1)  INTELLECTUAL PROPERTY: Urantia Foundation v. Maaherra, 99-15732 (9th Cir. Jan. 24, 2000) (unpublished).  Lay, Goodwin, and Schroeder, Circuit Judges.
         The District Court for Arizona, Judge Urbom presiding, entered a declaratory judgment in favor of the Urantia Foundation on its copyright infringement claim against Kristen Maaherra.  Maaherra appealed, claiming that the district court erred in failing to adjudicate her defenses and in determining that her case was suitable for declaratory judgment. 
        The USCA affirmed.  Given the narrow scope of it re-mand in Maaherra's first appeal, Urantia Foundation v. Maaherra, 114 F.3d 955 (9th Cir. 1997) ("Urantia I"), the USCA concluded that the district court did not err in entering a de-claratory judgment for the Foundation.  Urantia I found that the Foundation held a valid copyright on The Urantia Book and reversed the district court's entry of summary judgment in favor of Maaherra  Because the copyright was valid and Maaherra had conceded that she had copied the book, the USCA had earlier concluded that Maaherra infringed the Foundation's copyright and remanded the case to the district court for further proceedings on damages.  On remand, the Foundation waived any claims against Maaherra for money damages or injunctive relief and moved for a declaratory judgment that Maaherra infringed its copyright.  Because the remand had been limited to "further proceedings on damages," the USCA found no error in the district court's failure to adjudicate Maaherra's alleged defenses to the infringement.  Moreover, the USCA rejected Maaherra's argument that declaratory judgment was inappropriate because it did not settle the legal relationship between the parties.  The declaratory judgment resolved the only live issue:  whether Maaherra infringed the Foundation's copyright on the book.  The district court was not required to advise Maaherra on what por-tion of the book, if any, she could legally reproduce following the USCA's decision in Urantia I.

2)  INTELLECTUAL PROPERTY / SETTLEMENTS: Blackthorne Publishing, Inc. v. Black, 97-55656 (9th Cir. Jan. 28, 2000) (unpublished). Browning and Tashima, Circuit Judges, and King, District Judge.
       The District Court for the Central District of California, Judge Hupp presiding, entered summary judgment on the issue of copyright infringement in favor of defendants Shane Val Black and New Line Cinema Corporation, creators of The Long Kiss Goodnight.  Plaintiffs Steve Schanes and Picture Entertainment Corporation appealed.  The defendants cross-appealed, contending that the district court abused its discretion by refusing to grant them attorneys' fees.  They also argued that these appeals were improperly before the USCA because the parties had reached an enforceable settlement agreement.
        The USCA affirmed.  First, it found that no binding settlement agreement had been reached.  California law is well settled that an attorney must be specifically authorized to settle and compromise a claim, and under California law, an attorney has neither implied authority nor apparent authority to bind his client to a settlement agreement.  Moreover, the California Supreme Court has held that a substantial matter, such as a settlement agreement, requires that "a person dealing with an attorney, as dealing with any agent, must ascertain whether the agent has authority to do the purported act and assumes the risk if in fact the agent has no such authority."  Blanton v. Womancare, Inc., 696 P. 2d 645, 652. (Cal. 1985).  In the instant case, the defendants relied on the purported settlement agreement to their own peril;  they had not met their burden of proving that the plaintiffs' attorney had express authority to bind his clients to a settlement agreement.  Absent evidence of express authority, the plaintiffs' attorney's good faith belief that his clients had agreed to the settlement was insufficient to bind the plaintiffs. Thus, no binding settlement having been shown, the USCA concluded that it had jurisdiction over these appeals.
          Next, viewing the evidence in the light most favorable to the non-moving party in determining whether there were genuine issues of material fact, the USCA reviewed the district court's grant of summary judgment de novo and found that the district court properly granted summary judgment for the defendants because the plaintiffs failed to adduce sufficient evidence to substantiate their claim that they owned the copyright to another work called "Jack Hunter."  The plaintiffs did not obtain ownership through a 1995 assignment because Blackthorne Publishing had been suspended by the State of California in 1992 for nonpayment of its franchise taxes;  it was thus ineligible to conduct business in 1995 while still suspended.  The plaintiffs also did not acquire ownership through the 1989 corporate resolution because there was no written assignment of the copyright as required for a valid copyright transfer and the writing did not confirm a prior oral agreement.  In addition, the plaintiffs did not validly own the copyright simply because they registered with the U.S. Copyright Office, because the registration occurred more than five years after the first publication.  Because the plaintiffs failed to establish a genuine issue of material fact regarding ownership, the USCA declined to address the issue of copying.
        The district court also did not abuse its discretion or misapply the law under the Copyright Act by refusing to award the defendants attorneys' fees.  In denying the defendants' request for attorneys' fees, the district court properly considered frivolousness, motivation, objective reasonableness, and deterrence.  Finding nothing "exceptional" about the case, the district court also did not abuse its discretion in denying attorney's fees under the Lanham Act.  Finally,  the district court did not abuse its discretion in denying attorneys' fees under 28 USC Sec. 1927 because there had been no showing of bad faith on the part of the plaintiffs.

3)  REAL ESTATE / SECURITIES:  Kiefer v. Woolley, 98-55249 (9th Cir. Jan. 24, 2000) (unpublished).  B. Fletcher and Pregerson, Circuit Judges, and Weiner, District Judge.
         The District Court for the Central District of California, Judge Davies presiding, entered a declaratory judgment interpreting the terms of a class action settlement and finding that the settlement's non-recourse provisions did not bar a state court claim based on the agreement's separate covenant of good faith and fair dealing. The defendants, Robert E. Woolley and Robert E. Woolley, Inc., appealed.
       The USCA affirmed.  The appellants were the general partners in an organization that offered limited partnerships in hotel-owning ventures.  They were sued in a number of class action by limited partners alleging violations of federal securities laws and other related claims.  The class actions were settled by stipulations which required the general partners to repurchase ownership shares from the limited partners.  Tied to that obligation was a non-recourse provision that limited the general partners' liability to the value of specified property posted as collateral should they fail to repurchase the shares.  In a separate provision, the agreement included an express covenant of good faith and fair dealing.  The district court retained jurisdiction to enforce the stipulation.  Several years later, certain class members filed suit in California state court, alleging breach of the settlement agreement based on the general partners' failure to repurchase the limited partners' shares and seeking to hold the general partners personally liable.  The general partners returned to the federal court that had approved the settlement and sought a ruing that the non-recourse provision barred the limited partners from bring suit in state court.  The district court held that the class members were barred from holding the general partners personally liable for simply failing to repurchase the limited partners' shares, but were not barred from seeking personal liability in state court under the separate covenant of good faith and fair dealing.  The general partners appealed, arguing that the non-recourse provision constituted a bar to personal liability with respect to their obligations under the settlement agreement as a whole.  Two separate provisions of the settlement agreement were at issue.  The non-recourse provision limits the general partners' liability in case they failed to fulfill their repurchase obligation.  In addition, an express covenant of good faith and fair dealing included in the settlement agreement provided that both sides must undertake their best efforts to comply with all terms of the agreement.  While the parties have urged otherwise, the only real issue within the jurisdiction of the district court and thus squarely before the USCA was whether the class members were barred by the non-recourse provision from bringing a claim for breach of the covenant of good faith and fair dealing.  Non-recourse provisions, common in mortgages and other types of financing arrangements, are included in contracts to limit the liability of the obligor to specified collateral identified in advance.  By definition, such provisions do not limit the underlying obligation.  The non-recourse provision at issue here dealt specifically with a limitation of remedies should the general partners default in their contractual obligation to repurchase the limited partners' shares.  Personal liability claims based solely on the failure of the general partners to repurchase shares thus were barred by the non-recourse provision.  Not barred, however, were claims made on the basis of the covenant of good faith and fair dealings.  Such claims, which depend upon a theory that the failure to repurchase units resulted from a course of action constituting a breach of good faith and fair dealing, were based on a clause of the settlement stipulations not limited by the non-recourse provision.  The covenant of good faith and fair dealing included in the stipulation was independent of the repurchase obligations.  The wording of the covenant demonstrates that it was clearly intended to apply to the entire settlement agreement, including the repurchase obligations.  The proponent of a claim for breach of the covenant of good faith need not demonstrate that a contractual obligation has been broken.  The fact that the limited partners could not seek personal liability under a breach of contract claim for the general partners' failure to repurchase the shares thus could not bar them from seeking such liability under a claim for breach of the covenant of good faith and fair dealing.  The district court thus correctly declared that class members should be allowed to pursue personal liability for breach of the covenant of good faith and fair dealing.  Any declaration on the merits of the class members' claims would be outside the jurisdiction of the USCA.

