MILLER v. AMERICAN TELEPHONE & TELEGRAPH COMPANY 759Cite as 507 F~.2d 759 (1974)

easily meets that test. Appellees do notallege that it is invidiously discriminato-ry in a constitutional sense, and the clas-sification is a rational means of advanc-ing the purpose of the AFDC program:encouraging the presence of a relative inthe home of a dependent child to super-vise the child's upbringing.

The judgment of the district court isreversed.

Russell P. MILLER and Margaret JaneMiller, his wife, Appellants,

V.AMERICAN TELEPHONE & TELE-

GRAPH COMPANY (hereafterAT&T) et al.No. 73-2007.

United States Court of Appeals,Third Circuit.

Argued Sept. 3, 1974.Decided Nov. 4, 1974.

Stockholders brought derivative ac-tion against communications corporationand certain directors for, inter alia, pre-liminary and permanent injunctive'reliefagainst provision of further telephoneservice by the corporation to nationalcommittee of political party until debtowed by the committee for communica-tions services was paid. The UnitedStates District Court for the EasternDistrict of Pennsylvania, Louis C. Bech-tle, J., 364 F.Supp. 648, dismissed forfailure to state claim and the stockhold-ers appealed. The Court of Appeals,Seitz, Chief Judge, held that complaintin which it was alleged that decision notto collect debt was violative of federalprohibition against corporate campaignspending was sufficient to state claimunder New York law for breach of di-rectors' fiduciary duty.

Reversed and remanded.

1. Courts 0'406.5 (6)In viewing motion to dismiss for

failure to state claim, Court of Appealsmust consider all facts alleged in com-plaint and every inference fairly deduci-ble therefrom in the light most favor-able to plaintiffs.

2. Federal Civil Procedure '5=1772Complaint should not be dismissed

for failure to state claim unless it ap-pears that plaintiffs would not be enti-tled to relief under any facts which theymight prove in support of their claim.

3. Corporations ('1320(7)Complaint which was filed in stock-

holders' derivative action against corpo-ration and all but one of its directorsand in which it was alleged that failureto collect outstanding debt owed by na-tional committee of political party forcommunication services provided by thecorporation violated federal prohibitionagainst corporate campaign spendingwas sufficient to state claim under NewYork law for breach of directors' fiduci-ary duty. 18 U.S.C.A. § 610; 28 U.S.C.A. § 1332; Federal Election CampaignAct of 1971, § 301 et seq., 2 U.S.C.A. §431 et seq.; Communications Act of1934, § 202(a), 47 U.S.C.A. § 202(a).

4. Courts (9-359.1(7)In stockholders' derivative action,

pertinent law on question of corporatedirectors' fiduciary duties was that ofthe state in which corporation had beenincorporated.

5. Corporations @-393Under "sound business judgment"

rule, courts eschew intervention in cor-porate decision-making if judgment ofdirectors and officers is uninfluenced bypersonal consideration and is exercisedin good faith.

6. Corporations e-3-0(l)Under New York law, illegal acts

committed by directors of corporationmay amount to breach of fiduciary dutyeven if acts have been committed in or-der to benefit corporation.

760 ~~507 FEDERAL REPORTER, 2d SERIES

7. Elections (&'317Shareholders are within class for

whose protection federal prohibitionagainst corporate political contributionswas enacted. 18 U.S.C.A. § 610.8. Corporations (&-20(11)

For stockholders of communicationscorporation to establish that directors ofcorporation had violated federal prohibi-tion against corporate campaign spend-ing by failing to collect from nationalcommittee of political party a debt owedfor communication services provided atparty's convention, stockholders wouldhave to establish that corporation madecontribution of money or something ofvalue to the committee in connectionwith a federal election for the purposeof influencing the outcome of that elec-tion. 18 U.S.C.A. § 610.

9. Corporations @8:320 (11)To prove that communication corpo-

ration's failure to collect debt owed bynational committee of political party forcommunication services provided at par-ty convention constituted a "contribu-tion" within federal prohibition againstfederal campaign spending, stockholderswho brought derivative action would berequired to establish that the corpora-tion in fact made a gift to the commit-tee of the value of the communicationservices and such gift could be shown bydemonstrating that services were pro-vided with no intention to collect forthem, that valid debt was created attime services were rendered but was dis-charged formally or informally or thatdebt was no longer collectible as resultof failure of corporation's directors tosue within appropriate period of limita-tions. 18 U.S.C.A. § 610.

