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11461706

Parson v. United States

Parson v. United States

1990-01-08

No. 89-6141

1034

1034

493 U.S. 1034

493

United States Reports

Supreme Court of the United States

United States

2021-08-10T23:20:16.304242+00:00

CAP

Parson v. United States.

No. 89-6141. Parson v. United States.

12

73

C. A. 11th Cir. Certiorari denied.

7643984

NATIONAL TREASURY EMPLOYEES UNION, et al., Appellants v. UNITED STATES of America, Appellee

National Treasury Employees Union v. United States

1996-12-13

No. 96-5217

1423

1432

101 F.3d 1423

101

Federal Reporter 3d Series

United States Court of Appeals for the District of Columbia Circuit

United States

2021-08-10T17:53:36.573407+00:00

CAP

Before: SENTELLE, HENDERSON and ROGERS, Circuit Judges.

NATIONAL TREASURY EMPLOYEES UNION, et al., Appellants v. UNITED STATES of America, Appellee.

NATIONAL TREASURY EMPLOYEES UNION, et al., Appellants v. UNITED STATES of America, Appellee. No. 96-5217. United States Court of Appeals, District of Columbia Circuit. Argued Oct. 25, 1996. Decided Dec. 13, 1996. Gregory O’Duden, General Counsel, argued the cause for appellants, "with whom Elaine D. Kaplan, Deputy General Counsel, and Barbara A. Atkin, Associate General Counsel, Washington, DC, were on the briefs. Stephen W. Preston, Attorney, United States Department of Justice, argued the cause for appellee, with whom Frank W. Hunger, Assistant Attorney General, Eric H. Holder, Jr., United States Attorney, and Douglas N. Letter, Litigation Counsel, United States Department of Justice, Washington, DC, were on the brief. Before: SENTELLE, HENDERSON and ROGERS, Circuit Judges.

5283

33435

Opinion for the court filed by Circuit Judge SENTELLE. Opinion concurring in Part II B filed by Circuit Judge ROGERS. SENTELLE, Circuit Judge: The National Treasury Employees Union ("NTEU" or "Union"), its president, and two of its members appeal from the dismissal of their suit challenging the constitutionality of the Line Item Veto Act, Pub.L. No. 104-130, 100 Stat. 1200 (codified at 2 U.S.C. § 691-692 (1996)), for lack of Article III standing. We affirm, holding that appellants' alleged injury is neither sufficiently concrete nor imminent to create a justiciable controversy. I. Background This case arises out of an attempt by the NTEU, its president Robert Tobias, and two of its individual members to challenge the constitutionality of the Line Item Veto Act. NTEU is a labor organization representing 140,000 federal employees in various agencies and departments within the executive branch. Like private sector unions, NTEU works to represent employees through such traditional labor union activity as collective bargaining and grievance arbitration. However, because of the nature of public sector employment, in which Congress sets by law most of the key conditions of employment in the workforce, NTEU also seeks to protect its members' employment-related interests in the legislative appropriations process. The Line Item Veto Act provides that "the President may, with respect to any bill or joint resolution that has been signed into law pursuant to Article I, section 7, of the Constitution of the United States, cancel in whole (1) any dollar amount of discretionary budget authority; (2) any item of new direct spending; or (3) any limited tax benefit." 2 U.S.C. § 691(a). The President must notify Congress of any exercise of his cancellation power under the Act within five calendar days (excluding Sundays) of the enactment of the law containing the canceled item. Id. § 691(a)(3)(B). Congress may then nullify the President's cancellation by passing a "disapproval bill." Id. § 691b(a). Because the disapproval bill may be vetoed by the President, a President's exercise of his cancellation power will stand, as a practical matter, if supported by one-third plus one of the members of either House of Congress. By its terms, the Line Item Veto Act will not take effect until the earlier of the enactment of a seven-year balanced budget bill or January 1, 1997. Id. § 691 note. Nevertheless, on April 9, 1996, the day the Line Item Veto Act was signed into law, appellants brought suit against the United States in federal district court asking the court to declare the Act unconstitutional and enjoin its enforcement. According to appellants, the Line Item Veto Act violates the separation of powers, U.S. Const. art. I, § 7, 8, the Appropriations Clause, id. § 9, cl. 7, and the grant to each House of Congress of the power to "determine the Rules of its Proceedings," id. § 5. In their complaint, appellants allege several injuries that they contend are sufficient to satisfy the Article III standing requirement of "injury in fact." First, NTEU alleges that "[a]s a result of the Act, NTEU must modify its representational activities to devote addi tional resources — including time, money, and effort — to gain the support of the Executive Branch for measures that will benefit its members." Appellants' Amended Complaint at 8. Second, NTEU alleges that "the Act interferes with NTEU's ability to influence the passage of favorable legislation" by "mak[ing], it more difficult for NTEU to achieve favorable legislative treatment for its constituents without securing the advance support of the Executive Branch" for such legislation. Id. at 9. These allegations are supported by an affidavit filed by Robert M. Tobias, National President of NTEU, stating that enactment of the Line Item Veto Act has dramatically changed the landscape of the legislative process and thus, necessarily, affects the way NTEU does business regarding appropriations measures of interest to our members.... By transferring the power to make spending decisions from Congress to the President, the regime established by the Line Item Veto Act most certainly impairs the Union's ability to accomplish its key purpose of representing effectively its members' interests in the appropriations process. NTEU's work is so impeded because the unlawful Act creates a new scheme under which benefits achieved though the legislative process can be. entirely negated through the President's item veto power.... [T]o counter the new regime established by the Act and to protect against the threat of an item veto, NTEU must now expend additional time and money . to help ensure that the President does not thwart our legislative advocacy through the item veto. Tobias Aff. ¶ 12, 13. In addition to the injury inflicted upon the Union, President Tobias alleges that the Line Item Veto Act injures him "as an individual" by impairing his ability "as the elected National President of NTEU . to advance the interests of the Union." Id. ¶ 16. Similarly, two individual members of the Union allege that they "will be injured" because the Line Item Veto Act reduces NTEU's ability to advocate its members' views and requires NTEU to divert resources away from other union services of interest to members. Appellants' Amended Complaint at 9. Finally, President Tobias and the two individual members of the Union allege that the Line Item Veto Act injures them "in their capacity as voters" in that "their elected representatives' vote has lost value in the lawmaking and rulemaking process." Id. The United States moved to dismiss this action on the alternative grounds that appellants lack standing under Article III of the Constitution and that the matter was "currently nonjusticiable." On July 3, 1996, the district court granted the government's motion to dismiss for lack of Article III standing, reasoning that plaintiffs' alleged injuries are "too speculative and remote" to constitute an "injury sufficient to confer standing on the plaintiffs." National Treasury Employees Union v. United States, 929 F.Supp. 484, 488 (D.D.C.1996) (mem.) (hereinafter NTEU). While recognizing that "the. Act may change the way [NTEU] chooses to represent its members," the court concluded that the Act "does not perceptibly impair [NTEU's] representation efforts." Id. The court distinguished the line of cases recognizing "a concrete and demonstrable injury arising from a purportedly illegal action [that] increases the resources the group must devote to programs independent of its suit challenging the action" on the ground that in each of those cases the purportedly illegal action taken by the defendants "was at loggerheads with" and "squarely countered the plaintiffs' organizational objective." Id. at 488-89. The district court further reasoned that the alleged injury to NTEU was not "real and immediate," but instead was "wholly speculative." Id. at 489. According to the court, "plaintiffs' ultimate concerns will be realized only in the event that the President exercises the cancellation authority with respect to a particular appropriation affecting them" and Congress is unable to pass a disapproval bill to override the item veto. Id. The court rejected NTEU's argument that it was injured by the fact that the item veto authority "places the appropriations process under the Sword of Damocles" to which NTEU must now respond in order to represent its members adequately. Id. Be cause the President presently has a veto authority that may be exercised "to the detriment of NTEU members," id., the district court was not convinced that the addition of an item veto power would "perceptibly impair the plaintiffs' representation efforts," id. at 490. This appeal challenges the district court's dismissal of appellants' complaint for lack of standing. While appellants purport to argue that NTEU as well as the individual plaintiffs have standing to sue, the only argument seriously advanced is that NTEU has standing to sue on its own behalf. Therefore, we consider only that question. See Alabama Power Co. v. Gorsuch, 672 F.2d 1, 7 (D.C.Cir.1982) (per curiam) ("Courts have long declined to render decisions on important questions of far-reaching significance which have not been argued by the party who might benefit therefrom."). II. Analysis Article III of the federal Constitution vests "[t]he judicial Power of the United States . in one supreme Court, and in such inferior Courts as the Congress may . establish." U.S. Const. art. III, § 1. This judicial power extends only to "Cases" and "Controversies." Id. § 2. In an attempt to give meaning to Article III's case-or-eontro-versy requirement,' the courts have developed a series of principles termed "justicia-bility doctrines," among which are standing ripeness, mootness, and the political question doctrine. Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984). These doctrines are composed both of prudential elements which "Congress is free to override," see Fair Employment Council of Greater Wash., Inc. v. BMC Mktg. Corp., 28 F.3d 1268, 1278 (D.C.Cir.1994), and "core component^]" which are "essential and unchanging part[s] of the case-or-controversy requirement of Article III," Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992). Two of the justiciability doctrines — standing and ripeness — are implicated in the present case. Article III standing requires that a plaintiff have suffered an (1) "injury in fact— an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical" — (2) which is "fairly traceable" to the challenged act, and (3) "likely" to be "redressed by a favorable decision." Id. at 560-61, 112 S.Ct. at 2136 (internal quotations and citations omitted). These requirements apply whether an organization asserts standing to sue; either on its own behalf, or on behalf of its members. Havens Realty Corp. v. Coleman, 455 U.S. 363, 378, 102 S.Ct. 1114, 1124, 71 L.Ed.2d 214 (1982). With respect to the "injury in fact" requirement, an organization suing on its own behalf must demonstrate that it has suffered "concrete and demonstrable injury to [its] activities." Id. at 379, 102 S.Ct. at 1124. A mere "setback to the organization's abstract social interests" is inadequate to establish standing. Id. Further, the injury alleged cannot be " 'conjectural' or 'hypothetical,' " City of Los Angeles v. Lyons, 461 U.S. 95, 102, 103 S.Ct. 1660, 1665, 75 L.Ed.2d 675 (1983), "remote," Warth v. Seldin, 422 U.S. 490, 507, 95 S.Ct. 2197, 2209-10, 45 L.Ed.2d 343 (1975), "speculative," Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 42-46, 96 S.Ct. 1917, 1926-28, 48 L.Ed.2d 450 (1976), or "abstract," O'Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 675, 38 L.Ed.2d 674 (1974). Rather, it must be "certainly impending." Whitmore v. Arkansas, 495 U.S. 149, 158, 110 S.Ct. 1717, 1725, 109 L.Ed.2d 135 (1990) (internal quotations omitted). Ripeness, while often spoken of as a justiciability doctrine distinct from standing, in fact shares the constitutional requirement of standing that an injury in fact be certainly impending. See Duke Power Co. v. Carolina Envtl. Study Group, 438 U.S. 59, 81, 98 S.Ct. 2620, 2634-35, 57 L.Ed.2d 595 (1978); DKT Mem'l Fund, Ltd. v. Agency for Int'l Dev., 887 F.2d 275, 297 (D.C.Cir.1989) (holding that "the constitutional requirement for ripeness is injury in fact"). It is only the prudential aspect of ripeness— where a court balances "the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration," Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 1515-16, 18 L.Ed.2d 681 (1967)— that extends beyond standing's constitutional core. See Duke Power, 438 U.S. at 81-82, 98 S.Ct. at 2634-35. In other words, if a threatened injury is sufficiently "imminent" to establish standing, the constitutional requirements of the ripeness doctrine will necessarily be satisfied. At that point, only the prudential justiciability concerns of ripeness can act to bar consideration of the claim. We share with the district court the conclusion that the appellants lack Article III standing, at least on the present record; we are utterly convinced that their claim is not prudentially ripe. A. Article III Standing The starting point for our analysis of NTEU's alleged injury under the standing rubric is the Supreme Court's opinion in Havens Realty Corp. v. Coleman, supra. In Havens, the Court considered whether a nonprofit organization whose purpose was "to make equal opportunity in housing a reality in the Richmond Metropolitan Area" had standing to bring suit on its own behalf against a realty company for alleged violations of the Fair Housing Act. 455 U.S. at 368, 102 S.Ct. at 1118-19 (internal quotations omitted). The organization alleged that the defendant's unlawful housing practices "frustrated" the organization's efforts "to assist equal access to housing." Id. at 379, 102 S.Ct. at 1124 (internal quotations omitted). Further, the organization alleged that it "had to devote significant resources to identify and counteract the defendant's" unlawful housing practices. Id. (internal quotations omitted). Accepting these allegations as true, the Court concluded that the organization's "ability to provide counseling and referral services for low- and moderate-income home-seekers" had been "perceptibly impaired," thus creating an injury sufficient for purposes of standing. Id. According to the Court, "[s]ueh concrete and demonstrable injury to the organization's activities — with the consequent drain on the organization's resources — constitutes far more than simply a setback to the organization's abstract social interests." Id. Recently, the Supreme Court revisited the issue of organizational standing in Metropolitan Wash. Airports Auth. v. Citizens for the Abatement of Aircraft Noise, Inc., 501 U.S. 252, 111 S.Ct. 2298, 115 L.Ed.2d 236 (1991). There, the Court considered whether an organization whose primary purpose was to "implement a transportation policy for the Washington area that would . reduc[e] the operations at National [Airport] and alleviate] noise, safety, and air pollution problems associated with such operations," id. at 262, 111 S.Ct. at 2304-05, had standing to challenge the constitutionality of Congress' delegation to a Board of Review the power to veto airport planning decisions made by the Airports Authority Board of Directors, id. at 255, 111 S.Ct. at 2301. The Court recognized the existence of two harms arising from this scheme sufficient to establish Article III standing. The first injury was the increase "in noise, pollution, and danger of accidents." Id. at 264, 111 S.Ct. at 2305-06. The Court concluded that this injury was "fairly traceable" to the unexereised veto power "because knowledge that the . plan was subject to the veto power undoubtedly influenced [the] Board of Directors when it drew up the plan." Id. at 265, 111 S.Ct. at 2306. Second, the Court recognized that the veto power harmed the organization by "making it more difficult" for the organization to reduce noise and activity at the airport. Id. The Court further concluded that the organization's claim was "ripe" for judicial review despite the fact that the veto power had not been exercised to the organization's detriment. Id. at 265 n. 13, 111 S.Ct. at 2306 n. 13. As the Court explained, "[t]he threat of the veto hangs over the Board of Directors like the sword over Damocles, creating a here-and-now subservience to the Board of Review sufficient to raise constitutional questions." Id. (internal quotations omitted). It is important to note that it was not the mere existence of the unconstitutional veto power in Metropolitan that constituted the "injury in fact," but rather the increased (or at least not decreased) noise, activity, and danger that resulted from the unconstitutional veto power. As the Court explained the next term in Lujan v. Defenders of Wildlife, a "procedural injury" is inadequate to establish standing absent an alleged "discrete injury" flowing from the procedural violation. 504 U.S. at 571-72, 112 S.Ct. at 2142-43. However, in those cases involving procedural injuries, the standing requirements of re-dressability and immediacy are applied to the present violation of the procedural right that may someday injure a "concrete interest ]," rather than the discrete injury which the plaintiff often cannot establish "with any certainty." Id. at 572 n. 7, 112 S.Ct. at 2142 n. 7. We have previously found organizational standing to exist under facts similar to those that existed in Havens. For example, in Spann v. Colonial Village, Inc., 899 F.2d 24 (D.C.Cir.), cert. denied, 498 U.S. 980, 111 S.Ct. 508, 112 L.Ed.2d 521 (1990), two nonprofit organizations "dedicated to . ensuring equality of housing opportunity through education and other efforts" brought suit against an advertising agency and the owner and manager of a residential condominium development, alleging that the defendants ran discriminatory housing advertisements in the Washington Post in violation of the Fair Housing Act. Id. at'26. Plaintiffs further alleged that these discriminatory ads required plaintiffs to "devote scarce resources to identify and counteract defendants' advertising practices" and also "necessitated increased education efforts" to inform the public about laws prohibiting discrimination in housing. Id. at 28. We held that, because educational programs "could plausibly be required" to counteract defendants' conduct and because these programs would act as a "drain on the organizations' resources," plaintiffs' allegations were sufficient to establish standing to sue. Id. at 28-29, 31. Similarly, in Fair Employment Council of Greater Washington, Inc. v. BMC Mktg. Corp., supra, we concluded that the Fair Employment Council ("FEC") had standing to challenge the allegedly discriminatory placement practices of an employment agency, BMC Marketing ("BMC"). 28 F.3d at 1270. FEC alleged that "BMC's discriminatory actions . interfered with [FEC's community outreach, counseling, and research projects] and programs and . required the Council to expend resources to counteract BMC's alleged discrimination." Id. at 1276. We concluded that these allegations indicated that BMC's alleged discrimination made FEC's "overall task more difficult." - Id. As we explained, the alleged discrimination by BMC "might increase the number of people in need of counseling; similarly, to the extent that BMC's actions have made it harder for minorities to find jobs in greater Washington, they may have reduced the effectiveness of any given level of outreach efforts." Id. This, we said, constituted a "perceptible] impair[ment]" of the FEC programs sufficient to establish "injury in fact." Id. (internal quotations omitted). However, we went on to explain that expenses the FEC incurred in detecting the discriminatory practices of BMC were "self-inflicted" harms stemming from the FEC's "own budgetary choices" rather than any conduct of BMC. Id. This latter harm, we held, did not constitute an "injury" for purposes of standing. Id. at 1277. As the district court rightly noted, what Havens, Spann, and FEC—as well as Metropolitan — have in common is that the action challenged in those cases "was at loggerheads with the stated mission of the plaintiff." NTEU, 929 F.Supp. at 489. We, of course, recognize that conflict between a defendant's conduct and an organization's mission is alone insufficient to establish Article III standing. Frustration of an organization's objectives "is the type of abstract concern that does not impart standing." National Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1433 (D.C.Cir.1995); see also Havens, 455 U.S. at 379, 102 S.Ct. at 1124 (distinguishing injury to an "organization's activities" from "a setback to the organization's abstract social interests"). Individual persons cannot obtain judicial review of otherwise non-justiciable claims simply by incorporating, drafting a mission statement, and then suing on behalf of the newly formed and extremely interested organization. However, in those eases where an organization alleges that a defendant's conduct has made the organization's activities more difficult, the presence of a direct conflict between the defendant's conduct and the organization's mission is necessary—though not alone sufficient—to establish standing. If a defendant's conduct does not conflict directly with an organization's stated goals, it is entirely speculative whether the defendant's conduct is impeding the organization's activities. Moreover, in those cases where governmental action is challenged, if the government's conduct does not directly conflict with the organization's mission, the alleged injury to the organization likely will be one that is shared by a large class of citizens and thus insufficient to establish injury in fact. Warth, 422 U.S. at 499, 95 S.Ct. at 2205. NTEU alleged a direct causal link between the enactment of the Line Item Veto Act and the increased expenditure of funds now needed to achieve NTEU's organizational mission of improving the terms of employment for government workers. NTEU did not allege that an appropriations bill which would have improved the conditions of employment for government workers was subjected to the President's item veto power. Nor did NTEU allege that such an appropriations bill was modified in Congress as a result of a threatened exercise of the item veto power. Indeed, NTEU did not even allege that such an appropriations bill moved through Congress under this "Sword of Damocles." Plaintiffs allege only that they have expended more money lobbying the President in order to avoid these potential injuries. But the plaintiffs mission is not to influence the President's views on the rights of government workers. NTEU's mission is to obtain improved worker conditions—a mission not necessarily inconsistent with the Line Item Veto Act. For a myriad of reasons, a given President may be disinclined to exercise the item veto power as to government employee benefits. We do not and cannot know at this point. Absent a direct conflict between NTEU's mission and the Line Item Veto Act, we are unsure whether NTEU's additional expenditure of funds is truly necessary to improve the working conditions of government workers or rather is unnecessary alarmism constituting a self-inflicted injury. It is true that, "[f]or purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint." Metropolitan, 501 U.S. at 264, 111 S.Ct. at 2306 (internal quotations and citations omitted). But there is a difference between accepting a plaintiffs allegations of fact as true and accepting as correct the conclusions plaintiff would draw from such facts. NTEU would have us accept as true not only the fact that it has expended additional funds in an attempt to lobby the President more effectively, but also the speculative conclusion that such expenditures are a necessary link in achieving the organization's ultimate purpose. This we decline to do. B. Ripeness 1. Article III Even were we to accept NTEU's alleged conclusion that the Line Item Veto Act necessitates increased lobbying efforts directed at the President, we do not believe this alleged injury is sufficiently imminent to create a current justiciable controversy. As Lujan makes clear, Article III requires not only that an alleged injury be "concrete and particularized," but also that it be "imminent." In Havens, Metropolitan, Spann, and Fair Employment Council, the allegedly unlawful and injurious act had already occurred by the time suit was brought. In Havens, the plaintiff organization brought suit challenging "racial steering" practices in which defendants had already engaged. See 455 U.S. at 366, 102 S.Ct. at 1117-18. The same was true in both Spann, 899 F.2d at 26 (challenging discriminatory ads run in the Washington Post from January 1985 through the spring of 1986), and Fair Employment Council, 28 F.3d at 1270 (challenging defendants' failure to provide referrals for black employees in December 1990). We recognize that in eases like this one where a procedural violation is asserted, the courts have applied the imminence requirement to the procedural violation, not the discrete injury that might someday flow from such. Lujan, 504 U.S. at 572 n. 7, 112 S.Ct. at 2142 n. 7. For example, a plaintiff who lives adjacent to the site for proposed construction of a federally licensed dam has standing to challenge the licensing agency's failure to prepare an environmental impact statement, even though he cannot establish with any certainty that the statement will cause the license to be withheld or altered, and even though the dam will not be completed for many years. Id. Similarly, in Metropolitan, where the Court concluded that increased airport noise was traceable to an unexercised veto power, 501 U.S. at 264-65, 111 S.Ct. at 2305-06, the Board of Directors had adopted a master airport plan and the Board of Review had voted not to disapprove that plan by the time suit was brought, id. at 261, 111 S.Ct. at 2304. In this ease, NTEU concedes that "[t]he President . cannot exercise his veto power until January 1, 1997." Appellants' Brief at 11-12. While the Metropolitan Court recognized that the existence of even an unexer-cised veto may "creat[e] a 'here-and-now subservience' . sufficient to raise constitutional questions," 501 U.S. at 265 n. 13, 111 S.Ct. at 2306 n. 13, in this case the veto power is not only unexercised, but is as yet unavailable. Nor is an appropriations bill subject to the item veto pending before Congress. We do not mean to imply that NTEU's alleged injury will be sufficiently imminent on January 1 or on the evening of the State of the Union address when the President submits his budget to Congress. It is enough to say that NTEU's claim is not now ripe, particularly when we subject the claim to analysis under the prudential aspect of the ripeness doctrine. 2. Prudential Prudentially, the ripeness doctrine exists to prevent the .courts from wasting our resources by prematurely entangling ourselves in abstract disagreements, and, where, as here, other branches of government are involved, to protect the other branches from judicial interference until their decisions are formalized and their "effects felt in a concrete way by the challenging parties." Abbott Labs., 387 U.S. at 148-49, 87 S.Ct. at 1515. In testing whether the facts of a particular case meet that standard of ripeness, we have often applied a two-part analysis, evaluating' "[1] the fitness of the issues for judicial decision and [2] the hardship to the parties of' withholding court consideration." Id. at 149, 87 S.Ct. at 1515; accord NRDC v. EPA, 859 F.2d 156, 166 (D.C.Cir.1988). Taking the questions in reverse order, the only alleged hardship to the parties of withholding immediate judicial review is that the appellants, allegedly, will divide their resources differently between their lobbying efforts toward the Congress — still virtually as involved in the budget' making process as ever — on the one hand, and the President — who always had a veto, but now has a stronger one — on the other. Whatever is on the other side of the scale need not be very heavy to outweigh this light hardship. As for the current fitness for judicial review, while the broad legal theory advanced by appellants may be as complete as it ever will, the facts upon which its resolution may depend are not "fully crystallized," nor do the appellants feel their effects in a concrete way. Id. Further supporting our decision that this case is prudentially unripe is the usually unspoken element of the rationale underlying the ripeness doctrine: If we do not decide it now, we may never need to. Not only does this rationale protect the expenditure of judicial resources, but it comports with our theoretical role as the governmental branch of last resort. Allen, 468 U.S. at 752, 104 S.Ct. at 3325. Article III courts should not make decisions unless they have to. Relying on our opinion in Fair Employment Council, the parties seem to agree that prudential justiciability limitations do not bar consideration of a challenge to the Line Item Veto Act. In Fair Employment Council, we held that a federal statute which permitted "any 'person claiming to be aggrieved' by an unlawful employment practice to file suit," 28 F.3d at 1278 (quoting 42 U.S.C. § 2000e-5(f)(1)), "open[ed] the courts to anyone who satisfie[d] the constitutional requirements" of Article III, id. In the Line Item Veto Act; Congress specified that any individual adversely affected by [the Act] may bring an action, in the United States District Court for the District of Columbia, for a declaratory judgment and injunctive relief on the ground that any provision of this part violates the Constitution." 2 U.S.C. § 692(a)(1). Although when taken out of context, that provision seems to parallel the one we considered in Fair Employment Council, further examination reveals otherwise. 2 U.S.C. § 692(b) provides that any order entered pursuant to the judicial review provision of the Act is reviewable by direct appeal to the Supreme Court, not this court. We believe this provision constitutes a congres-sionally created barrier to our review of appellants' claim. Just as Congress may override prudential barriers to judicial review, Fair Employment Council, 28 F.3d at 1278, so too, may it deny a court the authority to review a ease or class of cases otherwise within the Article III judicial power. As the Supreme Court has stated: [T]he judicial power of the United States . is . dependent for its distribution and organization, and for the modes of its exercise, entirely upon the action of congress, who possess the sole power of creating the tribunals (inferior to the supreme court) for the exercise of the judicial power, and of investing them with jurisdiction either limited, concurrent, or exclusive, and of withholding jurisdiction from them in the exact degrees and character which to congress may seem proper for the public good. Cary v. Curtis, 44 U.S. (3 How.) 236, 245, 11 L.Ed. 576 (1845); cf. U.S. Const. art. III, § 2, cl. 2 ("the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make."). Thus, supporting our decision that this case is not prudentially ripe is the congressionally mandated route of review applicable to any action brought to test the constitutionality of the Act. Appellants' suit seeks a declaration that the Line Item Veto Act is unconstitutional and an injunction against its enforcement. Had the district court ruled on the merits of appellants' claim and granted injunctive relief instead of dismissing it, the decision would likely have been appealed to this court. We would then have been forced to render a decision that might well amount to a constitutionally suspect advisory opinion of questionable authority since it would speak in an area never intended by Congress to be within our jurisdiction. In other words, not only is this controversy unfit for decision by this court at this time, it may never be ripe for us to decide. Therefore, deciding the controversy would be at best a waste of judicial resources, and at worst a usurpation. Either way, ripeness considerations dictate that we affirm the district court's dismissal of the action. III. Conclusion NTEU may, at some time in the future, suffer an imminent concrete injury that is fairly traceable to the Line Item Veto Act. Because that point has not yet been reached, we hold that NTEU's claim is neither constitutionally nor prudentially justiciable. . Of course, the converse is not true. One may be able to demonstrate that an injury is "imminent'' (i.e., that the claim is constitutionally ripe), but be unable to demonstrate that the injury is "concrete and particularized," "fairly traceable" to the challenged action, or "likely to be redressed by a favorable decision."