4)  BANKING /  SHAREHOLDER SUITS: Kagnoff v. Baker, 98-56011 (9th Cir. Jan. 21, 2000) (unpublished).  Trott and W. Fletcher, Circuit Judges, and Molloy, District Judge.
       Susan Kagnoff, in her capacity as the personal representative of the estate of her late husband, David Kagnoff, appealed the judgment of the District Court for the Central District of California, Judge Stotler presiding, which dismissed for lack of standing David's shareholder derivative suit alleging that the board of directors of the Bank of Newport was negligent and breached its fiduciary duty in connection with the Bank's failure.  The Federal Deposit Insurance Corporation was appointed receiver of the Bank, but denied David's demand to prosecute an action against the directors.  The district court subsequently dismissed David's action for lack of standing in light of Pareto v. FDIC, 139 F.3d 696 (9th Cir. 1998), which held that, under the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), the FDIC succeeds to all rights held by a bank and its shareholders at the time the FDIC is appointed received.
 The USCA affirmed.  Susan Kagnoff advanced various arguments in support of her belief that Pareto did not control her case, but the USCA found none meritorious.  Pareto made it clear that FIRREA vests all rights and powers of a stockholder of a bank to bring a derivative action in the FDIC.  Congress has transferred everything it could to the FDIC, and that included a stockholder's right, power, or privilege to demand corporate action or to sue directors or others when action is not forthcoming.  As Pareto is still valid precedent in the Circuit, David's derivative suit failed for lack of standing.  Even if the doctrines of waiver or estoppel were applicable on the facts of this case, nothing in Pareto suggests that its standing analysis is subject to such qualifications.  Nor could the USCA think of any good reason why any alleged waiver or estoppel by the FDIC should somehow reconvey the standing that FIRREA took away from stockholders.

5)  RULE 11 SANCTIONS: Hutchinson v. Hensley Flying Service, Inc., 98-35361 (9th Cir. Jan. 6, 2000) (unpublished).  Reavley, Ferguson (dissenting), and Trott, Circuit Judges.
         In this case, a document offered in evidence was false because, unlike the original, it did not contained the word "President" in the signature block.  The plaintiffs possessed an accurate copy of the document two years prior to filing their complaint.  At least one year prior to filing that complaint, their attorney reviewed the documents.  Plaintiff Hutchinson and his attorney discussed the use of the inaccurate copy to oppose defendant Stroh's motion to dismiss. 
The District Court for Montana, Judge Molloy presiding, did not find the explanation offered by the plaintiffs' expert credible and found that the document had been altered to support a legal position and that the plaintiffs had actual and constructive knowledge that the document used by their attorney to oppose the motion to dismiss was false.  On appeal, the USCA first found that evidence was sufficient to support these findings and also that using a falsified document in evidence was sufficient grounds for a dismissal sanction under Rule 11.  Given the district judge's finding, supported by the evidence, that the plaintiffs had knowledge that the attorney was submitting a falsified document, the USCA could not say that the trial judge abused his discretion in ordering the dismissal.  The USCA also noted that attorneys' fees may only be awarded under Rule 11 after a motion by a party.  As the apellees did not move for an award of attorneys' fees, an award of fees was not justified under Rule 11.  The appellees argued that the district judge granted sanctions under inherent powers and under 28 USC Sec. 1927.  An award of sanctions must be properly itemized in terms of the sanctioning authority.  The findings of fact and conclusion of law and judgment entered by the district judge relied solely on Rule 11.  Because there was no motion by the appellees as required under Rule 11, the USCA vacated the award of attorney's fees.  The plaintiffs next argued that the sanction proceedings were brought pursuant to a motion by the appellees without benefit of the 21-day "safe harbor" provision of Rule 11(c)(1).  Because the sanctions had been raised by the district judge on his own motion, the "safe harbor" provision was inapplicable.  At the preliminary pretrial hearing on January 30, 1998, the district judge ordered an evidentiary hearing to be held on February 17, 1998 and instructed the attorneys to make any objections to "my suggestion of an evidentiary hearing."  The district judge's findings of fact and conclu-sions of law indicate that the sanctions were undertaken at the district judge's own initiative.  The plaintiffs' proposed findings of fact and conclusions of law, filed with the court, also stated that the district judge entertained sanctions on his own motion.  The record thus did not support the plaintiffs' contention that the sanctions were imposed pursuant to a motion by the appellees.  The plaintiffs also argued that the failure of the district judge to issue a show cause order rendered the sanction order procedurally defective.  The district judge ordered the plaintiffs to appear at an evidentiary hearing on February 17, 1998.  This order was given both in open court on the record on January 30, 1998 and by subsequent written order.  The district judge made it unmistakably clear that the February 17, 1998 hearing would result in a sanction order.  At both the January 30, 1998 hearing and the February 17, 1998 hearing, the district court specifically requested objections from counsel to the notice for the sanction hearing.  The plaintiffs' attorney declined to enter an objection to notice of the hearing.  The district judge gave more than sufficient notice that the parties would have to show cause why sanctions should not issue.  Moreover, this procedural issue was not raised in the district court.  The plaintiffs argued that the district judge erred in his assessment of Montana law concerning in personam liability of corporate officers and shareholders.  However, the USCA found that that issue of law was irrelevant to the question on appeal, which is a sanction order.  The plaintiffs relied on the falsified letter in their response to Stroh's motion to dismiss.  The district judge did not rule on the merits of in personam liability of Stroh, but on the sanctionable conduct of the plaintiffs.  The USCA thus vacated the award of attorneys' fees but affirmed in all other respects.
        Dissenting, Judge Ferguson disagreed with the majority's finding that dismissal is a legitimate sanction under Rule 11.  First, the text of Rule 11 explicitly states that the that district courts have discretion to impose both monetary sanctions (i.e., attorneys' fees and fines), and "directives of a nonmonetary nature"  FRCP 11(c)(2).  At issue was whether the term "directives of a nonmonetary nature" includes dismissal.  Judge Ferguson thought it did not.  He reached this conclusion after reviewing the Advisory Committee Notes (1993 Amendments) which provide a list of possible nonmonetary sanctions.  The list includes "striking the offending paper;  issuing an admonition, reprimand, or censure;  requiring participation in seminars or other educa-tional programs; … referring the matter to disciplinary authorities."  Noticeably absent from the list is dismissal or default.  The reason, Judge Ferguson said, is because the focus of Rule 11 is on an attorney's duty to "stop, think and investigate" before filing "baseless papers."  If an attorney violates this rule, the attorney should be punished.  The merits of the case are a separate issue that are "better dealt with under Rule 8, 12, or 56."  The majority nevertheless concluded that dismissal is an appropriate sanction under Rule 11.  In support, they cited Combs v. Rockwell Int'l Corp., 927 F.2d 486 (9th Cir.), cert. denied 502 U.S. 859 (1991).  But Judge Ferguson found Combs to be of little value here.  First, it was decided before Rule 11 was amended in 1993.  The 1993 Amendments significantly altered the language of Rule 11 and placed "greater constraints on the imposition of sanctions."  One change that occurred in 1993 was that Rule 11 no longer applied to discovery violations under Rules 26 through 37.  That is significant because the sanction in Combs was based upon a discovery violation under Rule 30(e).  Because Rule 11 no longer governs discovery violations, the Rule 11 portion of Combs is no longer the law.  Second, even before the 1993 Amendments, the Rule 11 portion of the Combs decision was suspect.  In Combs, the court stated that dismissal is an appropriate sanction for falsifying a deposition and that Rule 11, as well as the court's inherent powers , can be used to redress such mendacity.  In support of this legal principle, the court cited five Ninth Circuit cases.  Not one of these cases, however, had anything to do with Rule 11.  Instead, all of the cases dealt with sanctions under the court's inherent power, or under Rule 37(b)(2).  Thus, the Rule 11 portion of the Combs decision has always been of questionable value.  Judge Ferguson found his view reinforced by the fact that he has been unable to find a case from any circuit that has authorized the sanction of dismissal under Rule 11.  That is not to say that the district court was powerless to deal with the misconduct that occurred in the instant case.  Judge Ferguson noted that it could have used one of the other sanctions available under Rule 11, or if it felt that dismissal was absolutely necessary, it could have relied on its "inherent power."  The Ninth Circuit has explained that courts have inherent power to dismiss an action when a party has willfully deceived the court and engaged in conduct utterly inconsistent with the orderly administrative of justice.  However, "because of their very potency, inherent powers must be exercised with restraint and discretion."  Thus, before a district court can dismiss a case under its inherent powers, it must, inter alia, consider whether a lesser sanction is available and determine whether a "nexus" exists between the sanction and the misconduct.  Consideration of these requirements would likely change the nature of the sanction imposed in this case. First, Judge Ferguson said he did not believe that a sufficient "nexus" existed between the plaintiffs' misconduct and the district court's decision to dismiss the entire lawsuit.  The misconduct in this case occurred when the plaintiffs submitted an altered document in opposition to the appellees' motion to dismiss Stroh in his individual capacity.  Clearly, a "nexus" exists between the misconduct and the plaintiffs' claims against Stroh.  What Judge Ferguson said he did not understand is how the plaintiffs' misconduct relates to the claims against the defendant corporation, Hensley Flying Services.  The majority ignored the fact that, in addition to the plaintiff's claims against Stroh, the lawsuit also includes claims of unfair trade practice, tortuous interference, slander, and harassment against the Hensley corporation.  The altered document had nothing to do with those claims.  Judge Ferguson thus thought that dismissal of the claims against the corporate defendant was improper.  Second, Judge Ferguson thought the district court failed to provide a sufficient explanation why a lesser sanction would not be effective in preventing similar conduct in the future.  The Ninth Circuit has repeatedly stated that the district court must consider "less drastic sanctions" before it dismisses a case outright.  It cannot simply state that the conduct was so "outrageous" that it required dismissal.  The district court must provide a "reasonable explanation of possible and meaningful alternatives.  Failure to do so requires reversal.  Requiring the district court to consider a lesser sanction serves the dual purpose of preventing an abuse of power and promoting the importance of goal of adjudicating cases on the merits.  In the instant case, the district court never engaged in this type of analysis.  Judge Ferguson thus thought the case should be reversed and remanded for further consideration.

