Brewer v. Bureau of Indian Affairs, 1997 DSD 1

ALVINA BREWER,
Plaintiff,
v.
THE BUREAU OF INDIAN AFFAIRS
of the Department of the Interior, United States Government,
Defendant.
[1997 DSD 1]

United States District Court
District of South Dakota - Western Division
CIV. 96-5045

MEMORANDUM OPINION AND
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

Filed Jan 13, 1997.

RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  Plaintiff is a retired and re-employed employee of the Bureau of Indian Affairs (BIA), Pine Ridge Agency for Education, at the girl’s dormitory of the Pine Ridge High School. On May 29, 1996, plaintiff commenced this action to recover back pay wrongfully withheld from her wages. The original complaint alleged claims against Laurence T. Lorenz, the Director of the Office of Personnel Management; Norma Tibbits, William Gipp, and Basil Brave Heart, employees or former employees of the BIA in their official and individual capacities; the BIA of the Department of the Interior; the United States Government; and the Office of Personnel Management.

[¶2]  On October 11, 1996, defendants filed a motion to dismiss for lack of subject matter jurisdiction based on the following grounds: (1) plaintiff has not alleged any statute which waives the sovereign immunity of the United States with respect to her claims; (2) plaintiff has failed to plead either statutory waivers or specific exhaustion of administrative remedies which would be prerequisite to suit under the Administrative Procedure Act (APA) or the Civil Service Reform Act (CSRA); and (3) CSRA provides the exclusive remedy for federal employees claiming losses incurred in connection with federal employment and pay. Plaintiff has responded.

[¶3]  On October 15, 1996, prior to the filing of an answer by defendants, plaintiff filed a motion to amend complaint together with a copy of the amended complaint dismissing all defendants except the BIA of the Department of the Interior, United States Government. On December 17, 1996, the Court granted leave to amend. However, as demonstrated below, the amended pleading fails to cure the jurisdictional deficiencies regarding the remaining governmental defendant and therefore does not defeat defendant’s motion to dismiss. See generally Norbeck v. Davenport Community School Dist., 545 F2d 63, 70 (8th Cir. 1976) (concluding that it was not an abuse of discretion to deny a party the right to amend where the allegations contained in the amended complaint did not remedy the deficiencies present in the original complaint).

FACTS

[¶4]   In her amended complaint, plaintiff alleges that in 1962 she was originally employed by defendant BIA as an educational aide in the girls’ dormitory at Pine Ridge High School. See Amended Complaint at ¶ 4. In 1984 she became the dormitory manager and continued said position until her retirement on January 1, 1988. Id. at ¶ 5. Thereafter, the BIA requested plaintiff to return to her position as dormitory manager and as part of the inducement for her return, the BIA promised to seek payment of her full salary without deduction for her annuity. Id. at ¶¶ 7-8.1. In the event that it was not then possible for her to receive her full salary without deduction, plaintiff alleges that the BIA promised to seek payment of her full salary without deduction for her annuity at such time as it became possible to do so. See Plaintiff’s Amended Complaint at ¶ 10.{fn1} Furthermore, as part of the inducement for her return, the BIA promised to inform her of any change in the law which would permit her to receive her full salary without deduction from her annuity in the event that she was not eligible for full salary without deduction upon her re- employment. Id. at ¶ 9. Plaintiff alleges that based upon these promises and commitments, she agreed to return to the BIA. Id. at ¶ 11.

[¶5]  Thereafter, unbeknownst to plaintiff, Congress enacted the Federal Employees Pay Comparability Act of 1990 (FEPCA),2. Pub.L. 101-509, Title V. Nov. 5, 1990, 104 Stat. 1427 (5 USC §§ 3132, 3304a, 3324, 3326, 3405, 3594, 4502, 4505a, 4521, 4521 note, 4522-23, 5102, 5104, 5108, 5109, 5301, 5301 note, 5302, 5303, 5303 notes, 5304, 5304 note, 5304a, 5305, 5305 notes, 5306-8, 5311, 5313-16, 5318, 5331, 5333, 5335, 5361, 5363, 5371, 5372, 5372 note, 5372a, 5373, 5367, 5376 note, 5377, 5378, 5378 note, 5382, 5383, 5391, 5392, 5403, 5405, 5524a, 5532, 5541, 5541 note, 5542-45, 5547, 5595, 5706b, 5723, 5753-55, 5901-3, 8335, 8335 note, 8344, 8425, 8431, 8468, 8476); Pub.L. 102-378, § 3, Oct. 2, 1992, 106 Stat. 1355 (5 USC §§ 5304 note, 5305 note, 5378 note, 5545); Pub.L. 103-89, § 3(b)(2), Sept. 30, 1993, 107 Stat. 982 (5 USC § 5304 note); Pub.L. 103-123, Title VI, §628, Oct. 28, 1993, 107 Stat. 1266 (5 USC § 5305 note); and Pub.L. 103-178, Title III, § 303(a), Dec. 3, 1993, 107 Stat. 2034 (5 USC § 5305 note).{fn2} which permitted exceptions to the reductions in pay for both emergency employment purposes, as well as for exceptional difficulty in recruiting or retaining a qualified employee. Id. at ¶ 12. Plaintiff contends that the BIA breached its obligation to inform plaintiff of this change in law. Id. at ¶ 13. She further alleges that the BIA also failed to provide copies of the Federal Personnel Manual System Notices and Manual changes to her in a timely manner, which would have informed her of the changes in the law and regulations permitting her to obtain her annuity as well as her earned salary. Id. at ¶ 14.

[¶6]  In December of 1992, plaintiff became aware of the changes brought about by FEPCA, informed her supervisors of said changes, and submitted her request to obtain her salary without deduction of her annuity. Id. at ¶¶ 15-16. On August 23, 1994, nearly two years after plaintiff submitted her request, the Office of Personnel Management agreed plaintiff was entitled to and qualified for her full salary without deduction for her annuity. Id. at ¶¶ 17-18. Plaintiff alleges that defendant has arbitrarily and capriciously failed and refused to pay her the salary which was deducted from her earnings from the effective date of FEPCA through August 23, 1994, which amounts to approximately $35,000 plus interest.3. The Court arrived at the $35,000 amount by multiplying the number of pay periods from November 5, 1990, through August 23, 1994, which is approximately 100 by $350, which is the amount plaintiff alleges defendant withheld each pay period. See Plaintiff’s Responsive Brief at Appendix A, pg. 3. Furthermore, approximately $15,400 plus interest was allegedly withheld from the date of plaintiff’s request for a waiver of deductions on December 18, 1992, through August 23, 1994. This figure was arrived at by multiplying the number of pay periods from December 18, 1992, through August 23, 1994, which is approximately 44, by the $350 figure.{fn3} Id. at ¶ 19. Plaintiff asserts that she has exhausted all available administrative remedies. Id. at ¶ 20. Finally, plaintiff alleges jurisdiction pursuant to 28 USC 1331 and FEPCA. Id. at ¶ 3.

STANDARD OF REVIEW

[¶7]  Subject matter jurisdiction is a threshold issue which must be assured in every federal action. Kronholm v. Federal Deposit Ins. Corp., 915 F2d 1171, 1174 (8th Cir. 1990) (citing Barclay Square Properties v. Midwest Fed. Sav. & Loan, 893 F2d 968, 969 (8th Cir. 1990)). According to the Eighth Circuit Court of Appeals,

A court deciding a motion under Rule 12(b)(1) must distinguish between a “facial attack” and a “factual attack.” In the first instance, the court restricts itself to the face of the pleadings, and the non-moving party receives the same protections as it would defending against a motion brought under Rule 12(b)(6). The general rule is that a complaint should not be dismissed “‘unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.’”4. A plaintiff’s claim should not be dismissed for failure to state a claim unless it is patently clear that the plaintiff can prove no set of facts in support of its claim which would entitle it to relief. McCormack v. Citibank, N.A., 979 F2d 643, 646 (8th Cir. 1992); Murphy v. Lancaster, 960 F2d 746, 748 (8th Cir. 1992); and 5A Charles A. Wright & Arthur R. Miller Federal Practice & Procedure § 1357, at 325 (1990) (quoting Conley v. Gibson, 355 US 41, 45-46, 78 SCt 99, 102, 2 LEd 2d 80 (1957)). For purposes of a motion to dismiss for failure to state a claim, all well-pleaded factual allegations contained in plaintiff’s complaint are taken as true. McCormack, 979 F2d at 646; Murphy, 960 F2d at 748; and 5A Wright & Miller Federal Practice & Procedure § 1357, at 304. Because a motion pursuant to Rule 12(b)(6) tests the formal sufficiency of the plaintiff’s statement of a claim for relief, as opposed to the merits of such a claim, motions pursuant to Rule 12(b)(6) must be read in light of Fed. R. Civ. P. 8(a), which sets forth the requirements for pleading a claim. 5A Wright & Miller Federal Practice & Procedure § 1356, at 294-96. Rule 8(a) states in pertinent part that “[a] pleading which sets forth a claim for relief, ... shall contain ... a short and plain statement of the claim showing that the pleader is entitled to relief... .”

{fn4} In a factual attack, the court considers matters outside the pleadings, and the non-moving party does not have the benefit of 12(b)(6) safeguards.

Osborn v. United States, 918 F2d 724, 729-730 n.6 (8th Cir. 1990) (citations omitted).

[¶8]  Although defendant does not explicitly state whether its Rule 12(b)(1) motion presents a facial or factual attack, the distinction can be determined from defendant’s argument. The basis for defendant’s argument is derived from the allegations set forth in plaintiff’s complaint. Therefore, defendant’s motion presents a facial attack in which case the plaintiff’s complaint will not be dismissed unless it appears beyond doubt that she cannot prove any set of facts in support of her claim which would entitle her to relief.

DISCUSSION

[¶9]  The doctrine of sovereign immunity provides that the United States cannot be sued unless it gives its consent, and this consent defines a court’s jurisdiction to hear a particular case. United States v. Sherwood, 312 US 584, 586, 61 SCt 767, 769, 85 LEd 1058 (1941). Pursuant to the Tucker Act,

The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.

28 USC § 1491. In addition, the district court does have concurrent jurisdiction to grant monetary relief on claims under $10,000. See 28 USC § 1346(a)(2). See generally United States v. Mitchell, 463 US 206, 212-18, 103 SCt 2961, 2965-69, 77 LEd2d 580 (1993) (recognizing that while the Tucker Act constitutes a waiver of sovereign immunity it does not standing alone create any substantive right enforceable against the United States for money damages).

[¶10]  Plaintiff’s claim is essentially one against the United States for the payment of damages in the amount of $35,000 plus interest. Because the claim is in excess of $10,000, it is within the exclusive jurisdiction of the United States Court of Federal Claims. See Mullally v. United States, 95 F3d 12, 14 (8th Cir. 1996); Charles v. Rice, 28 F3d 1312, 1321-23 (1st Cir. 1994); Weeks Constr., Inc. v. Oglala Sioux Housing Auth., 797 F2d 668, 674-75 (8th Cir. 1986); State of Minnesota by Noot v. Heckler, 718 F2d 852, 857-58 (8th Cir. 1983); Sellers v. Brown, 633 F2d 106, 107-08 (8th Cir. 1980); Polos v. United States, 556 F2d 903, 905 (8th Cir. 1977); Maxy v. Kadrovach, 696 FSupp 425, 429 (W.D. Ark. 1988).

[¶11]  Plaintiff alleges that jurisdiction of this court arises under 28 USC § 1331 and FEPCA.5. It is well settled that 28 USC § 1331 does not provide a waiver of sovereign immunity for award of monetary relief. See generally United States v. Perry, 706 F2d 278, 279 (8th Cir. 1983) (“in the absence of a waiver of sovereign immunity, this statutory provision [§ 1332] affords no jurisdictional grounds.”); Gochnour v. Marsh, 754 F2d 1137, 1138 (5th Cir. 1985); Alamo Navajo v. Andrus, 664 F2d 229, 233 (10th Cir. 1981); and Beller v. Middendorf, 632 F2d 788, 790 (9th Cir. 1980). Plaintiff is seeking review under 28 USC § 1331, rather than review under 5 USC § 702 of the Administrative Procedure Act (APA). Even so, the 1976 amendment to the APA providing for review of agency action clearly does not waive sovereign immunity as a bar to actions requesting monetary relief against the United States. See 5 USC § 702; Bruce v. United States, 621 F2d 914, 918 (8th Cir. 1980) (“It is now well established that the Administrative Procedure Act, 5 USC § 702, does not provide an independent basis for subject matter jurisdiction.”); and Califano v. Sanders, 430 US 99, 97 SCt 980, 51 LEd 2d 192 (1977) (APA is not an independent source of federal jurisdiction).{fn5} See Plaintiff’s Amended Complaint at ¶ 3. However, “the use of [either] of these statutes to entertain a claim and to grant a judgment for damages greater than $10,000 would infringe on the exclusive jurisdiction of the Court of Claims.” Polos, 556 F2d at 905 n.5 (citing Carter v. Seamans, 411 F2d 767, 771 (5th Cir. 1969)) (noting that the Tucker Act supplies jurisdiction for claims for money damages against the United States only in the Court of Claims and additional waiver of sovereign immunity may be found in the Back Pay Act, 5 USC § 5596). See also Weeks, 797 F2d at 675 (citing Marcus Garvey Square, Inc. v. Winston Burnett Construction Co. of California, Inc., 595 F2d 1126, 1132 (9th Cir. 1979); DSI Corp. v. Secretary of Housing and Urban Development, 594 F2d 177, 180 (9th Cir. 1979)) (recognizing that waivers of sovereign immunity other than the Tucker Act should not apply when the United States is the real party in interest); Mitchell v. United States, 930 F2d 893, 896 n.3, 897 (Fed. Cir. 1991) (determining that service member’s suit for back pay falls within Claims Court’s Tucker Act jurisdiction and does not lie in district court); Nero v. Cherokee Nation of Oklahoma, 892 F2d 1457, 1464-65 (10th Cir. 1989); Com. of Mass. v. Secretary of H.H.S., 816 F2d 796, 799-800 (1st Cir. 1987); Spectrum Leasing Corp. v. United States, 764 F2d 891, 895 n.8 (D.C. Cir. 1985); Clark v. United States, 691 F2d 837, 839 (7th Cir. 1982). But see Ward v. Brown, 22 F3d 516, 520-21 (2d Cir. 1994) (finding that the Back Pay Act provides an independent waiver of sovereign immunity to vest jurisdiction in the federal district court). Therefore, plaintiff’s attempt to build subject matter jurisdiction in this Court are unavailing, and her claim shall be dismissed for lack of jurisdiction.

[¶12]  The Court is cognizant of its authority pursuant to 28 USC §16316. 28 USC §1631 provides as follows:

  Whenever a civil action is filed in a court as defined in section 610 of this title or an appeal, including a petition for review of administrative action, is noticed for or filed with such a court and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred.{fn6} to transfer this matter to the United States Court of Federal Claims to cure want of jurisdiction if such transfer is found to be in the interests of justice. See Weeks, 797 F2d at 676 (remanding a case in which the district court failed to consider the option of exercising its discretion to transfer the case instead of dismissing it outright); Polos, 556 F2d at 905-906 (remanding a case in order for the district court to transfer the matter to the United States Court of Federal Claims). However, this Court declines to exercise its authority to transfer in the interests of justice because the United States Court of Federal Claims would most likely dismiss the action based on the Civil Service Reform Act of 1978 (CSRA), Pub.L. 95-454, Oct. 13, 1978, 92 Stat. 1111. See Mullally, 95 F3d at 14 (finding that a transfer would not be in the interest of justice because the Court of Federal Claims would most likely dismiss the claim).

[¶13]  In 1978 Congress overhauled the civil service system through enactment of the CSRA which prescribes the protections and remedies available to federal employees for personnel actions or injuries sustained in the context of personnel actions. See 5 USC §§ 1101-05, 1201-22, 2301- 05, 7501-14, and 7701-03; Lindahl v. OPM, 470 US 768, 773, 105 SCt 1620, 1624, 84 LEd2d 674 (1985) (recognizing that the CSRA “comprehensively overhauled the civil service system”). Because the remedies available to federal employees under the CSRA are exclusive, the CSRA bars suit for money damages under the Tucker Act. See United States v. Fausto, 484 US 439, 453, 108 SCt 668, 677, 98 LEd2d 830 (1988) (concluding that the CSRA repealed “the judicial interpretation of the Back Pay Act-or, if you will, the Back Pay Act’s implication-allowing review in the Court of Claims of the underlying personnel decision giving rise to the claim for backpay.”). See generally Schweiker v. Chilicky, 487 US 412, 108 SCt 2460, 101 LEd2d 370 (1988) (barring of money damages under Bivens); Bush v. Lucas, 462 US 367, 103 SCt 2404, 76 LEd2d 648 (1983) (barring of money damages under First Amendment claim); and Premachandra v. United States, 739 F2d 392, 394 (8th Cir. 1984) (barring of money damages under FTCA).

CONCLUSION

[¶14]  After reviewing the arguments presented by both parties, this Court finds that it lacks jurisdiction to reach the merits of plaintiff’s claim. Furthermore, it would not be in the interests of justice to transfer this matter to the United States Court of Federal Claims because said Court would most likely dismiss the action based on the CSRA. Accordingly, it is hereby

[¶15]  ORDERED that defendant’s motion to dismiss (Docket #6) is granted. A judgment of dismissal shall be issued forthwith.



United States v. Gay, 1997 DSD 2

UNITED STATES OF AMERICA,

Plaintiff,

v.

ROYCE GAY,

Defendant.

[1997 DSD 2]

United States District Court

District of South Dakota - Western Division

CR96-50078

MEMORANDUM OPINION AND ORDER

DENYING DEFENDANT’S MOTION TO SUPPRESS EVIDENCE

Filed Jan 13, 1997

RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  On September 19, 1996, defendant was indicted for possession of controlled substances with the intent to distribute, a violation of 21 USC § 841(a)(1). Defendant filed a motion to suppress all evidence seized as a result of a search of defendant’s residence on or about August 7, 1996, as well as information obtained from defendant by the pretrial services officer and information contained in the alcohol and drug evaluation obtained at the request of the defendant’s attorney and submitted to pretrial services. The motion was referred to Magistrate Judge Marshall P. Young who held a suppression hearing concerning the motion on November 6, 1996. Magistrate Judge Young’s findings and recommendations are that the motion be denied. See Docket #25.

FACTS

[¶2]  On August 6, 1996, Sergeant Floyd Wilcox received a citizen’s complaint from defendant’s former father-in-law, Larry Bettelyoun, indicating that defendant had recently received a large shipment of marijuana which he was selling from his house (Tr. 64-65).

[¶3]  On the morning of August 7, 1996, Officer Peter Plenty Bulls of the Oglala Sioux Tribe Public Safety Commission was approached by Caroline Bettelyoun at the police department on an unrelated matter concerning a domestic dispute (Tr. 8-9). She sought his assistance in the retrieval of her grandchild from defendant’s residence because her daughter Carrie Bettelyoun, defendant’s girlfriend, and the defendant were fighting (Tr. 9-10). Officer Plenty Bulls agreed to accompany Caroline to defendant’s residence in an attempt to keep the peace (Tr. 8-10).

[¶4]  Officer Plenty Bulls followed Caroline to defendant’s residence which was a trailer whereupon she knocked on the door (Tr. 9). Defendant opened the door and Caroline advised him that “I came to get my grandchild because you are fighting.” (Tr. 9-10). Officer Plenty Bulls testified that defendant said “okay” and turned into the residence so they followed (Tr. 9). Officer Plenty Bulls followed Caroline into the trailer without stating his purpose for being there (Tr. 10-11). They did not ask permission to come into the trailer; however, there was no protest or objection to their entering the trailer (Tr. 10).

[¶5]  Upon walking into the trailer, the officer was in between the kitchen and the living room (Tr. 12, 25). He immediately detected a strong odor of pot or marijuana (Tr. 12). He did a visual search for signs of a disturbance and observed what appeared to be broken dishes or cups on the kitchen floor (Tr. 12, 29). He further observed on the kitchen table in front of him an ashtray with some cigarette butts, which he suspected to be marijuana (Tr. 13). He confirmed that it was marijuana by picking up one of the cigarette butts and smelling it. Id. Thereafter, the officer questioned defendant about the marijuana and informed him that he was under arrest for possession of marijuana (Tr. 14, 28).

[¶6]  At approximately 9:39 a.m., Officer Plenty Bulls used defendant’s telephone to call the dispatcher to request a criminal investigator (Tr. 14-15). Thereafter, defendant’s mother, Colleen Bettelyoun, arrived at the trailer (Tr. 16, 28-29, 54). Defendant started to clean up a broken dish in the kitchen, whereupon the officer told him to stop (Tr. 29). Defendant then picked up several roaches from the ashtray on the table, ran outside, crushed them, and threw them away (Tr. 30, 63). Defendant was handcuffed and placed in the police car (Tr. 31). The officer went and retrieved two of the roaches from the porch area on the ground. Id.

[¶7]  Sergeant Floyd Wilcox arrived on the scene shortly thereafter (Tr. 15, 32). At approximately 10:25 a.m., Criminal Investigator Lloyd Wilcox of the Oglala Sioux Tribe Public Safety Commission also arrived (Tr. 16, 54, 58). Officer Plenty Bulls apprised the other two officers about the situation as it existed at that time including his detection of the strong marijuana odor, the marijuana butts in the ashtray, defendant’s sweeping of the domestic dispute evidence, and defendant’s attempt to throw the roaches outside (Tr. 55, 59-62). Sergeant Wilcox also advised C.I. Wilcox of the August 6, 1996, tip that defendant had received some marijuana (Tr. 55, 65).

[¶8]  Officer Plenty Bulls’ police log entry at 10:25 a.m. states, “Lloyd is here, he said we have probable cause to search the residence, we are in the process of doing that now.” (Tr. 33) (Hearing Exhibit 9). Officer Plenty Bulls testified that this statement meant that they were going to apply for a search warrant, that they did not search the residence other than a “sweep” search (Tr. 33). Before the application for a search warrant was undertaken, the officers reentered the trailer and conducted a “sweep” search to discover (1) the whereabouts of defendant’s girlfriend Carrie Bettelyoun; (2) whether the propane was turned on in the trailer; and (3) additional evidence (Tr. 19, 34, 36, 65). They observed seven marijuana cigarette butts and some marijuana particles and seeds in the wastebasket (Tr. 36, 58, 78). Officer Plenty Bulls testified that during the sweep he just looked, and he did not touch or move any items (Tr. 34). However, C.I. Wilcox testified that he opened up a kitchen cabinet door, found a brown paper bag which he opened, and discovered a large amount of marijuana in two baggies (Tr. 37, 56, 77). He then closed the bag placing it in its original place and shut the cabinet door. Id.

[¶9]  Next, C.I. Wilcox called Stanley Star Comes Out, a Criminal Investigator with the Oglala Sioux Tribe Public Safety Commission, from defendant’s residence in order to obtain a search warrant (Tr. 22). C.I. Wilcox testified that he advised C.I. Star Comes Out about the Plenty Bulls’ observations, including the marijuana cigarette butts, and also the fact that he believed there was a large amount of marijuana in the house, based upon what he was told and what he observed (Tr. 66-67). Although C.I. Wilcox told C.I. Star Comes Out about the baggies of marijuana he discovered in the closed cabinet, the search warrant affidavit signed by C.I. Star Comes Out only references the marijuana cigarette butts and not the large amount of marijuana found in the kitchen cabinet (Tr. 69-70).

[¶10]  At approximately 11:38 a.m., after the “sweep” search and the discovery of the two baggies in the kitchen cabinet, Carrie Bettelyoun was located (Tr. 35, 68). She signed, as a co-resident, a consent to search the house (Tr. 18, 56, 68). However, no search was apparently conducted pursuant to her consent (Tr. 18).

[¶11]  Chief Judge Pat Lee of the Oglala Sioux Tribal Court signed a search warrant based upon the affidavit filed by C.I. Star Comes Out (Tr. 47-48). The search warrant was executed at approximately 1:35 p.m. and the items found in the inventory, Exhibit 11, were secured (Tr. 22, 76). The first item in the inventory is the seven marijuana butts which were found in a wastebasket by Officer Plenty Bulls (Tr. 76) (Hearing Exhibit 11). The second item, marijuana cigarette butts seized and residue, were found outside the house by Officer Plenty Bulls after they had been tossed there by defendant. Id. The third item, the brown Hardware Hank’s sack with the baggies of marijuana, was observed in the kitchen cabinet by C.I. Wilcox prior to the search warrant. Id. The other items contained in the inventory including the float, marijuana cigarette, sandwich baggies clamps, address book, pipe, key, safe, contents, and money, were found in the search pursuant to the search warrant. Id.

[¶12]  At the suppression hearing, three exhibits were received pursuant to the defense claim of violation of defendant’s Fifth and Sixth Amendment rights when he talked to the pretrial services officer and underwent an alcohol and drug evaluation (Tr. 79). On the pretrial services notice to defendant which he signed, defendant indicated that he did not wish to have a lawyer during his interview. See Docket #22 (Exhibit #4). The other two exhibits are authorizations by defendant to release information to the pretrial services officer and to release confidential information on drug or alcohol abuse programs. See Docket #22 (Exhibit ##5, 6).

STANDARD OF REVIEW

[¶13]  The Eighth Circuit Court of Appeals has set forth the following procedure for a district court to undertake when reviewing a magistrate judge’s findings and recommendations.

Once a proper objection is made to a magistrate judge’s finding, the district court must review that finding de novo. Taylor v. Farrier, 910 F2d 518, 521 (8th Cir. 1990); 28 USC § 636(b)(1). “In conducting [de novo] review, the district court must, at a minimum, listen to a tape recording or read a transcript of the evidentiary hearing.” Branch v. Martin, 886 F2d 1043, 1046 (8th Cir. 1989).

Jones v. Pillow, 47 F3d 251, 252 (8th Cir. 1995). Upon review of the suppression hearing transcript and consistent with the following discussion, the Court accepts Magistrate Judge Young’s recommendation to deny defendant’s motion to suppress.

DISCUSSION

[¶14]  Defendant has filed a motion to suppress the following items: (1) all evidence seized as a result of a search of the defendant’s residence on or about August 7, 1996; (2) information obtained from defendant by the pretrial services officer in violation of his Fifth and Sixth Amendment rights; and (3) information contained in the alcohol and drug evaluation obtained at the request of defendant’s attorney and submitted to pretrial services, also in violation of his Fifth and Sixth Amendment rights.

[¶15]  A.  SUPPRESSION OF EVIDENCE

[¶16]  1.  INITIAL ENTRY

[¶17]  Defendant contends that Officer Plenty Bulls’ initial entry into defendant’s trailer was unjustified; thus, the plain view doctrine is inapplicable and there was no probable cause or basis for a search warrant. It is well understood that “‘[T]he Fourth Amendment has drawn a firm line at the entrance to the house.’” United States v. Vance, 53 F3d 220, 221-22 (8th Cir. 1995) (quoting Payton v. New York, 445 US 573, 590, 100 SCt 1371, 1382, 63 LEd2d 639 (1980)). Law enforcement may not cross that line absent a search warrant unless there is consent to the search, search incident to a lawful arrest, or exigent circumstances. United States v. Selberg, 630 F2d 1292, 1294 (8th Cir. 1980). Magistrate Judge Young determined that the initial entry into the trailer was justified under both the consent and exigent circumstance exceptions to the warrant requirement.

[¶18]  Law enforcement may search an area if they obtain a voluntary consent from someone possessing adequate authority over the area. United States v. Chaidez, 906 F2d 377, 380 (8th Cir. 1990). Furthermore, “a voluntary consent need not amount to a waiver, consent can be voluntary without being an ‘intentional relinquishment or abandonment of a known right or privilege.’” Id. (citations omitted). The proper test for voluntariness is “whether the totality of the circumstances demonstrates that the consent was voluntary.” Id. The prosecution has the burden of proving voluntariness by a preponderance of the evidence. Id. “‘The touchstone of the Fourth Amendment is reasonableness.’” United States v. Sanchez, 32 F3d 1330, 1335 (8th Cir. 1994) (quoting Florida v. Jimeno, 500 US 248, 250, 111 SCt 1801, 1803, 114 LEd2d 297 (1991)). Thus, if it was reasonable for Officer Plenty Bulls to have concluded that defendant voluntarily consented to his entry into the trailer, the search passes muster under the Fourth Amendment. Sanchez, 32 F3d at 1335. Under the totality of the circumstances, this Court finds that the officer reasonably concluded that defendant voluntarily consented to his entry.

[¶19]  Officer Plenty Bulls accompanied Caroline Bettelyoun to defendant’s trailer to keep the peace. There was no evidence presented at the suppression hearing indicating that at the time Officer Plenty Bulls entered the trailer, he had any prior knowledge or reason to believe that defendant was involved in illegal drug activities, as to draw an inference that the officer was there for any ulterior motive. The evidence only indicates that Sergeant Wilcox had knowledge concerning the tip from Larry Bettelyoun from the previous day (Tr. 64-65). When Caroline, accompanied with Officer Plenty Bulls, knocked on defendant’s door, defendant opened the door and Caroline advised him that “I came to get my grandchild because you are fighting.” Officer Plenty Bulls testified that the defendant said “okay” and turned into the residence so they followed. See United States v. Shabazz, 883 FSupp 422, 426 (D. Minn. 1995) (citing United States v. Turbyfill, 525 F2d 57, 59 (8th Cir. 1975)) (defendant’s opening of a door constituted an implied invitation to enter); United States v. Donlon, 909 F2d 650, 655 (1st Cir. 1990) (determining that defendant’s opening of a screen door equated to permission to enter).

[¶20]  Officer Plenty Bulls’ testimony further indicates that defendant was fully aware that the officer was with Caroline since he was standing next to her at the door (Tr. 12). Although Officer Plenty Bulls did not specifically state his purpose for being there, defendant knew that they were there to get the child from Caroline’s initial statement to defendant. While it is also true that the officer did not specifically request permission to come into the trailer, defendant left the door open, said “okay,” and there was no protest or objection to either of them entering the trailer. See generally Shabazz, 883 FSupp at 427; United States v. Armstrong, 16 F3d 289, 295 (8th Cir. 1994) (apprising suspect of his right to refuse to consent to search, although important factor in determining voluntariness of consent, is not required for consent to be voluntary). Furthermore, there is no evidence that threats, show of force, or restraints were employed by the officer. Therefore, under the totality of the circumstances, this Court finds that the officer reasonably concluded that defendant voluntarily consented to his entry.

[¶21]  The Court further finds that in addition to defendant’s voluntary consent to enter, the officer had a right to enter under the exigent circumstances exception to the warrant requirement. According to the Eighth Circuit Court of Appeals, exigent circumstances exist “when law enforcement officials have a ‘legitimate concern for the safety’ of themselves or others.” Vance, 53 F3d at 222 (citing United States v. Antwine, 873 F2d 1144, 1147 (8th Cir. 1989)). See generally Selberg, 630 F2d at 1295; Mincey v. Arizona, 437 US 385, 392, 98 SCt 2408, 2413, 57 LEd2d 290 (1978) (“Numerous state and federal cases have recognized that the Fourth Amendment does not bar police officers from making warrantless entries and searches when they reasonably believe that a person within is in need of immediate aid.”). A reasonable warrantless entry is justified when there is a reasonable fear of harm. Vance, 53 F3d at 222 (citations omitted). The evidence of record supports the conclusion that Officer Plenty Bulls’ entry was justifiable on safety of others grounds.

[¶22]  On the morning of August 7, 1996, Officer Plenty Bulls was approached by Caroline Bettelyoun at the police department concerning a domestic dispute. She sought his assistance in the retrieval of her grandchild from defendant’s residence because her daughter Carrie Bettelyoun, defendant’s girlfriend, and the defendant were fighting. Officer Plenty Bulls agreed to accompany Caroline to defendant’s residence in an attempt to keep the peace. The officer had a legitimate concern for the safety of the grandchild, as well as for Carrie Bettelyoun who was reportedly fighting with defendant, and Caroline Bettelyoun who was attempting to retrieve her grandchild. It was not unreasonable for the officer to follow Caroline into defendant’s trailer in order to keep the peace.

[¶23]  2.  Plain View Doctrine

[¶24]  In United States v. Hughes, 940 F2d 1125 (8th Cir. 1991) the Eighth Circuit set forth the following three-prong test for a valid plain view seizure:

(1)  “the officer did not violate the Fourth Amendment in arriving at the place from which the evidence could be plainly viewed,” (2) the object’s incriminating character is immediately apparent, and (3) the officer has “a lawful right of access to the object itself.” Horton v. California, 496 US 128, 136-37, 110 SCt 2301, 2308, 110 LEd2d 112 (1990).

Id. at 1126, 1127 (quoted in United States v. Hatten, 68 F3d 257, 260 (8th Cir. 1995)). The purported plain view seizure of the marijuana cigarette butts in the ashtray meets all three requirements.

[¶25]  First, as previously set forth, Officer Plenty Bulls’ initial entrance into the trailer was lawful. Second, the incriminating nature of the evidence was immediately apparent. Upon walking into the trailer, placing him in between the kitchen and the living room, the officer immediately detected a strong odor of pot or marijuana. He did a visual search for signs of a disturbance and observed what appeared to be broken dishes or cups on the kitchen floor. He further observed on the kitchen table in front of him an ashtray with some cigarette butts, which he suspected to be marijuana. He confirmed that it was marijuana by picking up one of the cigarette butts and smelling it.

[¶26]  Third, Officer Plenty Bulls had a lawful right of access to the ashtray on the kitchen table. At the suppression hearing, there was no evidence presented that the officer opened containers or otherwise engaged in an unlawful search to discover the marijuana cigarette butts in the ashtray. The kitchen table with the ashtray was immediately to his right when he first stepped into the trailer doorway, as there was no divider between the living room and the kitchen areas (Tr. 25-26). Thus, the ashtray was clearly in plain view. Therefore, this Court concludes that the plain view seizure of the marijuana cigarette butts was valid and obtained in accordance with defendant’s Fourth Amendment rights.

[¶27]  However, the evidence seized during the sweep search was not pursuant to a valid plain view seizure. At the time of the sweep search, defendant was already arrested, handcuffed, placed in the patrol car, and probably on the way to the jail. It was not unreasonable for the police officers to reenter the trailer to turn off the propane in the trailer and to determine the whereabouts of defendant’s girlfriend Carrie Bettelyoun in light of the previous report that she had been fighting with defendant. Thus, any evidence that the officers inadvertently came across while searching for the propane shutoff or for Carrie Bettelyoun would be justifiable under the plain view doctrine. See generally Coolidge v. New Hampshire, 403 US 443, 465-66, 91 SCt 2022, 2037-38 (1971). However, C.I. Wilcox clearly did not inadvertently discover the baggies of marijuana when he opened up a kitchen cabinet door, found a brown paper bag which he opened, and discovered a large amount of marijuana in two baggies. Hughes, 940 F2d at 1126-27. The discovery of the seven marijuana cigarette butts in the wastepaper basket fails under the same analysis. The purpose of the officers’ reentry was to search for the propane shutoff and Carrie Bettelyoun, not for additional evidence prior to the arrival of a search warrant.

[¶28]  3.  Search Warrant

[¶29]  C.I. Wilcox called C.I. Star Comes Out in order to obtain a search warrant. C.I. Wilcox testified that he advised C.I. Star Comes Out about Officer Plenty Bulls’ observations, including the marijuana cigarette butts in the ashtray, and also the fact that he believed there was a large amount of marijuana in the house, based upon what he was told and what he observed. Although C.I. Wilcox told C.I. Star Comes Out about the baggies of marijuana he discovered in the closed cabinet, the search warrant affidavit signed by C.I. Star Comes Out only references the partially smoked marijuana cigarette butts and not the large amount of marijuana found in the kitchen cabinet. See Docket #22 (Exhibit #1) (Affidavit for Search Warrant). Chief Judge Pat Lee of the Oglala Sioux Tribal Court signed a search warrant based upon the affidavit filed by C.I. Star Comes Out. After a review of the affidavit for the search warrant, the Court concludes that there was sufficient probable cause for Judge Pat Lee to issue the warrant.1 As noted by Magistrate Judge Young, the marijuana cigarette butts in the ashtray, plus Larry Bettelyoun’s tip the previous day, formed the basis for the officers’ determination that there was sufficient probable cause to request a search warrant.{fn1} Therefore, the items which were discovered in the search pursuant to the search warrant which include the float, marijuana cigarette, sandwich baggies clamps, address book, pipe, key, safe, contents, and money were validly seized by law enforcement.

[¶30]  4.  Inevitable Discovery Doctrine

[¶31]  The government contends that the evidence discovered during the sweep search, which includes the two baggies of marijuana in the kitchen cabinet and the marijuana in the wastebasket, falls under the doctrine of inevitable discovery. As stated by Judge Wollman, “[t]he inevitable discovery exception to the exclusionary rule articulated in Nix v. Williams, 467 US 431, 440-50, 104 SCt 2501, 2507-12, 81 LEd2d 377 (1984), allows the government to show by a preponderance of the evidence that the evidence seized would have been discovered in any event by lawful means. Id. at 444, 104 SCt at 2509.” United States v. Halls, 40 F3d 275, 276 (8th Cir. 1994). The Court finds that the government has shown by a preponderance of the evidence that the marijuana in the kitchen cupboard and the wastebasket would have been discovered in any event during the lawful search pursuant to the search warrant.

[¶32]  Officer Plenty Bulls’ initial entry was lawful based upon consent and exigent circumstances, and the marijuana cigarette butts in the ashtray were lawfully seized under the plain view doctrine. These marijuana cigarette butts formed the basis for probable cause for the search warrant. As set forth by Magistrate Judge Young, the fact that the officers were applying for a search warrant and did not mention the unlawful search of the kitchen cabinet in the affidavit for the search warrant set in motion a search warrant that would have inevitably discovered the marijuana in the cabinet and wastebasket. See Vance, 53 F3d at 222; Murray v. United States, 487 US 533, 541-44, 108 SCt 2529, 2535-36, 101 LEd2d 472 (1988). Accordingly, defendant’s motion to suppress evidence seized at defendant’s trailer is denied.

[¶33]  B.  PRETRIAL SERVICE INTERVIEW

[¶34]  Defendant contends that the initial interview conducted by the pretrial services officer violate the defendant’s Fifth Amendment rights against self-incrimination or his Sixth Amendment right to counsel. On the pretrial services notice informing him of his rights which defendant signed, defendant indicated that he did not wish to have a lawyer during his interview. See Docket #22 (Exhibit #4). Defendant suggests that Minnick v. Mississippi, 498 US 146, 111 SCt 486, 112 LEd2d 489 (1990), precludes the government from any additional contact with the defendant where the defendant has invoked his right to remain silent and right to counsel. However, explicitly exempt from Miranda’s coverage are those “questions to secure the ‘biographical data necessary to complete booking or pretrial services.’” Pennsylvania v. Muniz, 496 US 582, 601, 110 SCt 2638, 2650, 110 LEd2d 528 (1990) (citations omitted); United States v. Reyes, 908 F2d 281, 287-88 (8th Cir. 1990) (inquiry about suspect’s name and other routine questions not interrogation because information elicited only for purposes of obtaining pretrial release). Based on the foregoing, defendant’s request to suppress information obtained from defendant and contained in the pretrial services bail report is denied.

[¶35]  C.  PENNINGTON COUNTY ALCOHOL AND DRUG EVALUATION

[¶36]  Defendant requests that all parts of the Pennington County Sheriff’s Office City/County Alcohol and Drug Program Evaluation dated October 10, 1996, except those portions submitted as an exhibit at the pretrial detention hearing on October 16, 1996, be suppressed. Defendant contends that the evaluation was obtained at defense counsel’s request and was inappropriately released by the Pennington County Sheriff’s Office to the US Probation Office without the consent of defendant or defense counsel or without notice to them, in violation of defendant’s Fifth and Sixth Amendment rights.

[¶37]  On September 24, 1996, defendant signed both an “AUTHORIZATION TO RELEASE INFORMATION TO PRETRIAL SERVICES OFFICER” and a specific “AUTHORIZATION TO RELEASE CONFIDENTIAL INFORMATION (DRUG OR ALCOHOL ABUSE PROGRAMS) UNRESTRICTED COMMUNICATION.” See Docket #22 (Exhibit ##5, 6). The authorization to release information to the pretrial services officer included medical records, as well as psychological and psychiatric records. Moreover, the specific release authorized the release of confidential information on drug or alcohol abuse programs unrestricted communication. Accordingly, defendant’s request to suppress the Pennington County Drug and Alcohol Evaluation is denied.

CONCLUSION

[¶38]  Based upon the above discussion, defendant’s motion to suppress must be denied. Officer Plenty Bulls’ initial entry was lawful based upon consent and exigent circumstances. Having established that the officer had a right to be in the trailer, the plain view seizure of the marijuana cigarette butts in the ashtray on the kitchen table was appropriate under the plain view doctrine. This discovery formed the basis for law enforcement to obtain a search warrant based on C.I. Star Comes Out’s valid affidavit of probable cause which did not include reference to the marijuana discovered in the kitchen cabinet during the sweep search. The search pursuant to the search warrant would have resulted in the discovery of the two marijuana baggies in the kitchen cabinet and the marijuana in the wastebasket even if law enforcement officials had not already been alerted to their existence. In addition, information obtained from the initial pretrial service interview and that from the Pennington County Drug and Alcohol Evaluation was lawfully obtained pursuant to the pretrial services notice and the authorizations signed by defendant. Accordingly, it is hereby

[¶39]  ORDERED that the Magistrate Judge’s findings and recommendations are accepted to the extent they are consistent with the above discussion and defendant’s motion to suppress (Docket #16) is denied.



United States v. Van Brocklin, 1997 DSD 3

UNITED STATES OF AMERICA,

Plaintiff,

v.

DARRELL DEAN VAN BROCKLIN;

Travis Edward Atterberry; Lawrence Kermit Pyatt,

A/k/a Kermit Lawrence Pyatt; and Susan Kay Hastings,

Defendants.

[1997 DSD 3]

United States District Court

District of South Dakota - Western Division

CR. 94-50067

MEMORANDUM OPINION

APPROVING FINDINGS AND RECOMMENDATIONS

Filed Jan 15, 1997

RICHARD H. BATTEY, Chief Judge

PROCEDURAL BACKGROUND

[¶1]  Pursuant to 28 USC § 636(b)(1)(B), this case was referred to Magistrate Judge Marshall P. Young for the purpose of submitting to the Court proposed findings and recommendations for the disposition of this case. On October 17, 1996, Magistrate Judge Young filed findings and recommendations relating to the claims of Thomas and Frances Buczek, James and Holly Van Brocklin, Arlan and Jean DeJong, and Keith and Marcia Moon. (Docket #641).

[¶2]  Claimants claim an interest in the property pursuant to a Proposal and Acceptance agreement signed by the claimants and John Charlson on behalf of Custom Craft Home Center, Inc. (Custom Craft). Claimants also believe that they have a possessory interest in the property involved in this claim involving four townhouses located in Lawrence County. They also claim they have an equitable interest based upon the material and labor furnished.

[¶3]  The townhouses which are the subject of this action were constructed on land acquired by Custom Craft from Darrell Van Brocklin and Cheryl Van Brocklin. Custom Craft was a corporation of which Darrell Van Brocklin and Cheryl Van Brocklin owned fifty percent and John and Cather Charlson owned fifty percent. It is the interest of Darrell Van Brocklin that the government seeks in this forfeiture arising out of Darrell Van Brocklin’s multiple convictions. See Deposition of Cheryl Van Brocklin, Ex. 10, July 30, 1996, Docket #602.

[¶4]  Petitioners were given notice of their right to object to the findings and recommendations. According to the Eighth Circuit Court of Appeals, “[O]bjections must be timely and specific to trigger de novo review by the District Court of any portion of the magistrate’s report and recommendations.” Thompson v. Nix, 897 F2d 356, 357-58 (8th Cir. 1990). On October 28, 1996, objections were timely filed to the findings and recommendations regarding Custom Craft, Thomas and Frances Buczek, James and Holly Van Brocklin, Arlan and Jean DeJong, and Keith and Marcia Moon. (Docket #658). On November 6, 1996, the government filed its response to the claimants’ objections. (Docket #662). Therefore, a de novo review is triggered by this Court pursuant to 28 USC § 636(b)(1). In performing a de novo review of the record in this case, this Court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.” See id.

[¶5]  The issue is whether the Proposal and Acceptance creates a valid, binding contract between Custom Craft and the prospective homeowners. Applying South Dakota law, the magistrate judge stated that for a contract to be valid involving the sale of land it must satisfy the statute of frauds. To satisfy the statute of frauds the agreement must “contain all material terms and conditions of the oral agreement between the parties.” The magistrate judge noted that at the hearing the parties who testified stated that “the Proposal and Acceptance did not define the terms of the agreement between the prospective homeowners and Custom Craft but instead was prepared to assist Custom Craft in obtaining construction loan financing from Norwest Bank.” There was otherwise no building contract as such. Magistrate Judge Young stated that South Dakota does not recognize a statute of frauds exception for part performance. The magistrate judge concluded that “[b]ecause the Proposal and Acceptance was not a valid contract between the parties defining the terms and conditions of the construction of the townhouses and because there is no consideration and no meeting of the minds, it is my finding and recommendation that it does not create a valid lien against the premises.” It was also pointed out by Magistrate Judge Young that petitioners may be entitled to mitigation after the sale of the property if the “sweat equity” of the petitioners which arose after the filing of the lis pendens by the government increased the value of the premises.

FACTUAL BACKGROUND

[¶6]  Custom Craft obtained four construction mortgages so that it could build four townhouses for its employees, James Van Brocklin, Keith Moon, Thomas Buczek, and Arlan DeJong. Norwest Bank has a first mortgage on each townhouse. The claimants completed a form entitled “Proposal and Acceptance.” These documents were completed in order to provide documentation so that Custom Craft could obtain financing for the proposed townhouse project. (TR 18:5-19:5; 23:22-24:1). The Proposal and Acceptance of Thomas and Frances Buczek was dated November 5, 1993. The Proposal and Acceptances of James and Holly Van Brocklin and Arlan and Jean DeJong were dated November 4, 1993. Keith and Marcia Moon’s Proposal and Acceptance agreement is undated.

[¶7]  In June of 1993, ground was broken on the townhouse project. (TR 9:20). Two months later, on August 18, 1994, Darrel Van Brocklin was indicted. Claimants were employees of Custom Craft and the government seeks forfeiture of Van Brocklin’s interest in Custom Craft. The claimants testified they were aware of Darrell Van Brocklin’s indictment. Four days later, on August 22, 1996, the government filed a lis pendens on the four townhouses. The claimants admit they had actual notice of the lis pendens. Actual notice not withstanding they would have received constructive notice pursuant to South Dakota Codified Laws Ch. 5-10. Despite actual notice of the filing of the lis pendens all the claimants continued to expend money and time in the preparation of the townhouses. Prior to the time of the filing of the lis pendens, the Moons had expended $500, the DeJongs had expended $798.40, and the Buczeks had expended $713. Following the filing of the lis pendens, the Moons, DeJongs, and Buczeks expended $12,009.66, $14,256.12, and $17,485.57, respectively.

[¶8]  Keith Moon testified that the townhouse project came about when he worked for John Charlson. At the time of the project, Charlson was a shareholder in Custom Craft. (TR 7:21-25). Charlson had told Mr. Moon that if he wanted to build his own home that he could do it at Custom Craft’s cost. (TR 8:1-2) It was several years later before Mr. Moon could proceed with the townhouse project.

[¶9]  According to Mr. Moon, the project started with the foundation work. (TR 9:23-25). The Moons were not responsible for pouring the foundation. (TR 10:20). Mr. Moon testified that the townhouse owners built all the aerial walls for the foundation work and did all the coating on the structures. (TR 9:23-25). Mr. Moon testified that his arrangement with Custom Craft was that he and his wife were supposed to do the “painting, trim work, carpet and vinyl, putting in the cabinets, and the dirt work, and things similar to these.” (TR 10:7-12).

[¶10]  Mr. Moon stated that the Proposal and Acceptance Agreement was “written so the bank for appraisal purposes [would] know what’s included in the project and what is not.” (TR 18:5-19:5). Mr. Moon said that the materials were Custom Craft’s obligation and any labor above $65,000 was Mr. Moon’s obligation. (TR 19:9-20:5). Exhibit 4, the Performance and Acceptance Agreement signed by the Moons and Charlson, states that “we propose hereby to furnish material and labor.” Mr. Moon explained that the materials and labor furnished by Custom Craft was for the sum of $65,000 but admitted the agreement, Exhibit 4, did not specify what items or labor were considered to be above the $65,000. (20:2-5).

[¶11]  The Moons are claiming a total of $12,509.66. (Exhibit 1). According to Mr. Moon, $500 of that was expended before August 23, 1994, the date the government filed the lis pendens on the four townhouses involved in this claim. (TR 11:6-10; see also Exhibit 8). The $500 included $100 for the foundation coating, $200 for building design, and $100 for legal paperwork. (TR 11:12-20). Mr. Moon testified that the expenses listed in Exhibit 1 were not performed while he was an employee of Custom Craft. (TR 13:21-14:11). Moon also stated that the $500 in expenses was on behalf of the entire project and not just his townhouse individually. (TR 14:16-24).

[¶12]  The Proposal and Acceptance signed by Charlson and the Moons is not notarized and does not contain an accurate legal description. (TR 12:22-13:1). The Moons did not pay any down payment at the time the agreement was signed. (TR 13:2-5). According to the Proposal and Acceptance Agreement, “Payment [was] to be made as follows: during construction and final at closing.” (Exhibit 4). No payment was made by the Moons during construction. (TR 16:5-24). Mr. Moon testified that the closing of the townhouse never occurred. (TR 13:12-14). He stated that the Proposal and Acceptance was “written to give the bank a figure to develop a long-term financing loan ...” and was not written to define the parties’ responsibilities in the project. (TR 23:22-24:1). He stated that Exhibit 4 defined what would be included in the project upon completion. (TR 24:6-10). Mr. Moon testified that he considered the Proposal and Acceptance a binding document that he was going to buy this particular piece of property. (TR 25:1-3).

[¶13]  Mr. Moon understood that Darrell Van Brocklin was a shareholder in Custom Craft and president of the company. (TR 15:8-12; 25:23-26:9).

[¶14]  Arlan and Jean DeJong also built one of the four townhouses at issue. Mr. DeJong was also employed by Custom Craft at the time the Proposal and Acceptance was signed. (Exhibit 3). Both the DeJongs testified at the hearing. The DeJongs claim that they have expended $15,054.52 on the townhouse project. (TR 30:22-23; see also Exhibit 7). Prior to the filing of the lis pendens the DeJongs spent $798.40 and after the filing $14,256.12. (TR 30:17-21). The $798.40 was expended on the following: $653.40 in a loan commitment fee; $45 for a credit report; and $100 for labor. (TR 30:24-31-2).

[¶15]  Mrs. DeJong testified that she did not believe the construction of the town homes would be affected by the Van Brocklin indictment. (TR 32:1-4). She stated that the loan relating to the loan commitment fees was never closed because of the filing of the lis pendens. (TR 32:12-15). According to her, the DeJongs do not have any record ownership in the townhouse. (TR 32:16-18). However, they have claimed an interest in the property. (TR 33:2-7). The basis for the DeJongs’ claim, according to Mrs. DeJong, is reflected in Exhibit 3, the Proposal and Acceptance agreement signed by the DeJongs and Charlson. Mrs. DeJong stated that there was no contractual agreement which clearly indicated that it was her and her husband’s responsibility to complete the basement’s foundation and coating work. (TR 33:12-20).

[¶16]  The DeJongs moved into the townhouse on December 27, 1994. (TR 35:3-6). The DeJongs made $600 monthly payments to Custom Craft to cover the interest on the construction loan which Custom Craft had with Norwest because Custom Craft could no longer make those payments. (TR 35: 13-25). The first payment of $600 was made to Custom Craft on March 24, 1995. (Exhibit 7). The last payment was made on January 9, 1996, directly to Norwest.

[¶17]  Mr. DeJong testified as follows regarding the agreement between Custom Craft and the DeJongs:

Well, Custom Craft -- this is a standard contract that we wrote that listed what we were to receive, the building as it would be completed. And to keep costs down besides buying the materials at cost, it was agreed that we do -- this is basically a verbal agreement; we would do much of the construction work ourselves, finishing; I did a little bit of framing, but basically installed carpet, painting. A lot of this work and some of this work like the finishing of the coatings on the cement work, the subcontractors simply subtracted that much from what he charged Custom Craft, and so this was a verbal agreement just to keep the costs down.

(TR 38:9-20). The DeJongs did not make any down payment at the time they signed the Proposal and Acceptance. (TR 39:23-25). Mr. DeJong testified that he was aware that there was a lis pendens filed which affected the title to his property. (TR 40:22-25). Mr. DeJong stated that Exhibit 3, the Proposal and Acceptance, did not define the terms of his agreement with Custom Craft. (TR 41:4-7). He stated that his testimony would be similar to Mr. Moons’ that some items in the agreement were items that the employees were required to perform on their own time. (TR 41:8-10).