541811

Paul et al. v. Davis

Paul v. Davis

1975-06-09

No. 74-891

1009

1009

421 U.S. 1009

421

United States Reports

United States District Court for the Western District of Pennsylvania

United States

2021-08-10T17:00:43.041486+00:00

CAP

Mr. Justice Douglas took no part in the consideration or decision of this motion.

Paul et al. v. Davis.

No. 74-891. Paul et al. v. Davis.

50

283

C. A. 6th Cir. [Certiorari granted, ante, p. 909.] Motion of Americans for Effective Law Enforcement, Inc., et al., for leave to file a brief as amici curiae granted. Mr. Justice Douglas took no part in the consideration or decision of this motion.

1333709

Fahy v. Pennsylvania

Fahy v. Pennsylvania

1995-01-09

No. 94-6238

1086

1086

513 U.S. 1086

513

United States Reports

Supreme Court of the United States

United States

2021-08-10T19:01:49.759124+00:00

CAP

Fahy v. Pennsylvania.

No. 94-6238. Fahy v. Pennsylvania.

10

68

Sup. Ct. Pa. Certio-rari denied.

36479

J. Gary DiLAURA, individually, and as president of Waterfront Homeowners Association of Western New York, et al.; James Lewis, individually, and as vice president of Waterfront Homeowners Association of Western NY; Barbara Custodi, individually, and as secretary of Waterfront Homeowners Association of Western NY; Richard Rozicki, individually, and as treasurer of Waterfront Homeowners Association of Western NY; John Arent; Thomas E. Arida; Lawrence Barclay; Ralph Barker; Harry Board; Patricia A. Boies; Richard Bowen; Stanley Brzezinski; Joseph D. Calato; Leonard Cannello; Jack Carpenter; William Carr; Miro Catipovic; Howard L. Charlsey; Century Club; Edgar Cooper; Joseph J. Costa; Roy Cotton; John A. Culbert; Walter Czapla; John T. Daniels; Thomas Deremer; William J. Desjardin; Ralph Engstron; Hugo Filax; Forbes; Philip Galmabacher; Donald Gannon; Arthur Gehrman; Robert Hackett; Robert Hadden; James J. Hallett; Robert P. Harper; Edgar E. Harris; John W. Hartman; Gladys M. Heinrich; John B. Henshaw; John Hess; Richard M. Hesson; William F. Hesson; Marcy Hilts; Dominic Hofert; Sheldon Holland; Gary Hunt; Violet Iadicicco; Stanley W. Jarosz; John W. Jaruszawicus; John J. Jaruszawicus; Dwight Jeeves; Robert Jensen; David K. Jordan; Lawrence C. Jugle; Philip Julias; James Kearney; Walter Kendzia; Robert J. Kiedrowski; James Kimbrough; Gail R. Klementowski; Kenneth V. Klementowski; Alex Kollwitz; Ed Konecki; Richard Kraus; Steve Kurthy; Frank Kustra; Richard LeClaire; Verna L. Learman; Gary Lewis; Norman Lichtenthal; Daniel Limenfelser; Raymond Lippens; Jack Livermore; Harvey R. Mack; Patrick MacKenna; Margaret Malican; Blue Water Marina; Placid Harbor Marina; Charles Markarian; Robert Marlin; James Martin; Ronald R. McMamee; Daniel J. McMamee; Richard P. McBride; Paul McCarthy; Patrick M. McLaughlin; George McMurdo; Louise E. Michaels; Jack Mikulksky; Gustave Milkey; Arlene Mille; Charles F. Mohr; Richard Molnar; Jeffrey L. Morgan; Richard G. Murray; Craig Neville; Jim Nicholas; Russell Nixon; Issac Pack; Arthur R. Page; Norman Parisi; Vincent Peri; Edwin Pfohl; Robert Phillips; Kim Piccirelli; Ken Pieri; Bohdan Pikas; Richard H. Popp; William Reagan; Elizabeth M. Reszel; Thomas Roberts; William Robinson; John Robinson; Richard Rozicki; Elmer C. Rumsey; Arthur Ruthowski; Edward L. Samulski; Allan F. Schreiner; Barbara C. Shedd; Wilfred S. Sherk; William J. Simon; John R. Simon; Thomas Sliwa; Dennis Smith; Robin Smith; Joseph J. Smith; Richard Stange; Thomas J. Stedman; James Stephenson; Flora Stone; William C. Sundeen; Robert F. Swan; Dennis Szymanski; David Taylor; Louis W. Taylor; Patrick Tench; Douglas Tiebor; William E. Tisdale; Harry Tolli; Donald Tompkins; Aldo Urbani; Arthur Wade; Kenneth F. Wagner; Kenneth H. Walczak; Robert W. Weaver; Loretta L. Weaver; Norma Wedlake; Elsa Werstine; Thaddeus Weselak; Tony Wiatr; Donald Wilkinson; Frank Williams; LaSalle Yacht Club, Inc.; William Young; Angelo Zino, Jr.; Waterfront Homeowners Association of Western NY, Plaintiffs-Appellants, v. POWER AUTHORITY of the STATE of NY, Defendant-Appellee

DiLaura v. Power Authority

1992-12-29

No. 1833, Docket 92-7061

73

82

982 F.2d 73

982

Federal Reporter 2d Series

United States Court of Appeals for the Second Circuit

United States

2021-09-21T20:02:18.861595+00:00

Harvard

Before WINTER, MINER, and McLAUGHLIN, Circuit Judges.

