Petition — Independent Order of Foresters v. Bier

é Buurame Court { f, at?

o FILED ah

i JUN & {9809 i

POT IN ee

tetainiie ie A)

IN THE -|

Art ew

LY AFT RGCOAK, Rey § CLERK

Supreme Court of the United States”

October Term, 1980

79-1924

THE INDEPENDENT ORDER OF FORESTERS, a fraternal

benefit society,

a Petitioner,

VS.

EVELYN BIER, et al.,

Respondents.

Petition for Writ of Certiorari

to the Superior Court of the State of California for the

County of Los Angeles.

ADAMS, DUQUE & HAZELTINE,

CHARLES GRIFFIN CALE,

523 West Sixth Street,

Los Angeles, Calif. 90014,

(213) 620-1240,

Attorneys for Petitioner

The Independent Order

of Foresters.

Of Counsel:

Loypb P. DERBY,

MARGARET LEVY.

Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622

SUBJECT INDEX

Page

Petition for Writ of Certiorari to the Superior Court

of the State of California for the County of Los

pre err re ree rer ery v

I I ns wiv cence ese enenyenwayee wanes

IE 5 ow oo 54h dol be ee eee

Cs Pe i ooh. kv eck oo ee ee ee

Foil Seaiate MO ina kW 5 cee cece es

Statement of the Case.............. BE gs

Statement of Reasons for Granting the Writ of Cer-

1. This Is a Case of First Impression ...........

2. Under California Law, the Complaint in Interven-

tion Would Be Barred by the Doctrines of Res

Judicata and Collateral Estoppel if the U.S. Dis-

trict Court Judgment Had Been Rendered by a

COR CE oo 3 Sas nw 6 ee ee

(a) The U.S. District Court Judgment Was a

Final Judgment on the Merits...........

(b) Privity of Parties Is Not an Issue........

3. By Permitting the Filing of the Complaint in In-

tervention, the Los Angeles Superior Court Vio-

fete 26 U.S... SOC FFG oo. s ckcrcevaesn

CN oo ood 4 ube oe hee ba oan ee Se

APPENDIX A. _ Clerk’s Notice Re Denial of the IOF’s

Potitiom Toe POWERS «ww wc cess cts App. p.

APPENDIX B. Order Re Petition for Writ of Mandate,

or, in the Alternative, for Writ of Prohibition .....

APPENDIX C. Order Denying the IOF’s Motion for

PP Pree re Ty ere re

APPENDIX D. Order Granting Respondents’ Motion

for Leave to Intervene in Pending Action.........

APPENDIX E. Order Dismissing Action for Lack of

Subject: Matter Jurisdiction ...........ccccsenes

12

13

TABLE OF AUTHORITIES CITED

Cases Page

Angel v. Bullington, 330 U.S. 183 (1947).......... 10

Berlin v. Eureka Lodge No. 9, K. of P., 132 Cal. 294

RR ak eae aes ded wna vas oh vb bee 11

Clemmer v. Hartford Insurance Co., 22 Cal.3d 865

eee lie a sdk Ve No a ae ee Re VR ie 12

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

IES ES ae aa or a ae ir 3

maeeay ¥. Palmer, 107 U.S. 3 (1882) ..........0.0. 9

Erie Railroad v. Tompkins, 304 U.S. 64 (1938) ..... 1]

Guaranty Trust Co. of New York v. York, 326 U.S. 99

es sap sls bh hoe 00's 0 0K vee 3 10, 11

Holderby v. Internat. Union etc. Engrs., 45 Cal.2d 843

ee nr 1]

Olwell v. Hopkins, 28 Cal.2d 147 (1946) ....... 1, 82

Slater v. Blackwood, 15 Cal.3d 791 (1975)......... 10

Stoll v. Gottlieb, 305 U.S. 165 (1938) ............. 9

Turnbull v. Payson, 95 U.S. 418 (1877) ........... )

Westlake Community Hosp. v. Superior Court, 17

ENO okra bc cceccsccecesasessaiaes 1]

Miscellaneous

Constitution and Laws of The Independent Order of

TS) 5

Constitution and Laws of The Independent Order of

ES 5

Constitution and Laws of The Independent Order of

PG NE. BOS oc cncccceccccsccccvececs ,

Rules

Federal Rules of Civil Procedure, Rule 18 .......... 10

Page

Statutes

California Insurance Code, Sec. 10970............. 4

United States Code, Title 28, Sec. 1257(3) ......... 3

United States Code, Title 28, Sec. 1332............ 10

United States Code, Title 28, Sec. 1738............