[¶18]  Frances Buczek testified that $713 was spent prior to the filing of the lis pendens. (TR 43:6-10). The $713 included the following: $413 for a loan application fee; $100 for building the basement window frames; $100 for coating the foundation; and $100 for construction cleanup. (TR 43:17-19). Mrs. Buczek testified that $600 monthly payments were first made to Custom Craft for interest on Custom Craft’s loan with Norwest. (TR 44:16-24). She stated that later they started making the payments to Norwest. (TR 44:16-24).

[¶19]  Counsel for the Buczeks also stipulated that the answers of Mrs. Buczek would be similar to those of the other claimants regarding the Proposal and Acceptance between the Buczeks and Custom Craft. (TR 46:7-12; see also Exhibit 2).

[¶20]  Neither James nor Holly Van Brocklin testified at the evidentiary hearing.

STANDARD OF REVIEW

[¶21]  The Eighth Circuit Court of Appeals has set forth the following procedure for a district court to undertake when reviewing a magistrate judge’s findings and recommendations.

Once a proper objection is made to a magistrate judge’s finding, the district court must review that finding de novo. Taylor v. Farrier, 910 F2d 518, 521 (8th Cir. 1990); 28 USC § 636(b)(1). “In conducting [de novo] review, the district court must, at a minimum, listen to a tape recording or read a transcript of the evidentiary hearing.” Branch v. Martin, 886 F2d 1043, 1046 (8th Cir. 1989).

Jones v. Pillow, 47 F3d 251, 252 (8th Cir. 1995). The Court “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” 28 USC § 636(b)(1) (emphasis added). In assessing this matter, this Court has performed a de novo review which included consideration of the actual testimony of the hearing transcript and any exhibits presented at the evidentiary hearing.

DISCUSSION

[¶22]  Claimants have listed five objections to the findings and recommendations filed by Magistrate Judge Young. Claimants’ objections are summarized as follows: (1) to the magistrate judge’s finding “distinguishing post lis pendens filing work from prior work;” (2) to his finding that claimants did not rely upon the Proposal and Acceptance; (3) to his finding that “[t]he townhouse claimants paid nothing, either as a down payment or during the construction phase as provided for in the Proposal and Agreement;” (4) to his finding that the oral agreements between the claimants and Custom Craft differed from the Proposal and Acceptance as to the items which Custom Craft was to provide in the construction of the townhouses; and (5) to his finding that claimants’ sweat equity was “invested after financing had been refused, rendering closing impossible.”

[¶23]  “De novo review of those portions of the magistrate’s report and findings to which a party timely objects is mandated by statute, 28 USC § 636(b)(1) ... .” Taylor, 910 F2d at 520; see also Jones, 47 F3d at 252; Belk v. Purkett, 15 F3d 803, 815 (8th Cir. 1994); Thompson, 897 F2d at 357 (stating, “If written objections are filed, the District Court shall conduct the required de novo review as to those portions of the magistrate’s report and recommendation to which objection is made”) (citing 28 USC § 636(b); Branch, 886 F2d at 1045-46). Therefore, this Court as required will perform a de novo review of the specific objections of the claimants.

I. REVIEW OF LEGAL CONCLUSIONS

[¶24]  This Court must first review the legal conclusions reached by the magistrate judge. After reviewing the legal conclusions, this Court will consider the objections made by the claimants and if those findings have any effect on the legal conclusions reached by this Court.

[¶25]  This Court must apply the applicable law when determining the issues in this case. Federal law is used when interpreting the meaning of terms in a federal statute, United States v. BCCI Holdings (Luxembourg), 48 F3d 551, 554 (D.C. Cir. 1995) (citations omitted), but in forfeiture actions, ownership of property is determined by state law. United States v. Lester, 85 F3d 1409, 1412 (9th Cir. 1996).

A. DID THE PARTIES INTEND THE PROPOSAL AND ACCEPTANCE TO BE A CONTRACT FOR THE SALE OF LAND?

[¶26]  The issue is whether the Proposal and Acceptance was a valid contract for the sale of land. Even if the Proposal and Acceptance is a valid contract, meaning that the four elements of SDCL § 53-1-21. Elements essential to existence of a contract are:

(1)  Parties capable of contracting;

(2)  Their consent;

(3)  A lawful object; and

(4)  Sufficient cause or consideration.{fn1} are satisfied, a court should not “create a contract for the parties which they did not intend.” Amdahl v. Lowe, 471 NW2d 770 (SD 1991). According to South Dakota law, if a writing is ambiguous parol evidence may be introduced to establish the intention of that writing when it was entered into by the parties. Delzer Constr. Co. v. South Dakota State Board of Transp., 275 NW2d 352, 355 (SD 1979). The issue of whether a contract is ambiguous is a question of law to be resolved by a court. Id. The intention of the parties is a question of fact to be resolved by the jury, the finder of fact. Id. (party had moved for summary judgment and the court held that what the parties intend under the contract is a question of fact for the jury). Given the posture of this case, this Court is the finder of fact. Therefore, this Court must first consider if the Proposal and Acceptance is ambiguous. If this Court concludes that the Proposal and Acceptance is ambiguous, then this Court must look to the intent of the parties when they entered into it. The Court cannot make a contract where none exists. The parties claiming a contract have the burden and responsibility to complete the contract according to the law of contracts. They have not met the burden here.

[¶27]  According to South Dakota law, a contract may be “ambiguous when ‘it is reasonably capable of being understood in more than one sense.’” Enchanted World Doll Museum v. Buskohl, 398 NW2d 149 (SD 1986). This Court finds that the Proposal and Acceptance may reasonably be understood in more than one sense. The Proposal and Acceptance is ambiguous in that it does not on its face clarify that it was an agreement for the sale of the townhouses.

[¶28]  As to the intent behind the Proposal and Acceptance, the testimony revealed that the agreement was created to provide the bank with a statement of what would be included in the finished product so that Custom Craft could obtain financing for the project. Mr. DeJong testified that the Proposal and Acceptance was “a standard contract that we wrote that listed what we were to receive, the building as it would be completed.” The testimony of the claimants was that the Proposal and Acceptance did not clarify the responsibilities between the claimants and Custom Craft. (TR 33:12-20; TR 38:9-20). Mrs. DeJong testified that “there was no contractual agreement which clearly indicated that it was her and her husband’s responsibility to complete the basement’s foundation and coating work.” Only one claimant, Mr. Moon, testified that he thought the Proposal and Acceptance created a binding document for the sale of the townhouses. (TR 25:1-3). Mr. Moons’ testimony regarding the Proposal and Acceptance is conflicting. Mr. Moon also testified that the Proposal and Acceptance was “written so the bank for appraisal purposes [would] know what’s included in the project and what is not.” (TR 18:5-19:5). Mr. Moon explained that the materials and labor furnished by Custom Craft was for the sum of $65,000 but admitted the agreement, Exhibit 4, did not specify what items or labor were considered to be above the $65,000. (TR 20:2-5). According to Mr. Moon, the agreement creates a binding document for the sale of land but the document is not binding as to the duties for which the agreement states that Custom Craft would be responsible. Given the testimony of the other claimants and Mr. Moon, the Court concludes that the intent of the Proposal and Acceptance was to create a document which would show what would be included in the finished product so that the document could be presented to a bank in an effort to obtain financing, not an agreement for the sale of real estate.

B. CONSIDERATION

[¶29]  This Court will discuss the issue of consideration since both plaintiff and claimants presented the issue and the magistrate judge’s legal conclusion was based in part on the fact that the claimants did not give any consideration to Custom Craft.

[¶30]  For the Court to be required to amend the forfeiture order, the standard which must be established by the claimants is set forth in 21 USC § 853 (n)(6) as follows:

(6)  If, after the hearing, the court determines that the petitioner has established by a preponderance of the evidence that—

(A)  the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B)  the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section;

the court shall amend the order of forfeiture in accordance with its determination.

21 USC § 853(n)(6) (emphasis added).

[¶31]  The applicable standard in this case is 21 USC § 853(n)(6)(B). In interpreting the meaning of 21 USC § 853(n)(6)(B) the Court in United States v. Reckmeyer stated as follows:

The legislative history of § 853(n)(6)(B) convinces us that Congress intended to permit general creditors who give value to the forfeited estate in an arm’s-length transaction to recover. We hold that general creditors who have a legal interest in the forfeited estate and who gave valuable consideration to the estate without knowledge of the potential forfeitability of the defendant’s assets may recover the value so conveyed under § 853(n)(6)(B).

Reckmeyer, 836 F2d at 207 (4th Cir. 1987) (emphasis added).

[¶32]  The government urges and the magistrate judge concluded that the contract between the parties did not satisfy the element of consideration. The South Dakota Supreme Court has established that a promise to pay constitutes consideration. State v. Murphy, 48 NW2d 225, 226 (SD 1951); See also Heinert v. Home Fed. Sav. & Loan Ass’n, 444 NW2d 718, 721 (SD 1989) (mutual promises are sufficient to constitute consideration). However, given that the intent of the Proposal and Acceptance was not to create a contract for the sale of land but to provide information to the bank for financing purposes, in signing the agreement the parties involved were not making mutual promises to each other for the sale of the townhouses. The parties did not have a “meeting of the minds.” See SDCL 53-3-3 (“consent is not mutual unless the parties all agree upon the same thing in the same sense”).

[¶33]  Another element required to create a valid contract is consent. See SDCL § 53-1-2. In Amdahl, one issue for the Court was whether the seller consented to the sale of 880 acres of land. Amdahl, 471 NW2d at 774. According to the court, “A party’s intentional conduct which constitutes a manifestation of assent will bind a party even though the party’s conduct does not truly express his or her state of mind.” Id. In Amdahl, the seller of the property had signed a statement to sell 880 acres. Id. The seller later attempted to argue that she intended to consent to the sale of 400 acres not 880. Id. The court in Amdahl concluded that the seller had consented to the sale of 880 acres. Id. The court noted, “Where, as here, the agreement describes the subject matter and the description does not admit of two meanings, the fact that one of the parties thought it was something else does not affect the contract.” Id. In this case as discussed above, the Proposal and Acceptance is not clear as to the meaning to the document. Also, the combined testimony of the claimants leads this Court to the conclusion that the intent of the Proposal and Acceptance was to state what would be included in the townhouses when they were finished so that Custom Craft could obtain financing for the project. The intent of the Proposal and Acceptance was not to create an agreement for the sale of land; therefore, the document did not create a binding document to sell the townhouses to the claimants. Given that the Proposal and Acceptance was not intended a contract for the sale of land, there is no consideration or consent creating a valid contract.

C.  STATUTE OF FRAUDS

[¶34]  SDCL 53-8-2 states, in part, as follows:

Contracts required to be in writing--Statute of Frauds. The following contracts are not enforceable by action unless the contract or some memorandum thereof is in writing and subscribed by the party to be charged or his agent, as authorized in writing: ...

(3)  An agreement for sale of real estate or an interest therein, or lease of the same, for a period longer than one year. However, this does not abridge the power of any court to compel specific performance of any agreement for sale of real estate in case of part performance thereof; . ...

SDCL § 58-8-2 (1990). The South Dakota Supreme Court has stated as follows regarding the requirements necessary to meet the statute of frauds, “The writing referred to in SDCL [§ ] 53-8-2 need not be in one document, the writings may consist of disjointed memoranda or protracted correspondence. As long as the substance of the contract can easily be inferred from the various writings, the requisites of the statute are met.” Wiggins v. Shewmake, 374 NW2d 111, 115 (SD 1985). This Court must consider whether the Proposal and Acceptance is a sufficient writing to satisfy the statute of frauds.2. If there is not a contract (oral or written) for the sale of land, then it is not necessary for the Court to determine if the statute of frauds was met. The majority of the testimony at the evidentiary hearing regarding the oral agreements between Custom Craft and the claimants dealt with the fact that the oral agreements established who was responsible for what in the completion of the townhouses. Claimants did not testify that there were oral agreements which created a contract for the sale of land. However, it is apparent to this Court that claimants must have thought that they had a contract for the sale of the real estate or the claimants would not have continued to spend their own money in an attempt to complete the project. Therefore, this Court will consider if the writing, in this case the Proposal and Acceptance, is sufficient to satisfy the statute of frauds.{fn2}

[¶35]  First, this Court must look to federal law to determine what is meant by the term “interest” as used in section 853(n)(6)(B). The Fourth Circuit stated as follows when construing what Congress meant by “interest in the property:”

We begin with the “assumption that the legislative purpose is expressed by the ordinary meaning of the words used.” Richards v. United States, 369 US 1, 9, 82 SCt 585, 591, 7 LEd2d 492 (1962). The Supreme Court has held that the term “interest” “comprehends all forms of real and personal property.” Russello v. United States, 464 US 16, 21, 104 SCt 296, 299, 78 LEd2d 17 (1983). The Court referred with approval to Black’s Law Dictionary’s broad construction of “interest” as “‘[t]he most general term that can be employed to denote a right, claim, title, or legal share in something.’” Id. at 21, 104 SCt at 299 (quoting Black’s Law Dictionary 729 (5th ed. 1979)). Black’s Law Dictionary defines a “legal interest” as an “interest in property or in claim cognizable at law in contrast to equitable interest.” Id. at 805. Thus the term “legal interest” encompasses all legally protected rights, claims, titles, or shares in real or personal property.

Reckmeyer, 836 F2d at 205. Using the definition of interest set forth in Reckmeyer, this Court must consider whether the claimants have a “right, claim, title, or legal share” in the townhouses.

[¶36]  Under South Dakota law, in order for claimants to have a “right, claim, title, or legal share” in the townhouses the statute of frauds must be satisfied. South Dakota law requires that a valid contract for the sale of real property must satisfy the statute of frauds. See SDCL § 53-8-2. If the statute of frauds is not satisfied, the writing is not admissible for the purpose of enforcing the contract. Brauger v. Snow, 405 NW2d 643, 646 (SD 1987). The South Dakota Supreme Court has set forth what is required under the statute of frauds for a contract involving the sale of real estate:

The statute of frauds requires that contracts for the sale of land must not only be in writing and signed by the party who is to be charged, but the writing must contain all the material terms and conditions of the oral agreement between the parties. Boekelheide v. Snyder, 71 SD 470, 26 NW2d 74 (1947); Carpenter v. Murphy, 40 SD 280, 167 NW 175 (1918); Phelan v. Neary, 22 SD 265, 117 NW 142 (1908). To satisfy the statute of frauds, a memorandum for the sale of land must describe the land, the price, and the contracting parties; it need not detain the form or delivery of the deed, the time and place of payment, or any other matters. 2 A. Corbin, Corbin on Contracts, Section 499 (1950) (Corbin on Contracts). See Boekelheide, 71 SD at 475, 26 NW2d at 77; Phelan, 22 SD at 268-9, 117 NW at 144. The statute of frauds requires only the writing evidence the substance of the contract. Wiggins v. Shewmake, 374 NW2d (111), at 114 (SD 1985); Aamot v. Eneboe, 352 NW2d 647 (SD 1984); Drake v. Sample, 279 NW2d 685 (SD 1979). There is no fatal ambiguity if the contract terms are sufficiently certain to make the acts required of each party clearly ascertainable. Wiggins, 374 NW2d at 115.

Amdahl v. Lowe, 471 NW2d 770, 774-75 (SD 1991). It is not required that “[t]he memorandum ... embody the exact terms of the contract, ‘it is sufficient that the substance of a contract for the purchase of real property is inferred from the writing[.]’” Wiggins, 374 NW2d at 114.

[¶37]  In Amdahl, the court concluded that the memorandum contained a general description of the land, that the purchase price was described, that the parties were identified, and the memorandum “set forth the essential terms in sufficient detail to determine the obligations of each party.” The Proposal and Acceptance between the claimants and Custom Craft does not satisfy the statute of frauds because the acts required of each party are not clearly ascertainable. See Amdahl, 471 NW2d at 475. The claimants testified that the Proposal and Acceptance was an agreement telling the bank what would be included in the project once it was completed and not an agreement clarifying the duties of the parties. The testimony of the claimants at the hearing revealed that the parties had established oral agreements which determined the responsibilities between the parties. The claimants have not pointed to any writings which clarify the duties of the parties. The substance of the agreement regarding the duties of the parties is part of an oral agreement and no writings exist which clarify those duties. These duties are material to the writing because they are essential in establishing what is included in the $65,000 price set forth in the proposal and acceptance which was to be paid by the claimants.

[¶38]  The claimants also urge that the part performance by them creates an exception to the statute of frauds. The Magistrate Judge, relying on Werner v. Norwest Bank South Dakota, concluded that South Dakota does not extend the part performance exception to the statute of frauds. Werner v. Norwest Bank South Dakota, 499 NW2d 138, 141 (SD 1993). The court in Werner stated, “[T]his Court has not recognized ... that we extend statute of frauds exceptions to include part performance.” Id. (citing 73 AmJuR2d Statute of Frauds, § 408, at 36 (1974)). The court concluded, “that the actions by Werner were performed either subsequent to the alleged contract or without justifiable reliance, we find no reason to consider adopting the [part performance] exception at this time.” Id. The Werner case dealt with an agreement to loan money and whether it should have been in writing; it did not deal with the sale of real estate. Taken in context, the court’s statement in Werner may have only dealt with an exception of part performance as to the provision of the statute of frauds requiring a writing to enforce a contract involving an agreement to loan money.

[¶39]  In this case, claimants have requested specific performance of the townhouses. However, SDCL § 53-8-2 permits a part performance exception to the statute of frauds when an individual is requesting specific performance. In Skjoldal v. Myren, the South Dakota Supreme Court stated, “To constitute part performance, the facts relied upon must be unequivocally and, ordinarily, exclusively referable to the contract.” Skjoldal, 191 NW2d 809, 813 (SD 1971) (citing 81 C.J.S. Specific Performance § 54, p. 538). See also Austin v. Cash, 906 P.2d 669, 673 (Mont. 1995). As stated previously, the contract involved in this case did not clearly state the responsibilities of the parties. Therefore, any part performance by the claimants was not clearly expressed in the Proposal and Acceptance who would be responsible for what given that the parties had oral agreements designating their duties.

D. SPECIFIC PERFORMANCE

[¶40]  Under South Dakota law for specific performance to be permitted “the contract with all its material terms and conditions must be proved by evidence so clear and satisfactory the mind of the trial court as to leave no doubt of the agreement.” Skjoldal, 191 NW2d at 811. South Dakota law requires that an obligation may not be specifically enforced if the terms of the agreement “are not sufficiently certain, to make the precise act which is to be done clearly ascertainable.” See 21-9-2(6).

[¶41]  In this case, the precise acts of the parties are not clearly ascertainable. The claimants testified that the agreement did not clarify who was responsible for the performance of specific duties in the construction of the townhouses. Mr. Moon testified that the agreement was not specific as to what labor was considered to be over the $65,000 contract price. Claimants testified that oral agreements with Custom Craft established who was responsible to perform specific duties in the construction of the townhouses. Even after hearing the oral testimony of claimants, the Court is not certain as to who was required to perform which jobs and the magistrate judge concluded the testimony of who was required to perform what jobs conflicts with the duties listed in the Proposal and Acceptance. Specific performance could not be awarded in this case because the material terms and conditions of the Proposal and Acceptance did not provide evidence so clear as to leave no doubt in the mind of this Court.

[¶42]  In Sabow v. Hall, 323 NW2d 861, 863 (SD 1982), the South Dakota Supreme Court stated,

It is clear from these facts and circumstances that the parties did not intend the offer and agreement to purchase to be a final or complete agreement on the terms and conditions of sale. The offer and agreement to purchase is therefore not a contract upon which specific performance could be based.

Id. Given the testimony of the claimants at the evidentiary hearing, it is also clear that in this case the parties did not intend the Proposal and Acceptance to be the final terms of their conditions for sale. Claimants testified that it was not meant to define the agreements of the parties but was meant as a vehicle for Custom Craft to obtain financing for the project. Since the agreement was not meant to be a final or complete agreement, the Court may not award specific performance to the claimants.

[¶43]  The third reason why specific performance may not be permitted in this case is established in SDCL § 21-9-4. That statute states as follows:

Mutuality of remedy or full performance by plaintiff required for specific performance. Neither party to an obligation can be compelled specifically to perform it, unless the other party thereto has performed, or is compellable specifically to perform, everything to which the former is entitled under the same obligation, either completely or nearly so, together with full compensation for any want of entire performance.

SDCL § 21-9-5 (1987). In this case, neither party was able to fulfill their obligation and neither party is entitled to specific performance. Custom Craft was unable to convey title because of the filing of the lis pendens and the claimants were unable to obtain financing so they could not pay “the rest” of the money due to Custom Craft at closing. “Mutuality of remedy” is not present; therefore, claimants are not entitled to specific performance.

[¶44]  The court in Reckmeyer required both a “legal interest” and “valuable consideration” for a claimant to recover under section 853(n)(6)(B). Without a valid contract at law for the sale of land, a claimant does not have a legal interest in the property. The parties do not have a contract for the sale of real estate which satisfies the statute of frauds; therefore, claimants do not have an interest in the property as required by section 853(n)(6)(B).

II. REVIEW FACTUAL FINDINGS

[¶45]  Claimants object to the magistrate judge’s distinguishing between work done prior to and following the filing of the lis pendens.3. The lis pendens was filed by the government on August 22, 1994.{fn3} Whether the claimants performed the work prior to or following the filing of the lis pendens is irrelevant given the legal conclusion reached. If claimants do not have a legal interest in the property, then pursuant to 21 USC § 853(n)(6) the Court is not required to amend the forfeiture order; therefore, when work was done by the claimant is irrelevant. When the work was done by the claimants may come into play when determining if the claimants have any equitable remedies at a mitigation hearing.

[¶46]  Claimants’ second objection is to the magistrate judge’s conclusion that the claimants did not rely on the Proposal and Acceptance. In reviewing the record, that Court finds only one express statement that could constitute reliance on the part of any of the claimants involved. Mr. Moon testified that he considered the Proposal and Acceptance a binding document that he was going to buy this particular piece of property. (TR 25:1-3). This Court believes that the record is clear. If the parties had not relied on the fact that they had an agreement with Custom Craft for the purchase of the townhouses, the parties would not have extended the money which they extended during the construction of the townhouses. However, the claimants have not alleged that the parties’ reliance should estop the government from arguing that the statute of frauds and that therefore a valid contract did not exist between the parties.4. In concluding that the claimants relied on the fact that they believed they had a binding contract for the sale of real estate with Custom Craft, this Court in no way is implying that this reliance was justified. It is not necessary for the Court to consider that issue.{fn4} The fact that reliance exists does not change the legal conclusion reached by this Court. Reliance may also come into play if the Court had concluded that South Dakota recognized part performance as an exception to the statute of frauds.

[¶47]  Claimants’ third objection is to the magistrate judge’s conclusion that “[t]he townhouse claimants paid nothing, either as a downpayment or during the construction phase as provided for in the Proposal and A[cceptance].” The claimants argue that serious money was expended during the construction phase. Placing claimants’ objection in context, the magistrate judge stated,

The claimants argue that because Norwest Bank at the time of the loan was an innocent bona fide purchaser, the townhouse claimants should be entitled to the same treatment. The difference here is that the bank gave consideration of $65,000 per townhouse to Custom Craft for their note and mortgage. The townhouse claimants paid nothing, either as a downpayment or during the construction phase as provided for in the Proposal and Acceptance.

The magistrate judge’s statement related to the fact that the claimants had not paid any consideration to Custom Craft. Given the Court’s conclusion above, the claimants’ objection does not change the legal conclusion reached by this Court.

[¶48]  Claimants’ fourth objection to the findings and recommendations of the magistrate judge is an objection based on a factual finding and not a legal conclusion. The magistrate judge stated,

The testimony by the prospective homeowners was that the Proposal and Acceptance did not define the terms of the agreement between the prospective homeowners and Custom Craft, but instead was prepared to assist Custom Craft in obtaining construction loan financing from Norwest Bank. The homeowners testified that they had oral agreements between themselves and Custom Craft whereby they were to perform sweat equity, including providing carpeting, painting, trim labor, vinyl floor coverings, installation of cabinets, and dirt work.

The Proposal and Acceptance indicates that Custom Craft was to provide these items.

Claimants argue that the only conflict between the two agreements is that the agreement said “carpet.” However, the Court’s reading of the transcript reflects that there are additional conflicts which exist. Mr. Moon stated that he and his wife were responsible for the “painting, trim work, carpet and vinyl, putting in the cabinets, and dirt work.” However, the Proposal and Acceptance stated also refers to painted objects and trim of the doors. In addition, the Proposal and Acceptance that Custom Craft “propose[d] to furnish material and labor” in accordance with the specifications listed in the proposal. However, Mr. Moon testified that the labor above the $65,000 cost to Custom Craft was to be provided by the townhouse owners. Mr. Moon testified that this was not contained within the Proposal and Acceptance agreement. This Court concludes that conflicts did exist as to the agreement. This Court finds that conflict exists at least as to which party was to perform the carpeting, tile work, and painting. However, the extent of the conflict does not change this Court’s legal conclusion that the Proposal and Acceptance was not a binding contract for the sale of land under South Dakota law.

[¶49]  Once again, claimants’ fifth objection also fails to have any binding effect on the legal conclusion reached by this Court. Claimants object to the following statement made by the magistrate: “Indeed, the sweat equity was invested after financing had been refused, rendering closing impossible.” Claimants argue that financing was accepted, not rejected. Claimants’ financing was originally approved; however, after the lis pendens was filed financing was rejected. (TR 32:12-15). At least some sweat equity could have been performed prior to financing being refused, since the claimants testified to some “sweat equity” which was performed prior to the filing of the lis pendens. However, the relevant date is the date on which the lis pendens was filed. In addition, this objection is immaterial as to the conclusions of law reached by this Court.

CONCLUSION

[¶50]  Based upon the record in this case, this Court adopts the magistrate judge’s findings. This Court holds that the Proposal and Acceptance agreement between the parties did not constitute a contract to sell real estate. A valid contract creating ownership rights in the townhouses was not created since the writings involved failed to satisfy the statute of frauds. As stated elsewhere in this opinion, the Court cannot make a contract between the parties. At best this Proposal and Acceptance was a financing document. The arrangement between Custom Craft and the claimants, employees of Custom Craft, was an oral agreement coupled with part performance. The claimants have failed to meet the elements set forth in 28 USC § 636(n)(6)(B) by a preponderance of the evidence. Claimants have failed to establish an interest in the townhouses as required by section 636(n)(6)(B). Claimants are not entitled to specific performance under South Dakota law.

[¶51]  This Court has not yet addressed whether claimants may be entitled to an equitable remedy based on the dollars extended by the claimants in “sweat equity.” This Court agrees with the magistrate judge that if the “sweat equity” by the claimants increased the value of the property subject to forfeiture, claimants may be eligible to be reimbursed at a mitigation hearing following the sale of the property.



Berry v. Assembly of God, 1997 DSD 4

JACOB O. BERRY,

Plaintiff,

v.

ASSEMBLY OF GOD,

Defendant.

[1997 DSD 4]

United States District Court

District of South Dakota - Western Division

CIV. 96-5061

MEMORANDUM OPINION GRANTING

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

Filed Jan 29, 1997.

RICHARD H. BATTEY, Chief Judge

PROCEDURAL HISTORY

[¶1]  On July 31, 1996, plaintiff Jacob Berry filed a complaint against defendant Assembly of God. On October 7, 1996, Berry’s first amended complaint was filed and on November 6, 1996, he moved this Court to permit him to file a second amended complaint. The Court granted Berry’s motion to amend on November 15, 1996. Berry’s second amended complaint alleges that a previous pastor of the Assembly of God, Morris Conklin, delivered him to Satan. As a result, Berry stated that he has suffered loss of property, destruction of livestock, and legal problems occurring on Satanic feast days. Berry informed the General Council of the Assembly of God of his “delivery to Satan.” No action was taken by the defendant after the General Council was informed. Berry alleges negligence and/or willful misconduct on the part of Assembly of God. Berry claims that as a result of defendant’s action he has suffered intense mental anguish, emotional distress, loss of sleep, problems on the job, and problems in social relationships. Berry has requested actual damages of $85,000 and punitive damages of $9,915,000.

[¶2]  On October 31, 1996, Assembly of God moved this Court to grant summary judgment in its favor because (1) this Court does not have subject matter jurisdiction over this cause of action, (2) Berry has failed to state a claim for infliction of emotional distress, (3) Berry’s complaint is barred by the statute of limitations, and (4) his complaint is barred by the doctrines of res judicata or estoppel. On November 12, 1996, Berry filed his response to Assembly of God’s motion for summary judgment and his statement of material facts. On November 15, 1996, this Court entered an order that any amendments in Berry’s second amended complaint would apply to the Assembly of God’s pending motion for summary judgment.

SUMMARY JUDGMENT STANDARD

[¶3]  Under Rule 56 of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if the movant can “show that there is no genuine issue as to any material fact and that [the movant] is entitled to judgment as a matter of law.” In determining whether summary judgment should issue, the facts and the inferences from those facts are viewed in the light most favorable to the nonmoving party, and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 US 574, 106 SCt 1348, 1356-57, 89 LEd2d 538 (1986). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in the pleadings, but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists.

[¶4]  In determining whether a genuine issue of material fact exists, the Court views the evidence presented based upon which party has the burden of proof under the underlying substantive law. Anderson v. Liberty Lobby, Inc., 477 US 242, 106 SCt 2505, 2513, 91 LEd2d 202 (1986). The Supreme Court has instructed that “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to ‘secure the just, speedy, and inexpensive determination of every action.’” Celotex Corp. v. Catrett, 477 US 317, 327, 106 SCt 2548, 2555, 91 LEd2d 265 (1986). The nonmoving party “must do more than show that there is some metaphysical doubt as to the material facts,” Matsushita, 106 SCt at 1356, and “[w]here the record as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Id.

[¶5]  The teaching of Matsushita was further articulated by the Supreme Court in Eastman Kodak Co. v. Image Technical Services, Inc., 504 US 451, 468, 112 SCt 2072, 2083, 119 LEd2d 265 (1992) where the Court said, “Matsushita demands only that the nonmoving party’s inferences be reasonable in order to reach the jury, a requirement that was not invented, but merely articulated, in that decision.” The Court expounded on this notion by reiterating its conclusion in Anderson that, “[s]ummary judgment will not lie ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Eastman Kodak, 504 US at 468 n.14, 112 SCt at 2083 n.14 (quoting Anderson, 477 US at 248, 106 SCt at 2510). To survive summary judgment there must be evidence that “reasonably tends to prove” plaintiff’s theory; defendants meet the burden under Fed. R. Civ. P. 56 when it is conclusively shown that the facts upon which the nonmoving party relied to support the allegations were not susceptible of the interpretation which was sought to give them; only reasonable inferences can be drawn from the evidence in favor of the nonmoving party. Id. (citations omitted).

[¶6]  Finally, should there remain any doubt as to whether the courts continue to harbor any antagonistic feeling toward resolution of summary judgment motions, Chief Judge Arnold in City of Mt. Pleasant, Iowa v. Associated Elec. Co-op, Inc., 838 F2d 268 (8th Cir. 1988) laid such thoughts to rest. He stated that, “a trilogy of recent Supreme Court opinions demonstrates that we should be somewhat more hospitable to summary judgment than in the past. The motion for summary judgment can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts’ trial time for those cases that really do raise genuine issues of material fact.” Id. at 273. See generally 1 Steven A. Childress & Martha S. Davis, Federal Standards of Review § 5.04 (2d ed. 1991) (discussing the standards for granting summary judgment that have emerged from the trilogy of Matsushita, Celotex, and Anderson). Under this trilogy, it is incumbent upon the nonmoving party, based upon the showing set forth by the moving party, to establish significant probative evidence to prevent summary judgment. See Terry A. Lambert Plumbing, Inc. v. Western Sec. Bank, 934 F2d 976, 979 (8th Cir. 1991).

FACTS

[¶7]  According to the Eighth Circuit:

To be material, the disputed facts must be facts which, under the substantive law governing the issue, might affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 US 242, 106 SCt 2505, 91 LEd2d 202 (1986)... . The mere existence of a factual dispute is insufficient alone to bar summary judgment; rather, the dispute must be outcome determinative under prevailing law. Howland v. Kilquist, 833 F2d 639, 642 (7th Cir. 1987).

Holloway v. Pigman, 884 F2d 365 (8th Cir. 1989).

[¶8]  Even if you accept all the facts of the plaintiff as true, defendant believes that it is entitled to summary judgment as a matter of law. Viewing the facts most favorably toward the nonmoving party, the Court finds the facts as follows:

1.  In 1983, Berry lived in Newell, South Dakota and was a member of the Newell Assembly of God whose pastor was Morris Conklin.

2.  Berry had personal disputes with Conklin prior to 1983 which involved the rubbing of Berry’s hand when Conklin shook Berry’s hand after church services; the manner in which Berry’s foot was handled at Berry’s foot washing ceremony; and Conklin’s giving of canned goods to Berry as a gift.

3.  Berry was emotionally abused by Conklin’s criticizing him for wearing dirty jeans to church; Conklin accusing Berry of not paying a tithe; Conklin’s statement that Berry was not supported after a house fire; Conklin’s accusation that Berry did not take communion in the church; and Conklin’s statement that he did not care where Berry worked while Berry was having a difficulty finding a steady job.

4.  Under Conklin’s direction, families were ruined and the church membership ceased. Berry openly criticized Conklin. Berry called other members of the church inquiring about the problems he perceived to be taking place within the church. On May 1, 1983, Berry “cornered” Conklin with criticism of other members of the church. Later that same day, Conklin asked him to attend a meeting at the church.

5.  At this meeting on May 1, 1983, Berry was read the verse from I Corinthians 5:5. It was not until March of 1996 that Berry began to realize that the reading of this scripture played a vital role in causing Berry’s problems. Berry believes that the ex-communication ceremony was unjustified and that he was delivered to Satan by the reading of that scripture.

6.  After Berry was delivered to Satan, he subconsciously began to fear that bad things would happen to him, and that as a result of his delivery to Satan, bad things did happen to him.

7.  Berry stated that May 1 is “Satanic Feast Day” and that when the adverse events occur on that day Satan is “leaving his footprint ... .”

8.  Berry stated that the following events have happened on one of the four “Satanic Feast Days,” February 2, May 1, August 2, and November 1, and that the Assembly of God is responsible for them:

a.  Berry experienced fires which were connected to the satanic.

b.  Berry had to buy medicine for a cow that suffered from an infection.

c.  Berry had a land payment which was due on May 1, 1984.

d.  Berry had to enter prison on April 30, 1986, due to satanic deception.

e.  Berry harassed and assaulted a co-employee. As a result, Berry was subsequently imprisoned and a writ of habeas corpus was denied on April 30, 1994.

f.  Berry received a response from the Federal Court of Appeals on February 2, 1994.

g.  Berry received a letter from an attorney on April 30, 1994, which stated that the attorney would not represent Berry in a malpractice action against the attorney who “first mishandled Plaintiff’s assault case.”

h.  Defendant’s lawyer stated that the parties should get together and discuss issues in a letter dated February 1,1996.

i.  Berry receives defendant’s motion for summary judgment on October 31, 1996.

9.  In 1984, Conklin left Newell. Berry had no contact with Conklin after June 7, 1983, except when he called Conklin in March of 1996. It was during this conversation that Conklin admitted delivering him to Satan.

10.  According to Berry, the first time Berry complained about the actions of the Assembly of God was in 1984. At that time, Berry contacted the South Dakota District Council. The Assembly of God alleges that the first time he contacted anyone was in November of 1989. This dispute is not material given the Court’s decision in this case. Berry next complained in his letter to David Nelson dated November 15, 1989. The parties disagree as to whether the letter contains an allegation of “homosexual harassment.” The Court concludes that such a dispute is also not material to the issues of this case.

11.   Defendant alleges that Berry wrote to the General Council of the church in August of 1993 and that for several years prior to that Berry had no communication with the church or any of its members. Berry denies confronting the General Council of the Assembly of God until March of 1996. He stated that he could not have confronted the council as to the damages he suffered until that time because it was not until March of that year that he realized his delivery to Satan had caused his problems. The Court concludes that this factual dispute is not material given the conclusion reached by this Court.

12.  Berry previously filed suit against Conklin in this Court. Berry voluntarily dismissed the lawsuit out of fear.

13.  Defendant states that “Berry contends that he was a victim of spiritual forces, and therefore, the Church should have engaged in ‘spiritual warfare’ on his behalf.” Berry denies that “spiritual warfare” is part of the complaint. Given the decision of the Court in this case, this factual dispute is not material to the case.

14.  Berry has not received any medical care since 1993. Berry has not seen a psychiatrist or psychologist for any emotional abuse which he has suffered.

DISCUSSION

[¶9]  This Court will first consider if it has subject matter jurisdiction to hear this case. Assembly of God urges this Court that it is entitled to summary judgment because this Court does not have subject matter jurisdiction over this cause of action. Berry has alleged subject matter jurisdiction based upon diversity of jurisdiction and arising under jurisdiction. See 28 USC §§ 1331, 1332.

[¶10]  The First Amendment to the United States Constitution protects the free exercise of religious beliefs. US Const. amend. I. The Fourteenth Amendment applies the First Amendment to the states. See City of Rapid City v. Kahler, 334 NW2d 510, 512 (SD 1983). Given the religious affiliation of the Assembly of God, this Court is confronted with the issue of whether the First Amendment bars the Court’s subject matter jurisdiction. Bible Way Church of Our Lord Jesus Christ of Apostolic Faith of Washington, D.C. v. Beards, 680 A.2d 419, 427 (D.C. Ct. App. 1996). The First Amendment prohibits this Court from hearing cases which will entangle it in “matters of ecclesiastical cognizance.” See Serbian Eastern Orthodox Diocese for United States of America and Canada v. Milivojevich, 426 US 696, 708, 96 SCt 2372, 2380, 49 LEd2d 151 (1976); Watson v. Jones, 80 US 679, 727, 20 LEd2d 666 (1871) (court should accept decisions of church involving “questions of discipline, or of faith, or ecclesiastical rule, custom, or law”); Beards, 680 A.2d 419; Burgess v. Rock Creek Baptist Church, 734 FSupp 30 (D.D.C. 1990).

[¶11]  Long ago the United States Supreme Court held that courts should not “revise or question ordinary acts of the church,” including the excommunication from membership. Bouldin v. Alexander, 82 US 131, 21 LEd 69 (1872). A well-established rule of law is that “[c]ivil courts are bound to accept the decision of the highest judicatories of a religious organization of hierarchical polity or matters of discipline, faith, internal organization, or ecclesiastical rule, custom, or law.” Serbian Eastern Orthodox Diocese v. Milivojevich, 426 US 696, 96 SCt 2372, 2382, 49 LEd2d 151 (1976). This does not mean that the church is above the law, but a court must take care to avoid a controversy which involves “‘religious doctrine and practice.’” Beard, 680 A.2d at 427 (quoting Burgess, 734 FSupp at 31).

[¶12]  The Court will first consider cases which have addressed the issue of whether the matter involved was one of “ecclesiastical cognizance.”

[¶13]  In Lewis v. Holy Spirit Ass’n for Unification, 589 FSupp 10 (D.C. Mass. 1983), plaintiff, a member of the church, alleged several claims against the church sounding in contract and tort, including torts of brainwashing and indoctrination. In considering the torts of brainwashing and indoctrination the court noted that “initiation procedures and conditions of membership in a religious organization are generally not subject to judicial review.” Id. at 12 (citing Turner v. Unification Church, 473 FSupp 367, 371 (D.C.R.I. 1978); United States v. Ballard, 322 US 78, 64 SCt 882, 88 LEd2d 1148 (1944); United States v. Seeger, 380 US 163, 85 SCt 850, 13 LEd2d 733 (1965)). The court stated that plaintiff may have intended to plead the tort of intentional infliction of emotional distress. Id. To prove the tort of intentional infliction of emotional distress, two elements that plaintiff must prove are that “defendant intended to inflict emotional distress or knew or should have known that distress would result to the plaintiff from its conduct [and] that the conduct was extreme and outrageous.” Id. The court concluded that plaintiff’s complaint failed to state a claim upon which relief could be granted for such a tort. Id.

[¶14]  In Beards, plaintiff accused defendant church of negligent failure to account for church funds. Id. at 423. The court concluded that it would only be permitted to address this issue if well-established accounting principles applied to the church. Id. at 427-28. The court determined that such well-established principles could only apply to the church if the principles were so universal that every church applied them and the church took it for granted that such principles should be adopted or the church had adopted such principles. Id. at 428. The court noted,

Accounting is an area riddled with major subjective decisions. When the entity in question is a religious society, those subjective decisions raise questions of internal church governance which are often themselves based on the application of church doctrine. For example: What should be the collection, tithing, or offering practices of the church? ... Who in the church establishes the spending priorities? Should the pastor have one or more discretionary funds? ... In each case, who makes the decision?

Id. at 429. The court found that the complaint did not allege that universally applicable rules of accounting applied to the church nor had the church alleged that it had adopted such principles. Id. at 428, 430. Therefore, the Court was unable to exercise jurisdiction over the matter given that it involved “ecclesiastical judgment.” Id. at 428, 430. The Free Exercise clause of the First Amendment prevented the court from hearing the claim. The court of appeals concluded that the trial court was in error in refusing to dismiss the negligence claim. Id. at 430.

[¶15]  In Burgess v. Rock Creek Baptist Church, the plaintiff alleged that the church terminated her membership against her will. Plaintiff sued for injunctive and declaratory relief that she was a member in good standing of the church and for intentional infliction of emotional distress which allegedly resulted from the church’s terminating her membership. Burgess, 734 FSupp at 31. The court in Burgess determined that in the Rock Creek Baptist Church’s determining who is and who is not a member is a matter of ecclesiastical cognizance. Id at 33. “‘The mere expulsion from a religious society, with the exclusion from a religious community, is not a harm for which courts can grant a remedy.’” Id. (quoting Grunwald v. Bornfreund, 696 FSupp 838, 840-41 (E.D.N.Y. 1988)). In concluding that the court was prohibited from adjudicating this dispute as to the termination of plaintiff’s membership, the court stated that it would be required to delve into matters of church policy, administration, and governance. Id. at 34. The court stated that it would be unable to determine matters of termination of church membership even if the termination had been “a simple mistake or arbitrary.” Id. The court held that determining such matters would violate the Free Exercise Clause of the First Amendment. Id.

[¶16]  The court in Burgess held that the “cloak” of ecclesiastical protection extended to plaintiff’s theory of intentional infliction of emotional distress. Id. The court concluded that the church’s “subsequent actions are so inextricably linked that— regardless of the legal theories upon which the plaintiff relies— for the purposes of the First Amendment analysis, the substance of her lawsuit infringes upon matters of ecclesiastical cognizance.” Id. Once a court is required to delve into “matters of ecclesiastical cognizance” any matters “inextricably linked” will also be barred as to subject matter jurisdiction based upon the First Amendment. See id. The Burgess court refused to hear the plaintiff’s claim of intentional infliction of emotional distress because it was “inextricably linked” to plaintiff’s action relating to her termination of membership by the church. Id.

[¶17]  In Paul v. Watchtower Bible and Tract Soc. of New York, Inc., 819 F2d 875 (9th Cir. 1987), the court held that plaintiff was barred by the First Amendment from bringing her claims alleging common law torts of defamation, invasion of privacy, fraud, and outrageous conduct. Plaintiff alleged that the intentional conduct on the part of the church resulted in emotional distress, alienation of affections, and harm to her reputation. The court held that “imposition of tort damages on the Jehovah’s Witnesses for engaging in the religious practice of shunning would constitute a direct burden on religion.” Id. at 880. The court stated:

Permitting prosecution of a cause of action in tort, while not criminalizing the conduct at issue, would make shunning an “unlawful act.” (“[T]he very essence of a tort is that it is an unlawful act.”). Imposing tort liability for shunning on the Church or its members would in the long run have the same effect as prohibiting the practice and would compel the Church to abandon part of its religious teachings. Were we to permit recovery, “‘the pressure ... to forego that practice [would be] unmistakable.’” The Church and its members would risk substantial damages every time a former Church member was shunned. In sum, a state tort law prohibition against shunning would directly restrict the free exercise of the Jehovah’s Witnesses’ religious faith.

Id. at 881 (citations omitted). According to the Ninth Circuit Court of Appeals, “A religious organization has a defense of constitutional privilege to claims that it has caused intangible harms— in most, if not all, circumstances.” Id. at 883. The court in Paul held that permitting the plaintiff to recover in tort for the intangible harms alleged would restrict the churches free exercise of religion; therefore, the causes of action alleged by the plaintiff were barred. Id.

[¶18]  Berry has failed to cite to any persuasive authority convincing this Court that this suit should not be barred by the First Amendment. Berry relies on Nally v. Grace Community Church of the Valley, 204 Cal. Rptr. 303 (Cal. Ct. App. 1984) (unpublished). The court in that case held that the clergyman or church was not barred from the “liability for intentional infliction of emotional distress caused by the nature or content of counseling simply because the counseling may have a spiritual aspect.” Id. at 307. The court went on to state, “The free exercise clause of the First Amendment to the United States Constitution ‘embraces two concepts, — freedom to believe and freedom to act. The first is absolute but, in the nature of things, the second cannot be.’” Id. (citations omitted). The court held that counseling fell within the latter category. However, a church’s policy on excommunication of a member would fall into the former category of “freedom to believe” which is an absolute bar under the First Amendment. The Court concludes that Berry’s reliance on Nally is misplaced.

[¶19]  Plaintiff also encourages this Court to follow the conclusions reached by the court in Swann v. Pack, 527 S.W.2d 99 (Tenn. 1975). However, this case involves state action and its application to the First Amendment. A religious practice may be curtailed where “it involves a clear and present danger to the interests of society.” In this case, the religious practice at issue involved snake handling and because the state has the right to protect a person from injuring himself the court enjoined any party from “handling, displaying, or exhibiting dangerous and poisonous snakes.” Berry’s reliance on Swann is also misplaced based on the different application of the First Amendment in that case.

[¶20]  This Court holds that for it to consider the damages alleged by Berry in this case it would be required to delve into “matters of ecclesiastical cognizance.” Defendant sets forth several issues which would have to be addressed by this Court in order for the Court to resolve the matter before it. The defendant states that the Court would be required to resolve the following: “(1) whether there exists a church doctrine of ‘delivery to Satan;’ (2) whether such a doctrine was applied to Plaintiff in 1983; (3) whether this practice was ‘unjustified’ under the facts or church procedure; (4) whether the practice caused various injuries as alleged; and (5) whether Defendant could or should have acted to intervene to ‘reverse the curse’” When considering at least five of the issues which would need to be resolved by this Court, it is clear that the resolution would involve “matters of ecclesiastical cognizance.” Berry has alleged that all his problems are a result of his “delivery to Satan” which he now realizes occurred when Conklin read to him from 1 Corinthians 5:5 at the church’s excommunication ceremony. It has been a long-standing policy of the courts not to involve themselves in disputes involving the excommunication of members. The First Amendment bars involvement in such suits. To resolve the issues in this suit the Court would be required to consider whether the church’s policy of excommunication is unjust. Consideration of such an issue would require resolution of matters of ecclesiastical cognizance and resolution of such matters is barred by the First Amendment.

[¶21]  Due to his “delivery to Satan,” Berry alleges he has suffered loss of property, destruction of livestock, and legal problems occurring on satanic feast days. Berry also alleges negligence and/or willful misconduct on the part of Assembly of God. Berry claims that as a result of defendant’s action he has suffered intense mental anguish, emotional distress, loss of sleep, problems on the job, and problems in social relationships Following the persuasive reasoning set forth by the court in Burgess, this Court concludes that all claims alleged by the plaintiff are “inextricably linked” to plaintiff’s excommunication by the church and are therefore barred by the First Amendment. The Court would be unable to make a judgment as to damages for this plaintiff without making some judgment as to the actions by the church when it excommunicated the plaintiff. Analyzing the church’s policy on excommunication would invade matters of ecclesiastical cognizance; therefore, all claims of the plaintiff are barred based upon free exercise clause of the First Amendment.

[¶22]  Using the analysis set forth by the court in Paul, permitting this Court to hear Berry’s claim of negligence and possibly the tort of intentional infliction of emotional distress1 Given this Court’s conclusion, it does not need to reach an opinion as to whether or not Berry has stated a claim of intentional infliction of emotional distress.

{fn1} (considering the intangible damages which Berry has alleged) would place a direct burden on the Assembly of God’s practice of excommunication. See Paul, 819 F2d at 881. The church would be discouraged from performing the practice because of the potential tort claims which plaintiffs would be allowed to bring. This type of discouragement of religious practices would be a direct burden on the church’s right to free exercise of religion.

[¶23]  “‘The constitutional guarantee of the free exercise of religion requires that society tolerate the type of harms suffered by [the plaintiff] as a price well worth paying to safeguard the right of religious difference that all citizens enjoy.’” Burgess, 734 FSupp at 35 (citing Bible & Tract Soc’y, 819 F2d at 884). Regardless of the jurisdictional basis alleged by Berry, the constitutional bar to Berry’s suit prevents the Court from having subject matter jurisdiction over this matter. Even considering the facts most favorable to the non-moving party, defendant Assembly of God is entitled to judgment as a matter of law.2. Based upon the Court’s conclusion, it is not necessary for the Court to address the additional reasons set forth by the defendant for summary judgment.{fn2}



McLain v. Chater, 1997 DSD 5

MITCHELL MCLAIN,

Plaintiff,

v.

SHIRLEY SEARS CHATER,

Commissioner of Social Security,

Defendant.)

[1997 DSD 5]

United States District Court

District of South Dakota - Western Division

CR96-5059

MEMORANDUM OPINION AND ORDER

Filed Feb 27, 1997.

RICHARD H. BATTEY, Chief Judge

PROCEDURAL HISTORY

[¶1]   On July 17, 1996, plaintiff/claimant Mitchell McLain (McLain) filed a complaint seeking review of the decision denying social security benefits to McLain. On November 5, 1996, defendant Shirley Sears Chater (Commissioner) filed a motion for summary judgment on the ground that no genuine issue as to any material fact exists and that therefore Commissioner is entitled to summary judgment as a matter of law. On November 15, 1996, McLain responded to Commissioner’s motion and requested that the case be reversed and that McLain’s disability benefits be reinstated. The Court has jurisdiction pursuant to 42 USC § 405(g).

[¶2]  On April 10, 1994, McLain filed an application for Title II disability benefits under Title II of the Social Security Act (the Act), 42 USC §§ 401-33. On October 19, 1993, McLain filed an application for Supplemental Security Income (SSI) benefits under Title XVI, 42 USC §§ 1381-83. McLain alleges an onset date for his disability of December 17, 1992. Initially, his applications were denied. McLain next filed a Request for Reconsideration which was also denied.

[¶3]  McLain then requested a hearing before the Administrative Law Judge (ALJ). On April 4, 1995, ALJ James W. Olson held a hearing on this matter. The ALJ determined that McLain has not performed substantial gainful activity since his onset date. (TR 18). The ALJ also concluded that McLain suffered from a “degenerative disc disease of the lumbar spine with herniation at L4-5, causing some impingement on the left L5 nerve root, and a bulging disc at L3-4.” The ALJ concluded that McLain’s impairments are severe. However, the ALJ determined that the severe impairments which McLain suffers from did not rise to the level of the Listing of Impairments. See Appendix1 to Subpart P, 20 CFR Part 404, Listing 1.05C. Finally, the ALJ concluded that McLain possesses the ability to perform past work activity as a service station attendant and that he was not under a disability as defined in the Act. (TR 19-22). Given his conclusion that McLain can perform past work, the ALJ held that McLain is not entitled to disability benefits and SSI. (TR 23).

FACTS

[¶4]  Plaintiff Mitchell McLain injured his back in May of 1989. He continued to work until he left his job as chief of police in 1992. (TR 46). His date of birth is September 30, 1963 (age 33).

[¶5]  The ALJ heard testimony regarding McLain’s previous employment. McLain has worked as a tire mechanic and a service station attendant. (TR 39). While working these jobs his duties consisted of the usual type of varied duties related to his employment. (TR 39-40). He states that he is no longer able to perform these type of duties because of the pain he would incur while performing them. (TR 40). McLain had also been employed by the Air Force as a security specialist from February of 1984 to May of 1984. (TR 39, 131). He was in the area of guarding missiles which, among other things, required a lot of walking. (TR 40).

[¶6]  McLain has worked as a parking enforcement officer (July 1984 to July 1985), a deputy sheriff corrections officer (July 1985 to July 1986), a deputy sheriff patrol officer (September 1986 to May 1990), and the chief of police in Selby, South Dakota (May 1992 to December 1992). (TR 39, 131). As a corrections officer, McLain was responsible for the safety and security of the inmates in the facilities. (TR 40). He was responsible for checking the cells routinely, transporting prisoners, and booking incoming inmates. (TR 40, 41). On occasion, McLain was also required to restrain the prisoners. (TR 41). In 1986, McLain began working as a deputy sheriff patrol officer. In 1990, McLain left his job as a patrol officer to return to college. (TR 44). His injury did not prevent him from regularly attending his college classes. (TR 38).