J. Gary DiLAURA, individually, and as president of Waterfront Homeowners Association of Western New York, et al.; James Lewis, individually, and as vice president of Waterfront Homeowners Association of Western NY; Barbara Custodi, individually, and as secretary of Waterfront Homeowners Association of Western NY; Richard Rozicki, individually, and as treasurer of Waterfront Homeowners Association of Western NY; John Arent; Thomas E. Arida; Lawrence Barclay; Ralph Barker; Harry Board; Patricia A. Boies; Richard Bowen; Stanley Brzezinski; Joseph D. Calato; Leonard Cannello; Jack Carpenter; William Carr; Miro Catipovic; Howard L. Charlsey; Century Club; Edgar Cooper; Joseph J. Costa; Roy Cotton; John A. Culbert; Walter Czapla; John T. Daniels; Thomas Deremer; William J. Desjardin; Ralph Engstron; Hugo Filax; Forbes; Philip Galmabacher; Donald Gannon; Arthur Gehrman; Robert Hackett; Robert Hadden; James J. Hallett; Robert P. Harper; Edgar E. Harris; John W. Hartman; Gladys M. Heinrich; John B. Henshaw; John Hess; Richard M. Hesson; William F. Hesson; Marcy Hilts; Dominic Hofert; Sheldon Holland; Gary Hunt; Violet Iadicicco; Stanley W. Jarosz; John W. Jaruszawicus; John J. Jaruszawicus; Dwight Jeeves; Robert Jensen; David K. Jordan; Lawrence C. Jugle; Philip Julias; James Kearney; Walter Kendzia; Robert J. Kiedrowski; James Kimbrough; Gail R. Klementowski; Kenneth V. Klementowski; Alex Kollwitz; Ed Konecki; Richard Kraus; Steve Kurthy; Frank Kustra; Richard LeClaire; Verna L. Learman; Gary Lewis; Norman Lichtenthal; Daniel Limenfelser; Raymond Lippens; Jack Livermore; Harvey R. Mack; Patrick MacKenna; Margaret Malican; Blue Water Marina; Placid Harbor Marina; Charles Markarian; Robert Marlin; James Martin; Ronald R. McMamee; Daniel J. McMamee; Richard P. McBride; Paul McCarthy; Patrick M. McLaughlin; George McMurdo; Louise E. Michaels; Jack Mikulksky; Gustave Milkey; Arlene Mille; Charles F. Mohr; Richard Molnar; Jeffrey L. Morgan; Richard G. Murray; Craig Neville; Jim Nicholas; Russell Nixon; Issac Pack; Arthur R. Page; Norman Parisi; Vincent Peri; Edwin Pfohl; Robert Phillips; Kim Piccirelli; Ken Pieri; Bohdan Pikas; Richard H. Popp; William Reagan; Elizabeth M. Reszel; Thomas Roberts; William Robinson; John Robinson; Richard Rozicki; Elmer C. Rumsey; Arthur Ruthowski; Edward L. Samulski; Allan F. Schreiner; Barbara C. Shedd; Wilfred S. Sherk; William J. Simon; John R. Simon; Thomas Sliwa; Dennis Smith; Robin Smith; Joseph J. Smith; Richard Stange; Thomas J. Stedman; James Stephenson; Flora Stone; William C. Sundeen; Robert F. Swan; Dennis Szymanski; David Taylor; Louis W. Taylor; Patrick Tench; Douglas Tiebor; William E. Tisdale; Harry Tolli; Donald Tompkins; Aldo Urbani; Arthur Wade; Kenneth F. Wagner; Kenneth H. Walczak; Robert W. Weaver; Loretta L. Weaver; Norma Wedlake; Elsa Werstine; Thaddeus Weselak; Tony Wiatr; Donald Wilkinson; Frank Williams; LaSalle Yacht Club, Inc.; William Young; Angelo Zino, Jr.; Waterfront Homeowners Association of Western NY, Plaintiffs-Appellants, v. POWER AUTHORITY of the STATE of NY, Defendant-Appellee.

J. Gary DiLAURA, individually, and as president of Waterfront Homeowners Association of Western New York, et al.; James Lewis, individually, and as vice president of Waterfront Homeowners Association of Western NY; Barbara Custodi, individually, and as secretary of Waterfront Homeowners Association of Western NY; Richard Rozicki, individually, and as treasurer of Waterfront Homeowners Association of Western NY; John Arent; Thomas E. Arida; Lawrence Barclay; Ralph Barker; Harry Board; Patricia A. Boies; Richard Bowen; Stanley Brzezinski; Joseph D. Calato; Leonard Cannello; Jack Carpenter; William Carr; Miro Catipovic; Howard L. Charlsey; Century Club; Edgar Cooper; Joseph J. Costa; Roy Cotton; John A. Culbert; Walter Czapla; John T. Daniels; Thomas Deremer; William J. Desjardin; Ralph Engstron; Hugo Filax; Forbes; Philip Galmabacher; Donald Gannon; Arthur Gehrman; Robert Hackett; Robert Hadden; James J. Hallett; Robert P. Harper; Edgar E. Harris; John W. Hartman; Gladys M. Heinrich; John B. Henshaw; John Hess; Richard M. Hesson; William F. Hesson; Marcy Hilts; Dominic Hofert; Sheldon Holland; Gary Hunt; Violet Iadicicco; Stanley W. Jarosz; John W. Jaruszawicus; John J. Jaruszawicus; Dwight Jeeves; Robert Jensen; David K. Jordan; Lawrence C. Jugle; Philip Julias; James Kearney; Walter Kendzia; Robert J. Kiedrowski; James Kimbrough; Gail R. Klementowski; Kenneth V. Klementowski; Alex Kollwitz; Ed Konecki; Richard Kraus; Steve Kurthy; Frank Kustra; Richard LeClaire; Verna L. Learman; Gary Lewis; Norman Lichtenthal; Daniel Limenfelser; Raymond Lippens; Jack Livermore; Harvey R. Mack; Patrick MacKenna; Margaret Malican; Blue Water Marina; Placid Harbor Marina; Charles Markarian; Robert Marlin; James Martin; Ronald R. McMamee; Daniel J. McMamee; Richard P. McBride; Paul McCarthy; Patrick M. McLaughlin; George McMurdo; Louise E. Michaels; Jack Mikulksky; Gustave Milkey; Arlene Mille; Charles F. Mohr; Richard Molnar; Jeffrey L. Morgan; Richard G. Murray; Craig Neville; Jim Nicholas; Russell Nixon; Issac Pack; Arthur R. Page; Norman Parisi; Vincent Peri; Edwin Pfohl; Robert Phillips; Kim Piccirelli; Ken Pieri; Bohdan Pikas; Richard H. Popp; William Reagan; Elizabeth M. Reszel; Thomas Roberts; William Robinson; John Robinson; Richard Rozicki; Elmer C. Rumsey; Arthur Ruthowski; Edward L. Samulski; Allan F. Schreiner; Barbara C. Shedd; Wilfred S. Sherk; William J. Simon; John R. Simon; Thomas Sliwa; Dennis Smith; Robin Smith; Joseph J. Smith; Richard Stange; Thomas J. Stedman; James Stephenson; Flora Stone; William C. Sundeen; Robert F. Swan; Dennis Szymanski; David Taylor; Louis W. Taylor; Patrick Tench; Douglas Tiebor; William E. Tisdale; Harry Tolli; Donald Tompkins; Aldo Urbani; Arthur Wade; Kenneth F. Wagner; Kenneth H. Walczak; Robert W. Weaver; Loretta L. Weaver; Norma Wedlake; Elsa Werstine; Thaddeus Weselak; Tony Wiatr; Donald Wilkinson; Frank Williams; LaSalle Yacht Club, Inc.; William Young; Angelo Zino, Jr.; Waterfront Homeowners Association of Western NY, Plaintiffs-Appellants, v. POWER AUTHORITY of the STATE of NY, Defendant-Appellee. No. 1833, Docket 92-7061. United States Court of Appeals, Second Circuit. Argued Aug. 12, 1992. Decided Dec. 29, 1992. John P. Bartolomei, Niagara Falls, NY (Paul A. Grenga, Bartolomei & Grenga, P.C., Niagara Falls, NY, of counsel), for plaintiffs-appellants. Andrew Feldman, Buffalo, NY (Ann W. Herman, Damon & Morey, Buffalo, NY, of counsel), for defendant-appellee. Before WINTER, MINER, and McLAUGHLIN, Circuit Judges.