IN THE

Supreme Court of the United States

October Term, 1980

No.

THE INDEPENDENT ORDER OF FORESTERS, a fraternal

benefit society, |

Petitioner,

VS.

EVELYN BIER, ef al.,

Respondents.

Petition for Writ of Certiorari

to the Superior Court of the State of California

for the County of Los Angeles.

Petitioner The Independent Order of Foresters (the

‘‘IOF’’), a fraternal benefit society, respectfully prays that

a Writ of Certiorari issue to the Superior Court of the State

of California for the County of Los Angeles (‘‘Los Angeles

Superior Court’’) to review that Court’s order allowing the

filing of a Complaint in Intervention by respondents Evelyn

Bier, Oscar Garcia, Boyce Garrett, Bernice Garrett, Doug-

las Halcolm, Vicki Langston, Teri-Lue Mayer, Dave Ru-

banowitz, Maury Shapiro, and RosylIn S. Shapiro, on behalf

of former San Fernando Valley Court 619 of the IOF. If

this Petition is denied, the IOF will be forced to relitigate

in the Los Angeles Superior Court issues which were de-

pet, Tae

cided or could have been decided in a prior action before

the United States District Court for the Central District of

California (the ‘‘U.S. District Court’’).

Opinions Below.

The April 10, 1980 order of the Supreme Court of the

State of California, summarily denying the IOF’s Petition

for Hearing, was not reported in any official California

Reports and is set forth in Appendix A.

The March 12, 1980 order of the Court of Appeal of the

State of California, Second Appellate District, summarily

denying the IOF’s Petition for Writ of Mandate, or, in the

Alternative, for Writ of Prohibition, was not published in

any official California Reports and is set forth in Appendix

B.

The February 11, 1980 minute order of the Los Angeles

Superior Court, which denied the IOF’s Motion for Recon-

sideration, was not reported in any official California Re-

ports and is set forth in Appendix C.

The October 24, 1979 minute order of the Los Angeles

Superior Court, which granted respondent’s Motion for

Leave to Intervene in this action, was not reported in any

official California Reports and is set forth in Appendix D.

Jurisdiction.

The minute order of the Los Angeles Superior Court,

granting respondent’s Motion for Leave to Intervene in this

action, was entered on October 24, 1979. The Los Angeles

Superior Court denied the IOF’s timely Motion for Recon-

sideration on February 11, 1980. The Court of Appeal de-

nied the IOF’s Petition for Writ of Mandate, or, in the

Alternative, for Writ of Prohibition, on March 12, 1980.

On April 10, 1980, the Supreme Court of California denied

the IOF’s Petition for Hearing. This Petition for Writ of

ax

Certiorari was filed less than ninety (90) days thereafter.

The jurisdiction of this Court is invoked under 28 U.S.C.

Section 1257(3).

The federal issue which is the subject of this Petition has

been finally decided in the California courts. Reversal of

the Los Angeles Superior Court on the federal issue would

be preclusive of any further litigation on the relevant cause

of action. In addition, a delay in review of the state court

decision would seriously erode the federal requirement that

full faith and credit be given to judgments of federal courts

and the corollary federal policy regarding judicial economy.

The minute order of the Los Angeles Superior Court thus

constitutes a ‘‘final judgment’’ for purposes of 28 U.S.C.

Section 1257(3). Cox Broadcasting Corp. v. Cohn, 420

U.S. 469, 482-483 (1975).

This Court’s review by certiorari is sought on the ground

that the Los Angeles Superior Court has denied full faith

and credit to the judgment of dismissal entered by the U.S.

District Court in a prior action by allowing the filing of a

Complaint in Intervention which secks to relitigate issues

finally determined by the U.S. District Court.

Question Presented.

When a federal court in a diversity case renders a judg-

ment based on the law of the state in which it sits and a

court of that state thereafter fails to give the same res judicata

and collateral estoppel effect to the federal court judgment

that the judgment would have if rendered by another court

of that state, has the state court failed to give full faith and

credit to the judgment of the federal court as required by

28 U.S.C. Section 1738?

wen ees

Federal Statute Involved.

