648 F.2d 97 (2nd Cir. 1981), 881, Contemporary Mission, Inc. v. United States Postal Service

Docket Nº:881, 882, Dockets 80-6134, 80-6202.
Citation:648 F.2d 97
Party Name:CONTEMPORARY MISSION, INC., Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Angelo J. Gaetano, Richard P. Evans, John Does I, II, and III, Defendants-Appellees.
Case Date:May 04, 1981
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 97

648 F.2d 97 (2nd Cir. 1981)

CONTEMPORARY MISSION, INC., Plaintiff-Appellant,

v.

UNITED STATES POSTAL SERVICE, Angelo J. Gaetano, Richard P.

Evans, John Does I, II, and III, Defendants-Appellees.

Nos. 881, 882, Dockets 80-6134, 80-6202.

United States Court of Appeals, Second Circuit

May 4, 1981

Argued March 27, 1981.

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[Copyrighted Material Omitted]

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William D. O'Reilly, Atkinson, N. H. (Leonard H. Rubin, Anderson & Rubin, New York City, of counsel), for plaintiff-appellant.

Richard N. Papper, Asst. U. S. Atty., S.D. N. Y., New York City (John S. Martin, Jr., U. S. Atty., S.D. N. Y., Michael H. Dolinger, Asst. U. S. Atty., S.D. N. Y., New York City, of counsel), for defendants-appellees.

Before OAKES and MESKILL, Circuit Judges, and SAND, District Judge. [*]

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MESKILL, Circuit Judge:

This is a consolidated appeal from an order and judgment of the United States District Court for the Southern District of New York, Pierce, J., granting the defendants summary judgment and an order denying the plaintiff's post-judgment motion under Fed.R.Civ.P. 60(b). Plaintiff instituted this action against the United States Postal Service and several postal officials claiming, among other things, that the individual defendants and others had conspired to interfere with the plaintiff's rights under the First and Fifth Amendments. Plaintiff sought both monetary damages and an injunction to restrain the defendants from performing any further unlawful acts. For the reasons set forth below, we affirm. Because this appeal concerns the propriety of granting a summary judgment, we set forth the facts in some detail.

BACKGROUND

Contemporary Mission purports to be a not-for-profit corporation engaged in religious and charitable pursuits, and maintains its principal place of business in the State of Connecticut. Appellant consists of a small group of Roman Catholic and Eastern-rite priests who support their organization, "virtually in full," with the revenue generated from a mail-order business. A. 40. Contemporary Mission's line of products has included a weight-reducing bath treatment called "Young & Firm"; golf lessons guaranteed to improve one's golf game by five strokes in five rounds; and tax-saving tips guaranteed to save taxpayers a minimum of $500. Appellant used pseudonyms in connection with its various enterprises; thus, for example, when selling tax tips it employed the name "CM, Inc. Tax Research Center," and when peddling golf lessons, appellant used the name "Golf Research Institute."

In April 1970 the Internal Revenue Service (IRS) granted Contemporary Mission an exemption from federal income tax pursuant to § 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3) (1976). In a letter dated April 23, 1970 the IRS stated the basis of its decision to grant the exemption:

Inasmuch as you are an integral part of the operations of the Missionary Society of the Holy Apostles, which is listed in the Official Catholic Directory, you come within the scope of the above-mentioned ruling. Your exempt status will continue as long as the Society's name appears in the Directory submitted annually to our National Office.

A. 177. The reference to the Missionary Society of the Holy Apostles (Holy Apostles) in the IRS' letter came as a result of a correspondence dated April 10, 1970 in which Father Issac N. Raney of the Holy Apostles had represented that Contemporary Mission was affiliated with his apostolate. A. 243, 366. No formal association between the two organizations, however, ever materialized. A. 314. 1

In 1975 Contemporary Mission applied as a nonprofit organization to the Postal Service for a "Special Bulk Third-Class Rates" permit which would allow appellant to send mail for 3.1 cents per item, rather than 8.3 cents per item, the normal bulk third-class mail rate. Contemporary Mission submitted the April 23, 1970 letter from the IRS and its Missouri "General Not For Profit Corporation" charter as proof of its nonprofit status. Shortly thereafter a special bulk rate permit was issued to appellant. The events which followed in the ensuing years formed the basis of this suit against the Postal Service and the individual defendants, in which Contemporary Mission alleged that the defendants and certain unnamed persons conspired to deprive plaintiff of due process of law and to revoke its postal permit because of its members' religious beliefs.