6)  BANKRUPTCY: In re Yu, 99-55646 (9th Cir. Jan. 10, 2000) (unpublished).  Leavy, Trott, and Silverman, Circuit Judges.   Shen appealed pro se an order the Bankruptcy Appellate Panel which had affirmed an order the Bankruptcy Court for the Central District of California granting summary judgment and dismissing Shen's complaint to deny Yu's discharge.  Shen also appealed the BAP's decision to deny his motion to recuse a member of the BAP panel. The USCA affirmed.  Shen filed an adversary proceeding to deny Yu's Chapter 7 discharge under 11 USC Secs. 727(a)(2) and (4), claiming that Yu had knowingly and fraudulently listed several false items on her bankruptcy schedules and had concealed property.  Because Shen failed to raise a genuine issue of material fact as to whether Yu had an actual intent to deceive her creditors when she completed her voluntary petition for Chapter 7 bankruptcy and as to whether she had made a false oath knowingly and fraudulently and related to a material fact, the bankruptcy court did not err in granting summary judgment.  Finally, because Shen failed to meet the standard for recusal pursuant to 28 USC Sec. 455, the district court did not abuse its discretion in denying his motion to recuse a member of the BAP.

7)  BANKRUPTCY: In re Park, 98-56815 (9th Cir. Jan. 20, 2000) (unpublished).  Hall, Trott, and W. Fletcher, Circuit Judges.  Dorame maintained that the bankruptcy court erred in dismissing his suit, thereby according res judicata effect to a previous bankruptcy court judgment.  He appealed the dismissal to the BAP, which affirmed.  He then appealed the BAP's decision to the USCA which also affirmed.  Dorame argued that the judgment in the earlier suit was not final because it contained language concerning an award of costs that occasioned a subsequent "Memorandum and Order re: Motion to Amend."  The USCA found this contention to be devoid of merit.  There is no support for the proposition that a post-judgment order regarding costs or fees deprives a judgment of its preclusive effect.  On the contrary, it is clear that such orders do not affect the finality of a judgment, which attaches when the judgment is entered.  The USCA granted the appellees' motion for attorneys' fees and costs for a frivolous appeal.

8)  BANKRUPTCY / CIVIL PROCEDURE:  In re U.S. Re-fining & Marketing Co., 97-56804 (9th Cir. Jan. 7, 2000) (unpublished).  B. Fletcher and Pregerson, Circuit Judges, and Weiner, District Judge.
        The District Court for the Central District of California, Judge Hatter presiding, affirmed an order of the Bankruptcy Court "remanding" this action to Texas state court, pursuant to 28 USC Sec. 1452(b).  As this was not a proper remand, the USCA had jurisdiction to review the order.  It reversed.  The adversary action began in a Texas state court.  It was removed by certain of the defendants to the U.S. District Court for the Northern District of Texas, pursuant to 11 USC Sec. 1452(a) and under the caption "Appellant Hudson-Ram, L.P.'s Chapter 11 proceeding," which itself was then pending in the U.S. District Court for the Central District of California.  The defendants next moved for a transfer of venue to the Central District of California.  After the claims of the debtor parties were settled, appellees Archer and Harris moved the California Bankruptcy Court for an order remanding the non-debtor third parties claims back to Texas state court.  The Bankruptcy Court granted the motion.  That order was affirmed by the U.S. District Court for the Central District of California.  However, the order remanding the action to Texas state court was not a valid exercise of the court's authority under 28 USC Sec. 1452(b) because the District Court for the Central District of California was not the court to which the claim or cause of action was removed.  While the USCA lauded the bankruptcy and district judges' efforts to conserve valuable juridical resources by sending the action directly back to Texas state court, since the sate court action was removed to the District Court for the Northern District of Texas, only that court had the authority to remand it to Texas state court.  The proper avenue for returning the adversary action to Texas state court would have been for the federal district court in California to transfer, rather than remand, the action to the federal district court in Texas, which could then remand to state court.  While the seriatim approach is not as efficient, it is the procedure mandated by Congress.