[¶7]  In May of 1992, McLain started his job as chief of police in Selby, a small town in South Dakota. As the chief of a one-person police department, he performed all the duties usually performed by an officer in a small town department. (TR 42). This job required that McLain sit for approximately five hours a day. (TR 43). Since he was the only police officer in Selby, his duties as chief of police did not differ greatly from his responsibilities as patrol officer. He stated that it was a “lighter position” as compared to his work as a deputy sheriff patrol officer. (TR 44-45). He quit working as the chief of police because he felt that the pain prohibited him from performing his daily duties. (TR 45). He said he could not handle the constant sitting and standing which the job required. (TR 45).

[¶8]  According to McLain, he is unable to return to any of his previous career fields because he “wouldn’t be able to function properly or efficiently because of [his] pain.” (TR 44). He quit working in December of 1992 because he stated his pain had gotten worse in some areas. (TR 47). When he left his job, his left leg would bother him because periodically it would go numb. (TR 47). Since he left his job, his right leg has also started to bother him. (TR 47). Besides his right leg, his condition at the time of the hearing had not changed from his condition in December of 1992. (TR 47).

[¶9]  McLain testified that his treating physician, Dr. Jenter, has placed certain restrictions on him because of his back condition. (TR 48). Dr. Jenter had limited the weight that he is allowed to lift to ten pounds. (TR 48). McLain is also not to sit or stand too long. (TR 48). He testified that he is able to stand for one hour or one hour and a half before the pain increases. (TR 48). He testified that he could touch his knees and squat, but that he did not know if he could touch his toes from a standing position. (TR 68). He also told the ALJ that he is able to move his fingers fine but has difficulty pulling and pushing his arms. (TR 68-69).

[¶10]  McLain testified that he has “good and bad days.” On a bad day, he would not be able to stand for an hour. (TR 49). He stated that is difficult for him to bend more than once every half hour and that on a good day he can only walk one or two miles if he stops frequently. (TR 49). On a good day, he has to lie down three times for a half hour each time. (TR 50). On a bad day, he may spend as many as five hours lying down. (TR 50). McLain also has problems with his left leg “giving way” on him. (TR 52). He estimates that he has fallen down twenty-five times in the last year due to his leg. (TR 52). According to Dr. Jenter, McLain suffers from atrophy of his leg and a foot drop. (TR 56-57). McLain stated that sometimes he can sit for an hour or an hour and a half. (TR 67).

[¶11]  Since 1992, McLain has been employed as a football coach in Hill City, South Dakota. (TR 53). This job requires that he draw up and call the offensive plays. (TR 53). It was an hour a day out of his time and games on the weekends. (TR 54).

[¶12]  McLain’s hobby is artwork. He testified that an art piece which used to take him a day would now take him a month. (TR 55). McLain also testified that since 1992 his recreational activities have been decreased. (TR 55). However, McLain’s doctor encourages him to remain active. These recreational activities have prevented his condition from deteriorating. (TR 56).

[¶13]  McLain took a functional capacities assessment (FCA) with Tony Yric. The FCA concluded that McLain can sit 4 to 5 hours a day, 50 to 55 minutes at a time; stand 3 hours a day, 15 to 20 minutes at a time; and walk 3 to 4 hours a day. The FCA also stated that he can bend/stoop, squat, crawl, climb stairs, crouch, kneel, and balance at least occasionally. The test showed that he has no problem grasping with his hands and no problem moving his head or neck. According to the FCA, McLain can move his right foot continuously and his left frequently. McLain testified that following this assessment, it took him two to three days before the level of pain was returned to the level before he took the test. (TR 60-61).

[¶14]  McLain takes the prescription drug propoxyphene and over-the-counter Tylenol. (TR 64-65). The propoxyphene causes him to feel light-headed. (TR 64). However, he testified that how often he takes the propoxyphene varies and on average probably five times a month. (TR 65).

[¶15]  Dr. Jenter testified that McLain is not able to perform any level of gainful employment on a regular continuous basis. (Exhibit 35). McLain testified that sometimes his medication upsets his stomach. (TR 64-65). Dr. Jenter limited the amount that McLain should lift to ten pounds. He also testified that depending on the surface McLain can stand from one hour to one and a half hours. He stated that on a good day McLain can walk a mile or two stopping frequently to rest and that McLain can sit for 30 minutes to one hour and a half at a time. Dr. Jenter stated that sometimes McLain’s left leg gives out.

STANDARD OF REVIEW

[¶16]  The decision of the ALJ must be upheld if it is supported by substantial evidence on the record as a whole. 42 USC § 405(g); Metz v. Shalala, 49 F3d 374, 376 (8th Cir. 1995) (citing Sullins v. Shalala, 25 F3d 601, 603 (8th Cir. 1994), cert. denied, US , 115 SCt 722, 130 LEd2d 627 (1995)); Smith v. Shalala, 987 F2d 1371, 1373 (8th Cir. 1993). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support such a conclusion. Shannon v. Chater, 54 F3d 484, 486 (8th Cir. 1995) (citing Richardson v. Perales, 402 US 389, 401, 91 SCt 1420, 1427, 28 LEd2d 842 (1971)). See also Onstead v. Sullivan, 962 F2d 803 (8th Cir. 1992) (quoting Whitehouse v. Sullivan, 949 F2d 1005, 1007 (8th Cir. 1991)). Review by this Court extends beyond a limited search for the existence of evidence supporting the Commissioner’s decision to include giving consideration to evidence in the record which fairly detracts from the decision. Brockman v. Sullivan, 987 F2d 1344, 1346 (8th Cir. 1993); Locher v. Sullivan, 968 F2d 725, 727 (8th Cir. 1992); Turley v. Sullivan, 939 F2d 524, 528 (8th Cir. 1991).

[¶17]  However, the Court’s role under section 405(g) is to determine whether there is substantial evidence in the record as a whole to support the decision of the Commissioner and not to reweigh the evidence or try the issues de novo. Murphy v. Sullivan, 953 F2d 383, 384 (8th Cir. 1992). Furthermore, a reviewing court may not reverse the Commissioner’s decision “merely because substantial evidence would have supported an opposite decision.” Woolf v. Shalala, 3 F3d 1210, 1213 (8th Cir. 1993); Smith v. Shalala, 987 F2d at 1374 (citing Locher, 986 F2d at 727 (quoting Baker v. Heckler, 730 F2d 1147, 1150 (8th Cir. 1984))). The Court must review the Commissioner’s decision to determine if an error of law has been committed. Smith v. Sullivan, 982 F2d 308, 311 (8th Cir. 1992); Nettles v. Schweiker, 714 F2d 833, 836 (8th Cir. 1983). The Commissioner’s conclusions of law are only persuasive, not binding, on the reviewing court. Smith v. Sullivan, 982 F2d at 311; Satterfield v. Mathews, 483 FSupp 20, 22 (E.D. Ark. 1979), aff'd per curiam, 615 F2d 1288, 1289 (8th Cir. 1980). As long as the ALJ’s decision is supported by substantial evidence, then this Court cannot reverse the decision of the ALJ even if the Court would have decided it differently. Smith v. Shalala, 987 F2d at 1374.

DISCUSSION

[¶18]  A disability is defined as

inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

In determining when a disability has occurred in a case, the ALJ must follow five prescribed steps. See Evaluation of Disability Rule, 20 CFR § 404.1520 (1996). The steps are summarized as follows:

(1)  First, a determination is made whether claimant is currently engaged in substantial gainful activity; if so, he must be found not disabled.

(2) If claimant is not engaged in substantial gainful activity, the next question is whether he is suffering from a severe impairment, defined as one that significantly limits the ability to perform basic work-related functions. If a severe impairment is not found claimant must be found not disabled.

(3) If there is a severe impairment, and it is one listed in Appendix 1 to Subpart P, claimant is found disabled on the medical evidence alone. [ See Appendix 1 to Subpart P of Part 404, 20 CFR §§ 404.1501 et seq. (1996)].

(4) If the impairment is not listed in Appendix 1, the next inquiry is whether claimant can perform relevant past work. If he can, a finding of no disability is required.

(5) Finally, if claimant cannot perform relevant past work, the question then becomes whether he can nevertheless do other jobs that exist in the national economy, despite his having a severe impairment that prevents return to his previous work.

McCoy v. Schweiker, 683 F2d 1138, 1141-42 (8th Cir. 1982). See also 20 CFR § 404.1520; 1 Harvey L. McCormick, Social Security Claims and Procedures § 410, at 346 (4th ed. 1991).

[¶19]  McLain does not object to the conclusions reached by the ALJ as to steps one and two. However, McLain does object to the ALJ’s conclusion as to step three. McLain stated that the medical records “clearly” provide evidence that McLain meets or equals an impairment listed under 1.05C of Appendix 1 to Subpart P. McLain also objects to the ALJ’s conclusion that McLain’s testimony and the testimony of his wife are not fully credible. McLain argues that the ALJ’s conclusion is not supported by substantial evidence. He also urges that it was legal error for the ALJ not to adopt the opinion of his treating physician.

I.

[¶20]  The first argument that McLain makes as a reason for reversing the Commissioner’s decision is that the record fails to provide substantial evidence for the ALJ’s conclusion that the impairments suffered by McLain do not meet or equal any of the impairments listed in Appendix 1. McLain believes that his impairment equals the impairment listed at 20 CFR Part 404(p), App. 1, Listing 1.05(c). This listing reads as follows:

C. Other vertebrogenic disorders (e.g., herniated nucleus puplosus, spinal stenosis) with the following persisting for at least 3 months despite prescribed therapy and expected to last 12 months. With both 1 and 2:

  1. Pain, muscle spasm, and significant limitation of motion in the spine; and

  2. Appropriate radicular distribution of significant motor loss with muscle weakness and sensory and reflex loss.

Id. The Commissioner believes that McLain incorrectly argues that this section applies to McLain.

[¶21]  For a listing to apply to a claimant, the claimant’s impairments must be so severe that based upon medical evidence alone the claimant is presumed to be disabled. See 20 CFR §§ 404.1525(a), 416.925(a) (1996). Also, the claimant must show that all the medical requirements for the listing are met. In Sullivan v. Zebley, 493 US 521, 110 SCt 885, 107 LEd2d 967 (1990), the Court stated, “For a claimant to show that his impairment matches a listing, it must meet all of the specified medical criteria. An impairment that manifests only some of those criteria, no matter how severely, does not qualify.” Id. at 891.

[¶22]  The issue the Court must consider is whether there is substantial evidence that listing 1.05C was not met. The Commissioner argues that McLain did not meet all the requirements of the listing because McLain did not prove by medical evidence the necessary motor and sensory loss. The ALJ also relied on this point in reaching his conclusion that the listing did not apply. (TR 18). The ALJ stated:

The claimant has not had the motor and sensory loss that is required to meet Listing 1.05C. For example, when evaluated by Larry L. Teuber, M.D., in August 1993, the claimant [had] 5/5 muscle strength (Exhibit 25, p.2). Deep tendon reflexes were present and equal and the sensory examination was normal. (Exhibit 25, p.2).

(TR 18).

[¶23]  McLain urges that the testimony of Dr. Teuber’s 1993 consultation does not contradict Dr. Jenter’s findings from 1994 and 1995. According to McLain, Dr. Jenter’s testimony shows evidence of “bilateral positive straight leg raising (TR at 203), increasing problems and symptoms on Mr. McLain’s right side (TR 203), and dictation from 1995 which shows weakness and measured atrophy of Claimant’s left lower leg. (TR 207).” McLain’s Reply Brief at 6. Based upon these examples, McLain urges his medical records show documentation of “weakness and sensory loss and confirm that Claimant meets the listings under 1.05C, as a matter of law.” McLain’s Reply Brief at 6.

[¶24]  At this step, the burden is upon McLain to establish that all the requirements of the listing are established. The Court finds that McLain failed to meet his burden of proof in this case, and without proof to the contrary there is substantial evidence in the record that all the elements of the listing were not established.

[¶25]  McLain objects to the ALJ’s reasoning that the listing was not satisfied, in part, because the ALJ is relying on the opinion of McLain’s consulting physician and not the treating physician.

The treating physician has the best opportunity to observe and evaluate a claimant’s condition. This court has on repeated occasions emphasized that the treating physician’s evidence must be given great weight, with deference to the physician’s findings over an examining physician or consultant.

Morse v. Shalala, 16 F3d 865, 872 (8th Cir. 1994). “The report of a consulting physician who examined that claimant once does not constitute ‘substantial evidence’ upon the record as a whole, especially when contradicted by the evaluation of the claimant’s treating physician.” Hancock v. Secretary of the Dep’t of Health, Educ. & Welfare, 603 F2d 739, 740 (8th Cir. 1979).   The claimant relies on Robertson v. Sullivan, 925 F2d 1124 (8th Cir. 1991), which recognized that “it is well settled, for instance, that a fact-finder is not permitted to adopt the opinion of a consulting physician who examined claimant only once over the opinion of claimant’s treating physician.”

[¶26]  In Clark v. Chater, 82 F3d 202 (8th Cir. 1996), the court concluded that the opinion of a claimant’s treating physician may be discounted. Id. at 204. The court stated, “We conclude that the ALJ properly discounted the opinion of Clark’s treating physician, in that his opinion was not consistent with the objective evidence in the record ... .” Id. at 204. The Eighth Circuit has stated that it is within the authority of the ALJ to resolve conflicts among the opinions of treating and examining physicians. Cabrnoch v. Bowen, 881 F2d 561, 564 (8th Cir. 1989). In this case, the ALJ discounted the credibility of Dr. Jenter because in his deposition he admitted that his “opinion is largely based upon what the claimant has told him about his functioning, rather than actual observance of the claimant.” (TR 21; TR 230). In concluding that listing 1.05C is met the “physical examination findings must be determined on the basis of objective observations during the examination and not simply a report of the individual’s allegations, e.g., he says his leg is weak, numb, etc.” 20 CFR Pt. 404, Subpt. P, App. 1, 1.00B. The fact that the treating physician, Dr. Jenter, admitted that often he would take McLain at his word is one reason why plaintiff has not met his burden to satisfy the listing.

[¶27]  Listing 1.05C requires “significant motor loss with muscle weakness and sensory and reflex loss,” and as stated previously, the listing must be established only by medical evidence. However, evidence was presented that McLain’s sensory examination was normal. (TR 18; Exhibit 25).

[¶28]  In this case the record provides evidence from several consulting physicians that McLain’s sensory was normal. On May 28, 1994, Kevin D. Whittle, M.D., Chief Medical Officer, in his Disability Determination and Transmittal, after observing McLain, also concluded that McLain’s sensory was normal. (TR 100). On June 14, 1989, Dr. Lee Ahrlin, M.D., stated that McLain had “[n]o sensory or motor deficits present.” (TR 161). McLain argues that Dr. Teuber’s findings are from 1993 and that Dr. Jenter’s findings from 1994 and 1995 are more recent and therefore more reflective of McLain’s impairments. However, in May of 1994, Dr. Whittle found that McLain’s sensory was normal. In addition, Dr. Jenter makes no clear conclusions as to McLain’s sensory and reflex loss where the other doctors have specifically concluded that McLain’s sensory was normal. The conclusions of Dr. Jenter do not clarify for the Court that the motor loss of McLain is significant. As required by listing 1.05C, McLain has failed to meet his burden of sensory and reflex loss by failing to set forth sufficient medical evidence or conclusions. The Court is to examine the evidence which detracts from the ALJ’s decision, but the Court is not to reweigh the evidence. There is substantial evidence supporting the conclusion of the ALJ that the listing requirement is not met.

II.

[¶29]  McLain second reason for arguing that the ALJ’s conclusion is inaccurate is because of the ALJ’s credibility determination as to the amount of pain which McLain is experiencing. When assessing the credibility of McLain’s testimony the ALJ set forth and applied the standard established in Polaski v. Heckler, 751 F2d 943 (8th Cir. 1984). The ALJ noted that McLain is expected to experience pain with his impairment, but that the evidence does not support that his pain is severe enough to preclude him from all substantial gainful activity. Regarding this point, the Eighth Circuit has stated, “An ALJ may not disregard a claimant’s subjective complaints of pain solely because they are not fully supported by objective medical evidence, but may properly discount the subjective complaints if inconsistencies exist in the record as a whole.” Wilson v. Chater, 76 F3d 238 (8th Cir. 1996).

[¶30]  In this case, the ALJ relied in part on the fact that even though McLain’s doctor had prescribed for him a strong pain medication he rarely uses it and instead uses Tylenol. The ALJ considered that McLain hunts less frequently since his impairment, but he still hunts twice a week. The ALJ noted that he is able to sit and fish, play board games, and watch movies. The ALJ also concluded that McLain’s description of his functional capacities is similar to the findings made in the FCA in April of 1994 and accepted the assessment as describing the ability of McLain’s current residual functional capacity.

[¶31]  McLain relies on Jeffery v. Secretary of Health & Human Servs., 849 F2d 1129, 1132 (8th Cir. 1988) in objecting to the ALJ’s conclusion that the pain is not severe enough to prohibit all substantial gainful activity. Specifically, McLain relies on the case for the fact that he believes there is evidence in the record for his preference for Tylenol over his prescription drugs and that based upon Jeffrey such evidence may not be used to discredit pain. In Jeffrey, the claimant testified to her growing fear of addiction on the prescription drugs and that she did not believe the prescription drugs were appreciably more effective than the over-the-counter pain killers. Id. at 1133. However, the court in Jeffery recognized that “a claimant’s allegations of pain may be discredited by evidence that [the claimant] relies on only mild pain medication or takes stronger medication only occasionally. Id. (citing Williams v. Bowen, 790 F2d 713, 715 (8th Cir. 1986)).

[¶32]  The ALJ’s reliance on the fact that the majority of the time McLain takes more mild over-the-counter pain killers instead of his prescribed pain killers is not misplaced. The Eighth Circuit has held that “[a] claimant’s allegations of disabling pain may be discredited by evidence that he or she has received minimal medical treatment and/or has taken medications, other than aspirin, for pain only on an occasional basis.” See Williams, 790 F2d at 715; Weber v. Harris, 640 F2d 176, 178 (8th Cir. 1981). There is substantial evidence in the record that McLain took his prescribed medication less frequently than over-the-counter pain killers.

[¶33]  In addition, McLain’s reliance on Jeffery is misplaced. In Jeffery, the ALJ failed to specifically identify any evidence that would discredit claimant’s complaints of pain. Jeffery, 849 F2d at 1132. Also, in Jeffery, claimant specifically testified to the fact that she was concerned about becoming addicted to her prescription drugs. Id. at 1133. McLain did not testify as to his fear of addiction, and the ALJ specifically stated reasons for discrediting McLain’s level of pain.

[¶34]  When considering McLain’s credibility as to the pain he is incurring, McLain also objects to the ALJ’s reliance— when reaching his conclusion— on the fact that McLain still goes fishing, hunts twice a week, and sits to play board games and watch movies. The ALJ also heard testimony by McLain that he goes camping once a month with his family, he still goes hiking, and he assisted in coaching a football team. McLain relies on cases in which a claimant has performed some daily activities but was unable to engage in substantial gainful activity. See Jeffery, 849 F2d at 1132; Thomas v. Sullivan, 876 F2d 666 (8th Cir. 1989). Case law permits the ALJ to consider daily activities when evaluating a claimant’s subjective complaints of pain. “Although daily activities alone do not disprove disability, they are a factor to consider in evaluating subjective complaints of pain.” Wilson, 76 F3d 238 (citing Russell v. Sullivan, 950 F2d 542, 545 (8th Cir. 1991)). See also Conley v. Bowen, 781 F2d 143 (8th Cir. 1986) (stating that the ALJ may consider inconsistencies in the record when determining making credibility findings as to claimant’s pain).

[¶35]  McLain also objects to the ALJ’s credibility determination because according to McLain, the ALJ chose “to use the FCA [Functional Capacities Assessment] to ignore and reject Claimant’s claimed pain and limitations is in error.” McLain points out that both Dr. Jenter, a medical expert, and Dr. Meiners, a vocational expert, do not see an inconsistency between the FCA and the pain testified to by McLain. McLain emphasizes that the testimony of Dr. Jenter points to the fact that the FCA does not show whether McLain would be able to perform substantial gainful activity on a regular basis. (Jenter deposition at 74, 75). McLain also points out that Dr. Meiners, after reviewing the FCA, testified that McLain could not be returned to competitive employment with his limitations. (TR 333).

[¶36]  However, the ALJ heard the testimony of Mr. Vigil but he did not hear the testimony of Dr. Meiners. As long as there was substantial evidence for the ALJ to accept Mr. Vigil’s opinion, the ALJ did not err. After hearing all the testimony of McLain, Mr. Vigil testified that McLain could perform the past relevant work of a service station attendant. The Court must look to evidence which detracts from the conclusion, but if there is substantial evidence to support the conclusion it may not reweigh the evidence. Based upon the testimony of Mr. Vigil, there was substantial evidence for the ALJ’s finding of fact that McLain could perform past relevant work. See Cabrnoch v. Bowen, 881 F2d 561, 563 (8th Cir. 1989) (stating, “it is also a matter of law that the fact findings of the ALJ underlying the Secretary’s decision are conclusive if supported by substantial evidence.”).

[¶37]  In reviewing the ALJ’s opinion, the Court does not find that the ALJ used the FCA to ignore McLain’s claimed pain. As mentioned above, the Court looked to how often McLain was taking his prescribed medication and the fact that McLain was still able to perform some everyday activities. The Court also considered the medical evidence before it. Specifically, in reaching its conclusion as to whether McLain is able to perform “gainful employment,” the ALJ recognized the testimony of Dr. Jenter.

[¶38]  After reviewing the favorable testimony and the disfavorable testimony, this Court finds that there is substantial evidence in the record to support the ALJ’s decision of credibility given to McLain’s testimony of pain. As long as the ALJ’s decision is supported by substantial evidence, then this Court cannot reverse the decision of the ALJ even if the Court would have decided it differently. Smith, 987 F2d at 1374.

III.

[¶39]  McLain’s third reason that the decision of the ALJ should be reversed is based upon the ALJ’s conclusion “that claimant’s impairments do not prevent him from performing his past relevant work.” McLain relies on the Eighth Circuit’s decision in Ulrick v. Heckler, 780 F2d 1381 (8th Cir. 1985). He argues that the ALJ’s decision cannot be based upon substantial evidence because the hypothetical question which the ALJ posed to the vocational expert, Mr. Vigil, did not take into account the fact that McLain could only sit or stand for a short period of time. McLain claims that the ALJ erred because the hypothetical question did not consider that McLain has good and bad days. The Commissioner believes that this argument is meritless because the ALJ was not required to hear testimony of a vocational expert where a claimant does not meet the burden of establishing the inability to perform past work. The Commissioner relies on case law which states that all limitations are not required to be included in a hypothetical question if the ALJ determines that such limitations were not credible. See Onstad v. Shalala, 999 F2d 1232, 1234 (8th Cir. 1993); Cruse v. Bowen, 867 F2d 1183, 1187 (8th Cir. 1989). McLain’s main objection is that the ALJ failed to set out for the vocational expert “claimant’s limitations regarding his good days and bad days, his frequent need to lay down for significant periods of time, and the fact that his left leg will ‘give out.’”

[¶40]  The vocational expert was present during McLain’s testimony at the hearing. (TR 76). At the hearing the ALJ presented the following question to the vocational expert,

Assume the same age, education, and work history, this time with these limits: Can sit for a half an hour to one hour, I think, can stand up to an hour, sometimes less, depends — This will vary, I’d say a half hour to an hour on both of those. It just depends on the day he’s having. That’s at one time. Can walk between 50 and 200 yards, depending on the day. His lifting is restricted to 10 pounds. He’s unable to walk on rough surface for any length of time, could bend over and touch his knees, but not his toes. Can do that maybe once an hour. Unable to squat and get back up easily, climb perhaps a flight of stairs at one time, but not repetitively. Can move— can do push and pull movements. I note in the record that his— probably his left arm has been in effect for only three months, bearing in mind the 12— month rule. He is able to manipulate his hand bilaterally... . [W]ould there be any job that exists in the national economy that an individual with those limits could perform?

(TR 81-82). The ALJ later asked if any of the jobs which the vocational expert believed that McLain could perform allowed McLain the opportunity to lie down. (TR 84). Given the combination of these questions, the ALJ covered the areas which McLain was concerned were not addressed except for the fact that McLain’s leg would give out on him. However, this factor was addressed by McLain’s attorney at the hearing. (TR 89).

[¶41]  In presenting the previous questions to the vocational expert, the ALJ excluded from the vocational expert’s consideration his opinion as to whether McLain could perform past work. (TR 82). As discussed above, the ALJ concluded that the testimony of McLain was not entirely credible and McLain could perform past work of a service station attendant and that such employment was available in the national economy. It was not necessary for the ALJ to consider the hypothetical questions which were posed to the expert given that the ALJ concluded that McLain was able to perform past relevant work. Gaddis v. Chater, 76 F3d 893, 896 (8th Cir. 1996) (holding that if a claimant is able to perform past relevant work then the services of a vocational expert are not necessary). Therefore, even if the ALJ erred in failing to pose all McLain’s impairments to the vocational expert, McLain’s objection is meritless given that the conclusion reached by the ALJ was not based on this hypothetical question.

IV.

[¶42]  McLain’s fourth reason for urging this Court to reverse the decision of the ALJ is that the entire record does not support the finding that McLain is able to perform gainful employment within the national economy. McLain basically reiterates the reasons set forth above for his conclusion that the record lacks substantial evidence in concluding that he is able to return to his previous employment as a station attendant. The Court disagrees.

[¶43]  The ALJ in part relied on the conclusions of the FCA and the vocational expert in concluding that McLain is able to perform past relevant work. Given that the treating physician did not perform a FCA, it was not error for the ALJ to rely on the one performed by Work Analysis Systems, Inc. Also, the testimony of McLain and his treating physician was similar to the conclusions reached in the FCA. In addition, in this case the ALJ is permitted but not required to look to the opinion of the vocational expert to determine if McLain could return to any of his past employment.

[¶44]  The ALJ is allowed to balance the testimony of the vocational expert’s interpretations of the FCA against the testimony of the treating physician. The testimony of a medical doctor is not to include vocational testimony. See Smallwood v. Chater, 65 F3d 87 (8th Cir. 1995) (stating, “The treating physicians ... gave opinions as to whether the claimant could find work or be gainfully employed... . This type of conclusion is outside the medical province ... .”). The evidence failed to establish that Dr. Jenter had the expertise to testify as a vocational expert. After hearing the testimony of McLain in this case, the vocational expert testified that given McLain’s situation he should be able to perform his past relevant work of service station attendant. (TR 80). In addition, there is substantial evidence in the record for the ALJ not to accept McLain’s credibility as far as the severity of his pain. The record showed that McLain still went hunting, fishing, hiking, and camping although not as often as he did before the injury. Also, even though he had been prescribed stronger prescription drugs, the majority of the time he took over-the-counter pain killers. McLain failed to meet his burden that he was unable to perform his prior work as a service station attendant. This Court concludes that based upon the record as a whole there is substantial evidence to conclude that McLain could perform past work as a service station attendant.

CONCLUSION

[¶45]  After reviewing the record, this Court finds that there is substantial evidence supporting the decision of the ALJ.

Accordingly, it is hereby

ORDERED that the decision of the ALJ is affirmed and McLain is not determined to be disabled under the Act.

IT IS FURTHER ORDERED that the summary judgment of defendant is granted (Docket #13) and the plaintiff’s request for reversal (Docket #11) is denied.



United States v. Red Elk, 1997 DSD 6

UNITED STATES OF AMERICA,

Plaintiff,

v.

RICHARD RED ELK,

Defendant.

[1997 DSD 6]

United States District Court

District of South Dakota - Central Division

CR. 96-30031

REPORT AND RECOMMENDATION FOR DISPOSITION

OF DEFENDANT’S MOTION TO DISMISS

FOR PROSECUTORIAL MISCONDUCT BEFORE GRAND JURY

Filed Jan 21, 1997

Mark A. Moreno, Magistrate Judge

[¶1]  Defendant, Richard Red Elk, has filed a Motion to Dismiss for Prosecutorial Misconduct Before Grand Jury and Memorandum of Law in support thereof, Docket Nos. 51, 52. Plaintiff, United States of America, has filed a written Objection to the Motion, Docket No. 56. The Motion was thereafter forwarded to this Court for handling pursuant to the District Court’s1. The Honorable John B. Jones, Senior United States District Judge, presiding.{fn1} earlier Order of Referral. Docket No. 39. Because defendant’s Motion is a dispositive one, the Court is only authorized to decide the same on a report and recommendation basis. In accordance with 28 USC § 636(b)(1), the Court does now make and propose the following Report and Recommendation for disposition of defendant’s Motion.

PROCEDURAL HISTORY

[¶2]  Defendant is charged with the murder of A.B., a twenty-month-old male child, in violation of 18 USC §§ 1111 and 1153. Docket Nos. 1, 2. The indictment charges that the killing was committed on or about November 2, 1992 in Eagle Butte, South Dakota on the Cheyenne River Reservation, and was done with malice aforethought and by the use of force that caused A.B. to suffer a fatal head trauma. Id. After being arraigned on the murder charge, defendant filed a Motion to Dismiss Based on Prosecutorial Misconduct That Occurred Before the Grand Jury. Docket No. 51. Defendant’s Motion was heard, along with various other Motions filed by him, in an evidentiary hearing held on December 5, 1996. Docket Nos. 75, 76, 78, 79.

DISCUSSION

I.

[¶3]  Defendant claims in his Motion that the actions and conduct of plaintiff’s counsel in conjunction with the grand jury proceedings constituted prosecutorial misconduct. He requests that the indictment be dismissed based on violations of his constitutional rights and/or pursuant to the supervisory powers of the District Court. In support of his request for dismissal, he alleges that prosecutors:

1.  Commented on the evidence;

2.  Called his ten-year-old son as a witness against him without benefit of family, counsel or a guardian ad litem, and in violation of the parent-child and family privileges.

3.  Threatened, intimidated and harassed witnesses related or thought to be sympathetic to him;

4.  Impermissibly, repeatedly and falsely told the grand jury that his wife was lying about A.B.;

5.  Misled the grand jury or otherwise engaged in fundamentally unfair tactics before it; and

6.  Compromised the independence of the grand jury.

II.

[¶4]  An indictment may be dismissed for prosecutorial misconduct only upon a showing of “flagrant error” that significantly infringes on the ability of the grand jury to exercise independent judgment and actually prejudices the defendant. United States v. Larrazolo, 869 F2d 1354, 1357 (9th Cir. 1988); Bank of Nova Scotia v. United States, 487 US 250, 255-60 (1988). Federal courts draw their power to dismiss indictments from two sources, namely constitutional error and their inherent supervisory powers. United States v. Isgro, 974 F2d 1091, 1094-99 (9th Cir. 1992), cert. denied, 507 US 985 (1993); United States v. DeRosa, 783 F2d 1401, 1404 (9th Cir.), cert. denied, 477 US 908 (1986).

[¶5]  “[A] court may dismiss an indictment if it perceives constitutional error that interferes with the grand jury’s independence and the integrity of the grand jury proceeding.” Isgro, 974 F2d at 1094. To warrant a dismissal on this ground, the prosecutorial misconduct “must significantly infringe upon the grand jury’s ability to render an independent judgment.” Larrazolo, 869 F2d at 1357 (citing DeRosa, 783 F2d at 1404)). The relevant inquiry thus focuses on the impact of the alleged misconduct on the grand jury’s impartiality, not on prosecutorial culpability. United States v. Sears, Roebuck & Co., Inc., 719 F2d 1386, 1392 (9th Cir. 1983), cert. denied, 465 US 1079 (1984); DeRosa, 783 F2d at 1405. Constitutional error is found “where the structural protections of the grand jury have been so compromised as to render the proceedings fundamentally unfair, allowing the presumption of prejudice” to the defendant. Bank of Nova Scotia, 487 US at 257 (citing Rose v. Clark, 478 US 570, 577-78 (1986);2. The Supreme Court has on a number of occasions held that deep-rooted irregularities in grand jury composition could affect the deliberative process and create a structurally defective body such that indictments could be dismissed without a showing of prejudice. See e.g., Vasquez v. Hillery, 474 US 254 (1986) (racial discrimination in selection of grand jurors compelled dismissal of indictment); Rose v. Mitchell, 443 US 545 (1979) (same); Ballard v. United States, 324 US 187 (1946) (exclusion of women from grand jury required dismissal). The Court, however, made clear in Bank of Nova Scotia, 487 US at 256-57 that these “structural defect” cases are not isolated exceptions to an overall rule, but instead are part of a discreet line of cases with a coherent message. Rather than require the defendant to make a difficult if not impossible showing of how subtle, inhehow biases and stereotypes from a racially or gender discriminatory jury can affect the indictment process to his/her detriment, the court simply created an irrebutable presumption of prejudice. Id. at 257 (“The nature of the violation allow[s] a presumption that the defendant was prejudiced, and any inquiry into harmless error would have required unguided speculation”); cf., United States v. Lamantia, 59 F3d 705, 708 (7th Cir. 1995); cert. denied, 116 SCt 711 (1996).{fn2} Isgro, 974 F2d at 1094. A constitutional violation may also be found if the defendant can show a history of prosecutorial misconduct that is so systematic and pervasive and that is affects the fundamental fairness of the proceeding or if the independence of the grand jury is substantially infringed. Bank of Nova Scotia, 487 US at 259; Isgro, 974 F2d at 1094.

[¶6]  A court may also dismiss an indictment under its own supervisory powers “because of misconduct before the grand jury, at least where [the] misconduct amounts to a violation of one of those ‘few, clear rules which were carefully drafted and approved by [the Supreme] Court and by Congress to ensure the integrity of the grand jury’s functions."’ United States v. Williams, 504 US 36, 46 (1992) (quoting United States v. Mechanik, 475 US 74 (1986) (O'Connor, J. concurring in judgment)). Courts, however, have repeatedly cautioned that such power is limited and must be used sparingly. See United States v. Santana, 6 F3d 1, 10 (lst Cir. 1993) (referring to such power as a “potent elixir that should not be casually dispensed”). Indeed, the Supreme Court has semaphored the limitations of such power in several of its recent decisions. See Williams, 504 US at 50 (“any power federal courts may have to fashion, on their own initiative, rules of grand jury procedure is a very limited one, not remotely comparable to the power they maintain over their own proceedings”); Bank of Nova Scotia, 487 US at 254 (federal court may not dismiss an indictment for errors in grand jury proceedings unless such errors prejudice the defendant and may not invoke its supervisory power to circumvent the harmless-error inquiry prescribed by FRCrP 52(a)); United States v. Hasting, 461 US 499 (1983) (a court may not invoke its supervisory power to reverse a conviction in order to castigate the prosecution for misconduct that did not prejudice the defendant); United States v. Payner, 447 US 727 (1980) (“the supervisory power does not authorize a federal court to suppress otherwise admissible evidence on the ground that it was seized unlawfully from a third party not before the court”); see also, Santana, 6 F3d at 9-11. Before dismissing an indictment pursuant to its supervisory power, a court must first find that the defendant was actually prejudiced by the misconduct alleged. Absent such prejudice - that is, absent proof that the misconduct “substantially influenced the grand jury’s decision to indict or proof that “there is ‘grave doubt’ that the decision to indict was free from the substantial influence of [the misconduct]” dismissal is not warranted. Bank of Nova Scotia, 487 US at 256. Even if the requisite showing of misconduct and prejudice has been made, nonetheless, a court must “tailorE ] relief appropriate [to] the circumstances.” United States v. Morrison, 449 US 361, 365 (1981). As the court observed in Bank of Nova Scotia:

Errors of the kind alleged in these cases can be remedied by means other than dismissal. For example, a knowing violation of [FRCrP 6] may be punished as contempt of court. In addition, the court may direct a prosecutor to show cause why he should not be disciplined and request the bar of the Department of Justice to initiate disciplinary proceedings against him. The court may also chastise the prosecutor in a published opinion. Such remedies allow the court to focus on the culpable individual rather than granting a windfall to the unprejudiced defendant.

487 US at 263 (citation omitted).

III.

[¶7]  At the outset, defendant claims that the prosecutors made impermissible comments about the evidence to the grand jury. He first complains about statements made by one of the prosecutors, during the early stages of the grand jury. After telling the jury that A.B. died “... from head injuries of the type being swung into a wall or hit by a bat on these two areas of his head ...”, the prosecutor said, “The only explanation that I can come up with is that [defendant] hurt this child at some time ... he’s the main suspect ... .” GrJ. Tr. (6-30-93) at 19, 21.3. These statements were made during the course of the prosecutor’s examination of defendant’s girlfriend at the time, Patricia Red Fox, in an apparent effort to obtain testimony from Red Fox that implicated defendant in A.B.’s death.{fn3} He next complains about the prosecutors informing the grand jury that it should not be “surprised” if witnesses related or sympathetic to defendant had “memory” problems and of the eventuality of being presented with the case and asked to return an indictment.4. The statements in question are as follows:

  [The prosecutor]: Don’t be surprised. I’m afraid that our first witnesses will all have terrible memories. But let me explain, that’s not all bad. Because when a witness comes in and says, I can’t remember, I don’t remember a thing, sometimes that’s fine, because then they can’t later on show up as a defense witness and say, Oh, yeah, I remember so-and-so confessed to me about that. Because they are trying to undermine the prosecution’s case when it actually gets there.

  So I don’t necessarily mind if a witness is brought in here and says, I can’t remember, I swear I can’t remember. Because then their credibility is undermined when they later show up and all of a sudden miraculously remember something that helps the defendant. ...

  But I do want them in here to either find out what they know or what they don’t know. Because one way or another, this case is going to be presented to you eventually for an indictment.

  ...

  [Prosecutor]: I think I will bring her back in and just ask her the question what is her recollection of how [A.B.] died. I’m sure she can’t remember but will bring her in and ask her that question.

GrJ. Tr. (10-18-95) at 16-18.{fn4}

[¶8]  Finally, defendant complains about a statement made by the same prosecutor concerning various post-mortem photographs of A.B. that were shown to the grand jury.5. After the testimony of one of the witnesses, some of the grand jurors and the prosecutor engaged in the following colloquy:

  Juror: The pictures did bother her. I could tell.

  [The prosecutor]: That’s what they are there for.

  Juror: Boy, you're ornery.

  Juror: No, she isn’t ornery enough.

GrJ. Tr. (10-18-95) at 42-43.{fn5}

[¶9]  The prosecutor often “serves as the ‘guiding arm of the grand jury’ and is responsible for [the] orderly and intelligible presentation of [the] case”. United States v. Singer, 660 F2d 1295, 1303 (8th Cir. 1981) (quoting United States v. International Paper Co., 457 FSupp 571, 576 (SD Tex. 1978), cert. denied, 454 US 1156 (1982).

The purpose of the grand jury requires that it remain free, within constitutional and statutory limits, to operate “independently of either prosecuting attorney of judge.” Nevertheless, a modern grand jury would be much less effective without the assistance of the prosecutor’s office and the investigative resources it commands. The prosecutor ordinarily brings matters to the attention of the grand jury and gathers the evidence required for the jury’s consideration. Although the grand jury itself may decide to investigate a matter or seek certain evidence, it depends largely on the prosecutor’s office to require the evidence or witnesses it requires. The prosecutor also advises the lay jury on the applicable law.

United States v. Sells Engineering, Inc., 463 US 418, 430 (1983) (citation and footnote omitted).

[¶10]  The prosecutor’s initial comments were made in the context of providing general background and investigative information to members of the grand jury, including the crime he (the prosecutor) believed had been committed and who committed it. Although the prosecutor did offer his own explanation for how A.B. was hurt, he told the grand jury that defendant was only a “suspect” and did not express his personal belief as to defendant’s guilt. See Sears, 719 F2d at 1388-94. There is certainly nothing iniquitous about the prosecutor advising the grand jury in general terms of the nature of an investigation and who the target of the investigation is. See United States v. Cederquist, 641 F2d 1347, 1353 (9th Cir. 1981) (grand jury aware that the prosecutor believes that an indictment is warranted and the fact that the prosecutor conveys such an impression to jurors does not require reversal).

[¶11]  Furthermore, the comments now being attacked were made to the first grand jury empaneled to hear evidence concerning the homicide investigation, not the grand jury that ultimately returned an indictment against defendant. Portions of the testimony heard by the first grand jury were read to the second grand jury. In addition, transcripts of all prior testimony were made available to the second grand jury but none of the grand jurors requested any information from the prior proceedings beyond what was read to them. The assailed comments were not read to the grand jury that indicted defendant. It is therefore unlikely that these comments had much, if any influence on the grand jury’s decision to indict defendant. See United States v. Carr, 764 F2d 496, 498-99 (8th Cir. 1985) (no prejudice where grand jury before which an FBI agent was improperly characterized as “an agent of the grand jury” did not hand down the indictment against defendant) cert. denied, 475 US 1010 (1986).

[¶12]  The prognosticative comments concerning “memory” problems of potential witnesses can be disposed of in short order. These comments were made in the midst of “strategy” discussions between the prosecutor and grand jury members and appear to be an attempt by the prosecutor to explain not only why certain witnesses were being called and had not been asked to testify before but also to give grand jurors an idea of what to expect from the witnesses. Significantly, the prosecutor explicitly stated that the purpose in calling these witnesses was “to [ ] find out what they know or what they don’t know” and added that recollection difficulties among witnesses is “not all bad” and that she (the prosecutor) did not necessarily mind if a witness, appearing before the grand jury, said that he/she could not remember. GrJ. Tr. (10-18-95) at 17. This Court sees nothing sinister about the prosecutor’s remarks but even if the remarks can be viewed as a comment about the credibility of the witnesses, the same did not constitute misconduct that can support a dismissal of the indictment. See United States v. Pabian, 704 F2d 1533, 1539 (11th Cir. 1983).

[¶13]  Nor did the prosecutor’s remark concerning the eventual presentment of the case for indictment invade the province of the grand jury and its independent deliberations and cause defendant prejudice sufficient to warrant a dismissal. See United States v. Montgomery, 990 F2d 266, 270-71 (7th Cir. 1993) (prosecutor’s use of the expression “we're indicting” in response to grand jury’s request for a list of names did not rise to the level of misconduct, compromise the integrity of the process or affect the substantial rights of the defendant). Moreover, to the extent that the statement can be construed as an indication from the prosecutor that an indictment was warranted, this impression, if in fact the same was conveyed to the grand jury, does not require dismissal of the indictment. Larrazolo, 869 F2d at 1360-61 (citing Cederquist, 641 F2d at 1353).

[¶14]  Similarly, the post-mortem photographs of A.B. (Which were shown to the grand jury) and the prosecutor’s remarks concerning same, even when viewed in combination, were not sufficiently inflammatory or flagrant to support a claim that absent the introduction of the photographs and the allegedly improper remarks, the indictment would not have been returned. See United States v. Edmonson, 962 F2d 1535, 1539 (lOth Cir. 1992) (allegedly inflammatory and prejudicial statements and improper photographs held to not constitute misconduct or error of the magnitude required for dismissal). Moreover, defendant does not contend that any of the witnesses altered their testimony or refused to testify because of the photographs. See United States v. Risken, 788 F2d 1361, 1370-71 (8th Cir.), rejecting defendant’s contention that the prosecutor’s threat to prosecute a witness for perjury so intimidated a witness that he refused to testify) cert. denied, 479 US 923, 1986. This, coupled with the lack of any reason showing of actual prejudice vitiates any misconduct assertions relating to the photographs. See United States v. McKie, 831 F2d 819, 821 (8th Cir. 1987).

IV.

[¶15]  Defendant also argues that prosecutors, by calling his ten-year-old son, P.R.E., as a witness before the grand jury, violated the “parent-child/family privilege” and caused the child psychological trauma. In response, plaintiff maintains that the child was a possible witness to the alleged murder and that the interests of justice in calling a potential eyewitness in a murder investigation outweigh any constitutional right to family integrity advanced by defendant.

[¶16]  As a threshold matter, any claim of prosecutorial misconduct, based on a violation of the “parent-child/family” privilege must fail because there is no such privilege which defendant is entitled to assert under these circumstances. In re Erato, 2 F3d 11, 16 (2d Cir. 1993); In re Grand Jury Proceedings of John Doe v. United States, 842 F2d 244, 246-48 (lOth Cir.), cert. denied, 488 US 894 (1988); United States v. Davies, 768 F2d 893, 893-900 (7th Cir.), cert. denied, 474 US 1008 (1985).

[¶17]  Yet even assuming, arguendo, that such a privilege does exist, defendant has no standing to assert the privilege because he was not the person subpoenaed to testify before the grand jury. See Payner, 447 US at 731-36; Trammel v. United States, 445 US 40, 51-53 (1980); see also, United States v. Leisure, 844 F2d 1347, 1359 (8th Cir.), cert. denied, 488 US 932 (1988).

[¶18]  Defendant cites In re Agosto, 553 FSupp 1298 (D.Nev. 1983) for the proposition that the parent-child/family privilege arises from the penumbras of the Constitution and that a child cannot be compelled to testify against his father. In Agosto, the district court quashed a grand jury subpoena which would have required a child to give testimony for use in a contemplated indictment against the child’s father. Because the court quashed the subpoena prior to the child having to testify, the defendant’s standing to assert the privilege never became an issue. More importantly, however, Agosto has never been followed by the Eighth Circuit6. Nor does it appear likely, in view of its prior precedent, that the Eighth Circuit would follow Agosto if asked to. See In re O'Brien, 728 F2d 1172, 1174 (8th Cir. 1984) (rejecting witness’ argument that compelled testimony before the grand jury would violate his First Amendment right to freedom of association by “compromising his social and family relationships”).{fn6} and has been rejected by virtually every other federal court that has been called upon to recognize and apply a parent-child/family privilege. See In re Erato, 2 F3d at 16; In re John Doe, 841 F2d at 246-48; Davies, 768 F2d at 896-900; Port v. Heard, 764 F2d 423, 428-30 (5th Cir. 1985); United States v. Ishmail, 756 F2d 1253, 1257-58 (6th Cir. 1985); In re Grand Jury Subpoena of Santarelli, 740 F2d 816, 817 (llth Cir. 1984); United States v. (Under Seal); 714 F2d 347, 349, n.4 (4th Cir. 1983); In re Matthews, 714 F2d 223, 224 (2d Cir. 1983); United States v. Jones, 683 F2d 817, 818-19 (4th Cir. 1982); United States v. Penn, 647 F2d 876, 885 (9th Cir.) (en banc), cert. denied, 449 US 903, (1980); In re Grand jury Proceedings of Starr, 647 F2d 511, 512-13 & n.4 (5th Cir. 1981); see also, United States v. Duran, 884 FSupp 537, 541 (D.D.C. 1995); United States v. Lavasseur, 699 FSupp 995, 1006 (D.Mass. 1988), aff'd, 867 F2d 36 (1st Cir. 1989);7. In addition, several states have expressly rejected the parent-child/family privilege. See e.g., In re Inquest Proceedings, 676 A.2d 790 (VT. 1996); State v. Good, 308 S.C. 313, 417 S.E.2d 643 (S.C.App. 1992); State v. Maxon, 110 Wash. 2d 564, 756 P.2d 1297 (1988); State v. Willoughby, 532 A.2d 1040 (Me. 1987); People v. Dixon, 161 Mich. App. 388, 411 NW2d 760 (1987); People v. Sanders, 99 Ill. 2d 262, 457 N.E.2d 1241 (1983); Three Juveniles v. Commonwealth, 390 Mass. 357, 455 N.E.2d 1203 (1983), cert. Denied, 465 US 1068 (1984); Cissna v. State, 170 Ind. App. 437, 352 N.E.2d 793 (1976).{fn7} but see, In re Grand Jury Proceedings, Unemancipated Minor, No. CY-96-1454A, 1996 WL 739256 at **3-10 (E.D. Wash. Dec. 17, 1996); In Re Greenberg, 11 Fed. R. Evid. Serv. 579 (D.Conn. 1982).8. Greenberg, like Agosto, has not been followed by any federal appellate court. See Unemanci- pated Minor Child, 1996 WL 739256 at ** 3-10: In re John Doe, 842 F2d at 247.{fn8} This Court agrees with the “great weight of authority” and finds that there is no compelling basis, legal or otherwise, for acknowledging a parent-child/family privilege under the circumstances present.

[¶19]  In any event, assuming, without conceding, that a parent-child/family privilege does exist and that defendant has standing to assert it, the privilege cannot and should not be applied in this case. In Trammel, the Supreme Court granted certiorari to consider whether an accused could invoke the privilege against adverse spousal testimony so as to exclude the voluntary testimony of his wife. 445 US at 41-42. The Court observed that the common law had long recognized a privilege protecting communications between husband and wife, priest and penitent, attorney and client, and physician and patient. 445 US at 4451. Even so, the Court observed that Congress, in the enactment of Fed. R. Evid. 501, granted federal courts the authority to “continue the evolutionary development of testimonial privileges in federal criminal trials [and federal grand jury proceedings] ... with the flexibility to develop rules of privilege on a case-by-case basis.” 445 US at 47. The Court, however, emphasized the facts that:

Testimonial exclusionary rules and privileges contravene the fundamental principle that “the public ... has a right to every man’s evidence.” As such, they must be construed and accepted “only to the very limited extent that permitting a refusal to testify or excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth.”

445 US at 50-51). (Citations omitted). Trammel makes clear that the search for truth and society’s quest to administer justice creates a strong presumption against testimonial privileges because they result in the suppression of competent evidence.

[¶20]  Confidentiality is the essential element of any privilege, and the importance thereof must be weighed against the “need for production of relevant evidence in a criminal proceeding [which] is specific and central to the fair adjudication of a particular criminal case in the administration of justice. Without access to specific facts, a criminal prosecution may be totally frustrated.” United States v. Nixon, 418 US 683, 713 (1974).

[¶21]  After carefully balancing the interests of the respective parties in light of relevant precedent, this Court believes that any parent-child/family privilege available to defendant is outweighed by plaintiff’s interests in investigating crimes and enforcing the criminal laws of the United States. See Branzburg v. Hayes, 408 US 665, 686-709 (1972); In re John Doe, 842 F2d at 245-48; Port, 764 F2d at 428-33.

[¶22]  Alternatively, this Court believes that the policy considerations underlying the Eighth Circuit’s decision in United States v. Allery, 526 F2d 1362 (8th Cir. 1975) apply with equal force here. In Allery, defendant was convicted of attempting to rape his twelve-year-old daughter. The Eighth Circuit held that the “anti-marital facts” privilege9. This privilege prohibits one spouse from testifying against one another during the length of the marriage. The “marital communications” privilege, by contrast, bars testimony concerning statements privately communicated between spouses.{fn9} is subject to an exception for offenses committed against a spouse and/or a child/stepchild. 526 F2d at 1366-67.

We recognize that the general policy behind the husband-wife privilege of fostering family peace retains vitality today as it did when it was first created. But, we note that a serious crime against a child is an offense against that family harmony and to society as well.

526 F2d at 1366. See also, United States v. White, 974 F2d 1135, 1137-38 (9th Cir. 1992) (citing Allery and holding that the “marital communications” privilege should not apply to a crime committed against a stepchild living in the home).

[¶23]  The fact that A.B. was a foster child as opposed to a child of either defendant or Red Fox is, in this Court’s view, a distinction without a difference. Allowing a parent to prevent his own child from giving eyewitness testimony that incriminates the parent in the death of another child residing in the home is not only inconsistent with any recognized privilege but also impedes the search for and the discovery of the truth and the doing of justice. Because the crime allegedly committed against A.B. was also an offense against defendant’s entire family and society as a whole, any privileged testimony was admissible.

[¶24.] For these reasons, the prosecutor did not abuse the grand jury process by subpoenaing P.R.E. before the grand jury and inquiring about the circumstances surround A.B.’s death.

V.

[¶25]  Defendant further asserts that various witnesses thought to be sympathetic to him, including P.R.E., were threatened, intimidated and harassed by prosecutors in front of the grand jury. The transcript of P.R.E.’s testimony reveals that he was gently questioned for a brief period of time and was given a break to be with his parents. GrJ. Tr. (2-11-93) at 48-87, 8992. During his testimony, P.R.E. disclosed that earlier in the day, defendant told him that he (defendant) “might be in trouble”. Id. At 82-83. Although P.R.E. testified before the grand jury on his own, his parents were in the immediate vicinity of the meeting room and thus able to provide him comfort and support if need be. Id. At 92. The prosecutor was kind and patient with P.R.E. and did not intimidate the child. Id. At 4887, 89-92.

[¶26.] Defendant contends that P.R.E. suffered “psychological trauma” as a result of his experience before the grand jury. The transcript, however, does not indicate that he was “traumatized” during his short time with the grand jury. More importantly, whether or not P.R.E.’s grand jury appearance caused him mental harm has little, if any, bearing absent some kind of showing that members of the grand jury were aware of this and influenced by it in their decision-making process. Inasmuch as defendant has failed to establish that P.R.E.’s testimony and alleged injuries influenced the grand jury’s decision to indict or unfairly affected its independent judgment, his misconduct assertions must fail. See Bank of Nova Scotia, 487 US at 256-62; United States v. Pino, 708 F2d 523, 529-31 (lOth Cir. 1983); see also, McKie, 831 F2d at 821.