10. Corporations cs:320(11)Stockholders who brought deriva-

tive action against communications cor-poration and certain of its directors forfailure to collect debt owed by nationalcommittee of political party for commu-nication services provided at party's con-vention, and who alleged that failure tocollect the debt was in violation of fed-eral prohibition against corporate cam-

paign spending had burden of establish-ing nexus between alleged gift and afederal election. 18 U.S.C.A. § 610.11L Corporations cl-320(11)

Stockholders who brought derivativeaction against corporation and certain ofits directors for failure to collect debtowed to the corporation by national com-mittee of political party for communica-tion services provided at party's conven-tion and who contended that failure tocollect the debt was violative of federalprohibition against corporate campaignspending were required to convince factfinder that a gift, whenever made, wasmade for purpose of aiding one candi-date or party in a federal election andthat legitimate business justificationsdid not underlie alleged inaction of di-rectors. 18 U.S.C.A. § 610.12. Elections (&317

Mere failure of corporation to col-lect debt owed by a national committeeof political party for communicationservices provided by corporation at par-ty convention would not violate federalprohibition against corporate campaignspending. 18 U.S.C.A. § 610.13. Courts e-406.5(6)

On appeal from dismissal of stock-holders' derivative action against corpo-ration and certain of its directors forfailure to collect debt owed corporationby national committee of political partyfor communication services furnished bythe corporation, direct federal cause ofaction would not be implied in favor ofstockholders against directors for al-leged violation of federal prohibitionagainst corporate campaign spendingand Communications Act where federallaw count was not included in complaintand there was no indication that ques-tion had ever been presented to districtcourt. 18 U.S.C.A. § 610; Communica-tions Act of 1934, § 202(a), 47 U.S.C.A.§ 202(a) ; Fed.Rules Civ.Proc. rule 15,28 U.S.C.A.

Clarke F. Hess, King of Prussia, Pa.,for appellants; Butera & Detwiler, Kingof Prussia, Pa., of counsel.

760

MILLER v. AMERICAN TELEPHONE & TELEGRAPH COMPANY 761Cite as 507 F.2d 759 (1974)

Philip M. Hammett, Eugene A. Spec-tor, Nicholas E. Chimicles, Philadelphia,Pa., for appellees; Schnader, Harrison,Segal & Lewis, Philadelphia, Pa., ofcounsel.

Before SEITZ, Chief Judge, GIB-BONS and GARTH, Circuit Judges.

SEITZ, Chief Judge.Plaintiffs, stockholders in American

Telephone and Telegraph Company("AT&T"), brought a stockholders' de-rivative action in the Eastern Districtof Pennsylvania against AT&T and allbut one of its directors. The suit cen-tered upon the failure of AT&T to col-lect an outstanding debt of some $1.5million owed to the company by theDemocratic National Committee("DNC") for communications servicesprovided by AT&T during the 1968Democratic national convention. Feder-al diversity jurisdiction was invoked un-der 28 U.S.C. § 1332.

Plaintiffs' complaint alleged that "nei-ther the officers or directors of AT&Thave taken any action to recover theamount owed" from on or about August20, 1968, when the debt was incurred,until May 31, 1972, the date plaintiffs'amended complaint was filed. The fail-ure to collect was alleged to have in-volved a breach of the defendant direc-tors' duty to exercise diligence in han-dling the affairs of the corporation, tohave resulted in affording a preferenceto the DNC in collection procedures inviolation of § 202(a) of the Communica-tions Act of 1934, 47 U.S.C. § 202(a)(1970), and to have amounted toAT&T's making a "contribution" to theDNC in violation of a federal prohibi-tion on corporate campaign spending, 18U.S.C. § 610 (1970).'

Plaintiffs sought permanent relief inthe form of an injunction requiringI. This was the statute in force at tile time

of the 1968 Democratic convention.Amendments not pertinent to the iiroblembefore us were made by the Federal ElectionCampaign Act of 1971, 86 Stat. 3 (codifiedin scattered sections of 2, 18 U.S.C.). See

507 F 2d-48V2

2AT&T to collect the debt, an injunctionagainst providing further services to theDNC until the debt was paid in full, anda surcharge for the benefit of the corpo-ration against the defendant directors inthe amount of the debt plus interestfrom the due date. A request for a pre-liminary injunction against the provi-sion of services to the 1972 Democraticconvention was denied by the districtcourt after an evidentiary hearing.