5329

33371

McLAUGHLIN, Circuit Judge: Plaintiffs appeal from a judgment of the United States District Court for the West ern District of New York, Richard J. Arcara, Judge, dismissing their claims for compensatory and punitive damages and injunctive relief under 16 U.S.C. § 803(c) (1988) and state negligence law. Plaintiffs own land on the Niagara River shoreline. They sued the Power Authority of the State of New York ("PASNY") for damages and injunctive relief resulting from PASNY's ice control procedures on the River. The district court dismissed the action in its entirety, (1) finding that plaintiffs failed to state a claim under § 803(c); (2) holding that it lacked subject matter jurisdiction over plaintiffs' request for injunctive relief; and (3) declining to exercise supplemental jurisdiction (what used to be known as pendent jurisdiction) over plaintiffs' state-law negligence claims. We now affirm. BACKGROUND The facts of this case are fully reported at 654 F.Supp. 641, 643-44 (W.D.N.Y.1987) (Elfvin, J.) ["DiLaura I"] and 786 F.Supp. 241, 243-45 (W.D.N.Y.1991) (Arcara, J.) ["DiLaura II"]. We summarize the salient facts relevant to this appeal. The Niagara River connects Lake Erie and Lake Ontario. With various power-related facilities controlling the flow and elevation of the river, PASNY and its Canadian partner Ontario Hydro have transformed the Niagara River into a long "hydraulic canal" to produce electrical power. Two international treaties, related regulations, and a license issued by the Federal Energy Regulatory Commission ("FERC"), govern PASNY's managed diversion of Niagara River waters. The two international agreements between the United States and Canada are the Boundary Waters Treaty, Jan. 11, 1909, U.S.-Gr. Brit., 36 Stat. 2448 ("1909 Treaty"), and the Treaty Concerning Uses for the Waters of the Niagara River, Feb. 27, 1950, U.S.-Can., T.I.A.S. No. 2130, 694 ("1950 Treaty"). The 1909 Treaty established an International Joint Commission ("IJC"), giving it jurisdiction to regulate the diversion, obstruction, and use of boundary waters. See 1909 Treaty, arts. VII-XII, 36 Stat. at 2451-54; see also Miller v. United States, 583 F.2d 857, 860 (6th Cir.1978); Soucheray v. Corps of Eng'rs of the United States Army, 483 F.Supp. 352, 353 (W.D.Wis.1979). The 1909 Treaty also regulated the use of the Niagara River by establishing minimum water flows over Niagara Falls. See 1909 Treaty, art. V, 36 Stat. at 2450-51. The 1950 Treaty increased flow requirements and authorized the construction of various "remedial works" in the River to regulate the water flow over Niagara Falls. See 1950 Treaty, arts. II-IV, T.I.A.S. No. 2130 at 696-97. In 1957, Congress enacted the Niagara Redevelopment Act ("NRA"), 16 U.S.C. § 836-836a (1988), directing FERC to issue a license to PASNY "for the construction and operation of a power project with capacity to utilize all of the United States share of the water of the Niagara River permitted to be used by international agreement." Id. § 836(a). The license for the Niagara Project specifically reserved to FERC the right to regulate PASNY's use of the Niagara River waters for the protection of life, health and property. Id. § 803(c). All decisions regarding River water diversions for power production, operation of the Control Structure — the principal "remedial work" — and ice control operations require close coordination between PASNY and Ontario Hydro. In particular, the two power entities have joint development procedures, described in the Niagara River Ice Control Manual, for minimizing the effect of ice on the River flow and the operation of the Control Structure. There was a severe winter storm on the Upper Niagara River in early 1985. Plaintiffs, who own property in New York along the East Channel of the Niagara River, allege that PASNY over-reacted to this event by diverting too much water into the Niagara Project power intakes, thus caus ing the River to flow in a reverse direction. This, plaintiffs claim, resulted in an ice jam with consequent flooding and ice damage to plaintiffs' property. Asserting claims under 16 U.S.C. § 803(c) and state-law negligence, plaintiffs sued in the Western District in April 1985, for compensatory and punitive damages and injunctive relief. PASNY answered that the unpredictable weather along the Niagara River caused the ice jam, and that the situation would have been much worse if PASNY had not intervened to control the storm damage. Plaintiffs moved for a preliminary injunction to prevent PASNY from causing more flooding. In a Memorandum and Order dated February 26, 1987, the district court (per Judge Elfvin) denied the motion. DiLaura I, 654 F.Supp. 641. Although Judge Elfvin agreed that § 803(c) creates a federal claim and that the district court had jurisdiction to grant injunctive relief, he denied the motion because plaintiffs failed to make the required showing of irreparable harm, a likelihood of success, and a balance of hardships tipping decidedly in their favor. DiLaura I, 654 F.Supp. at 646-47. The case was then transferred to Judge Arcara in April 1989. At the final pre-trial conference in April 1991, Judge Arcara, on his own motion, raised the issue of subject matter jurisdiction. The issue was then briefed and argued. By Memorandum and Order dated December 2, 1991, the court dismissed the complaint. DiLaura II, 786 F.Supp. 241. With respect to plaintiffs' § 803(c) claim, Judge Arcara found that § 803(c) does not create a federal claim and that plaintiffs' complaint therefore failed to state a claim upon which relief could be granted. He also dismissed plaintiffs' request for injunctive relief for lack of subject matter jurisdiction under the "political question" doctrine and the exhaustion requirement. Acknowledging the interests of federalism and comity, the court also declined to exercise supplemental jurisdiction over plaintiffs' state-law negligence claims. DiLaura II, 786 F.Supp. at 255. DISCUSSION A. Law of the Case Before considering the merits of this case, we raise, sua sponte, a threshold issue — whether Judge Arcara's conclusions of law were barred by the "law of the case" doctrine. The law of the case doctrine "posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Liona Corp. v. PCH Assocs. (In Re PCH Assocs.), 949 F.2d 585, 592 (2d Cir.1991) (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816, 108 S.Ct. 2166, 2177, 100 L.Ed.2d 811 (1988)); see also 1B James W. Moore, Jo D. Lucas & Thomas S. Currier, Moore's Federal Practice ¶ 0.404[1], at 117 (1991) ("Under the doctrine of law of the case, a decision on an issue of law made at one stage of a case becomes a binding precedent to be followed in successive stages of the same litigation."). This "doctrine is admittedly discretionary and does not limit a court's power to reconsider its own decisions prior to final judgment." Virgin Atl. Airways v. National Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.), cert. denied, — U.S. —, 113 S.Ct. 67, 121 L.Ed.2d 34 (1992); see also Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983) ("Law of the case directs a court's discretion, it does not limit the tribunal's power."). As we have noted, "[t]he major grounds justifying reconsideration are 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'" Virgin Atl. Airways, 956 F.2d at 1255 (quoting 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4478, at 790 (1981)) [hereinafter Federal Practice & Procedure ]. Deciding to reconsider Judge Elfvin's finding concerning plaintiffs' § 803(e) claim, Judge Arcara emphasized that the finding was made upon a motion for a preliminary injunction; and, he concluded that "the issue of whether § 803(c) creates a federal cause of action for damages was not directly before him and his holding in that regard was merely dictum." 786 F.Supp. at 250. Without deciding whether the finding was holding or dictum, we approve the result, recognizing that "[t]he decision of both the trial and appellate court on whether to grant or deny a temporary injunction does not preclude the parties in any way from litigating the merits of the case." 11 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2962, at 630-31 (1973). Thus, the preliminary and summary nature of Judge Elfvin's ruling counsels restraint in a strict application of law of the case. In revisiting Judge Elfvin's finding concerning jurisdiction over plaintiffs' request for an injunction, the court expressed the view that "[i]t is obvious from his decision that Judge Elfvin had serious questions concerning the Court's jurisdiction" but "deemed it prudent . to assume jurisdiction____" DiLaura II, 786 F.Supp. at 252. Because subject matter jurisdiction is particularly suited for reconsideration, see, e.g., Federal Practice & Procedure § 4478, at 799, in this case, Judge Arcara properly and prudently revisited the earlier summary ruling on so basic a question. In any event the doctrine of law of the ease "permits a change of position if it appears that the court's original ruling was erroneous." Kinsman Transit Co. v. City of Buffalo, 388 F.2d 821, 825 n. 9 (2d Cir.1968); accord Arizona v. California, 460 U.S. 605, 103 S.Ct. 1382, 75 L.Ed.2d 318. Recognizing that "Judge Elfvin did not have the benefit, at that time, of Judge Ginsberg's [persuasive] decision in South Carolina Public Serv. Auth. v. FERC [850 F.2d 788 (D.C.Cir.1988) ]," 786 F.Supp. at 250, the court articulated a legitimate ground to support its reconsideration. Because Judge Arcara's reasons for revisiting Judge Elfvin's prior rulings were "cogent" and "compelling," Doe v. New York City Dep't of Social Servs., 709 F.2d 782, 789 (2d Cir.), cert. denied, 464 U.S. 864, 104 S.Ct. 195, 78 L.Ed.2d 171 (1983), we find no error in the court's rejection of the law of the case doctrine in this case. B. The § 803(c) Claim Plaintiffs argue that 16 U.S.C. § 803(c) creates a private claim and, therefore, the district court has subject matter jurisdiction over their claim for compensatory and punitive damages, and injunctive relief, under 16 U.S.C. § 825p. In determining whether § 803(c) gives a private litigant a federal claim, the most important inquiry is whether Congress intended to create such a right of action. Suter v. Artist M., — U.S. —, 112 S.Ct. 1360, 1370, 118 L.Ed.2d 1 (1992); Karahalios v. National Fed'n of Fed. Employees, Local 263, 489 U.S. 527, 532-33, 109 S.Ct. 1282, 1286-87, 103 L.Ed.2d 539 (1989); see Health Care Plan, Inc. v. Aetna Life Ins. Co., 966 F.2d 738, 740 (2d Cir.1992). Unless congressional intent is clearly stated or can reasonably be inferred, "the essential predicate for implication of a private remedy simply does not exist." Karahalios, 489 U.S. at 533, 109 S.Ct. at 1286 (quoting Thompson v. Thompson, 484 U.S. 174, 179, 108 S.Ct. 513, 516, 98 L.Ed.2d 512 (1988)). To divine Congress' intent on this issue, we apply the four-pronged test of Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). As we have noted, that test has been "refocused" by a series of Supreme Court decisions to emphasize the centrality of the second factor — congressional intent — and to treat the remaining factors "only as proxies for legislative intent." Health Care Plan, 966 F.2d at 740; see, e.g., Karahalios, 489 U.S. at 532-33, 109 S.Ct. at 1285-86; Thompson, 484 U.S. at 179, 108 S.Ct. at 516; Touche Ross & Co. v. Redington, 442 U.S. 560, 575-76, 99 S.Ct. 2479, 2488-89, 61 L.Ed.2d 82 (1979). Where, as here, "the scope of a statutory provision is not made crystal clear by the language of the provision, it is appropriate to turn to the legislative history of the statute" in order to determine congressional intent. Berger v. Heckler, 771 F.2d 1556, 1571 (2d Cir.1985). Judged against these guideposts, we agree with the district court that neither the statutory language nor the legislative history of § 803(c) reveals any congressional intent to create a new private cause of action against FERC licensees. There is nothing in the legislative history to contradict the district court's assertion that "Congress simply wanted to preserve the right of injured property owners to bring actions for damages against licensees in state court under traditional state tort law, and to shield the United States against liability." 786 F.Supp. at 249. A perusal of the original House version of the bill reveals an intent to preserve existing state liability laws: No license hereunder shall have the effect of relieving the licensee from liability for any injury or damages occasioned by the construction, maintenance, or operation of said project works; and the United States shall in no event be liable therefor. H.R.Rep. No. 715, 65th Cong., 2d Sess. § 10(c), at 6 (1918). The floor debate on the FPA also indicates that property damage caused by licensees was to be determined by reference to state law. See 56 Cong. Rec. 9913-14 (daily ed. Sept. 3, 1918). Indeed, after a detailed analysis of the statute, the Supreme Court concluded that "[t]he Act leaves to the states their traditional jurisdiction subject to the admittedly superior right of the Federal Government." First Iowa Hydro-Elec. Coop. v. Federal Power Comm'n, 328 U.S. 152, 171, 66 S.Ct. 906, 915, 90 L.Ed. 1143 (1946). Most courts considering this issue have concluded that § 803(c) does not create an independent federal right of action. See, e.g., South Carolina Pub. Serv. Auth. v. FERC, 850 F.2d 788, 795 (D.C.Cir.1988) (finding that § 803(c) does not create an independent federal cause of action, but simply preserves existing state tort law with its own rules of liability for damages caused by licensees); Pike Rapids Power Co. v. Minneapolis, St. P. & S.S.M. Ry. Co., 99 F.2d 902, 911-12 (8th Cir.), cert. denied, 305 U.S. 660, 59 S.Ct. 362, 83 L.Ed. 428 (1938); Beaunit Corp. v. Alabama Power Co., 370 F.Supp. 1044, 1051 (N.D.Ala.1973); Key Sales Co. v. South Carolina Elect. & Gas Co., 290 F.Supp. 8, 23 (D.S.C.1968), aff'd, 422 F.2d 389 (4th Cir.1970) (per curiam); Alabama Power Co. v. Smith, 229 Ala. 105, 155 So. 601, 604 (1934); Rice Hope Plantation v. South Carolina Pub. Serv. Auth., 216 S.C. 500, 59 S.E.2d 132, 140-42 (1950), overruled on other grounds, McCall v. Batson, 285 S.C. 243, 329 S.E.2d 741 (1985). But see Seaboard Air Line R.R. v. County of Crisp, 280 F.2d 873, 875-76 (5th Cir.1960) ("It seems to us unlikely that the Congress intended by the language it used to do no more than to disclaim liability on the part of the United States for the acts of the licensee."), cert. denied, 364 U.S. 942, 81 S.Ct. 460, 5 L.Ed.2d 373 (1961); DiLaura I, 654 F.Supp. at 644 (holding that § 825p provides a statutory' basis for plaintiffs seeking to impose on PASNY the liability referenced in § 803(c)). Accordingly, we adopt the majority rule and conclude that the district court did not err in finding that plaintiffs' cause of action under § 803(c) failed to state a claim upon which relief could be granted. C. Appellants' Request for Injunctive Relief Plaintiffs argue that, even if there is no private damage remedy under § 803(c), the district court would still have jurisdiction to issue an injunction under § 825p. Although § 825p might be read to support this distinction, we reject the contention and hold, as did the district court, that injunctive relief is not available because of the exhaustion requirement. Failure to exhaust administrative remedies permits a court to dismiss the action because no subject matter jurisdiction exists. See 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350, at 194-96 (2d ed. 1990 & Supp.1992) and the cases cited therein. This is especially true where Congress has designed an extensive administrative procedure to protect the interests of potential plaintiffs. The FPA endowed FERC with full regulatory authority over projects such as the Niagara Project, entrusting "a broad subject-matter to administration by the [FERC], subject to Congressional oversight, in the light of new and evolving problems and doctrines." Niagara Mohawk Power Corp. v. Federal Power Comm'n, 379 F.2d 153, 158 (D.C.Cir.1967). This authority includes the right to issue licenses for the construction and operation of hydroelectric projects. See 16 U.S.C. § 797(e). In this case, PASNY is licensed by FERC and must obey FERC's rules and regulations prescribed for the protection of life, health, and property. See id. § 803(c). Dissatisfied with PASNY's ice control procedures, appellants have filed a complaint in the district court, seeking an injunction to compel PASNY to follow the procedures outlined in the Niagara River Ice Control Manual. The threshold issue is whether the district court has jurisdiction over this action. In enacting the FPA, Congress established a system for dealing with complaints to FERC, see 16 U.S.C. § 825e-h, and created a special procedure to review FERC's action or inaction. Under this procedure, the complainant must first appeal the FERC action to the full commission, 18 C.F.R. § 385.904 (1992), and then request a rehearing, id. § 385.713. Only then, after exhausting all administrative remedies, may the complainant seek judicial review. 16 U.S.C. § 8251; see City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 336, 78 S.Ct. 1209, 1218, 2 L.Ed.2d 1345 (1958) ("Congress in [§ 825Z] prescribed the specific, complete and exclusive mode for judicial review of [FERC's] orders.") Appellants contend that they are free from these administrative constraints because they are not seeking to review anything but only to compel PASNY to adhere to its own procedures. While this argument has a certain semantic appeal, we reject it as simply too facile. In California Save Our Streams Council, Inc. v. Yeutter, 887 F.2d 908 (9th Cir.1989), the Ninth Circuit rejected a similarly strained theory, concluding that "appellants seek, through careful pleading, to avoid the strict jurisdictional limits imposed by Congress____and we do not believe that the jurisdictional remedy prescribed by Congress hangs on the ingenuity of the complaint." Id. at 911-12. Likewise, appellants in this ease attempt to fashion an independent claim against PASNY, seeking to escape FERC's jurisdiction over its licensees and its administrative proceedings. We agree with the district court that FERC in the first instance "has the power and the expertise to decide if the license was violated or if the current operating procedures should be changed." DiLaura II, 786 F.Supp. at 253. Accordingly, we find no error in the district court's conclusion that it lacked jurisdiction to review appellants' claims because they failed to exhaust FERC's administrative remedies. D. Supplemental Jurisdiction Both parties contend that the district court erred by not exercising supplemental jurisdiction over the appellants' state law negligence claim after it decided to dismiss the federal § 803(c) claim. The parties contend that the court should address this supplemental state law claim in the interests of judicial economy and fairness. We disagree. Once a district court has determined that the original federal claim should be dismissed, its decision to relinquish jurisdiction over a supplemental state claim will be reversed only for abuse of discretion. See Finz v. Schlesinger, 957 F.2d 78, 83 (2d Cir.) (citing Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7, 108 S.Ct. 614, 619 n. 7, 98 L.Ed.2d 720 (1988)), cert. denied, — U.S. —, 113 S.Ct. 72, 121 L.Ed.2d 38 (1992); Mayer v. Oil Field Sys. Corp., 803 F.2d 749, 757 (2d Cir.1986). "[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine — judicial economy, convenience, fairness, and comity— will point toward declining to exercise jurisdiction over the remaining state-law claims." Carnegie-Mellon Univ., 484 U.S. at 350 n. 7, 108 S.Ct. at 619 n. 7; see also Castellano v. Board of Trustees of the Police Officers' Variable Supplements Fund, 937 F.2d 752, 758 (2d Cir.) (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966)) (" 'if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well.' "), cert. denied, — U.S. —, 112 S.Ct. 378, 116 L.Ed.2d 329 (1991). Here, the district court stated that "the interests of federalism and comity strongly support dismissal of the state law negligence claim" because "the legislative history of the FPA clearly establishes that Congress was determined not to infringe the traditional jurisdiction of the States in the areas of property rights and tort liability." 786 F.Supp. at 254. Furthermore, we have held that the parties' judicial economy argument is not dispositive. See Kidder, Peabody & Co. v. Maxus Energy Corp., 925 F.2d 556, 564 (2d Cir.) (citation omitted) ("The judicial economy factor should not be the controlling factor, and it may be appropriate for a court to relinquish jurisdiction over pendent claims even where the court has invested considerable time in their resolution."), cert. denied, — U.S. —, 111 S.Ct. 2829, 115 L.Ed.2d 998 (1991), appeal after remand, In re Ivan F. Boesky Secur. Litigation, 957 F.2d 65 (2d Cir.1992). Accordingly, we find that the district court did not abuse its discretion in relinquishing jurisdiction over the supplemental state law negligence claim. CONCLUSION To sum up: We find that the district court properly dismissed plaintiffs' federal claim for failure to state a claim upon which relief can be granted. Further, the court properly dismissed plaintiffs' request for injunctive relief for lack of subject matter jurisdiction. Finally, we affirm the court's decision not to exercise supplemental jurisdiction over plaintiffs' state law negligence claims. Accordingly, the judgment of the district court is affirmed. . The Federal Power Act ("FPA"), 16 U.S.C. § 791a-828c (1988 & Supp.1990), originally created the Federal Power Commission ("FPC"). See 16 U.S.C. § 792 (1988). FERC succeeded the FPC in 1977. For clarity, we identify all FPC actions as FERC actions. . Section 803(c) of the Federal Power Act provides: Each licensee hereunder shall be liable for all damages occasioned to the property of others by the construction, maintenance, or operation of the project works or of the works appurtenant or accessory thereto, constructed under the license, and in no event shall the United States be liable therefor. 16 U.S.C. § 803(c) (1988). . Section 825p provides in pertinent part: The District Courts of the United States . shall have exclusive jurisdiction . of all suits in equity and actions at law brought to enforce any liability, or duty created by, or to enjoin any violation of, [the FPAj. 16 U.S.C. § 825p (1988). .The four factors of the Cort analysis are: First, is the plaintiff one of the class for whose especial benefit the statute was enacted . — that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? . Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? . And finally, is the cause of action one traditionally ' relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? Cort, 422 U.S. at 78, 95 S.Ct. at 2088 (1975) (internal quotation marks omitted) (citations omitted). . Because we hold the district court lacked jurisdiction, we decline to consider the implications of the political question doctrine in this case, or whether FERC had primary jurisdiction over the issues raised.

11485926

Goldstein v. Delta Air Lines, Inc.

Goldstein v. Delta Air Lines, Inc.

1990-02-20

No. 89-1034

1078

1078

493 U.S. 1078

493

United States Reports

Supreme Court of the United States

United States

2021-08-10T23:20:16.304242+00:00

CAP

Goldstein v. Delta Air Lines, Inc.

No. 89-1034. Goldstein v. Delta Air Lines, Inc.

14

83

C. A. 11th Cir. Certiorari denied.

1146850

Directo v. California

Directo v. California

1994-05-16

No. 93-8294

1088

1088

511 U.S. 1088

511

United States Reports

Supreme Court of the United States

United States

2021-08-10T19:41:01.579341+00:00

CAP

Directo v. California.

No. 93-8294. Directo v. California.

13

83

Ct. App. Cal, 2d App. Dist. Certiorari denied.

1335458

Apelt v. Arizona

Apelt v. Arizona

1994-10-03

No. 93-9165

834

834

513 U.S. 834

513

United States Reports

Supreme Court of the United States

United States

2021-08-10T19:01:49.759124+00:00

CAP

Apelt v. Arizona.

No. 93-9165. Apelt v. Arizona.

10

65

Sup. Ct. Ariz. Certiorari denied.

11872214

Peter SHELDON, Conservator of the Estate of Thoburn Milar Stamm III and Cannon Nicholls Stamm, Minors, Plaintiff-Appellant-Cross-Appellee, v. PHH CORPORATION, a foreign corporation, successor to Avis Leasing Corp., f/k/a WE TRY HARDER, INC., Defendant-Appellee-Cross-Appellant

Sheldon v. PHH Corp.

1998-02-02

Nos. 606, 607, Dockets 97-7453, 97-7385

848

856

135 F.3d 848

135

Federal Reporter 3d Series

United States Court of Appeals for the Second Circuit

United States

2021-08-10T20:28:12.175289+00:00

CAP

Before: WALKER and JACOBS, Circuit Judges, and BRIEANT, District Judge.

Peter SHELDON, Conservator of the Estate of Thoburn Milar Stamm III and Cannon Nicholls Stamm, Minors, Plaintiff-Appellant-Cross-Appellee, v. PHH CORPORATION, a foreign corporation, successor to Avis Leasing Corp., f/k/a WE TRY HARDER, INC., Defendant-Appellee-Cross-Appellant.

Peter SHELDON, Conservator of the Estate of Thoburn Milar Stamm III and Cannon Nicholls Stamm, Minors, Plaintiff-Appellant-Cross-Appellee, v. PHH CORPORATION, a foreign corporation, successor to Avis Leasing Corp., f/k/a WE TRY HARDER, INC., Defendant-Appellee-Cross-Appellant. Nos. 606, 607, Dockets 97-7453, 97-7385. United States Court of Appeals, Second Circuit. Argued Nov. 20, 1997. Decided Feb. 2, 1998. Andreas F. Lowenfeld, New York City (Gerald G. Paul, Elizabeth A. O’Connor, Kara H. Stein, Fleming, Zulack & Williamson, LLP, New York City, of counsel), for Plaintiff-Appellant-Cross-Appellee. Beth J. Goldmaeher, Westbury, NY (Frank J. Laurino, Faden & Goldmaeher, Westbury, NY, on the brief), for Defendant-Appellee-Cross-Appellant. Before: WALKER and JACOBS, Circuit Judges, and BRIEANT, District Judge. Honorable Charles L. Brieant, of the United States District Court for the Southern District of New York, sitting by designation.