[¶27]  In addition to his assertions relating to P.R.E., defendant likewise contends that one of the prosecutors intimidated certain witnesses by advising them of their rights and the consequences of testifying falsely. See GrJ. Tr. (10-18-95) at 9lo, 23-24, 55-57; GrJ. Tr. (10-19-95) at 4-6, 64-66. Defendant maintains that the prosecutor, by and through her advisements, “implicitly” threatened these witnesses with criminal prosecution and perjury charges.

[¶28]  “It is not improper per se for a ... prosecuting attorney to advise prospective witnesses of the penalties for testifying falsely. But warnings concerning the dangers of perjury cannot be emphasized to the point where they threaten and intimidate the witness into refusing to testify.” Risken, 788 F2d at 1370 (quoting United States v. Blackwell, 694 F2d 1325, 1334 (D.C. Cir. 1982)).

[¶29]  The prosecutor’s statements in the instant case do not approximate the kind of governmental misconduct held unconstitutional in Webb v. Texas, 409 US 95, 98 (1972) (per curiam) in which the trial court gratuitously and at great length admonished the defendant’s only witness not to lie and warned him of the dire consequences of perjury, or in United States v. Smith, 478 F2d 976, 979 (D.C. Cir. 1973), in which the prosecutor threatened to prosecute the prospective witness for past crimes if he took the stand and testified in a pending trial. Rather, this Court is convinced that the prosecutor’s statements amounted to a constitutionally permissible “warning” of the dangers of committing perjury. Risken, 788 F2d at 1371; see also, United States v. Holloway, 778 F2d 653, 657 (llth Cir. 1985) (prosecutor may inform witness that he would be subject to prosecution for lying to grand jury), cert. denied, 476 US 1158 (1986). All of the witnesses were able to testify and did so even after the perjury explanation was given to them. No witness was threatened with retaliatory prosecution if he/she refused to testify. The prosecutor’s remarks were limited to warning the witnesses about the serious consequences of testifying falsely and answering any questions they had about what perjury was. See e.g., GrJ. Tr. (10-19-95) at 4-6. The advisements given appear to be substantively the same or at least similar to the ones upheld in Risken. 778 F2d at 1370-71. [530.] While prosecutors should exercise considerable restraint when advising witnesses of the potential dangers of committing perjury, the prosecutor here stayed well within acceptable limits in her dealings with witnesses believed to be “on defendant’s side”. Risken, 788 F2d at 1370-71; Blackwell, 694 F2d at 133436; see also, Holloway, 778 F2d at 655-69.

VI.

[¶31]  Defendant next contends that prosecutors falsely accused his “wife”, Red Fox,10. Although defendant and Red Fox had five children together, resided under the same roof and may have been considered husband and wife in the “Indian way”, they did not marry until April, 1996, the same month defendant was indicted on the murder charge.{fn10} of lying to the grand jury. Id. at 59. The “accusatory” statements defendant refers to were made during the prosecutors’ examination of Red Fox.11. Defendant points to two instances where this occurred. First, after Red Fox testified that she could not really remember why she took A.B. to the hospital the night of November 2, 1992, one of the prosecutors retorted:

I don’t think there’s anyone in this room that believes that you can’t remember what you saw that made you think you should take him to the hospital. So tell the grand jury the truth about what you saw that made you think you should take him to the hospital... . GrJ. Tr. (10-19-95) at 35.

Later, when Red Fox could not remember how defendant disciplined A.B., the other prosecutor pressed harder:

But it’s fairly significant, in my opinion, that all of those children had expressed recollection of how [defendant] disciplined [A.B.]. I find it hard to believe that if the children noticed how [defendant] disciplined him that you would fail to notice.

So I’m going to ask you again to think a little bit harder and talk about how [defendant] Would discipline [A.B.].

Id. At 59.{fn11} It is apparent from the grand jury transcript that Red Fox was uncooperative at times and conveniently could not recall certain important events. Just as any other attorney would do when examining a hostile witness, prosecutors challenged Red Fox and her memory lapses, not in an effort to “insinuate” to the grand jury that she was lying, but rather in an attempt to flush out the truth and find out what really happened on the night of A.B.’s death. Prosecutors aggressively tried to solicit candid responses from Red fox about her knowledge of what transpired on the night in question but did not do so in such a flagrant or abusive manner that would dictate judicial intervention and corrective action. Sears, 719 F2d at 1393-94; Pabian, 704 F2d at 1539-40; see also, United States v. Rodriguez, 777 FSupp 297, 298 (SD N.Y. 1991) (prosecutor’s question to grand jury witness concerning whether he knew what a “cock and bull story” was was better left unasked but not too prejudicial as to warrant dismissal of the indictment); United States v. Ruiz, 702 FSupp 1066, 1072-73 (SD N.Y. 1989) (statements to first grand jury implying the prosecutor’s disbelief of defendant’s testimony did not constitute prosecutorial misconduct mandating dismissal of the indictment), aff'd, 894 F2d 501 (2d Cir. 1990).

[¶32]  The fact that the grand jury had been earlier furnished with Red Fox’s testimony and was thus aware of what she saw, did and knew of that fateful day, not only reinforces this conclusion but also rebuts any claim on the part of defendant and of actual prejudice. Id.; see also, Bank of Nova Scotia, 487 US at 254-63. So too does Red Fox’s handwritten log for the time period of September 23, 1992 through November 2, 1992 which the grand jury obtained from her in conjunction with her later testimony. See GrJ. Tr. (10-19-95) at 75-86 & Ex. 3.

[¶33]  Defendant bases his misconduct contention on United States v. Samango, 607 F2d 877 (9th Cir. 1979). In Samango, the prosecutor gave the grand jury lengthy transcripts of testimony given before previous grand juries and did not warn it of a key witness’ doubtful credibility. 607 F2d at 881-83. The Ninth Circuit found that the transcript of the defendant’s testimony was “an impressive repertory of insults and insinuations” and “contained much testimony by the prosecutor in the form of questions which were usually denied and definitely conveyed the prosecutor’s belief that [the defendant] was guilty and evasive.” 607 F2d at 883. The appeals court held that the “cumulative effect” of the prosecutor’s conduct “operated to the defendants’ prejudice by producing a biased grand jury” and affirmed the district court’s dismissal of the indictment. 607 F2d at 884-85.

[¶34]  The facts here are a far cry from those in Samango. In short, Samango is factually distinguishable and therefore inapposite.

VII.

[¶35]  Ever persistent, defendant argues that prosecutors misled the grand jury and failed to correct the false impression they created concerning his guilt. According to defendant, prosecutors elicited testimony that showed he and Red Fox borrowed money and attempted to hire an attorney shortly after the November 2, 1992 incident (thereby intimating that he must be A.B.’s killer) but offered no evidence to dispel this impression or explain his actions or motivations for doing so.

[¶36] The grand jury, however, need only hear the prosecution’s side of an investigation and need not be presented with exculpatory evidence in the possession of the prosecutor. Williams, 504 US at 51-52. A suspect or defendant has no right to have evidence favorable to him or her presented to a grand jury, just as he/she has no right to testify him/herself before such a body. Id. At 51; see also, Isgro, 974 F2d at 1096 (“in fairly expansive language, Williams clearly rejects the idea that there exists a right to such ‘fair’ or ‘objective’ grand jury deliberations”).

[¶37] Nonetheless, a prosecutor may not deliberately mislead a grand jury or instill false impressions to it in an effort to obtain an indictment. See DeRosa, 783 F2d at 1404-07. Yet, “absent some evidence of gross purposeful deception by the prosecutor, an indictment legally valid on its face will not be overturned because it is possible that some of the evidence presented to the grand jury may have permitted an erroneous adverse inference... .” United States v. Levine, 700 F2d 1176, 1179 (8th Cir. 1983) (quoting United States v. Cady, 567 F2d 771, 776 (8th Cir. 1977), cert. denied, 435 US 944 (1978)). Defendant does not claim that the indictment is invalid on its face. Nor has he met his burden and overcome the strong presumption of regularity afforded to grand jury proceedings or shown that the grand jury was, in fact, misled or deceived by the intentional conduct of the prosecutors or that he suffered actual prejudice therefrom. McKie, 831 F2d at 821; Kouba, 822 F2d at 773-74; United States v. Hintzman, 806 F2d 840, 843 (8th Cir. 1986); Levine, 700 F2d at 1178-80; United States v. Johnson, 767 F2d 1259, 1275 (8th Cir. 1985); see also, DeRosa, 783 F2d at 1404-07; Pino, 708 F2d at 529-31.

VIII.

[¶38] Finally, defendant claims that the independence of the grand jury was compromised and that dismissal of the indictment is mandated. This Court has carefully scrutinized the record and, particular, the grand jury transcripts and believes that the cumulative effect of the assignment of errors and indiscretions did not operate to defendant’s prejudice by producing a biased grand jury. In other words, the prosecutorial misconduct alleged was not a substantial encroachment on the grand jury’s ability to exercise its independent judgment. Edmonson, 962 F2d at 1539; Larrazolo, 869 F2d at 1357-61; DeRosa, 783 F2d at 140407; Sears, 719 F2d at 1391-94; Pino, 708 F2d at 529-31; see also, Bank of Nova Scotia, 487 US at 254-63; Isgro, 974 F2d at 1095-99.

IX.

[¶39]  In summation, this Court finds that the misconduct asserted was not sufficiently egregious to abrogate defendant’s constitutional rights12. Although some courts have analyzed the constitutional component of prosecutorial misconduct claims under the Due Process Clause of the Fifth and Fourteenth Amendments, see Samango, 607 F2d at 881 and United States v. Basurto, 497 F2d 781, 785 (9th Cir. 1974), in light of applicable precedent and the Constitution itself, it appears that the right to unbiased treatment by a grand jury is really one grounded in the Grand Jury Clause of the Fifth Amendment. Because the grand jury’s determination is a preliminary one, and because the entire panoply of constitutional protections are available to the defendant at trial, courts have not been inclined to extend due process rights to grand jury proceedings. See e.g., Calandra, 414 US at 349 (“Because the grand jury does not finally adjudicate guilt or innocence, it has traditionally been allowed to pursue its investigative and accusatorial functions unimpeded by the evidentiary and procedural restrictions applicable to a criminal trial”); Silverthorne v. United States, 400 F2d 627, 639 (9th Cir. 1968), cert. denied, 400 US 1022 (1971) (“If a grand jury is prejudiced by outside sources when in fact there is sufficient evidence to indict, the greatest safeguard to the liberty of the accused is the petit jury and the rules governing its determination of a defendant’s guilt or innocence”). Thus, as already alluded to herein, the constitutional grounds for dismissal of an indictment are limited. Indeed, “[a]n accused’s only cognizable interest in grand jury proceedings, therefore - the only interest that courts can vindicate by dismissing indictments on constitutional grounds - is to have a legally constituted grand jury make and form an independent evaluation of the evidence to determine if there is probable cause to believe [him/her] guilty of a crime. Sears, 719 F2d at 1391, n.7 (citing Cederquist, 641 F2d at 1352).{fn12} and support a dismissal of the indictment. The Court likewise finds that even when added together, the instances of alleged misconduct do not raise a substantial question, much less a grave doubt, as to whether they had a substantial effect on the grand jury’s decision to indict defendant on the murder charge. Inasmuch as defendant has failed to show the existence of either constitutional or prejudicial errors that warrant dismissal of the indictment, his Motion must be denied.

CONCLUSION AND RECOMMENDATION

[¶40]  Based on the foregoing and in accordance with 28 USC § 636(b)(1), this Court concludes that prosecutors did not circumvent the grand jury’s autonomy by using flagrant or overreaching conduct that requires the indictment be dismissed because of constitutional errors or pursuant to a court’s supervisory powers. Accordingly, the Court recommends that defendant’s Motion to Dismiss For Prosecutorial Misconduct Before Grand Jury, Docket No. 51, be denied.



United States v. Biesman, 1997 DSD 7

UNITED STATES OF AMERICA,

Plaintiff,

v.

BRYON BIESMAN,

Defendant.

[1997 DSD 7]

United States District Court

District of South Dakota - Western Division

CR96-50074

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S

MOTION TO SUPPRESS EVIDENCE

Filed Feb, 1997.

RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  On September 19, 1996, defendant was indicted for conspiracy to distribute a controlled substance, a violation of 21 USC §§ 841(a)(1) and 846. Defendant filed a motion to suppress evidence consisting of a propane torch and triple beam scale observed during a protective sweep of defendant’s residence wherein he was arrested pursuant to a valid arrest warrant. The motion was referred to Magistrate Judge Marshall P. Young who held a suppression hearing concerning the motion on January 2, 1997.

[¶2]  Magistrate Judge Young found that there was an insufficient basis to justify the protective sweep of defendant’s basement and recommended that the triple beam scale and propane torch be suppressed. See Docket #28. He further noted that in the event this Court determines that the protective sweep was justified, it was not a full search of the premises and only extended to a cursory inspection of those places where a person might be found. Id. Finally, Magistrate Judge Young reviewed the affidavit for the search warrant disregarding any reference to the scale or propane torch observed during the suppressed search and concluded that the search warrant was based on sufficient probable cause. Id.

STANDARD OF REVIEW

[¶3]  The Eighth Circuit Court of Appeals has set forth the following procedure for a district court to undertake when reviewing a magistrate judge’s findings and recommendations.

Once a proper objection is made to a magistrate judge’s finding, the district court must review that finding de novo. Taylor v. Farrier, 910 F2d 518, 521 (8th Cir. 1990); 28 USC § 636(b)(1). “In conducting [de novo] review, the district court must, at a minimum, listen to a tape recording or read a transcript of the evidentiary hearing.” Branch v. Martin, 886 F2d 1043, 1046 (8th Cir. 1989).

Jones v. Pillow, 47 F3d 251, 252 (8th Cir. 1995). Upon review of the suppression hearing transcript and consistent with the following discussion, the Court accepts Magistrate Judge Young’s finding, albeit a close call, that there was an insufficient basis to justify a protective sweep under the facts and circumstances of this case. However, the Court concludes that the torch and scale should not be excluded based on application of the inevitable discovery doctrine.

FACTS

[¶4]  Defendant was indicted for conspiracy to distribute a controlled substance on September 19, 1996. The indictment was sealed and an arrest warrant was issued. On September 27, 1996, at approximately 1 p.m., six law enforcement officers went to defendant’s residence to arrest him and serve the warrant. The six officers were Special Agents Robert Hanson and Kenneth Etchison of the Drug Enforcement Administration, Deputy United States Marshal Doug Ludovissie, Special Agent John Buszko of the Division of Criminal Investigation, Deputy Sheriff Lynn McLane of the Pennington County Sheriff’s Department, and Detective McCabe of the Rapid City Police Department (T.T. 19). The agents had a long history of intelligence information dating back to 1994 regarding defendant’s involvement with the manufacture and sale of methamphetamine (T.T. 13-17). Deputy McLane testified that defendant was implicated during numerous informant debriefings and two controlled purchases of methamphetamine were conducted at defendant’s residence in September of 1995 and August of 1996 (T.T. 13-17, 27). Deputy McLane and Agent Hanson further testified that defendant owned several automatic weapons and that methamphetamine affects personalities making users more dangerous particularly when they are around weapons (T.T. 15, 18, 61).

[¶5]  Approximately one hour prior to the officers’ entry into defendant’s residence, Deputy McLane surveyed the residence which included license plate checks on the vehicles around the residence (T.T. 25, 28). She determined that the automobiles at the residence belonged to defendant and Karen Jones, his girlfriend of seven years who jointly occupied the residence (T.T. 25). Also prior to executing defendant’s arrest warrant, several officers unsuccessfully attempted to execute another arrest warrant on Joseph Norman (T.T. 35, 40, 43, 64-65). Because Mr. Norman was not at his residence the inference could be drawn that he was at defendant’s residence given the fact that he was known to associate with defendant (T.T. 40). However, no vehicle registered to Mr. Norman was found at defendant’s residence, there was no specific instruction by any of the officers to look for Mr. Norman at defendant’s residence, and the officers did not ask Karen Jones or the defendant about Mr. Norman’s whereabouts. Id.

[¶6]  At approximately 1 p.m., Deputy McLane and Agent Etchison went around to the back of the home in order to insure that no one left or entered the residence (T.T. 20, 31). Hanson, Ludovissie, Buszko, and McCabe knocked on the front door and announced their presence to Karen Jones (T.T. 30-31). She informed the officers that defendant was sleeping in the back bedroom and requested they keep their voices down so that they would not wake up the nephew who was asleep in the living room (T.T. 10, 51). Agents Hanson and Buszko both testified that Agent Hanson and Marshal Ludovissie followed Jones into the back bedroom with their firearms drawn whereupon they found the defendant in bed (T.T. 39, 51, 53). Karen Jones testified that none of the officers unholstered their weapons (T.T. 6). Defendant was informed there was a warrant for his arrest, and the officers assisted him in getting dressed (T.T. 51-54).

[¶7]  Meanwhile, Agent Buszko and Detective McCabe did a visual sweep of the living room and kitchen areas for officer safety and to confirm that a child was in fact sleeping in the living room area (T.T. 31). Agent Buszko testified that approximately 15 to 30 seconds after their initial entry into the residence, he accompanied Detective McCabe down a set of stairs into the basement to ensure that no other individuals were in the house for purposes of officer safety (T.T. 31-32). This testimony is consistent with Deputy McLane’s testimony that upon her entry into the residence approximately two to three minutes after the initial entry, Agent Buszko and Detective McCabe had already returned from the basement area and defendant was being escorted out of the residence (T.T. 20-21). Once again Karen Jones contradicted the officers’ testimony by asserting that the officers did not enter the basement until after defendant was led out of the residence (T.T. 7).

[¶8]  In any event, Agent Buszko testified that both officers had their guns drawn and yelled “[p]olice, police, arrest warrant” when they entered the basement (T.T. 32, 44). They went in what appeared to be a bedroom wherein they observed in plain view a propane torch on a desk and a triple beam scale on a cabinet above the desk (T.T. 33). The officers did not open any cabinets or drawers, but simply looked in places where a person could have been hiding. Id. They came back upstairs as the defendant was coming out of the bedroom, announced the area was clear, and that no one was in the search area (T.T. 33-34). The officers secured the residence for approximately two and one-half hours while the search affidavit was being prepared (T.T. 41).

[¶9]  Agent Etchison drafted the affidavit for the search warrant which was issued by this Court. The affidavit contains extensive information obtained from six different informants regarding defendant’s use and distribution of methamphetamine from his residence. See Affidavit for Search Warrant at 2-6. The affiant further set forth that all six informants provided extensive information on drug trafficking in and around Rapid City, South Dakota, as well as in outlying states and that information has been confirmed either through other sources of intelligence or by their cooperating actions. Id. at 2-6, 8. The affidavit also includes the controlled methamphetamine purchase conducted at defendant’s residence on August 7, 1996. Id. at 7. The affidavit states that a grand jury indicted defendant on September 19, 1996, for conspiracy to distribute methamphetamine, and that he was arrested on September 19, 1996. Id. Finally, the affidavit does make reference to the triple beam scale and torch found in the basement of the residence. Id. at 8.

DISCUSSION

[¶10]  Defendant argues that the protective sweep of the entire house was invalid under the facts and circumstances confronting the officers and that there were no articulable circumstances that the officers were in a dangerous position based on evidence that: (1) the officers’ guns were holstered; (2) there was no yelling by police; (3) there were no dangerous persons within the house; and (4) the vehicle check indicated that only vehicles owned by defendant and Karen Jones were outside the residence (T.T. 64-65). Defendant further contends that the inevitable discovery doctrine should not apply under the facts of this case (T.T. 65-66).

[¶11]  The government argues that the protective sweep was lawful because the facts establish that the officers had specific, articulable facts upon which to believe that other persons may be present posing a danger to the officers, and the scope of the protective search was reasonable given the layout of the house. See Government’s Objections to Findings and Recommendations at 1-2 (Docket #31). The government further contends that application of the inevitable discovery doctrine is warranted based on defendant’s concession that there was sufficient probable cause for the issuance of the search warrant and Magistrate Judge Young’s finding that “there is ample probable cause to allow the issuance of a search warrant, absent any reference to the scale or propane torch found pursuant to the suppressed search.” Id. at 2-3 (citing Docket #28 at 7-8); (T.T. 62-63, 67).

[¶12]  A.  PROTECTIVE SWEEP

[¶13]  In Maryland v. Buie, 494 US 325, 110 SCt 1093, 108 LEd2d 276 (1990), the Supreme Court articulated an exception to the traditional warrant requirement for law enforcement effectuating an in-home arrest, permitting them to conduct a “protective sweep” of the premises to ensure officers’ safety. 110 SCt at 1098-1100. The Buie court addressed two types of “protective sweeps.” Id. at 1098-1099. Under the first less pervasive type of search, officers conducting a search incident to a lawful arrest may, “as a precautionary matter and without probable cause or reasonable suspicion, look in closets and other spaces immediately adjoining the place of arrest from which an attack could be immediately launched.” Id. at 1098. See also United States v. Hawkins, 59 F3d 723, 727 (8th Cir. 1995); United States v. Horne, 4 F3d 579, 586 (8th Cir. 1993) (permitting a protective sweep when defendant and three others in house had already been handcuffed at the time the sweep was made).

[¶14]  The second more pervasive search which is at issue in this case involves a sweep extending “only to a cursory inspection of those spaces where a person may be found” and lasting “no longer than is necessary to dispel the reasonable suspicion of danger and in any event no longer than it takes to complete the arrest and depart the premises.” Buie, 110 SCt at 1099. Officers may conduct such a protective sweep when they have “articulable facts which, taken together with the rational inferences from those facts, would warrant a reasonably prudent officer in believing that the area to be swept harbors an individual posing a danger to those on the arrest scene.” 110 SCt at 1098. See also United States v. Blackshiers, 52 F3d 331, 1995 WL 238835 at *1 (8th Cir. 1995) (permitting a protective sweep of a basement in which voices where heard and the arrestee informed officers that there was a shotgun in the basement).

[¶15]  The first issue to be resolved is whether articulable facts existed which, taken together with the rational inferences from those facts, would warrant a reasonably prudent officer in believing that defendant’s basement harbored an individual posing a danger to those on the arrest scene. Magistrate Judge Young found that such articulable facts were not present. Based on the following discussion, this Court agrees. In this case, the officers possessed a valid warrant for defendant’s arrest; therefore, they had the authority to enter defendant’s residence and search anywhere in the house that defendant might be found. See Payton v. New York, 445 US 573, 100 SCt 1371, 63 LEd2d 639 (1980). Upon knocking on defendant’s door, officers were informed by Karen Jones that defendant was sleeping in the back bedroom and were requested to keep their voices down so that they would not wake up the nephew who was asleep in the living room. Agent Hanson and Marshal Ludovissie followed Jones into the back bedroom with their firearms drawn whereupon they found defendant in bed. Defendant was informed there was a warrant for his arrest and they assisted him in getting dressed. There is no evidence that defendant resisted in any fashion.

[¶16]  To be sure, Agent Buszko and Detective McCabe were justified in conducting a visual sweep of the living room and kitchen areas for officer safety and to confirm that a child was in fact sleeping in the living room area. It is true that Karen Jones initially informed the officers that defendant was sleeping in a back bedroom; however, it would indeed be a dangerous policy for law enforcement to take every assertion or statement made to them at face value. Courts have consistently recognized that precautions taken by law enforcement in furtherance of their safety should not be routinely second-guessed. See Greiner v. City of Champlin, 816 FSupp 528, 541 (D. Minn. 1993) (citing United States v. Hensley, 469 US 221, 235, 105 SCt 675, 683, 83 LEd2d 604 (1985); United States v. Bruton, 647 F2d 818, 822 (8th Cir.), cert. denied, 454 US 868, 102 SCt 333, 70 LEd2d 170 (1981)).

[¶17]  However, Agent Buszko and Detective McCabe went beyond permissible boundaries violating defendant’s Constitutional privacy rights by entering defendant’s basement under the circumstances presented them. Agent Buszko testified that approximately 15 to 30 seconds after their initial entry into the residence, he accompanied Detective McCabe down a set of stairs into the basement to ensure that no other individuals were in the house for purposes of officer safety.1. This testimony is consistent with Deputy McLane’s testimony that upon her entry into the residence approximately two to three minutes after the initial entry, Agent Buszko and Detective McCabe had already returned from the basement area and defendant was being escorted out of the residence. This discredits Karen Jones testimony that the officers did not enter the basement until after defendant was led out of the residence. {fn1} Rather than electing to “freeze” the basement in order to prevent anyone from emerging and surprising the officers, and wait for the other officers to follow Karen Jones into the back bedroom to determine whether defendant was in fact sleeping, the officers chose to yell “[p]olice, police, arrest warrant” and enter the basement with their guns drawn. See Buie, 110 SCt at 1095 (officer announced that he would “freeze” the basement so that no one could come up and surprise the officers).

[¶18]  At the evidentiary hearing, the officers failed to articulate any specific basis for believing that the basement harbored any individual posing a threat to them. See United States v. Akrawi, 920 F2d 418, 420 (6th Cir. 1990) (holding unconstitutional a sweep of the second floor of a house after arrest occurred on first floor where officers could point to “no specific basis” for believing anyone posed a threat from the second floor). There was testimony presented at the evidentiary hearing regarding the unsuccessful attempt to execute another arrest warrant on Joseph Norman and that he was known to associate with defendant. However, no vehicle registered to Mr. Norman was found at defendant’s residence, there was no specific instruction by any of the officers to look for Mr. Norman at defendant’s residence, and the officers did not ask Karen Jones or the defendant about Mr. Norman’s whereabouts.

[¶19]  While officers did have information concerning defendant’s possession of several automatic weapons, they encountered no resistance upon entering the house, did not search or pat down Karen Jones, and had no difficulty in arresting defendant. Id. See generally United States v. Colbert, 76 F3d 773, 775 (6th Cir. 1996). They heard no noises or voices indicating that anyone might have been in hiding in the basement. Akrawi, 920 F2d at 419-20; Buie, 110 SCt at 1095; United States v. Sherry, 906 FSupp 1311, 1317 (D. Neb. 1995). Furthermore, the basement was not immediately adjoining the area in which defendant was arrested. See United States v. Lauter, 57 F3d 212, 216-17 (2d Cir. 1995) (permitting protective sweep of room immediately adjoining the area in which defendant was arrested). Based on the foregoing, this Court holds that there were no articulable facts which, taken together with the rational inferences from those facts, would warrant a reasonably prudent officer in believing that defendant’s basement harbored an individual posing a danger to those on the arrest scene to justify the sweep search of the basement. Therefore, the Court must determine whether the inevitable discovery doctrine should apply under the facts of this case.

[¶20]  B. INEVITABLE DISCOVERY DOCTRINE

[¶21]  The government contends that the propane torch and triple beam scale discovered during the sweep search fall under the inevitable discovery exception2. The Court notes that the government has argued that the torch and scale should not be suppressed based on the inevitable discovery rule approved in Nix v. Williams, 467 US 431, 104 SCt 2501, 81 LEd 2d 377 (1984), as opposed to the independent source doctrine announced in Silverthorne Lumber Co. v. United States, 251 US 385, 40 SCt 182, 64 LEd 319 (1920) and further elaborated on in Segura v. United States, 468 US 796, 104 SCt 3380, 82 LEd 2d 599 (1984) and Murray v. United States, 487 US 533, 108 SCt 2529, 101 LEd 2d 472 (1988). As stated by the Seventh Circuit,

While the inevitable discovery and independent source doctrines are closely related, they are not the same. The inevitable discovery doctrine applies where evidence is not actually discovered by lawful means, but inevitably would have been. Its focus is on what would have happened if the illegal search had not aborted the lawful method of discovery. The independent source doctrine, however, applies when the evidence actually has been discovered by lawful means. Its focus is on what actually happened--was the discovery tainted by the illegal search?

United States v. Markling, 7 F3d 1309, 1318 n.1 (7th Cir. 1993) (citations omitted).

{fn2} to the exclusionary rule. As stated by Judge Wollman, “[t]he inevitable discovery exception to the exclusionary rule articulated in Nix v. Williams, 467 US 431, 440-50, 104 SCt 2501, 2507-12, 81 LEd2d 377 (1984), allows the government to show by a preponderance of the evidence that the evidence seized would have been discovered in any event by lawful means. Id. at 444, 104 SCt at 2509.” United States v. Halls, 40 F3d 275, 276 (8th Cir. 1994). See generally United States v. Vance, 53 F3d 220, 221-22 (8th Cir. 1995). The Court finds that the government has shown by a preponderance of the evidence that the torch and scale would have been discovered in any event during the lawful search pursuant to the search warrant.

[¶22]  The government directs the Court’s attention to defendant’s concession that there was sufficient probable cause for the issuance of the search warrant and Magistrate Judge Young’s finding that “there is ample probable cause to allow the issuance of a search warrant, absent any reference to the scale or propane torch found pursuant to the suppressed search.” See Government’s Objections to Findings and Recommendations at 2-3 (Docket #31) (citing Docket #28 at 7-8). See also T.T. 62-63, 67. Reviewing Agent Etchison’s affidavit for the search warrant under the Franks-based approach of excluding the tainted evidence observed in the basement, the Court finds that the untainted information considered alone, overwhelmingly establishes probable cause. See Franks v. Delaware, 438 US 154, 171-72, 98 SCt 2674, 2684, 57 LEd2d 667 (1978); United States v. Estrada, 45 F3d 1215, 1218-20 (8th Cir. 1995) (finding under independent source doctrine analysis that the untainted information contained in the affidavit for search warrant established probable cause); United States v. Markling, 7 F3d 1309, 1316-17 (7th Cir. 1993) (elaborate discussion of the Franks-based approach); United States v. Whitehorn, 829 F2d 1225, 1231-32 (2d Cir. 1987) (stating that the “ultimate inquiry ... is not whether the underlying affidavit contained allegations based on illegally obtained evidence, but whether, putting aside all tainted allegations, the independent and lawful information stated in the affidavit suffices to show probable cause.”)

[¶23]  The affidavit contains an extensive summary of defendant’s drug activities dating back to 1994 and a wealth of detail from six informants who had seen methamphetamine inside defendant’s residence, purchased methamphetamine inside the residence, and in other ways were knowledgeable about defendant’s illegal drug activities. See Estrada, 45 F3d at 1218. The preponderance of the evidence shows that had a search warrant been sought based on these facts, it would have been granted and the evidence in question discovered. See Sherry, 906 FSupp at 1321. Excluding the evidence “would impermissibly place the prosecution ‘in a worse position simply because of some earlier police error or misconduct.’” Halls, 40 F3d at 277 (quoting Nix, 467 US at 443, 104 SCt at 2508). Therefore, the inevitable discovery doctrine is applicable and the torch and scale will not be suppressed.

CONCLUSION

[¶24]  Based upon the above discussion, defendant’s motion to suppress must be denied. Consistent with the Magistrate Judge’s findings and recommendations, this Court holds that there were no articulable facts which, taken together with the rational inferences from those facts, would warrant a reasonably prudent officer in believing that defendant’s basement harbored an individual posing a danger to those on the arrest scene to justify the sweep search of the basement. However, upon reviewing the affidavit for the search warrant under the Franks-based approach of excluding the tainted evidence observed in the basement, the Court finds that the untainted information considered alone overwhelmingly establishes probable cause. The Court further finds that the search pursuant to the search warrant would have resulted in the discovery of the propane torch and triple beam scale in the basement even if law enforcement officials had not already been alerted to their existence. Accordingly, it is hereby

[¶25]  ORDERED that defendant’s motion to suppress (Docket #20) is denied.



Athey v. Farmers Ins. Grp., 1997 DSD 8

DANIEL ATHEY,

Plaintiff,

v.

FARMERS INSURANCE GROUP,

Defendant.

[1997 DSD 8]

United States District Court

District of South Dakota - Southern Division

CIV. 96-4238

MEMORANDUM DECISION AND ORDER

MARSHALL, Magistrate Judge.

[¶1]  Plaintiff’s motion to compel discovery (Doc. 23) and defendant’s motion for protective order (Doc. 33) came before the court on February 27, 1997, for hearing. Plaintiff appeared by his counsel, James A. Hertz of Christopherson, Bailin & Anderson, while defendant appeared through its counsel, James E. Moore of Woods, Fuller, Shultz & Smith, P.C. The court has reviewed the various motions and the briefs filed in support of those motions, listened to the argument of counsel, and reviewed the entire file herein. Based upon that review, and good cause appearing therefor, the court will grant plaintiff’s motion to compel discovery (Doc. 23) and deny defendant’s motion for a protective order (Doc. 33) for the following reasons.

FACTUAL BACKGROUND

[¶2]  The undisputed facts of the case are that on or about December 3, 1993, the plaintiff, Daniel Athey, was involved in an motor vehicle accident with Robert F. Hajek at the intersection of Elmwood Avenue and Oak Street in Sioux Falls, South Dakota, in which plaintiff sustained injuries. At the time of that accident, the plaintiff was covered by a valid automobile insurance policy issued by defendant, Farmers Insurance Exchange, which policy included, among other coverages, underinsured motorist coverage for bodily injury or death with coverage limits of $100,000 per person and $300,000 per accident.

[¶3]  The plaintiff alleges in his complaint that at the time of the collision, Mr. Hajek was operating an “underinsured motor vehicle” within the meaning of his policy of insurance with the defendant; Mr. Hajek’s applicable coverage limits were $25,000. In its answer, the defendant admitted that it consented to the $25,000 settlement of plaintiff’s tort claims against Mr. Hajek’s insurer and waived its right to subrogation. The plaintiff claims he is entitled to the amount of money that will reasonably and fairly compensate him for all elements of loss, not to exceed the policy limit of $100,000, less the $25,000 coverage limits paid by Mr. Hajek’s insurance carrier.

[¶4]  In his complaint, plaintiff has pled both claims for breach of contract and bad faith failure to pay insurance claims. The defendant alleges that a claim for underinsured motorist benefits must be decided before a bad faith claim arises; thus, the defendant asserts that the bad faith action is at best premature because no decision has been made with regard to plaintiff’s underinsured motorist claim. Whether the claim has been denied appears to be a fact question which will not prevent discovery in this case.

DISCUSSION

[¶5]  Defendant’s objections to plaintiff’s discovery requests fall into three broad categories. Each category will be discussed separately.

[¶6]  1.  Relevance.

[¶7]  Defendant objected to Interrogatory No. 2 and Document Request Nos. 1 through 4 and 6 on the basis that the requests were beyond the scope of Rule 26(b) or beyond the scope of discovery. As such, the court will consider the objections to be one based upon relevancy.   The spirit of the Federal Rules, as well as the letter of those Rules, look to the free discovery of a wide range of information, some of which may prove to be inadmissible at trial. All of the matters sought by the plaintiff in these discovery requests seek relevant information or are requests that are reasonably calculated to lead to the discovery of relevant information. Accordingly, defendant’s objection on the basis that the requests are beyond the scope of discovery or beyond the scope of Rule 26(b) is overruled.

[¶8]  2.  Work product.

[¶9]  Defendant has asserted a work product objection in response to Interrogatory No. 2 and Document Request Nos. 1 and 7. The essence of defendant’s claim is that its investigation of this claim was done in preparation for litigation. However, most cases hold that insurer investigations are presumptively in the ordinary course of business and not in anticipation of trial. Henry Enterprises, Inc. v. Smith, 255 Kan. 615, 592 P.2d 915, 920 (1979). The rationale underlying such decisions is that Rule 26(b)(3) does not protect insurers, such as the defendant, from discovery simply because insurers always deal with potential trial claims. See, e.g. State Farm Fire & Casualty Co. v. Perrigan, 102 F.R.D. 235, 238-39 (W.D. Va. 1984).

[¶10]  Perhaps the most instructive case cited by either party on application of the work product doctrine to the investigative reports of insurance companies is APL Corp. v. Aetna Casualty and Surety Co., 91 F.R.D. 10 (D.C. Md. 1980). In that case, the District Court granted plaintiff’s motion to compel noting:

The courts have repeatedly recognized that, while litigation often results from an insurance company’s denial of a claim, it cannot be said that any document prepared by an insurance company after such a claim has arisen is prepared in anticipation of litigation within the meaning of Rule 26(b)(3). “[T]he nature of the insurance business is such that an insurance company must investigate a claim prior to determining whether to pay its insured.”

91 F.R.D. at 17, quoting Westhemeco, Ltd. v. New Hampshire Inns Co., (1979, SD NY.) 82 F.R.D. 702. If a different rule were applied, few, if any, documents prepared by an insurer would ever be discoverable as all could be said to have been prepared in anticipation of litigation any time after a claim has arisen. Such a result is logically absurd. APL Corp. v. Aetna Casualty and Surety Co., 91 F.R.D. at 18. Thus, defendant’s claim of work product privilege is overruled.

[¶11]  Defendant also claims that the discovery sought is protected by the attorney/client privilege. The existence of an attorney/client privilege presupposes confidential communications between a lawyer and his or her clients. Gray v. Dicknell, 86 F3d 1472, 1482 (8th Cir. 1996). In this case, the defendant has not identified any communications between its lawyer and any of the defendant’s employees to which the attorney/client privilege could apply. Because of that inability, defendant’s assertions that the matters contained in its claims file are covered by the attorney/client privilege is hereby overruled.

[¶12]  3.  Unduly burdensome or overbroad.

[¶13]  Defendant claims that it would be unduly burdensome for it to produce the complaints it has received concerning its claims policies. Specifically, defendant notes that Farmers received over 400 liability claims in the State of South Dakota in 1996. However, the affidavit Farmers offered in support of this claim belies the burdensome nature of plaintiff’s request. For example, the Affidavit of Terry L. Magee shows that Farmers maintains a state by state log pertaining to complaints that insured have made. Farmers need only identify the claim from that log and refer to the file to discover the disposition of that claim. Such a procedure is not unduly burdensome.

[¶14]  Generally, parties may obtain discovery regarding any unprivileged matter so long as it “appears reasonably calculated to lead to the discovery of admissible evidence.” F.R.Civ.P. 26(b)(1). Courts have construed this rule broadly “to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 US 340, 351, 98 SCt 2380, 2389, 57 LEd 2d 253 (1978). Here Plaintiffs’ discovery directly relates to its bad faith claim and thus appears relevant. Accordingly, the onus is on the party objecting to discovery to state the grounds for the objection “with specificity.” F.R.Civ.P. 33(b)(4). Mere recitation of the familiar litany that an interrogatory or a request for production is “overly broad, burdensome, oppressive and irrelevant will not suffice.” Josephs v. Harris Corp., 677 F2d 985, 992 (3d Cir. 1982); Mead Corp. v. Riverwood Nat. Resources Corp., 145 F.R.D. 512, 515 (D.Minn. 1992).

[¶15]  Here the defendants have merely stated that plaintiff’s request is “burdensome.” While the request covers a number of years, defendants have provided the court with no estimate of how many documents may be responsive to plaintiff’s request or how much time would be required to prepare a response. Thus, the court has no way to determine if the request is in fact “burdensome.” Moreover, from defendants’ response the court cannot determine whether there is any information at all that is responsive to plaintiff’s request. Defendants have failed to show that the plaintiff’s request is burdensome.

CONCLUSION

[¶16]  Based on the foregoing discussion, it is hereby

[¶17]  ORDERED that plaintiff’s motion to compel (Doc.23) is granted, and it is further

[¶18]  ORDERED that defendant’s motion for a protective order (Doc. 33) is denied.

[¶19]  The plaintiff’s request for costs and fees pursuant to Rule 37(a)(4) is hereby denied.



U.S. ex rel Steele v. Turn Key Gaming, 1997 DSD 9

UNITED STATES ex rel. JOHN YELLOW BIRD STEELE,

Plaintiff,

v.

TURN KEY GAMING, INC.

and WAYNE BARBER,

Defendants.

[1997 DSD 9]

United States District Court

District of South Dakota - Western Division

CIV. 96-5113

MEMORANDUM OPINION

and

ORDER GRANTING MOTION TO DISMISS

Filed March 18, 1997.

RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  On December 18, 1996, plaintiff filed this action as a qui tam1. Qui tam is an abbreviation for the Latin phrase “qui tam pro domino rege quam pro se imposo sequitur.” The phrase literally means “who sues on behalf of the king as well as for himself.” Black’s Law Dictionary 1251 (6th ed. 1990). See also Bass Anglers Sportman’s Soc’y v. United States Plywood-Champion Papers, Inc., 324 FSupp 302, 305 (SD Tex. 1971). {fn1} proceeding pursuant to 25 USC § 81. Plaintiff is an enrolled member of the Oglala Sioux Tribe (“Tribe”). Although plaintiff is the president of the Tribe, the action is brought by plaintiff individually and on relation of the United States. The Tribe is not a party to these proceedings.

[¶2]  Plaintiff alleges that defendants entered into two agreements dated January 19, 1995, in which defendant Turn Key Gaming, Inc. (“Turn Key”) agreed to provide management services for the casino known as the Prairie Wind Casino located on the Pine Ridge Indian Reservation. One agreement provided that Turn Key would rent to the tribe certain facilities and equipment to be utilized by the tribe in the conduct of its Class III gaming operation. (Complaint, Exhibit A.) The second agreement was an employment agreement for the Prairie Wind Casino in which the defendant Wayne Barber (“Barber”) was to become the employee of the Oglala Sioux Tribe in the operation and management of the casino. (Complaint, Exhibit B.)

[¶3]  The essence of plaintiff’s qui tam action is that Turn Key and Barber, in violation of 25 USC § 81, unlawfully received money from the Tribe pursuant to the agreements which had never been approved by the Secretary of Interior and Commissioner of Indian Affairs. Plaintiff seeks a recovery of $1.4 million paid under the rental agreement and in excess of $50,000 obtained by Barber under the employment agreement.

[¶4]  Plaintiff invokes the Court’s federal question jurisdiction under 28 USC § 1331.

DISCUSSION

[¶5]  A.  Qui Tam Actions

[¶6]  25 USC § 81 provides as follows:

§ 81.Contracts with Indian tribes or Indians

No agreement shall be made by any person with any tribe of Indians, or individual Indians not citizens of the United States, for the payment or delivery of any money or other thing of value, in present or in prospective, or for the granting or procuring any privilege to him, or any other person in consideration of services for said Indians relative to their lands, or to any claims growing out of, or in reference to, annuities, installments, or other moneys, claims, demands, or thing, under law or treaties with the United States, or official acts of any officers thereof, or in any way connected with or due from the United States, unless such contract or agreement be executed and approved as follows:

First. Such agreement shall be in writing, and a duplicate of it delivered to each party.

Second. It shall bear the approval of the Secretary of the Interior and the Commissioner of Indian Affairs indorsed upon it.

Third. It shall contain the names of all parties in interest, their residence and occupation; and if made with a tribe, by their tribal authorities, the scope of authority and the reason for exercising that authority, shall be given specifically.

Fourth. It shall state the time when and place where made, the particular purpose for which made, the special thing or things to be done under it, and, if for the collection of money, the basis of the claim, the source from which it is to be collected, the disposition to be made of it when collected, the amount or rate per centum of the fee in all cases; and if any contingent matter or condition constitutes a part of the contract or agreement, it shall be specifically set forth.

Fifth. It shall have a fixed limited time to run, which shall be distinctly stated.

All contracts or agreements made in violation of this section shall be null and void, and all money or other thing of value paid to any person by any Indian or tribe, or any one else, for or on his or their behalf, on account of such services, in excess of the amount approved by the Commissioner and Secretary for such services, may be recovered by suit in the name of the United States in any court of the United States, regardless of the amount in controversy; and one-half thereof shall be paid to the person suing for the same, and the other half shall be paid into the Treasury for the use of the Indian or tribe by or for whom it was so paid.

[¶7]  According to the plain words of the statute, all contracts made in violation of the statute are null and void and all money or other thing of value paid by any tribe may be recovered by a suit in the name of the United States in any court of the United States regardless of the amount in controversy; and one-half thereof shall be paid to the person and the other half shall be paid into the treasury of the United States in trust for the use of the Indian tribe for whom it was so paid. Thus, plaintiff Steele seeks payment to him individually of one-half of the amount paid by the Tribe, the other one-half to be paid to the United States. As stated, plaintiff Steele is not pursuing this action in his official capacity as president of the Oglala Sioux Tribe, but seeks a personal judgment to which he would be entitled one-half as an Indian person under section 81. Additionally, he seeks prejudgment interest, attorney’s fees, accounting fees, and other appropriate and reasonable expenses to which he may be entitled.

[¶8]  A qui tam action has been referred to as a “bounty hunter’s” statute.2. This statute also provides a remedy for violations of the Indian Gaming Regulatory Act. United States ex rel. Mosay v. Buffalo Bros. Management, Inc., 20 F3d 739 (7th Cir. 1994).{fn2} United States ex rel. Mosay v. Buffalo Bros. Management, Inc., 20 F3d 739 (7th Cir. 1994). Plaintiff Steele is the “bounty hunter.” The statute was originally enacted on May 21, 1872, ch. 117, 17 Stat. 136, now codified as 25 USC § 81. This section constitutes an independent grant of jurisdiction to the federal courts over the subject matter of the statute. The first qui tam statute appeared in the late 14th century in England and the Supreme Court has noted that qui tam has been around “ever since the foundation of our government.” See United States ex rel. Yellowtail v. Little Horn State Bank, 828 FSupp 780, 783 n.3 (D. Mont. 1992) (citing Marvin v. Trout, 199 US 212, 225, 26 SCt 31, 34, 50 LEd 157 (1905)).

DEFENDANTS’ MOTION TO DISMISS

[¶9]  In addressing a motion to dismiss, a court must take all facts alleged in plaintiff’s complaint as true and construe all allegations and reasonable inferences arising therefrom in the light most favorable to plaintiff. Palmer v. Tracor, Inc., 856 F2d 1131 (8th Cir. 1988). A motion to dismiss can be granted only if it appears beyond doubt that plaintiff can prove no set of facts which would entitle plaintiff to relief. Id. at 187; Conley v. Gibson, 355 US 41, 45-46, 78 SCt 99, 102, 2 LEd2d 80 (1957).3. The Court understands that it does have discretion to convert a motion to dismiss to a motion for summary judgment under Federal Rule of Civil Procedure 56, but declines to do so in view of the fact that granting the motion to dismiss is appropriate under these circumstances.{fn3} The Court assumes for the purpose of resolving the motion to dismiss that the two agreements of January 19, 1995, were not approved by the Secretary of the Interior or the Commissioner of Indian Affairs. The Court notes that appended on the bottom of each agreement is the statement, “Approved pursuant to 25 USC 81 and other applicable federal statutes on the 26th day of January, 1995, by Delbert Brewer, Superintendent, Bureau of Indian Affairs, Pine Ridge Agency, Pine Ridge, South Dakota.” For the purpose of deciding the motion the Court assumes, as it must, that the approval was not in compliance with the statute.

[¶10]  In support of defendants’ motion to dismiss, defendants allege that (1) the Oglala Sioux Tribe is an indispensable party which has not been joined, requiring dismissal of the case; (2) Steele lacks standing to bring a qui tam action; and (3) the January 19, 1995, agreements do not relate to “Indian lands,” thereby requiring the necessary section 81 approval.4. The Court is not unmindful of other grounds urged in support of motion to dismiss, namely (4) the Tribe and its president are impermissibly splitting their causes of action; (5) defendants’ counterclaim should survive the Conley v. Gibson test, and (6) even though the agreements were not required to be approved by the Bureau of Indian Affairs, both agreements were in fact approved by Brewer’s endorsement. In view of this Court’s ruling, it is unnecessary to discuss these alleged grounds for relief.{fn4}

LACK OF STANDING

[¶11]  Defendants invite the Court to hold that plaintiff lacks standing to pursue this action. The Court declines the invitation. The Court notes some cases have been dismissed for lack of standing. One such case is In re United States ex rel. Hall, 825 FSupp 1422 (D. Minn. 1993),5. See also United States ex rel. Yellowtail v. Little Horn State Bank, 828 FSupp 780 (D. Mont. 1992), aff’d on other grounds, 15 F3d 1095 (9th Cir. 1994).{fn5} a qui tam action brought by members of an Indian tribe against non-Indians merchants and vendors challenging validity under federal law of contracts entered into by tribes in the course of establishing and operating tribal gaming enterprises. In applying the Supreme Court’s holding in Warth v. Seldin, 422 US 490, 498, 95 SCt 2197, 2205, 45 LEd2d 343 (1975), the district court dismissed all of the actions brought in that multiparty litigation for lack of standing. As an alternate ground for dismissal, the court held that the Indian tribes were indispensable parties under Federal Rule of Civil Procedure 19. The court held that the tribes could not involuntarily be joined due to the tribes’ sovereign immunity since the Indian tribes were parties to the agreements under consideration, the court held that the tribes were therefore indispensable. The action was then dismissed.

INDISPENSABLE PARTIES

[¶12]  In an unpublished per curiam opinion, the Eighth Circuit affirmed the dismissal in Hall for failure to join indispensable parties. The opinion stated as follows:

The tribes cannot be joined involuntarily because they are entitled to sovereign immunity, and there is no indication that the immunity would be waived. We agree with the District Court that the tribes are necessary parties within the meaning of Fed. R. Civ. P. 19(a)(2)(i). They are parties to the challenged contracts, and their interest in the validity of the contracts would be directly affected by a judgment declaring the contracts void and unlawful, which is the relief sought by the plaintiffs. Under Fed. R. Civ. P. 19(b), the question then becomes “whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable.” For the reasons given in the above opinion of the District Court, we agree with the Court that the Indian tribes are indispensable in the sense that word is used in Rule 19. It is simply inconceivable to us that a suit claiming that a contract is invalid should be allowed to proceed in the absence of all parties to the contract.

This ground — failure to join indispensable parties — is adequate to dispose of the entire case, and we affirm on that basis. It is thus not necessary for us to reach the issues of standing and of the merits that the parties have briefed. The judgment is affirmed, substantially for the reasons given in that portion of the District Court’s opinion that deals with Rule 19. See 8th Cir. R. 47(B).

[¶13]  The opinion of the Minnesota district court and the unpublished opinion in affirmance are the end of the story. See also United States ex rel. Hall v. Tribal Dev. Corp., 100 F3d 476 (7th Cir. 1996), which dismissed the 42 qui tam actions originally brought in the United States District Court for the District of Minnesota. United States ex rel. Hall v. Tribal Dev. Corp., 49 F3d 1208 (7th Cir. 1995); In re United States ex rel. Hall, 825 FSupp 1422 (D. Minn. 1993), aff’d, 27 F3d 572 (8th Cir. 1994), cert. denied, US , 115 SCt 1112, 130 LEd2d 1076 (1995).

[¶14]  The Court notes in plaintiff’s memorandum brief that plaintiff would invite this Court to discount the Eighth Circuit per curiam opinion as one not to be relied upon as precedent. The affirmance was pursuant to Eighth Circuit Rule 47(B). This Court also declines this invitation. Rule 47(B) is a rule often applied by the appellate court for the enforcement of a lower court’s decision without opinion. The rule provides:

A judgment or order appealed may be affirmed or enforced without opinion if the court determines an opinion would have no precedential value and any of the following circumstances disposes of the matter submitted to the court for decision:

(1)  a judgment of the district court is based on findings of fact that are not clearly erroneous.

(2)  ...

(3)  ...

(4)  No error of law appears.

Indeed, the appellate court from time to time does quote from its own unpublished opinions.6. For example, the Court of Appeals has cited an unpublished opinion in Jones v. Mabry, 723 F2d 590, 595-96 (8th Cir. 1993). {fn6} The fact that Hall was affirmed in an unpublished opinion in no way detracts from Hall’s precedential value. The affirmance enhances Hall’s precedential authority.

[¶15]  Plaintiff simply misperceives the effect of an unpublished opinion on Hall and invites the Court to adopt the ruling of Arrow v. Gamblers Supply, Inc., 55 F3d 407 (8th Cir. 1995). This is the third invitation which this Court declines. Arrow was not a case ruling on whether the Yankton Sioux Tribe was an indispensable party. That case was one where the tribe’s motion was treated as a request to intervene pursuant to Federal Rule of Civil Procedure 24. See Part 2, head note 1. In that case United States District Judge John Jones, District of South Dakota, denied intervention because of the tribe’s failure to act in a timely fashion, so the court in its discretion refused intervention. The facts in Arrow differ materially from the present case. In Arrow, the tribe made a belated Rule 19 motion for joinder. The district court barred the motion on the basis of laches.

[¶16]  The Tribe has not joined this action. While the Court can only speculate as to why the Tribe did not join in this case and thereby waive its sovereign immunity, there are many independent reasons why it might not wish to do so. Perhaps the Tribe was not offered the opportunity to join. In addition to simply not wishing to involve the Tribe in this litigation, the tribal council may have believed that to associate itself in a qui tam action may jeopardize its future ability to involve itself with other persons, both Indian and non-Indian in the management and operation of gambling casinos within the reservation. The Minnesota district court in Hall, 825 FSupp at 1429, referred to such a reason as follows:

In a larger sense, the precedent set by rescission of transactions freely entered by the tribes would likely be extremely prejudicial to the tribes’ long term interest in Indian gaming and the revenue it provides. The plaintiffs essentially seek rescission of the contracts and disgorgement of money paid for goods and services rendered pursuant to those contracts. The message such a judgment would send to outside vendors would be that transactions with Indian gaming enterprises are subject to cancellation at any time and without regard to whether the contracts were freely and fairly negotiated, the extent to which the parties have performed their duties under the contracts or the settled expectations and reliance of the parties. Very few merchants would be willing to transact business with Indian casinos under such risky conditions. This might well signal the end of Indian gaming in the Upper Midwest. Regardless of whether such a judgment would otherwise constitute the correct application of the law, it would undeniably be prejudicial to the interests of the Indian tribes.