On motion of the defendants, the dis-trict court dismissed the complaint forfailure to state a claim upon which re-lief could be granted. 364 F.Supp. 648(E.D.Pa.1973). The court stated thatcollection procedures were properlywithin the discretion of the directorswhose determination would not be over-turned by the court in the absence of anallegation that the conduct of the direc-tors was "plainly illegal, unreasonable,or in breach of a fiduciary duty* . . ." Id. at 651. Plaintiffs ap-peal from dismissal of their complaint.

[1-3] In viewing the motion to dis-miss, we must consider all facts allegedin the complaint and every inferencefairly deductible therefrom in the lightmost favorable to the plaintiffs. A com-plaint should not be dismissed unless itappears that the plaintiffs would not beentitled to relief under any facts whichthey might prove in support of theirclaim. Judging plaintiffs' complaint bythese standards, we feel that it doesstate a claim upon which relief can begranted for breach of fiduciary dutyarising from the alleged violation of 18U.S.C. § 610.

[4, 5] The pertinent law on the ques-tion of the defendant directors' fiduci-ary duties in this diversity action is thatof New York, the state of AT&T'sincorporation.2 See Perlman v. Feld-

18 U.S.C. § 610 (1970), as amended (Supp.jII, 1972).

2. Although pilaintiffs alleged in their com-plaint that AT&T is a Delaware corporation,they have not suggested the incorrectness of

762 ~~507 FEDERAL REPORTER, 2d SERIES

mann, 219 F.2d 173, 175 (2d Cir.), cert.denied, 349 U.S. 952, 75 S.Ct. 880, 99 L.Ed. 1277 (1955) ; Kroese v. GeneralCastings Corporation, 179 F.2d 760, 765(3d Cir.), cert. denied, 339 U.S. 983, 70S.Ct. 1026, 94 L.Ed. 1386 (1950) ; Re-statement (Second) of Conflicts § 309(1971). The sound business judgmentrule, the basis of the district court's dis-missal of plaintiffs' complaint, expressesthe unanimous decision of Americancourts to eschew intervention in corpo-rate decision-making if the judgment ofdirectors and officers in uninfluenced bypersonal considerations and is exercisedin good faith. Pollitz v. Wabash Rail-road Co., 207 N.Y. 113, 100 N.E. 721(1912); Bayer v. Beran, 49 N.Y.S.2d 2,4-7 (Sup.Ct.1944); 3 Fletcher, PrivateCorporations § 1039 (perm. ed. rev. vol.1965). Underlying the rule is the as-sumption that reasonable diligence hasbeen used in reaching the decision whichthe rule is invoked to justify. Casey v.Woodruff, 49 N.Y.S.2d 625, 643 (Sup.Ct.1944).

Had plaintiffs' complaint alleged onlyfailure to pursue a corporate claim, ap-plication of the sound business judgmentrule would support the district court'sruling that a shareholder could not at-tack the directors' decision. See UnitedCopper Securities Co. v. AmalgamatedCopper Co., 244 U.S. 261, 37 S.Ct. 509,61 L.Ed. 1119 (1917); Clifford v. Met-ropolitan Life Insurance Co., 264 App.Div. 168, 34 N.Y.S.2d 693 (2d Dept.1942) ; 13 Fletcher, Private Corpora-tions § 5822 (perm. ed. rev. vol. 1970).Where, however, the decision not to col-lect a debt owed the corporation is itselfalleged to have been an illegal act, dif-ferent rules apply. When New York lawregarding such acts by directors is con-sidered in conjunction with the underly-ing purposes of the particular statuteinvolved here, we are convinced that thebusiness judgment rule cannot insulatethe defendant directors from liability if

the court's determination on the applicationfor p~relimninary injunction that AT&T is infact organized under the laws of New York.

they did in fact breach 18 U.S.C. § 610,as plaintiffs have charged.