4690

28988

JACOBS, Circuit Judge: The Stamm family, residents of New York, were in a collision while on a car trip to Michigan in 1985. Mr. Stamm was driving; Mrs. Stamm was critically injured. The accident was caused by another driver, who was driving a car leased from We Try Harder, Inc. ("WTH"). In 1986, the parents sued WTH in New York State Supreme Court, and reached a settlement of their claims. Ten years afterward, the two Stamm children (who are still minors) commenced the present litigation, through Peter Sheldon as conservator of their estate (hereinafter "plaintiffs"), asserting claims for loss of parental consortium and for physical and emotional injuries sustained in the accident. They named as defendant PHH Corporation, which they believed (erroneously) was the successor to WTH. When plaintiffs discovered that they had sued the wrong party, they moved to amend the complaint to substitute as a defendant the actual successor to WTH-PHH Vehicle Management Services Corporation ("PHH Vehicle"). PHH Corporation moved to dismiss and opposed the motion to amend. In dismissing the complaint against PHH Corporation and denying plaintiffs' motion to amend the complaint to substitute PHH Vehicle, the United States District Court for the Southern District of New York (Kaplan, J.) held that: (i) substituting PHH Vehicle as defendant on the loss of parental consortium claim would be futile because New York law does not recognize such a claim; and (ii) although plaintiffs' physical injury and emotional distress claims are viable, amendment would prejudice PHH Vehicle. See Sheldon v. PHH Corp., No. 96 Civ. 1666,1997 WL 91280 (S.D.N.Y. Mar. 4,1997). On appeal, plaintiffs argue (i) that the loss of parental consortium claim is governed by Michigan law, which recognizes such a cause of action, rather than New York law, which does not; and (ii) that substitution of defendants would not have been futile. PHH Corporation cross-appeals, arguing that the district court erred in concluding that plaintiffs' physical injury and emotional distress claims were viable. For the reasons that follow, we affirm the judgment of the district court and dismiss the cross-appeal. BACKGROUND On June 30, 1985, Thoburn Milar Stamm, Jr. was driving his family through Osceola County, Michigan. His three passengers were his wife, Marilyn Stamm, and their two children, plaintiffs Thoburn Milar Stamm III and Cannon Nicholls Stamm, who at the time were four years old and one-and-a-half, respectively. All were New York residents and the car was registered in New York. Their car was struck by an automobile driven by Dorothy Millbrook, a Michigan resident. Mrs. Stamm sustained serious and permanent brain injuries. The children have alleged that they suffered physical and emotional injuries. Millbrook's car was registered in Michigan and was leased from WTH (a Delaware corporation with its principal place of business in Garden City, New York), which was a wholly owned subsidiary of Avis Leasing Corporation. WTH had leased the car through its New York office to Capital Distributing Company, Millbrook's husband's employer, for use in Michigan. In 1986, Mr. and Mrs. Stamm sued WTH and the manufacturer of Millbrook's vehicle in New York State Supreme Court, Bronx County, seeking damages for Mrs. Stamm's injuries and for Mr. Stamm's loss of consortium. In 1991, the parties agreed to a structured settlement of $6.5 million. In the meantime, WTH went through two corporate changes. In 1986, Avis Leasing Corporation sold all outstanding shares of WTH stock to PHH Holdings Corporation, a subsidiary of PHH Corporation; at the same time, WTH changed its name to Avis Leasing Corporation, and the former Avis Leasing Corporation changed its name to Avis Enterprises, Inc. Then in 1991, the new Avis Leasing Corporation (formerly WTH) merged into PHH Vehicle, so that the ultimate successor to WTH is PHH Vehicle. Both PHH Corporation and PHH Vehicle are incorporated in Maryland, and have their principal places of business there. In April 1995, the Stamm children (through their father) filed suit against PHH Corporation in the United States District Court for the Eastern District of Michigan, seeking damages for loss of parental consortium and emotional pain and suffering pursuant to Michigan's owner liability statute. Apparently, this complaint was never served. On June 9, 1995, the children filed an action (through Sheldon as the conservator of then-estate) against PHH Corporation and their father in Wayne County Circuit Court, in Detroit, seeking the same relief as they had in the unserved federal complaint (with the addition of a claim for physical injuries the children suffered in the accident). In August 1995, the state court granted the defendant's motion to transfer that action from Detroit to Osceola County, Michigan, the place of the accident. Plaintiffs then filed and served an amendment to their federal complaint, substituting Sheldon (in lieu of their father) as representative, and suing PHH Corporation only; the amended complaint sought damages for loss of parental consortium and for physical injuries and emotional pain and suffering resulting from the accident. In January 1996, plaintiffs moved to change the venue of their lawsuit to the Southern District of New York pursuant to 28 U.S.C. § 1404(a); transfer was granted on February 28, 1996. At that point, the Michigan state action was discontinued without prejudice on consent of all parties. In the course of discovery, plaintiffs learned that PHH Vehicle — not PHH Corporation — was WTH's successor, and therefore the only proper defendant. They moved on July 30, 1996, to amend the complaint to change the name of the defendant from "PHH Corporation" to "PHH Vehicle Management Service Corporation." Plaintiffs conceded that they had no claim against PHH Corporation, but asserted that no one would be prejudiced by an amendment naming the proper defendant. In response, PHH Corporation moved to dismiss the complaint against it, and argued that amendment would be futile because New York law (i) governs and (ii) does not recognize a cause of action for loss of parental consortium. The district court dismissed the complaint against PHH Corporation and denied the motion for leave to amend. First, the district court concluded that New York substantive law would govern even under Michigan choice of law rules, and that substitution of PHH Vehicle for PHH Corporation therefore would be futile, at least as to the loss of parental consortium claim. Sheldon, 1997 WL 91280, at *7. Next, the district court found that because the accident occurred outside New York, New York's no-fault statute did not bar the action for physical injuries. Id. The district court also found that plaintiffs stated a claim for infliction of emotional distress, id. at *8, but as to these two claims, denied plaintiffs' motion to substitute PHH Vehicle as the defendant because PHH Vehicle would have been prejudiced by its inability to contest the transfer from Michigan to New York and because plaintiffs offered no valid explanation for initially suing the wrong party. Id. at *8-9. DISCUSSION Typically, "[w]e review the denial of a motion to amend for abuse of discretion." Wake v. United States, 89 F.3d 53, 57 (2d Cir.1996). However, insofar as the district court based its denial of the motion to amend on a conclusion of law — i.e., that New York law, and not Michigan law, governs plaintiffs' loss of parental consortium claim — that conclusion of law is subject to review de novo. I. The Appeal Plaintiffs sued PHH Corporation for loss of parental consortium, and sought leave to amend in order to assert the same claim against PHH Vehicle. Michigan recognizes a cause of action on behalf of a child for the loss of a parent's consortium. See Berger v. Weber, 411 Mich. 1, 303 N.W.2d 424, 427 (1981). New York does not. See De Angelis v. Lutheran Med. Ctr., 58 N.Y.2d 1053, 1055, 462 N.Y.S.2d 626, 627, 449 N.E.2d 406, 407 (1983). Thus, to decide whether plaintiffs' assertion of such a claim against PHH Vehicle would be futile, as the district court concluded, we must determine which law governs. The threshold question is which state's choice of law rules apply. In a diversity case, a district court ordinarily determines the applicable state law by reference to the choice of law rules of the forum state. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). However, when a case has been transferred pursuant to 28 U.S.C. § 1404(a), even on plaintiff's own motion, a court will apply the law of the transferor forum, including that forum's choice of law rules. See Ferens v. John Deere Co., 494 U.S. 516, 519, 110 S.Ct. 1274, 1277-78, 108 L.Ed.2d 443 (1990). Although the transfer of this case from Michigan would seem to mean that Michigan law and choice of law rules apply, defendant argues that because plaintiffs are essentially seeking to drop the only defendant and add a new one, this action should be treated as a completely new case — i.e., as a case commenced in the Southern District of New York rather than one transferred from Michigan— and that New York choice of law rules therefore should apply. We need not decide this issue because the application of New York substantive law is required even if we use Michigan choice of law rules. A. Michigan determines the governing law in tort claims as follows: [A Michigan court] will apply Michigan law unless a "rational reason" to do otherwise exists. In determining whether a rational reason to displace Michigan law exists, we undertake a two-step analysis. First, we must determine if any foreign state has an interest in having its law applied. If no state has such an interest, the presumption that Michigan law will apply cannot be overcome. If a foreign state does have an interest in having its law applied, we must then determine if Michigan's interests mandate that Michigan law be applied, despite the foreign interests. Sutherland v. Kennington Truck Serv., Ltd., 454 Mich. 274, 562 N.W.2d 466, 471 (1997) (citations omitted). In determining whether another state has an interest, the court must initially ask whether the foreign state, under its own choice of law rules, would apply its own law. Id. 562 N.W.2d at 473. So, for instance, in Sutherland, the Michigan court determined that an Ontario court would have applied the law of the place of the accident (Michigan) and concluded that Ontario lacked an interest in seeing its law applied. Id. If the court determines that the foreign state has an interest in applying its own law, the court must consider what those interests are and balance them against Michigan's own interests, taking into account other factors such as the need for certainty and predictability and the prevention of forum shopping. See Aetna Cas. & Surety Co. v. Dow Chem. Co., 883 F.Supp. 1101, 1110 (E.D.Mich.1995); Isley v. Capuchin Province, 878 F.Supp. 1021, 1023 (E.D.Mich.1995). Michigan will allow its law to yield to another law when there is a "rational reason" to do so, including if the foreign state's interests substantially outweigh Michigan's interest in the litigation. See Isley, 878 F.Supp. at 1023. B. Following the analysis of Sutherland, we begin by looking to New York choice of law rules to determine whether New York would apply its own law here. "In the context of tort law, New York utilizes interest analysis to determine which of two competing jurisdictions has the greater interest in having its law applied in the litigation." Padula v. Lilarn Properties Corp., 84 N.Y.2d 519, 521, 620 N.Y.S.2d 310, 311, 644 N.E.2d 1001, 1002 (1994). When the conflict involves rules that regulate conduct, the law of the place of the tort governs. Id. at 522, 620 N.Y.S.2d at 311, 644 N.E.2d at 1002. The claim here, however, is one for loss of parental consortium — a loss-allocating, not conduct-regulating, rule. See id. at 522, 620 N.Y.S.2d at 312, 644 N.E.2d at 1003 ("Loss allocating rules . are those which prohibit, assign, or limit liability after the tort occurs_"). When the conflict concerns a loss-allocating rule, the choice of law analysis is governed by the three principles articulated in Neumeier v. Kuehner, 31 N.Y.2d 121, 128, 335 N.Y.S.2d 64, 70, 286 N.E.2d 454 (1972). See Padula, 84 N.Y.2d at 522, 620 N.Y.S.2d at 312, 644 N.E.2d at 1003; see also Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 72-73, 595 N.Y.S.2d 919, 923, 612 N.E.2d at 281 (1993); Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 201, 491 N.Y.S.2d 90, 98, 480 N.E.2d at 686-87 (1985). Neumeier rules 1 and 3 are the only ones potentially applicable here. Rule 1 is that "[w]hen the [plaintiff] and the [defendant] are domiciled in the same state, and the car is there registered, the law of that state should control and determine the standard of care which the [defendant] owes to [the plaintiff]." 31 N.Y.2d at 128, 335 N.Y.S.2d at 70, 286 N.E.2d at 457. Neumeier rule 3 is that: [W]hen the [plaintiff] and the [defendant] are domiciled in different states, the rule is necessarily less categorical. Normally, the applicable rule of decision will be that of the state where the accident occurred but not if it can be shown that displacing that normally applicable rule will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants. Id. Defendant argues that Neumeier rule 1 — and consequently New York law— applies here because the parties share a common domicile: plaintiffs are New York residents and WTH had its principal place of business in New York. Plaintiffs argue that the domicile of a corporation is determined by reference to the state of incorporation, not its principal place of business, and that WTH therefore is domiciled in Delaware, not New York. Further, plaintiffs claim that because Millbrook was domiciled in Michigan, and Millbrook's vehicle was registered in Michigan, the ease is not governed by Neumeier rule 1. This dispute only matters, however, if Neumeier rule 3 would result in application of Michigan law. We need not decide the question because even if Neumeier rule 3 governs, New York courts would still use New York law. Although Neumeier rule 3 presumes application of Michigan law here, that presumption is overcome when applying New York law "will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants." Id. We conclude that applying New York law would have those salutary effects. When the extent of victim compensation is at issue, the plaintiffs domicile has an interest in applying its law because that forum is where the loss is felt and where the burden of the victim's uncompensated needs may fall. See, e.g., Pescatore v. Pan American World Airways, Inc., 97 F.3d 1, 14 (2d Cir.1996); Burgio v. McDonnell Douglas, Inc., 747 F.Supp. 865, 872 (E.D.N.Y.1990). Similarly, the location of defendant's headquarters has an interest in avoiding burdensome liability for entities that do business within its borders. In fact, New York has decided not to afford a recovery for loss of parental consortium in part to avoid the imposition of "tort liability almost without limit." De Angelis, 58 N.Y.2d at 1055, 462 N.Y.S.2d at 627, 449 N.E.2d at 407; see also Pescatore, 97 F.3d at 14. Here, both of these factors point to New York; plaintiffs are New York residents, and WTH was headquartered in New York. Compared to these interests of its own, New York courts would view any interest Michigan may have as insignificant. Michigan affords a cause of action for loss of parental consortium in order to compensate children who have lost enjoyment of their parent's "love, companionship, affection, society, comfort, services and solace." See Berger v. Weber, 411 Mich. 1, 303 N.W.2d 424, 426 (1981). But Michigan can have no appreciable interest in securing that recovery for little New Yorkers. Cf. Chila v. Owens, 348 F.Supp. 1207, 1210 (S.D.N.Y.1972) (Weinfeld, J.). Michigan's sole relevant connection to this case is that the accident occurred there. However, "[u]nder New York's choice of law rales, when conflicting rales concern the allocation of loss rather than the regulation of conduct, the locus jurisdiction has at best a minimal interest in determining the right of recovery or the extent of the remedy." Pes-catore, 97 F.3d at 13 (citations and internal quotation marks omitted); see also AroChem Int'l, Inc. v. Buirkle, 968 F.2d 266, 270 (2d Cir.1992). A New York court would likely conclude that application of New York law would advance the relevant substantive law purposes because New York is the only state with an important interest in applying its law. We must also ask whether applying New York law will impair the smooth working of the multi-state system. We think that New York's interests are so weighty that most jurisdictions likely would apply New York law. Doing so will also contribute to the smooth working of the multi-state system by discouraging forum shopping. Plaintiffs conceded in their opposition to defendant's motion for a stay pending disposition of the state suit that they filed suit in Michigan (an inconvenient forum as demonstrated by their own motion to transfer) solely to take advantage of its more favorable law: "The case had to be filed in Michigan, where the accident occurred, because it is a claim for damages for loss of parental consortium, which is recognized by Michigan law." C. Because New York courts would apply New York law to plaintiffs' loss of parental consortium claims, Michigan's choice of law rales require that we compare New York's interests with those of Michigan in order to see whether there is a "rational reason" not to apply Michigan law. See Best v. Dante Gentilini Trucking, Inc., 778 F.Supp. 360, 364 (E.D.Mich.1991) ("If the foreign state does have an interest, a court's second duty is to determine whether reason requires that the law of the foreign state displace that of the forum state.") (citations and internal quotation marks omitted). We conclude that a Michigan court would find that New York's interest in applying its law to plaintiffs' loss of consortium claims vastly outweighs any interest of Michigan, that application of New York law in these circumstances would advance other goals such as prevention of forum shopping, and that a "rational reason" exists to set aside the presumption that Michigan law governs. A Michigan court would likely conclude that Michigan lacks any substantial interest in permitting these plaintiffs to recover for loss of parental consortium. As one court has noted in interpreting Michigan choice of law rules, "[W]here [a] statute is designed to protect local interests, there is no reason to extend its benefits to a nonresident whose state has no similar statute." Mahne v. Ford Motor Co., 900 F.2d 83, 87 (6th Cir.1990). Michigan's loss of parental consortium cause of action is intended to benefit Michigan residents by allowing them additional recovery; but neither party here is a Michigan resident. Nor would a Michigan court attach overarching importance to the fact that the accident occurred in Michigan. In Olmstead v. Anderson, 428 Mich. 1, 400 N.W.2d 292 (1987), the plaintiff, a resident of Minnesota, sued the defendant, a Michigan domiciliary, for claims arising out of a ear accident in Wisconsin. The Supreme Court of Michigan concluded that Wisconsin, the location of the accident, had no interest in applying its law limiting damages in wrongful death actions: "The operative fact is that neither party is a citizen of the state in which the wrong occurred. Since neither party in this case is a citizen of Wisconsin, that state has no interest in seeing its limitation of damage provision applied." Id. 400 N.W.2d at 804. The court added that although the state in which the accident happened may be interested in having its conduct-regulating statutes brought to bear on non-residents, "[t]he state of the place of the wrong has little or no interest in . compensation when none of the parties reside there." Id. (citation omitted); see also Mahne, 900 F.2d at 87; Best, 778 F.Supp. at 365; Burney v. P V Holding Corp., 218 Mich.App. 167, 553 N.W.2d 657, 659 (1996), appeal denied, No. 108376, 572 N.W.2d 9 (Mich. Dec. 9,1997). Michigan courts would consider New York's interests strong because plaintiffs are residents of New York and WTH -had its principal place of business in New York. As one Michigan court has noted, "Michigan has no interest in affording greater rights of tort recovery to a [foreign] resident than those afforded by [the foreign state]." Farrell v. Ford Motor Co., 199 Mich.App. 81, 501 N.W.2d 567, 572 (1993). Furthermore, Michigan courts have recognized that the defendant's domicile has a substantial interest in limiting exorbitant damage awards. See id. (noting that place where defendant maintained headquarters "has an obvious and substantial interest in shielding [defendant] from open-ended . claims"). Finally, this case raises the forum shopping concerns addressed in Olmstead: The concern surrounding forum shopping stems from the fear that a plaintiff will be able to determine the outcome of a case simply by choosing the forum in which to bring the suit.... raising the fear that applying the law sought by a forum-shopping plaintiff will defeat the expectations of the defendant or will upset the policies of the state in which the defendant acted (or from which the defendant hails). Olmstead, 400 N.W.2d at 303 (citations and internal quotation marks omitted). Olm-stead warns that suspicion of forum shopping should be aroused "when the plaintiff fore-goes the economies afforded by bringing suit at home," and when jurisdictional issues do not explain this litigation decision. Id. (citations and internal quotation marks omitted). As noted, plaintiffs chose to sue in Michigan, an inconvenient forum to which they have no real connection. Where as here, Michigan's only relevant connection to the claim is the place of collision, and the plaintiff ventured far from home to sue there, only to seek transfer on the ground that Michigan is an inconvenient forum, a Michigan court would likely find that New York's strong interests and the need to discourage forum shopping constitute "rational reasons" to apply New York law. Accordingly, New York law governs plaintiffs' claims for loss of parental consortium, and the district court did not err in finding that plaintiffs could not state a claim for loss of parental consortium against PHH Vehicle. II. The Cross-Appeal In considering plaintiffs' motion for leave to amend, the district court gave consideration to the viability of the claims sought to be pleaded. The cross-appeal of defendant PHH Corporation challenges two of those rulings: (i) that because the accident occurred outside New York, "the New York no-fault law and its 'serious injury' threshold for personal injury claims do not apply in this case," Sheldon, 1997 WL 91280, at *7 (citations omitted), and the claim is therefore governed by New York common law; and (ii) that the emotional harm claim was legally sufficient because the plaintiffs were in the zone of danger when their mother was injured. The district court nevertheless denied plaintiffs' motion for leave to substitute PHH Vehicle on the grounds that: (i) PHH Vehicle would be prejudiced by this late addition as it was "afforded no opportunity to contest the motion for transfer in Michigan [and] the district court in Michigan [did not] assess the propriety of a transfer in regard to [PHH Vehicle]"; and (ii) plaintiffs offered no valid explanation for their error in suing the wrong party. Id. at *8-9. We have no jurisdiction to consider this cross-appeal. The only named defendant is PHH Corporation, which has no standing to appeal the district court's decision. "[A] prevailing party cannot appeal from a district court judgment in its favor." Ashley v. Boehringer Ingelheim Pharmaceuticals (In re DES Litigation), 7 F.3d 20, 23 (2d Cir.1993) (hereinafter "In re DES Litigation')-, see also Concerned Citizens of Cohocton Valley, Inc. v. New York State Dep't of Environmental Conservation, 127 F.3d 201, 204 (2d Cir.1997). The court granted PHH Corporation's motion to dismiss the complaint because it is not the real party-in-interest and plaintiffs have no claim against it. The district court's conclusions relating to the physical injury and emotional distress claims cannot affect PHH Corporation. PHH Vehicle does face potential legal liability on the physical injury and emotional distress claims, but that entity is not a party to this case: it was not named in the complaint (in fact, that was the whole point of the motion to amend) and it did not intervene. "The rule that only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment, is well settled." Marino v. Ortiz, 484 U.S. 301, 304, 108 S.Ct. 586, 587, 98 L.Ed.2d 629 (1988) (per curiam). Defendant's cross-appeal therefore must be dismissed. CONCLUSION The judgment of the district court is affirmed and defendant's cross-appeal is dismissed. . Because plaintiffs were minors at the time of the accident and have yet to reach the age of majority, the delay in filing this action presents no statute of limitations problem. . The parties do not seem to dispute that the relevant corporation for the purposes of determining PHH Vehicle's residence and interests is WTH, its predecessor, which was a Delaware corporation with its principal place of business in New York. In addition, to the extent that we might consider PHH Vehicle's current domicile in this analysis, Maryland, its state of incorporation and the location of its principal place of business, does not recognize a cause of action for loss of parental consortium. See Monias v. En-dal, 330 Md. 274, 623 A.2d 656, 661-62 (1993). . Although plaintiffs reference other contacts with Michigan, such as the fact that Millbrook resided and had her car registered there, they do not explain why those contacts give Michigan an interest in applying its law to plaintiffs' loss of parental consortium action against defendant. See Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 197, 491 N.Y.S.2d 90, 95, 480 N.E.2d at 685 (1985) ("[T]he [only] facts or contacts which obtain significance in defining State interests are those which relate to the purpose of the particular law in conflict.") (citations and internal quotation marks omitted) (alterations in original). . Although the following analysis touches on some of the same factors mentioned above in the New York choice of law analysis, here we look at those factors through the eyes of a Michigan court applying Michigan choice of law rules. . Defendant's notice of appeal purports to be on behalf of PHH Vehicle as well: NOTICE IS HEREBY GIVEN that the defendant, PHH Corp., named in the caption as PHH Corp., successor to AVIS LEASING CORP., »a WE TRY HARDER, INC. [and, if warranted, PHH Vehicle Management Services Corp.] hereby cross-appeals.... (emphasis added) (alterations in original). But the notice of appeal cannot by itself confer standing on PHH Vehicle. We note also that even if PHH Vehicle was a party to this appeal, it still would not have standing to appeal the district court's ruling; PHH Vehicle succeeded in precluding plaintiffs from amending the complaint and the district court's conclusions relating to the physical and emotional injury claims have no preclusive effect because they were unnecessary to the judgment. See, e.g., In re DES Litigation, 1 F.3d at 23. . Plaintiffs have not appealed the district court's finding that prejudice to PHH Vehicle precluded amendment of the complaint to substitute PHH Vehicle as a defendant on the physical injury and emotional distress claims.

