Petitioners Reply Brief — Israel v. Futuronics Corp., 102 S. Ct. 1435 (1982) (No. 81-1037)

Office - Supreme Court, U.S.

FILED

oe JAN 28 1982

ALEXANDE! . »TEVAS,

IN THE —— —_

Supreme Court of the United States

OCTOBER TERM, 1981

ISRAEL AND RALEY,

Petitioner,

Vv.

FUTURONICS CORPORATION,

Respondent.

On Petition for a Writ of Certiorari To

The United States Court of Appeals

For The Second Circuit

PETITIONER’S REPLY MEMORANDUM

Mortimor S. Gordon

460 Park Avenue

New York, New York 10022

Telephone: (212) 838-4600

Counsel for Petitioner

January, 1982

THE CASILLAS PRESS, INC. — 1717 K Street N.W. — Washington, D.C. ~ 223-122°

(i)

TABLE OF CONTENTS

Page

I. | The Opposing Brief Concedes the Material Errors in the

Reviews Below and Defines the Significant Conflict with

the Decisions of this Court and the Circuit Courts .......... 1

Il. The Petition for A Writ of Certiorari was clearly Filed

gon, cckéendesecanteouneae 666 9

TABLE OF AUTHORITIES

Cases: . __Page

In re American Range & Foundry Co.,

ee I BEE a dccccccncovestcecesceresses 6,n.3

In re Arlan’s Department Stores, Inc.,

ED «i Ln nonce veceepenseseees 5,n.3

Bank v. Blum,

En od oc eceteneseouesenaeene 6,n.3

In re Barceloux, .

es nas co euneneaneees 6, n.3

Behringer v. Lybrand & Morgan,

i MD occ ccbcccccsssencvcsciecoes 7,0.3

In re Bemporad Carpet Mills, Inc., ;

ED cic cc covdercesescéséececccce 6, n.3

In re Botany Industries, Inc.,

ey pe EY IE: BUD oc wc cccccccecccecedesees §,n.3

Calhoun v. Stratton,

oc ky ccccecteceuncecdncestd 6,n.3

Page

In re Calton Crescent, Inc.,

173 F.2d 945 (2nd Cir. 1949);

aff'd sub nom, Manufacturer’s Trust Co.

v. Becker, et al., 338 U.S. 304 (1949) 0... ccc cece cece cee eees 5

Citizens Bank of Michigan City v. Opperman,

DP IEE ccbcccebisccodecccccedcdccosccaccsecees 9

In re Colonial Services Co.,

Gs BOUED cc cc ccccccccccccccccccsecces 6, n.3

Comstock v. Group of Investors,

EEE a cidvchudccceess. deuscecevecoessepencne 5

Matter of Dawson,

446 F. Supp. 196 (E.D. Mo. 1978) .........-.-0 cece ee eeee 6,n.3

Dee v. United Exchange Bidg.,

OB F.2d STB Goths Cle. 1937) 2. cccccccccccccccccccccccces 6, n.3

Dickinson Industrial Site v. Cowan,

309 U.S. 382, 60S. Ct. $95 (1940) ............ ethene caneaes 5

In re Dole Co.,

244 F. Supp. 751 (N.D. Me. 1965) ..........-- 0c ee eeeeeee 5,n.3

In re Dunhill Suspender Corp.,

162 F. Supp. 608 (S.D.N.Y. 1958) .... 2... 2.2 ee cece eeeeee $,n.3

Matter of Edinboro Development Inc., .