Finally, the Tribe may simply conclude that the concept of sovereign immunity which the Tribe enjoys is much too important of a concept to waive for the purpose of this qui tam action.

[¶17]  In the application of Rule 19 of the Federal Rules of Civil Procedure, there is a two-part inquiry which the Court must consider. Rule 19(a) refers to persons to be joined if feasible and Rule 19(b) provides for a determination as to whether “in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable.” The factors to be considered by the Court include: First, to what extent a judgment rendered in the person’s absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.

[¶18]  In considering the first factor, the Court points out that this case has only been filed for a short duration (December 18, 1996). Discovery has barely begun. As stated by the appellate court in United States ex rel. Hall, “it is simply inconceivable ... that a suit claiming that a contract is invalid should be allowed to proceed in the absence of all the parties to the contract.” Nos. 93-2903MN, 93-3089MN, slip op. at 4 (8th Cir. 1994). Additionally, the precedent-setting conduct of the Tribe in rescinding transactions freely entered into by the Tribe would likely be extremely prejudicial to the Tribe’s long-term interest in Indian gaming and the revenue it provides. Tribal gaming operations are relatively new in this state7. In 1986 the South Dakota Constitution was amended to authorize a state lottery or video games of chance. See S.D. Const. art. III, § 25. On March 1, 1989, South Dakota enacted a statutory scheme authorizing video lottery games which became effective July 1, 1989. See 1989 S.D. Sess. L. Ch. 368 (codified as amended at S.D.C.L. ch.. 42-7A, including S.D.C.L. §§ 42-7A-1, -3, -4, -89, -13 through -16, -36 through -50). {fn7} and if they are to become successful, it would be important that the tribes not rescind otherwise valid contracts which have as their mission the fostering of successful gambling operations on the state’s Indian reservations.

[¶19]  In addressing the second factor outlined in Rule 19(b), the prejudice to the Tribe cannot be lessened. If the contracts violate 25 USC § 81, they are void. If not, they fully comply with the law and are valid. See In re United States ex rel. Hall, 825 FSupp at 1431. The Court believes that both the third and fourth factors pale in importance to the first and second factors, and thereby the Court determines that since joinder is not feasible by reason of the very important concept of tribal sovereignty, the case must be dismissed.

CONCLUSION

[¶20]  Based upon the finding by this Court that the Oglala Sioux Tribe is an indispensable party and the equitable principles enunciated in Rule 19, do not favor a continuation of the action independent of the Tribe as an important party to the January 19, 1995, agreements, the Court dismisses the action by judgment entered herewith. The matter of the application of the federal rule of standing must await further discussion in another case at another time. It is

[¶21]  ORDERED that defendants’ motion to dismiss plaintiff’s complaint is granted.

[¶22]  IT IS FURTHER ORDERED that plaintiff’s motion to dismiss defendants’ counterclaim is denied as moot.

[¶23]  IT IS FURTHER ORDERED that defendants’ motion to consolidate with Civ. 96-5084 is denied as moot.



Pummel v. Lutheran Hospital & Homes, Inc., 1997 DSD 10

DAVID PUMMEL,

KELLIE PUMMEL, individually; and DAVID PUMMEL and KELLIE PUMMEL,

as Guardians Ad Litem for DEREK S. PUMMEL, a Minor,

Plaintiffs,

v.

LUTHERAN HOSPITALS AND HOMES SOCIETY OF AMERICA,

d/b/a BELLE FOURCHE HEALTH CARE CENTER

Defendant.

[1997 DSD 10]

United States District Court

District of South Dakota - Western Division

CIV. 95-5076

MEMORANDUM OPINION AND ORDER

GRANTING DEFENDANT’S PARTIAL MOTION FOR SUMMARY JUDGMENT



RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  On November 2, 1995, plaintiffs David and Kellie Pummel [hereinafter “parents”] commenced this diversity action individually and on behalf of their minor son Derek Pummel. They allege that Derek was permanently injured by negligent treatment he received from defendant hospital. They further allege a cause of action in their own right for emotional distress and loss of consortium. See Complaint at ¶¶XVI-XX (Count III) and ¶XXIII (Count IV). On February 18, 1997, defendant filed a partial motion for summary judgment as to counts III and IV of plaintiffs’ complaint asserting that the parents’ claims for emotional distress and loss of consortium are legally non-cognizable under South Dakota law. See Docket #18.

[¶2]  The Court has jurisdiction pursuant to 28 USC § 1332.

FACTS

[¶3]  A.  DEREK PUMMEL

[¶4]  Derek Pummel was born on November 7, 1993, at defendant hospital. See Defendant’s Statement of Material Facts at ¶1 [hereinafter “DSMF at ¶ ”]. Following birth and treatment for complications not at issue in this action, Derek was placed in an isolette with a chemical warming pad. Id. at ¶2. While in the isolette Derek was severely burned on his shoulder, neck, and back of the head. Id. at ¶3. Defendant accepts legal liability for Derek’s burns. Id. at ¶4.

[¶5]  B.  DAVID AND KELLIE PUMMEL

[¶6]  Approximately one-half hour after being placed in the heated isolette, Derek began crying and screaming. See Plaintiffs’ Statement of Material Facts at ¶6 [hereinafter “PSMF at ¶ __ ”] (citing Affidavit of David Pummel at ¶3). Kellie could hear her son screaming from a nearby room in the hospital where she had been taken after delivery. See Affidavit of Kellie Pummel at ¶3. Both parents questioned defendant hospital personnel as to what was causing their newborn child to scream, but no action was taken by defendant hospital. See PSMF at ¶7 (citing Affidavit of David Pummel, ¶¶3-4) (citing Affidavit of Kellie Pummel at ¶3; Deposition of Kellie Pummel; Deposition of David Pummel).

[¶7]   When Derek was finally lifted from the isolette by a nurse, David immediately saw blisters and redness to his son’s neck, back, shoulders, and arm. Id. at ¶10. He exclaimed “he’s been burned!” Id. (citing Affidavit of David Pummel at ¶6). Plaintiffs further allege that the nurse ignored David’s concern and the injury to his newborn child when she placed Derek on a metal scale on his back without further care. Id. at ¶11 (citing Affidavit of David Pummel at ¶7) David then went to his wife’s room and informed her that their son had been burned. Id. at ¶13 (citing Affidavit of David Pummel at ¶10; Affidavit of Kellie Pummel at ¶6).

[¶8]  In his affidavit, David sets forth that he felt extreme shock fright, anxiety, worry, and rage, and could feel his heart pounding during the time he observed his son scream and discovered that he had been burned. & PSMF at ¶14 (citing Affidavit of David Pummel at ¶¶6-9). Kellie’s affidavit sets forth that she felt panic, terror, concern, extreme shock fright, anxiety, and, worry, and could feel her heart pounding during this same time period. Id. (citing Affidavit of Kellie Pumrnel at m 4-8). When Derek was taken to Rapid City Regional Hospital, Kellie broke down emotionally. Id. at ¶15 (citing Affidavit of Kellie Pummel at ¶7; Affidavit of David Pummel ¶11). In her own words, Kellie explains that she “went nuts and became furious.” Id. at ¶17 (citing Affidavit of Kellie Pummel at ¶10). Both parents were shocked, felt sick nearly vomited, and nearly fainted. Id. at ¶16 (citing Affidavit of Kellie Pummel at ¶9; Affidavit of David Pummel at ¶12).

[¶9]  During Derek’s stay approximately one week at Rapid City Regional Hospital the parents witnessed their newborn son undergo skin debridements which made them physically ill. Id. at ¶18 (citing Affidavit of Kellie Pummel at ¶11; Affidavit of David Pummel ¶13). When Derek was released home the parents attempted the skin debridement process. Id. at ¶19. This caused David to become physically sick and Kellie to cry and seek assistance from defendant hospital. Id. (citing Affidavit of David Pummel at ¶14; Affidavit of Kellie Pummel ¶13). Moreover, for the next 30 days David became physically sick, stressed, and depressed upon seeing his son’s burns. Id. at ¶20 (citing Affidavit of David Pummel at ¶15). Kellie was unable to bond with her newborn baby. Id. at ¶21 (citing Affidavit of Kellie Pummel at ¶15-16). She became depressed which resulted in medication and treatment for emotional problems. Id.

SUMMARY JUDGMENT STANDARD

[¶10]  Under Rule 56(c) of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if the movant can “show that there is no genuine issue as to any material fact and that [the movant] is entitled to judgment as a matter of law.” In determining whether summary judgment should issue, the facts and inferences from those facts are viewed in the light most favorable to the nonmoving party, and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 US 574, 106 SCt 1348, 1356-57, 89 LEd2d 538 (1986). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in the pleadings, but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists.

[¶11]  In determining whether a genuine issue of material fact exists, the Court views the evidence presented based upon which party has the burden of proof under the underlying substantive law. Anderson v. Liberty Lobby, Inc., 477 US 242, 106 SCt 2505, 2513, 91 LEd2d 202 (1986). The Supreme Court has instructed that “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to ‘secure the just, speedy, and inexpensive determination of every action.’” Celotex Corp. v. Catrett, 477 US 317, 327, 106 SCt 2548, 2555, 91 LEd2d 265 (1986). The nonmoving party “must do more than show that there is some metaphysical doubt as to the material facts” and “[w]here the record as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Matsushita, 106 SCt at 1356.

[¶12]  The teaching of Matsushita was further articulated by the Supreme Court in Eastman Kodak Co. v. Image Technical Services, Inc., 504 US 451, 468, 112 SCt 2072, 2083 (1992) where the Court said, “Matsushita demands only that the nonmoving party’s inferences be reasonable in order to reach the jury, a requirement that was not invented, but merely articulated, in that decision.” The Court expounded on this notion by reiterating its conclusion in Anderson that, “[s]ummary judgment will not lie ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Eastman Kodak, 504 US at 468 n.14, 112 SCt at 2083 n.14 (quoting Anderson, 477 US at 248, 106 SCt at 2510). To survive summary judgment there must be evidence that “reasonably tends to prove” plaintiffs’ theory; defendant meets the burden under Fed. R. Civ. P. 56(c) when it is conclusively shown that the facts upon which the nonmoving party relied to support the allegations were not susceptible of the interpretation which was sought to give them; only reasonable inferences can be drawn from the evidence in favor of the nonmoving party. Id. (citations omitted).

[¶13]  Finally, should there remain any doubt as to whether the courts continue to harbor any antagonistic feeling toward resolution of summary judgment motions, Chief Judge Arnold in City of Mt. Pleasant, Iowa v. Associated Electric Co-op, Inc., 838 F2d 268 (8th Cir. 1988) laid such thoughts to rest. He stated that, “a trilogy of recent Supreme Court opinions demonstrates that we should be somewhat more hospitable to summary judgment than in the past. The motion for summary judgment can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts’ trial time for those cases that really do raise genuine issues of material fact.” Id. at 273. The trilogy of Celotex, Anderson, and Matsushita provides the Court with a methodology in analyzing defendant’s partial motion for summary judgment. See generally 1 Steven A. Childress & Martha S. Davis, Federal Standards of Review § 5.04 (2d ed. 1991) (discussing the standards for granting summary judgment that have emerged from Matsushita, Celotex, and Anderson). Under this trilogy, it is incumbent upon plaintiffs as the nonmoving party, based upon the showing set forth by defendant, to establish significant probative evidence to prevent summary judgment. See Terry A. Lambert Plumbing, Inc. v. Western Sec. Bank, 934 F2d 976, 979 (8th Cir. 1991).

DISCUSSION

[¶14]  South Dakota law governs the substantive issues in this diversity case. B.B. v. Continental Ins. Co., 8 F3d 1288, 1291 (8th Cir. 1993). Because plaintiffs concede that Knowles v. United States, 1996 SD , 544 NW2d 183 [hereinafter “Knowles III, 544 NW2d at ”], forecloses a parental loss of consortium claim for injuries to a minor child as a separate cause of action, defendant is entitled to partial summary judgment as to that claim. See Docket #21. Based on the following discussion, the Court further holds that South Dakota law does not recognize a parent’s claim for negligent infliction of emotional distress for injuries brought about by witnessing injury to a minor child when the parent neither suffers any direct physical injury or impact nor is placed in actual fear for personal safety from a defendant’s negligent act or conduct.

[¶15]  A.  BYSTANDER RULES FOR DEFINING LIABILITY

[¶16]  Clearly, South Dakota law recognizes a claim of negligent infliction of emotional distress. Wright v. Coca Cola Bottling Co., 414 NW2d 608 (SD 1987); Nelson v. WEB Water Dev. Ass’n, Inc., 507 NW2d 691 (SD 1993). At issue in this matter are the limitations South Dakota law places on the class of plaintiffs that may recover for emotional injuries and on the injuries that may be compensable.1. The injury the parents are alleging “is mental or emotional harm (such as fright or anxiety) that is not directly brought about by a physical injury, but that may manifest itself in physical symptoms.” Consolidated Rail Corp. v. Gottshall, 512 US 532, 114 SCt 2396, 2405, 129 LEd 2d 427 (1994).{fn1} Whether these limitations are phrased in terms of proximate causation and reasonably foreseeable injuries or in terms of the duty to avoid inflicting emotional harm owed by a defendant to a certain class of plaintiffs is merely academic as these formulations are functionally equivalent. See generally Consolidated Rail Corp. v. Gottshall, 512 US 532, 114 SCt 2396, 2406, 129 LEd2d 427 (1994).

[¶17]  A brief discussion of the three major limiting tests for evaluating claims alleging negligent infliction of emotional distress provides the Court with a slate upon which to review established South Dakota precedent on this issue. These major limiting tests are as follows: (1) the “physical impact” test; (2) the “zone of danger” test; and (3) “relative bystander” or “foreseeability” test. Id. at 2406-07; Gnirk v. Ford Motor Co., 572 FSupp 1201, 1202 n.3 (DSD 1983).2. See generally Melanie L. Carpenter, Peterson v. Sioux Valley Hospital: Reckless Infliction of Emotional Distress, 38 S.D. L. Rev. 359, 371 (1993).{fn2} The “physical impact” test is the most restrictive in that it requires the third person/bystander to have suffered a direct physical injury or impact from the tortfeasor. Id. at 2406. The “zone of danger” test requires the third person/bystander to have either sustained a direct physical impact as a result of defendant’s negligent conduct or to have had an actual fear for his or her personal safety in order to recover. Id. Finally, the “relative bystander” or “foreseeability” test which is the most accepted and least restrictive limiting test permits a third person/bystander to recover if the tortfeasor could reasonably foresee the emotional distress. Id. at 2407.3. The “relative bystander” or “foreseeable” test was first enunciated in Dillon v. Legg, 68 Cal. 2d 728, 69 Cal. Rptr. 72, 441 P.2d 912 (1968). The Dillon court offered three factors to be considered as bearing on the question of reasonable foreseeability:

(1) Whether plaintiff was located near the scene of the accident as contrasted with one who was a distance away from it. (2) Whether the shock resulted from a direct emotional impact upon plaintiff from the sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence. (3) Whether plaintiff and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship. Id., at 740-741, 69 Cal. Rptr., at 80, 441 P.2d, at 920.

Consolidated Rail, 114 SCt at 2407. {fn3}

[¶18]  A review of the facts as previously set forth and all reasonable inferences from those facts in a light most favorable to plaintiffs, demonstrates that plaintiffs may only prevail on their emotional distress claim under the “relative bystander” or “foreseeability” test because they suffered no direct physical injury or impact from the negligent use of the isolette nor was there actual fear for their personal safety from the isolette. As demonstrated below, their emotional distress claims must be dismissed because South Dakota does not adhere to the “relative bystander” or “foreseeability” test.

[¶19]  B.  SOUTH DAKOTA PRECEDENT

[¶20]  In Gnirk v. Ford Motor Co., 572 FSupp 1201 (DSD 1983), Judge Porter in effect predicted that the South Dakota Supreme Court would recognize the “relative bystander” or “foreseeability” test. Based on South Dakota precedent existing at that time, Judge Porter determined that South Dakota’s highest court would permit a bystander mother to recover for emotional distress inflicted upon her while witnessing the death of her child. Id. 1203-05.4. Judge Porter concluded that “a genuine issue of fact exists concerning whether the event in which her son lost his life inflicted great depression, insomnia, and permanent psychological injury upon plaintiff [mother], which injury proximately caused bodily injury to plaintiff.” Gnirk, 572 FSupp at 1205.{fn4} Plaintiffs’ reliance on a subsequent line of South Dakota cases to support Gnirk’s prediction is misplaced.

[¶21]  The decision of Wright v. Coca Cola Bottling Co., 414 NW2d 608 (SD 1987), involved a plaintiff who had received a direct physical injury upon drinking from a soft drink containing a decomposed mouse. Id. at 608. It did not involve the third person/bystander situation which is presently before the Court. The case of Nelson v. WEB Water Dev. Ass’n, Inc., 507 NW2d 691 (SD 1993), is also distinguishable based on the fact that it also did not involve a third person/bystander. Id. at 693. Nelson’s theory regarding emotional distress arose from termination of his employment, as opposed to indirect physical injury resulting from witnessing the injury to a loved one. Id.

[¶22]  Despite plaintiffs’ attempts to distinguish the case of Knowles v. United States, 544 NW2d 183 (SD 1996), the Court finds the recent South Dakota decision to be factually and legally on point. A brief historical prospective of that decision aids in discerning the limitations South Dakota law places upon a claim for negligent infliction of emotional distress. On March 2, 1992, William and Jane Knowles commenced a medical malpractice action individually and on behalf of their minor son Kris who received severe permanent brain damage by negligent treatment he received at the Ellsworth Air Force Base Hospital. Knowles v. United States, 829 FSupp 1147, 1150 (DSD 1993) [hereinafter “Knowles I, 829 FSupp at ”].5. Jurisdiction was premised under the Federal Tort Claims Act Federal Tort Claims Act (FTCA), 28 USC § 1346(b).{fn5} The parents asserted a cause of action in their own right for emotional distress and loss of consortium which this Court dismissed. Id. at 1152, 1157. Defendant United States admitted liability and this Court entered judgment for one million dollars based on application of the damage cap contained in the 1986 amended version of SDCL § 21-3-11. Id. at 1157.CG Times Regular(  2 CG Times[  1 XXXH[hereinafter “Knowles II, 29 F3d at ”]. The third question which is of importance in this case was as follows: “(3) Does South Dakota law recognize emotional distress or loss of consortium for injuries to a minor child as a separate cause of action?” Id. at 1266. The South Dakota Supreme Court accepted and explicitly held that “we do not recognize a parent’s emotional distress or loss of consortium for injuries to a minor child.” Knowles III, 544 NW2d at 193 (emphasis added).6. However, the South Dakota court went on to state that it does “recognize a parent’s right to assert claims for loss of the child’s services and for medical and other consequential damages incurred in caring for the child.” Knowles III, 544 NW2d at 193. S.D.C.L. § 25-7-6.1 obligates parents to pay “for the necessary maintenance, education and support of the child.” The Eighth Circuit “read[s] this language to include medical expenses.” Knowles II, 29 F3d at 1264 n.4. Based on the South Dakota Supreme Court’s answers to the certified questions, the Eighth Circuit Court of Appeals remanded the case for trial on the issue of whether any medical service specialist was negligent because the revived 1985 statutory cap does not cover medical service specialists. Knowles v. United States, 91 F3d 1147, 1151 (8th Cir. 1996) [hereinafter “Knowles IV, 91 F3d at ”].{fn6}

[¶24]  The Court does not accept plaintiffs’ invitation to factually distinguish Knowles III from their case. The Knowles III court under similar facts and circumstances foreclosed bystander parents’ emotional distress claims resulting from the witnessing of serious injuries to a newborn child at the hands of a negligent hospital. As set forth by the Eighth Circuit opinion certifying the question to South Dakota’s highest court, 15-day-old Kris Knowles was released to his parents from the defendant hospital with an abnormally low temperature. Knowles II, 29 F3d at 1263. Kris was then taken to a pediatric clinic for a blood test at which time his mother expressed concern about his temperature and coloring. Id. He was immediately readmitted to the defendant hospital for hypothermia treatment. Id. He developed hypoglycemia and suffered respiratory arrest, which in turn caused severe, irreversible brain damage. Id. To be sure, these series of events were devastating to his parents. However, the Knowles’s emotional distress claims were dismissed because South Dakota does not recognize a parent’s emotional distress for injuries to a minor child. For this same reason, the parents’ claims for emotional distress must be dismissed in this case.

CONCLUSION

[¶25]  After reviewing the arguments presented by all parties and after reviewing the facts and inferences that may be derived therefrom in a light most favorable to plaintiffs as the nonmoving party, this Court finds that no genuine issues of material fact exist and defendant is entitled to judgment as a matter of law as to the parents’ emotional distress and loss of consortium claims. Accordingly, it is hereby

[¶26]  ORDERED that defendant’s partial motion for summary judgment (Docket #18) is granted.

July, 1997.

RICHARD H. BATTEY, CHIEF JUDGE



Karr v. Callahan, 1997 DSD 11

WILLIAM R. KARR,

Plaintiff,

v.

JOHN J. CALLAHAN,1. Effective March 1, 1997, President Clinton appointed John J. Callahan to serve as Acting Commissioner of Social Security to succeed Shirley S. Chater. Pursuant to Fed. R. Civ. P. 25(d)(1), John J. Callahan is substituted for Shirley S. Chater as the defendant in this action. See also 42 USC § 405(g). Effective March 1, 1997, President Clinton appointed John J. Callahan to serve as Acting Commissioner of Social Security to succeed Shirley S. Chater. Pursuant to Fed. R. Civ. P. 25(d)(1), John J. Callahan is substituted for Shirley S. Chater as the defendant in this action. See also 42 USC § 405(g). {fn1}

Acting Commissioner of Social Security,

Defendant.

[1997 DSD 11]

United States District Court

District of South Dakota - Western Division

CIV. 96-5054

MEMORANDUM OPINION AND ORDER

Filed March, 1997

RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  Pending are the claimant’s (Karr’s) and the defendant’s (Commissioner’s) cross-motions for summary judgment. Karr protectively filed an application for Title II disability insurance benefits2. Under Title II of the Social Security Act, a claimant is considered disabled “if he is unable to engage in any substantial activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months.” 42 USC § 1382c(a)(3)(A). {fn2} and Title XVI supplemental security income on February 3, 1994, alleging disability as of February 1, 1994 (A.R. 77-79; 80-82). After being denied through the reconsideration level, he timely requested a hearing which was held before an Administrative Law Judge (ALJ) on April 21, 1995 (A.R. 19-28). At the hearing, Karr was not represented by counsel (A.R. 19). Karr, his wife Deanna, and vocational expert Arthur E. Smith provided testimony at the hearing (A.R. 37-75).

[¶2]  On May 25, 1995, the ALJ issued his decision denying the claims (A.R. 19-27). The ALJ determined that Karr was not disabled because he retained the residual functional capacity to perform at least a full range of sedentary3. “Sedentary work involves lifting no more than 10 pounds at a time and occasionally lifting or carrying articles like docket files, ledgers, and small tools.” See 20 CFR §§ 404.1567(a), 416.967(a) (1996).{fn3} and a limited range of light4. “Light work involves lifting no more than 20 pounds at a time with frequent lifting or carrying of objects weighing up to 10 pounds.” See 20 CFR §§ 404.1567(b), 416.967(b) (1996).{fn4} work, a significant number of which exist in the regional and national economy (A.R. 26 (Findings 7, 12)). On May 17, 1996, the Appeals Council declined review of the ALJ’s determination (A.R. 7-8). On July 26, 1996, the Appeals Council vacated its prior decision in order to consider additional evidence, and again denied review, making it the Commissioner’s final decision (A.R. 4-5). See 20 CFR § 416.1481 (1996). On June 9, 1996, Karr commenced this action to review the Commissioner’s final decision denying his claims. See Docket #3.

[¶3]  This Court has jurisdiction under 42 USC § 405(g) and 42 USC § 1383(c)(3).

FACTS

[¶4]  Karr was born in 1949 and has a high school education (A.R. 19, 77). He served in the United States Marine Corps from 1966-70 which included a one-year tour in Vietnam (A.R. 174-75). From 1978 to 1993, Karr held 46 different jobs in a dozen states (A.R. 126-35). He has worked as a construction laborer, restaurant manager, store clerk, cook, maintenance worker, and ranch hand (A.R. 19). Karr alleged his disabling condition was arthritis in his knees, stomach problems, and mild depression (A.R. 142). He did not allege alcohol dependence or medical illness related to alcoholism. Id.

[¶5]  A.  MEDICAL/PSYCHOLOGICAL EVIDENCE

[¶6]  In December of 1993, Karr was admitted to a veteran’s hospital for alcohol detoxification (A.R. 167). His physical examination and diagnostic tests revealed bilateral degenerative changes in his knees and an irritated small intestine without ulceration (A.R. 168). Detoxification and treatment of his medical complaints were successful and he was discharged (A.R. 167). A few weeks later he returned to the hospital because of stomach pain and was prescribed medication for possible gastritis (A.R. 181-82).

[¶7]  In June of 1994, Karr was examined by an orthopedic surgeon, Don K. Gilchrist, M.D. (A.R. 191). Dr. Gilchrist noted that Karr had incurred ligament damage to the right knee when he was thrown from a truck that ran over a land mine while he was in the service in 1969. Id. Dr. Gilchrist also noted that Karr walked without a limp, and there was no instability in either knee. Id. X-rays revealed bilateral osteoarthritis of the knees; however, Dr. Gilchrist opined that bilateral knee replacements were not warranted. Id. Karr informed Dr. Gilchrist that standing in the same position for over ten minutes increased his pain, but he could walk virtually an unlimited distance before experiencing much pain. Id. Dr. Gilchrist concluded that Karr was capable of a sedentary job which would permit him to frequently change his bodily positions. Id.

[¶8]  In April of 1994, Dr. Jan F. Onik, D.O., performed a consultative examination on Karr (A.R. 183-89). Dr. Onik noted that Karr had some degenerative changes in his knees, but the range of motion was essentially normal (A.R. 184). Dr. Onik found Karr’s overall mental status to be normal. Id.5. Dr. Onik determined that Karr was “mildly depressed” and had a mild memory impairment, but was oriented with no thinking disturbance (A.R. 184, 187).{fn5}

[¶9]  B.  ALJ DECISION

[¶10]  At the onset of the administrative hearing the following exchange occurred between the ALJ and Karr--ALJ: “[I]t’s my understanding you wish to continue the hearing without the services of an attorney. Is that right, sir?” Karr: “That’s right.” See (A.R. 39-40). Based on this exchange, the ALJ concluded in his written decision that Karr voluntarily waived his right to counsel (A.R. 19).

[¶11]  In evaluating Karr’s claim, the ALJ applied the five-step sequence specified in 20 CFR §§ 404.1520 (Title II), 416.920 (Title XVI) (AR. 19-27).6. The determination of whether a claimant is entitled to Title II disability insurance benefits or Title XVI supplemental security income benefits must be made according to the following five-step sequential evaluation. See 20 CFR § 404.1520 (Title II); 20 CFR § 416.920 (Title XVI). Step One: The ALJ must determine if the claimant is engaged in “substantial gainful activity.” If so, the claimant cannot be found disabled. Step Two: If the claimant is not engaged in substantial gainful activity, the ALJ must determine if the claimant suffers from a “severe impairment.” Step Three: If the claimant does have a severe impairment, the ALJ must next determine if this impairment meets or equals an impairment listed in 20 CFR Part 404, Subpt. P, App. 1. If the claimant has a listed impairment, then the claimant must be found to be disabled. Step Four: If the claimant does not have a listed impairment, the ALJ must determine whether the claimant can return to his or her past relevant work. If the claimant can return to past relevant work, he or she is not entitled to benefits. Step Five: If the claimant cannot return to past relevant work, then the burden shifts to the Commissioner to demonstrate that the claimant can do some other work which exists in substantial numbers in the national economy. If the Commissioner does not carry this burden, the claimant must be found to be disabled. {fn6} The ALJ first determined that Karr has not engaged in substantial gainful activity since 1993 (A.R. 22; A.R. 25 (Finding 2)). In step two of the sequential evaluation, he determined that Karr has a “severe impairment.” After a review of the medical and other evidence, he found that Karr has a history of alcoholism, mild anxiety, arthritis of the knees, and gastritis Id. However, the ALJ concluded in step three of the sequential evaluation that although Karr’s impairments may be considered to be “severe,” they are not impairments which meet or equal an impairment listed in 20 CFR Part 404, Subpt. P, App. 1. Id.

[¶12]  In step four of the sequential evaluation, the ALJ determined that based on the medical evidence and testimony, Karr would be unable to return to his past relevant work as a cook, construction laborer, ranch hand, or maintenance worker because of the exertional requirements involved in these occupations (A.R. 24; A.R. 26 (Finding 6)). Therefore, under step five of the sequential evaluation, the ALJ acknowledged that the Commissioner had the burden of proving that a significant number of jobs existed in the national economy which Karr could still perform considering his combined medically determinable impairments, functional limitations, age, education, and past work experience (A.R. 24).

[¶13]  The ALJ made a determination that Karr’s allegations about his condition and limitations were not credible based in part on the inconsistency of his statements to Dr. Gilchrist and his hearing testimony regarding his ability to walk before experiencing pain (A.R. 22, A.R. 25 (Finding 4)). The ALJ also noted that the record as a whole did not support a conclusion that Karr’s symptoms were of such intensity as to preclude all substantial gainful activity (A.R. 22-23). The ALJ concluded that Karr has the residual functional capacity to perform the physical exertional and nonexertional requirements of a full range of sedentary and a limited range of light work with the following limitations: (1) no lifting and carrying more than 20 pounds occasionally and 10 pounds frequently; (2) no standing or walking longer than one-half hour at one time or totally in an eight-hour work day; (3) no repetitive operation of foot controls; (4) no ladder climbing; (5) occasional stair climbing and balancing; (6) occasional to never kneeling, crouching, or crawling; (7) avoidance of even moderate exposure to cold, wetness, humidity, and vibration; and (8) no exposure to hazardous machinery (A.R. 24; A.R. 25 (Finding 5)).

[¶14]  Based in part on the testimony of Arthur E. Smith, a vocational expert, the ALJ found Karr to have some transferable work skills and that jobs exist in significant numbers in the national and regional economy which Karr is capable of performing (A.R. 26 (Findings 10, 12)).7. In his assessment, the ALJ took into account the fact that Karr was 45 years old and had a high school education (A.R. 26 (Findings 8-9)).{fn7} Specifically, such occupations as identified by the vocational expert include telemarketer, order clerk, cab dispatcher, check cashier, amusement cashier, and bench assembler of which 30,000 jobs exist in Missouri and 1,500,000 nationally (A.R. 25; A.R. 26 (Finding 12)). Therefore, the ALJ concluded Karr cannot be found disabled as defined by the Social Security Act (A.R. 26 (Finding 13)) (citing 20 CFR §§ 404.1520(f) and 416.920(f)).

STANDARD OF REVIEW

[¶15]  The decision of the ALJ must be upheld if it is supported by substantial evidence on the record as a whole. 42 USC § 405(g); Metz v. Shalala, 49 F3d 374, 376 (8th Cir. 1995) (citing Sullins v. Shalala, 25 F3d 601, 603 (8th Cir. 1994)); Smith v. Shalala, 987 F2d 1371, 1373 (8th Cir. 1993). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support such a conclusion. Shannon v. Chater, 54 F3d 484, 486 (8th Cir. 1995) (citing Richardson v. Perales, 402 US 389, 401, 91 SCt 1420, 1427, 28 LEd2d 842 (1971)). Review by this Court extends beyond a limited search for the existence of evidence supporting the Commissioner’s decision to include giving consideration to evidence in the record which fairly detracts from the decision. Brockman v. Sullivan, 987 F2d 1344, 1346 (8th Cir. 1993); Locher v. Sullivan, 968 F2d 725, 727 (8th Cir. 1992); Turley v. Sullivan, 939 F2d 524, 528 (8th Cir. 1991). However, the Court’s role is to determine whether there is substantial evidence in the record as a whole to support the decision of the Commissioner and not to reweigh the evidence or try the issues de novo. Murphy v. Sullivan, 953 F2d 383, 384 (8th Cir. 1992). Furthermore, a reviewing court may not reverse the Commissioner’s decision “merely because substantial evidence would have supported an opposite decision.” Woolf v. Shalala, 3 F3d 1210, 1213 (8th Cir. 1993); Smith v. Shalala, 987 F2d at 1374 (citing Locher, 986 F2d at 727 (quoting Baker v. Heckler, 730 F2d 1147, 1150 (8th Cir. 1984))).

[¶16]  In addition to reviewing the Commissioner’s decision to determine if it is supported by substantial evidence in the record as a whole, the Court must review the Commissioner’s decision to determine if an error of law has been committed. Smith v. Sullivan, 982 F2d 308, 311 (8th Cir. 1992); Nettles v. Schweiker, 714 F2d 833, 836 (8th Cir. 1983). The Commissioner’s conclusions of law are only persuasive, not binding, on the reviewing court. Smith, 982 F2d at 311; Satterfield v. Mathews, 483 FSupp 20, 22 (E.D. Ark. 1979), aff'd per curiam, 615 F2d 1288, 1289 (8th Cir. 1980).

DISCUSSION

[¶17]  In his motion for summary judgment, Karr seeks reversal of the ALJ’s decision based on the following grounds: (1) the waiver of counsel at the administrative hearing was invalid; (2) failure of the ALJ to develop the record; (3) failure of the ALJ to adequately perform step 3 of the sequential evaluation; (4) failure of the ALJ to consider in combination all of his impairments based on the ALJ’s determination that claimant’s affective disorder had no effect; and (5) the Commissioner failed to carry his burden of proof at step five of the sequential evaluation when the vocational expert’s (VE) testimony was based on the ALJ’s inadequate hypothetical question

[¶18]  A.  WAIVER OF COUNSEL

[¶19]  Karr contends that his waiver of counsel was invalid; thus, he was deprived of a full and fair hearing. The record indicates that on March 21, 1995, Karr was sent a notice of hearing which set forth that:

You May Choose To Have A Person Represent You

If you want to have a representative, please get one right away. You should show this notice to anyone you may appoint. You or that person should also call this office to give us his or her name, address, and telephone number.

See (A.R. 33). Based on this notice which Karr admits he received and the exchange between Karr and the ALJ at the beginning of the hearing wherein Karr indicated his desire to proceed without counsel, the Court finds that he was adequately advised of his right to employ counsel and intelligently waived this right. See Wingert v. Bowen, 894 F2d 296, 298 (8th Cir. 1990).

[¶20]  B.   FAILURE TO ADEQUATELY DEVELOP THE RECORD

[¶21]  It is well established that the ALJ has a duty to fully and fairly develop the record. Boyd v. Sullivan, 960 F2d 733, 736 (8th Cir. 1992) (quoting Warner v. Heckler, 722 F2d 428, 431 (8th Cir. 1983)). Karr argues that the ALJ’s failure to further develop the record as to Karr’s alcohol problems and his failure to request additional medical records after the hearing requires remand. The Court disagrees.

[¶22]  The record reveals that Karr did not allege alcohol dependence or medical illness related to alcoholism in his disability report (A.R. 142). Even so, there was evidence of Karr’s prior alcohol problems introduced at the hearing. Such evidence included his admission into a veteran’s hospital for alcohol detoxification in December of 1993. He successfully completed the detoxification program and was discharged. Karr testified at the hearing that although he drank socially, alcohol was no longer a problem for him (A.R. 57). There was sufficient evidence of record which demonstrated that Karr had the ability to control his use of alcohol and that his use of alcohol socially did not significantly affect his ability to work. See Lubinski v. Sullivan, 952 F2d 214, 216 (8th Cir. 1991). Therefore, the ALJ did not err by failing to further develop the record regarding alcohol abuse.

[¶23]   Karr’s contention that the ALJ erred by failing to request additional medical records after the hearing also lacks merit.8. Karr submitted medical records dated May 1995 through November 1995 to the Appeals Council for review (A.R. 210-437). Upon review of this new evidence, as well as other medical records, the Appeals Council concluded that the additional evidence did not provide a basis for changing the ALJ’s decision (A.R. 4).{fn8} Karr cites the following statement made by the ALJ at the end of the hearing to support his position:

[S]ometimes when I review a case, I decide I need some additional evidence, in which case I might follow-up with the Veteran’s Administration Hospital or maybe get you examined again by somebody else. If new evidence comes in to the record, do you want me to send you copies so you can make comments or objections about it? Or do you want to waive your right to review any additional medical evidence that comes in?

See (A.R. 74) (emphasis added). Clearly, this language does not commit or otherwise bind the ALJ particularly in light of the medical and other evidence contained in the record which was before the ALJ. Such evidence included the following: (1) Karr’s testimony that he was not under the care of a physician and that he had not obtained medical treatment for nearly one year prior to the hearing (A.R. 54, 59-60). See Box v. Shalala, 52 F3d 168, 171 (8th Cir. 1995); (2) Dr. Gilchrist’s assessment of June 1994 wherein he determined that Karr walked without a limp, there was no instability in either knee, bilateral knee replacements were not warranted, and that Karr was capable of a sedentary job which would permit him to frequently change his bodily positions. See Smallwood v. Chater, 65 F3d 87, 89 (8th Cir. 1995); (3) Dr. Onik’s finding that Karr’s overall mental status was normal. See Williams v. Sullivan, 960 F2d 86, 89 (8th Cir. 1992); and (4) Statements by Karr regarding his ability to engage in full and varied daily activities. See Shannon, 54 F3d at 487; Clark v. Shalala, 28 F3d 828, 831 (8th Cir. 1994).

[¶24]  C.  STEP 3 OF THE SEQUENTIAL EVALUATION

[¶25]  Karr next asserts that the ALJ failed to adequately discuss the evidence and his rationale for determining that Karr was not disabled, as well as the relevant listing impairment. He contends that the relevant listing is section 1.03, which provides in relevant part,

Arthritis of a major weight-bearing joint (due to any cause):

With history of persistent joint pain and stiffness with signs of marked limitation of motion or abnormal motion of the affected joint on current physical examination. With:

A.  Gross anatomical deformity of hip or knee (e.g, subluxation, contracture, bony or fibrous ankylosis, instability) supported by X-ray evidence of either significant joint space narrowing or significant bony destruction and markedly limiting ability to walk and stand... .

20 CFR Part 404, Subpt. P, App. 1, § 1.03.

[¶26]  To be sure, even if a claimant’s individual impairments do not meet or equal a listing, the law requires the ALJ to “consider the combined effect of all [the claimant’s] impairments” in determining whether the claimant is disabled. See 20 CFR §§ 404.1523 and 416.923. The record indicates that the ALJ did not ignore the issue but specifically found that “[t]he claimant has a history of gastritis, arthritis, alcoholism, and mild/depression. However, he does not have an impairment or combination of impairments of such severity as to meet or equal any section of the Listings of Impairments.” See generally Berry v. Schweiker, 675 F2d 464, 468 (2d Cir. 1982) (holding that the absence of an express rationale regarding claimed listed impairments is not necessary when the evidence before the ALJ indicates that his conclusion was supported by substantial evidence); Waite v. Bowen, 819 F2d 1356, 1359 (7th Cir. 1987); Murphy v. Secretary of Health & Human Services, 872 FSupp 1153, 1157 (E.D.N.Y. 1994) .

[¶27]  Moreover, Karr failed to present medical or other evidence demonstrating that he meets the criteria of Listing § 1.03. See Comstock v. Chater, 91 F3d 1143, 1146 (8th Cir. 1996) (evidence supported ALJ’s finding that a claimant’s back problems did not equal a listed impairment). Orthopedic surgeon, Don K. Gilchrist, M.D., noted in his June 1994 assessment that Karr walked without a limp and there was no instability in either knee. While X-rays did reveal bilateral osteoarthritis of the knees, Dr. Gilchrist opined that bilateral knee replacements were not warranted. In addition, Karr informed Dr. Gilchrist that standing in the same position for over ten minutes increased his pain, but he could walk virtually an unlimited distance before experiencing much pain. Therefore, the Court finds that the ALJ properly addressed the listing impairment issue and the record indicates that his conclusion was supported by substantial evidence.

[¶28]  C.  AFFECTIVE DISORDER

[¶29]  Karr challenges the ALJ’s finding that depression and anxiety did not significantly impact Karr’s ability to work.9. Appended to the ALJ’s decision is the psychiatric review technique form (PRTF) wherein the ALJ determined that Karr was not affected by an affective disorder (A.R. 28-31).{fn9} The record indicates that Karr had not received frequent psychological or psychiatric help. See Williams v. Sullivan, 960 F2d 86, 89 (8th Cir. 1992). Moreover, Dr. Onik, who performed a consultative examination on Karr, opined that Karr’s overall mental status was normal. The ALJ’s finding is supported by substantial evidence.

[¶30]  E.  VOCATIONAL EXPERT (VE)

[¶31]  Karr asserts that the Commissioner failed to carry his burden of proof at step five of the sequential evaluation because the VE’s testimony was based on the ALJ’s inadequate hypothetical question which did not include his depression. The Court disagrees. The ALJ’s hypothetical question accurately reflected all Karr’s pain and impairments which the ALJ found credible. Roe v. Chater, 92 F3d 672, 675 (8th Cir. 1996) (the hypothetical question need only include those impairments that the ALJ finds are substantially supported by the record as a whole); Totz v. Sullivan, 961 F2d 727, 730 (8th Cir. 1992); Penn v. Sullivan, 896 F2d 313, 317 (8th Cir. 1990). Karr has not shown that the ALJ failed to accurately describe his conditions.

[¶32]  The VE listened to all the testimony at the administrative hearing, including Karr’s allegations about his condition and pain, in order to aid in his assessment of Karr’s ability to perform jobs which exist in significant numbers in the regional and national economies (A.R. 67). See generally Jenkins v. Bowen, 861 F2d 1083, 1086-87 (8th Cir. 1988) (noting the significance of the fact that the VE sat in on the entire hearing and listened to all the testimony). In posing the hypothetical question to the VE, the ALJ told the VE to assume that the hypothetical person had Karr’s background, work experience, and transferrable skills and to consider the limitations testified to at the hearing (A.R. 67-73). Such limitations included: (1) no lifting and carrying more than 20 pounds occasionally and 10 pounds frequently; (2) no standing or walking longer than one-half hour at one time or totally in an eight-hour work day; (3) no repetitive operation of foot controls; (4) no ladder climbing; (5) occasional stair climbing and balancing; (6) occasional to never kneeling, crouching, or crawling; (7) avoidance of even moderate exposure to cold, wetness, humidity, and vibration; and (8) no exposure to hazardous machinery. Id. Because the hypothetical question reflected an accurate account of Karr’s limitations, the ALJ was entitled to consider the opinion of the VE as reliable evidence of the existence of other work Karr could perform. See Onstad v. Shalala, 999 F2d 1232, 1234 (8th Cir. 1993).

CONCLUSION

[¶33]  The Commissioner’s decision that Karr is not disabled because he has the residual functional capacity to perform the physical exertional and nonexertional requirements of a full range of sedentary and a limited range of light work of which a substantial number exist in the national and regional economies is supported by substantial evidence in the record as a whole. Accordingly, it is hereby

[¶34]  ORDERED that Karr’s motion for summary judgment (Docket #8) is denied.

[¶35]  IT IS FURTHER ORDERED that the Commissioner’s motion for summary judgment (Docket #10) is granted. The Commissioner shall have judgment against Karr.



Innovative Home Health v. P.T.-O.T. Associates, 1997 DSD 12

INNOVATIVE HOME HEALTH CARE, INC.,

a South Dakota corporation; DENNIS MEIER; and GWEN HOUGDAHL,

Plaintiffs,

v.

P.T.-O.T. ASSOCIATES OF THE BLACK HILLS,

a general partnership; AT HOME QUALITY HEALTH CARE CO.,

a South Dakota corporation; KARL KIRSCH; and SUSAN REDDEN,

Defendants.

[1997 DSD 12]

United States District Court

District of South Dakota - Western Division

CIV. 96-5030

MEMORANDUM OPINION AND ORDER

GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Filed Apr 11, 1997.

RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  On March 22, 1996, plaintiffs filed this action against defendants alleging a violation of the Sherman Act (15 USC §§ 1 and 2) and the Clayton Act (15 USC §§ 15 and 26). In addition, plaintiffs seek to invoke this Court’s supplemental jurisdiction pursuant to 28 USC § 1367(a) for claims for breach of contract in regard to a settlement agreement and intentional interference with contract and business expectancy. Defendants Karl Kirsch (hereinafter “Kirsch”) and Susan Redden (hereinafter “Redden”) filed counterclaims against plaintiffs Dennis Meier (hereinafter “Meier”) and Gwen Hougdahl (hereinafter “Hougdahl”) alleging breach of contract of the Settlement Agreement. Kirsch and Redden are also seeking indemnification from Meier and Hougdahl based on the terms of the Settlement Agreement. On December 4, 1996, plaintiffs amended their complaint dismissing their section 2 Sherman Act claim.

[¶2]  On December 16, 1996, defendants filed their Fed. R. Civ. P. 56 motion for summary judgment against plaintiffs’ claims and in favor of defendants’ counterclaims. All responses and replies have been filed. This Court has jurisdiction pursuant to 28 USC § 1331 and 28 USC § 1367(a). The Court grants summary judgment to defendants in total.

STATEMENT OF FACTS

[¶3]  A.  PARTIES

[¶4]  Plaintiff Innovative Home Health Care, Inc. ( hereinafter “IHHC”) is a home health care agency in Rapid City, South Dakota.1. See Defendants’ Statement of Material Facts at ¶¶ 1, 8 (hereinafter “DSMF at ¶ ”) (citing Plaintiffs’ Amended Complaint at ¶¶ I, II; DSMF, Exh.2 at p. 8. (Meier Deposition)).{fn1} Plaintiffs Meier and Hougdahl are shareholders and officers of IHHC.2. Id. at ¶¶ 2, 3 (citing Plaintiffs’ Amended Complaint at ¶¶ I, VI).{fn2} Defendant At Home Quality Health Care Co. (hereinafter “At Home”) is a home health care agency in Rapid City, South Dakota.3. Id. at ¶¶ 6, 9 (citing DSMF, Exh. 1 (IHHC Articles of Incorporation)). {fn3} Defendant Redden is the sole stockholder and director of At Home.4. Id. at ¶ 7 (citing DSMF, Exh. 1). {fn4} At Home directly competes with IHHC in the home health care industry.5. Plaintiffs’ Amended Complaint at ¶ VII.{fn5}

[¶5]  Defendant, P.T.-O.T. Associates of the Black Hills (hereinafter “P.T.-O.T.”) is a South Dakota general partnership engaging in the business of providing physical and occupation therapy in Rapid City, South Dakota.6. DSMF at ¶ 4 (citing Answer of P.T.-O.T. and Kirsch at ¶ 6 (Docket #6)). See also Plaintiffs’ Amended Complaint at ¶ VIII. {fn6} P.T.-O.T. provides physical and occupation therapy directly to its own patients and under contract on behalf of home health agencies, long-term care facilities, and other similar entities.7. Plaintiffs’ Amended Complaint at ¶ VIII.{fn7} Defendant Kirsch is a managing general partner in P.T.-O.T.8. DSMF at ¶ 5. See also Plaintiffs’ Amended Complaint at ¶ VIII.{fn8} Plaintiffs assert that because P.T.-O.T. is one of only two contract physical and occupational therapy providers that serve home health agencies in Pennington County, South Dakota, it has substantial power to influence or control the home health care market in the county.9. Plaintiffs’ Amended Complaint at ¶ X. {fn9} Plaintiffs further contend that P.T.-O.T. also services a significant measure of the demand for contract physical and occupational therapy by long-term care facilities, which is a significant source of business for home health care in the county, placing it in a position to influence discharge planning for patients leaving long-term care facilities.10. Id. at ¶ XI.{fn10}

[¶6]  B.  ALLEGATIONS

[¶7]  In Count I of their complaint, plaintiffs allege that defendants as co-conspirators engaged in a combination and conspiracy to unreasonably restrain trade. The conspiratorial conduct is alleged as follows: (1) denial of “essential facilities;”11. Id. at ¶ IX.{fn11} (2) refusal to deal;12. Id. at ¶¶ XIII and XVI(a).{fn12} (3) use of market power of P.T.-O.T. to eliminate patient referrals to IHHC;13. Id. at ¶ XVI(b).{fn13} (3) interference with and appropriation of established patient/provider relationships;14. Id. at ¶ XVI(c).{fn14} (4) appropriation of a marketing opportunity that belonged to IHHC;15. Id. at ¶ XVI(d).{fn15} (5) employment of “cappers” or “steerers” to divert existing patients of IHHC to P.T.-O.T., At Home, or other home health care providers to which P.T.-O.T. provided contract therapy services;16. Id. at ¶ XVI(e).{fn16} (6) the attempted inducement of former key employees to resign and join At Home;17. Id. at ¶ XVI(f).{fn17} (7) the publication of false and disparaging statements regarding the viability of and quality of care offered by IHHC;18. Id. at ¶ XVI(g).{fn18} and (8) the filing of a “sham” lawsuit in state court by P.T.-O.T. against Hougdahl alleging breach of a covenant not to compete by Hougdahl.19. Id. at ¶ XVII.{fn19} Plaintiffs further contend that the underlying effect and purpose of these practices were as follows: (1) to manipulate or control the quality, output, or price of home health care services in Pennington County; (2) to artificially increase defendants’ market power; and (3) to arbitrarily restrain IHHC from access to the home health care market.20. Id. at ¶ XVIII.{fn20}

[¶8]  Count II of Plaintiffs’ Amended Complaint sets forth a claim for breach of contract regarding the prior Settlement Agreement. Specifically, plaintiffs allege that Kirsch and Redden have committed the following acts in violation of the terms of their Settlement Agreement: (1) kept, used, or disclosed confidential and proprietary information belonging to IHHC; (2) solicited the existing patients who were customers of IHHC; (3) appropriated a marketing opportunity belonging to IHHC; (4) disparaged IHHC by publishing or causing to be published false and malicious statements concerning its continued viability; and (5) unlawfully and intentionally disrupted or interfered with IHHC’s business.21. Id. at ¶ XXVI(a)-(e).{fn21} In regard to plaintiffs’ breach of contract claim, defendants Kirsch and Redden filed counterclaims against plaintiffs Meier and Hougdahl alleging breach of contract of the Settlement Agreement.22. Defendants Kirsch and Redden seek to invoke this Court’s supplemental jurisdiction pursuant to 28 USC § 1367(a) for their claims of breach of contract set forth in their counterclaims.{fn22} Defendants Kirsch and Redden allege in Count I of their counterclaims that plaintiffs Meier and Hougdahl are in default under the terms of the Settlement Agreement, promissory notes, and personal guarantees owing each defendant $23,333.33 plus 10.5 percent interest accruing from September 22, 1995.23. See Counterclaim of Defendant Kirsch at ¶¶ 2-4 (Docket # 6); Counterclaim of Defendant Redden at ¶¶ II-V (Docket # 5).{fn23} Count II of the counterclaims alleges that by the terms of the prior Settlement Agreement defendants Kirsch and Redden are entitled to indemnification or contribution from plaintiffs for any and all liability, as well as reasonable attorney’s fees based on a duty to defend theory.24. See Counterclaim of Defendant Kirsch at ¶¶ 5-7; Counterclaim of Defendant Redden at ¶¶ VI-VII.{fn24}

[¶9]  Count III of Plaintiffs’ Amended Complaint sets forth a claim for intentional interference with contract and business expectancy with regard to IHHC’s patients, with physicians, with referral sources, and with other businesses through the acts forming the basis for their breach of contract claim enumerated in Count II.