28 United States Code Section 1738:

ee

‘*The records and judicial proceedings of any court

of any such State, Territory or Possession, or copies

thereof, shall be proved or admitted in other courts

within the United States and its Territories and Pos-

sessions by the attestation of the clerk and seal of the

court annexed, if a seal exists, together with a certif-

icate of a judge of the court that the said attestation is

in proper form.

“Such Acts, Records and judicial proceedings or

copies thereof, so authenticated, shall have the same

full faith and credit in every court within the United

States and its Territories and Possessions as they have

by law or usage in the courts of such State, Territory

or Possession from which they are taken.”’

Statement of the Case.

The IOF is a fraternal benefit society, as defined in Sec-

tion 10970 et seq. of the California Insurance Code. The

IOF was organized by Act of Parliament and exists under

the provisions of the Canadian and British Insurance Com-

pany Acts of Canada. The IOF is qualified to do business

and is doing business as a fraternal benefit society in the

State of California. Its members enjoy fraternal and social

activities by participating in local lodges called ‘‘courts,”’

and they are also provided with insurance coverage by the

IOF.

This action arises from the suspension and eventual rev-

ocation of the charter of one of the subordinate courts of

the IOF, former Court 619. The initial decision to suspend

the charter of former Court 619 was made by one of the

regional governing bodies of the IOF, the High Standing

Committee of the High Court of California South. Certain

—

members of former Court 619 appealed that decision to the

Supreme Chief Ranger of the IOF and then to the Executive

Council of the IOF pursuant to Sections 262(7) and 262(9)

of the Constitution and Laws of the IOF (the ‘‘IOF Con-

stitution’) and the suspension was upheld. However, mem-

bers of former Court 619 failed to exhaust their ultimate

appellate remedy within the IOF in that they did not appeal

to the Supreme Court of the IOF within the time provided

by Section 263 of the IOF Constitution.

The [OF commenced the present action on June 30, 1976

with the filing of its Complaint for Preliminary and Per-

manent Injunction, Claim and Delivery, and Accounting.

On July 28, 1976, the Los Angeles Superior Court granted

the IOF’s request for a preliminary injunction, which is

currently in effect.

On January 12, 1977, purported representatives of former

Court 619 filed an action in the Los Angeles Superior Court,

Case No. C 186309, seeking reinstatement of former Court

619 as a fully privileged participating court of the IOF, an

accounting of funds and one million dollars in damages. It

was alleged that two of the four named representatives were

officers of former Court 619 at the time of its suspension.

The IOF removed the action to the U.S. District Court

and moved to dismiss the action on the ground that the

members of former Court 619 had failed to exhaust their

internal remedies by appealing to the Supreme Court of the

IOF within the time provided. The Honorable William

Matthew Byrne, Jr., United States District Judge, granted

the I[OF’s Motion to Dismiss and dismissal was entered on

August 16, 1977. (Appendix E to this Petition.) No appeal

was taken from the judgment entered by the U.S. District

Court, and the time in which such an appeal could be taken

has long since expired.

x

=

Thereafter, on August 20, 1979, respondents, again pur-

ported representatives of former Court 619, filed a Motion

for Leave to Intervene in this action. At the same time,

respondents also filed their voluminous proposed 45-page

Complaint in Intervention and Petition for Writ of Mandate

for Reinstatement, Accounting and Claim and Delivery

(Exhibit F to the IOF’s Petition for Writ of Mandate/Pro-

hibition lodged with the California Court of Appeal, Second

Appellate District).

The IOF opposed respondents’ Motion for Leave to In-

tervene in this action on the ground that the issues and

claims presented by the proposed Complaint in Intervention

had already been finally determined or could have been

determined in the federal action before Judge Byrne and

that respondents were barred by the principles of res judicata

and collateral estoppel from relitigating these same issues.

In that regard, it was pointed out that the Complaint which

the IOF removed to the U.S. District Court sought:

a) Reinstatement of former Court 619 as a fully priv-

ileged, participating court of the IOF;

b) Reinstatement of all suspended or expelled mem-

bers of former Court 619;

c) A surrender of assets of former Court 619;

d) An accounting of funds; and

e) Damages of $1 million.

