National City Bank v. Battisti

581 F.2d 565
CourtCourt of Appeals for the Sixth Circuit
DecidedDecember 2, 1977
DocketNo. 77-3532
StatusPublished
Cited by9 cases

This text of 581 F.2d 565 (National City Bank v. Battisti) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National City Bank v. Battisti, 581 F.2d 565 (6th Cir. 1977).

Opinion

PER CURIAM.

This court has received briefs and has heard extensive oral arguments upon a petition for mandamus or prohibition filed by plaintiff Banks against a United States District Judge for the Northern District of Ohio, Eastern Division. The relief sought is the vacating of two orders dated November 4, 1977 and November 18, 1977, entered by said District Judge in a school desegregation case, Reed v. Rhodes, which was recently remanded to him by this court for further consideration under the recent holdings of the United States Supreme Court in Dayton Board of Education v. Brinkman, 433 U.S. 406, 97 S.Ct. 2766, 53 L.Ed.2d 851 (1977).

In March 1977 the Board of Education of Cleveland (hereinafter the Board) determined that it required $35,000,000 in addition to its anticipated current receipts from taxes to operate the schools for the April— June 1977 period. The Board issued “Current Tax Revenue Notes” in that amount, with the petitioners purchasing $15,000,000 of these notes on April 1, 1977, with a maturity date of December 29, 1977. The Board resolution authorizing the issuance of the notes recited that the Board has levied taxes sufficient to “discharge such notes at maturity” and further provided—

Such tax shall be placed before and in preference to all other items and for the full amount thereof. The funds derived from such tax levy are irrevocably pledged for the payment of the interest and principal of such notes when and as the same fall due.

In August 1977 the Auditor of the State of Ohio, pursuant to O.R.C. § 3313.483, conducted an audit which revealed that the Board would incur a deficit in excess of $19,000,000 by December 31, 1977. This cash flow report included all known sources of income and projected expenses, including the payment of a $20,000,000 1977-A Series and the $15,000,000 1977-B Series notes held by the petitioners. The 1977-A Series notes were paid off at maturity on November 1, 1977 and are not involved in this litigation. Thereafter the Board prepared [567]*567its own cash flow report which projected a deficit of nearly $21,000,000 by December 31, 1977.

On April 1, 1977 the district court issued an order in Reed v. Rhodes prohibiting the Board and its superintendent from closing any school “without specific prior approval of the court.” On October 11, 1977 the Board filed a motion to modify the April 1 order. A Special Master submitted a report on the motion to modify in which he reviewed the financial condition and projection of the Cleveland school system, suggested that there were various methods available for shoring up its financial condition and recommended to the court that the motion to modify be denied. On October 21, 1977 the district court issued a further order in which it directed the Board and its officers, employees and agents “to continue the operation of the Cleveland City School District . . . until the further order of this Court” and further decreed that the members of the Board and its officers, agents and employees would be “expressly relieved from any and all personal liability under any law or statutes of the State of Ohio” which they might incur as a result of compliance with the court’s orders to continue the operation of the schools.

On November 2,1977 the petitioners, who were not then parties in Reed v. Rhodes, filed a Complaint for a Writ of Mandamus in the Supreme Court of Ohio, naming the Board, its clerk and the auditor and treasurer of Cuyahoga County as respondents. In that action the petitioners sought an order from the Supreme Court of Ohio compelling the respondents therein to pay into and retain in the Board’s bond retirement fund tax revenues received by the Board in the year 1977 in an amount sufficient to retire the Series 1977-B Notes at maturity.

On November 4, 1977, the respondent, Chief Judge Battisti, issued a temporary restraining order in the pending action of Reed v. Rhodes in which the petitioners herein were joined as defendants and were enjoined “from further prosecuting or seeking to enforce any orders or claims arising from the proceedings in the Ohio State Supreme Court, . . . [describing the proceeding for a writ of mandamus] and from initiating proceedings in any other court that would, or would threaten to, interfere with the jurisdiction of the Court in this case.” This order also contained the following language:

The entry of this Temporary Restraining Order will not prejudice the interests or rights of the National City Bank or/and the Cleveland Trust Company. Those interests or rights can be protected by the filing of appropriate pleadings or by seeking modification or review of orders issued in this case.

The temporary restraining order was issued prior to the filing of an affidavit or verified complaint as required by Rule 65(b), F.R. C.P. It appears from the record that the temporary restraining order was issued on the basis of an oral motion by the United States, amicus curiae in Reed v. Rhodes. Further, the temporary restraining order did not state why it was granted without notice, nor did it contain an expiration date as required by Rule 65(b).

Both orders, herein considered, pertain to the threatened closing of the Cleveland school system due to alleged lack of financial resources. Both orders had the purport of requiring the prior consideration by the District Judge before steps were taken which would require such closing.

The District Judge’s order of November 4 stated the immediate reasons for his action as follows:

This Court, in an opinion issued August 31, 1976, having found the Cleveland and State Defendants liable for violation of the rights of the Plaintiffs, as guaranteed by the 14th Amendment to the United States Constitution, to attend the public schools without being subjected to racial discrimination or segregation, issued orders requiring the development of appropriate remedies by the local and state defendants.1
[568]*568Included in the orders issued by this Court in this case was one on October 19, 1977, requiring the local and state defendants to keep the public schools of Cleveland open and in full operation. On November 1, 1977, the National City Bank and the Cleveland Trust Company filed pleadings with the State Supreme Court of Ohio which, if granted, might obstruct or impede the ability of the local and state defendants to implement the October 19, 1977 order of this Court, based on the record in these proceedings as discussed in open court on November 4, 1977 with all the parties present.

Rather than seek “modification or review” of the orders, petitioners sought and secured a stay from a single judge of this court and prosecuted their action in the Supreme Court of Ohio to conclusion State ex rel. Nat’l City Bank v. Board of Education, 52 Ohio St.2d 81, 369 N.E.2d 1200 (1977).

The temporary restraining order issued on November 4, 1977 was not appealable.

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581 F.2d 565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-city-bank-v-battisti-ca6-1977.