[6] Roth v. Robertson, 64 Misc. 343,118 N.Y.S. 351 (Sup.Ct.1909), illustratesthe proposition that even though comn-mitted to benefit the corporation, illegalacts may amount to a breach of fiduci-ary duty in New York. In Roth, themanaging director of an amusementpark company had allegedly used corpo-rate funds to purchase the silence ofpersons who threatened to complainabout unlawful Sunday operation of thepark. Recovery from the defendantdirector was sustained on the groundthat the money was an illegal payment:

For reasons of public policy, we areclearly of the opinion that paymentsof corporate funds for such purposesas those disclosed in this case must becondemned, and officers of a corpora-tion making them held to a strict ac-countability, and be compelled to re-fund the amounts so wasted for thebenefit of stockholders. . . . Tohold any other rule would be establish-ing a dangerous precedent, tacitlycounte-nancing the wasting of corpo-rate funds for purposes of corruptingpublic morals. Id. at 346, 118 N.Y.S.at 353.

The plaintiffs' complaint in the instantcase alleges a similar "waste" of $1.5million through an illegal campaign con-tribution.

Abrams v. Allen, 297 N.Y. 52, 74 N.E.2d 305 (1947), reflects an affirmationby the New York Court of Appeals ofthe principle of Roth that directors mustbe restrained from engaging in activi-ties which are against public policy. InAbrams the court held that a cause ofaction was stated by an allegation in aderivative complaint that the directorsof Remington Rand, Inc., had relocatedcorporate plants and curtailed produc-tion solely for the purpose of intimidat-ing and punishing employees for theirinvolvement in a labor dispute. The

We conclude, therefore, that plaintiffs havetacitly admitted that AT&T is a New Yorkcorporation, and we will treat it as such.

-1I

1

m

762

MILLER v. AMERICAN TELEPHONE & TELEGRAPH COMPANY 763Cite. as 507 F.2d 759 (1074)

Court of Appeals acknowledged that,"depending on the circumstances," proofof the allegations in the complaint mightsustain recovery, inter ailia, under therule that directors are liable for corpo-rate loss caused by the commission of an"unlawful or immoral act." Id. at 55, 74N.E.2d at 306. In support of its hold-ing, the court noted that the closing offactories for the purpose alleged was op-posed to the public policy of the stateand nation as embodied in the New YorkLabor Law and the National Labor Rela-tions Act. Id, at 56, 74 N.E.2d at 307.3

[71 The al leged violation of the fed-eral prohibition against corporate politi-cal contributions not only involves thecorporation in criminal activity but sim-ilarly contravenes a policy of Congressclearly enunciated in 18 U.S.C. § 610.4That statute and its predecessor reflectcongressional efforts: (1) to destroythe influence of corporations over elec-tions through financial contributionsand (2) to check the practice of usingcorporate funds to benefit political par-ties without the consent of the stock-holders. United States v. CIO, 335 U.S.106, 113, 68 S.Ct. 1349, 92 L.Ed. 1849(1948).

The fact that shareholders are withinthe class for whose protection the stat-ute was enacted gives force to the argu-ment that the alleged breach of thatstatute should give rise to a cause of ac-

3. That violation of a federal statute is thebasis of the breach of fiduciary duty andthat therefore tQhe court is required to inter-pret the federal statute has not (d terredlNew York courts from entertaining suchsuits against directors. ,See IKnopfler vBohen, 15 A.D.2d 922, 225 N`~.Y.S.2d 609 (2dDept. 1962) cf. Simon v. Socony VacuumOil Co., 179 Mlisc. '202, 38thNY~ 270(Sup.Ct.1942).

4. We note that prior to June 1, 1974, corpo-rate political contributions made "directly orindirectly" violated New York law. Law ofJuly 20, 1965, ch. 10-31, § 43, L1965] -N.Y.Laws 1783 (repealed 1974). Furthermore,apart from the statutory prohibition, politi-cal donations by corporations were apparent-ly ultra vires acts in New York. ,See Peopleex rel. Perkins v. Moss, 187 N.Y. 410, 80 N.E. 383 (1907). Corporations or organiza-

tion in those shareholders to force thereturn to the corporation of illegallycontributed funds. Since political con-tributions by corporations can bechecked and shareholder control over thepolitical use of general corporate fundseffectuated only if directors are re-strained from causing the corporation toviolate the statute, such a violationseems a particularly appropriate basisfor finding breach of the defendant di-rectors' fiduciary duty to the corpora-tion. Under such circumstances, the di-rectors cannot be insulated from liabilityon the ground that the contribution wasmade in the exercise of sound businessjudgment.

