A suit brought by shippers to enjoin a railroad company from
putting a tariff schedule into effect on the ground that it
violates rights secured by the Act to Regulate Commerce is a case
arising under the Constitution and laws of the United States, and
the jurisdiction of the circuit court over the person of the
defendant must be determined accordingly.
Under the jurisdictional Act of March 3, 1875, c. 137, 18 Stat.
470, as amended by the Act of March 3, 1887, c. 373, 24 Stat. 552,
corrected by the Act of August 13, 1888, c. 866, 25 Stat. 433, the
circuit court in the district of which the defendant is not an
inhabitant has not jurisdiction of a case arising under the
Constitution and laws of the United States, even though diverse
citizenship exist, the plaintiff resides in the district, and the
cause be one alone cognizable in a federal court.
Where pleas to the jurisdiction which should have been sustained
on one ground were overruled but subsequently the circuit court of
appeals reversed and remanded with instructions to dismiss without
prejudice for want of jurisdiction on a different ground, this
Court may reach the result which should have been originally
arrived at by affirming the decree of the circuit court of appeals
without expressing any opinion as to the merits of the reasoning on
which it was based.
166 F. 206 affirmed.
The facts, which involve the jurisdiction of the circuit court,
are stated in the opinion.
Page 215 U. S. 502
MR. JUSTICE WHITE delivered the opinion of the Court.
This litigation was commenced on the equity side of the Circuit
Court of the United States for the Southern District of Georgia, by
the filing on July 25, 1908, of a bill on behalf of the present
appellants, all citizens of the State of Georgia, who are wholesale
dealers in groceries and food products and like commodities. The
defendants named in the bill are the appellees in this Court,
railroad corporations of states other than Georgia,
viz.,
the Atlantic Coast Line Railroad Company, the Louisville &
Nashville Railroad Company, the Nashville, Chattanooga & St.
Louis Railway Company, the Southern Railway Company, and the
Cincinnati, New Orleans & Texas Pacific Railway Company.
Briefly stated, the object of the bill was to restrain the
putting into effect, by the interstate carriers just named, of
proposed advances in rates on fresh meats, grain products, hay, and
packinghouse products within the territory of what is known as the
Southeastern Freight Association. That territory, roughly
described, embraces the States of South Carolina, Florida, Georgia,
points in Tennessee, and that portion of Alabama east of a line
drawn from Chattanooga through Birmingham, Selma, and Montgomery to
Pensacola. It was averred that freight tariffs embodying the
proposed advances in rates had been filed with the Interstate
Commerce Commission, that notice had been given that such tariffs
would become effective on August 1, 1908, and that practically
every interested line of railroad within the territory in question
had joined in such tariffs as participating carriers. The advance
in rates was averred to be an "arbitrary and unlawful exaction,"
and to be the direct outcome of understandings and agreements in
suppression of competition and in unlawful combination in restraint
of interstate trade, arrived at and made effective through the
agency of the Southeastern Freight Association and other affiliated
associations, and that the acts of such combinations in
Page 215 U. S. 503
making the advance of rates complained of was the result of a
conspiracy unlawful as well at common law as under the statutes of
the United States. Averring that to permit the going into effect of
the proposed unjust and unreasonable rates would entail irreparable
loss and injury to complainants and others similarly situated,
would operate to the prejudice of the public interest, and would
bring about a multiplicity of suits for reparation, the bill prayed
the allowance of an injunction
pendente lite, restraining
the putting into effect of the proposed advances, and that, upon a
final hearing, a decree might be awarded perpetually enjoining such
advances.
Specially appearing for the purpose, the various defendants
respectively filed a plea to the jurisdiction, each defendant
asserting in substance an exemption from being sued in a district
of which it was not an inhabitant. Demurrers to the pleas to the
jurisdiction were sustained. Thereupon, without waiving the benefit
of the pleas, defendants jointly demurred to the bill upon numerous
grounds. Without specifically passing on the demurrer, the court
heard the application for an injunction upon affidavits and
documents submitted on behalf of the complainants, and on August 1,
1908, announced its opinion sustaining the contention of the
complainants and directing the injunction prayed to issue upon the
condition that complainants should, within ten days, present their
complaint to the Interstate Commerce Commission for investigation
and determination of the reasonableness of the rates involved. 163
F. 738. Two days afterwards, an order was entered in which, among
other statements, it was recited
"that the complainants, together with other persons in the
cities of Atlanta, Columbus, Rome, and Athens, Georgia, have this
day filed with the Interstate Commerce Commission their complaint,
praying the Commission to investigate and determine the
reasonableness of the rates involved, also to declare what are just
and reasonable maximum rates
Page 215 U. S. 504
"
The order decreed that the defendants to the action and each of
them
"be and they are hereby jointly and severally enjoined from
enforcing collection of the advance in rates made effective August
first, 1908, from Ohio and Mississippi River crossings, Nashville,
Tennessee, and points with relation thereto, to all points within
the State of Georgia, on classes B, C, D, and F, fresh meats, C, L,
grain products, hay, and packinghouse products, this injunction to
continue and remain in force pending an investigation and
determination of the reasonableness of the rates involved by the
Interstate Commerce Commission or until further order of the
court."