9)  BANKRUPTCY: In re Dorame, 98-55545 (9th Cir. Jan. 11, 2000) (unpublished).  Hall, Trott, and W. Fletcher, Circuit Judges.   Dorame maintained that the Bankruptcy Appellate Panel erred by dismissing his appeal for lack of jurisdiction.  The USCA affirmed.  Dorame's Notice of Appeal improperly cast the dismissal order as a "final judgment yet to be entered."  In fact, the bankruptcy court's judgment of May 1, 1997, was final with respect to everything but attorneys' fees.  Thus, because the Notice of Appeal was untimely when filed on September 3, 1997, the BAP lacked jurisdiction to hear the appeal.

10)  BANKRUPTCY: In re Majauskas, 99-15024 (9th Cir. Jan. 25, 2000) (unpublished).  Beezer, O'Scannlain, and Thomas, Circuit Judges.  Chapter 7 debtor Majauskas appealed an order of the District Court for Hawaii, Judge Pence presiding, which had reversed the bankruptcy court's discharge of Majauskas' Health Education Act Loans ("HEAL") used to finance his osteopathic education.  The USCA affirmed.  Considering that Majauskas is young, without dependents, possesses a professional degree, and had opportunities to prevent debarment from federal assistance and benefits programs, the USCA agreed with the district court that the non-discharge of Majauskas' HEAL debt would not be unconscionable.

11)  BANKRUPTCY: In re Voltaire Investments, 97-56748 (9th Cir. Jan. 5, 2000) (unpublished).  D.W. Nelson, Beezer, and T.G. Nelson, Circuit Judges.
        The District Court for the Central District of California, Judge Hupp presiding, awarded $138,077.78 to Rohayem for breach of contract.  Voltaire Investments, and individuals DeGuzman and Dagher appealed. 
       The USCA affirmed.  Voltaire argued that Rohayem failed to obtain proper corporate and court approval for a commission agreement.  However, there was no evidence that Voltaire claimed before either the bankruptcy court or the district court that Rohayem's negotiations of that agreement evidenced a breach of fiduciary duty.  Similarly, the record indicated that Voltaire had not raised the lack of bankruptcy court approval before either court.  As this new issue depends on the factual record and is not a pure question of law, the USCA declined to consider it.  Voltaire also challenged the district court's calculation of damages, arguing that the breached agreement foresaw more deductions that the court allowed.  The bankruptcy court and district court calculated damages based on their interpretation of the oral agreement, as presented by the testimony of the parties.  Where a district court draws upon extrinsic evidence in interpreting a contract, the USCA will not reverse its factual findings as to that extrinsic evidence unless they are clearly erroneous.  Both the bankruptcy court and the district court thoroughly considered this matter, and the USCA saw nothing that would lead it to conclude that the decision was clearly erroneous.  It thus affirmed the award of $138,077.78 to Rohayem.  Voltaire also maintained that the district court erred in using the California prejudgment interest rate of 10%, rather than the federal rate under 28 USC Sec. 1961.  While it reviews a district court's award of pre-judgment interest for abuse of discretion, here the determination of the rate of interest turned solely upon whether state or federal law governed the claim.  The USCA thus reviewed de novo.  Where a claim arises under state law, the award of pre-judgment interest is also governed by state law.  Here, the district court affirmed the bankruptcy court's pre-judgment interest award, which was based on the finding that California's contract law was applicable.  The USCA agreed.  Rohayem brought a state claim and it was appropriate to award pre-judgment interest pursuant to the California rate.

12)  TAXATION:  Spicer v. Jensen, 98-55633 (9th Cir. Jan. 6, 2000) (unpublished).  Browning and Tashima, Circuit Judges, and King, District Judge.
        Spicer sued three IRS agents for their failure to accord him an administrative hearing, inform him of the statutory authority establishing his tax liability, and provide him certain information about the agents regarding their identity and authority.  Spicer brought his action pursuant to the Mandamus Statute, 28 USC Sec. 1361, and Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 US 388 (1971).  The District Court for the Central District of California, Judge Baird presiding, granted the defendants motion to dismiss.  Spicer appealed.
       The USCA affirmed.  Spicer's mandamus action is barred by sovereign immunity since the government cannot be sued without its consent.  A suit in mandamus to compel government agents to perform an action is a suit against the United State, and is barred unless there has been a waiver of sovereign immunity.  The bar of sovereign immunity cannot be avoided by naming officers and employees of the U.S. as defendants.  No waiver of sovereign immunity applies to Spicer's mandamus action.  The Mandamus Statute itself did not waive sovereign immunity.  Moreover, the mandamus action was not maintainable pursuant to any independent waiver of immunity.  Instead, the action is subject to the Anti-Injunction Act (AIA), which states, in relevant part:  "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person."  IRC Sec. 7421(a).  In its most basic form, Spicer's mandamus claim challenged the validity of the assessment or collection of a tax.  It was precisely the type of claim barred by the AID.  Spicer's claim also did not fall within the narrow exception to the AIA, since he has not shown that the government would ultimately lose on the merits, that he has no adequate legal remedy, and that irreparable harm will result in the absence of injunctive relief.  Spicer's Bivens claim is similarly barred.  Bivens actions lie only for violations of rights secured by the Constitution.  The Ninth Circuit has never recognized a constitutional violation arising from the collection of taxes.  Even if Spicer could identify a constitutional violation, he could not maintain a Bivens action because Congress has provided a statutory mechanism for relief in the form of a refund action, and "even an incomplete statutory remedy renders a Bivens cause of action unavailable.  The district court thus correctly granted the motion to dismiss.

13)  TAXATION:  Walker v. USA, 97-36105 (9th Cir. Jan. 12, 2000) (unpublished).  Leavy, Fernandez, and Thomas, Circuit Judges.
        The District Court for Oregon, Magistrate Judge Ashmanskas presiding dismissed for lack of jurisdiction this action challenging the IRS's collection and retention of certain funds in connection with George and Sharon Walker's allegedly delin-quent federal tax liabilities.  George and Sharon Walker, and George Walker as Trustee for Andrew James Unincorporated Business Trust (collectively "Walkers") appealed.
        The USCA affirmed in part, reversed in part, and remanded for further proceedings.  First, while the government argued before the district court that the first claim brought by the Trust was one for wrongful levy under IRC Sec. 7426 and time-barred by the statute of limitations found in IRC Sec. 6532(c), it now agrees with the Trust that this first claim is for a refund.  Under USA v. Williams, 514 US 527 (1995), the Trust may bring a refund suit based on its assertion that it was wrongfully compelled to pay George and Sharon Walker's taxes.  As a claim for a refund, it was timely filed under IRC Sec. 6511.  The USCA thus reversed the district court's dismissal of this claim.  Second, The Walkers' lien release claim was moot because the IRS filed Certificates of Release of Federal Tax Lien, releasing the two liens that were referenced in the Walkers' complaint.  Third, the USCA affirmed the district court's dismissal of the Walkers' claim for damages because the Walkers did not exhaust their administrative remedies as required by IRC Sec. 7432(d)(1).  An administrative claim for failure to release a tax lien must include the taxpayer's identifying information, a copy of the notice of the lien affecting the property, the grounds for the claim, a description of injuries, and the amount of the claim.  The Walkers' correspondence with the IRS did not satisfy the exhaustion requirement because the Walkers did not describe their injury nor specify the amount of damages claimed.  Fourth, the underlying purpose of Walkers' request for a declaratory judgment was relief from the tax collection activities of the IRS.  But, as federal courts are generally without jurisdiction to grant declaratory or injunctive relief, the district court did not err in dismissing the claim for declaratory relief.