[¶10]  C.  BACKGROUND

[¶11]  Prior to September 22, 1995, Meier, Hougdahl, Kirsch, and Redden were shareholders in IHHC.25. DSMF at ¶ 10 (citing DSMF, Exh. 3 at p. 23 (Meier Deposition)). {fn25} On July 25, 1995, Meier and Hougdahl made an attempt to dissolve IHHC by initiating a dissolution action in state court which was ultimately resolved by a Settlement Agreement.26. Id. at ¶ 11 (citing DSMF, Exh. 4 (Settlement Agreement)). {fn26} Under the terms of the Settlement Agreement, Meier, Hougdahl, and IHHC purchased the interests of Kirsch and Redden in IHHC.27. Id. at ¶ 12 (citing DSMF, Exh. 4 at pp. 2-3). {fn27} Meier, Hougdahl, and IHHC were to pay an amount of $73,333.33 to both Kirsch and Redden.28. DSMF, Exh. 4 at p. 2. {fn28} Payments in the amount of $50,000 were made to both Kirsch and Redden at the time of the Settlement Agreement.29. Id. {fn29} At issue in this case is the remaining balance in the amount of $23,333.33 plus interest at the annual rate of 10.5 percent which was to be paid to both Kirsch and Redden on March 22, 1996.30. DSMF at ¶¶ 13-14 (citing DSMF, Exh. 4 at p. 2.). {fn30} Meier and Hougdahl executed promissory notes and personal guarantees for said amount.31. Id. at ¶ 13 (citing DSMF, Exh. 5-6). {fn31} This action was brought on or about the due date of the promissory notes; hence, the due date of the notes has passed and no payments have been made on said notes.32. Id. at ¶ 15 (citing DSMF at Exh. 7 (Meier Deposition, pp. 202-203; Hougdahl Deposition, p. 62)).{fn32}

[¶12]  On September 1, 1994, P.T.-O.T. entered into a contract with IHHC for a one-year period wherein P.T.-O.T. agreed to provide occupational therapy services to IHHC.33. Id. at ¶ 17 (citing DSMF, Exh. 9 (Occupational Therapy Contract)). {fn33} P.T.- O.T. also entered into a contract with IHHC for a one-year period for the provision of physical therapy services on October 1, 1994.34. Id. at ¶ 16 (citing DSMF, Exh. 8 (Physical Therapy Contract)).{fn34} After settlement of the IHHC dissolution action, neither the physical therapy contract nor the occupational therapy contract were extended and both expired of their own force on October 1, 1995 and September 1, 1995, respectively.35. Id. at ¶ 18 (citing DSMF, Exh. 8-9). {fn35} P.T.- O.T. wrote two letters to IHHC dated September 22 and September 29, 1995, indicating that P.T.-O.T. would no longer provide either physical or occupational therapy services to IHHC as of October 1, 1995.36. Id. at ¶ 19 (citing DSMF, Exh. 10-11). {fn36}

[¶13]  At a P.T.-O.T. staff meeting held on September 28, 1995, Kirsch informed the employees/therapists of P.T.-O.T. of the termination of the physical and occupational therapy services with IHHC, specifically instructing “the therapists to inform their patients of the termination but in no way to solicit them to any other home health care business.”37. Id. at ¶ 20 (citing DSMF, Exh. 12 (P.T.-O.T. Staff Meeting Minutes (September 28, 1995))).{fn37} After the termination of the services contracts, IHHC was able to provide physical therapy and occupational therapy services to its patients on very short notice, but with some hardships.38. Id. at ¶ 22 (citing DSMF, Exh. 14 (Meier Deposition, pp. 132-133; Hougdahl Deposition pp. 66-68; 155-156)). See also Plaintiffs’ Statement of Material Facts at ¶ 22 (hereinafter “PSMF at ”) (citing PSMF, Exh. 73 at pp. 13-18, 118; Exh. 54). {fn38} On October 2, 1995, P.T.-O.T. entered into a contract with At Home to provide physical, occupational, and speech therapy services.39. DSMF at ¶ 21 (citing DSMF, Exh. 13).{fn39}

[¶14]  Plaintiffs have named three experts in this case: (1) John Mitchell, CPA/CFP, a damages expert; (2) Andrew Beedle, a liability expert; and (3) Michael J. Myers, assistant law professor, also a liability expert.40. Id. at ¶ 23 (citing Plaintiffs’ Amended Designation of Expert Witnesses (Docket # 83)). {fn40} Plaintiffs contend that the health care market fixes no concern upon price; thus, they have not alleged that defendants engaged in price fixing.41. Id. at ¶ 24 (citing DSMF, Exh. 15 (Meier Deposition, p. 260; Hougdahl Deposition, pp. 134, 140; Beedle Deposition, pp. 92-94)). See also PSMF at ¶ 24 (citing PSMF at Exh. 51). {fn41} In his deposition, Meier testified that he is not privy to information concerning the market percentage of patients that P.T.-O.T. influenced regarding therapy services, and he doesn’t believe that information is available from anyone.42. DSMF at ¶ 25 (citing DSMF, Exh. 16 (Meier Deposition, pp. 88-89, 143-144)).{fn42} In addition, Meier is not privy to any information as to what percent of the market any of the home health care companies had at any given time, nor what percent of therapy services would have been provided by P.T.-O.T. to any home health care agency.43. Id. {fn43} Although Plaintiffs’ Amended Complaint alleges that the relevant geographic market is Pennington County, plaintiff Meier testified in his deposition that the geographic market is five counties in the Black Hills which included Pennington, Meade, Lawrence, Custer, and Fall River counties.44. Id. at ¶ 26 (citing Plaintiffs’ Amended Complaint at ¶ XVIII; DSMF, Exh. 17 (Meier Deposition, p. 147)).{fn44}

[¶15]  Plaintiffs’ conspiracy to restrain trade theory consists mainly of the following: (1) the timing of P.T.-O.T.’s termination of its physical therapy and occupational therapy services contracts with IHHC in connection with the timing of the incorporation of At Home and the formation of the P.T.-O.T./At Home service contracts;45. Id. at ¶ 41 (citing DSMF, Exh. 13 (P.T.-O.T./At Home Services Agreement); DSMF, Exh. 31 (Meier Deposition, pp. 362-377)). {fn45} (2) certain P.T.-O.T. interoffice staff meeting minutes including the September 28, 1995, meeting in which Kirsch informed the employees/therapists of P.T.-O.T. of the termination of the physical and occupational therapy services with IHHC;46. Id. at ¶ 43 (citing DSMF, Exh. 12; Exh. 31 (Meier Deposition, p. 372)).{fn46} (3) affidavits of Avis Tellinghusen, Bob Melvin, Meier, and Hougdahl;47. See Plaintiffs’ Memorandum in Opposition to Summary Judgment at 9 (citing PSMF, Exh. 53 (Affidavit of Avis Tellinghuisen); Exh. 55 (Affidavit of Bob Melvin); Exh. 56 Affidavit of Meier); and Exh. 57 (Affidavit of Hougdahl)). {fn47} (4) deposition excerpts from Redden and Kirsch;48. Id. (citing PSMF, Exh. 69 (Redden Deposition); Exh. 70 (Kirsch Deposition)).{fn48} and (5) At Home employee set- up forms for DeAnn Myers and Trisha Kirsch.49. Id. (citing PSMF, Exh. 61 (At Home Employee Form)).{fn49} Plaintiff Meier also testified in his deposition regarding plaintiffs’ refusal to deal claim that P.T.-O.T. conspired with At Home to have P.T.-O.T. refuse to deal with IHHC.50. DSMF at ¶ 28 (citing DSMF, Exh. 19 (Meier Deposition, pp. 345-350)). {fn50} He specifically set forth that the alleged refusal to deal did not: (1) increase the cost of home health care in the counties that IHHC serves; (2) decrease the overall revenues that the home health care agencies in those counties produced; (3) result in a decrease in the demand for home health care services overall in the counties in question; (4) decrease patients’ access to home health care overall within the counties in question; or (5) result in inadequate care for any patients in the home health care area.51. Id. {fn51}

[¶16]  In addition, plaintiffs Meier and Hougdahl have indicated that IHHC’s patients do not have any greater expense because of the fact that IHHC employees now provide physical therapy and occupational therapy services instead of those services being provided by a contractor such as P.T.-O.T.52. Id. at ¶ 29 (citing DSMF, Exh. 20 (Meier Deposition, pp. 52-53; Hougdahl Deposition pp. 115-116)). {fn52} IHHC’s patients do not discern the difference between physical and occupational therapy services provided by a contract provider or by an employee.53. Id. {fn53} Meier also testified that due to defendants’ actions at least 10 to 20 patient referrals were lost.54. Id. at ¶ 45 (citing DSMF, Exh. 34 (Meier Deposition, p. 257)).{fn54} However, the record also indicates that plaintiffs are unaware of any lesser number of referrals or even the overall number of referrals to other home health agencies during the time period of the alleged wrongdoing.55. Id. at ¶ 30 (citing DSMF, Exh. 21 (Meier Deposition, pp. 243-44)). {fn55} In addition, the number of home health care patients that IHHC had increased from 80 to 85 patients in July of 1995, to 92 or 93 patients in September of 1996.56. Id. at ¶ 39 (citing DSMF, Exh. 29 (Meier Deposition, p. 32)).{fn56} Plaintiffs also allege that Kirsch used or disclosed confidential or proprietary information belonging to IHHC which included referral list information and a manual.57. Id. at ¶ 56 (citing DSMF, Exh. 46 (Meier Deposition, pp. 214, 407, 409-410)). {fn57} Hougdahl further claims that she saw employees who are now employed by At Home removing materials from IHHC late one night.58. PSMF at ¶ 56 (citing PSMF, Exh. 69 (Susan Redden Deposition, pp. 157-59)).

See also DSMF, Exh. 57 at ¶¶ 3-4 (Affidavit of DeAnn Myers); DSMF, Exh. 58 at ¶¶ 2-3 (Affidavit of Gayle Effenberger).{fn58}

[¶17]  While plaintiffs suggested their experts would provide support for their argument that the referral pattern evidences an interference by defendants, their experts have no opinions concerning statistical evidence relative to the alleged impact on IHHC’s referrals.59. DSMF at ¶ 47 (citing DSMF, Exh. 36 (Myers Deposition, p. 26; Beedle Deposition, p. 22; and Mitchell Deposition p. 57)). {fn59} In support of plaintiffs’ allegations that defendants steered or solicited patients of IHHC, Hougdahl in her deposition identified the following four patients who left IHHC: Susie Munson, Tom Greene, Phillip Love, and Alice Suchta.60. Id. at ¶ 48 (citing DSMF, Exh. 37 (Hougdahl Deposition, pp. 52-53, 117)). {fn60} All four patients have submitted affidavits wherein they state that no employee or officer of P.T.-O.T. including Kirsch ever solicited their business or downgraded IHHC.61. Id. at ¶ 49 (citing DSMF, Exh. 38 (Affidavit of Susie Munson); Exh. 39 (Affidavit of Tom Greene); Exh. 40 (Affidavit of Phillip Love); Exh. 48 (Affidavit of Alice Suchta) (Attached to Defendants’ Reply Memorandum)). See also DSMF at ¶¶ 50-51 (citing DSMF, Exh. 41 (Meier Deposition, p. 379; Hougdahl Deposition, pp. 59-60)); DSMF at ¶ 53 (citing DSMF, Exh. 44 (Meier Deposition, pp. 263-64)). {fn61} It is undisputed that IHHC’s patients are not bound by any contract to remain with them for any length of time because it is the patient’s choice who will be the patient’s home health care provider.62. Id. at ¶ 52 (citing DSMF, Exh. 43 (Meier Deposition, pp. 93, 197, 213, 218-219, 236, 391, and 397-98)).{fn62}

SUMMARY JUDGMENT STANDARD

[¶18]  Under Rule 56(c) of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if the movant can “show that there is no genuine issue as to any material fact and that [the movant] is entitled to judgment as a matter of law.” In determining whether summary judgment should issue, the facts and inferences from those facts are viewed in the light most favorable to the nonmoving party, and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 US 574, 106 SCt 1348, 1356-57, 89 LEd2d 538 (1986). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in the pleadings, but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists.

[¶19]  In determining whether a genuine issue of material fact exists, the Court views the evidence presented based upon which party has the burden of proof under the underlying substantive law. Anderson v. Liberty Lobby, Inc., 477 US 242, 106 SCt 2505, 2513, 91 LEd2d 202 (1986). The Supreme Court has instructed that “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to ‘secure the just, speedy, and inexpensive determination of every action.’” Celotex Corp. v. Catrett, 477 US 317, 327, 106 SCt 2548, 2555, 91 LEd2d 265 (1986). The nonmoving party “must do more than show that there is some metaphysical doubt as to the material facts,” and “[w]here the record as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Matsushita, 106 SCt at 1356.

[¶20]  The teaching of Matsushita was further articulated by the Supreme Court in Eastman Kodak Co. v. Image Technical Services, Inc., 504 US 451, 468, 112 SCt 2072, 2083 (1992) where the Court said, “Matsushita demands only that the nonmoving party’s inferences be reasonable in order to reach the jury, a requirement that was not invented, but merely articulated, in that decision.” The Court expounded on this notion by reiterating its conclusion in Anderson that, “[s]ummary judgment will not lie ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Eastman Kodak, 504 US at 468 n.14, 112 SCt at 2083 n.14 (quoting Anderson, 477 US at 248, 106 SCt at 2510). To survive summary judgment there must be evidence that “reasonably tends to prove” plaintiffs’ theory; defendants meet the burden under Fed. R. Civ. P. 56(c) when it is conclusively shown that the facts upon which the nonmoving party relied to support the allegations were not susceptible of the interpretation which was sought to give them; only reasonable inferences can be drawn from the evidence in favor of the nonmoving party; and the Court must consider whether the inference of conspiracy is reasonable. Id. (citations omitted).

[¶21]  Where there has been ample opportunity for discovery, summary judgment is appropriate in antitrust litigation just as in any other litigation upon a showing by the moving party of an absence of any genuine issue of material fact. Willmar Poultry Co. v. Morton- Norwich Prod., Inc., 520 F2d 289 (8th Cir. 1975), cert. denied, 424 US 915, 96 SCt 1116, 47 LEd2d 320 (1976).63. The trilogy of Celotex, Anderson, and Matsushita has redefined the standard for summary judgment previously annunciated in Adickes v. S.H. Kress & Co., 398 US 144, 157, 90 SCt 1598, 1608, 26 LEd 2d 142 (1970) and Poller v. Columbia Broadcasting, Inc., 368 US 464, 467, 82 SCt 486, 7 LEd 2d 458, 488 (1962). Poller and Adickes run counter to the teachings of Celotex, Anderson, and Matsushita which take issue with the concept that summary judgment is to be used sparingly. In First National Bank of Ariz. v. Cities Serv. Co., 391 US 253, 88 SCt 1575, 20 LEd 2d 569 (1968), an antitrust case decided by the Supreme Court six years after Poller, the Court set forth that:

[T]o the extent that petitioner’s burden-of-proof argument can be interpreted to suggest that Rule 56(e) should, in effect, be read out of antitrust cases and permit plaintiffs to get to a jury on the basis of the allegations in their complaints, coupled with the hope that something can be developed at trial in the way of evidence to support those allegations, we decline to accept it. While we recognize the importance of preserving litigants’ rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an antitrust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence tending to support the complaint.

Id. 391 US at 289-90, 88 SCt at 1593. This case has been interpreted to soften Poller by rejecting the view that summary judgment “should, in effect, be read out of antitrust cases.” See William W. Schwarzer, Alan Hirsch, and David J. Barrans, The Analysis and Decision of Summary Judgment Motions: A Monograph on Rule 56 of the Federal Rules of Civil Procedure, Federal Judicial Center, at 4 (1991). {fn63} This action was commenced over one year ago. The record comprises 111 entries in four files. There have been numerous depositions and affidavits filed. Ample time for discovery has passed. Should there remain any doubt as to whether the courts continue to harbor any antagonistic feeling toward resolution of summary judgment motions in antitrust cases, Chief Judge Arnold in City of Mt. Pleasant, Iowa v. Associated Electric Co- op., 838 F2d 268 (8th Cir. 1988) laid such thoughts to rest. He stated that, “a trilogy of recent Supreme Court opinions demonstrates that we should be somewhat more hospitable to summary judgment than in the past. Id. at 273. See also Midwest Radio Co. v. Forum Pub. Co., 942 F2d 1294, 1296 (8th Cir. 1991). The motion for summary judgment can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts’ trial time for those cases that really do raise genuine issues of material fact.” Id.

[¶22]  Based on the foregoing, the trilogy of Celotex, Anderson, and Matsushita provides the Court with a methodology in analyzing defendants’ motion for summary judgment against all of plaintiffs’ claims and in favor of defendants’ counterclaims. See generally 1 Steven A. Childress & Martha S. Davis, Federal Standards of Review § 5.04 (2d ed. 1991) (discussing the standards for granting summary judgment that have emerged from Matsushita, Celotex, and Anderson). Under this trilogy, it is incumbent upon the nonmoving party (plaintiffs), based upon the showing set forth by the moving party (defendants), to establish significant probative evidence to prevent summary judgment. See Terry A. Lambert Plumbing, Inc. v. Western Sec. Bank, 934 F2d 976, 979 (8th Cir. 1991).

[¶23]  Plaintiffs have been unable to sustain their burden in the face of defendants’ showing. Plaintiffs’ conspiracy allegations in support of their antitrust claim are based solely upon surmise, conjecture, and conclusions from unsupported facts. Plaintiffs have failed to produce probative evidence to support their breach of contract and tortious interference of contract and business expectancy claims. Furthermore, plaintiffs have failed to counter defendants’ showing that they are entitled to summary judgment on their counterclaims.

DISCUSSION

[¶24]  A.  ANTITRUST

[¶25]  Section 1 of the Sherman Act proscribes “(e)very contract, combination ... or conspiracy, in restraint of trade or commerce ... .” 15 USC § 1. A successful claim under Section 1 of the Sherman Act requires proof of three elements: (1) a contract, combination, or conspiracy; (2) a resultant unreasonable restraint of trade in the relevant market; and (3) an accompanying injury. E.S. Dev., Inc. v. RWM Enter., Inc., 939 F2d 547, 553, 556 (8th Cir. 1991); Rosebrough Monument Co. v. Memorial Park Cemetery Ass’n, 666 F2d 1130, 1138 (8th Cir. 1981). See also Denny’s Marina, Inc. v. Renfro Prod., Inc., 8 F3d 1217, 1220 (7th Cir. 1993) (citing Dillard v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 961 F2d 1148, 1158 (5th Cir. 1992), cert. denied sub nom., Dillard v. Security Pacific Corp., 506 US 1079, 113 SCt 1046, 122 LEd2d 355; Wilder Enter., Inc. v. Allied Artists Pictures Corp., 632 F2d 1135, 1139 n.1 (4th Cir.1980); Ernest W. Hahn, Inc. v. Codding, 615 F2d 830, 844 (9th Cir.1980); cf. Matsushita, 475 US at 586, 106 SCt at 1356). Defendants dispute all three elements of proof. Because plaintiffs’ proof clearly fails to establish the first element of their antitrust claim, the Court need not discuss the second and third elements.

[¶26]  An antitrust plaintiff is not required to prove the existence of a formal agreement among defendants to establish a combination or conspiracy. E.S. Dev., Inc., 939 F2d at 553 (citing Reed Bros., Inc. v. Monsanto Co., 525 F2d 486, 495 (8th Cir.1975), cert. denied, 423 US 1055, 96 SCt 787, 46 LEd2d 645 (1976)). “Indeed, it is axiomatic that the typical conspiracy is ‘rarely evidenced by explicit agreements,’ but must almost always be proved by ‘inferences that may be drawn from the behavior of the alleged conspirators.’” E.S. Dev., Inc., 939 F2d at 553, 554 (citing H.L. Moore Drug Exchange v. Eli Lilly & Co., 662 F2d 935, 941 (2d Cir.1981); Michelman v. Clark-Schwebel Fiber Glass Corp., 534 F2d 1036, 1043 (2d Cir.), cert. denied, 429 US 885, 97 SCt 236, 50 LEd2d 166 (1976)), cert. denied, 459 US 880, 103 SCt 176, 74 LEd2d 144 (1982)). Furthermore, “an antitrust plaintiff may prove the existence of a combination or conspiracy by providing either direct or circumstantial evidence sufficient to ‘warrant a ... finding that the conspirators had a unity of purpose or common design and understanding, or a meeting of the minds in an unlawful arrangement.’” E.S. Dev., Inc., 939 F2d at 554 (citing American Tobacco Co. v. United States, 328 US 781, 810, 66 SCt 1125, 90 LEd 1575 (1946), quoted in H.L. Moore Drug, 662 F2d at 941; Cheatham’s Furniture Co. v. La-Z-Boy Chair Co., 728 FSupp 569, 571 (E.D. Mo.1989), aff'd, 923 F2d 858 (8th Cir. 1990); Monsanto Co. v. Spray-Rite Service Corp., 465 US 752, 764, 104 SCt 1464, 79 LEd2d 775 (1984)). However, even though all evidence and reasonable inferences are to be viewed in the light most favorable to plaintiffs, the nonmoving party, “the range of permissible inferences from ambiguous evidence is limited in a section one case.” Lovett v. General Motors Corp., 998 F2d 575, 578 (8th Cir. 1993) (citing Matsushita, 475 US at 588, 106 SCt at 1356). Stated somewhat differently, “(c)onduct that is consistent with permissible competition as with illegal conspiracy, does not, standing alone, support an inference of antitrust conspiracy.” Matsushita, 475 US at 688, 106 SCt at 1356 (citations omitted) (emphasis added).64. In considering a summary judgment motion, the Court must consider only the evidence that is admissible at trial in determining whether the evidence is sufficient to enable a reasonable jury to conclude that a combination or conspiracy did exist, keeping in mind that all evidence and reasonable inferences are to be viewed in the light most favorable to plaintiffs as the nonmoving party. Walker v. Wayne County, Iowa, 850 F2d 433, 434 (8th Cir. 1988); Multi-Tech Sys. v. Hayes Microcomputer Prod. Inc., 800 FSupp 825, 844 (D. Minn. 1992). See generally Pink Supply Corp. v. Hiebert, Inc., 788 F2d 1313, 1319 (8th Cir. 1986) (citing Burlington Coat Factory Warehouse Corp. v. Esprit De Corp., 769 F2d 919, 924 (2d Cir.1985) (“[w]ithout a showing that admissible evidence will be available at trial, a party may not rely on inadmissible hearsay in opposing a motion for summary judgment.”)). {fn64}

[¶27]  The circumstantial evidence produced by plaintiffs in support of their conspiracy theory for the most part consists of: (1) the timing of P.T.-O.T.’s termination of its physical therapy and occupational therapy services contracts with IHHC in connection with the timing of the incorporation of At Home and the formation of the P.T.-O.T./At Home service contracts;65. DSMF at ¶ 41 (citing DSMF, Exh. 13 (P.T.-O.T./At Home Services Agreement); DSMF, Exh. 31 (Meier Deposition, pp. 362-377)). {fn65} (2) certain P.T.-O.T. interoffice staff meeting minutes including the minutes from the September 28, 1995, meeting in which Kirsch informed the employees/therapists of P.T.-O.T. of the termination of the physical and occupational therapy services with IHHC;66. Id. at ¶ 43 (citing DSMF, Exh. 12 (P.T.-O.T. Staff Meeting Minutes); Exh. 31 (Meier Deposition, p. 372)).{fn66} (3) affidavits of Avis Tellinghuisen, Bob Melvin, Meier, and Hougdahl;67. See Plaintiffs’ Memorandum in Opposition to Summary Judgment at 9 (citing PSMF, Exh. 53 (Affidavit of Avis Tellinghuisen); Exh. 55 (Affidavit of Bob Melvin); Exh. 56 Affidavit of Meier); and Exh. 57 (Affidavit of Hougdahl)). {fn67} (4) deposition excerpts from Redden and Kirsch;68. Id. (citing PSMF, Exh. 69 (Redden Deposition); Exh. 70 (Kirsch Deposition)).{fn68} and (5) At Home employee set-up forms for DeAnn Myers and Trisha Kirsch.69. Id. (citing PSMF, Exh. 61 (At Home Employee Forms)).{fn69} As demonstrated below, the range of permissible inferences that may be derived from this ambiguous evidence is insufficient to combat defendants’ showing that no conspiracy existed.

[¶28]  Plaintiffs contend that the timing of P.T.-O.T.’s termination of its physical therapy and occupational therapy services contracts with IHHC which occurred on or about October 1, 1995 and September 1, 1995, respectively, in connection with the timing of the incorporation of At Home and the formation of the P.T.-O.T./At Home service contracts which occurred on or about October 2, 1995, evidences the conspiracy.70. Because P.T.-O.T. and At Home are not competitors in any market and both P.T.- O.T. and At Home acted in favor of their own economic interests in this case, a theory of conscious parallelism is unavailable to plaintiffs. As defined by the Eleventh Circuit, “(c)onscious parallelism is uniform business conduct by competitors that permits a court to infer the existence of a conspiracy between these competitors.” Todorov v. DCH Healthcare Auth., 921 F2d 1438, 1456 n.30 (11th Cir. 1991) (citing Interstate Circuit, Inc. v. United States, 306 US 208, 221, 59 SCt 467, 472, 83 LEd 610 (1939)). Proof of parallel business behavior alone is insufficient to establish a conspiracy. Theatre Enter., Inc. v. Paramount Film Distrib. Corp., 346 US 537, 540-41, 74 SCt 257, 259, 98 LEd 273 (1954). As further explained by the Eleventh Circuit,

The idea behind this theory is that competitors’ parallel business decisions are probative of the existence of a conspiracy between these competitors. The evidence used to support this theory is circumstantial. To ensure that we do not punish unilateral conduct, however, we require more than mere evidence of parallel conduct by competitors to support an inference of a conspiracy; an agreement is properly inferred from conscious parallelism only when “plus factors” exist.

Todorov, 921 F2d at 1456 n.30. These “plus factors” include actions contrary to the defendants’ economic interests and a motivation to enter into such an agreement. Petruzzi’s IGA Supermarkets v. Darling-Delaware Co., 998 F2d 1224, 1242 (3d Cir.), cert. denied, 510 US 994 (1993). See generally Admiral Theatre Corp. v. Douglas Theatre Co., 585 F2d 877, 884 (8th Cir. 1978).{fn70} P.T.-O.T. had a legitimate business reason for canceling its services contracts with IHHC. The acrimonious relationship between the parties arising out of the breakup of IHHC created an undesirable work atmosphere which could adversely affect the ultimate work product. Indeed, a unilateral refusal to deal is no Sherman Act violation. Monsanto, 465 US at 761, 104 SCt at 1469 (citing United States v. Colgate & Co., 250 US 300, 307, 39 SCt 465, 468, 63 LEd 992 (1919) (noting that a manufacturer has a right to deal, or refuse to deal, with whomever it likes, as long as it does so independently)); Health Care Equal. Comm. v. Iowa Medical Society, 851 F2d 1020, 1032 (8th Cir. 1988); Terry’s Floor Fashions v. Burlington Indus., 763 F2d 604, 610-11 (4th Cir. 1985); Aquachem Co., Inc. v. Olin Corp., 699 F2d 516, 520 (11th Cir. 1983). Plaintiffs have failed to produce sufficient evidence tending to exclude the possibility of independent action by P.T.-O.T.

[¶29]  Plaintiffs also rely on certain P.T.-O.T. interoffice staff meeting minutes including the minutes from the September 28, 1995, meeting in which Kirsch informed the employees/therapists of P.T.-O.T. of the termination of the physical and occupational therapy services with IHHC. Consistent with the foregoing discussion, these minutes only evidence P.T.-O.T.’s business decision not to renew a service contract with IHHC. Clearly, such evidence does not warrant a finding that P.T.-O.T. and At Home had a unity of purpose or common design or a meeting of the minds in an unlawful arrangement. To the contrary, the September 28, 1995, minutes support defendants’ position because Kirsch specifically instructed “the therapists to inform their patients of the termination but in no way to solicit them to any other home health care business.”71. DSMF at ¶ 20 (citing DSMF, Exh. 12 (P.T.-O.T. Staff Meeting Minutes) (emphasis added)).{fn71} Furthermore, plaintiffs have failed to produce evidence regarding At Home’s involvement in said meetings as to rule out independent action by P.T.-O.T.

[¶30]  Plaintiffs set forth their conspiracy theory in two paragraphs of their response brief wherein they contend that the following exhibits without specific references establish a conspiracy: Exh. 53 (Affidavit of Avis Tellinghuisen); Exh. 55 (Affidavit of Bob Melvin); Exh. 56 (Affidavit of Meier); Exh. 57 (Affidavit of Hougdahl); Exh. 61 (At Home Employee Forms); Exh. 69 (Redden Deposition); and Exh. 70 (Kirsch Deposition).72. See Plaintiffs’ Memorandum in Opposition to Summary Judgment at 9. {fn72} Upon thorough review of these exhibits, the Court concludes that the range of permissible inferences that may be derived from this ambiguous evidence is insufficient to combat defendants’ showing that no conspiracy existed.

[¶31]  Avis Tellinghuisen was P.T.-O.T.’s office manager during September and October of 1995. See PSMF, Exh. 53 at ¶¶ 1-2. In her affidavit, she sets forth that Redden called Kirsch on the average of three to four times per day. Id. at ¶¶ 3-4. Evidence of meetings alone is not sufficient to support a conspiracy particularly in light of the fact that Tellinghuisen does not state what was said in the telephone conversations. Hanson v. Shell Oil Co., 541 F2d 1352, 1359 (9th Cir. 1976), cert. denied, 429 US 1074, 97 SCt 813, 50 LEd2d 792 (1977). There is no evidence that Redden and Kirsch entered into a conspiracy or furthered a conspiracy during these phone conversations.

[¶32]  Bob Melvin is an independent insurance agent who alleges he had a phone interview with Trisha Kirsch, R.N., a former employee of IHHC, wherein she explained that she was leaving IHHC because of Karl Kirsch her “jackass brother-in-law.” See PSMF, Exh. 55 at ¶¶ 1-2.73. Trisha Kirsch categorically denies ever having made any such statement about Karl Kirsch. See DSMF, Exh. 51 (Affidavit of Trisha Kirsch).{fn73} Aside from the inherent evidentiary problems emanating from this affidavit, it is not relevant to proving there was any conspiracy.

[¶33]  Plaintiff Meier submitted an affidavit wherein he discusses IHHC’s loss of its contract with P.T.-O.T., as well as the loss of certain patients and employees. However, the affidavit provides only speculation, conjecture, and surmise regarding defendants’ actions and plaintiffs’ loss of P.T.-O.T.’s contract. See PSMF, Exh. 56 (Affidavit of Meier). The same is true as to plaintiff Hougdahl’s affidavit wherein she sets forth only conclusory statements as to the alleged conspiracy without providing specifics or evidence from which a reasonable jury could infer that a combination or conspiracy existed. See PSMF, Exh. 57 at p. 8 (Affidavit of Hougdahl).74. The Court recognizes that in certain aspects both Meier’s and Hougdahl’s affidavits contradict their prior deposition testimony. See generally Camfield Tires, Inc. v. Michelin Tire Corp., 719 F2d 1361, 1364-66 (8th Cir. 1983) (submission of an affidavit contradicting earlier deposition testimony in order to raise a “sham issue” to defeat summary judgment should be ignored).{fn74}

[¶34]  Plaintiffs also submitted At Home employee set-up forms which indicate Trisha Kirsch and DeAnn Myers went to work for At Home on or about October 2, 1995. See PSMF, Exh. 61 (At Home Employee Forms). In her affidavit, Trisha Kirsch states,

[I] left Innovative Home Health Care on or about September 1995. I was not forced to leave Innovative by Karl Kirsch. I left Innovative because after Dennis Meier became in charge, my workload dropped from 20 to 25 patients per week to 8 to 10 patients per week. When I left Innovative Home Health Care, I did not go to At Home Quality Health Care. I went to Rapid City Regional Hospital. Later, I did go to work for At Home Quality Health Care.

See DSMF, Exh 51 at ¶ 2 (Affidavit of Trisha Kirsch). In her affidavit, DeAnn Myers stated that prior to her seeking employment with At Home, she was concerned her employment would be terminated if Dennis Meier became owner of IHHC in the buy-out. See DSMF, Exh. 57 at ¶ 4 (Affidavit of DeAnn Myers). There is simply no evidence contained in the At Home employee set-up forms which aids plaintiffs’ conspiracy theory.

[¶35]  Plaintiffs cite an excerpt from Redden’s deposition to support their theory that Kirsch and Redden embarked on a conspiracy to deprive IHHC of business. See Plaintiffs’ Memorandum in Opposition to Summary Judgment at 9 (citing PSMF, Exh. 69 at pp. 158-159). That portion of Redden’s testimony discusses two incidents. The first incident pertains to Hougdahl’s claims that she saw IHHC employees DeAnn Myers and Gayle Effenberger, who are now employed by At Home, removing materials from IHHC late one night.75. PSMF at ¶ 56 (citing PSMF, Exh. 69 (Susan Redden Deposition, pp. 157-59)).{fn75} In her affidavit, DeAnn Myers explains the incident outside IHHC as follows:

I was one of the two employees who was confronted by Gwen Hougdahl outside Innovative’s premises on a Monday night at approximately 10:45 p.m. on or about September 11, 1995. I was working late because before the buy-out, the attorneys wanted Gayle Effenberger to compile financial statements by the next morning. I offered to stay late with her as we felt it was an unsafe neighborhood late at night, and I had other unfinished paperwork I could do.

After looking both ways upon exiting the building ... we proceeded to our cars, when Gwen Hougdahl jumps out of nowhere and asks, “What do you have there?” We were terrified with the sudden outburst and appearance in the dark of night. Realizing then it was Gwen, I said, “Here’s my stuff. Do you want to see?” Gwen replied, “No, I just want to make sure you don’t have any manuals.” The items I was carrying consisted of a paper bag of apples, a frame that Susan Redden had given me, and some of my birthday and other cards. Gayle and I both felt our employment would be terminated if Dennis Meier became owner in the buy-out, so we had decided we would take some of our personal items home.

See DSMF, Exh. 57 at ¶¶ 3-4 (Affidavit of DeAnn Myers). Gayle Effenberger corroborates DeAnn Myers’ explanation in her affidavit. See DSMF, 58 at ¶¶ 2-3 (Affidavit of Gayle Effenberger). The incident outside IHHC does not support plaintiffs’ theory that Kirsch and Redden embarked on a conspiracy to deprive IHHC of business.

[¶36]  The second matter Redden refers to in her deposition pertains to the state court’s prior determination that Redden had oppressed the other owners of IHHC. See DSMF, Exh. 69 at pp. 158-59 (Redden Deposition). Redden’s oppressive conduct was ultimately resolved by the Settlement Agreement whereby Meier, Hougdahl, and IHHC purchased the interests of Kirsch and Redden in IHHC.76. DSMF at ¶ 12 (citing DSMF, Exh. 4 at pp. 2-3). {fn76} Evidence that Redden had oppressed other owners of IHHC is too ambiguous to warrant a finding that there was a conspiracy or that any of the alleged conspirators had a unity of purpose or common design and understanding, or a meeting of the minds in an unlawful arrangement.

[¶37]  Finally, plaintiffs contend that excerpts of Kirsch’s deposition helps establish the conspiracy. While Kirsch testified that he had talked to Redden, there is no evidence that the content of any conversations either established or furthered any alleged conspiracy.77. PSMF, Exh. 70 at pp. 35-42 (Kirsch Deposition).{fn77} See generally Hanson, 541 F2d at 1359 (evidence of meetings alone is not sufficient to support a conspiracy). Kirsch also discussed an incident wherein he requested Gayle Effenberger to call Medicare to determine the ownership of IHHC because Hougdahl was calling P.T.-O.T.’s employed therapists and soliciting them.78. Id. at pp. 50, 86, 104-105.{fn78} All the evidence plaintiffs have submitted to support their conspiracy theory, considered as a whole, is too ambiguous for a reasonable jury to infer the existence of a conspiracy.

[¶38]  Because the Court finds that all defendants are entitled to summary judgment on the antitrust claim based on plaintiffs’ failure to produce sufficient probative evidence that a combination or conspiracy existed between defendants, the Court need not inquire into the standards for evaluating whether the alleged restraint of trade is unreasonable or whether there exists an antitrust injury.

[¶39]  B.  SUPPLEMENTAL JURISDICTION

[¶40]  Having granted summary judgment to defendants on plaintiffs’ federal claim, the remaining issues are plaintiffs’ state law claims for breach of contract and tortious interference with contract and business expectancy, and defendants’ counterclaims for breach of contract and indemnification.79. Plaintiffs seek to invoke this Court’s supplemental jurisdiction pursuant to 28 USC § 1367(a) for claims for breach of contract in regard to the Settlement Agreement and intentional interference with contract and business expectancy. Defendants Kirsch and Redden also seek to invoke this Court’s supplemental jurisdiction for their claims of breach of contract and indemnification set forth in their counterclaims. {fn79} This Court is granted supplemental jurisdiction80. Pursuant to the Judicial Improvements Act of 1990, the former common-law doctrines of pendent and ancillary jurisdiction were codified “under the new rubric of supplemental jurisdiction” in 28 USC § 1367. See Willman v. Heartland Hosp. East, 34 F3d 605, 613 (8th Cir. 1994); North Cent. F.S., Inc. v. Brown, 951 FSupp 1383, 1410 (ND Iowa 1996).{fn80} over state law claims and counterclaims which form part of the same case or controversy as claims over which this Court has original jurisdiction. See 28 USC § 1367(a);81. 28 USC § 1367(a) provides in relevant part,

  [I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution... .{fn81} Achtien v. City of Deadwood, 814 FSupp 808, 819 (DSD 1993); North Cent. F.S., Inc. v. Brown, 951 FSupp 1383, 1410 (ND Iowa 1996) (once a federal district court has subject matter jurisdiction over a claim, an opposing party’s compulsory counterclaim also comes within the court’s jurisdiction, even when that counterclaim lacks an independent basis for federal subject matter jurisdiction). However, this Court also has broad discretion to dismiss state law claims and counterclaims over which it has only supplemental jurisdiction if the Court has dismissed all claims over which the Court had original jurisdiction. See 28 USC § 1367(c)(3); Willman v. Heartland Hosp. East, 34 F3d 605, 613 (8th Cir. 1994) (recognizing that the district court has broad discretion to exercise what it still described as “pendent” jurisdiction over the state-law claims and “ancillary” jurisdiction over the counterclaims); Achtien, 814 FSupp at 819.

[¶41]  Accordingly, the Court must determine whether in its discretion, given the facts and circumstances of this case, it should retain jurisdiction over these claims under 28 USC § 1367(c)(3). The same determination must be made as to defendant Kirsch’s and Redden’s counterclaims with the admonition that the counterclaims must be “compulsory” counterclaims within the meaning of Fed. R. Civ. P. 13(a). As recognized by the Eighth Circuit Court of appeals, “[i]ssues such as judicial efficiency, convenience, and fairness to the litigants are relevant to the federal court’s exercise of its discretion.” Condor Corp. v. City of St. Paul, 912 F2d 215, 221 (8th Cir. 1990). These factors weigh in favor of resolving the state issues presented here.

[¶42]  This action is the third in a series of litigation between some or all of the parties which arose out of differences in the business of IHHC. The facts and circumstances upon which plaintiffs base their antitrust claim form the basis behind the breach of the Settlement Agreement and tortious interference of contract and business expectancy claims. These facts were developed through over a year’s worth of discovery. The record is replete with references to the state claims in numerous depositions and affidavits. In addition, the case comprises 111 entries contained in four files. Ample time for discovery has passed. This Court has developed the majority of the facts necessary for the resolution of the state claims in the adjudication of the federal antitrust claim. The parties have presented their arguments in support of their state claims in the motion for summary judgment. In addition, as demonstrated below, because the Court finds that there is no genuine issue as to any material fact and that defendants are entitled to judgment as a matter of law on the state claims, this matter is resolved without the additional burdens associated with trial. As for defendants Kirsch’s and Redden’s counterclaims, they are “compulsory” counterclaims within the meaning of Fed. R. Civ. P. 13(a) in that they arise out of the transaction or occurrence that is the subject matter of plaintiffs’ antitrust claim and do not require for their adjudication the presence of third parties of whom the Court cannot acquire jurisdiction.82. Fed. R. Civ. P. 13(a) provides that:

A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if (1) at the time the action was commenced the claim was the subject of another pending action, or (2) the opposing party brought suit upon the claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13.

It is well established that failure to plead a compulsory counterclaim while litigation is pending bars the party from raising the claim. Law Offices of Jerris Leonard v. Mideast Sys., Ltd., 111 F.R.D. 359, 361 (D.D.C. 1986) (citations omitted). {fn82}

[¶43]  1.  Breach of Settlement Agreement

[¶44]  On September 21, 1995, defendants Kirsch and Redden and plaintiffs Meier, Hougdahl, and IHHC entered into a Settlement Agreement in order to resolve the dissolution action of IHHC filed in state court.83. DSMF, Exh. 4 (Settlement Agreement).{fn83} Under the terms of the Settlement Agreement, Meier, Hougdahl, and IHHC purchased the interests of Kirsch and Redden in IHHC.84. Id. at pp. 2-3. {fn84} Meier, Hougdahl, and IHHC were to pay an amount of $73,333.33 to both Kirsch and Redden.85. Id. at p. 2. {fn85} Payments in the amount of $50,000 were made to both Kirsch and Redden at the time of the Settlement Agreement.86. Id. {fn86} At issue in this case is the remaining balance in the amount of $23,333.33 plus interest at the annual rate of 10.5 percent which was to be paid to both Kirsch and Redden on March 22, 1996.87. Id.{fn87} Meier and Hougdahl executed promissory notes and personal guarantees for said amount.88. DSMF at ¶ 13 (citing DSMF, Exh. 5-6). {fn88}

[¶45]  Paragraph V of the Settlement Agreement contains a non-interference clause which provides:

Defendants [Kirsch and Redden] agree to and shall abide by the terms of the Innovative Home Health Care, Inc., Confidentiality Statement, a copy of which is annexed hereto as exhibit A. The Confidentiality Statement shall not be construed to prohibit defendants from employment in their professions or from placing newspaper advertisements or notices, Yellow Page notices, or other general advertising or marketing not specifically directed at the corporation’s patients, vendors, or customers. This Agreement specifically shall not be construed to preclude Defendant Kirsch or any entity he is with from providing physical or occupational therapy to other home health care entities; provision of therapy services shall not, in and of itself, constitute a breach of this Agreement.

The parties shall not disparage, unlawfully disrupt, or unlawfully and intentionally interfere with the business or lawful activities of any other party.

See DSMF, Exh. 4 at p. 4. The Confidentiality Statement, which is annexed to the Settlement Agreement, contains the following two proscriptions: (1) prohibition against use, copying, reproduction or taking confidential information, which is described as certain written information; and (2) prohibition against competition, competition being defined as soliciting for the purpose of rendering service to any person or organization that is or was a patient/customer of IHHC. See DSMF, Exh. 4 at Attachment A (Confidentiality Statement).

[¶46]  This action was brought on or about the due date of the promissory notes; hence, the due date of the notes has passed and no payments have been made on said notes.89. Id. at ¶ 15 (citing DSMF at Exh. 7 (Meier Deposition, pp. 202-203; Hougdahl Deposition, p. 62)).{fn89} Plaintiffs contend that they are not obligated to pay the remaining balance due because Kirsch and Redden have breached the terms of the Settlement Agreement. Specifically, plaintiffs allege that Kirsch and Redden have committed the following acts in violation of the terms of their Settlement Agreement: (1) kept, used, or disclosed confidential and proprietary information belonging to IHHC; (2) solicited the existing patients who were customers of IHHC; (3) appropriated a marketing opportunity belonging to IHHC; (4) disparaged IHHC by publishing or causing to be published false and malicious statements concerning its continued viability; and (5) unlawfully and intentionally disrupted or interfered with IHHC’s business. In regard to plaintiffs’ breach of contract claim, defendants Kirsch and Redden filed counterclaims against plaintiffs Meier, Hougdahl, and IHHC alleging breach of contract of the Settlement Agreement. Defendants Kirsch and Redden allege in their counterclaims that they have not breached the Settlement Agreement; therefore, plaintiffs are in default under the terms of the Settlement Agreement, promissory notes, and personal guarantees owing each defendant $23,333.33 plus 10.5 percent interest accruing from September 22, 1995.

[¶47]  After reviewing all facts and inferences derived therefrom in a light most favorable to plaintiffs this Court concludes that defendants Kirsch and Redden did not breach the Settlement Agreement. Plaintiffs have failed to present sufficient evidence that defendants kept, used, or disclosed confidential and proprietary information belonging to IHHC. As previously discussed in the antitrust section, Hougdahl’s claims that she saw IHHC employees DeAnn Myers and Gayle Effenberger, who are now employed by At Home, removing materials from IHHC late one night does not establish that defendants removed any confidential or proprietary information. Furthermore, DeAnn Myers and Gayle Effenberger set forth in their affidavits that they were merely removing personal items.

[¶48]  Plaintiffs’ contention that defendants breached the Settlement Agreement by soliciting customers of IHHC is unsupported by the record. Meier also testified that due to defendants’ actions at least 10 to 20 patient referrals were lost. However, the record also indicates that plaintiffs are unaware of any lesser number of referrals or even the overall number of referrals to other home health agencies during the time period of the alleged wrongdoing. In fact, the record indicates that the number of home health care patients that IHHC had increased from 80 to 85 patients in July of 1995, to 92 or 93 patients in September of 1996. In addition, at a P.T.-O.T. staff meeting held on September 28, 1995, Kirsch specifically instructed “the therapists to inform their patients of the termination but in no way to solicit them to any other home health care business.”90. DSMF at ¶ 20 (citing DSMF, Exh. 12 (P.T.-O.T. Staff Meeting Minutes)).{fn90} In further support of plaintiffs’ allegations that defendants steered or solicited patients of IHHC, Hougdahl in her deposition identified the following four patients who left IHHC: Susie Munson, Tom Greene, Phillip Love, and Alice Suchta.91. DSMF at ¶ 48 (citing DSMF, Exh. 37 (Hougdahl Deposition, pp. 52-53, 117)). {fn91} All four patients have submitted affidavits wherein they state that no employee or officer of P.T.-O.T., including Kirsch, ever solicited their business or downgraded IHHC.92. Id. at ¶ 49 (citing DSMF, Exh. 38 (Affidavit of Susie Munson); Exh. 39 (Affidavit of Tom Greene); Exh. 40 (Affidavit of Phillip Love); Exh. 48 (Affidavit of Alice Suchta) (Attached to Defendants’ Reply Memorandum)). See also DSMF at ¶¶ 50-51 (citing DSMF, Exh. 41 (Meier Deposition, p. 379; Hougdahl Deposition, pp. 59-60)); DSMF at ¶ 53 (citing DSMF, Exh. 44 (Meier Deposition, pp. 263-64)). {fn92} It is undisputed that IHHC’s patients are not bound by any contract to remain with them for any length of time because it is the patient’s choice who will be the patient’s home health care provider.93. Id. at ¶ 52 (citing DSMF, Exh. 43 (Meier Deposition, pp. 93, 197, 213, 218-219, 236, 391, and 397-98)).{fn93}

[¶49]  There is no evidence that Kirsch and Redden appropriated a marketing opportunity belonging solely to IHHC. The Settlement Agreement specifically provides that it “shall not be construed to preclude Defendant Kirsch or any entity he is with [i.e. P.T.-O.T.] from providing physical or occupational therapy to other home health care entities [i.e. At Home]; provision of therapy services shall not, in and of itself, constitute a breach of this Agreement.” See DSMF, Exh. 4 at p. 4.

[¶50]  Plaintiffs have also failed to produce sufficient evidence indicating that defendants disparaged IHHC by publishing or causing to be published false and malicious statements concerning its continued viability.94. The Settlement Agreement prohibits defendants from disparaging, unlawfully disrupting, or unlawfully and intentionally interfering with the business or lawful activities of plaintiffs. See DSMF, Exh. 4 at p. 4.{fn94} In support of this allegation plaintiffs make reference to Meier’s deposition testimony wherein he states that an unknown person told doctors in the community that IHHC was going out of business. See PSMF ¶ 53; DSMF ¶ 53 (citing DSMF Exh. 44 at pp. 263-64) (Meier Deposition)). Without additional evidence, this Court will not accept plaintiffs’ invitation to attribute these statements to defendants merely because they were made around the same time that Kirsch and Redden were bought out of IHHC. The Court further finds that deposition comments by Brad Ferguson, a partner in P.T.-O.T., wherein he states that the reason P.T.-O.T. terminated the contract with IHHC was due in part to a disagreement with the way IHHC conducted business does not establish that defendants disparaged IHHC by publishing or causing to be published false and malicious statements concerning its continued viability. See DSMF ¶¶ 53-54 (citing DSMF, Exh. 32) (Brad Ferguson Deposition). See generally DSMF, Exh. 32 (Kirsch Deposition); DSMF, Exh. 12 (P.T.-O.T. Staff Meeting Minutes).

[¶51]  Finally, plaintiffs contend that defendants unlawfully and intentionally disrupted or interfered with IHHC’s business by soliciting IHHC’s patients and taking confidential and proprietary information belonging to IHHC. As previously discussed, plaintiffs have failed to produce sufficient probative evidence that defendants engaged in such conduct.

[¶52]  Because plaintiffs have failed to combat defendants’ showing that defendants did not breach the Settlement Agreement, defendants shall have summary judgment against plaintiffs as to their breach of contract claim contained in Count II of their Amended Complaint. In addition, summary judgment is granted in favor of defendants Kirsch’s and Redden’s breach of contract counterclaim. Because defendants have not breached the Settlement Agreement, plaintiffs Meier, Hougdahl, and IHHC are in default under the terms of the Settlement Agreement, promissory notes, and personal guarantees owing each defendant $23,333.33 plus 10.5 percent interest accruing from September 22, 1995.

[¶53]  2.  Indemnification

[¶54]  Defendants Kirsch and Redden are also seeking indemnification from plaintiffs Meier and Hougdahl for all reasonable costs and expenses including reasonable attorney’s fees incurred in defending this lawsuit.95. Due to the nature of this action, defendants are foreclosed from seeking indemnification from IHHC. See generally S.D.C.L. § 47-2-58.2 (precludes a corporation from indemnifying a director, officer, employee, or agent of a corporation from an action by or in the right of the corporation); SDCL § 47-2-58.8; SDCL § 47-5-27.{fn95} Defendants rely on the indemnification clause contained in paragraph 4 of the Settlement Agreement which specifically provides,

Plaintiffs [Meier and Hougdahl] and Innovative Home Health Care, Inc., agree to indemnify and defend defendant directors and to hold defendant directors harmless from any and all claims, demands, and causes of action, including third-party actions or cross-actions seeking contribution or indemnity, or any other liability that arises out of or is related to the operation of Innovative Home Health Care, Inc., either before or after the execution of this Agreement.

See DSMF, Exh. 4 at pp. 3-4 (emphasis added).96. The Settlement Agreement also provides that,

d.  Upon due diligence examination by plaintiffs, to be completed prior to plaintiffs’ possession of the corporation even if such possession occurs prior to the exchange of consideration for this Agreement plaintiffs and corporation shall individually and jointly indemnify and release defendants from any and all liabilities or obligations relating to or arising out of their capacity as shareholders, officers, directors, or employees of said corporation, except to the extent such release would be inconsistent with the terms of this Agreement.  

See DSMF, Exh. 4 at pp. 2-3. {fn96} Under the Matsushita, Celotex, and Anderson trilogy, it is incumbent upon the Meier and Hougdahl as the nonmoving parties, based upon the showing set forth by Kirsch and Redden, the moving parties, to establish significant probative evidence to prevent summary judgment. See Terry A. Lambert Plumbing, Inc., 934 F2d at 979. Plaintiffs Meier and Hougdahl have failed to combat defendants’ showing. Accordingly, defendants Kirsch and Redden are entitled to all reasonable costs and expenses, including reasonable attorney fees, incurred by the filing of this suit.

[¶55]  3.  Tortious Interference With Contractual Relations

[¶56]  The essential elements of a cause of action for tortious interference with contractual relations are as follows:

(1)  the existence of a valid business relationship or expectancy;

(2)  knowledge by the interferer of the relationship or expectancy;

(3)  an intentional and unjustified act of interference on the part of the interferer;

(4)  proof that the interference caused the harm sustained; and

(5)  damage to the party whose relationship or expectancy was disrupted.

Nelson v. WEB Water Dev. Ass’n, 507 NW2d 691 (SD 1993) (quoting Tibke v. McDougall, 479 NW2d 898, 908 (SD 1992)).

[¶57]  The Court has heretofore concluded that defendants did not unlawfully and intentionally disrupt or interfere with IHHC’s business by engaging in any of the following conduct:

(1)  keep, use, or disclose confidential and proprietary information belonging to IHHC;

(2)  solicit the existing patients who were customers of IHHC;

(3)  appropriate a marketing opportunity belonging to IHHC; or

(4)  disparage IHHC by publishing or causing to be published false and malicious statements concerning its continued viability.

[¶58]  Plaintiffs have failed to produce significant probative evidence to controvert defendants’ showing of the lack of an unjustified act of intentional interference necessary to invoke liability under plaintiffs’ theory of tortious interference with contractual relations so as to preclude summary judgment on that issue. See Terry A. Lambert Plumbing, Inc., 934 F2d at 979.

CONCLUSION

[¶59]  After viewing the arguments presented by both parties and after reviewing the facts and inferences that may be derived therefrom in a light most favorable to plaintiffs, this Court concludes that plaintiffs have failed to present sufficient probative evidence in support of their conspiracy theory as to create a genuine issue of material fact to withstand defendants’ motion for summary judgment on the antitrust claim alleged in Count I of Plaintiffs’ Amended Complaint. The Court further finds that defendants are entitled to summary judgment against plaintiffs on the breach of contract and tortious interference with contractual and business relations claims alleged in Counts I and II of Plaintiffs’ Amended Complaint. In addition, defendants Kirsch and Redden are entitled to summary judgment against plaintiffs for their counterclaims of breach of contract and indemnification. Because said plaintiffs are in default under the terms of the Settlement Agreement, promissory notes, and personal guarantees, they shall pay each defendant $23,333.33 plus 10.5 percent interest accruing from September 22, 1995. Furthermore, plaintiffs Meier and Hougdahl shall indemnify defendants Kirsch and Redden for all reasonable costs and expenses, including reasonable attorney fees, incurred by the filing of this suit. Accordingly, judgment shall be issued forthwith.