422 F. Supp. 1049 (W.D. Pa. 1976) .... 2... 6. cece eee enes 5,n.3

In re Garrett Road Corp.,

256 F. Supp. 709 (E.D. Pa. 1966) ....... 66. . eee ence eens $,n.3

In re Garvin Properties, Inc.,

411 F.2d 594 (Sth Cir. 1969) .. 2.0... cc cece eee eee eeeee 6,n.3

Gochenour v. Cleveland Terminal Building Co.,

142 F.2d 991 (6th Cir. 1944) .. 2.2... cece cece e eee e eens 6, n.3

Page

Gypsum Co., United States v.,

oe en eae hanedecedhusbaseseonanbes 5

In re Hamilton Distributors, Inc.,

EE, CED win ediecdccoeccccecsceesees 6, n.3

Johnson v. Carolina Scenic Stages,

I dias cc cccpaseonbonseumece 5,n.3

In re Jones,

CED voc pour 6edseccededsdecscebes 6,n.3

Katchen v. Landy,

ee ee ED . cccccegeccnceceseseososona 5

King v. Baer,

482 F.2d 552 (10th Cir. 1973), cert. den.,

414 U.S. 1068, 94S. Ct. 577, 38 L. Ed. 2d 473 ............. 7,n.3

Matter of Land Investors, Inc.,

ED cd ceconccvenecssesesbeonce 6, n.3

Levitt v. Robinson,

ES IE oo 6 conaccnccesceenaaeseouese 6,n.3

Marquette Nat. Bank v. First of Omaha Service Corp.,

439 U.S. 297, 58 L. Ed. 2d 534, 99S. Ct. 54(1978) ............ 10

In re McGinnis,

i , CR ccc cecesdbcvcdosvcoesesses 6, n.3

In re Midwest Engineering and Equipment Co.,

on does concdcecsseedesoseces 6, n.3

Milbank, Tweed & Hope v. McCue,

ccc cedddestecedsusnesses 5,n.3

Miller v. Robinson,

I Sk oi a ll cn as wos ceccdeasionke 6,n.3

iv

Page

In re Moran,

456 F.2d 1030 (3rd Cir. 1972), cert. den., 409

U.S. 872, 93 S.Ct. 201, 34 L. Ed. 2d 123 (1972) ............ 5,n.3

Matter of Mullendore,

SEGA, GEEED so cecccvccccccessosccesess 7,n.3

Matter of Multiponics, Inc.,

EE, SED co ccccoscccesccedoesssoceense 6,n.3

In re Necessary, Joe, & Son, Inc.,

475 F. Supp. 610 (W.D. Va. 1979) ... 0... cece cece eee 5,n.3

In re Nelson & Sons, Inc.,

en Cn... ivackd eedsudecesecosshecs 6,n.3

New York, N.H. & H.R. Co. v. lannotti,

567 F.2d 166 (2nd Cir. 1977),

eS eee 5,n.3

Providence Rubber Co. v. Goodyear,

Fs Be PE TEED ccc vceccccueeeccesccoocess 10

Puget Sound Power & Light Co. v. County of King, ;

264 U.S. 22, 68 L. Ed. 541, 49S. Ct. 261 (1924) ..........+... 10

Reconstruction Finance Corp. v. Denver &

Rio Grande West R. Co.,

328 U.S. 495, 66 S. Ct. 1282 & 1384, 90 L. Ed. 1400

MEET bane on5dbesd sdb de0c0 0: 1ndicesccdbebscentecvocsees 5

Rose Pass Mines, Inc. v. Howard,

GES Fe Fe ete GED co ccccccccccccvccesccccceoss 6,n.3

Roth v. Reich,

164 F.2d 305 (2nd Cir. 1947) .... 2.6.6 e ccc eee ees $,n.3

In re Schumaker Construction, Inc.,

TTT 6, n.3

Page

Scofield v. NLRB,

394 U.S. 423, 22 L. Ed. 2d 285, 89S. Ct. 1154(1969) .......... 10

Seminole Nation, United States v.,

299 U.S. 417, 81 L. Ed. 316, 57S. Ct. 283 (1937) ............. 10

In re Standard Gas & Electric Co.

SE, SEED vc cbncceccvcnceepedvescesete 5,n.3

Stolkin v. Nachman,

I, BED nc con conccccocesbeabncseaes 6,n.3

Sullivan & Cromwell v. Colorado Fuel & Iron Co.,

ey EEG GED onccucccccceccccecceccontees 7,n.3

In re 32-36 North State St. Bldg. Corr ,

SE, CED ncccécececcocecévesseudboocse 6,n.3

Time Oil Co. v. Wolverton,

491 F.2d 361 (9th Cir. 1974), cert. den.,

417 U.S. 947, 94S. Ct. 3072, 41 L.Ed. 2d

DPE 46 bGtaad sO sadaetivadccconecoecesceeeannes 6, n.3

Tracy v. Spitzer-Rorick Trust & Savings Bank,

i a. a wl veboonbeseseoened 6,n.3

Matter of Urban America Development Co.,

oe. ce oust ueseauteenss 6, n.3

In the Matter of Vickers,

ey EE DEE, Cb civcccopacceuceceseeeeees 6,n.3

In re Webcor, Inc.,

CE... 5 ca vcccrecceseecousenens 6,n.3

In re West Counties Const. Co.,

182 F.2d 409 (7th Cir. 1950) ............... ne pporpiuinenle 6,n.3

In re Williamson,

431 F. Supp. 1023 (W.D. Okla. 1976) ................ sie Beene

vi

Page

Statutes, Federal:

Title 28, United States Code, Sec. 2101(c) ..........60005 cee 9,11

Court Rules:

en. dl Sevecksecceepyedeestaioscsecces v)

i ocr. Chee ncees dueceseiceteresesentece 7

nL. inks usu Sed geeedsaveges 66d seceseee’s 3

iE ccotucddectotedecnceeedesosospercs 2,7

Bankruptcy Rules 801, 802, 803, 810 .... 2.2... . ee cee ee eee 4

Advisory Committee Note to Rule 810 ...... 2... 0.06.6. c eee ee 4

Federal Rules of Civil Procedure, Rule 52(a) ...............000::- 4

Other Authorities:

Supreme Court Practice,

i '. ccc cee deneasuceseseerees y

IN THE

Supreme Court of the United States

OCTOBER TERM, 1981

No. 81-1037

ISRAEL AND RALEY,

Petitioner,

v.

FUTURONICS CORPORATION,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

PETITIONER’S REPLY MEMORANDUM

I. THE OPPOSING BRIEFS' CONCEDE THE

MATERIAL ERRORS IN THE REVIEWS BELOW

AND DEFINE THE SIGNIFICANT CONFLICT WITH

THE DECISIONS OF THIS COURT AND THE CIR-

CUIT COURTS.

Futuronics Corporation, in its opposing briefs, does not

address the substantial questions presented in the Petition

'Petitioner has received two (2) different opposing briefs from

Respondent in the mail; three copies of the first brief on January 13,

1982, and two copies of the second brief on January 21, 1982. Peti-

tioner assumes that the second opposing brief is the result of the

failure of the first brief to comply with Supreme Court Rules

33.2(b)(2) and 34.1(a), (b), and (f). However, with uncertainty as to

which brief is the opposing brief, this Reply is to both.

2

concerning due process and the application and interpreta-

tion of the Bankruptcy Rules. Apart from the specious

argument that the Petition was untimely, the opposing

briefs undercut the foundation for the forfeiture

substituted by the district judge by acknowledging that the

assessment of compensation and sanctions does not de-

pend upon the findings and assessment in another case but

is “a factual determination peculiar to the facts of this

case” (First Opp. Brf., p. 2, Second Opp. Brf., pp. i & ii).

The opposing briefs then undercut the foundation upon

which the majority’s reiteration of the forfeiture is based

by conceding that “Bankruptcy Rule 219(d) does not make

it mandatory for the bankruptcy court to deny all compen-

sation” (First Opp. Brief, p. 17, Second Opp. Brf., p.16).

If, as stated in the opposing briefs, there was no man-

datory penalty involved in this case and the jurisdiction

for the determination was vested in the discretion of the

Bankruptcy Court based on the facts which are peculiar to

this case, then the forfeiture substituted on review clearly

may not stand and it is respectfully submitted that a sum-

mary disposition by this Court affirming the trier-of-fact

may now be in order.

The judicial process of a trial and appellate review is not

a gauntlet through which a party must run subject to

whatever opinion each judge may choose to render along

the way. The trial is to determine the facts and resolve the

issues in accordance with the application of proper legal

principles; and once the facts have been correctly found

they are binding in any subsequent review. The appellate

process is to provide a review of and not a substitution for

the decision of the trier-of-fact under standards which re-

quire that decision to be affirmed unless the findings are

clearly erroneous or there has been a material mistake in

applying the appropriate law or it is apparent that there

3

has been a clear abuse of the discretion which is vested in

the trier-of-fact.