14)  TAXATION:  Nowak v. IRS, 98-56656 (9th Cir. Jan. 21, 2000) (unpublished).  Beezer, O'Scannlain, and Thomas, Circuit Judges.
       Nowak appealed pro se the grant of summary judgment entered for the defendant IRS by the District Court for the Southern District of California, Judge Huff presiding.  The district court ruled that certain information redacted from a document fell within an exemption to the Freedom of Information Act.  On appeal, Nowak did not contest the adequacy of the IRS's search in response to his FOIA request;  rather, he argued that the district court erred in holding that the redacted material could be withheld under the exemption.
        The USCA affirmed.  The FOIA mandates a policy of broad disclosure of government documents when production is properly requested.  An agency may withhold information, however, if the information contained in the document falls within one of nine statutory exemptions.  If an agency withholds information under an exemption, the burden is on the agency to sustain its action.  Here the district court found that the redacted information was covered by 5 USC Sec. 552(b)(7) which allows an agency to withhold records or information compiled for law enforcement purposes, but only to the extent that the production of such would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law.  Based on several affidavits from agency officials, the district court concluded that the redacted information, if disclosed, "would significantly hamper the defendant's tax collection and law enforcement functions, and facilitate taxpayer circumvention of federal Internal Revenue laws."  Nowak maintained that the district court erred in relying on the claims in the affidavits in deciding against him.  However, the USCA noted that the IRS may satisfy its burden by presenting affidavits that provide a reasonably detailed description of the requested information, and the basis for invoking the exemption.  Nowak offered no persuasive arguments as to why the district court should not have relied on the affidavits.  The USCA thus concluded that the district court had an adequate factual basis for its decision.  Nowak also maintained that the IRS, by previously disclosing the information he requested to a third party, waived its right to claim the exemption now.  As evidence of prior disclosure, Nowak showed that he was in possession of another version of the very documents he requested.  That copy did not include the contested redactions.  However, assuming that it were to apply the waiver rule, the USCA found that Nowak's argument still failed.  To establish a waiver, the previous disclo-sures must have been authorized and voluntary.  Nowak offered no explanation as to how he obtained the copy sufficient to determine whether the alleged, previous disclosures were voluntary.  Nowak had also not established that the copy originated from the same documents he now sought.  Nowak also argued that the district court should have conducted an in camera review of the redacted information to determine whether it qualified for protection under exemption 7(E).  Because it found the affidavits comprised an adequate basis for the district court's determination that the redacted information fell within the 7(E) exemption, the USCA concluded that in camera review was unnecessary.  The district court thus committed no legal error.

15)  TAXATION:  Porter v. CIR, 99-70043 (9th Cir. Jan. 21, 2000) (unpublished).  Beezer, O'Scannlain, and Thomas, Circuit Judges. Porter appealed pro se a Tax Court decision upholding the Commissioner of Internal Revenue's determination of deficiencies for the 1992, 1993, and 1994 tax years.  Porter also appealed the Tax Court's denial of his motion for a continuance.  The USCA affirmed.  Porter's contention that the CIR failed to meet his burden of proving that Porter received the income in dispute lacked merit.  Porter's arguments challenging the admissibility of the CIR's evidence were waived because they were not asserted in the Tax Court.  Because Porter's "verified petition" was insufficient to rebut the presumption that the CIR's defi-ciency assessments were correct, the Tax Court did not clearly err.  Finally, the Tax Court did not abuse its discretion by denying Porter's motion for a continuance.

16)  TAXATION:  Leonard Pipeline Contractors, Ltd. v. CIR, 98-71430 (9th Cir. Jan. 26, 2000) (unpublished).  Sneed and Pregerson, Circuit Judges, and Carter, District Judge.
       Leonard Pipeline Contractors ("Taxpayer") appealed a judgment of the Tax Court which limited the deduction of reasonable compensation to its president, Leonard, for the 1987 tax year to $700,000.
       The USCA affirmed.  As a threshold matter, the USCA found that the actions of the Tax Court in consulting with the experts and urging settlement on the parties did not "unfairly prejudice" the Taxpayer.  The USCA thus rejected the Taxpayer's suggestion for a de novo review.  In the context of a IRC Sec. 162(a)(1) "reasonableness" inquiry, the reasonableness of compensation paid by a corporation is a question of fact reviewed for clear error;  and review under the "clearly erroneous" standard is significantly deferential, requiring a "definite and firm conviction that a mistake has been committed."  Second, in addressing the issue of reasonable compensation, the court must consider a number of factors "with no single factor being dispositive."  These factors may be divided into five broad categories:  (1) the employee's role in the company;  (2) a comparison of the compensation paid to the employee with compensation paid to similarly situated employees in similar companies;  (3) the character and condition of the company;  (4) whether a conflict of interest exists that might permit the company to disguise dividend payments as deductible compensation; and (5) whether the compensation was paid pursuant to a structured, formal, and consistently applied program.  Elliotts, Inc. v. CIR, 716 F.2d 1241 (9th Cir. 1983).  The USCA found that the Tax Court properly took into account all of these factors in its determination.  Third, the burden of proof is on the Taxpayer to show that the CIR's determination is wrong.  Once the taxpayer shows that the CIR's determination is erroneous, the presumption of correctness disappears and the Tax Court must determine from the entire record a reasonable level of compensation under the particular facts and circumstances.  "It is not necessary that the value arrived at by the trial court be a figure as to which there is specific testimony, if it is within the range of figures that may properly be deducted from the evidence.:  Silverman v. CIR, 538 F.2d 927 (2nd Cir. 1976) (quoting Anderson v. CIR, 250 F.2d 242 (5th Cir. 1957), cert. denied, 356 US 950 (1958).  Of the five Elliotts factors, the Tax Court found that two of the factors favored the Taxpayer, two were neutral, and one was inconclusive.  Moreover, the Tax Court did not find the expert witnesses of either side credible.  Finally, the Tax Court found that the compensation was arbitrarily set at the amount that Leonard had recently paid his ex-wife in a divorce settlement.  The Tax Court thus was convinced that Taxpayer was entitled to a greater compensation deduction than that allowed by the government but was not convinced that it was entitled to the actual amount paid.  The Tax Court concluded that $700,000 was reasonable compensation:  $200,000 as salary for 1987;  $95,000 as payment for undercompensation for 1985 and 1986;  a bonus of $100,000; and $296,000 as a lump-sum retirement payment.  The $395,000 for salary and bonus was reasonable because:  (1) all of the experts agreed that Leonard had been under-compensated in the past;  (2) Leonard received no reward for his effort in obtaining the All-American contract;  and (3) Leonard received no prior reward for development of the new insulation process.  The Tax Court did not err in finding that Leonard had been undercompensated in 1985, 1986 and 1987.  Taxpayer's own justification for the compensation as set out in the resolution of the Board of Directors support the Tax Court's conclu-sion.  The resolution authorizing paying Leonard based largely on his work with All-American project.  The All-American project lasted from 1985 through 1987 and these were the same years that the resolution noted that Leonard had not been paid by the Taxpayer.  The Tax Court also did not err in calculating the proper amount of compensation actually paid to Leonard during 1985, 1986 and 1987.  Generally, these entities are kept separate in determining reasonable compensation.  However, on occa-sion, salaries paid by various entities in the aggregate may be considered in determining the reasonableness of compensation to the employee.  Finally, the Tax Court did not clearly err in rejecting the opinions of the experts in determining a reasonable bonus.  The Tax Court could either reject an expert's opinion in its entirety, accept it in its entirely, or accept selective portions of it.