Since plaintiffs have alleged actualdamage to the corporation from thetransaction in the form of the loss of a$1.5 million increment to AT&T'streasury,5 we conclude that the com-plaint does state a claim upon which re-lief can be granted sufficient to with-stand a motion to dismiss. 6

[8] We have accepted plaintiffs' alle-gation of a violation of 18 U.S.C. § 610as a shorthand designation of the ele-ments necessary to establish a breach ofthat statute. This is consonant with thefederal practice of notice pleading. SeeConley v. Gibson, 355 U.S. 41, 47-48, 78S.Ct. 99, 2 L.Ed.2d 80 (1957); Fed.R.

tions financially supported by corporationsdoing business in the state are now permit-ted to make contributions up to $5,000 peryear. N.Y. Election Law § 480 (McKinney'sConsol.Laws, c. 17, Supp.1974).

5 Under -New York law, allegation of breacheven of a federal statute is apparently insuf-ficient to state a cause of action unless th 'breach caused independent damage to thecorporation. See Diamond v. Davis, 263App.Div. 68, 31 N.Y.S.2d. 582 (1st Delit.1941) ; Borden v. Cohen, 231 N.Y.S.2d 902(th~up.Ct.3962). Bu~t svee Runeie v. BankersTrust Co., 6 N.Y.S.2d 623 (Sup.Ct.193S).

6. We express no opinion today on the ques-tioii of whether plaintiffs' complaint mayalso state a cause of action for breach of fi-duciary duty arising from the alleged viola-tion of 47 U.S. C. § 202 (a).

I '

im w

764 ~~507 FEDERAL REPORTER, 2d SERIES

Civ.P. 8(f). That such a designation issufficient for pleading purposes doesnot, however, relieve plaintiffs of theirultimate obligation to prove the elementsof the statutory violation as part oftheir proof of breach of fiduciary duty.At the appropriate time, plaintiffs willbe required to produce evidence suffi-cien t to establish three distinct elementscomprising a violation of 18 U.S.C. §610: that AT&T (1) made a contribu-tion of money or anything of value tothe DNC (2) in connection with a feder-al election (3) for the purpose of influ-encing the outcome of that election. SeeUnited States v. Boyle, 157 U.S.App.D.C.166, 482 F.2d 755, cert. denied, 414 U.S.1076, 94 S.Ct. 593, 38 L.Ed.2d 483(1973); United States v. Lewis FoodCo., Inc., 366 F.2d 710 (9th Cir. 1966).The first two of these elements are ob-vious from the face of the statute; thethird was supplied by legislative historyprior to being made explicit by 1972amendments to definitions applicable to§ 610.7

A "Contribution" to the DNC

[9] In proving a contribution to theDNC, plaintiffs will be required to es-tablish that AT&T did in fact make agift to the DNC of the value of the com-munications services provided to the1968 Democratic convention. Such agift could be shown, for example, bydemonstrating that the services wereprovided with no intention to collect forthem. Likewise, plaintiffs could meettheir burden in this respect by provingthat although a valid debt was created

7. See United States v. UAWY, 352 U.S. 567,589, 77 S.Ct. 529, 1 L.Ed.2d 563 (1957),where, after examining the legislative histo-ry and chronological development of federalp~rohibitions on campaign contributions bycorporations and labor organizations, the Su-preme Court stated: "The evil at whichCongress has struck in § 313 [now 18 U.S.C. § 610] is the use of corporation or unionfunds to influence the public at large to votefor a particular candidate or a particularparty."

As amended by the Federal Election Cam-paign Act of 1971 (effective April 7, 1972),

at the time the services were rendered,that debt was discharged formally or in-formally by the defendants or is nolonger legally collectible as a result ofthe defendants' failure to sue upon itwithin the appropriate period oflimitation.8 In any event, as a thresholdmatter, plaintiffs will be required toshow that actions of the defendants haveresulted in the surrender of a validclaim of $1.5 million for services ren-dered to the DNC.

In Connection With a Federal Election[10] Plaintiffs must also establish

that the contribution was in connectionwith a federal election. Obviously, thecommunications services were providedin connection with the 1968 election. If,however, a valid debt was created atthat time and the alleged gift was madeat some later time when the debt wasforgiven or became legally uncollectible,the contribution may have been made inconnection with a subsequent federalelection. Plaintiffs did not allege thedate of the contribution in their com-plaint, but their burden on remand willinclude establishing a nexus between thealleged gift and a federal election.