Here, the trier-of-fact was called upon to assess tli

compensation due Petitioner for its services in prosecuting

contract rights against the United States before a separate

forum for a period of four years resulting in the creation

of funds and benefits which successfully restored

Futuronics Corporation to solvency. The trier-of-fact,

who had been involved in the bankruptcy proceedings for

a number of years, conducted the trial, heard the evidence

and arguments, considered the precedents and the law,

and made findings and conclusions which resolved the

controversy by tailoring a remedy which compensated

Petitioner for its years of dedicated effort, imposed sanc-

tions for prohibited actions he attributed to Petitioner,

and prevented a windfall to Futuronics Corporation,

which knew of and expressly agreed to the Petitioner’s ac-

tions. Only after it obtained the fruits of Petitioner’s labor

did Futuronics urge the denial of compensation to Peti-

tioner because of the employment of and payment for the

Arutt firm’s contributed services at no charge to and with

the knowledge and express agreement of Futuronics.

However, based on his findings and conclusions, the trier-

of-fact rejected the clearly unconscionable position of

Futuronics and decided instead to set aside the compensa-

tion specified in the original Order and the retainer and fee

agreement and, as urged by the creditors, fixed the com-

pensation due Petitioner under the criteria of Bankruptcy

Rule 219(c) subject to a further penalty of $190,000. On

review, without considering the validity of the application

and interpretation of the Bankruptcy Rules in the trial

court’s conclusions and while disregarding the findings of

the Petitioner’s total dedication to the successful pursuit of

rights on behalf of Futuronics and the knowledge and con-

4

sent of the parties involved in the bankruptcy proceeding,

a forfeiture of all compensation was substituted for the

trial court’s assessment as being a mandatory penalty

under a decision on wholly distinguishable facts in another

case and under a subparagraph of a former law.

The findings of the trier-of-fact have been affirmed

twice and they clearly cannot be questioned, as

acknowledged in the opposing briefs.? Further, as now

conceded in the opposing briefs, the assessment was re-

quired to be based on these findings and not those in

another case ant! was committed to the discretion of the

trier-of-fact and not to the imposition of a mandatory

penalty.

A review of the assessment by the trier-of-fact, here,

was subject to the standard of whether he properly and

adequately exercised his discretion and not whether the

reviewing judge would reach the same assessment if he had

been vested with the discretion. A review of the decision of

the Bankruptcy Court is subject to the standards prescrib-

ed in Rule 52(a) of the Federal Rules of Civil Procedure

(Bankruptcy Rules 801, 802, 803, 810, Advisory Commit-

tee Note to Rule 810). Fee allowances and sanctions are

findings based on sound equitable discretion in reconciling

competing claims to reach an overal! fair resolution and

“are not reviewable except where a clear abuse of discre-

tion is apparent.” The knowledge and consent of the

unharmed beneficiaries “gives the court full discretion to

deny” the sanction. [United States v. Gypsum Co., 333

?However, Futuronics Corporation, in the opposing briefs proceeds

to question and ignore findings, particularly the findings of more than

400 hours of professional services contributed by the Arutt firm in

helping to create the funds for which services Petitioner paid at no

charge to Futuronics; and the knowledge of and express agreement by

Mr. Blanck, for Futuronics, to the Petitioner’s employment of the

Arutt firm.

5

U.S. 364, 395, 68 S. Ct. 525, 92 L.Ed. 746 (1948); Katchen

v. Landy, 382 U.S. 323, 327, 86 S.Ct. 467, 15 L.Ed. 2d 391

(1966); Dickinson Industrial Site v. Cowan, 309 U.S. 382,

389, 60 S.Ct. 595, 84 L.Ed. 819 (1940); Reconstruction

Finance Corp. v. Denver & Rio Grande West. R. Co., 328

U.S. 495, 533, 66 S.Ct. 1282 & 1384, 90 L.Ed. 1400 (1946);

Comstock v. Group of Investors, 335 U.S. 211, 230, 68

S.Ct. 1454, 92 L.Ed. 1911 (1948); Calton Crescent, Inc.,

173 F.2d 945, 946 (2nd Cir. 1949), affd sub nom.,

Manufacturers Trust Co. v. Becker, 338 U.S. 304, 70

S.Ct. 127, 94 L.Ed. 107 (1949)]. The standard, which has

been described as “universal” throughout the Circuit

Courts, is that the reviewing court will not disturb or in-

terfere with the trial court’s assessment of compensation

and sanction absent a sustaining of the very heavy burden

of showing a “clear or gross abuse of the discretion” com-

mitted to the trial court amounting to “a failure to act con-

scientiously and fairly”, an “obvious miscarriage of

justice”, or a “manifest disregard of right and reason.”?