17)  INSURANCE:  Anguiano v. Allstate Insurance Co., 97-56704 (9th Cir. Jan. 6, 2000) (unpublished).  B. Fletcher, D.W., Nelson, and Brunetti, Circuit Judges.
        Third party claimant Anguiano, a passenger injured in a car driven by the insured, Romero, appealed the summary judg-ment for Allstate Insurance Company entered by the District Court for the Central District of California, Judge Byrne presid-ing.  Anguiano sued Allstate for breach of the duty of good faith and fair dealing pursuant to Romero's assignment of his rights against Allstate to Anguiano. 
        The USCA affirmed.  Allstate did not breach the duty of good faith and fair dealing because Allstate's reason for with-holding payment for the full policy limits was not unreasonable or without proper cause.  California's Medi-Cal program possessed a lien for $83,109.74 on any settlement proceeds paid to Anguiano by Allstate.  As a result, Allstate had a statutory obligation to either discharge the lien or obtain a hardship waiver before Allstate could tender any settlement payments to Anguiano or his family.  Moreover, Medi-Cal had a statutory right to sue Allstate if Allstate tendered payment to Anguiano before discharging the Medi-Cal lien.  Thus, Allstate's decision to reject any offer that failed to account for the Medi-Cal lien could not be construed as bad faith conduct on the part of Allstate.  The undisputed record evidence shows that Anguiano never presented Allstate with a reasonable settlement offer because Anguiano never submitted a proposal to Allstate that included a discharge or waiver of the Medi-Cal lien.  Allstate informed Anguiano about the necessity of accounting for the Medi-Cal lien when Allstate rejected Anguiano's first settlement offer.  However, Anguiano never submitted another offer that cured the defect.  Moreover, on its own initiative, Allstate employed a settlement consultant to research the possibility of obtaining a hardship waiver for Anguiano on the MediCal lien.  The district court thus did not err in granting summary judgment on An-guiano's bad faith claim as Allstate had not unreasonably with-held payment on the claim.

18)  INSURANCE:  Chmura v. Allstate Insurance Co., 97-56137 (9th Cir. Jan. 19, 2000) (unpublished).  Browning, Hall, and Graber, Circuit Judges.
        The Chmuras sued Allstate Insurance Company for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing when Allstate refused to tender a defense to the Chmuras after they were sued by the buyer of their house for fraud, negligent misrepresentation, and negligence.  The District Court for the Central District of California, Judge Stotler presiding, granted Allstate's Rule 12(b)(6) motion to dismiss.  The Chmuras appealed.
        The USCA reversed.  In ruling for Allstate, the district court relied on a long line of cases interpreting California insurance law, which stated that the insuring words "legally obligated to pay" operated to cover those claims that arose from tort liabilities (ex delicto), but not to those that arose from contract liabilities (ex contractu).  The district court opined that Allstate had no duty, in that no potential for coverage existed because the Chmuras' claims arose by operation of contract.  By the time the Chmuras appealed, the California Supreme Court had granted certiorari to consider the issue whether a general liability insurance policy may never provide an insured defendant with coverage for losses that are plead by the plaintiff as breaches of contract.  Vandenberg v. Superior Court, 73 Cal. Rptr. 2d 195 (1998)  The USCA thus deferred decision of this case pending resolution of Vandenberg.  Earlier this year, the California Supreme Court decided Vandenberg and held that the phrase "legally obligated to pay" does not create an ex contractu / ex delicto distinction and, therefore, that contractual liabilities also are covered under commercial general liability insurance policies such as that at issue in this case.  Vandenberg v. Superior Court, 88 Cal. Rptr. 2d 366 (1999).  In so holding, the California Supreme Court explicitly overruled the cases that had applied the contract / tort distinction.  As a result, those cases relied on by the district court and Allstate to reach the conclusion that Allstate had no duty to defend are now disapproved.  In its letter to the USCA informing it of the Vandenberg decision, Allstate stated as much.  The USCA thus concluded as a matter of law that Allstate had a duty to defend in this case, because the defunct ex contractu / ex delicto distinction was the sole basis for the district court's dismissal of this case in favor of Allstate.  Allstate argued that, notwithstanding the above conclusion, the USCA should preclude the Chmuras' "bad faith" claim on remand.  To state a cause of action for breach of the implied covenant of good faith and fair dealing, a plaintiff must show that (1) the insurance company withheld benefits that were due under the insurance policy, and (2) that such withholding was unreasonable.  Whether or not an insurance company's decision is rea-sonable under the circumstances normally is a question of fact for the jury.  In granting Allstate's motion to dismiss, the district court resolved the first prong as a matter of law and did not reach the second.  The USCA said it had no record before it that would entitle it to decide the issue of reasonableness and thus declined to do so.  The appropriate forum for the resolution of the second prong, it said, is the district court.

19)  INSURANCE: Dalton v. National Union Fire Insurance Company of Pittsburgh., 97-56637 (9th Cir. Jan. 5, 2000) (unpublished).  Kozinski and Thomas, Circuit Judges, and Rawlinson, District Judge.
         The USCA upheld the summary judgment entered by the District Court for the Central District of California, Judge Hatter presiding.  In order for judgment creditors, such as the Daltons, to recovery the proceeds of an insurance policy under California Insurance Code Sec. 11580(b)(2) they must plead and prove:  (1) that they obtained a judgment for bodily injury;  (2) that the judgment was against a person insured under the policy; and (3) that the policy covers the relief awarded in the judgment.  At oral argument, the parties essentially agreed on their con-struction of the policy endorsement at issue.  Thus, the question presented was whether the tortfeasor, Wells, was acting in the "business or personal affairs" of Guaranteed Products Company ("GPC") when the accident occurred.  On that issue, which the parties agreed was determinative of whether Wells was an insured under the policy, the USCA concluded that Well was not using the U-Haul in GPC's business or personal affairs.  Rather, he was using it to complete a personal move from one city to another.  Because Wells was acting in his own personal affairs, and not GPC's, when the accident occurred, he is not an "insured" as defined in the policy.  Thus, the Daltons were not entitled to recovery under Sec. 11580(b)(2).