In comparison, the voluminous Complaint in Intervention

which respondents filed in this action seeks:

a) Reinstatement of former Court 619 as a subordi-

nate court in good standing of the IOF and an

injunction, enjoining the IOF from treating former

Court 619 as anything other than a local member

court in good standing;

os

b) An order compelling transfer of OF members who

reside within the jurisdictional boundaries of for-

mer Court 619 to the reinstated Court 619;

c) Claim and delivery of all property belonging to

former Court 619 and appointment of a receiver

to manage the property and funds of former Court

619;

d) An accounting of membership dues; and

e) Compensatory damages in an unspecified amount,

attorneys’ fees and punitive damages of $30 mil-

lion,

All of the above claims in both actions stem from one

alleged injury—the suspension and eventual revocation of

former Court 619’s charter by the IOF. The only distinctions

between the two actions are a broadening of the form of

relief sought in the Complaint in Intervention filed in this

action to include a prayer for an injunction and appointment

of a receiver and an increase in the dollar amounts of dam-

ages sought.

On October 24, 1979, the Los Angeles Superior Court

granted respondents’ Motion for Leave to Intervene in this

action. The Honorable Robert Fainer’s minute order stated:

“*.. . [I]t is clear that [the] ‘administrative remedy

problem’ is a bar to petitioners’ request to intervene

as to the issue of the suspension applying the doctrine

of collateral estoppel. There is, however, no prior de-

termination by the federal court as to the right of pe-

titioners to intervene on the issue of reinstatement.”’

(Appendix D to this Petition).

The IOF filed a Motion for Reconsideration of the minute

order permitting intervention. In its motion, the IOF argued

that while Judge Fainer correctly ruled that respondents are

in privity with the U.S. District Court plaintiffs and that the

a:

doctrine of collateral estoppel applies to the Complaint in

Intervention insofar as the issue of ‘‘suspension’’ is con-

cerned, he incorrectly ruled that the issue of ‘‘reinstate-

ment’’ was not barred by res judicata or collateral estoppel.

Judge Fainer agreed to reconsider his earlier ruling on the

merits, and on February 11, 1980 he reaffirmed his prior

order allowing the proposed Complaint in Intervention to

be filed. (Appendix C to this Petition.)

The IOF then sought an extraordinary writ from the Cal-

ifornia Court of Appeal. In its petition for the writ, the IOF

contended that the Los Angeles Superior Court, by allowing

the filing of the proposed Complaint in Intervention, had

denied full faith and credit to the judgment entered by the

U.S. District Court. On March 12, 1980 the California Court

of Appeal summarily denied the IOF’s petition. (Appendix

B to this Petition.)

The IOF again raised the issue of full faith and credit in

its Petition for Hearing to the California Supreme Court.

An order, summarily denying the IOF’s Petition for Hear-

ing, was entered by the California Supreme Court on April

10, 1980. (Appendix A to this Petition.)

=

STATEMENT OF REASONS FOR GRANTING

THE WRIT OF CERTICRARI.

1. This Is a Case of First Impression.

The law has long been settled that judgments of federal

courts are on an equal footing with judgments of state courts

and are entitled to the same full faith and credit, 28 U.S.C.

Section 1738; Embry v. Palmer, 107 U.S. 3, 9-10 (1882):

Turnbull v. Payson, 95 U.S. 418, 423 (1877).

In Stoll v. Gottlieb, 305 U.S. 165, 177 (1938), this Court

held that the courts of Illinois were required to give res

judicata effect to the decree of a federal bankruptcy court

sitting in Illinois.

However, the federal court judgment in Stoll v. Gottlieb,

supra, was based on rights arising under federal law. The

IOF is unaware of any decision of this Court which holds

that a state court must, under 28 U.S.C. Section 1738, give

the same res judicata effect to a judgment of a federal court

sitting in that state and properly exercising diversity juris-

diction, as the state court would give to a judgment rendered

by a court of that state.

The IOF respectfully submits that the Los Angeles Su-

perior Court was required, under 28 U.S.C. Section 1738,

to give conclusive effect to the prior judgment of the U.S.

District Court.

2. Under California Law, the Complaint in Interven-

tion Would Be Barred by the Doctrines of Res ju-

dicata and Collateral Estoppel if the U.S. District

Court Judgment Had Been Rendered by a Califor-

nia Court.

Under California law, a final judgment on the merits

between parties who are in privity operates as a bar to a

subsequent action upon the same cause of action, settling

was

not only every issue that was raised, but also every issue

that might have been raised in the first action. Slater v.

Blackwood, 15 Cal.3d 791, 795 (1975).

(a) The U.S. District Court Judgment Was a Final Judgment on

the Merits.