‘First Circuit: See, In re Dole, 244 F. Supp. 751, 754, 757-758 (N.D.

Me. 1965).

Second Circuit: See, Arlan’s Dept. Stores, Inc., 615 F.2d 925, 943

(2nd Cir. 1979); New York, N.H. & H.R. Co. v. lannotti, 567

F.2d 166, 179 (2nd Cir. 1977), cert. den., 98 S.Ct. 120 (1977);

Roth v. Reich, 164 F.2d 305, 311 (2nd Cir. 1947); In re Dunhil”

Suspender Corp., 162 F. Supp. 608, 611 (S.D.N.Y. 1958).

Third Circuit: See, In re Moran, 456 F.2d 1030, 1031 (3rd Cir. 1972),

cert. den., 409 U.S. 872, 93 S. Ct. 201, 34 L. Ed. 2d 123 (1972);

In re Standard Gas & Electric Co., 106 F.2d 215, 216 (3rd Cir.,

1939); Matter of Edinboro Development, Inc., 422 F. Supp.

1049, 1051 (W.D. Pa. 1976); In re Botany Industries, Inc., 403

F. Supp. 234, 237 (E.D. Pa. 1975); In re Garrett Road Corp.,

256 F. Supp. 709, 714 (E.D. Pa. 1966).

Fourth Circuit: See, Milbank, Tweed & Hope v. McCue, 111 F.2d

100, 101 (4th Cir. 1940); Johnson v. Carolina Scenic Stages, 242

F.2d 263, 264 (4th Cir. 1957); In re Joe Necessary & Son, Inc.,

475 F. Supp. 610, 613-614 (W.D. Va. 1979).

6

Here, in substituting the forfeiture, the reviewing judges

found no error in the findings of the trier-of-fact, made no

additional or conflicting findings showing that the trier-

Fifth Circuit: See, Rose Pass Mines, Inc. v. Howard, 615 F.2d 1088,

1091 (Sth Cir. 1980); Matter of Multiponics, Inc., 622 F.2d 709,

723 (Sth Cir. 1980); In re Jones, 490 F.2d 452, 455 (Sth Cir.

1974); In re Bemporad Carpet Mills, Inc., 434 F.2d 988, 989 (Sth

Cir. 1970); In re Garvin Properties, Inc., 411 F.2d 594, 594-595

(Sth Cir. 1969).

Sixth Circuit: See, In re Nelson & Sons, Inc., 426 F.2d 235, 236 (6th

Cir. 1969) cert. den., 397 U.S. 1038, 90S. Ct. 1359, 25 L. Ed. 2d

650 (1970); Gochenour v. Cleveland Terminal Bidg. Co., 142

F.2d 991, 995 (6th Cir. 1944); Calhoun v. Stratton, 61 F.2d 302,

303 (6th Cir. 1932).

Seventh Circuit: See Matter of Land Investors, Inc., 544 F.2d 925, 933

(7th Cir. 1976); Stolkin v. Nachman, 472 F.2d 222, 228 (7th Cir.

1973); In re Midwest Engineering and Equipment Co., 440 F.2d

326, 328-329 (7th Cir. 1971); In re Webcor, Inc., 392 F.2d 893,

898-899 (7th Cir. 1968); Jn re Schumaker Construction, Inc.,

346 F.2d 353, 355 (7th Cir. 1965); In re West Counties Const.

Co., 182 F.2d 409, 411 (7th Cir. 1950); In re 32-36 North State

St. Bldg. Corp., 164 F.2d 205, 206 (7th Cir. 1947); In re

Hamilton Distributors, Inc., 440 F.2d 1178, 1180 (7th Cir.

1971).

Eighth Circuit: See Matter of Urban America Development Co., 564

F.2d 808, 809 (8th Cir. 1977); Jn re Colonial Services Co., 480

F.2d 747, 748 (8th Cir. 1973); Tracy v. Spitzer Rorick Trust &

Savings Bank, 12 F.2d 755, 756-757 (8th Cir. 1926); Matter of

Dawson, 446 F.Supp. 196, 198-199 (E.D. Mo. 1978); In re

American Range & Foundry Co., 41 F.2d 845, 847-848 (D.