374675

Memphis Natural Gas Co. v. Beeler, Attorney General of Tennessee, et al.

Memphis Natural Gas Co. v. Beeler

1942-03-30

No. 499

794

794

315 U.S. 794

315

United States Reports

Supreme Court of the United States

United States

2021-08-10T21:16:34.353695+00:00

CAP

Memphis Natural Gas Co. v. Beeler, Attorney General of Tennessee, et al.

No. 499. Memphis Natural Gas Co. v. Beeler, Attorney General of Tennessee, et al.

18

100

See ante, p. 649.

11791216

Clark et al. v. United Bank of Denver National Assn. et al.

Clark v. United Bank of Denver National Ass'n

1973-11-05

No. 73-319

1004

1004

414 U.S. 1004

414

United States Reports

Supreme Court of the United States

United States

2021-08-10T19:09:28.409842+00:00

CAP

Clark et al. v. United Bank of Denver National Assn. et al.

No. 73-319. Clark et al. v. United Bank of Denver National Assn. et al.

20

107

C. A. 10th Cir. Certiorari denied.

8555

Tucker v. Missouri

Tucker v. Missouri

1963-06-10

No. 1352, Misc.

817

817

374 U.S. 817

374

United States Reports

Supreme Court of the United States

United States

2021-08-10T21:26:36.500002+00:00

CAP

Tucker v. Missouri.

No. 1352, Misc. Tucker v. Missouri.

12

82

Supreme Court of Missouri. Certiorari denied.

6641693

Bert Friedberg & Company et al. v. United States

Bert Friedberg & Co. v. United States

1957-06-25

Reap. Dec. 8868; Entry No. 13100, etc.

539

539

39 Cust. Ct. 539

39

United States Customs Court Reports

United States Customs Court

United States

2021-08-11T01:44:45.756484+00:00

CAP

Bert Friedberg & Company et al. v. United States

(Reap. Dec. 8868) Entry No. 13100, etc. Bert Friedberg & Company et al. v. United States (Decided June 25, 1957) Lawrence & Tuttle for the plaintiffs. George Cochran Doub, Assistant Attorney General, for the defendant.

246

1498

Oliver, Chief Judge: The appeals for reappraisement listed in schedule "A," hereto attached and made a part hereof, relate to various classes of merchandise exported from France and entered at the port of San Francisco. The cases have been submitted for decision on a written stipulation wherein the parties agree that the issues involved herein are the same in all material respects as those which were the subject of the decision in Bert Friedberg & Company v. United States, 36 Cust. Ct. 596, Reap. Dec. 8590, the record in which was incorporated herein by consent. In that case, the court held foreign value, as defined in section 402 (c) of the Tariff Act of 1930, as amended, to be the proper basis for appraisement of the merchandise there under consideration, and that such statutory value did not include the so-called "French sole or unique tax." An agreed set of facts, included in the stipulation of submission, establishes that the proper basis for appraisement of the merchandise involved herein is statutory foreign value, and that such value for each of the items in question is the appraised value "less the additions made by the importer on entry because of advances by the appraiser in similar cases," and I so hold. . , Judgment will be rendered accordingly.

6688198

Protests 25081-K, etc., of Domestic Fur Co. et al. (New York)

Protests 25081-K of Domestic Fur Co.

1941-04-09

No. 45699

605

606

6 Cust. Ct. 605

6

United States Customs Court Reports

United States Customs Court

United States

2021-08-11T02:44:13.897245+00:00

CAP

Protests 25081-K, etc., of Domestic Fur Co. et al. (New York).

No. 45699. Protests 25081-K, etc., of Domestic Fur Co. et al. (New York).

56

320

Opinion by Walker, J. It was stipulated that the dogskins in question are undressed and similar to those the subject of Bracher v. United States (5 Cust. Ct. 153, C. D. 389). The claim for free entry under paragraph 1681 was therefore sustained.

6570950

Mego Corp. v. United States

Mego Corp. v. United States

1974-12-19

C.D. 4574; Court Nos. 70/62273, etc.

190

199

73 Cust. Ct. 190

73

United States Customs Court Reports

United States Customs Court

United States

2021-08-10T23:22:22.740847+00:00

CAP

Mego Corp. v. United States

(C.D. 4574) Mego Corp. v. United States Court Nos. 70/62273, etc. (Decided December 19, 1974) Allerton deC. Tomphlns for the plaintiff:. Oarla A. Sills, Assistant Attorney General (Bieven P. Florsheim, trial attorney ), for the defendant.

