the Miami Lounge when Williams and Rogulich helped load the boxes into a trailer attached to the automobile of the two men who were with them. Cashman also testified, as did Diorio, that at that time Cashman was painting his automobile. If the ice cube maker was taken out of the Cashman garage on the night of February 7th, it was necessarily placed in the garage on January 14th, the night the goods were stolen, since no goods were delivered to the ga rage during the time intervening between those two dates. The garage was rented by Williams. He and Rogulich on several occasions came to the garage and removed some of the boxes. Even though Williams was the one who rented the garage and received payment for the ice cube maker, Rogulich’s repeated trips to the garage and his assistance in bringing the boxes to the garage, in taking them away, including the boxes containing the ice cube maker, and his presence at the tavern with Williams when the sale was made to Kraw— all this would seem to furnish reasonable grounds for finding that the entire matter was a joint enterprise and that the defendants were both in possession .of the ice cube machine from the time it was stolen until it was delivered to Kraw. Rogulich cites three decisions of this Court as supporting the proposition that even if there was possession by Williams, there was none by Rogulich. The cases cited were United States v. O’Brien, 7 Cir., 174 F.2d 341; United States v. Wainer, 7 Cir., 170 F.2d 603; and Caringella v. United States, 7 Cir., 78 F.2d 563. In none of those Cases was there evidence connecting the particular defendants released directly with the stolen property. In the O’Brien case, O’Brien was twice seen on the night of the theft with the owner of the truck used to steal the goods. He was first seen sitting in the truck with the owner. There was no evidence that the stolen goods were in the truck at that time. O’Brien was drunk and wandered in and out of a certain bar during that night. Later he was again seen walking with the owner of the truck. At that time he was intoxicated. Sometime between these two times the truck was used in a theft by its owner. In the Wainer case [170 F.2d page 605] the defendant had asserted to officers entering the liquor store which was accused of receiving stolen cases of beer, “I am the boss.” In fact that was not true, and he was never shown to have had anything to do with the property. In the Caringella case the defendant owned the place of storage of the goods but was not shown to have known of its use for this or to have been involved in any way with it. These cases present an entirely different factual picture from that in the instant case. In the Caringella case, supra, this Court pointed out that such issues should ordinarily be left to the jury and said, 78 F.2d at page 566: “* * * Unexplained possession of stolen goods shortly after a theft may evidence guilt. In fact, the surrounding circumstances, coupled with this fact of possession, may make a persuasive case of guilt. * * *” We think this statement applicable to the present case. The defendants also insist that there was no evidence furnishing a basis for a reasonable inference that they had knowledge that the ice cube maker had been stolen. We cannot agree with this contention. Williams rented Cashman’s garage the day before the theft to store some “stuff” for a while. Both defendants brought the “stuff,” including the ice cube maker, to the garage in the middle of the night almost immediately after it was stolen. The ensuing trips to the garage were also made after dark. Williams denied ever seeing or having the stolen ice cube maker in his possession. Williams denied that Rogulich went with him to the Cashman garage on February 7th. Williams said at the trial that he had known Rogulich for about a year, but he had told the investigating F.B.I. agent that he was not acquainted with Rogulich and that he was not acquainted with anyone by the name of Diorio. When Williams sold the ice cube machine to Kraw he furnished no bill of sale nor any receipt. He accepted as the purchase price less than one-half of the regular retail price and requested that the two checks given in payment be made out, one to “Cash” and the other to Diorio and that the second check then be endorsed by Diorio. Williams’ name thus appeared on neither check. Rogulich, on the other hand, admitted to F.B.I. Agent Yadon that' he knew there was an ice cube maker out at the Cashman garage. He said he had gone out there with Williams to see about buying it but that, upon examining it, he found it to be too large for his purposes and so did not buy it. All of these inconsistencies and misstatements considered with the facts which were proved or admitted do not present the picture of men engaged in a legitimate transaction. It is too much to believe that this picture was brought about by coincidence or by innocent errors. The trial judge was clearly justified in finding that both defendants had known that the property was stolen. The defendants also strenuously object to the action of the trial court in admitting evidence, over the objection of defendants’ counsel, of the theft -from the Indiana Motor Express Company of crates and cartons containing radio and television sets and television tubes and of the theft of a pick-up truck. The trial judge said that he was admitting this evidence on the theory that in connection with all of the other evidence and circumstances, “it tends to establish the fact that there was a theft of some merchandise, and should be considered in connection with all of the other evidence and circumstances in evidence as to whether or not the property in question was stolen property.” The other merchandise was stolen from the same freight dock on which the ice cube maker had been located at the time of the theft. It was stolen during the night of Saturday, January 14, 1950, the same night the crates containing the ice cube machine were unloaded from a pickup truck into Cashman’s garage. The Indiana Motor Express Company’s pick-up truck was stolen the same night and was abandoned in the driveway of private property about 2:00 a. m. of the same night, at a point only two miles distant from the Cash-man garage.