Wilcox v. Callahan, 1997 DSD 13

LOLA M. WILCOX,

Plaintiff,

v.

JOHN J. CALLAHAN,

Acting Commissioner of Social Security,

Defendant.

[1997 DSD 13]

United States District Court

District of South Dakota - Western Division

CR 96-5069

MEMORANDUM OPINION AND ORDER

Filed May, 1997

RICHARD H. BATTEY, Chief Judge

PROCEDURAL HISTORY

[¶1]  On August 29, 1996, plaintiff/claimant Lola M. Wilcox (Wilcox) filed a complaint seeking review of the decision denying her social security benefits. On February 14, 1997, Wilcox filed a motion for summary judgment requesting that the Commissioner’s decision be reversed or in the alternative that the case be remanded to the agency for consideration of new and material evidence. On March 10, 1997, Acting Commissioner of Social Security, John J. Callahan, responded to Wilcox’s motion requesting that the Commissioner’s decision be affirmed on the ground that no genuine issue as to any material fact exists and that the Commissioner is entitled to summary judgment as a matter of law. The Court has jurisdiction pursuant to 42 USC § 405(g).

[¶2]  On April 24, 1994, Wilcox filed applications for Title II disability benefits under Title II of the Social Security Act (the Act), 42 USC §§ 401-33, and for Supplemental Security Income (SSI) benefits under Title XVI, 42 USC §§ 1381-83. Wilcox alleges an onset date for her disability of May 5, 1991. Initially, her applications were denied. Wilcox next filed a Request for Reconsideration which was also denied.

[¶3]  Wilcox then requested a hearing before the Administrative Law Judge (ALJ). On November 30, 1995, ALJ James W. Olson held a hearing on this matter. On January 25, 1996, the ALJ issued an opinion which denied Wilcox benefits. The ALJ determined that Wilcox had not been engaged in substantial gainful activity since the alleged onset of her disability and that claimant has a severe impairment. (AR 23). However, the ALJ found that Wilcox was not considered disabled under the Listing of Impairments (Appendix 1 to Subpart P, 20 CFR Part 404). (AR 23). The ALJ concluded that although Wilcox could not perform her past relevant work she would be able to perform sedentary jobs which exist in significant numbers in the regional or national economy. (AR 25). On July 1, 1996, the Appeals Council declined to review the ALJ’s decision. Wilcox then requested judicial review by this Court.

FACTS

[¶4]  On April 20, 1994, Wilcox filled out a disability report. She stated that her disabling condition was “Charco[t] Marie” which affects her from her ankles down. (AR 87). She said the disease causes her feet to swell and that she cannot stand for long periods of time. (AR 87). The report stated that Wilcox could not walk up stairs without using the railing. (AR 87).

[¶5]  The disease Wilcox suffers from is a genetically transmitted neurological disease known as Charcot-Marie-Tooth. (AR 35). When Wilcox was ten years old, she had surgery on her feet due to the disease. (AR 35, 87). She was required to have heel-cord lengthening procedures and fusion of both ankles. (AR 121, 177). Wilcox is unable to pronate, supinate, or dorsiflex either foot and does not have a passive or aggressive range of motion in her right ankle. (AR 124). Wilcox has a limp to the left and has difficulty putting weight on her right ankle without pain. (AR 124).

[¶6]  Despite this disease, Wilcox is responsible for taking care of herself. (AR 102). She does not require any assistance in caring for herself. (AR 102). Wilcox cooks and does all her own shopping. (AR 102). As for household maintenance, Wilcox washes her dishes and cleans the house everyday. She does laundry two times a week. (AR 87). Wilcox also works in the garden. (AR 103). In May of 1994, Wilcox’s little boy was only a year old and a lot of her time was spent caring for him. (AR 103).

[¶7]  On August 11, 1994, Wilcox filled out another form, a Reconsideration Disability Report. This report asked Wilcox to describe the changes in daily activities since she filed her claim. (AR 98). Wilcox stated that she gets tired when standing and that her feet hurt and are stiff after she has been sitting down. (AR 98). She also stated that it is difficult to get up steps without holding on to anything. (AR 98). On December 12, 1994, Wilcox filled out a form requesting a hearing before an ALJ. When asked to describe the changes in her condition, Wilcox stated that one side was getting stiffer than the other and that if she walked too much her ankles would hurt. (AR 107). Wilcox also stated that she is not able to get around without first putting on her boots and that she is unable to walk long distances. (AR 107).

[¶8]  On July 19, 1994, a functional capacities assessment was performed on Wilcox. The conclusion of the individual who performed the functional capacity assessment was that Wilcox’s ankles limited her ambulation but that she could still do sedentary work. (AR 112). The individual also noted that Wilcox had good upper body strength and ability. (AR 112). On July 14, 1994, Melanie Schramm, D.O., noted that Wilcox’s upper extremities were normal and that no reduced range of motion was noted. (AR 122). Dr. Schramm concluded that Wilcox’s upper body strength and function was normal. (AR 124). Dr. Schramm also stated that Wilcox is “limited in her motion and ambulation due to the problems with [her] ankles.” (AR 124). Dr. Schramm determined that Wilcox could perform work that involved her upper body and that she would not have difficulty communicating and sitting. (AR 124).

[¶9]   Since the surgery, Wilcox testified that she has had swelling in her ankles and that more recently her hands are starting to swell. She stated that she can use her hands for about twenty minutes before she has to quit using them. (AR 42). Wilcox testified that she can sit for 15 minutes before her hands start swelling up. At the hearing, she stated that when she walks for long distances her ankles get sore and she can hardly move them. (AR 36). She testified that if she is not wearing shoes she is not able to walk. (AR 44). According to Wilcox, wearing her cowboy boots help her to walk. (AR 44). At the time of the hearing before the ALJ, Wilcox was taking one Motrin a day to deal with the pain. (AR 38). Wilcox testified that her ankle is in slight constant pain and that there is not a cure for her disease. (AR 37).

[¶10]  As of November 30, 1995, Wilcox testified that she had seen three doctors about her ankle: Dr. Delany, Dr. Gulf, and Dr. Arlen. (AR 37). She stated that Dr. Delany is her treating physician. (AR 42).

STANDARD OF REVIEW

[¶11]  The decision of the ALJ must be upheld if it is supported by substantial evidence on the record as a whole. 42 USC § 405(g); Metz v. Shalala, 49 F3d 374, 376 (8th Cir. 1995) (citing Sullins v. Shalala, 25 F3d 601, 603 (8th Cir. 1994), cert. denied, 573 US 1076, 115 SCt 722, 130 LEd2d 627 (1995)); Smith v. Shalala, 987 F2d 1371, 1373 (8th Cir. 1993). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support such a conclusion. Shannon v. Chater, 54 F3d 484, 486 (8th Cir. 1995) (citing Richardson v. Perales, 402 US 389, 401, 91 SCt 1420, 1427, 28 LEd2d 842 (1971)). See also Onstead v. Sullivan, 962 F2d 803 (8th Cir. 1992) (quoting Whitehouse v. Sullivan, 949 F2d 1005, 1007 (8th Cir. 1991)). Review by this Court extends beyond a limited search for the existence of evidence supporting the Commissioner’s decision to include giving consideration to evidence in the record which fairly detracts from the decision. Brockman v. Sullivan, 987 F2d 1344, 1346 (8th Cir. 1993); Locher v. Sullivan, 968 F2d 725, 727 (8th Cir. 1992); Turley v. Sullivan, 939 F2d 524, 528 (8th Cir. 1991).

[¶12]  However, the Court’s role under section 405(g) is to determine whether there is substantial evidence in the record as a whole to support the decision of the Commissioner and not to reweigh the evidence or try the issues de novo. Murphy v. Sullivan, 953 F2d 383, 384 (8th Cir. 1992). Furthermore, a reviewing court may not reverse the Commissioner’s decision “merely because substantial evidence would have supported an opposite decision.” Woolf v. Shalala, 3 F3d 1210, 1213 (8th Cir. 1993); Smith v. Shalala, 987 F2d at 1374 (citing Locher, 986 F2d at 727 (quoting Baker v. Heckler, 730 F2d 1147, 1150 (8th Cir. 1984))). The Court must review the Commissioner’s decision to determine if an error of law has been committed. Smith v. Sullivan, 982 F2d 308, 311 (8th Cir. 1992); Nettles v. Schweiker, 714 F2d 833, 836 (8th Cir. 1983). The Commissioner’s conclusions of law are only persuasive, not binding, on the reviewing court. Smith v. Sullivan, 982 F2d at 311; Satterfield v. Mathews, 483 FSupp 20, 22 (E.D. Ark. 1979), aff'd per curiam, 615 F2d 1288, 1289 (8th Cir. 1980). As long as the ALJ’s decision is supported by substantial evidence, then this Court cannot reverse the decision of the ALJ even if the Court would have decided it differently. Smith v. Shalala, 987 F2d at 1374.

DISCUSSION

[¶13]  A disability is defined as

inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

In determining when a disability has occurred in a case, the ALJ must follow five prescribed steps.1. The steps are summarized as follows:

(1) First, a determination is made whether claimant is currently engaged in substantial gainful activity; if so, she must be found not disabled.

(2) If claimant is not engaged in substantial gainful activity, the next question is whether she is suffering from a severe impairment, defined as one that significantly limits the ability to perform basic work-related functions. If a severe impairment is not found claimant must be found not disabled.

(3) If there is a severe impairment, and it is one listed in Appendix 1 to Subpart P, claimant is found disabled on the medical evidence alone. [ See Appendix 1 to Subpart P of Part 404, 20 CFR §§ 404.1501 et seq. (1996)].

(4) If the impairment is not listed in Appendix 1, the next inquiry is whether claimant can perform relevant past work. If she can, a finding of no disability is required.

(5) Finally, if claimant cannot perform relevant past work, the question then becomes whether she can nevertheless do other jobs that exist in the national economy, despite his having a severe impairment that prevents return to his previous work.

McCoy v. Schweiker, 683 F2d 1138, 1141-42 (8th Cir. 1982). See also 20 CFR § 404.1520; 1 Harvey L. McCormick, Social Security Claims and Procedures § 410, at 346 (4th ed. 1991). {fn1} See Evaluation of Disability Rule, 20 CFR § 404.1520 (1996).

[¶14]  Wilcox does not object to the ALJ’s conclusions as to steps one, two, and three. Wilcox’s objections stem from the process the ALJ went through in reaching his conclusions to steps four and five— that a significant number jobs exist in the national economy which Wilcox is capable of performing.

I.

[¶15]  Wilcox’s first objection is that the ALJ failed to give adequate weight to the evidence that her hand was impaired. Wilcox argues that the fact that her hand was impaired was supported by substantial evidence. Wilcox states that two physicians rendered expert opinions that use of her hands was limited by her disease. Wilcox relies on the opinion of Dr. Bryan D. Den Hartog “that repetitive activities of the hands would be precluded by claimant’s disease.” However, this opinion is dated February 21, 1996, and was not part of the record when the ALJ made his decision. The Appeals Council did consider the assessment by Dr. Hartog; therefore, this Court will consider this report in determining if there was substantial evidence for the ALJ to refuse to consider Wilcox’s hand pain. See Mackey v. Shalala, 47 F3d 951, 953 (8th Cir. 1995) (stating that when considering if the ALJ’s decision is supported by substantial evidence the reviewing court will consider “new evidence deemed material by the Appeals Council that was not before the ALJ”).2. Although, the Appeals Council failed to make a finding that the evidence was material, the council considered the report of Dr. Hartog. This Court finds that the council must have considered the evidence to be material and this Court will therefore consider this evidence when reviewing the entire record.{fn2}

[¶16]  Based upon the evidence before him, the ALJ concluded that all Wilcox’s claims of pain, functional limitations, and total disability were not fully credible. The ALJ found that Wilcox’s complaints were credible to the extent that “they limit her performing work in which she is not required to stoop, climb stairs, traverse uneven ground, stand or walk for more than short periods of time, or lift more than 25 pounds on occasion, but not repetitively.” (AR 24). However, considering all the evidence, the ALJ found that Wilcox’s complaints of back pain and her problems with her hands were not credible.3. Wilcox has not appealed the ALJ’s conclusion as to her back pain.{fn3} (AR 24).

[¶17]  When assessing the credibility of Wilcox’s testimony the ALJ set forth and applied the standard established in Polaski v. Heckler, 751 F2d 943 (8th Cir. 1984).4. Under the standard set forth in Polaski, the ALJ noted that factors to be considered are “claimant’s work record, the observations of physicians and third parties, the claimant’s daily activities, the duration, frequency, and intensity of her symptoms, precipitating and aggravating factors, her medications and use of medical treatment other than medications; her other attempts to obtain relief; and her functional restrictions must all be carefully considered.” (AR 24). {fn4} In reaching his conclusion that Wilcox’s complaints of back and hand pain were not credible, the ALJ noted that Wilcox had not complained of these problems to her doctors. In addition, the record also represents that Wilcox failed to describe this type of pain in her original application for benefits or in any of her subsequent applications. (AR 87, 96, 107). The ALJ also took Wilcox’s daily activities into account. He noted that Wilcox testified that she crochets blankets and that this activity was not compatible with her allegation of pain and swelling in her hands. (AR 24). The ALJ also found that the other activities performed by Wilcox (daily household chores in spurts, cooking breakfast, cleaning up, caring for her son, doing the dishes, dusting, sweeping, and vacuuming) are not compatible with Wilcox’s allegation that she is unable to work. (AR 24). When assessing Wilcox’s credibility, the ALJ pointed out that the only pain medication Wilcox uses is over-the-counter Motrin. In fact, at the hearing Wilcox testified that she only takes Motrin once a day. (AR 24).

[¶18]  The ALJ also relied, in part, on the conclusion by Dr. Schramm, a consultative doctor, who found that Wilcox’s upper body strength and function were normal. (AR 25). The ALJ relied on Dr. Schramm’s conclusion that Wilcox would be able to perform active employment that involved her upper body but not a lot of walking and that Wilcox would not have a problem sitting.5. The ALJ recognized that Dr. Schramm’s conclusion contained an inconsistency. Dr. Schramm stated, “[Wilcox] would be able to work in any active employment that involved her upper body, but not involving a lot of walking or sitting... She would not have difficulty in sitting, communicating or handling objects. She would be limited in her stooping, climbing, kneeling and crawling.” (AR 25). The ALJ concluded, “Dr. Schramm’s statement contains an internal inconsistency regarding the claimant’s ability to sit, but [the undersigned] concludes that Dr. Schramm meant that she could not do a lot of walking or standing, and that she would not have problems sitting, since the claimant had only on[e] complaint, which concerned her ankle problems.” (AR 25). This Court agrees with the ALJ’s conclusion. Wilcox has not specifically challenged this conclusion by the ALJ. {fn5} The ALJ also had in the record the report of the doctor who performed the functional capacities assessment. The conclusion by this doctor was that Wilcox should be able to do sedentary work. (AR 112).

[¶19]  When considering an issue on appeal, this Court is also required to examine the testimony which is disfavorable to the conclusion reached by the ALJ. In support of her argument, Wilcox also points to the medical records of Dr. Steven K. Goff and Dr. Hartog. Dr. Goff’s examination revealed that Wilcox’s hands showed an intrinsic weakness. (AR 177). However, Dr. Goff, unlike Dr. Schramm, did not make any assessment as to whether Wilcox could work. Wilcox urges that Dr. Schramm did not examine her hands and that therefore the ALJ must rely on the medical records of a doctor who performed those examinations.

[¶20]  The Eighth Circuit has stated, “An ALJ may not disregard a claimant’s subjective complaints of pain solely because they are not fully supported by objective medical evidence, but may properly discount the subjective complaints if inconsistencies exist in the record as a whole.” Wilson v. Chater, 76 F3d 238 (8th Cir. 1996). See also Conley v. Bowen, 781 F2d 143 (8th Cir. 1986) (stating that the ALJ may consider inconsistencies in the record when determining credibility findings as to claimant’s pain). In this case, the ALJ concluded that Wilcox’s complaints of pain were not credible based upon the lack of medical evidence, her daily activities, and her lack of need for prescription pain medication. These are all legitimate considerations. See, e.g., Wilson v. Chater, 76 F3d 238 (holding that “although daily activities alone do not disprove disability, they are a factor to consider in evaluating subjective complaints of pain”); Woolf, 3 F3d at 1213 (court considered that there was little or no medical evidence of claimant’s alleged disability); Jeffery v. Secretary of Health & Human Servs., 849 F2d 1129, 1133 (8th Cir. 1988) (citing Williams v. Bowen, 790 F2d 713, 715 (8th Cir. 1986)) (stating, “a claimant’s allegations of pain may be discredited by evidence that [the claimant] relies on only mild pain medication or takes stronger medication only occasionally”). The ALJ considered all the evidence regarding Wilcox’s allegations of pain in her hands and after examining the record as a whole, he found these allegations to be inconsistent.

[¶21]  Wilcox urges that the ALJ’s opinion about a non-existence of an opinion or the non- seriousness of a symptom cannot supplant a doctor’s opinion. This Court does not disagree with Wilcox’s argument; however, her argument misses the point. The ALJ’s opinion in this case did not supplant the doctor’s opinion. On the contrary, the ALJ looked to the record and examined the inconsistencies. The ALJ looked to the medical evidence, Wilcox’s daily activities, and the pain medication she was taking. As emphasized above, these are all legitimate considerations. When looking at the record as a whole, the ALJ had the opinions of two consulting doctors to compare, Dr. Schramm and Dr. Goff.6. Wilcox testified that Dr. Delany was her treating physician. Therefore, given that both Dr. Goff and Dr. Schramm are consulting physicians the law does not require that the opinion of either doctor be given more weight by the ALJ when he was examining the evidence.{fn6} After considering all the evidence, it was not error for the ALJ to rely on the opinion of Dr. Schramm. The ALJ heard testimony that plaintiff performed daily household chores such as sweeping, vacuuming, washing dishes, and laundry, and that she enjoyed working in her garden and crocheting. This Court finds that it was reasonable for the ALJ to have relied on the opinion of Dr. Schramm and to have concluded that the opinion of Dr. Schramm was consistent with the other evidence presented, specifically the testimony of Wilcox.

[¶22]  In addition, Wilcox urges that the report of Dr. Hartog provides substantial evidence that the complaints regarding pain in her hands should have been taken into consideration.

Dr. Hartog concluded, “[Wilcox] has significant weakness of her hands which will restrict her in carrying things more than 10-15 pounds in weight. She is going to have problems doing repetitive motion activities with her hands because of the fatigue ability of the muscles in the hands and forearm.” (AR 13). Dr. Hartog also noted that at a maximum Wilcox is capable of lifting twenty to thirty pounds and that if employed she should have a sit down type job.

Dr. Hartog also believed that Wilcox would qualify for disability benefits. The assessment of Dr. Hartog is not sufficient to persuade this Court that substantial evidence did not exist to support the ALJ’s conclusion. Dr. Hartog’s conclusions—that if Wilcox does work she would have to have a “sit down type job,” that she cannot carry more than ten to fifteen pounds, and that she cannot lift more than twenty to thirty—lend support to the ALJ’s decision. Even Wilcox testified that she could lift twenty-five pounds if she was not required to lift that weight all day long. (AR 45). Dr. Hartog’s assessment does not cure the inconsistencies within the record.

[¶23]  After reviewing the favorable and disfavorable evidence in the record, this Court finds that there is substantial evidence in the record to support the ALJ’s finding of credibility as to Wilcox’s pain in her hands. As long as the ALJ’s decision is supported by substantial evidence, then this Court cannot reverse the decision of the ALJ even if the Court would have decided it differently. Smith, 987 F2d at 1374. In light of all the evidence, the record contains substantial evidence which supports the ALJ’s decision to not consider Wilcox’s allegations of pain in her hands.

II.

[¶24]  Wilcox’s second objection is that the hypothetical question which was posed to Louis C. Phillips, the vocational expert, was inadequate.7. The first hypothetical question asked by the ALJ stated as follows:

Q. ALJ:  Okay. Assume you have an individual who’s a younger person, meaning under the age of 50, with a high school education and work history in the production area involving small parts... . Assume you have an individual who is unable to stoop, climb stairs, and is able to stand or walk for only a veery short period [of] time; is unable to traverse uneven ground, is limited as such to where the walking precludes light work.

(AR 51).{fn7} Wilcox argues that the ALJ failed to include within the hypothetical question her allegations that she had pain in her hands. The law in this circuit does not require that a claimant’s limitations be included in a hypothetical question if the ALJ determines that such limitations are not credible. Onstad v. Shalala, 999 F2d 1232, 1234 (8th Cir. 1993); Cruse v. Bowen, 867 F2d 1183, 1187 (8th Cir. 1989). Therefore, based upon the Court’s conclusion above— that there was substantial evidence to conclude that Wilcox’s hand pain was not credible, the ALJ was not required to include this information in his hypothetical question.

III.

[¶25]  Wilcox’s third argument is that reliable evidence did not exist for the ALJ to conclude that jobs existed for Wilcox in significant numbers. In concluding that work exists in the national economy, the ALJ took administrative notice of Medical Vocational Rule 201.27 (see Table 1 of Appendix 2 to Subpart P, 20 CFR Part 404). The ALJ stated, “Using Rule 201.27 as a framework for decision-making, administrative notice is taken that there are significant numbers of jobs in the national economy which Wilcox is able to perform.” The ALJ then stated that his conclusion was further supported by the vocational expert’s testimony regarding the availability of jobs within the national economy. (AR 26).

[¶26]  42 USC § 423(d)(2)(A) defines “work within the national economy” as “work which exists in significant numbers either in the region where such individual lives or in several regions of the country.” For a finding that work exists for a claimant within the national economy, it is not required that work exist for the claimant in the immediate area which she lives. 20 CFR § 404.1566(a)(1).

[¶27]  At the hearing before the ALJ, Phillips testified that according to the Unskilled Employment Quarterly, in the third quarter of 1995 there were 1,061 individuals working as cashiers in Rapid City. He also testified that 48 of those positions would be sedentary and 278 would be light. Phillips testified that 2,474,000 individuals are working as cashiers nationally. As to the national figures, Phillips did not have an exact percentage of cashiers in the national economy which would fit the ALJ’s hypothetical requiring sedentary positions. Phillips calculated that 20 percent of the positions nationally would fit the hypothetical. Phillips based his calculation on the conclusion that the national ratio for cashier jobs to sedentary cashier jobs would be the same nationally as it is in Rapid City, South Dakota. Phillips reasoned that the ratio was one-fourth based upon the fact that there were 48 sedentary cashier jobs in Rapid City and 287 light cashier jobs. This Court believes that the more appropriate percentage would have been 5 percent. Out of 1,061 cashier positions available regionally 48, approximately 5.0 percent, were sedentary. Therefore, nationally approximately 137,350 sedentary cashier positions would be available. Phillips also testified that Wilcox could perform the job of gate guard and that 803,000 of those jobs were available in the national economy of which Wilcox could perform 1/16th, or 50,187 of the available gate guard jobs.

[¶28]  Wilcox relies on Bjornholm v. Shalala, 39 F3d 888, 891 (8th Cir. 1994), in her conclusion that reliable evidence did not exist to support the conclusion that jobs exist in significant numbers. In Bjornholm, the issue was whether “given the fact that [claimant] can now only do sedentary work, there remains a serious question as to whether there is, in fact, a significant number of jobs either in the local or in several regions of the national economy that [claimant] can perform.” Id. at 890. The ALJ in Bjornholm found that there was a significant number of jobs in the local or several regions of the national economy. Id. However, the appellate court noted that the difficulty with the ALJ’s findings is within the scope of the statistics. Id. The Dictionary of Occupational Titles (DOT) job classifications relied upon by the ALJ involved positions requiring light physical exertion. Although, the numbers provided to the ALJ may have included positions involving sedentary work, the court held

that the statistics must match the claimant: the [Commissioner] must show that there are available sedentary jobs for which Bjornholm has transferrable skills. The [Commissioner] cannot conclude that appropriate sedentary jobs exist based upon statistics for light-exertion classifications. In light of these circumstances, we have no alternative but to remand to the district court with directions to remand to the [Commissioner]. The [Commissioner] may elect either to award benefits, to remand for a further proceeding to determine whether there exists, in fact, a significant number of jobs in the local or in several regions of the national economy within any of these three DOT categories that can be performed by an individual with the skills and physical capability of Bjornholm.

Id. at 891. Based upon Phillips’ calculation, the ALJ erred when he considered that there were 549,000 sedentary cashier jobs available in the national economy.8. Given the Court’s conclusion to remand this case, the court need not determine at this time if the method used by the vocational expert to conclude the percentage of sedentary cashier and sedentary gate keeper jobs available in the national economy was permissible. Wilcox has not cited any case law which would support such a conclusion. In addition, the ALJ is required to find that there are significant jobs available in either in the region were such individual lives or in several regions of the country. 42 USC § 423(d)(2)(A). {fn8} Although this Court may consider 137,350 jobs to be significant, the ALJ did not base his finding upon this number. The Eighth Circuit has held that “a district court may not, under the Social Security Act, make findings of fact to supplement those of the [Commissioner].” Lewis v. Califano, 574 F2d 452, 456 (8th Cir. 1978) (citing 42 USC § 405(g); Torres v. Secretary of Health, Education & Welfare, 475 F2d 466 (1st Cir. 1973)).

[¶29]  The issue for this Court is whether the testimony of the vocational expert was necessary for the ALJ to have substantial evidence that there were a significant number of jobs available in the national economy which Wilcox could perform. If the testimony of the ALJ was necessary, then based on Bjornholm, this case must be remanded. However, this Court finds that this case may be distinguished from Bjornholm. Based upon the law in the Eighth Circuit, this Court believes that the testimony of the vocational expert was not necessary in concluding that there was a significant number of jobs. In McCoy v. Schweiker, 683 F2d 1138, 1148 (8th Cir. 1982) (en banc), the Court held that when the “grid” (Tables 1,2, & 3 of 20 CFR Pt. 404, Subpt. P, App.2) applies the Commissioner’s duty to call a vocational expert is eliminated. In Bjornholm, the claimant was disabled according to the Medical-Vocational Guidelines, meaning that jobs did not exist in significant numbers in the national economy which claimant could perform. The ALJ was required to prove that there were a significant number of jobs which claimant could perform either locally or in several regions of the national economy. Bjornholm, 39 F3d at 890. Therefore, in Bjornholm the testimony of the vocational expert was necessary, given the “presumption” under the “grid.” In Wilcox’s case, under 20 CFR Pt. 404, Subpt. P, App.2, Table 1, Rule 201.27, Wilcox is considered not disabled. A finding of not disabled under the “grid” means that there are significant jobs within the economy for a person with Wilcox’s age, education, RFC, and work experience. 1 Harvey L. McCormick, Social Security Claims and Procedure § 447, at 524 (4th ed. 1991). In addition, when the “grid” applies, as it does in Wilcox’s case, the testimony of a vocational expert is not required. Therefore, even though Phillips erred in calculating the number of sedentary cashier jobs available in the national economy, this Court is not required to remand this case because substantial evidence exists without the testimony of Phillips. In fact, the ALJ even noted that the testimony of Phillips lent additional support to his conclusion that under Rule 201.27 a significant number of jobs existed in the national economy.

[¶30]  Finally, this Court must consider if substantial evidence existed for the ALJ to conclude that Rule 201.27 of the “grid” was applicable to Wilcox. Rule 201.27 calls for a decision of not disabled for a claimant age 18 to 44, with a high school education or more, who is capable of performing sedentary work, and who has no previous work experience or unskilled work experience. At the time of the hearing, Wilcox was 35 years old. She also has a high school education. The record supports the conclusion that Wilcox has unskilled work experience or no previous experience. Wilcox testified that she worked in the garden and that she crocheted. She also testified that she performs many household chores. Further, 20 CFR §§ 404.1567(a) and 416.967(a) define sedentary work as lifting and carrying a maximum of ten pounds at a time, sitting, and occasional walking or standing. Wilcox testified that occasionally she could lift up to twenty-five pounds. By her testimony regarding household chores (e.g., vacuuming, dusting, dishes, laundry) and daily activities (e.g., caring for her son and herself and visiting relatives), the record also represents that Wilcox is able to walk or stand occasionally. The record contains substantial evidence to conclude that Wilcox could perform sedentary work. There was substantial evidence to conclude that Wilcox fit within the “grid” Rule 201.27.

IV.

[¶31]  Wilcox’s fourth objection is that the agency’s own standards as set forth in SSR 96- 9p require that Wilcox should be found disabled. See SSR 96-9p, 1996 WL 374185. However, this rule was enacted on July 2, 1996. The ALJ’s findings are dated January 25,1996; therefore, the ALJ could not be expected to have applied this rule. The Court is not required to make a finding as to whether it agrees with Wilcox’s interpretation of SSR 96-9p.

V.

[¶32]  Wilcox’s final argument is that the case should be remanded for new and material evidence. Wilcox believes that her new and material evidence meets the standard required by 42 USC § 405(g) for remanding a case. Wilcox alleges new and material evidence of a hand impairment and an affective disorder (“mild but long-standing depression”).

[¶33]  A reviewing court is permitted to order remand for additional evidence to be considered “‘only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding.’” Woolf, 3 F3d at 1215 (quoting 42 USC § 405(g)). See also Mackey, 47 F3d at 953.

[¶34]  This Court finds that Wilcox’s evidence as to her hand impairment is not new evidence. A medical assessment by Dr. Hartog was not provided to the ALJ but was provided to the Appeals Council. Wilcox believes that this medical assessment provides new and material evidence. The Eighth Circuit has stated, “When the Appeals Council has considered material new evidence and nonetheless declined review, the ALJ’s decision becomes the final action of the [Commissioner]... . At this point, our task is only to decide whether the ALJ’s decision is supported by substantial evidence in the record as a whole, including the new evidence deemed material by the Appeals Council that was not before the ALJ.” Mackey, 47 F3d at 953. The Appeals Council stated in its report that it did consider Dr. Hartog’s report and concluded that it did not provide “a basis for changing the Administrative Law Judge’s decision.” (AR 3). This evidence is not considered to be new evidence before this Court.

[¶35]  Wilcox also urges that the report of Dr. Donald W. Burnap provides new and material evidence and that the case should be remanded because of this evidence. At the request of Wilcox’s attorney, Dr. Burnap met with Wilcox. Dr. Burnap is trained as both a physician and a psychiatrist. He has practiced medicine for twenty years and has done several hundred evaluations at the request of the Social Security Administration. Based upon a hour conversation with Wilcox, Dr. Burnap has diagnosed her with Dysthymic Disorder, 300.4. Dr. Burnap stated that Wilcox suffers from “mild but long-standing depression.” See Letter to Catherine Enyeart dated February 6, 1997 (Docket #17). He believes that she is employable in the future with therapy and vocational rehabilitation training, but given the resources which are available where she lives and her emotional problems, Dr. Burnap believes that she would not be employable for two to three years.

[¶36]  Dr. Burnap’s assessment is dated February 6, 1997. This is more than one year after the decision of the ALJ and seven months after the decision of the Appeals Council. 42 USC § 405(g) requires that “there is good cause for the failure to incorporate such evidence into the record in a prior proceeding.” Wilcox has not provided the Court with any reason for her failure to provide this evidence at a prior proceeding.

[¶37]  When considering whether the evidence of Wilcox’s alleged mental impairments should have been remanded, the court in Sullins v. Shalala, 25 F3d 601, 604 (8th Cir. 1994), found it noteworthy that “[the claimant] did not allege a disabling mental impairment in her application for disability benefits” and “that she did not offer the impairment as a basis for her disability at her hearing” before the ALJ. Id. The evidence offered in Sullins in support of the claimant’s argument of her alleged mental impairment was a consultative report prepared by a doctor which arrived too late to be considered. Id. The Court recognized that the report was material because it offered evidence that claimant did suffer from mental impairments. Id. at 605 n. 6. However, the court found that

there was no good cause for [claimant’s] failure to incorporate it in the record. She had full opportunity to develop the record as to any mental impairments before the administrative record was closed, but failed to do so.

Id. See also Smith v. Shalala, 987 F2d 1371, 1375 (8th Cir. 1993) (court refused to remand case based upon additional medical reports because claimant had opportunity to consult with psychiatrist before record was closed and also the time frame between the medical reports and the ALJ’s decision— two years— and the decision of the Appeals Council and the medical reports—one year—does not warrant remanding the case); Delrosa v. Sullivan, 922 F2d 480, 484- 85 (8th Cir. 1991); Williams v. Bowen, 790 F2d 713, 715 (8th Cir. 1986).

[¶38]  Wilcox failed to allege any allegations of depression in her disability applications or in the hearing before the ALJ. See Sullins, 25 F3d at 604. Wilcox also had full opportunity to develop her record before the administrative law judge. In addition, Wilcox failed to provide good cause for presenting this evidence earlier. See id. This Court does not know what the impact of Dr. Burnap’s assessment would be on a newly-filed application for benefits; however, this Court finds that Wilcox has failed to show good cause for her failure to present this evidence. See Smith, 987 F2d at 1375.

CONCLUSION

[¶39]  There is substantial evidence within the record to support the ALJ’s conclusion that Wilcox is able to perform significant jobs within the national economy and that as a result she is not disabled. Accordingly, it is hereby

[¶40]  ORDERED that the decision of the ALJ shall be affirmed and the Commissioner’s motion for summary judgment (Docket #20) is granted and Wilcox’s motion is denied.



Perez v. Gaffey, 1997 DSD 14

DAVID PEREZ and PAULINE McBRIDE,

husband and wife,

Plaintiffs,

v.

MATTHEW F. GAFFEY,

duly appointed, qualified, and acting Deputy States Attorney of Charles Mix County,

ROY KING, a duly appointed, qualified, and acting Social Worker of the State of South Dakota,

and SALLY WINTER, an individual,

Defendants.

[1997 DSD 14]

United States District Court

District of South Dakota - Southern Division

CIV. 96-4326

MEMORANDUM OPINION

Mark F. Marshall, Magistrate Judge

[¶1]  This matter came before the court for a motions hearing on Monday, May 19, 1997, at 2:00 p.m. for consideration of Defendant Sally Winter’s Motion for Summary Judgment and Request for Oral Argument (Doc. 11) and Defendant Matthew F. Gaffey’s Motion for Summary Judgment and Request for Oral Argument (Doc 14). The plaintiffs appeared by their counsel, John E. Burke, while the defendants, Matthew F. Gaffey and Sally Winter, appeared by their counsel, Sandra K. Hoglund and Rick W. Orr. Craig K. Kennedy, counsel for defendant, Roy King, was also present.

I.

[¶2]  David Perez and Pauline McBride, husband and wife, brought this action against Matthew F. Gaffey, the duly appointed, qualified, and acting Deputy States Attorney for Charles Mix County, Roy King, a duly appointed, qualified, and acting Social Worker for the State of South Dakota, and Sally Winter, an individual. Apparently at the behest of King, Gaffey instituted an investigation to determine whether Perez had violated the provisions of SDCL ch 22-46. Chapter 22-46 was designed to prevent the abuse or neglect of “disabled adults”. Perez, while 39 years of age, married McBride while she was 85 years of age. Perez also apparently received gifts of money or property from McBride

[¶3]  Pursuant to his investigation, Gaffey determined that the matter should be presented to a grand jury. He thus convened a Charles Mix County grand jury on April 10, 1996. Two witnesses, King and Winter testified before the grand jury. The appearance of the witnesses was compelled by subpoena. At the conclusion of the grand jury session, Perez was indicted on counts of theft by deception under SDCL §§ 22-30A-3 and 22-30A-17, as well as a count of theft by exploitation under SDCL §§ 22-46-3 and 22-30A-17.

[¶4]  On June 5, 1996, Perez moved to dismiss the indictment claiming that Ms. McBride had undergone a psychiatric examination which showed her mentally competent and capable of disposing of her property as she saw fit. Instead of granting the motion to dismiss, the Circuit Court ordered, on Gaffey’s motion, an indepedent psychological examination to assist Gaffey in his determination of whether continued prosecution of the criminal case was appropriate. On August 5, 1996, Perez, McBride, and Gaffey stipulated and agreed that Ms. McBride would submit to an independent psychological evaluation to be conducted by Dr. David Bean.

[¶5]  Bean conducted his evaluation of Ms. McBride and determined that she was not a “disabled adult” within the meaning of SDCL § 22-46-3. Moreover, Dr. Bean also determined that McBride was competent to make her own decisions regarding the disposition of her property. Shortly after receiving Dr. Bean’s evaluation, Gaffey, on behalf of the State, voluntarily dismissed the indictment against Mr. Perez.

[¶6]  The plaintiffs complain that the acts which violated their constitutional rights include the testimony of the defendants before the grand jury, the summoning of the grand jury, action of the state’s attorney before the grand jury, and obtaining an indictment in front of the grand jury, as well as the arrest and imprisonment of Plaintiff Perez by law enforcement officers.

[¶7]  For the reasons discussed in this memorandum, the court finds the actions of Defendant Gaffey and Defendant Winter are the appropriate subject of absolute immunity.

II.

A.

[¶8]  For nearly sixty years the “Rules of Federal Civil Procedure have authorized motions for summary judgment upon proper showings of lack of a genuine, triable issue of material fact.” Celotex Corp. v. Catrett, 477 US 317, 327 (1986). Summary judgment is authorized when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Brandsis v. Kaiser Aluminum & Chemical Corp., 47 F3d 947, 949 (8th Cir. 1995); Beyermach v. Sears, 49 F3d 1324, 1325 (8th Cir. 1995).

[¶9]  The moving party, here States Attorney Gaffey and witness Sally Winter, bears “the initial responsibility for informing the court of the basis for their motion and identifying those portions of the record which show lack of a genuine issue. Reed v. Woodruff County, Ark., 7 F3d 808, 810 (8th Cir. 1983). When the moving party has met this burden, the non-moving party may not rest upon the mere allegations or denials of its pleadings. By affidavit or otherwise...the non-moving party must set forth specific facts showing there is a genuine issue for trial. Although “direct proof is not required to create a jury question, ... to avoid summary judgment, ‘the facts and circumstances relied upon must attain the dignity of substantial evidence and must not be such as merely to create a suspicion.’” Metge v. Baehler, 762 F2d 621, 625 (8th Cir. 1985) (quoting Impro Products, Inc. v. Herrick, 715 F2d 1267, 1272 (8th Cir. 1983), cert. denied 465 US 1026 (1984)).

[¶10]  The trial court’s function is not to weigh the evidence and determine the truth of the matter but to ascertain whether there is a genuine issue for trial. Johnson v. Enron Corp. 906 F2d 1234, 1237 (8th Cir 1990). The trial court must assess the adequacy of the non-moving party’s response and whether that showing, upon admissible evidence, would be sufficient to carry the burden of proof at trial. If the non-moving party fails to make a sufficient showing of a genuine issue of material fact, the moving party is entitled to judgment as a matter of law.

B.

[¶11]  As the United States Supreme Court has observed, “our system of jurisprudence rests on the assumption that all individuals, whatever their position in government, are subject to federal law.” Butz v. Economou, 438 US 478, 506, 98 SCt 2894, 2910 (1978). Nevertheless, mindful that for the sake of the nation’s general good, the Constitution empowers officials to act within the scope of their official responsibilities, the United States Supreme Court has recognized “that there are some officials whose special function require a full exemption from liability” for their performance of official acts. Id. at 508, 98 SCt at 2911.

[¶12]  The list of those entitled to absolute immunity from civil liability includes the President of the United States for official acts, Nixon v. Fitzgerald, 457 US 731, 756, 102 SCt 2690, 2704 (1982); members of Congress for their legislative acts, regardless of motive, under the Speech and Debate Clause, US Const. Art. I, §6, Dombrowski v. Eastland, 387 US 82, 84-5, 87 SCt 1425, 1427-28 (1967) (per curiam); Tenney v. Brandhove, 341 US 367, 372, 377, 71 SCt 783, 786, 788 (1951); judges in courts of general jurisdiction for judicial acts, Stump v. Sparkman, 435 US 349, 359-60, 98 SCt 1099, 1106-07 (1978); prosecutors for prosecutorial functions, Imbler v. Pachtman, 424 US 409, 427, 96 SCt 984, 993 (1976); and witness are entitled to absolute immunity from civil suit for testimony given in judicial proceedings, Briscoe v. LaHue, 460 US 325, 334, 103 SCt 1108, 1115 (1983).

C.

[¶13]  As the United States Supreme Court has noted, “absolute immunity defeats a suit at the outset, so long as the official’s actions were within the scope of immunity.” Imbler v. Pachtman, 424 US at 419 n. 13, 96 SCt at 990 n. 13. In the mid-nineteenth century, the United States Supreme Court recognized that it was “a general principle of the highest importance to the proper administration of justice that a judicial officer, in exercising the authority vested in him, [should] be free to act upon his own convictions, without apprehension of personal consequences to himself.” Stump v. Sparkman, 435 US at 355, 98 SCt 1104 quoting Bradley v. Fisher, 80 US 335, 347 (1872). Absolute immunity protects participants in judicial proceedings to help guaranty independent decision making and present harassment and intimidation. See Johnson v. Kegans, 870 F2d 992, 996 (5th Cir.), cert. denied 492 US 921, 109 SCt 3250 (1989).

[¶14]  Prosecutors are absolutely immune for their conduct in “initiating a prosecution and in presenting the state’s case” because such activities are “intimately associated with the judicial phase of the criminal process.” Imblar v. Pachtman 424 US at 430, 96 SCt at 995. Prosecutors enjoy immunity from Section 1983 actions “so long as the actions complained of appear to be within the scope of prosecutorial duties.” Price v. Moody, 677 F2d 676, 677 (8th Cir. 1982). It is fundamental that “[p]reparation both for the initiation of the criminal process and for trial may require the obtaining, reviewing, and evaluating of evidence.” Imblar v. Pachtman, 424 US at 431 n. 33, 96 SCt at 995 n. 33. If the prosecutor is acting as an advocate for the state in a criminal prosecution, then the prosecutor is entitled to absolute immunity. Buckley v. Fitzsimmons, 509 US 259, _____, 113 SCt 2606, 2615 (1993).  

[¶15]  Under the authority cited above, Gaffey is entitled to absolute immunity for all of his acts undertaken in preparation for presentation of the Perez matter to the grand jury. While one may fault the thoroughness with which Gaffey obtained, reviewed, and evaluated the evidence which he presented to the grand jury, there can be no doubt whatsoever that what Gaffey did was within the scope of his role as an advocate for the state in a criminal prosecution.

[¶16]  Although it is not completely clear that plaintiffs allege that Gaffey violated their constitutional rights with regard to the ultimate disposition of the case, whether they make such an allegation is of no moment. Gaffey’s decision to dismiss the case only after obtaining an independent opinion as to Ms. McBride’s competency was one made within the scope of Gaffey’s role as an advocate for the state. Thus, Gaffey is absolutely immune for the decisions he made with respect to the disposition of Perez’s case. See Zar v. South Dakota Board of Examiners, 976 F2d 459, 466 (8th Cir. 1992); Williams v. Hartje, 827 F2d 1203, 1210 (8th Cir. 1987). Gaffey simply does not have to defend alleged prosecutorial mistakes if those mistakes occurred in the performance of a function recognized as inherent in his role as an advocate for the state. Brodnicki v. City of Omaha, 75 F3d 1261, 1268 (8th Cir. 1996) citing Meyers v. Morris, 810 F2d 1437, 1446 (8th Cir.) cert. denied, 484 US 828, 108 SCt 97 (1987).

[¶17]  Because Gaffey is absolutely immune as discussed in this opinion, there is no need to address the issue of qualified immunity nor immunity under SDCL § 22-46-6. However, even if Gaffey was found not to have absolute immunity, he nonetheless would be entitled to summary judgment under the provisions of SDCL § 22-46-6. That statute provides:

Any institution regulated pursuant to Chapter 34-12 and any employee, agent, or member of a medical or dental staff thereof who, in good faith, makes a report of abuse, exploitation, or neglect of a disabled adult is immune from any liability, civil or criminal, that might otherwise incurred or imposed, and has the same immunity with respect to participation in any judicial proceeding resulting from such report. Immunity also extends in a like manner to public officials involved in the investigation of abuse, exploitation, or neglect of disabled adult, or to any person or institution provided herein who, in good faith, cooperates with such officials in an investigation.

[¶18]  While the South Dakota Supreme Court has not interpreted this statute, its language plainly states that public officials like Gaffey have immunity from civil actions for their investigation of abuse, exploitation, or neglect of disabled adults such as McBride was alleged to be.

[¶19]  “The intent of a statute must be derived from the statute as a whole, from its language, and by giving it its plain, ordinary, and popular meaning.” Bryant v. Butte County, 457 NW2d 467, 470 (SD 1990). The plain language of SDCL § 22-46-6 provides Gaffey with immunity from this suit.

[¶20]  Plaintiffs have alleged, in addition to their Section 1983 claims, a claim of malicious prosecution under South Dakota law. This claim falls within the District Court’s supplemental jurisdiction.

[¶21]  28 USC § 1367(a) provides:

[I]n any civil action of which the District Courts have original jurisdiction, the District Court shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

[¶22]  A court “may decline to exercise supplemental jurisdiction” if “(3) the District Court has dismissed all claims over which it has original jurisdiction.” 28 USC § 1367(c); see Packett v. Stenberg, 969 F2d 721, 726-27 (8th Cir. 1992). Because the court has dismissed all claims against Defendant Gaffey which fall within this court’s original jurisdiction, it will exercise its discretion under 28 USC § 1367(c) and dismiss the malicious prosecution action.

D.

[¶23]  As noted in the previous section, prosecutors are absolutely immune from civil suits for money damages under 42 USC § 1983. See Imblar v. Pachtman, 424 US at 431. Moreover, conspiracy allegations will not pierce a prosecutor’s absolute immunity. See Ashelman v. Pope, 793 F2d 1072, 1078 (9th Cir. 1986) (en banc).

[¶24]  Just as prosecutors are absolutely immune from civil suits for money damages under Section 1983, so to are witnesses who testify in the course of judicial proceedings are absolutely immune. Briscoe v. LaHue, 460 US 325, 329-334, 103 SCt 1108 (1983). Several circuit courts of appeal have extended Briscoe to immunize grand jury witnesses as well. Holt v. Castaneda, 832 F2d 123, 125-26 (9th Cir. 1987); Alioto v. City of Shively, 835 F2d 1173, 1174 (6th Cir. 1987); Kincaid v. Eberle, 712 F2d 1023, 1024 (7th Cir.) (per curiam), cert. denied, 464 US 1018, 104 SCt 551 (1983).

[¶25]  Moreover, grand jury witnesses are immune from civil suit for liability under Section 1983 for their testimony even if the testimony was perjured. Alioto v. City of Shively, 835 F2d at 1174; Holt v. Castaneda, 832 F2d at 125-26; Blevins v. Ford, 572 F2d 1336, 1338 (9th Cir. 1978).

[¶26]  While plaintiffs allege some kind of conspiracy between witness Winter and Assistant States Attorney Gaffey, there is no evidence before the court of such a conspiracy sufficient to create a genuine issue of material fact. Moreover, conclusory allegations of a conspiracy between the prosecutor and a detective witness are not sufficient to pierce the prosecutor’s absolute immunity. Ashelman v. Pope, 793 F2d 1072, 1078 (9th Cir. 1986) (en banc); Ivey v. Board of Regents, 673 F2d 262, 268 (9th Cir. 1982). If such allegations are insufficient to pierce a prosecutor’s absolute immunity, such allegations must likewise be insufficient to pierce the absolute immunity afforded grand jury witnesses. Because witness Winter has absolute immunity for her conduct before the grand jury, her motion for summary judgment must be granted.

[¶27]  Because Winter is absolutely immune as discussed in this opinion, there is no need to address the issue of qualified immunity nor immunity under SDCL § 22-46-6. However, even if Winter was found not to have absolute immunity, she nonetheless would be entitled to summary judgment under the provisions of SDCL § 22-46-6. That statute provides:

Any institution regulated pursuant to Chapter 34-12 and any employee, agent, or member of a medical or dental staff thereof who, in good faith, makes a report of abuse, exploitation, or neglect of a disabled adult is immune from any liability, civil or criminal, that might otherwise incurred or imposed, and has the same immunity with respect to participation in any judicial proceeding resulting from such report. Immunity also extends in a like manner to public officials involved in the investigation of abuse, exploitation, or neglect of disabled adult, or to any person or institution provided herein who, in good faith, cooperates with such officials in an investigation.

[¶28]  While the South Dakota Supreme Court has not interpreted this statute, its language plainly states that persons like Winter who cooperate in good faith with an official investigation have immunity from civil actions for their investigation of abuse, exploitation, or neglect of disabled adults such as McBride was alleged to be.

[¶29]  “The intent of a statute must be derived from the statute as a whole, from its language, and by giving it its plain, ordinary, and popular meaning.” Bryant v. Butte County, 457 NW2d 467, 470 (SD 1990). The plain language of SDCL § 22-46-6 provides Winter with immunity from this suit.

[¶30]  Plaintiffs have alleged, in addition to their Section 1983 claims, a claim of malicious prosecution under South Dakota law. This claim falls within the District Court’s supplemental jurisdiction.

[¶31]  28 USC § 1367(a) provides:

[I]n any civil action of which the District Courts have original jurisdiction, the District Court shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

[¶32]  A court “may decline to exercise supplemental jurisdiction” if “(3) the District Court has dismissed all claims over which it has original jurisdiction.” 28 USC § 1367(c); see Packett v. Stenberg, 969 F2d 721, 726-27 (8th Cir. 1992). Because the court has dismissed all claims against Defendant Winter which fall within this court’s original jurisdiction, it will exercise its discretion under 28 USC § 1367(c) and dismiss the malicious prosecution action.

III.

[¶33]  For all of the reasons discussed in this Memorandum Opinion, Defendant Gaffey’s Motion for Summary Judgment (Doc. 14) and Defendant Winter’s Motion for Summary Judgment (Doc. 11) shall be granted.



Primeaux v. United States, 1997 DSD 15

LESA M. PRIMEAUX, f/k/a LESA M. LAMONT,

f/k/a LISA M. BAD WOUND,

Plaintiff,

v.

UNITED STATES OF AMERICA,

Defendant.

[1997 DSD 15]

District of South Dakota - Western Division

CIV. 94-5048

MEMORANDUM OPINION AND ORDER



NATURE AND PROCEDURAL HISTORY

[¶1]  On July 11, 1994, plaintiff commenced this action under the Federal Tort Claims Act, 28 USC §§ 1346(a), 2671 et seq. (FTCA). She seeks damages arising from a sexual assault by Bureau of Indian Affairs (BIA) police officer Kenneth Michael Scott (Scott). At the conclusion of a three-day trial, the Court entered its findings of fact and conclusions of law whereby the Court found that while there was a sexual assault, it was committed while Scott was on a frolic of his own and not acting in the course or scope of his employment. (T.T. 259). Thereafter, judgment was entered in favor of the government.

[¶2]  Upon appeal to the Eighth Circuit Court of Appeals, the majority opinion determined that this Court’s “finding that Scott’s assault was not foreseeable because he was not acting within the scope of his actual authority-that is, exercising law enforcement duties-was too narrow.” Primeaux v. United States, 102 F3d 1458, 1463 (8th Cir. 1996). On February 24, 1997, the Eighth Circuit issued its mandate remanding the case for reconsideration of the factual findings with application of South Dakota law relating to apparent authority. Id. The Court issued a revised briefing schedule which required the parties to complete their submissions on or before April 15, 1997. The parties have submitted briefs in support of their positions in regard to Scott’s apparent authority and the matter is ripe for adjudication. Based on the following discussion, the Court finds that the unique facts and circumstances present in this case do not support a finding that Scott’s conduct falls within the doctrine of apparent authority.

FACTS

[¶3]  On November 9, 1991, at approximately 1 a.m., plaintiff was driving on South Dakota Highway 18 (T.T. 243). When she turn her car around, it became stuck in a snowbank (T.T. 26, 245). After several futile attempts to free her vehicle, she began walking toward the nearest town of Martin, South Dakota, a distance of approximately two to three miles (T.T. 245).1. At trial plaintiff testified that after she unsuccessfully attempted to free her vehicle, she remained in her car until officer Scott came upon the scene (T.T. 27). However, officer Scott testified that he came upon plaintiff while she was walking down the highway toward Martin (T.T. 120). Based on express evidence and inferences naturally flowing from that evidence, the Court made its finding that plaintiff was walking toward Martin (T.T. 245).{fn1} It was dark and cold, but it was not snowing (T.T. 26, 38, 120, 245). Scott, a police officer on the Rosebud Indian Reservation who was outside his jurisdiction while returning from a physical fitness training seminar in Artesia, New Mexico, came upon plaintiff’s car (T.T. 118). He stopped to offer assistance; however, no one was there. Id. Scott was driving a white government vehicle with government license plates, a police light bar on the roof, and a radio, but no decals on the side or cage inside (T.T. 71, 120, 139, 246). The government paid for the training and travel expenses (T.T. 142, 259). In addition, Scott did not use leave time to attend the session but was on “travel status,” continuing to draw his BIA salary (T.T. 140- 41, 150-51). Although Scott was not dressed in official uniform,2. Scott was unarmed without a night stick and was not wearing a badge (T.T. 82, 217, 190- 91).{fn2} he was wearing clothing that a civilian could reasonably mistake for a police uniform (T.T. 28, 133, 252).