3997

23509

Maletz, Judge: The problem in this consolidated action concerns the proper tariff classification of merchandise invoiced as "Baseball Game" that was exported from Hong Kong and entered at the port of New York in August ánd October 1969. The merchandise was classified by the government under item 737.90 of the tariff schedules, as other toys, not specially provided for, and assessed duty at the modified rate of 28 percent ad valorem. The government claims alternatively that the merchandise is classifiable under item 737.80, as toys, not specially provided for, having a spring mechanism, and thus dutiable at the modified rate of 33 percent ad valorem. Plaintiff claims alternatively that the imported merchandise is properly classifiable (1) under item 735.20, as game or sport equipment, dutiable at the modified rate of 16 percent ad valorem; or (2) under item 734.20, as game machines, dutiable at the modified rate of 8 percent ad valorem; or (3) under item 734.56, as other baseball equipment, dutiable at the modified rate of 12 percent. The pertinent provisions of the tariff schedules read as follows: Classified under: Subpart E [Part 5, Schedule 7] headnotes: 1. The articles described in the provisions of this subpart (except parts) shall be classified in such provisions, whether or not such articles are more specifically provided for elsewhere in the tariff schedules, but the provisions of this subpart do not apply to— (iii) games and other articles in items 734.15 and 734.20, toy balls (items' 735.09-12), and puzzles and games in item 735.20 (see pail; 5D of this schedule). 2. For the purposes of the tariff schedules, a "toy" is any article chiefly used for the amusement of children or adults. Toys, and parts of toys, not specially provided for: 737.90 Other_ 28% ad val. Alternative classification claimed by government: Toys, and parts of toys, not specially provided for: 737.80 - Toys having a spring mechanism_ 33% ad val. Classification claimed by plaintiff [Subpart D, Part 5, Schedule 7] : 735.20 Puzzles; game, sport, gymnastic, athletic, or playground equipment; all the foregoing, and parts thereof, not specially provided for_ 16% ad val. Alternative classification claimed by plaintiff; 734.20 Game machines, including coin or disc operated game machines and including games having mechanical controls for manipulating the action, and parts thereof_'_ 8% ad val. Alternative classification claimed by plaintiff: Baseball equipment and parts thereof: 734.56 Other_ 12% ad val. I The imported merchandise consists of (1) a device which projects balls by means of a mechanism having a battery operated, coil-spring controlled pitching arm; (2) a set of eight small plastic, hollow balls, each approximately one and one half inches in diameter; and (3) a plastic, hollow telescoping bat, which, when extended to its full length, is 25 inches long. The projecting device has a rack for holding the balls which is designed to deliver the balls one-at-a-time to the pitching arm. In turn, the pitching arm is designed to propel the balls one-at-a-time to a batter standing (with the bat) a few yards from the mechanism. The pitching arm may be adjusted by placing a key attached to the coil spring into one of a number of slots thereby changing the tension on the arm and controlling the height and speed at which the ball is propelled. The device contains an on-off electric switch connected to the battery. When the switch is turned on, the battery supplies power to a motor which activates a lever that revolves and activates the spring controlled pitching arm, which then propels -each ball at constant time intervals to a distance of some 20 feet. About eight seconds elapse between the time the switch is turned on and the first ball projected, which is sufficient time to enable the user to turn on the device and then move to the batter position. As imported, tbe merchandise was packed in a carton on which was printed the following: Professional Home Run Adjustable Pitching Machine Be a Real Slugger - Practice at Home * Automatic Delivery * Adjustable Pitching Height For All Ages * Safe Non-Toxic Plastic Bat and Balls FuN For EveryoNe Also, as imported, the carton contained an instruction sheet which set forth instructions on assembly and use of the merchandise and also described how one or more persons "can play baseball" therewith. This instruction sheet read as follows: The "Home Run Baseball Game" by Mego is designed to operate in the same manner as the famous "Iron Mine" Pitching Machine used by the Major League Baseball Clubs. To operate simply insert D battery in the direction as indicated and close door. Take the ball chute and insert the pin into the machine and take the chute holder and insert into the holes as indicated in -figure A and rest chute in brackets. Insert key on lower end of the spring into the slots provided on the bottom of machine. By moving the key into the different slots you can adjust the height and speed of the pitch. Put balls into the chute and turn the switch on. If the machine does not start immediately, push on gently toward the back of the machine, machine will now operate correctly. To open bat, grasp both ends and pull outwards with twisting motion. You are now ready to play baseball. Games One of the ideal features of the "Home Run Baseball'Game" is that one person can play baseball. Set-up the machine at an appropriate distance and mark off on the wall at 2 foot intervals, single, double, triple and home-run. Turn on the machine, the balls that hit before the wall are out. Any balls above the first line is a single, above the second a double and so on. This way you can enjoy batting practice. For 2 people, one bats and one fields alternatively, this makes it much more difficult to score runs. For 3 or more players, use the machine as the pitcher and position the players as you would any normal baseball game. Children of different ages can play together since the machine can be adjusted to the appropriateheight and speed. Now Lets Play Ball ! The imported merchandise was designed for boys in the seven to twelve age bracket; was sold at retail for about $7.00; and was adver tised m plaintiffs catalogue as "Action Toys." It was patterned after the "Iron Mike" which i's a baseball pitching machine that will throw a baseball 60 feet at different speeds and is used by baseball teams, and at batting ranges, for batting practice. The nature of the merchandise is such that it can be operated and used by a single person. In this connection, a single person will load the ball rack with balls and turn the projecting device on. The time lag 'between the projections of the balls allows the person to take a batting stance at the appropriate distance and position from the device and attempt to hit the projected balls with the bat. Once all the balls have been projected, the person shuts off the device and the process can be repeated. However, the merchandise can be used by more than one person, such as in a game of "single, double, triple." II At the trial, two witnesses testified for plaintiff, while defendant failed to call any witnesses. Plaintiff's first witness, Neal Nubian, director of creative projects for plaintiff, testified that the imported article acts as a substitute pitcher and was designed to teach a young boy how to hit a ball. He added that he knew of no other use for the article other than pitching a ball. The witness further testified that the vast majority of his observations as to the use of the article were made in retail sales demonstrations in stores in various parts of the United States where children would be afforded the opportunity to hit a few balls. Also, Nubian stated that at one time he was co-manager of a Little League team and used the article in the basement of a school to teach the children on the team how to hit. In addition, he testified that the article was used in plaintiff's offices by plaintiff's employees to play "single, double, triple," and that the most experience he personally had with the article was using it in conjunction with friends or children to play this game. Plaintiff's second witness, Martin Abrams, the president of plaintiff, testified that the article was developed from the "Iron Mike," and that he had seen it used thi'oughout the United States about fifty to a hundred times over a four-year period. More particularly, he stated that he had seen it used in demonstrations in retail stores; on location at a baseball field in Florida where plaintiff had some six children participate in the filming of a TV commercial of the article, and in friends' homes about five to six times in 1969 and about the same number of times in 1970. He further indicated that he had played •with, it in the office in the manner indicated by the previous witness. On the basis of his observations, he stated that the article was used extensively by persons for competitive purposes to refine their skill and do better than the next person and was also used "occasionally" for noncompetitive purposes. The witness concluded that the article was not chiefly used to teach batting, but rather was chiefly used as a game in a competitive atmosphere. Pie further stated that even were it to be assumed that the chief use of the article is for teaching, it would still be a game. Thus he testified (K.99) : Even assuming that it was to teach them, it would still constitute a game. Because within the frame of reference, it's teaching them how to play a game. It's teaching them a skill to perfect which falls within a "game" premise. III We turn now to plaintiff's claims that the merchandise is properly classifiable under item 735.20 as "game equipment" or under item 734.20 as "game machines." As to these claims, it is to be noted that headnote l(iii) of schedule 7, part 5, subpart E (previously quoted) provides that an article which is both a toy and a game or game equipment is classifiable under the provisions for games or: game equipment rather than under the provisions for toys. Thus the key question with respect to these claims by plaintiff is whether the merchandise in issue is a "game" regardless of whether it is also a toy. See e.g., Mego Corp. v. United States, 62 CCPA —, —, C.A.D. 1137, slip op. at 7 (Nov. 21, 1974) ; Montgomery Ward & Co. v. United States, 66 Cust. Ct. 233, 234 (1971). "The common meaning of the term 'game' for tariff purposes refers to a competition or contest which involves skill, chance or endurance or any combination of these three elements, and which is played according to rules with the objective of winning." Mego Corp. v. United States, 67 Cust. Ct. 19, 24, C.D. 4246 (1971). See also e.g., Mego Corp. v. United States, supra, C.A.D. 1137, slip op. at 7. Further, as this court stated in Montgomery Ward, supra, 66 Cust. Ct. at 238: Of course, a game is necessarily a contest, but one which may be between two or more persons, or between one person and the game itself. For example, a slot machine can only be played by one person at a time . A pinball machine can only be played by one person at a time and is a contest between man and machine which involves an element of skill, while the slot machine is essentially a game of chance. Darts can be played or practiced by one person alone simply as a test of skill of the player, with no necessity for an opposing player. All the above are "games" or "game machines" within the provisions for "games and sporting goods" in schedule 7, part 5, subpart D of the tariff schedules, and do not necessarily involve more than one person in their playing. The point is that these activities are games since they result in a "score" measuring one's skill or luck or combination thereof against a given set of rules. Beyond this, it is important to observe that our appellate court recently held that items 734.20 and 735.20 — which cover, among other things, game machines and game equipment — are not "chief use" provisions. Mego Corp. v. United States, supra, C.A.D. 1137, slip op. at 10-11. Instructive in this regard are the following comments in the Tariff Classification Study (Schedule 7, 1960), pp. 287-288: The classification problems connected with sports equipment and games and game equipment which may'be chiefly used for the amusement of children are particularly troublesome. The earlier provisions of this subpart discussed above for equipment for various games such as ¡baseball, croquet, and golf,' are derived principally from tariff paragraph 1502, and it is intended that the equipment which would be classified thereunder would be of such character and quality as is ordinarily used in the serious pursuit of the game or sport named. Such equipment may be diminutive in size for use by children, such as a boy's baseball glove, but it would nevertheless be classified under these provisions so long as it was of a character suitable for use in organized play of these games. [Emphasis added.] Measured by these standards, it must be concluded that the imported article is not a game. For one thing, examination of the article, without more, establishes that by its design and construction it is not directed to a contest or competition. Cf. Mego Corp. v. United States, supra, C.A.D. 1137, slip op. at 9. The record shows that the .function of the article is to pitch a ball and to enable the batter to hit the 'ball so pitched. Thus, there is nothing inherent in the article which restricts its ordinary use to that of a game. Moreover, there are no specific rules for play; rather, the user can make up whatever rules he wants. See e.g., R. 80-81. It is true that an instruction sheet comes with the merchandise. But this instruction sheet merely suggests how one or more persons "can play baseball" therewith. Nor is the merchandise limited in its design and construction to use in a competition or contest. For it can be, and was in fact, used by individual persons for batting of balls and for batting practice, and tbe balls can be used separately for most any play activity limited only by the imagination of a child. Plaintiff, however, argues that an article used in perfecting one's ability to play a game, i.e., batting practice, is game equipment for tariff purposes. I cannot agree. A game machine, or game equipment, must 'be of such character and quality as is ordinarily used in the pursuit of the game or sport as opposed to preparing or practicing therefor. Hence, if an article is not ordinarily used in a contest, or in competition, it is not a game, notwithstanding that the elements of skill and/or endurance and/or chance might be involved. The short of the matter is that the mere batting of balls, or batting practice, simply does not involve the element of competition. What is more, the fact that a child may compete with himself, in training for a given game, by seeing how many times, or how far, or how high, he can hit a ball does not convert the imported merchandise into a game any more than a top would be converted into a game by virtue of a child competing with himself in seeing how long he can cause the top to spin. On a related aspect, it is true that the imported article can be used for playing a game. But this consideration is scarcely decisive. For innumerable articles can be and are used by children (and adults) for playing games, notwithstanding that by no stretch of the imagination are they considered games. To take an extreme example, pennies are often used by children (and adults) in a game called "pitching pennies" where the winner is the one who pitches his penny closest to the' wall. Despite the fact that pennies are used for this purpose, it would strain all credulity to consider them-as games. For the foregoing reasons, it is held that the articles in question are not "games" for tariff purposes and, accordingly, plaintiff's claims for classification under item 735.20 as "game equipment" or under item 734.20 as "game machines" are overruled. IV We come now to plaintiff's claims that the'imported mechandise is properly classifiable, under item 735.20 as sport equipment or under item 734.56 as other baseball equipment. In considering these.claims, it is to be noted that headnote 1 (iii) of schedule 7, part 5, subpart E does not exempt sport equipment or baseball equipment from the per vasive character of tlie toy provisions covered by that' subpart. See Mego Corp. v. United States, supra, 67 Cust Ct. at 29. Therefore, in order to be successful in its claims that the importation is sport or baseball equipment, plaintiff must not only overcome the presumption of correctness attendant upon the government's classification of the importation as a toy, it must also establish that the importation falls within the category of sport or baseball equipment. Ib'id. Plaintiff has failed in both regards. For one thing, it is clear on the basis of the present record that plaintiff has failed to overcome the presumption that the importation is a toy (i.e., an article chiefly used for amusement purposes). In fact, the record supports the presumption. First, an examination of the merchandise shows that it is a plaything used for amusement purposes and that the fun that children would derive from using the merchandise is essentially the same kind of enjoyment they would derive from any other objects which are commonly thought of as toys. See United States v. Topps Chewing Gum, Inc., 58 CCPA 157, 159, C.A.D. 1022, 440 F.2d 1384, 1385 (1971). Second, in their testimony both of plaintiff's witnesses characterized the importation as a "toy." See E. 37,119, 120,151. Indeed, plaintiff's witness Abrams, the president of the plaintiff-corporation, readily conceded that the merchandise was an article of "amusement." See R. 123-125. Third, plaintiff advertised and offered the merchandise in its catalogue as an "Action Toy." Bearing mention on this phase is New York Merchandise Co., Inc. v. United States, 62 Cust. Ct. 38, C.D. 3671, 294 F. Supp. 971 (1969). There it was held that a "junior edition" of a baseball glove was properly classifiable as baseball equipment because it was of such character and quality as to be suitable for use by children in a regular or organized game of baseball. As the court stated (62 Cust. Ct. at 44) : "Those children who cannot afford the more costly baseball gloves can still successfully engage in a game of baseball using the gloves in issue." In short, the only real difference between the "junior edition" involved therein, and the type of baseball gloves used by adults, was the size and the quality of the materials from which it was made. By contrast, in the present case, the imported merchandise is incapable of use in a game of baseball. Thus, as plaintiff's witness Nubian testified, neither the bat nor the balls can be used in a regular game of baseball, and because of weight and size of the ball, a pitcher would be unable to pitch it to the home plate on a regular sized diamond. See E. 74-76, 83. Moreover, the "Iron Mike," which the imported merchandise is patterned after, is not used in the game of baseball, the human pitcher of a nine member team having yet to be replaced by a machine. However, assuming arguendo that an "Iron Mike" is baseball equipment for tariff purposes, the legislative history discussed at length in New York Merchandise, supra, 62 Cust. Ct. at 43-44, reveals the intent of the Congress to have imitations of sports equipment, made for small children, classified as toys and not as sport or baseball equipment. The imported merchandise falls precisely within this category for it is nothing more than a toy imitation of an "Iron Mike." It may be that the imported merchandise can be used to improve one's skill in the actual game of baseball. But not every object or device that might improve one's skill in a given sport is, ipso facto, sport equipment. For example, a broom stick could be used to bat small rubber balls, yet, quite obviously, it is not baseball or sport equipment. By the same token, an ordinary length of rope could be used by a boxer to improve his skills, yet it could hardly be argued that a length of rope is sport equipment. From what has been said, it is concluded that plaintiff's claims for classification of the imported merchandise as sport equipment under item 735.20 or as baseball equipment under item 734.56 must be overruled. V In summary, the court overrules plaintiff's alternative claims for classification of the imported articles (1) as game or sport equipment under item 735.20; (2) as game machines under item 734.20; and (3) as baseball equipment under item 734.56. Judgment will be entered accordingly. The modified rates specified here and hereafter were effected by Pres. Proc. 3822, T.D. 68-9. In paragraph 10 of its complaint, plaintiff also claimed alternatively that the imported merchandise consisted of gymnastic, athletic, or playground equipment -within the meaning of item 735.20. However, plaintiff, in its brief, has not set forth any argument In support of these claims and they are therefore deemed abandoned. In this game, one or more persons field, one or more persons bat, and the article acts as the pitcher. If the batter hits the ball past the pitcher, it is a single, double, triple or home run depending upon the height. However, if a fielder catches the ball on the fly, it's an out. Ais tlie court pointed out in Montgomery Ward, supra at 236 : '[ü]nder the tariff schedules, all games and game equipment are now provided for in schedule 7, part 5, subpart D — the congressional intent being to remove all games, including 'toy games,' from the toy provisions." Baseball is defined by Webster's Third New International Dictionary, Unabridged <1963), as: A game played with a ball, bat, and gloves between 2 teams of 9 players each on a large field centering upon 4 bases tbat form the corners of a square 90 feet on each side, each team having a turn at bat and in the* field during each of the 9 innings that constitute a normal game, the winner being the team that scores the most runs. It -will be recalled that tbe government classified the Imported merchandise under item 737.90, as other toys, not specially provided for, and assessed duty at the rate of 28 percent ad valorem. It will also be recalled that the government claims alternatively that the merchandise is classifiable under item 737.80, as toys, not specially provided for, having a spring mechanism, and thus dutiable at the rate of 88 percent ad valorem. In considering this alternative claim, it must be borne in mind that in a case such as the present where the importer brings suit, this court may not render an affirmative judgment for a rate of duty higher than that assessed. See e.g., J. E. Barnard & Co., Inc. v United States, 64 Cust. Ct. 525, 527, C.D. 4029 (1970), appeal dismissed, 58 CCPA 165 (1970). Accordingly, the court deems it appropriate In the circumstances of this case to pretermit the question as to whether or not the imported articles are properly dutiable under item 737.80, as toys having a spring mechanism.

6594163

M. H. Garvey Co. v. United States, protests 60/19152, 61/20365, and 61/20379 (Boston)

M. H. Garvey Co. v. United States

1966-10-19

No. P66/276

819

820

57 Cust. Ct. 819

57

United States Customs Court Reports

United States Customs Court

United States

2021-08-10T20:01:39.675729+00:00

CAP

M. H. Garvey Co. v. United States, protests 60/19152, 61/20365, and 61/20379 (Boston).

No. P66/276. — M. H. Garvey Co. v. United States, protests 60/19152, 61/20365, and 61/20379 (Boston).

71

431

Ford, J. In accordance with stipulation of counsel that the merchandise covered by the foregoing protests consists of palm leaf hats similar in all material respects to those the subject of Bailey-Mora Co., Inc., a/c Vera Lou, Inc., et al. v. United States (54 Cust. Ct. 55, C.D. 2508), the claim of the plaintiff was sustained.

11715423

Jackson v. United States

Jackson v. United States

1997-05-12

No. 96-8578

1222

1222

520 U.S. 1222

520

United States Reports

Supreme Court of the United States

United States

2021-08-11T00:05:17.022221+00:00

CAP

Jackson v. United States.

No. 96-8578. Jackson v. United States.

12

73

C. A. 6th Cir. Certiorari denied.

6161740

Cooper v. Irving Trust Co., Trustee, et al.

Cooper v. Irving Trust Co.

1937-10-11

No. 325

725

725

302 U.S. 725

302

United States Reports

Supreme Court of the United States

United States

2021-08-10T19:08:04.501287+00:00

CAP

Cooper v. Irving Trust Co., Trustee, et al.

No. 325. Cooper v. Irving Trust Co., Trustee, et al. October 11, 1937. Mr. Murray C. Bernays for petitioner. Messrs. J. Arthur Leve and Charles Rosenbaum, for respondents.

44

267

Petition for writ of certiorari to the Circuit Court of Appeals for the Second Circuit denied.

3592965

UNITED STATES v. AMERICAN TOBACCO COMPANY

United States v. American Tobacco Co.

1897-04-12

No. 742

468

480

166 U.S. 468

166

United States Reports

Supreme Court of the United States

United States

2021-09-21T20:02:18.861595+00:00

Harvard

UNITED STATES v. AMERICAN TOBACCO COMPANY.