The first action, filed by the members of former Court

619 on January 12, 1977, sought reinstatement of former

Court 619 as a fully privileged, participating court of the

IOF, an accounting of funds and $1 million in damages.

The iOF properly removed the action to the U.S. District

Court. All of the requirements of 28 U.S.C. Section 1332

were met: (1) plaintiffs were residents of the State of Cal-

ifornia and the IOF was a nonresident corporation doing

business in California; and (2) the amount in controversy

exceeded $10,000. Thus the U.S. District Court had subject

matter jurisdiction of the controversy. The action was dis-

missed because the plaintiffs were barred from suing in any

court, state or federal, due to their failure to exhaust their

internal administrative remedies.

If the plaintiffs as representatives of former Court 619

had any claims against the IOF which were not barred by

their failure to exhaust administrative remedies, these claims

could have been asserted under Rule 18 of the Federal Rules

of Civil Procedure. The U.S. District Court, exercising its

diversity jurisdiction, could have decided all issues which

might have been raised in the state court. Angel v. Bulling-

ton, 330 U.S. 183, 191 (1947).

The U.S. District Court, sitting in diversity, was bound

by California law in determining whether the original rep-

resentatives of former Court 619 were barred as a matter

of law from instituting a legal action against the LOF. Guar-

anty Trust Co. of New York v. York, 326 U.S. 99, 110

(1945); Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78

(1938).

The California Supreme Court has recognized that a dis-

missal may constitute an actual determination on the merits

where the court determines that plaintiffs are barred as a

matter of law from any recovery. Olwell v. Hopkins, 28

Cal.2d 147 (1946).

In Holderby v. Internat. Union etc. Engrs., 45 Cal.2d

843, 846 (1955), the California Supreme Court stated the

rule regarding exhaustion of administrative remedies in the

context of an action for reinstatement in a labor union:

‘It is the general and well established jurisdictional

rule that a plaintiff who seeks judicial relief against an

organization of which he is a member must first invoke

and exhaust the remedies provided by that organization

applicable to his grievance.”

The rule was specifically applied to an action by a member

of a subordinate lodge of a fraternal benefit society in Berlin

v. Eureka Lodge No. 9, K. of P., 132 Cal. 294, 296 (1901).

There, the California Supreme Court held that a member

must exhaust all the remedies provided by the society’s laws

for, the redress of his grievance before he may resort to a

court of law.

Under California law, the exhaustion of remedies doctrine

applies equally to actions for reinstatement to membership

in a private association and actions seeking damages for an

allegedly wrongful termination of membership. Westlake

Community Hosp. v. Superior Court. 17 Cal.3d 465, 476-

477 (1976).

Thus, the failure to exhaust remedies is not a mere tech-

nicality which can be cured with the passage of time. The

failure of the members of former Court 619 to exhaust their

administrative remedies forever cuts off their right to sue

|

on this cause of action because the time within which they

could have exhausted their remedies within the IOF has long

since expired. The dismissal of the U.S. District Court

therefore operates as a judgment on the merits. Since no

appeal was taken from the judgment, and the time to appeal

has expired, the judgment is final. O/well v. Hopkins, supra,

28 Cal.2d at 152.

(b) Privity of Parties Is Not an Issue.

By holding that respondents were collaterally estopped

from relitigating the issue of the ‘‘suspension’’ of former

Court 619 (Appendix D to this Petition), the Los Angeles

Superior Court in the present action necessarily found that

respondents were in privity with the plaintiffs in the prior

U.S. District Court action. See, e.g., Clemmer v. Hartford

Insurance Co., 22 Cal.3d 865, 874 (1978).

Thus, privity of parties is not an issue in connection with

this Petition.

3. By Permitting the Filing of the Complaint in Inter-

vention, the Los Angeles Superior Court Violated

28 U.S.C. Section 1738.

The claims for relief presented in the U.S. District Court

action and the present Complaint in Intervention all stem

from one alleged injury—the suspension of former Court

619’s charter by the IOF. Thus, both the U.S. District Court

action and the Complaint in Intervention are founded on the

same cause of action. Since respondents are in privity with

the plaintiffs in the District Court action, under California

law they are barred by the principles of res judicata and

collateral estoppel from relitigating the issues which were

or could have been litigated in the U.S. District Court action.

Despite this basic rule of law, the Los Angeles Superior

Court has permitted the filing of the Complaint in Inter-

=

vention. This action denied full faith and credit to the U.S.