Minn. 1926).

Ninth Circuit: See Time Oil Co. v. Wolverton, 491 F.2d 361, 365 (9th

Cir. 1974), cert. den., 417 U.S. 947, 94S. Ct. 3072, 41 L. Ed. 2d

667 (1974), Bank v. Blum, 460 F.2d 197, 200 (9th Cir. 1972);

Levitt v. Robinson, 402 F.2d 753, 755 (9th Cir. 1968); Miller v.

Robinson, 378 F.2d 2, 3 (9th Cir. 1967); Dee v. United Exchange

Bidg., 88 F.2d 372, 375 (9th Cir. 1937); In re Barceloux, 74 F.2d

289, 294 (9th Cir. 1934).

Tenth Circuit: See In re McGinnis, 586 F.2d 162, 164 (10th Cir. 1978);

In the Matter of Vickers, $77 F.2d 683, 687 (10th Cir. 1978);

-

of-fact had not properly and adequate!y supported the ex-

ercise of his discretion, and did not consider the conclu-

sions of improper reliance and a prohibited act under the

trial court’s application and interpretation of Bankruptcy

Rule 219(a) and Bankruptcy Rule 219(d). Rather, on

review, the assessment by the trier-of-fact was rendered lit-

tle more than a superfluous advisory opinion with the

district judge interjecting his own opinion that a forfeiture

was required by a decision in a wholly distinguishable case

while conceding that “some may disagree” with his opi-

nion; and the majority below reiterated the forfeiture as a

mandatory penalty.

Futuronics argues deception and evil intent, yet where

was the deception or evii intent when Petitioner required

the Court’s approval prior to the execution of the retainer

and fee agreements and received in the mail the Order and

the retainer and fee agreement executed by the Arutt firm

and by Mr. Blanck; or when Petitioner devoted essentially

four years of its professional life to fighting for rights and

interests on behalf of Futuronics; or when Petitioner paid

the Arutt firm for its contributed services in helping to

create the funds at no charge to Futuronics; or when Peti-

tioner immediately filed a full Rule 219 statement of

services at the first suggestion that such a statement was

needed; or when the parties involved in the the bankruptcy

proceeding maintained a dead silence until after the suc-

cessful end of litigation and the receipt of the funds and

benefits created by Petitioner’s labor? Petitioner has never

questioned the fact that, until Petitioner’s statement of

Behringer v. Lybrand & Morgan, 270 F.2d 670, 675 (10th Cir.

1959); King v. Baer, 482 F.2d 552, 557-558 (10th Cir. 1973), cert.

den., 414 U.S. 1068, 94 S. Ct. 577, 38 L. Ed. 2d 473 (1973); Mat-

ter of Mullendore, 527 F.2d 1031, 1038 (10th Cir. 1975);

Sullivan & Cromwell v. Colorado Fuel & Iron Co., 96 F.2d 219,

222 (10th Cir. 1938); Jn re Williamson, 431 F. Supp. 1023, 1029

(W.D. Okla, 1976).

services, the court was not and should have been informed

of the employment of the Arutt firm, but this does not

create illicit fee splitting in Petitioner’s reliance on the

unaltered Order and the executed retainer and fee agree-

ment and the Petitioner’s employment of and payment for

the Arutt firm’s contributed services at its own expense

and with the express consent of the client nor does it

render proper the substitution of a forfeiture on review as

a mandatory penalty in lieu of the assessment by the trial

court in the exercise of its equitable discretion un the entire

findings in this case.

While conceding the errors in the reviews below, the op-

posing briefs present a distorted and incomplete version of

the findings and asserts that the errors do not matter

because the substitution of the forfeiture for the assess-

ment by the trier-of-fact is not important and is not in con-

flict with the decisions of this Court and the Circuit

Courts. However, the substituted forfeiture based on the

erroneous standards of wholly distinguishable facts in

another case and a mandatory penalty constitute a clear

and direct departure from and conflict with the required

standards for a review of the exercise of the discretion

which is committed to the trier-of-fact in bankruptcy.

These standards have been established by the decisions

and Rules of this Court and had been consistently applied

by the Circuit Courts. Apart from the failure to address

the substantial questions which are presented in the Peti-

tion and the clearly unconscionable result, the erroneous

reviews below may not stand as a precedent for the review-

ing judge to usurp the discretion which is committed to the

trier-of-fact under the law.