For the Purpose of Influencing an Elec-tion

[11, 12] Finally, plaintiffs must alsoconvince the fact finder that the gift,whenever made, was made for the pur-pose of aiding one candidate or party ina federal election. Proof of non-collec-tion of a debt owed by the DNC will beinsufficient to establish the statutory vi-

the definition of "contribution" for purposesof 18 U.S.C. § 610 is a gift of money oranything of value "made for the liurpose ofinfluencing the nomination for election, orelection" of any person to federal office orfor influencing the outcome of a primary ornational nominating convention. 18 U.S.C.591 (1970), as amended (Supp. II 1972).

8. See 47 U.S.C. § 415(a) (1970) which re-quires communications carriers to commnenceactions for recovery of charges within oneyear from the time the cause of action ac-crues.

764

-IqMM

BARD, v. SEAMANSCite as 507 F.2d 765 (1974)

olation upon which the defendants'breach of fiduciary duty is predicated;plaintiffs must shoulder the burden ofp~roy g an impermissible motivation un-

- -derlying the alleged inaction. In the ab-sence of direct proof of a partisan pur-pose on the part of the defendants,plaintiffs may produce evidence suffi-cient to justify the inference that theonly discernible reason for the failure topursue the debtor was a desire to assistthe Democratic Party in achieving suc-cess in a federal election. At a mini-mum, plaintiffs must establish that le-gitimate business justifications did notunderlie the alleged inaction of the de-fendant directors. The possibility ofthe existence of such reasonable businessmotives illustrates the need for proof ofmore than mere non-collection even ofthe debt of a political party in order toestablish a breach of 18 U.S.C. § 610.9

III.[13] In addition to advancing claims

of breach of fiduciary duty by the de-fendants, plaintiffs have urged in thiscourt that we "imply" a direct federalcause of action in their favor againstthe defendant directors for the allegedviolations of 18 U.S.C. § 610 and 47 U.S.C. § 202(a). A federal law count wasnowhere included in the plaintiffs' com-plaint and there is no indication in therecord that this question was everpresented to the district court. Afterremand of this case, plaintiffs will havean opportunity to move to amend theircomplaint pursuant to Rule 15, Fed.R.Civ.P., and the district court will actupon any such motion within the discre-tion afforded under that rule.

The order of the district court will bereversed and the case remanded for fur-ther proceedings consistent with thisopinion.

9. Compiling an unsecured debt of this magni-tude is no longer possible under new regula-tions of the Federal Communications Com-mission adopted May 5, 1972. The FCCregulations, 47 C.F.R. § 64.801-804 (1973),permit the granting of unsecured credit topolitical candidates but require terminationof services if charges remain unpaid for 15

Cha esW. BARD, Plaintiff-Appellant,V.

Robert C SEAMANS, Secretary of theAir re, and Major General Alton D.Slay, ommanding General, Lowry AirForce ase, Defendants-Appellees.

No. 74-1016.

Unite States Court of Appeals,Tenth Circuit.

ged July 12, 1974.cded Dec. 9, 1974.

A discha ged serviceman brought anaction seekin to have his "dischargefor unsuitabil y" declared void and ex-punged. The United States DistrictCourt for the istrict of Colorado, FredM. Winner, J., dismissed the suit, andthe serviceman ppealed.' The Court ofAppeals, Hollow , Circuit Judge, heldthat the court ha subject matter juris-diction over the a ton under the Admin-istrative Procedue Act but that theserviceman hadf iled to exhaust hisadministrative rem dies by not havingfirst resorted~ to th Board for Correc-tion of Military Rec rds.

Affirmed as mo ified.

1. Courts G=284(3)Federal District ourt had subject

matter jurisdiction u er Administra-tive Procedure Act ov action by ser-viceman to have his "d charge for un-suitability" declared voi and expungedfor failure of air fiorcl personnel tofollow regulations in hning discharge.5 U.S.C.A. §§ 551 et se 701 et seq.,702-704, 706; 28 U.S. §§ 1331,2201; Fed.Rules Civ.Proc ule 8 (a), 28U.S.C.A.2. Armed Services 1922

Action of former ser, iceman tohave military "discharge for nsuitabil-

days and the debtor does notp within 7days after notice givcn "forthiwit ' upon ex-piration of the 15 day period. Common car-riers are explicitly required to act to collectthe unpaid balance prior to the running ofthe one year statute of limitations found in47 U.S.C. § 415(a) (1970).

765

1V