District Court judgment by not giving that judgment the res

judicata or collateral estoppel effect it would have been

afforded if rendered by a California court.

Conclusion.

Having had their day in court and having lost, respondents

are attempting to circumvent the consequences of this loss

by relitigating the same case in a different court before a

different judge. The policy behind the doctrine of full faith

and credit, as enunciated by 28 U.S.C. 1738, is to prevent

such an abuse of the judicial system.

Judicial economy is not served by allowing litigants to

bounce back and forth between state and federal courts. In

particular, federal courts should not become a testing ground

for frivolous claims, with the claimant knowing he can refile

in state court should his federal action be dismissed.

Finally, the policies behind removal jurrisdiction will be

frustrated if a nonresident defendant such as the IOF can

win in federal court, only to find itself subsequently re-

litigating the same issues in state court.

For the above reasons, the IOF respectfully requests that

this Court grant the requested Petition for Writ of Certiorari.

Respectfully submitted,

ADAMS, DUQUE & HAZELTINE,

CHARLES GRIFFIN CALE,

Attorneys for Petitioner, The Independent

Order of Foresters.

Of Counsel:

LoybD P. DERBY,

MARGARET LEvy.

APPENDIX A.

Clerk’s Notice Re Denial of the IOF’s

Petition for Hearing.

Supreme Court of the State of California

2/CV. 58691

The Independent Order of Foresters, v. Superior Court,

L.A. County, Bier, et al, Rpi’s.

I have this day filed Order ........ Hearing Denied.

Dated: April 10, 1980.

Respectfully,

G. E. Bishel,

Clerk.

—2— ,

APPENDIX B.

Order Re Petition for Writ of Mandate, or,

in the Alternative,

for Writ of Prohibition.

Court of Appeal of the State of California, Second Ap-

pellate District, Division Three.

2nd Civil No. 58691

The Independent Order of Foresters, a fraternal benefit

society, Petitioner, v. Superior Court of the State of Cali-

fornia for the County of Los Angeles, Respondent, Evelyn

Bier, et al., Real Parties in Interest.

THE COURT:

The petition for writ of mandate/prohibition, filed herein

on February 27, 1980, has been read and considered. The

petition is denied for failure to state facts sufficient to justify

the relief sought.

COURT OF APPEAL-SECOND DIST.

FILED

MARCH 12, 1980

CLAY ROBBINS, JR. Clerk

on

APPENDIX C.

Order Denying the IOF’s Motion

for Reconsideration.

Superior Court of the State of California

for the County of Los Angeles

No. C 165 965

The Independent Order of Foresters,

v. Rene Charbonneau, et al.

Motion comes on for hearing and is orally argued.

Matter is submitted.

LATER — The court reconsiders its order of Oct. 24,

1979, and after a review of moving and opposition papers

and matters raised in oral argument now reaffirms its said

order permitting the complaint-in-intervention to be filed.

In doing so, the court notes that injunctive sought in the

complaint-in-intervention (filed Nov. 2, 1979) seeks relief

contrary to the preliminary injunction now in effect. The

court sees no problem with the intervenors seeking per-

manent injunctive relief contrary to an existing preliminary

injunction.

Intervenor to give notice.

Minutes entered February 11, 1980.

County Clerk.

po oe

APPENDIX D.

Order Granting Respondents’ Motion for Leave

to Intervene in Pending Action.

Superior Court of the State of California

for the County of Los Angeles

No. C 165 965

The Independent Order of Forester

v. Rene Charbonneau, et al.

Matter argued and taken under submission. Later, the

Court renders the following decision:

1. Motion is granted.

(a) Intaking judicial notice of Judge Byrne’s decision

in the federal case of U.S. District Court (Central California)

#770210 WMB, it is clear that ‘‘administrative remedy

problem’”’ is a bar to petitioners’ request to intervene as to

the issue of the suspension applying the doctrine of collateral

estoppel. There is, however, no prior determination by the

federal court as to the right of petitioners to intervene on

the issue of reinstatement.

(b) The state trial court must make a determination

as to whether further administrative remedies are futile for

intervenors, whether there is bad faith or whether there is

an estoppel or waiver. This must be done by this court in

a fact determination proceeding, to wit, a trial or, possibly,

a summary judgment motion. The court cannot make this

determination in this motion to intervene or on any challenge

to the pleadings by a demurrer or motion to strike.