9

Il. THE PETITION FOR A WRIT OF CERTIORARI WAS

CLEARLY FILED WITHIN THE REQUIRED TIME

Respondent’s argument that the Petition was untimely is

based on the same type of incomplete and distorted

reasoning which characterizes its entire position that Peti-

tioner should receive no compensation for its dedication

of four years to the successful pursuit of rights on behalf

of Respondent. Although recognizing that Title 28, United

States Code Section 2101(c) governs the “time within

which a petition for writ of certiorari may be filed”, the

Respondent ignores the words, “entry of”, in the Statute

and argues that the words, “the date of the denial of

rehearing”, in Supreme Court Rule 20.4 means that the fil-

ing period starts on the date an opinion is signed rather

than the date such opinion is entered and served on the

parties. This argument ignores its clearly anomalous

result. An opinion denying a rehearing could be signed

and dated but, because of second thoughts, further con-

sideration or any other reason, remain in chambers for

twenty, fifty, or even ninety days (here, twenty-eight

days), and then be entered or filed and distributed to the

parties. Respondent argues that the time from signing the

opinion to its entry should thus reduce the statutory period

for or even bar the filing of an appeal or petition to this

Court without the parties even knowing, until it is too late,

that the rehearing had been denied.

As recognized in the opposing briefs, the start of the

ninety day period under 28 U.S.C. § 2101(c) is that point

in time at which the lower court has fully and finally

disposed of the rights of the parties and a timely petition

for rehearing suspends that disposition until the final

disposition of the petition itself [Citizens Bank of

Michigan City v. Opperman, 249 U.S. 448, 450 (1919);

Supreme Court Practice, Stern and Gressman, Sth ed., at

10

399 (1978)]. However, the opposing brief does not address

the elements which establish that final disposition.

The question of when a final disposition occurs involves

considerations of both the event itself and notice to the

parties; and this question has long been settled by the deci-

sions of this Court. The rights of parties in respect to the

timeliness of proceeding to the Supreme Court “are deter-

mined by the date of actual entry, or of the signing and fil-

ing of the final decree.” [Providence Rubber Co. v.

Goodyear, 73 U.S. 153, 156, 18 L.Ed. 762, 763 (1868);

Emphasis supplied]. Even if there is notice of an opinion,

there must be notice of the entry of the final disposition of

the case to start the ninety day filing period [Scofield v.

N.L.R.B., 394 U.S. 423, 427, 22 L.Ed. 2d 285, 89 S.Ct.

1154, 1156-57 (1969)]. [Cf., Puget Sound Power & Light

Co. v. County of King, 264 U.S. 22, 681 L.Ed. 541, 44

S.Ct. 261 (1924); United States v. Seminole Nation, 299

U.S. 417, 81 L.Ed. 316, 57 S.Ct. 283 (1937); Marquette

Nat. Bank v. First of Omaha Service Corp., 439 U.S. 297,

307, n.18, 58 L.Ed. 2d 534, 99 S.Ct. 54 (1978)].

Here, while the majority opinion and dissenting opinion

of the panel denying rehearing was signed on August 7,

1981, it was neither entered nor filed until September 4,

1981, with the denial of the suggestion for rehearing en

banc, and the parties were thereafter served with this final

disposition of the action in the Second Circuit (Petition,

Appendix 2a and 77a). Respondent’s opposing briefs ad-

mit that the Petition was filed within ninety days of the en-

try, or of the signing AND filing of this final disposition

1]

and receipt of notice. Accordingly, the Petition was timely

under 28 U.S.C. § 2101(c) and the Rules and decisions of

this Court.

Respectfully submitted,

MORTIMOR S. GORDON

460 Park Avenue

New York, New York 10022

Telephone: (212) 838-4600

Counsel for Petitioner

CERTIFICATE OF SERVICE

I hereby certify that on this ___ day of January, 1982,

three copies of this Reply Memorandum were mailed, first

class postage prepaid, to Gary L. Blum, Esq., 425 Park

Avenue, New York, New York 10022, Counsel for

Futuronics Corporation, Respondent. I further certify

that all parties required to be served have been served.

Mortimor S. Gordon

Counsel for Petitioner