UNITED STATES v. AMERICAN TOBACCO COMPANY. APPEAL FROM THE COURT OF CLAIMS. No. 742. Submitted March 29, 1897. Decided April 12, 1897. The tobacco company purchased from an internal revenue officer of the United States revenue stamps to the amount of $4100.10, to be put upon its tobacco as manufactured. April 2, 1893, its factory in New York and all the contents were destroyed by Are. Among the contents were the stamps so purchased. Of these, stamps to the value of $1356.63 had not been used, and stamps to the value of $2743.47 had been put upon packages of tobacco which were still in the factory, unsold. The prop erty was insured. In settling with the insurers the latter paid the tobacco company the value of the destroyed stamps, and it was understood that the insurers were entitled to whatever might be received or recovered from the Government under the provisions of the statute amending the laws relating to internal revenue. Act of March 1, 1879, c. 125. The company under the provisions of that act applied .to the Treasury Department for the return of the destroyed stamps. . The rules of the department required the applicant for such repayment to make oath that he had not theretofore presented a claim for the refunding of the amount asked for, and that its amount or any part thereof had not been received by him. Instead thereof the company filed an oath that the amount had not been claimed of the Government, and that no portion of it had been received from the Government. The department having refused payment, the company thereupon brought this action in the Court of Claims. Held, (1) That the action was properly brought in the name of the insured for the use of the insurers; (2) That payment by the insurer to the company did not bar the right of the latter to recover from the-United States; (3) That by recovering from the United States the company would be- come the trustee of the insurers, who were its equitable assignees; (I) That upon the facts found by the Court of Claims the action could be maintained, as the payment by the insurers constituted no bar; (5) That there was a substantial compliance with the Treasury regulation concerning thé oath when the.oath was filed on the part of the company of the fact of the destruction, and that no claim for refunding had been presented to the Government, and no portion of the claim had been paid by it; (6) That the company had an insurable interest in the stamps destroyed; (7) That it was too late to set up for the first time in this court that the Government had the election to reimburse the claimant by giving stamps instead of by payment in cash. This action was brought in the Court of Claims for the purpose of recovering the value of certain internal revenue stamps, alleged to have been destroyed by fire before they had been used! The action is founded upon the provisions of section 3426 of the United States Revised Statutes, as amended by chapter 125 of the laws of 1879, 20 Stat. 327, 349, the first paragraph of section 17 of which reads as follows : “The Commissioner of Internal Revenue may, upon receipt of satisfactory evidence of the facts, make allowance for or redeem such of the stamps issued under the provisions of this title, or of any internal revenue act, as may have been spoiled, destroyed or rendered useless or unfit for the purpose intended, or for which the owner may have no use, or which, through mistake, may have been improperly or unnecessarily used, or where the rates or duties represented thereby have been excessive in amount, paid in error, or in any manner wrongfully collected; and such allowance or redemption shall be made either by giving other stamps in lieu of the stamps so allowed for or redeemed, or by refunding the amount or value to the owner thereof, deducting therefrom, in case-of repayment, the percentage, if any, allowed to the purchaser thereof; but no allowance or redemption shall be made in any case until the stamps so spoiled or rendered useless shall have been returned to the Commissioner of Internal Revenue, or until satisfactory proof has been made showing the reason why the same cannot be so returned: Provided, That nothing herein shall be held as authorizing redemption of, or allowance for, any of the stamps allowance for which is prohibited by the provisions of ‘An act relative to the redemption of unused-stamps,’ approved July twelfth, 1.876.” On the 27th of May, 1895, the American Tobacco Company filed its petition in the Court of Claims in its own name for the use of certain insurance companies named in the petition, to recover the value of the stamps destroyed by fire in its factory. The facts as to the loss and destruction of the stamps were set forth and .judgment asked for the value thereof. The usual general denial of all the allegations of the petition was filed by the Attorney General on behalf of the United States, and the case went to trial, and after the evidence had been submitted, the court found the following facts: That the tobacco company was a manufacturer of tobacco, occupying a building in New York city, which was established-solely as a manufactory, no sales of tobacco being' made at the factory, the shipments therefrom being made in bulk after the tobacco had been stamped according to law. On the 2d of April, 1893, the factory and its entire contents were destroyed by fire. Among those contents were internal revenue stamps of the United States of the face value of $4100.10. These'stamps had been purchased by the company from the United States Collector of Internal Revenue for use in the factory. Some of the stamps were unattached to packages of tobacco, and had never been used, and they were of the face value of $1356.63; the balance of the stamps of the f§ce Value of $2743.47 had been attached to packages of tobacco which had not been sold or offered for sale or removed from the factory for sale. The tobacco company had purchased and paid for these stamps, which were totally destroyed, and there were no unsettled claims against the company on behalf of the United States. The court also found the following facts: “IY. On or about the 1st day of November, 1893, the claimant filed with the Treasury Department, under the rules and regulations of said department, a claim for the redemption of said stamps so destroyed, with proof of said loss, which claim was examined and certified as true and correct by the United States Internal Revenue Collector for said district, but without recommendation of payment, for the reason, stated, by- the collector, ‘ that the claimant had been paid by the insurance companies for the value of the stamps’; and on the 14th day of February, 1894, the department rendered its cisión upon said application, declining to allow the same, for the reason ‘ that satisfactory evidence .has been furnished to this office that you have received reimbursement of the value of -said stamps by the recovery of insurance thereon.’ “Y. Thereafter, on or about the 2d day of April, 1895, the claimant, by its attorneys, filed an amended petition for, the redemption of said stamps, and asked for a rehearing'; and on April. 10, 1895, the Treasury Department rendered a decision declining to grant a rehearing, and this suit was brought. “YI. The contents of said factory were insured to the American Tobacco Company, by the insurance companies for whose use. this suit is brought, in. the full sum of $139,500. The total loss by fire as adjusted and settled with said claimant was $78,635.47, which sum said companies have paid to the American Tobacco Company in proportions as the face of their several policies bears to the whole sum insured. The face value of said United States internal revenue stamps destroyed as aforesaid, namely, $4100.10, was a part of the sum so paid by said insurance companies. “VII. In the adjustment of the losses and the payment thereof it was understood between the claimant and the insurance companies that the insurance companies were entitled to have and should receive, in the proportions their several policies bore to the entire amount insured, the amount' of the redemption money for the destroyed stamps to be' recovered upon the application aforesaid or in this suit. “ VIII. This suit was brought by the claimant, for the use of said insurance companies in the proportions aforesaid, to recover the value of said stamps so destroyed. “IX. By an existing regulation of the Commissioner of Internal Revenue, made June 12, 1873, by authority of the act of June 30, 1864,' section 11, afterwards reenacted as Revised Statutes, section 3426, all claims arising under that section were required to be made upon a certain printed form, called ‘Form 38/ and ever since some time in 1875, and probably earlier, all claimants under the said section have been required to make oath,- upon Form 38, that they have ‘ not heretofore presented any claim for the refunding of the above-mentioned amount or any part thereof/ and ‘ that the value or reimbursement of the value of said stamps, or any portion thereof, has not heretofore been received by claimant, directly or indirectly.’ “ X. In presenting the claim as stated in Finding IV, the claimant’s general manager did not make the oath referred to in Finding IX in the form required by the Commissioner of Internal Revenue, but, instead of taking the required oath, he made oath that the clairpant had ‘ not heretofore presented any claim to the Government for the refunding of the above-mentioned amount, or any part thereof/ and ‘that the value or reimbursement of the value of said stamps, or any portion thereof, has not heretofore been received by claimant, directly or indirectly, from the Government.’ ” As a conclusion of law the court found that claimant was entitled, for the use. of the companies, to recover the sum of $4100.10. Judgment pursuant to the finding of the court was entered, from which an appeal was taken to this court. Mr. Assistant Attorney General Dodge and Mr. Assistant Attorney Binney for appellants. Mr. Charles W. Needham and' Mr. John B. Cotton for appellee.

4710

26983

Mr. Justice Peckham, after stating the facts, delivered the opinion of the court. Three assignments of errors, alleged to have been made by the court below, have been filed on the part of the Government, as follows: " 1. In holding that the use appellees had an equitable claim against the appellant which could be enforced by a suit in the name of the nominal appellee. '•'2. In holding that section 3426 of the Revised Statutes, as amended in 1879, required the Commissioner of Internal Revenue to refund the tax represented by the face value of destroyed tobacco-tax stamps, or to furnish others in their place, in cases where the full amount represented by such face value had been recovered by the tobacco manufacturer from insurance companies, so that he had been subjected to no loss. " 3. In entering judgment in favor of the appellee for the Sum of $4100.10." It is argued upon the part of the Government that as the insurance companies have paid the tobacco company in full for the value of the stamps destroyed by fire, they have thereby become the actual plaintiffs in this suit, and that the connection of the tobacco company is merely nominal; the case must, therefore, be decided as one between the United States and the insurance companies. Dealing with the companies in that light, it is further urged that their right to sue is based upon the ground that they are subrogated to the rights of the tobacco company, and consequently if there be no right of subrogation, there is no right of recovery; there is no right of subrogation, because there was no insurable interest in the stamps on the part of the tobacco company; and there was no insurable interest because the tobacco company could obtain from the Government either other stamps in lieu of the stamps destroyed, or the amount or value thereof, upon giving satisfactory evidence of the necessary facts to the Commissioner of Internal Revenue, and therefore the tobacco company was not liable to suffer any loss, and as a consequence had no insurable interest in the stamps. The argument, as we think, is not well founded. The case is not to be treated or decided as one between the United States and the insurance companies. On the contrary, the rights .of the companies, as between them and the Government, are not the subject-matter of the suit. The insurance companies, as such, have no right of action against the Government. -It is the right of the claimant, the tobacco company, which is to be passed upon, and unless that company h^s a legal cause of complaint no recovery can be had in this suit. The companies must recover in the name of the tobacco company and by reason of its lights. Hall & Long v. Railroad Companies, 13 Wall. 367, 372, and cases cited. The suit is properly brought in the name of the insured for the use of the insurers, but the cause of action rests on the rights of the owner. Ibid.; Phœnix Ins. Co. v. Erie & Western Transportation Co., 117 U. S. 312, 321, and cases cited. Payment to the owner by the insurer does not bar. the right against another party originally liable for the loss, but the •owner, by recovering payment of the underwriters, becomes trustee for them, and by necessary implication makes an equitable assignment to them of his right to recover in his 'name. Rockingham Mutual Fire Ins. Co. v. Bosher, 39 Maine, 253, 255. The question then arises as to what right, if any, the tobacco company has under the statute above cited, when it appears that the company has received payment from the insurance companies for the value of the stamps destroyed. Is that fact a bar to its right to claim payment under that section in a case where the recovery is. sought for the purpose of reimbursing the insurance companies for the payments made by them to the extent of the value of the stamps ? We think upon the facts found by the Court of Claims the action can be maintained, and the payments by the insurance companies constitutes no bar. No question is made in regard to the sufficiency of the proof in regard to the destruction of the stamps by fire or of the bona fides of the tobacco company. The claim was examined and certified as true and.correct by the United States Collector of Internal Revenue for the district in which the factory was situated, but he failed to recommend payment of the claim, for the reason, as stated by him, ".that the claimant had been paid by the insurance companies for the value of the stamps "; and the department itself, when the claim was made, rendered its decision upon the application, declining to allow the same, for the reason " that satisfactory evidence has been furnished to this office that the claimant has received reimbursement of the value of the stamps by the recovery of insurance thereon." It is true that the claimant was unable to comply with the regulations of the department in one particular regarding the oath to be made by such claimant. It could not truthfully be said that the claimant had not theretofore received directly or indirectly the value or reimbursement of the value of the stamps. This oath was required by what is called "Form 38," which was a certain printed form of oath to be taken by all claimants for reimbursement- for stamps claimed to- have been destroyed within the meaning of the section of the Revised Statutes heretofore quoted. The claimant, however, through its proper officer, did make oath that it " had not heretofore presented any claim to the Government for the refunding of the above-mentioned amount, or any part thereof," and " that the value or reimbursement of the value of said stamps, or any portion- thereof, has not heretofore been received by claimant directly or indirectly pro»?. the Government." While the regulation prescribed by the Commissioner of Internal Revenue would be regarded as proper and appropriate for the purpose of satisfying him of the fact of the destruction of the stamps, yet we think there was a substantial compliance with that regulation on the part of the tobacco company in this .case, when it made oath through its proper officer to the fact of such destruction, and that it had not. presented any claim for the refunding of the amount or any part thereof to the Government, nor had the value of said stamps, or any portion thereof, been theretofore received by the claimant, either directly or .indirectly, from the Government. The real object of the regulation, it must be assumed, was to prevent fraud upon or improper claims against the Government and to protect it from itself twice paying for the loss. If the object of the regulation Avere to discover whether the stamps had been insured and Avhether payment therefor had been made by the insurance company, and if so, to base a refusal to reimburse upon that fact, Ave think that portion of the regulation Avas unreasonable, and compliance Avith the form as provided Ayas unnecessary. The purpose of the statute was to have the Government reimburse the person Avho had bought and paid for internal revenue stamps which had been destroyed under the circumstances mentioned in the statute, before they had been used. To make such reimbursement Avould.be no loss to the Government, while to retain the amount paid AVould be highly inequitable. The Government recognized this fact by the passage of the statute in question. The company did not purchase the stamps in payment of any tax then due from it to the Government ; they were purchased as a matter of convenience and to be thereafter affixed -to packages of tobacco which were to be sold in the future. The Tax Avas laid upon sales of tobacco and the stamps Avere resorted to as a convenient means of collecting the tax on such sales. Of course, if no sales-of packages of tobacco took place upon Avhich the stamps might be-affixed, no tax had become due to the Government, and therefore if after the purchase of the stamps they Avere destroyed by fire, the purpose of their purchase was frustrated and the ' Government was not entitled, upon any equitable ground, to retain the money paid for the stamps. In Jones v. Van Benthuysen, 103 U. S. 87, 88, Mr. Justice Miller said, speaking for the court: "Undoubtedly this statute, 15 Stat. 125, 152; only intended, to impose a tax upon the sales of tobacco, .and if the dealer was also the owner of stamps to be used in paying the duties on tobacco, he could sell them separately in any quantity, without being liable to a tax for such sales. When unattached to the tobacco they do not enter into its value, and they can be bought and sold at their face value as an independent commodity, to be used when and wherever the purchasers choose to do so. For such sales no tax is imposed upon the seller or the buyer. " On the other hand, we are of opinion that when they are once attached to the tobacco and cancelled, and can neter be lawfully used again, they cease to have any separate and independent value, and that which they had previously has be-. come merged into that of the tobacco. All subsequent sales are made upon the basis of the increased value the tobacco has acquired by the payment of the stamp duty, and can never be estimated apart from this. " It would seem to follow from this that if the stamps for which the plaintiff was charged by the collector were not affixed to the tobacco at the time he made the sale, no tax should be charged to him for that value. On the other hand, if the stamps were affixed at the time of the sale, they then entered into the value of the tobacco purchased, and the broker who made the sale should be taxed on the price of the tobacco as it was sold." Where the stamps have been destroyed under the circumstances detailed in this case, and those who paid for them apply to fhe Government to be reimbursed for their value, what materiality is there in the fact that the applicant has been paid the value of such stamps by an insurance company under and by virtue of a separate contract made with that company on the part of the claimant upon good consideration ? That circumstance does not alter the fact that the Government has been paid for the stamps which were to be used for a certain purpose — the payment of taxes thereafter to become due the Government — and that by reason of the destruction of the stamps by fire they cannot be used for the purpose for which they were intended.' Whatever sales of tobacco might be thereafter effected by the tobacco company would have to be evidenced by the attaching of other stamps upon the packages sold. Unless, therefore, the Government repaid the value of these stamps so destroyed, or provided other stamps in lieu thereof without any further payment, the Government would be in the position of one who retained money to which it had no equitable right. It would be no answer to that fact to show that some other person had reimbursed the claimant the amount it had .paid for the stamps. That would not alter the position of the Government. We cannot think that the payment to the claimant by the insurance companies absolved the Government in the slightest degree from the duty, under that statute, of paying back the money which it had received and for which it had delivered stamps that had been destroyed by fire before the contemplated use of them had been made. Whether or not the insurance companies could have made a successful defence (to the extent of the value of the stamps in question) to an action on their policies by the assured, because of an alleged lack of insurable interest in the stamps by the assured, is beside the question. They were not bound to make such defence. Having received the premiums they had the right to fulfil their contract, and the tobacco company after such payment might still ask the Government to pay to it the value of the stamps in order that it might thereafter repay the insurance companies. The Government loses nothing by payment in such case. It simply repays money which it has no equitable right to retain. The technical question of insurable interest does not arise in this case, which involves simply the construction of the statute cited and the. right of the claimant to recover. As was said in Mason v. Sainsbury, 3 Dough 61, 64, by Mansfield, Lord Chief Justice, in reference to a defence of payment by the insurance companies: " The case is clear: the act puts the Hundred, for civil purposes, in the place of the trespassers; and upon principles of policy, as in the case of other remedies against the Hundred, I am satisfied that it is to be considered as if the insurers had not paid a farthing." This was a case against the Hundred, .upon a statute making it liable for damages to property caused by a mob. Although the insurance company had paid the damages, the action in the name of the owner of the property was sustained exactly the same as if there had been no payment by the insurers. The liability of the Hundred, under the statute, was not thereby in the least affected. This case under the statute cited is still stronger because the Government suffers no actual loss by the repayment, while it would secure an unjust and inequitable profit by its refusal to pay. We are also of opinion that the' tobacco company had an insurable interest in the stamps. It owned them absolutely, having purchased and paid for them. The right of reimbursement under the conditions named in the statute did not affect that insurable interest, nor prevent the possibility of loss or prejudice arising from the destruction of the stamps. Because an owner of property may be able to reimburse himself ja case of its destruction, from other sources, is no reason for denying to such owner an insurable interest in the property. An owner has an insurable interest in his property to the extent of the value of the building on it, notwithstanding the existence of a mortgage on the property sufficient to absorb it. Per Bradley, J., in Insurance Co. v. Stinson, 103 U. S. 25, 29; May on Insurance, § 81, 82. The amount of interest or its character is not material in determining the question whether a party who attempts to recover under a policy has an insurable interest. (Ibid.) Upon all the facts, we think the objections above alluded to are untenable. Another objection raised by the Government is that, under the section of the statute cited, the Commissioner of Internal [Revenue had the choice, in making an allowance or redemption, either to give other stamps in lieu of the stamps so allowed for or redeemed, or to refund in money the amount or value to the owner of the stamps, and that as he had such election when he was applied to by the owner, an action thereafter commenced to recover the face value of the stamps in money deprived him of that election, and hence could not be maintained. The statute does give to the Commissioner of Internal Revenue the choice as to how reimbursement for the loss of stamps should be made; whether by delivering other stamps or by payment of the face value thereof in money. When the claim in this case was filed with the Treasury Department, the Commissioner had then the choice, upon being satisfied of the necessary facts, to reimburse the claimant in either way he thought proper, either in stamps or in money. That was the time when his election could properly have been made. Instead thereof he refused absolutely to do either, and gave as his reason that the claimant had already been paid for the stamps by the recovery of the insurance thereon. If that were-a sufficient reason in law, the Commissioner was justified in his refusal. As it was not a sufficient reason, the Commissioner was not justified, however sincerely he believed that he was. The claimant was, therefore,- by reason of this refusal, compelled to resort to the courts in order to obtain its legal rights under the statute. Having filed its claim in the Court of Claims and asked for judgment for the money value of the stamps, and a trial upon the merits as to the liability of the Government to respond at all having been had in the court below, and so far- as appears from the record no question of this kind having been therein made, it is too late, upon argument in this court, for the Government for the first time to question the form of the remedy, whether it should be a demand for money only or one which left the election still with the Commissioner to reimburse claimant by giving stamps instead of payment in cash. The objection does not go to the merits of the claim, but is one of procedure only; hence, even if it would have been valid if taken in time, it may be and was waived by the failure of the Government, so far as the record shows, to take the objection until the argument of the case in this court. We find no error in the record authorizing a reversal of the judgment of the Court of Claims, and it is, therefore, Affirmed.