[¶4]  After he determined that the car was abandoned, Scott continued to proceed toward Martin (T.T. 119-20). Approximately 300 to 400 yards down the road, Scott came upon plaintiff walking on the shoulder of the road (T.T. 120). Scott stopped, turned on the red lights on the roof, and offered her a ride (T.T. 27). At trial, Scott testified that he stopped to offer a ride as an individual, not as a police officer (T.T. 134, 145). Plaintiff accepted and got in the front seat of the car (T.T. 30). Plaintiff testified on direct examination that when she was sitting in the car she was fearful Scott would arrest her for drinking and driving or turn her over to the Martin authorities, although she acknowledged that he did not ask her if she had been drinking or threaten to arrest her (T.T. 30-31, 134). On cross examination she testified that she voluntarily got into the vehicle because she wanted a ride (T.T. 72).

[¶5]  While en route to Martin, Scott informed plaintiff that he was a police officer from Rosebud Indian Reservation (T.T. 88, 121). Soon thereafter, Scott pulled off the highway onto a side road, ostensibly to stretch his legs and to relieve himself (T.T. 32-33, 122-23, 248). After driving a short distance on the side road, Scott stopped the vehicle and ordered plaintiff to step out of the vehicle (T.T. 33, 123, 248-49). Plaintiff testified that one of the reasons she got out of the vehicle was because of his status as a police officer (T.T. 33). He then grabbed her, unzipped and pulled down her jeans, pulled her by the hair, and committed an act of sexual penetration (T.T. 249).3. In the end, plaintiff, having a very submissive and passive personality, submitted out of fear and intimidation to Scott who maintained a significant physical advantage (T.T. 247, 252, 254). {fn3} Thereafter, he attempted oral intercourse with her. Id.

DISCUSSION

[¶6]  A.  GOVERNING PRINCIPLES

[¶7]  The applicable South Dakota law governing the scope of employment issue presented by this case is set forth in Primeaux v. United States, 102 F3d 1458 (8th Cir. 1996). The three primary authorities relied on by the Eighth Circuit for determining the scope of employment test to be used in this case consist of Deuchar v. Foland Ranch, Inc., 410 NW2d 177 (SD 1987),4. In Deuchar, the South Dakota Supreme Court relied on the factors listed in Restatement (Second) of Agency § 229 in determining whether a ranch hand was acting within the scope of his employment when he accidentally shot a hunter. Deuchar, 410 NW2d at 180 n.2. The Deuchar court quoted from § 229 in relevant part:

(1)  To be within the scope of the employment, conduct must be of the same general nature as that authorized, or incidental to the conduct authorized.

(2) In determining whether or not the conduct, although not authorized, is nevertheless so similar to or incidental to the conduct authorized as to be within the scope of employment, the following matters of fact are to be considered:

(a) whether or not the act is one commonly done by such servants;

(b) the time, place and purpose of the act;

(c) the previous relations between the master and the servant;

(d) the extent to which the business of the master is apportioned between different servants;

(e) whether or not the act is outside the enterprise of the master or, if within the enterprise, has not been entrusted to any servant;

(f) whether or not the master has reason to expect that such an act will be done;

(g) the similarity in quality of the act done to the act authorized;

(h) whether or not the instrumentality by which the harm is done has been furnished by the master to the servant;

(i) the extent of departure from the normal method of accomplishing an authorized result; and

(j) whether or not the act is seriously criminal.

Id. at 180 n.2 (quoting Restatement (Second) of Agency § 229). {fn4} Leafgreen v. American Family Mut. Ins. Co., 393 NW2d 275 (SD 1986), and Red Elk v. United States, 62 F3d 1102 (8th Cir. 1995). These cases, in addition to other cases applying South Dakota law, establish that foreseeability is the linchpin of the South Dakota scope of employment test. Primeaux, 102 F3d at 1461.

[¶8]  In Leafgreen, the South Dakota Supreme Court stated that “a principal is liable for tortious harm caused by an agent where a nexus sufficient to make the harm foreseeable exists between the agent’s employment and the activity which actually caused the injury.” Leafgreen, 393 NW2d at 280. The Leafgreen court further recognized that foreseeability is governed by the following standard: “[T]he employee’s conduct must not be so unusual or startling that it would be unfair to include the loss caused by the injury among the costs of the employer’s business.” Id. at 280-81. The South Dakota court applied Restatement (Second) of Agency § 261, which discusses apparent authority as it relates to fraud. Id. at 277. As stated by the Eighth Circuit in Primeaux, the analogous section of the Restatement relating to tortious wrongdoing reads as follows:

(2)  A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless:

   . ...

(d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.

Primeaux, 102 F3d at 1462 (quoting Restatement (Second) of Agency § 219(2)(d)).

[¶9]  The Primeaux court further noted that section 265(1) of the Restatement gives the general rule for apparent authority, which is that “‘[a] master or other principal is subject to liability for torts which result from reliance upon, or belief in, statements or other conduct within an agent’s apparent authority.’” Id. (quoting Restatement (Second) of Agency § 265(1)).5. The Eighth Circuit further noted that South Dakota cases consistently articulate respondeat superior law as including principles of apparent authority. Id. (citing Leafgreen, 393 NW2d at 277 (“Under general rules of agency law, a principal may be held liable for fraud and deceit committed by an agent within his apparent authority, even though the agent acts solely to benefit himself.”); McKinney v. Pioneer Life Ins. Co., 465 NW2d 192, 194 (SD 1991) (“Generally, a principal may be held liable for the fraud and deceit of his agent acting within the scope of his actual or apparent authority, even though the principal was unaware of or received no benefit from his agent’s conduct.”) (citing Dahl v. Sittner, 429 NW2d 458, 462 (SD 1988)); State v. Hy Vee Food Stores, Inc., 533 NW2d 147, 149 (SD 1995) (discussing vicarious criminal liability and noting, “Well settled is the basic principle that criminal liability for certain offenses may be imputed to corporate defendants for the unlawful acts of its employees, provided that the conduct is within the scope of the employee’s authority whether actual or apparent”); Siemonsma v. David Mfg. Co., 434 NW2d 70, 73 (SD 1988) (relying on Restatement (Second) of Agency § 265(1))).{fn5} Based on the foregoing, the Eighth Circuit reads South Dakota law to hold the employer vicariously liable not only for foreseeable tortious wrongs committed pursuant to the employee’s actual authority, but also for those committed when apparent authority of the employee “puts him in a position where his harmful conduct would not be ‘so unusual or startling that it would be unfair to include the loss caused by the injury among the costs of the employer’s business.’” Primeaux, 102 F3d at 1462-63 (quoting Olson v. Tri-County State Bank, 456 NW2d 132, 135 (SD 1990) (quoting Leafgreen, 393 NW2d at 280-81)). Hence, “[f]oreseeability necessarily includes not only instances of use or abuse of actual authority, but also of use or abuse of apparent authority.” Id. at 1463.

[¶10]  In Red Elk v. United States, 62 F3d 1102 (8th Cir.1995), the Eighth Circuit determined that under the facts and circumstances presented by that case that it was foreseeable that an on-duty tribal police officer would violate the position of trust his employment provided and sexually assault a victim. Id. at 1107.6. This Court in its oral findings and conclusions of law distinguished the present case from Red Elk by noting that under the facts presented here, Scott was not on duty for enforcement purposes, was not armed, was outside of his jurisdiction, and was not picking up plaintiff for any violation of law (T.T. 259). {fn6} In Primeaux, the Eighth Circuit expounded on this notion by stating that,

It is no less foreseeable that such an abuse of authority could occur while the officer is not technically on duty, but rather possesses the apparent authority sufficient to cause a person to rely on or fear that authority and succumb to sexual advances.

Primeaux, 102 F3d at 1463.7. The Primeaux court further recognized numerous cases holding employers liable for sexual assaults or excessive use of force by police officers for the reason that such conduct is foreseeable because of the unique position of trust held by such officers. Primeaux, 102 F3d at 1463 (citing Mary M. v. City of Los Angeles, 54 Cal. 3d 202, 285 Cal. Rptr. 99, 814 P.2d 1341, 1352 (1991) (holding a police officer liable for a sexual assault because he took “advantage of his authority and control as a law enforcement officer”)); White v. County of Orange, 166 Cal. App. 3d 566, 571, 212 Cal. Rptr. 493, 496 (Cal. Ct. App.1985) (holding that a police officer could have acted within the scope of his employment when he stopped a motorist and sexually assaulted her, and noting that “the police officer carries the authority of law with him into the community ... [and] the officer’s method of dealing with this authority is certainly incidental to his duties”); Applewhite v. City of Baton Rouge, 380 So. 2d 119, 122 (La. Ct. App. 1979) (finding employer liability for a police officer’s sexual abuse of a woman in his custody, and noting “where it is found that a law enforcement officer has abused the ‘apparent authority’ given such persons to act in the public interest, their employers have been required to respond in damages”)).

  The Primeaux court went on to state that “[i]t is equally likely that this trust is relied upon when officers appear to be exercising their authority, especially because of the ‘on-call’ nature of their employment.” Id. (citing Osborne v. Lyles, 63 Ohio St. 3d 326, 587 N.E.2d 825, 831 (1992) (reversing summary judgment for the city in a case of excessive force used by an off-duty police officer at an accident scene in part because the officer was to “be considered on duty at all times, for purposes of discipline”); Daigle v. City of Portsmouth, 129 N.H. 561, 534 A.2d 689, 699 (1987) (holding the city liable for an off-duty police officer’s assault because the employment-related activities of employees who have an “obligation, or at least the option, to perform official duties whenever the need may arise” are considered within the scope of their employment)).{fn7} As to the present case, the Eighth Circuit recognized that it is possible that Scott was aided in his assault of plaintiff by the existence of the agency relation. Id. (citing Restatement (Second) of Agency § 219(2)(d). Accordingly, “[i]f Scott accomplished his objective by using his status as a police officer, and if Primeaux relied on his position in succumbing to his advances, then his conduct may fall within the doctrine of apparent authority.” Id. (citing Restatement (Second) of Agency § 265) (emphasis added).

[¶11]  B.  APPARENT AUTHORITY

[¶12]  While it is clear from the Court’s oral findings of fact and conclusions of law that Scott’s sexual act was not preceded by an assertion of actual authority, the issue remains whether it was preceded by an assertion of apparent authority. It is also manifest that under the unique facts and circumstances of this case, once plaintiff entered the front seat of the vehicle, plaintiff did not succumb to Scott’s actions based on any reliance on actual or apparent authority. Rather, she submitted out of fear and physical intimidation to Scott who maintained a significant physical advantage (T.T. 247, 252, 254). The scene of the rape occurred off a side road located several miles from the town of Martin late at night. There was little or no action she could have taken once she entered the vehicle.8. Although plaintiff testified that one of the reasons she got out of the vehicle was because of his status as a police officer (T.T. 33), it is clear that at that point in time there was little or no action she could take under the circumstances.{fn8} Therefore, the Court’s analysis focuses on the facts and circumstances present at the point plaintiff entered the front seat of the vehicle.

[¶13]  The significance of Scott’s status or appearance as an officer of the law is minimized under the unique circumstances present in this case. Unlike the vast body of case law holding the employer liable for sexual assaults committed by officers who were aided in accomplishing a sexual assault by utilizing their position of authority to detain or stop their victims, Scott did not arrest, detain, or even stop plaintiff through use of actual or apparent authority. See generally Red Elk, 62 F3d at 1104 (officer ordered victim into back of car for curfew violation); Bates v. United States, 701 F2d 737, 739 (8th Cir. 1983) (holding military policeman’s conduct in stopping automobile and raping young women did not arise out of scope of employment under Missouri law); Mary M. v. City of Los Angeles, 54 Cal. 3d 202, 285 Cal. Rptr. 99, 814 P.2d 1341 (1991) (officer detained the victim by activating his red lights and threatened to take her to jail for driving while intoxicated); White v. County of Orange, 166 Cal. App. 3d 566, 212 Cal. Rptr. 493 (Cal. Ct. App. 1985) (officer stopped victim’s car); Applewhite v. City of Baton Rouge, 380 So. 2d 119 (La. Ct. App. 1979) (officer used authority to place victim into police custody for vagrancy). To the contrary, plaintiff was stranded “[o]n a cold winter night in [the] middle of practically nowhere near the Indian reservation.” (T.T. 252). See also (T.T. 26, 38, 120, 245). Although plaintiff testified that before entering the vehicle she noticed that the red lights on the roof were turned on, she acknowledged that she voluntarily got into the vehicle because she wanted a ride (T.T. 27, 72).9. At trial, Scott testified that he stopped to offer a ride as an individual, not as a police officer (T.T. 134, 145). There is no evidence that Scott turned on his red lights to stop or detain plaintiff. {fn9}

[¶14]  Plaintiff testified on direct examination that when she was sitting in the car she was fearful Scott would arrest her for drinking and driving or turn her over to the Martin authorities; however, she acknowledged that he did not ask her if she had been drinking or threaten to arrest her (T.T. 30-31, 134). In addition, Scott never requested her driver’s license nor did he ask her to perform a breathalyzer or field sobriety test. Plaintiff has failed to show by a preponderance of the evidence that she relied on the cloak of Scott’s apparent authority as an officer to enter into the front seat of his vehicle. See generally Leafgreen, 393 NW2d at 280 (foreseeability of an agent’s criminal or tortious conduct when operating with apparent authority is seen through the eyes of the third party who was harmed by the agent’s conduct rather than from the principal’s or the agent’s point of view). Plaintiff attempts to convince the Court that she relied upon Scott’s authority as a police officer in submitting to his demands. This she must do to bring her case under the umbrella of the Red Elk and Deuchar. The Court finds her attempt lacking credibility. On the dark, cold night in practically the middle of nowhere, plaintiff accepted the ride in order to escape the elements. Based upon the facts, the Court is not convinced that the police vehicle had anything to do with the assault which later took place. In any event, she has not met her burden in this regard.

[¶15]  It is this significant point that distinguishes this case from the decisions of Red Elk,10. Red Elk v. United States, 62 F3d 1102 (8th Cir.1995).{fn10} Deuchar,11. Deuchar v. Foland Ranch, Inc., 410 NW2d 177 (SD 1987).{fn11} and Leafgreen.12. Leafgreen v. American Family Mut. Ins. Co., 393 NW2d 275 (SD 1986).{fn12} In Red Elk, the two officers were clearly aided by their status as police officers and the victim had relied on said status. Red Elk, 62 F3d at 1107. When the officers picked up the victim ostensibly to return her safely home as a curfew violator, they were on duty, in uniform, armed, and patrolling in a marked police car. Id. The victim clearly relied on their authority when she entered the rear seat of the patrol car from which she had no way to exit without the officers’ help. Id. To the contrary, officer Scott was not purporting to act on behalf of the government by stopping, detaining, or arresting plaintiff for any violation of the law. Moreover, plaintiff has not shown that she relied on Scott’s apparent authority when entering the front seat of the vehicle.

[¶16]  In Deuchar, the South Dakota Supreme Court held that a genuine issue of material fact existed as to whether a ranch hand without the required specific authority of the ranch owner to hunt on a particular occasion was acting within the scope of his employment, as measured by the foreseeability test, when he shot a hunter he was guiding. Deuchar, 410 NW2d at 182. The ranch owner had testified that hunters could not hunt on the ranch unless accompanied by corporate employees. Id. at 179. Thus, under this unique factual scenario, it could be foreseeable that a hunter could rely on the ranch hand’s apparent authority to guide a hunt which was in furtherance of the ranch business. The present case is distinguishable in that Scott was not purporting to act on behalf of the government when he offered plaintiff a ride. Furthermore, plaintiff did not rely on any apparent authority of an agent, as the hunter presumably did under the circumstances present in Deuchar.

[¶17]   In Leafgreen, insureds brought suit against their insurer for damages stemming from the wrongful acts of the insurer’s agent. Leafgreen, 393 NW2d at 276. The agent had gained access into the insureds’ home for the ostensible purpose of writing liability insurance for them. Id. However, the agent was really gaining information to assist two professional burglars, who latter burglarized the residence. Id. In affirming the trial court’s grant of summary judgment in favor of the insurer, the South Dakota Supreme Court held that there was an insufficient nexus between the agent’s employment as an insurance agent and the burglary as to make the harm foreseeable and impute liability to insurer. Id. at 281. The South Dakota court based its decision in part on the fact that the agent had learned that the insureds would be out of town the day of the burglary through his friendship with the insureds, and not because of this status as an insurance agent. Id. Similarly, plaintiff entered the front seat of the vehicle because she needed a ride that cold, dark night, not because of Scott’s status as a law enforcement officer. Leafgreen is authority for the rule that there must be a sufficient nexus between the agent’s employment and the agent’s acts to impute liability upon the principal. Plaintiff fails to establish such nexus between Scott’s employment and his assaultive conduct.

CONCLUSION

[¶18]  Plaintiff has failed to meet her burden of proving that Scott accomplished his objective by using his status as a police officer or that she relied upon Scott’s apparent authority when she entered the front seat of his vehicle. Hence, Scott’s assault was not foreseeable because he was not acting within the scope of his actual or apparent authority. However reprehensible Scott’s actions, to hold otherwise under the unique facts and circumstances presented by this case would blur the settled law of South Dakota as determined by the Red Elk, Deuchar, and Leafgreen trilogy. In short, plaintiff’s case is not a Red Elk and Deuchar case. Accordingly, judgment for the government shall be issued forthwith.

  4th day of June, 1997.

RICHARD H. BATTEY, CHIEF JUDGE





Bordeaux v. United States, 1997 DSD 16

DARWIN THOMAS BORDEAUX,

Plaintiff/Petitioner,

v.

UNITED STATES OF AMERICA,

Defendant/Respondent.

[1997 DSD 16]

United States District Court

District of South Dakota - Central Division

CIV. NO. 96-3036

CRIM. NO. 96-30049-03

REPORT AND RECOMMENDATIONS

FOR DISPOSITION

Filed May 6, 1997

Mark A. Moreno, Magistrate Judge

[¶1]  The above-captioned matter1. Plaintiff/Petitioner, Darwin Thomas Bordeaux, will be referred to as “Bordeaux” and Defendant/Respondent, United States of America, will be referred to as “Government".{fn1} was referred to this Court by the District Court,2. The Honorable Charles B. Kornmann, United States District Judge, presiding.{fn2} pursuant to 28 USC § 636(b)(1)(B) for the submission to the latter Court of proposed findings of fact and recommendations for disposition of the matter. Docket No. 204.

[¶2]  Having carefully reviewed and considered all of the records on file herein and being fully advised in the premises, this Court does now make and propose the following Findings of Fact, Report and Recommendations for Disposition.

PROCEDURAL HISTORY

[¶3]  Bordeaux, along with Augustin Ashton White Horse, Anthony Provancial and Willis Edward Dickson, II, was charged conjointly by an Indictment, filed on October 27, 1994, with Kidnapping and Second Degree Murder in violation of 18 USC §§ 2, 1153, 1111, and 1201(a)(2). He was arrested, arraigned (after pleading not guilty to both charges) and released pending trial. On April 28, 1995/ a jury found Bordeaux guilty of Kidnapping as charged and guilty of the lesser offense of Voluntary Manslaughter, in violation of 18 USC §§ 2, 1153 and 1112.

[¶4]  The trial court sentenced Bordeaux to a term of imprisonment of sixty-three months, to be followed by five years of supervised release. Bordeaux thereafter appealed and his convictions were affirmed by the Eighth Circuit Court of Appeals. United States v. Bordeaux, 84 F3d 1544, 1546, 1549 (8th Cir. 1996).

[¶5]  Subsequently, on September 9, 1996, Bordeaux filed a pro se Motion under 28 USC § 2255 to Vacate, Set Aside or Correct Sentence. After counsel was appointed to represent him, Bordeaux filed an Amended Motion and both parties submitted written arguments in the form of memoranda.

FACTUAL BACKGROUND

[¶6]  Some time after 6:30 a.m. on January 17, 1993, Bordeaux, White Horse, Provancial, Dickson and M.F., a juvenile, were driving around Mission, South Dakota when they observed Dale Williams walking along the road. Williams was wearing the leg brace he regularly wore because of an accident he had suffered several years before. One of the group members offered Williams a ride. Williams accepted, saying that he was going to his mother’s house. Instead of taking Williams home, Dickson drove Williams to Dickson’s own house, where all of the members of the group got out of the vehicle and started kicking and hitting Williams as he attempted to leave the area. After beating Williams for several minutes, laughing and cheering all the while, the members of the group put Williams back into the vehicle and drove to an isolated location east of Mission. There, Williams was removed from the car, kicked and beaten with fists and with a small baseball bat, which the members of the group took turns using. White Horse broke the bat over Williams’ head, whereupon the members of the group struck Williams with the broken pieces. Williams was then put into the trunk of the vehicle and the group members drove back to Dickson’s home. White Horse, Provancial and Dickson left Bordeaux and M.F. in the vehicle. Bordeaux thereafter got out of the vehicle and, pursued by M.F., ran to the home of an acquaintance. A short time later, Dickson’s father, who lived behind Dickson, got into the vehicle to move it and discovered Williams in the trunk. Unaware of the nature and extent of Williams’ injuries, Dickson’s father drove Williams to Williams’ mother’s residence and left him there. Subsequently, a neighbor noticed Williams sitting on the porch of the residence and called the tribal police department. The police responded, and after finding that Williams had been severely beaten, summoned an ambulance. Williams went into cardiac arrest while being transported to the Indian Health Service Hospital in Rosebud, South Dakota and died soon afterward as a result of the injuries inflicted upon him by members of the group. [q7] Bordeaux, White Horse, Provancial and Dickson were indicted and charged with Kidnapping and Second Degree Murder. Provancial and Dickson pled guilty to a Superseding Information charging them with Voluntary Manslaughter and agreed to testify at trial. M.F. pled guilty to an Information charging him with being a juvenile delinquent and likewise agreed to testify at trial. Bordeaux and White Horse were tried together on the charges in the Indictment and found guilty of Kidnapping and Voluntary Manslaughter.

[¶8]  Following the imposition of a prison sentence of more than five years and an unsuccessful appeal, Bordeaux filed a pro se Motion under 28 USC § 2255 seeking three grounds for relief, to wit:

1.  That he was denied effective assistance of counsel;

2.  That there was insufficient evidence to support his kidnapping conviction; and

3.  That his trial should have been severed.

Later, after counsel was appointed, Bordeaux filed an Amended Motion alleging that “[hgis right to effective assistance of counsel was denied to him by the actions and/or omissions of his trial counsel” by virtue of counsel’s deficient performance and, in particular, counsel’s failure:

1.  “[T]o file pre-trial motions relating to the limitation of evidence";

2.  “[T]o file any jury instructions either before the trial, pursuant to the pretrial order, or during the trial"; and

3.  “[T]o properly object to the Government’s peremptory dismissal of jurors based solely upon race.”

In a Memorandum in support of his Motion for Evidentiary hearing, Bordeaux alleged, for the first time, that trial counsel’s performance was objectively unreasonable because counsel “failed to properly apprise his client of the reason of the interview by the Assistant United States Attorney and the Federal Bureau of Investigation [FBI] and allowed the prosecution to develop the outcome of that interview to the jury.”

DISCUSSION

[¶9]  I. RELEVANT STANDARDS.

[¶10]   i. Pleading

[¶11]  Section 2255 (1996),3.  This statute was amended last year by Title I of the Anti-Terrorism and Effective Death Penalty Act of 1996, signed into law by the President on April 24, 1996. Pub. L. No. 104-32, 110 Stat. 1214. The new statute created a one year statute of limitations for filing § 2255 motions and established a number of triggering dates for the one year period, including “the date on which the judgment of conviction becomes final.” See § 2255(1)-(4). Although the statute, or for that matter the Act itself, does not define when such a judgment becomes “final”, it appears that the triggering event is the completion of certiorari proceedings in the United States Supreme Court on direct review or the expiration of the time for filing a writ of certiorari in cases in which certiorari is not sought. Indeed, the language used in the statute closely parallels the test the Supreme Court utilizes when applying its Teague doctrine to determine at what point in time a prisoner’s conviction “becomes final” when scrutinizing retroactivity claims in habeas corpus cases. See e.g., Teague v. Lane, 489 US 289, 305 (1989) (new rule applies in habeas corpus proceeding only if announced while prisoner’s case was “pending on direct review of not yet final”); see also, Caspari v. Bohlen, 510 US 383, 390 (1994) (“a state conviction and sentence become final for purposes of retroactivity analysis when the availability of direct appeal to the state courts has been exhausted and the time for filing a petition for writ of certiorari has elapsed or a timely petition has been finally decided”). Moreover, when Congress chooses to employ language that has become recognized in prior precedent in a particular area of law, the rules of statutory construction call for defining a statute’s terms in accordance with the judicial meaning already in place. See e.g., Evans v. United States, 504 US 255, 259-60 & n.3 (1992) (“It is a familiar ‘maxim that a statutory term is generally presumed to have its common-law meaning’ ... [o]r as Justice Frankfurter advised, ‘if a word is obviously transplanted from another legal source, whether the common law or other legislation, it bring the old soil with it."')

  Bordeaux’s original § 2255 Motion was filed on September 9, 1996, less than two months after his request for rehearing was denied by the Eighth Circuit. His Motion, therefore, is timely and properly before the District Court for consideration.{fn3} the Rules Governing § 2255 Proceedings (1993) and the Model Motion appended to the Rules require a prisoner to “specify all of the grounds for relief which are available to [the prisoner] and of which he has or, by the exercise of reasonable diligence, should have knowledge and [to] set forth in summary form the facts supporting each of the grounds thus specified.” Rule 2(b) of the Rules Governing § 2255 Proceedings (emphasis added); see also, Model Form for Motions Under 28 USC § 2255 (1982) (“[y]our attention is directed to the fact that you must include all grounds for relief and all facts supporting such grounds for relief in the motion you file seeking relief from any judgment of conviction” (emphasis added)). This “fact pleading” requirement - which is distinct from the “notice pleading” rules applicable in other federal civil cases, see Fed. R. Civ. P. 8; McFarland v. Scott, 512 US 849, 860 (1994) (O'Connor, J., concurring in judgment in part) (“habeas petition, unlike a [civil] complaint, must allege the factual underpinnings of the [prisoner’s] claims”)4. See also, Advisory Committee Note to Rule 4 of the Rules Governing § 2254 Cases (quoting Aubut v. State of Maine, 431 F2d 688 (lst Cir. 1970)) (“notice pleading is not sufficient [in habeas corpus pleadings], for the petition is expected to state facts that point to a ‘real possibility of constitutional error"').{fn4} ; - is significant and mandates that the prisoner, at a minimum, summarily plead specific facts supporting each of his/her claims for relief. See e.g., McFarland, 512 US at 856 (“habeas corpus petitions must meet heightened pleading requirements”); Hill v. Lockhart, 474 US 52, 60 (1985); McMann v. Richardson, 397 US 759, 764 n.9 (1970). Althoughthe Rules governing § 2255 cases do not require an itemization of the relevant evidence and legal authority in the pleading, see e.g., Jones v. Jerrison, 20 F3d 849, 853 (8th Cir. 1994), they do require enough supporting facts for each claim to distinguish it from generic-type claims5. See e g. Hill, 474 US at 57-60 (general allegation of ineffective assistance of counsel is insufficient; prisoner must allege specific facts establishing both unreasonable-representation and prejudice prongs of ineffective assistance standard); Strickland v. Washington, 466 US 668, 687-700 (1984) (absence of specific allegations of prejudice).{fn5} and to justify the granting of habeas relief once the facts alleged have been proven.6. See e.g Voytik v. United States, 778 F2d 1306, 1310 (8th Cir. 1985) (“to maintain a claim for ineffective assistance of counsel [a prisoner] must plead facts sufficient to show that both his counsel’s performance fell below an objective standard of reasonable representation and that he was prejudiced by this deficient performance”); Hill, 474 US at 61-63 (White, J., concurring) (pleading insufficient on reasonable-representation prong of ineffective assistance claim because prisoner did not support allegation that counsel was remiss in failing to advise him of effective prior conviction with allegation that counsel knew of prior conviction); Blackledge v. Allison, 431 US 63, 75 n.7 (1977) (petition must “state facts and point to a ‘real possibility of error"'); Wright v. Minnesota, 833 F2d 746, 749 (8th Cir. 1987) (“[d]ismissal of a petition without a hearing is proper if the allegations, even if true, fail to state a claim cognizable in federal habeas corpus proceeding”), cert. denied, 485 US 1011 (1988).{fn6}

[¶12]  B. Evidentiary Hearing.

[¶13]  A prisoner is entitled to an evidentiary hearing on a § 2255 motion “[u]nless the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief.” 28 USC § 2255; Standing Bear v. United States, 68 F3d 271, 272 (8th Cir. 1995), cert. denied, 116 SCt 1444 (1996); Fngelen v. United States, 68 F3d 238, 240 (8th Cir. 1995); United States v. Duke, 50 F3d 571, 576 (8th Cir.), cert. denied, 116 SCt 224 (1995). An evidentiary hearing, however, need not be held if the claims raised in the motion are inadequate on their face. Payne v. United States, 78 F3d 343, 347 (8th Cir. 1996): Shaw v. United States, 24 F3d 1040, 1043 (8th Cir. 1994). Thus, a motion containing mere “conclusory allegations unsupported by specifics” may be summarily dismissed without an evidentiary hearing. Rule 4(b) of the Rules Governing § 2255 Proceedings7. Rule 4(b) states in pertinent part as follows:

  If it plainly appears from the face of the motion and any annexed exhibits and the prior proceedings in the case that the movant is not entitled to relief in the district court, the judge may make an order for its summary dismissal and cause the movant to be notified.{fn7} ; Voytik, 778 F2d at 1308 (no evidentiary hearing required where prisoner failed to make specific, non-conclusory allegations); Smith v. United States, 677 F2d 39, 41 (8th Cir. 1982) (conclusory allegations, unsupported by any specifics, are subject to summary dismissal); Smith v. United States, 618 F2d 507, 510 (8th Cir. 1980)(claims based on unsupported conclusions will not suffice to demand an evidentiary hearing).8. See also, Engelen, 68 F3d at 240; Hollis v. United States, 796 F2d 1043, 1046 (8th Cir.), cert. denied, 479 US 965 (1986); United States v. Lambros, 614 F2d 179, 180-81 (8th Cir. 1980); c.f., United States v. McMullen, 98 F3d 1155, 1158-59 (9th Cir. 1996); Aleman v. United States, 878 F2d 1009, 1012-14 (7th Cir. 1989).{fn8}

[¶14]  C. Ineffective Assistance of Counsel.

[¶15]  “The well-established framework for analyzing ineffective assistance of counsel claims reflects the Sixth Amendment’s focus on assuring the ‘fairness’ and ‘legitimacy’ of our adversary system.” Payne v. United States, 78 F3d at 345 (citing Strickland). The Strickland standard, “although by no means insurmountable, is highly demanding.” Payne, 78 F3d at 345 (quoting Kimmelman v. Morrison, 477 US 365, 382 (1986)). The analysis is two-fold:

First, the defendant must show that counsel’s performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as “counsel” guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defendant. This requires showing that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable.

Strickland, 466 US at 687-700; see also, Willis v. United States, 87 F3d 1004, 1006 (8th Cir. 1996); Shaw v. United States, 892 FSupp 1265, 1270 (DSD 1995), aff'd, 92 F3d 1189 (8th Cir. 1996). The defendant must make both of the showings in order to obtain habeas relief based on an ineffective assistance of counsel claim. Strickland, 466 US at 687, 690-94; see also, Engelen, 68 F3d at 240.

[¶16]  With respect to the performance aspect of the Strickland test, the defendant must demonstrate that counsel’s representation fell below an objective standard of reasonableness under prevailing professional norms. Strickland, 466 US at 688; Azure v. United States, 925 FSupp 671, 677 (DSD 1996). Judicial review of counsel’s performance is highly deferential; a court must indulge a strong presumption that counsel’s conduct falls within the wide range of professionally reasonable assistance and sound trial strategy. Strickland, 466 US at 689; Azure, 925 FSupp at 677-78.

[¶17]  Professionally unreasonable trial errors, however, do not satisfy the burden of proving ineffectiveness absent a showing of prejudice to the defendant. Strickland, 466 US at 691-92; Driscoll v. Delo, 71 F3d 701, 706 (8th Cir. 1995), cert. denied, 117 SCt 273 (1996). A court will set aside the judgment of conviction only when counsel’s performance renders the result of the trial proceeding unreliable or fundamentally unfair. Lockhart v. Fretwell, 506 US 364, 372 (1993); Azure, 925 FSupp at 678 & n.6. Unreliability or unfairness does not result if the ineffectiveness of counsel does not deprive the defendant of any substantive or procedural right to which the law entitles him or her. Fretwell, 506 US at 372; Azure, 925 FSupp at 678.

[¶18]  II. APPLICATION.

[¶19]  A.  Failure to File Pretrial Motions to Limit Evidence.

[¶20]  In his Amended Motion, Bordeaux alleges that he received ineffective assistance of counsel because his trial counsel failed to file pretrial motions “relating to the limitation of evidence.” He does not specify, in either his Motion or accompanying Memorandum, the evidence that allegedly should have been limited or provide any constitutional, statutory or other basis for the limitation of such evidence. The factual allegations concerning the “deficiency” prong of the Strickland test are vague and generalized and those relating to the “prejudice” prong of the test are nowhere to be found. His ineffectiveness claim, therefore, is legally insufficient and subject to dismissal without an evidentiary hearing. Hill, 474 US at 57-60; Strickland, 468 US at 700; United States v. Robinson, 64 F3d 403, 405 (8th Cir. 1995); Hollis, 796 F2d at 1046; Voytik, 778 F2d at 1308-10; Smith, 677 F2d at 41; Smith, 618 F2d at 510.9. See also, Anderson v. Collins, 18 F3d 1208, 1221 (5th Cir. 1994) (ineffective-assistance claims must specify action attorney should have taken and why it would have made a difference); Siciliano v. Vose, 834 F2d 29, 31 (lst Cir. 1987) (proper to deny evidentiary hearing and dismiss if pleadings do not allege “specific and detailed supporting facts”); Smith v. Wainwright, 777 F2d 609, 616 (1 Ith Cir. 1985) (general allegation of ineffective assistance of counsel is insufficient; petition must allege specific errors in counsel’s performance and facts showing prejudice), cert. denied, 477 US 905 (1986).{fn9}

[¶21]  B.  Failure to File Jury Instructions.

[¶22]  Bordeaux next claims that trial counsel’s failure to file any jury instructions before or during the trial amounted to ineffective assistance. He does not, however, allege that the instructions given by the trial court were erroneous or explain how he was prejudiced by counsel’s omissions. Nor does he articulate exactly how counsel’s failure to propose instructions constitutes deficient performance in this instance. His claim as presented, therefore, does not contain allegations or supporting facts that, if accepted as true, would satisfy the Strickland standard and entitle him to habeas relief. Willis, 87 F3d at 1006-08; Payne, 78 F3d at 347; Engelen, 68 F3d at 240-41.110. See also, Hill, 474 US at 61-63 (White, J., concurring); Larson v. United States, 905 F2d 218, 220-21 (8th Cir. 1990); Wright, 833 F2d at 749.{fn10}

[¶23]  C.  Failure to Object to Government’s Use of Peremptory Challenges.

[¶24]  Bordeaux also claims that trial counsel was ineffective by virtue of counsel’s failure to object to the Government’s use of peremptory challenges to strike a number of Native Americans. Bordeaux, however, does not support his claim with the predicate facts required to state a claim for relief. His scanty and conclusory allegations, put forth with little or no background substantiation, do not satisfy the pleading requirements for § 2255 cases or make out a viable Strickland ineffectiveness claim. Murray v. Groose, 106 F3d 812, 815 (8th Cir. 1997); Carter v. Hopkins, 92 F3d 666, 669-70 & n.3 (8th Cir. 1996), cert. denied, 117 SCt 1113 (1997); Randolph v. Delo, 952 F2d 243, 246-47 (8th Cir. 1991), cert. denied, 504 US 920 (1992); Voytik, 778 F2d at 1308-10.11. See also, Hill, 474 US at 57-63; Strickland, 468 US at 687-700; United States v. Williams, 954 FSupp 1093, 1094-95 (D. Md. 1997); Davidson v. Gengler, 852 FSupp 782, 785-89 (W.D. Wisc. 1994).{fn11}

[¶25]  D. Failure to Give Proper Advice Regarding Prosecution Interview and to Object to the Prosecution’s Use of the Same at Trial.

[¶26]  Finally, although not raised or even alluded to in his Amended Motion, Bordeaux claims in a Memorandum submitted in support of his Motion for Evidentiary Hearing, that he received ineffective assistance when his trial counsel failed to properly advise him of the reasons for an interview by the prosecutor and an FBI Agent and allowed the Government to “develop the outcome” of the interview before the jury at trial. Inasmuch as this claim is vague, lacking in specifics, difficult to understand, speculative, conclusory and fails to include allegations that provide a colorable basis for relief under the Strickland test, it must be summarily dismissed. Payne, 78 F3d at 345-48; Thomas v. United States, 27 F3d 321, 326-27 (8th Cir. 1994); Voytik, 778 F2d at 1308-10.12. See also, Hill, 474 US at 57-63; Strickland, 468 US at 687-700; Drew v. United States, 46 F3d 823, 825-26 (8th Cir.), cert. denied, 116 SCt 72 (1995); Whitnev v. United States, 513 F2d 326, 329-30 (8th Cir. 1974).{fn12}

REPORT AND RECOMMENDATIONS FOR DISPOSITION

[¶27]  After a careful review of the record in light of applicable precedent, this Court believes that Bordeaux in not entitled to relief under 28 USC § 2255 and that his Amended Motion should be dismissed without an evidentiary hearing. Accordingly, based on the foregoing findings of fact and legal discussion and pursuant to 28 USC § 636(b)(1)(B) and (C), it is hereby

[¶28]  RECOMMENDED that Bordeaux’s Motion for Evidentiary Hearing, Docket No. 210, be DENIED. It is further

[¶29]  RECOMMENDED that Bordeaux’s Amended Motion/Petition Under 28 USC 2255 to Vacate and Set Aside Sentence, Docket No. 206, be   DENIED in all respects and dismissed with prejudice.



Fines v. Callahan, 1997 DSD 17

DUANE FINES,

Plaintiff,

v.

JOHN J. CALLAHAN,1. Effective March 1, 1997, President Clinton appointed John J. Callahan to serve as Acting Commissioner of Social Security to succeed Shirley S. Chater. Pursuant to Fed. R. Civ. P. 25(d)(1), John J. Callahan is substituted for Shirley S. Chater as the defendant in this action. See also 42 USC § 405(g). {fn1}

Acting Commissioner of Social Security,

Defendant.

[1997 DSD 17]

United States District Court

District of South Dakota - Western Division

CIV. 96-5112

MEMORANDUM OPINION AND ORDER



RICHARD H. BATTEY, Chief Judge

NATURE AND PROCEDURAL HISTORY

[¶1]  Pending are the claimant’s (Fines’) and the defendant’s (Commissioner’s) cross- motions for summary judgment. Fines filed an application for Title II disability insurance benefits2. Under Title II of the Social Security Act, a claimant is considered disabled “if he is unable to engage in any substantial activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months.” 42 USC § 1382c(a)(3)(A). {fn2} on May 24, 1994, alleging disability due to a lower back injury as of May 10, 1991 (A.R. 54, 58-61). After being denied through the reconsideration level, he timely requested a hearing which was held before an Administrative Law Judge (ALJ) on September 28, 1995 (A.R. 28). Fines was represented by counsel at the hearing. (A.R. 28). Fines and vocational expert Robert Peregrine provided testimony at the hearing (A.R. 28-57).

[¶2]  On December 28, 1995, the ALJ issued his decision denying the claim (A.R. 11-21). The ALJ determined that Fines was not disabled because he retained the ability to perform light3. “Light work involves lifting no more than 20 pounds at a time with frequent lifting or carrying of objects weighing up to 10 pounds.” See 20 CFR §§ 404.1567(b) (1996).{fn3} to sedentary4 “Sedentary work involves lifting no more than 10 pounds at a time and occasionally lifting or carrying articles like docket files, ledgers, and small tools.” See 20 CFR §§ 404.1567(a) (1996).{fn4} work, a significant number of which exist in the regional and national economy (A.R. 19 (Findings 11-13)). On November 19, 1996, the Appeals Council declined review of the ALJ’s determination making it the Commissioner’s final decision (A.R. 3-4). See 20 CFR § 404.981 (1996). On December 17, 1996, Fines commenced this action to review the Commissioner’s final decision denying his claim. See Docket #1.

[¶3]  This Court has jurisdiction under 42 USC § 405(g) and 42 USC § 1383(c)(3).

FACTS

[¶4]  Fines was born in February of 1939 (A.R. 58). Thus, he was approaching age 55 on his onset date, and he was 57 at the time of his hearing. He has an eighth-grade education and he has not obtained a GED (A.R. 32, 81). Fines has over 30 years’ experience as a freight delivery truck driver for Hyman Freight (A.R. 33). His duties included driving trucks, loading and unloading freight weighing up to 100 pounds, and operating a forklift (A.R. 33-34, 81).

[¶5]  A.  MEDICAL/PSYCHOLOGICAL EVIDENCE

[¶6]  On June 30, 1994, Dr. Daniel A. Rey performed a consultative examination on Fines (A.R. 145-47). Dr. Rey noted that Fines only had intermittent exacerbations of back pain and he has reached the point where he is able to determine what activities he can tolerate (A.R. 145). Dr. Rey also noted that aspirin provides modest relief for Fines’ pain and that he has not been placed on any regular medications. Id. See also A.R. 156, 210. Dr. Rey opined that Fines’ avoidance of bending and lifting and his use of chiropractic manipulations when needed enable him to be very active, walk, mow the lawn, and engage in other activities without significant limitations (A.R. 147).

[¶7]  On September 15, 1994, Fines sought treatment for back and knee pain (A.R. 156). X- rays were taken of his back and knees revealing some congenital anomalies in his back; however, no significant treatment was suggested, and Fines was told to return in six months (A.R. 157). The medical evidence indicates that Fines has a long-standing history of low back pain with x-ray evidence of mild degenerative changes of the spine (A.R. 146). While he has a history of knee pain, x-rays of the knee are negative (A.R. 175-188).

[¶8]  On October 5, 1994, Fines underwent a consultative psychological evaluation due to his allegation of a learning disorder (A.R. 89, 169-74). The examining psychologist, Dr. James Snow, noted Fines’ full scale IQ was 119, based on a verbal score of 107 and a performance score of 131 (A.R. 172). He rated Fines’ IQ in the “bright normal range of intellectual functioning and the verbal and performance score in the average and very superior ranges” (A.R. 172). Fines’ memory testing score was 77, placing him in the “low average” range (A.R. 173). Dr. Snow found no marked psychological problems and made no diagnosis of any psychological condition (A.R. 173-74).

[¶9]  B.  ALJ DECISION

[¶10]  In evaluating Fines’ claim, the ALJ applied the five-step sequence specified in 20 CFR §§ 404.1520 (AR. 14-20).5. The determination of whether a claimant is entitled to Title II disability insurance benefits must be made according to the following five-step sequential evaluation. See 20 CFR § 404.1520. Step One: The ALJ must determine if the claimant is engaged in “substantial gainful activity.” If so, the claimant cannot be found disabled. Step Two: If the claimant is not engaged in substantial gainful activity, the ALJ must determine if the claimant suffers from a “severe impairment.” Step Three: If the claimant does have a severe impairment, the ALJ must next determine if this impairment meets or equals an impairment listed in 20 CFR Part 404, Subpt. P, App. 1. If the claimant has a listed impairment, then the claimant must be found to be disabled. Step Four: If the claimant does not have a listed impairment, the ALJ must determine whether the claimant can return to his or her past relevant work. If the claimant can return to past relevant work, he or she is not entitled to benefits. Step Five: If the claimant cannot return to past relevant work, then the burden shifts to the Commissioner to demonstrate that the claimant can do some other work which exists in substantial numbers in the national economy. If the Commissioner does not carry this burden, the claimant must be found to be disabled. {fn5} The ALJ first determined that Fines has not engaged in substantial gainful activity since May 10, 1991 (A.R. 15, 18 (Finding 2)). In step two of the sequential evaluation, he determined that Fines has a “severe impairment.” (A.R. 15). After a review of the medical and other evidence, he found that Fines has degenerative changes of the spine, knee pain, and a history of collarbone fracture (A.R. 15, 18 (Finding 3)). The ALJ further noted that although Fines alleges a learning disability, the medical evidence does not support the presence of any severe medically determinable cognitive deficit or psychological impairment (A.R. 15). Ultimately, the ALJ concluded in step three of the sequential evaluation that although Fines’ impairments may be considered to be “severe,” they are not impairments which meet or equal an impairment listed in 20 CFR Part 404, Subpt. P, App. 1 (A.R. 15, 18 (Finding 3)).

[¶11]  In step four of the sequential evaluation, the ALJ determined that based on the medical evidence and testimony, Fines would be unable to return to his past relevant work as a truck driver because of the exertional requirements involved in this occupation (A.R. 17, A.R. 18 (Finding 6)). In assessing Fines’ credibility regarding subjective symptoms, the ALJ applied the standards enumerated in Polaski v. Heckler, 739 F2d 1320 (8th Cir. 1984) (A.R. 17). The ALJ determined that Fines’ testimony in regard to his physical limitations was generally credible (A.R. 17). Based on the evidence, the ALJ concluded that Fines “has the residual functional capacity to perform the physical exertional and nonexertional requirements of work except for lifting in excess of 20 pounds or sitting for more than 30 minutes without changing positions (A.R. 17, A.R. 18 (Finding 5)). See 20 CFR § 404.1545.

[¶12]  Under step five of the sequential evaluation, the ALJ acknowledged that the Commissioner had the burden of proving that a significant number of jobs existed in the national economy which Fines could still perform in light of vocational factors (A.R. 17). Based in part on the testimony of vocational expert Robert Peregrine, the ALJ found Fines to have some transferable work skills such as eye-hand-foot coordination, mathematics, collection of money, use of a radio, and some light maintenance skills, which he demonstrated in his past work (A.R. 17, 19 (Finding 10)). The ALJ concluded that although Fines’ additional nonexertional limitations do not permit him to perform the full range of light and sedentary work, given his transferable skills jobs exist in significant numbers in the national and regional economy which Fines is capable of performing (A.R. 19 (Finding 12)).6. In his assessment, the ALJ took into account the fact that Fines was 57 years old and had an eighth-grade education (A.R. 18-19 (Findings 8-9)).{fn6} Specifically, such occupations as identified by the vocational expert include check cashier, gaming cashier, time keeper, telephone answering service operator, automobile service station attendant, sales clerk, park aide, and recreation facilities aide. Id. Therefore, the ALJ concluded Fines cannot be found disabled, at any time through the date of the ALJ’s decision, as defined by the Social Security Act (A.R. 19 (Finding 13)) (citing 20 CFR § 404.1520(f)).

STANDARD OF REVIEW

[¶13]  The decision of the ALJ must be upheld if it is supported by substantial evidence on the record as a whole. 42 USC § 405(g); Metz v. Shalala, 49 F3d 374, 376 (8th Cir. 1995) (citing Sullins v. Shalala, 25 F3d 601, 603 (8th Cir. 1994)); Smith v. Shalala, 987 F2d 1371, 1373 (8th Cir. 1993). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support such a conclusion. Shannon v. Chater, 54 F3d 484, 486 (8th Cir. 1995) (citing Richardson v. Perales, 402 US 389, 401, 91 SCt 1420, 1427, 28 LEd2d 842 (1971)). Review by this Court extends beyond a limited search for the existence of evidence supporting the Commissioner’s decision to include giving consideration to evidence in the record which fairly detracts from the decision. Brockman v. Sullivan, 987 F2d 1344, 1346 (8th Cir. 1993); Locher v. Sullivan, 968 F2d 725, 727 (8th Cir. 1992); Turley v. Sullivan, 939 F2d 524, 528 (8th Cir. 1991). However, the Court’s role is to determine whether there is substantial evidence in the record as a whole to support the decision of the Commissioner and not to reweigh the evidence or try the issues de novo. Murphy v. Sullivan, 953 F2d 383, 384 (8th Cir. 1992). Furthermore, a reviewing court may not reverse the Commissioner’s decision “merely because substantial evidence would have supported an opposite decision.” Woolf v. Shalala, 3 F3d 1210, 1213 (8th Cir. 1993); Smith v. Shalala, 987 F2d at 1374 (citing Locher, 986 F2d at 727 (quoting Baker v. Heckler, 730 F2d 1147, 1150 (8th Cir. 1984))).

[¶14]  In addition to reviewing the Commissioner’s decision to determine if it is supported by substantial evidence in the record as a whole, the Court must review the Commissioner’s decision to determine if an error of law has been committed. Smith v. Sullivan, 982 F2d 308, 311 (8th Cir. 1992); Nettles v. Schweiker, 714 F2d 833, 836 (8th Cir. 1983). The Commissioner’s conclusions of law are only persuasive, not binding, on the reviewing court. Smith, 982 F2d at 311; Satterfield v. Mathews, 483 FSupp 20, 22 (E.D. Ark. 1979), aff'd per curiam, 615 F2d 1288, 1289 (8th Cir. 1980).

DISCUSSION

[¶15]  In his motion for summary judgment, Fines focuses on step five of the ALJ’s decision. Specifically, Fines contends that his particular job as a freight delivery truck driver constituted unskilled work and that he did not have any transferable skills. Based in part on the vocation expert’s testimony, the ALJ classified Fines’ skill level as semi-skilled (A.R. 17, 19 (Finding 10), 50).

[¶16]  The regulations define semi-skilled work as follows:

Semi-skilled work. Semi-skilled work is work which needs some skills but does not require doing the more complex work duties. Semi-skilled jobs may require alertness and close attention to watching machine processes; or inspecting, testing or otherwise looking for irregularities; or tending or guarding equipment, property, materials, or persons against loss, damage or injury; or other types of activities which are similarly less complex than skilled work, but more complex than unskilled work. A job may be classified as semi-skilled where coordination and dexterity are necessary, as when hands or feet must be moved quickly to do repetitive tasks.

See 20 CFR § 404.1568(b).7 The regulations define unskilled work as follows:

Unskilled work. Unskilled work is work which needs little or no judgment to do simple duties that can be learned on the job in a short period of time. The job may or may not require considerable strength. For example, we consider jobs unskilled if the primary work duties are handling, feeding and offbearing (that is, placing or removing materials from machines which are automatic or operated by others), or machine tending, and a person can usually learn to do the job in 30 days, and little specific vocational preparation and judgment are needed. A person does not gain work skills by doing unskilled jobs.

20 CFR § 404.1568(a).{fn7}

[¶17]  Transferability is defined as follows:

We consider you to have skills that can be used in other jobs, when the skilled or semi-skilled work activities you did in past work can be used to meet the requirements of skilled or semi-skilled work activities of other jobs or kinds of work. This depends largely on the similarity of occupationally significant work activities among different jobs.

See 20 CFR § 404.1568(d)(1).

[¶18]  The operation of a motor vehicle in combination with Fines’ additional duties at Hyman Freight unquestionably constituted “semi-skilled” work within the meaning of that term as used in Social Security law. See generally Barker v. Shalala, 40 F3d 789, 792-93 (6th Cir. 1994) (classifying work as a truck driver as semi-skilled work); Paulson v. Bowen, 836 F2d 1249, 1251 (9th Cir. 1988) (finding no basis to refute ALJ’s determination that prior truck driving work was semi-skilled); Perez v. Heckler, 777 F2d 298, 303 (5th Cir. 1985) (finding that “[t]ruck driving requires coordination, dexterity, alertness, and use of the hands and feet; therefore, the ALJ’s determination that [claimant’s] past work experience was semi-skilled was supported by substantial evidence.”); Smith v. Sullivan, 1990 WL 92665, *3 (6th Cir. 1990).

[¶19]  Furthermore, Fines’ duties at Hyman Freight imparted transferable skills aside from that of driving an automobile. The ALJ pointed to a number of specific skills that Fines has developed such as eye-hand-foot coordination, mathematics, collection of money, use of a radio, and some light maintenance skills.8 Intelligence tests administered to Fines by Dr. James Snow provide further support for the ALJ’s conclusion regarding Fines’ developed skills and his ability to engage in light duty semi-skilled work. Cf. Walston v. Sullivan, 956 F2d 768, 771-72 (8th Cir. 1992). Dr. Snow rated Fines’ IQ in the bright normal range of intellectual functioning and the verbal and performance score in the average an