20)  MARITIME LAW: Helffrich v. Atlantis Submarines, Inc., 98-16611 (9th Cir. Jan. 4, 2000) (unpublished).  Browning, Rymer, and Kleinfeld, Circuit Judges.
         Affirming in part, reversing in part, and remanding, the USCA found that the District Court for Hawaii, Judge Gillmor presiding, properly refused to award Helffrich attorneys' fees.  In a case such as this, attorneys' fees are properly awarded only where a shipowner has been willful and persistent in failing to investigate a seaman's claim for maintenance and cure or to pay maintenance.  The district court did nor err in finding that Atlantis Submarines did not willfully and persistently fail to investigate or to pay Hilffrich's maintenance and cure claim.  On the contrary, Atlantis investigated Helffrich's claim of injury, kept in contact with her doctor and attempted to accommodate her by providing light duty work.  The district court also correctly concluded that it had no authority to award costs for witnesses beyond that prescribed in 28 USC Secs 1920 and 1821(b).  Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 US 437 (1987), established that "absent explicit statutory or contractual authorization for the taxation of the expenses of a litigant's witness as costs, federal courts are bound by the limitations set out in 28 USC Secs. 1821 and 1920.  It is also settled that in admiralty, pre-judgment interest must be granted unless peculiar circumstances justify its denial. The district court apparently overlooked Hilffrich's request for pre-judgment interest in her Complaint and Proposed Findings of Fact and Conclusions of Law.  The USCA thus remanded to allow the district court to deter-mine whether peculiar circumstances justified the denial of pre-judgment interest.

21)  ENVIRONMENTAL LAW / CLEAN WATER ACT / JURISDICTION  USA v. Appel, 98-55727 (9th Cir. Jan. 11, 2000) (unpublished).  Pregerson (dissenting), Noonan, and O'Scannlain, Circuit Judges.
          Appel owns a 30 acre parcel of property in Ventura County, California.  The Ventura River runs through Appel's property, as does its tributary, the San Antonio Creek.  In 1993, the Army Corps of Engineers became aware of discharges of dredged and fill materials on Appel's property.  On January 4, 7, and 8 of 1993, a Corps employee observed large dump trucks dumping plant debris and dirt into or immediately adjacent to the River.  On January 26, 1993, the Corps initiated a formal federal enforcement response by issuing a cease and desist letter ordering Appel to stop discharging dredged or fill material on the property without a Clean Water Act ("CWA") Sec. 404 permit.  Appel failed to comply with the Corps' cease and desist letter and continued to discharge dredged materials.  In response, the Corps requested assistance from the Environmental Protection Agency ("EPA").  In December 1993, the EPA wrote Appel a letter expressing its concern that he had violated the CWA and urged him to comply with the Corps' cease and desist letter.  The EPA's letter explained the consequences of violating the CWA and notified Appel it intended to make on-site inspections to assess CWA jurisdiction.  Appel responded by a letter dated December 20, 1993, objecting to and demanding proof of federal jurisdiction over him, a "Citizen of California," and over his property.  He also indicated that he would not allow the EPA to conduct an on-site inspection at that time.  On January 24, 1994, the EPA obtained administrative warrants authorizing the EPA and its representatives to gather necessary information to make a jurisdictional determination under the CWA.  On Febru-ary 1, 1994, the EPA executed the warrants with a team of personnel from the EPA, the Corps, the U.S. Fish and Wildlife Service, and the California Department of Fish and Game. 
The EPA then wrote Appel again on April 1, 1994, explaining Sec. 404's permitting requirements and reiterating the various enforcement responses the federal government could invoke under the CWA.  The EPA also sent Appel copies of relevant CWA provisions and federal regulations.  On April 20, 1994, the EPA issued a Findings of Violation and Compliance Order under CWA Sec. 309(a) against Appel for discharging dredged and fill materials into the Ventura River and the San Antonio Creek without a Sec. 404 permit.  Attached to the Order was a color photocopy of an aerial photograph showing the EPA's depiction of the lateral extent of waters of the United States.  The Compliance Order required Appel to immediately cease his unpermitted discharges of dredged and fill materials into waters of the United States and to prepare a remediation plan subject to the EPA's approval to remedy his illegal fill activities.  The letter warned Appel of the legal consequences of noncompliance and offered him assistance with formulating an acceptable Remediation Plan.  Appel continued to refuse to comply with the Order and continued to demand proof of federal jurisdiction over him, a "Citizen of California."  After several more warnings, the EPA referred the matter to the U.S. Department of Justice for civil prosecution in federal court.  In addition, Appel was tried and convicted in state court for violating California Water Code Sec. 13387, a felony.  The jury there found that Appel had unlawfully discharged pollutants, including dredged soil, garbage, fill material, and material from land clearing.
         The federal proceedings against Appel commenced in November 1994, when the U.S. filed a complaint and motion for preliminary injunction in the District Court for the Central District of California.  District Judge Baird granted the motion for a preliminary injunction on December 27, 1994, and enjoined Appel from discharging pollutants into waters of the United States in violation of Secs. 310(a) and 404 of the CWA.  On November 13, 1995, the government moved for partial summary judgment.  The district court granted this motion in February 1996, concluding that the Ventura River and the San Antonio Creek are waters of the United States within the meaning of the CWA and that the EPA's jurisdictional determination was not arbitrary or capricious.  The court noted that the EPA made its jurisdictional determination based on the lateral extent of the ordinary high water mark for the Ventura River and the San Antonio Creek.  Additionally, the court noted that consistent with the governing regulations, the EPA determined the ordinary high water mark by analyzing aerial photographs and conducting "extensive" field observations.  The court considered the declarations of Appel's expert, but concluded that they were not on point.  Following the district court's entry of partial summary judgment, the court conducted a three day trial to determine what restoration measures would be necessary and what civil penalties should be imposed.  The court entered final judgment for the United States and adopted the restoration plan prepared for the government and ordered Appel to implement that plan.  It also order Appel to pay $100,000 in civil penalties, payable in installments over a period of five years.  On appeal, Appel challenged neither the terms of the restoration plan nor the civil penalty.  Instead, he challenged the EPA's determination that the waters into which he discharged fill were "waters of the United States" as defined by the CWA and its implementing regulations.
        The USCA reversed and remanded.  At issue on appeal was whether Appel should have an opportunity to challenge the determination of the EPA that his property fell within the waters of the United States.  This determination had been made by a biologist employed by the EPA on the basis of aerial photos of the land and physical inspection of it, by means of which he set the ordinary high water mark of the River as it related to Appel's property.  Appel challenged the accuracy of the method used, offering declarations of Robert Ayer, a licensed civil engineer, who teaches courses on hydrology at the University of Southern California.  Ayer declared that the EPA's estimate was erroneous and its method unscientific.  In his view a topographic map was necessary to determine the ordinary high water mark.  In his opinion it was "professional malpractice to determine flow waters parameters without an accurate survey of topography of the area surrounding the river."  The district court found Azer's declaration "persuasive and almost enough to defeat the summary judgment", but ruled that the EPA had made its determination in accordance with the regulations and thus that the determination was not arbitrary or capricious but binding on the court.  The relevant regulation, 33 CFR Sec. 328.3(e), leaves open what, in any given case, is the appropriate way for determining a river's ordinary high water mark.  In this case, where the River is know to flood, it is not clear that the method used is an appropriate method prescribed by the regulation.  Appel offered evidence to doubt that it was.  As the matter was contested in terms of the accuracy appropriate here, it was incumbent on the district court to take testimony and make a judgment as to what method is appropriate in this case.
          Dissenting, Judge Pregerson thought that, contrary to the majority's assertion, the issue on appeal was not whether Appel should have an opportunity to challenge the EPA's determination that his property fell within the waters of the United States.  He already had the opportunity to challenge the EPA's jurisdictional determination both in the district court and on appeal.  Rather, the issue on appeal was whether his challenge should succeed.  It could succeed only if the EPA's jurisdictional determination was "arbitrary or capricious."  Because, Judge Pregerson thought it was not, he would affirm the decision of the district court.  Appel's challenge was based on the opinion of his expert that the method used by the EPA scientist to determine the ordinary high water mark was not scientifically accurate.  But the EPA scientist had not used a novel or untested method in conducting his analysis.  As the district court correctly noted, "the regulations clearly state that the criteria relied on by [the EPA's scientist] are those used by the Corps to determine the ordinary high water mark."  Moreover, Appel did not dispute that the method used by the EPA to determine the high water mark was consistent with the governing regulation.  Rather, Appel simply argued that the method listed in the Corps' long-standing regulations was unscientific.  Judge Pregerson noted that judges should not second-guess the validity of the method listed in the governing regulation, nor should they substitute their own judgment of what might be a better method to determine the ordinary high-water mark.  Appel had not even challenged the regulation directly, nor could he as the statute of limitations for challenging the regulation directly had passed.  The majority, however, was persuaded by the testimony of Appel's expert and determined that the inclusion of a catch-all phrase at the end of the regulation required reversal.  The regu-lation defines "ordinary high water mark" as "that line on the shore established by the fluctuations of water and indicated by physical characteristics such as clear, natural line impressed on the bank, shelving, changes in the character of soil, destruction of terrestrial vegetation, the presence of litter and debris, and other appropriate means that consider the characteristics of the surrounding areas.  The majority concluded that the phrase "or other appropriate means" indicates that the regulation "left open what, in any given case, is the appropriate way for determining a river's ordinary high water mark."  Judge Pregerson disagreed with this conclusion for two reasons.  First, he thought that the plain language of the regulation did not support this conclusion.  When the regulation is read in its entirety, it is clear that the inclusion of the phrase "or other appropriate means" does not mean that the traditional method described in the regulation is, at times, inappropriate.  The phrase in question simply indicates that the EPA has the option of using other appropriate methods to determine the high water mark.  Second, Judge Pregerson thought it was necessary to defer to the EPA's interpretation of its own regulations, if its interpretation is not unreasonable or inconsistent with the regulations.  The majority did not suggest that the EPA's interpretation of the regulation (that the method described is a proper method for determining the ordinary high water mark) was unreasonable.  The EPA's scientist had complied with the regulation and used the method expressly set forth in the regulation.  Additionally, evidence introduced by the EPA demonstrated that the EPA's scientist's method, using field observations and examining aerial photographs, was the method traditionally used to determine the ordinary high water mark.  Consequently, it was clear that the EPA's "interpretation of the regulation and reliance on the regulation and reliance on the regulation was not unreasonable.  Appel failed to demonstrate that the EPA's jurisdictional determination was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."  As the Supreme Court has explained "[w]hen specialist express conflicting views, an agency must have discretion to rely on the reasonable opinions of its own qualified experts even if, as an original matter, a court might find contrary views more persuasive."  Marsh v. Oregon Natural Resources Council, 490 US 360, 378 (1989). Because the record established that the EPA's jurisdictional determination was a reasonable one, Judge Pregerson said he would affirm the district court's judgment for the United States.

