Zeller v. United States

• Decision Date: 21 March 1979
• Docket Number: No. 76 C 508.,76 C 508.
• Citation: 467 F. Supp. 487
• Parties: Sol ZELLER, Plaintiff, v. UNITED STATES of America, Interstate Commerce Commission, Marvin Kampel, George Stafford, and Daniel LoRusso, Defendants.
• Court: U.S. District Court — Eastern District of New York

467 F. Supp. 487

Sol ZELLER, Plaintiff, v. UNITED STATES of America, Interstate Commerce Commission, Marvin Kampel, George Stafford, and Daniel LoRusso, Defendants.

No. 76 C 508.

United States District Court, E. D. New York.

March 21, 1979.

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COPYRIGHT MATERIAL OMITTED

Harry E. Youtt, Thal & Youtt, New York City, for plaintiff.

Richard P. Caro, Asst. U. S. Atty., Brooklyn, N. Y., Edward R. Korman, U. S. Atty., Eastern District of New York, Brooklyn, N. Y., for defendants.

GEORGE C. PRATT, District Judge:

This lawsuit, seeking damages and injunctive relief under various federal statutes and pendent state claims, presents several questions of law, the most important ones involving interpretation of the federal Freedom of Information Act and the federal Privacy Act. Defendants move for dismissal, partly for judgment on the pleadings pursuant to FRCP 12(c), and partly for summary judgment pursuant to FRCP 56(b). Papers filed with the court for consideration on the motion include statements pursuant to Eastern District Rule 9(g), affidavits of counsel and parties, Interstate Commerce Commission files and records pertaining to plaintiff, and extensive memoranda of law.

Although the major issues involve solely questions of law, the undisputed factual and procedural context in which they arise provides a necessary perspective from which to approach them.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1970 and 1971, plaintiff Sol Zeller was engaged in the business of brokering charter bus tours for individuals and groups in the New York-Long Island area, usually for vacation, sight-seeing, or educational purposes. Doing business under the names "Sol Zeller Tours" and "Executive Motor Tours", plaintiff acted as a broker between clients seeking transportation and available charter bus companies. Zeller did not possess the broker's license from the Interstate Commerce Commission (ICC) that is required of individuals who, for compensation, arrange for interstate transportation of passengers or property. See Part II, § 211(a) of the Interstate Commerce Act, 49 U.S.C. § 311(a).¹

In 1970, Zeller arranged a charter bus tour for the Hillel Country Day School of Lawrence, New York. Planned as a one-day interstate excursion on July 15, 1970, from Lawrence, on Long Island, to Lancaster, Hershey and York, Pennsylvania, with a return to Lawrence, the trip ended in a tragic highway accident near Allentown, Pennsylvania, that killed seven children who were passengers on the chartered bus, and injured many others.²

In August, 1971, the ICC commenced a civil action in the United States District Court for the Eastern District of New York,³ pursuant to the Interstate Commerce Act, 49 U.S.C. § 311(a) & (c), and § 322(b)(1), seeking to restrain Zeller, doing business as Sol Zeller Tours and Executive Motor Tours, from continuing to

broker the transportation of passengers by motor vehicle for compensation in interstate or foreign commerce * * * without first having obtained * * * a broker's license authorizing such transactions * * * as required by * * * the Interstate Commerce Act. See Exhibit A to Defendants' Memorandum of Law in Support of Motion to Dismiss and for Summary Judgment, Civil Action No. 71 C 1037, Complaint at 3.

An appendix to that complaint listed transactions alleged to be representative instances of plaintiff's unlawful arrangement of transportation. Among those listed was the ill-fated July 15, 1970 Hillel Country Day School trip.

Zeller's answer to that complaint denied that any of the transactions listed in the appendix had been arranged in violation of law; in response to requests for admission, Zeller denied the receipt of compensation for the transportation listed. Nevertheless, the case was concluded on June 12, 1972, after Zeller consented to "Findings of Fact and Conclusions of Law" signed by the late Judge Judd, in which it was found that

on various dates and on numerous occasions between March 6, 1970, and the date of the filing of the complaint in said action, said defendant for compensation as a broker sold and offered for sale transportation subject to * * * the Interstate Commerce Act * * * and held himself out by advertisement * * as a person who * * * arranges for such transportation * * *. Exhibit A to Defendants' Memorandum, Findings of Fact and Conclusions of Law at 2, June 12, 1972.

The court also found that Zeller had arranged for such transportation on "some of the dates specified in the appendix attached and made a part of the complaint * * *." Id. at 3.