2. Petitioners are to file and serve (by mail) their com-

plaint-in-intervention within thirty days after date of ruling.

Petitioners are to give notice.

Minutes entered October 24, 1979.

County Clerk.

a

APPENDIX E.

Order Dismissing Action for Lack of

Subject Matter Jurisdiction.

United States District Court

Central District of California

No. CV 77-210-WMB

Rene Charbonneau, John Croyt, Dan Schlick, and Glenn

Marshall, Representing All of Court 619, San Fernando

Valley, of The Independent Order of Foresters, Plaintiffs,

v. The Independent Order of Foresters, a Fraternal Society,

and Does | through III, inclusive, Defendant.

Defendant Independent Order of Foresters (IOF) filed a

motion to dismiss pursuant to Rules 12(b)(1) and 12 (b)(6),

Federal Rules of Civil Procedure, for lack of subject-matter

jurisdiction and for failure to state a claim under which relief

could be granted. At the hearing on this matter, the parties

stipulated that the questions of whether plaintiffs were re-

quired to exhaust internal administrative procedures of IOF

before bringing this action, and if so, whether those pro-

cedures had been exhausted or whether plaintiffs were ex-

cused from exhausting them, were to be decided based on

the materials filed with the court and presented at the hear-

ing, and neither side desired to submit additional documents

or evidence.

The court finds that the plaintiffs failed to exhaust the

internal appellate review procedures provided to them in the

IOF Constitution and are not excused from such failure.

Plaintiffs are four individuals who have been suspended

from membership in the defendant organization. Pursuant

to the procedures for appeal set forth in the IOF Constitution,

plaintiffs took timely successive appeals to the prescribed

review bodies until they reached the penultimate IOF ap-

pellate authority, the Executive Council. The Executive

oe ee

Council’s decision upheld plaintiffs’ suspension from IOF.

Under Section 263(1) of the IOF Constitution, plaintiffs had

twenty days, to file an appeal to the ultimate appellate body,

the Supreme Court. No appeal to the Supreme Court was

filed. Section 260(3) of the IOF Constitution provides that

‘‘Any aggrieved party failing to take an appeal from any

action or decision in the manner and within the time laid

down in the Constitution and laws shall be bound by such

action or decision and shall have no further recourse whether

in law or in equity, in respect of the subject matter of such

action or decision.”’

Plaintiffs urge that they are excused from their obligation

to exhaust the internal appellate review procedure because

an appeal to the Supreme Court would have been a useless

administrative act. Plaintiffs rely on Section 40(1) of the

IOF Constitution, which provides that the Executive Council

‘*shall during the recess of the Supreme Court exercise all

_the rights, powers and privileges of the Supreme Court

. . aS fully and effectually as the same might be done by

the Supreme Court in session.’’ Plaintiffs argue that inas-

much as the Supreme Court was in recess, the Executive

Council, which had already ruled against them, would have

invoked this provision and have summarily affirmed its ear-

lier decision.

Even assuming that the Executive Council would have

exercised its rights under Section 40(1), the plaintiffs have

not shown that the Executive Council would have failed to

reconsider in good faith all grounds for appeal. More sig-

nificantly, there is no reason to assume that the matter would

not have been deferred until the Supreme Court’s next reg-

ular session, or that the Supreme Court would not be called

into special session, pursuant to the procedures set forth in

Section 10 of the IOF Constitution. To assume that an appeal

to the Supreme Court would have been useless is unwar-

a, oe

ranted speculation. Thus, plaintiffs have failed to bring their

case in line with those that excuse useless additional ad-

ministrative appeals before commencement of legal action.

See, e.g., Ogo Associates v. City of Torrance, 37 Cal.App.3d

830, 834, 112 Cal.Rptr. 761, 763 (1974).

As a result, this action is untimely and no subject matter

jurisdiction exists. Western International Hotels v. Tahoe

Regional Planning Agency, 387 F.Supp. 429, 433 (D. Nev.

1975); Messling v. Finch, 322 F.Supp. 1279 (D. Pa. 1971);

Ricciotti v. Warwick School Committee, 319 F.Supp. 1006,

1011-12 (D.R.I. 1970). Accordingly,

IT IS HEREBY ORDERED that the motion to dismiss

for lack of subject-matter jurisdiction of the defendant In-

dependent Order of Foresters is granted.

DATED: August 8, 1977.

Wm. Matthew Byrne, Jr.

United States District Judge.