22)  MANDAMUS / ARBITRATION: PowerAgent Inc. v. U.S. District Court, 99-70560 (9th Cir. Jan. 14, 2000) (unpublished).  Canby, Thompson, and Graber, Circuit Judges.
        Petitioner PowerAgent sought a writ of mandamus directing the District Court for the Northern District of California to (1) vacate its order striking the petitioner's amended complaint, (2) determine whether the claims set forth in the petitioner's amended complaint are arbitrable, and (3) retain jurisdiction over the non-arbitrable claims. 
       The USCA denied the petition.  Mandamus, it noted, is a "drastic" remedy, to be invoked only in extraordinary situations.  In determining whether the writ should issue, the court considers whether:  (1) the petitioner has no other adequate means, such as direct appeal, to obtain the relief desired;  (2) the petitioner will be damaged or prejudiced in a way not correctable on appeal;  (3) the district court's order is clearly erroneous as a matter of law;  (4) the district court's order is an oft-repeated error;  and (5) the district court's order raises new and important problems or issues of first impressions.  Bauman v. U.S. District Court, 557 F.2d 650 (9th Cir. 1997).  Because these factors rarely point in the same direction, the USCA balances conflicting indicia when determining whether to issue a writ.  Nonetheless, the USCA held that in general the existence of clear error is dispositive.  Here, the petitioner failed to show that the district court clearly erred as a matter of law in striking the amended complaint.  The petitioner maintained that the district court, upon striking the amended complaint, erred in stating it had already exhausted the jurisdiction vested in it by the Arbitration Act.  However, the district court did assert jurisdiction—it struck the amended compliant.  Moreover, the USCA could not say that the district court clearly erred in so doing.  The petitioner maintained that it had the absolute right to file the amended compliant because no responsive pleading had been filed.  The USCA disagreed.  As the district court observed, a plaintiff's right to amend is not unlimited.  For example, a plaintiff may not seek leave to amend in the face of a motion to dismiss when it cannot state a claim for relief without contradicting allegations made in the original complaint. Nor may a plaintiff freely amend a complaint to forestall the grant of summary judgment.  One court has also reasoned that a district court may properly ignore an amended complaint when a plaintiff has amended to strip the court of jurisdiction to confirm an arbitration award.  If a plaintiff could drop factual allegations in an amended complaint to circumvent a previously issued order compelling arbitration, every order compelling arbitration would become merely provisional, subject to a plaintiff's "right" to amend to defeat the order.  Here, the district court relied on facts asserted by the petitioner in reaching its decision to stay the case and compel arbitration.  Once the district court reached that decision, the petitioner was not free to retract those assertions in an effort to avoid arbitration.  As to the other Bauman factors, the petitioner maintained that it had no other adequate means to obtain the relief desired because it may not be able to proceed through the arbitration process, given its precarious financial position.  However, this argument was rejected in Calderon v. U.S. District Court, 163 F.3d 530 (9th Cir.), cert. deniedsubnom., Calderon v. Taylor, 119 S.Ct. 274 (1998).  Similarly, the petitioner's contention that it would be damaged in a way not correctable on appeal was unavailing.  Delay and financial hardship are consequences faced by all litigants who believe a district court has erred.  Finally, although the petitioner probably has shown that its petition for a writ of mandamus raised a new issue of law, that factor alone is not determinative, and in view of the other Bauman factors which point toward denial of the petition, the USCA was persuaded that a writ of mandamus should not issue.  Another consideration supported this decision.  Congress has clearly discouraged immediate appellate review of orders compelling arbitration in 9 USC Sec. 16(b).  Although Sec. 16 allows immediate appellate review of orders refusing to stay actions and denying applications to compel arbitration, in Sec. 16(b) it prohibits appeals of orders granting stays and compelling arbitration, except as otherwise provided in 28 USC Sec. 1292(b).  This distinction promotes Congress' clear intent "to move the parties to an arbitrable suit out of court and into arbi-tration as quickly and easily as possible." Moses H. Cone Mem'l Hosp. V. Mercury Constr. Corp., 460 US 1,22 (1983