On the same day, Judge Judd granted judgment enjoining Zeller from independently brokering motor transportation for compensation in interstate or foreign commerce, and from holding himself out to broker such transportation, without first obtaining a broker's license from the ICC. The judgment was consented to by Zeller personally and by his counsel. See Exhibit A to Defendants' Memorandum.

On the following day, June 13, 1972, the ICC regional office in Boston, Massachusetts, disseminated to various newspapers and trade publications as well as to other ICC regional offices, a press release describing the consent judgment and the fact that Zeller had been enjoined from independently brokering motor transportation for compensation in interstate commerce without first obtaining a broker's license from the ICC. The press release read as follows:

For Release: IMMEDIATE June 13, 1972 COURT ACTION: INTERSTATE COMMERCE COMMISSION v SOL ZELLER, doing business as SOL ZELLER TOURS and EXECUTIVE MOTOR TOURS

In the United States District Court for the Eastern District of New York — Honorable Orrin G. Judd, Judge.

On June 12, 1972 at Brooklyn, New York, judgment was entered permanently enjoining the defendant Sol Zeller, doing business as Sol Zeller Tours and Executive Motor Tours, Brooklyn, New York, from brokering motor transportation for compensation in interstate or foreign commerce, or holding himself out to broker such transportation, without first obtaining a broker's license from the Interstate Commerce Commission.

The complaint filed in this case alleged that the defendant, a passenger broker who held and holds no broker's license from the Interstate Commerce Commission, had in violation of the Interstate Commerce Act for compensation arranged for and sold the interstate transportation by motor bus of various groups, including the transportation of children from the Hillel Country Day School, Lawrence, Long Island, New York to Lancaster, Hershey and York, Pennsylvania which prematurely ended in a fatal accident on July 15, 1970 near Allentown, Pennsylvania in which seven of the children were killed. The charter bus operator involved in that charter trip, Tedesco Bus Co., Inc., had previously on October 1, 1971 been fined $3,000 for violations of the Interstate Commerce Act in the United States District Court for the District of New Jersey as a result of a criminal action instituted at the instance of the Interstate Commerce Commission.

The instant case was instituted and presented to the court by the Commission's Bureau of Enforcement upon information furnished by the Bureau of Operations. (Refer E 2-71-19).

Over a year later, in late 1973, defendant Marvin Kampel, who was employed by the ICC as a district supervisor in the New York area, was instructed by his superiors to investigate whether Zeller was violating the Interstate Commerce Act or was operating in violation of the 1972 injunction.⁴ His investigation was conducted during 1974 and 1975, and included field interviews with known or possible customers of Zeller. On at least one occasion, Kampel gave a copy of the June 13, 1972 press release to the person being interviewed. Kampel Aff., ¶ 6.

In addition to the investigation, Kampel also at times assisted prospective applicants for brokers' licenses who visited the ICC offices in New York. On at least six occasions he distributed copies of the press release to such individuals in order to demonstrate the consequences of operating without a broker's license. Kampel Aff. ¶ 7. Kampel had no part, however, in the preparation and initial distribution of the press release.

By letter dated April 13, 1975, addressed to the Secretary of the ICC, Zeller contested the wording of the 1972 press release on the ground that it contained statements and implications that were inaccurate, misleading, and prejudicial. He asserted that much of the language in the press release had been taken out of context; that the press release incorrectly raised implications connecting Zeller's violation of the Interstate Commerce Act with the bus accident near Allentown; that the press release prejudiced him by associating him with the carrier on the bus trip and by stating that the carrier had been fined in a previous criminal proceeding; and finally, that the press release failed to indicate that the consent judgment did not prevent him from acting as an agent for a broker or being otherwise employed by a broker. Zeller requested that appropriate corrections be made, and demanded access to the complete ICC file and all ICC records and documents pertaining to him. See Rec. at 51-53.⁵

The ICC responded that it considered the press release to be factually correct. It construed plaintiff's April 13, 1975 request as having been made pursuant to the Freedom of Information Act, 5 U.S.C. § 552 (FOIA), and advised him that he was entitled to examine approximately 108 pages of material; he was denied access to other ICC records relating to him on the ground that they fell into several exemptions contained in that statute. Letter dated May 12, 1975, addressed to plaintiff from Acting Secretary of ICC, Rec. at 47-48. Certain records were withheld on the ground that they were wholly or partially exempt as intra-agency memoranda, FOIA(b)(5);⁶ other documents were considered investigatory records exempt on the ground that their production...