Defendant Evans' Actions

In 1976, after receiving a series of consumer complaints, the Postal Service commenced

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an investigation 2 of Contemporary Mission's mail order business. Richard P. Evans, a Postal Inspector and one of the named defendants, began the inquiry into appellant's activities in September 1976. Most of the complaints received by the Postal Service concerned appellant's failure to deliver ordered merchandise or to fulfill "guarantees" that had been made in promotional literature.

Contemporary Mission claims that Evans conducted a campaign of harassment against it by turning over consumer complaints to the Connecticut Economic Crime Unit, the Westport Police, and the United States Attorney for the District of Connecticut; extracting a substantially false affidavit, dated January 19, 1977, from Father Leo Ovian, the Assistant Supervisor of the Holy Apostles, in which Father Ovian denied that any affiliation between appellant and his apostolate had ever existed and stated that Contemporary Mission had "manipulated" the Holy Apostles into preparing the April 10, 1970 letter to the IRS; 3 making derogatory comments to a local newspaper about Contemporary Mission; turning over a copy of Father Ovian's affidavit to the IRS in 1977; and finally, contacting a couple of commercial mail firms with whom appellant contracted and inquiring of them whether the priests of appellant wore clerical collars in the course of their business transactions.

Evans attested that he never turned over any of the complaints received by the Postal Service to the Connecticut Economic Crime Unit, but did receive complaints from the Westport Police. Evans further attested that he did conduct discussions with the United States Attorney's office throughout his investigation. With respect to the alleged "extraction" of Father Ovian's affidavit, Evans attested that he interviewed Father Ovian in the presence of Father Raney on January 14, 1977 about the latter's relationship with Contemporary Mission and that Father Ovian "freely and without any promise or threats of any kind" agreed to summarize the interview in a sworn affidavit. Additionally, Evans denied that he ever gave any information to the author of the 1977 newspaper article concerning the appellant. In connection with the IRS, Evans concedes that he contacted the IRS in late 1976 and 1977 about appellant's tax exemption, but states that he did so because the tax exemption had been the basis for granting appellant its nonprofit permit. However, Evans "(did) not recall giving a copy of Father Ovian's affidavit to anyone at IRS." A. 101. Additionally, Evans attested that in early 1979 he contacted two of appellant's contract mailers to determine the volume of mail being sent by them on behalf of appellant, and that he may have questioned whether the members of appellant wore clerical garb, since they had when they applied for the nonprofit permit in 1975. Finally, Evans concluded in his affidavit that he acted in good faith, knew nothing of appellant's religious beliefs, and at all times acted within the scope of his authority. 4

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Defendant Gaetano's Actions

Plaintiff also alleges that defendant Angelo J. Gaetano, a Mail Classification Clerk, twice interrupted the plaintiff's mailings without authorization. In 1976 the Postal Service received complaints about appellant's use of nonprofit postal rates for what appeared to be commercial activities. A meeting was held in which members of Contemporary Mission, Gaetano, and two other postal officials discussed the problem. In the course of the discussion, appellant contended that it had received previous clearance to use several of the pseudonyms. After the meeting, a letter was prepared by Gaetano outlining the irregularities involving appellant's mailings that still concerned the Postal Service. The letter was sent to appellant on March 16, 1976.

On March 22, 1976 Gaetano instructed a postal clerk to "hold" appellant's bulk mailings which suddenly had dramatically increased. Gaetano attested that his action, which he characterized as routine, resulted from his uncertainty concerning the validity of appellant's permit. The following day a meeting took place among appellant, appellant's lawyer, and postal officials at which Contemporary Mission "pointed out that Gaetano had arbitrarily interfered with our mail and threatened to sue Gaetano for damages if he continued to do such things." A. 38. Thereafter, the Postal Service agreed to accept appellant's mailings. Appellant concedes that it was caused no harm by the brief interruption. 5

Three years later, on May 7, 1979, one of Gaetano's superiors handed him a memorandum from the Postal Inspection Service, which incorporated the final report of Inspector Evans. The report noted that, in 1970, "the major determining factor in granting the non-profit mailing rate" to Contemporary Mission had been the passage in the April 23, 1970 IRS letter which stated that appellant was "an integral part of the operations of the Missionary Society of The Holy Apostles" and thus entitled to share in the Holy Apostles' tax exemption. Annexed to the report were sworn statements of Father Ovian and Father Raney of the Holy Apostles which contradicted the aforementioned IRS letter with statements to the effect that Contemporary Mission had never been affiliated with the Holy Apostles. The Postal Inspector concluded in the report that Contemporary Mission must...

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