Thereupon an appeal was taken to the Circuit Court of Appeals
for the Fifth Circuit. It was there held that the case presented
"for necessary consideration the proper construction of the Act to
Regulate Commerce," and that the jurisdiction of the court did not
rest solely upon diversity of citizenship of the parties. The
court, being of opinion
"that the sound construction of the different provisions of the
Act to Regulate Commerce, as amended and now in force, necessarily
forbids the exercise of the jurisdiction attempted to be invoked by
the bill,"
reversed the decree of the circuit court and remanded the case
to that court with instructions to dismiss the bill without
prejudice.
Assignments of error eighteen in number have been filed wherein,
in various forms of statements, appellants assail the action of the
circuit court of appeals in adjudging that the circuit court was
without jurisdiction over the subject matter of the bill. The
appellees also, in the argument at bar, press upon our notice, as
they did below, the claims made in the special pleas to the
jurisdiction filed in the circuit court. It is, of course, the duty
of this Court to see to it that the jurisdiction of the circuit
court was not exceeded (
Louisville & Nashville R. Co. v.
Mottley, 211 U. S. 149,
211 U. S. 152,
and cases cited), and we shall dispose of the case before us by
considering and deciding the last-mentioned contention. The basis
of the claim that the circuit court had not
Page 215 U. S. 505
acquired jurisdiction over the person of the defendants was that
none of the defendants was an inhabitant of the district in which
the suit was brought, and that the suit being one
"wherein the jurisdiction is not founded only on the fact that
the action is between citizens of different states, but is based
also upon acts of Congress of the United States relating to
interstate commerce, and alleged causes of action arising
thereunder,"
the defendant could not be sued outside of the district of which
it was an inhabitant. As cause of demurrer to the pleas, the
complainants stated "that the controversy presented by the bill is
wholly between citizens of different states, and is solely founded
upon diversity of citizenship." While sustaining the demurrer, the
circuit court yet declared:
"It is true that, it this case, the illegality of the alleged
increase in rates must necessarily, in large measure, be determined
by the federal law. The legality or illegality of the alleged
combination in restraint of trade must be determined by the same
law, and it seems to be conceded that, generally speaking, this
Court would not have jurisdiction of these questions finally except
under conditions which do not exist here. That is to say, the court
can only, for final determination, entertain the federal question
in the district of which the defendants are inhabitants."
Despite these views, however, as the court considered, if the
averments of the bill were taken as true, there was "a threatened
and immediate, violation of the federal law of the gravest
character to a large number of people," irreparable injury would be
occasioned if the increase in rates were allowed to go into effect,
and as there was not time for those affected to have protection or
seek recourse elsewhere, jurisdiction was entertained for the
purpose of giving temporary relief.
The pertinent section of the statute regulating the original
jurisdiction of circuit courts of the United States is the first
section of the Act of March 3, 1875, c. 137, 18 Stat. 470, as
Page 215 U. S. 506
amended by the Act of March 3, 1887, c. 373, 24 Stat. 552, as
corrected by the Act of August 13, 1888, c. 866, 25 Stat. 433,
reading as follows:
"That the circuit courts of the United States shall have
original cognizance, concurrent with the court of the several
states, of all suits of a civil nature at common law or in equity,
where the matter in dispute exceeds, exclusive of interest and
costs, the sum or value of two thousand dollars, and arising under
the Constitution or laws of the United States . . . or in which
there shall be a controversy between citizens of different states,
in which the matter in dispute exceeds, exclusive of interest and
costs, the sum or value aforesaid. . . . But . . . no civil suit
shall be brought before either of said courts against any person by
any original process or proceeding in any other district than that,
whereof he is an inhabitant; but where the jurisdiction is founded
only on the fact that the action is between citizens of different
states, suit shall be brought only in the district of the residence
of either the plaintiff or the defendant."
In
Patton v. Brady, 184 U. S. 608,
discussing the question as to when a case may be said to arise
under the Constitution of the United States, the court
observed:
"It is said by Chief Justice Marshall that"
"a case in law or equity consists of the right of the one party,
as well as of the other, and may truly be said to arise under the
Constitution or a law of the United States whenever its correct
decision depends on the construction of either,"
"
Cohen v. Virginia, 6 Wheat.
264,
19 U. S. 379, and again,
when"
"the title or right set up by the party may be defeated by one
construction of the Constitution or law of the United States, and
sustained by the opposite construction."
"
Osborn v. Bank of United
States, 9 Wheat. 738,
22 U. S.
822.
See also Little York Gold-Washing & Water
Co. v. Keyes, 96 U. S. 199,
96 U. S.
201;
Tennessee v. Davis, 100 U. S.
257;
White v. Greenhow, 114 U. S.
307;
Railroad Company v. Mississippi,
102 U. S.
135,
102 U. S. 139. "
Page 215 U. S. 507
In
Tennessee v. Davis, supra, the Court said:
"What constitutes a case, thus arising was early defined in the
case cited from 6 Wheat. [
Cohen v. Virginia]. It is not
merely where a party comes into court to demand something conferred
upon him by the Constitution or by a law or treaty. A case consists
of the right of one party as well as the other, and may truly be
said to arise under the Constitution or a law or a treaty of the
United States whenever its correct decision depends upon the
construction of either. cases arising under the laws of the United
States are such as grow out of the legislation of Congress, whether
they constitute the right or privilege or claim, the protection or
defense of the party, in whole or in part, by whom they are
asserted. Story, Const. sec. 1647. It was said in
Osborn v.
Bank (9 Wheat. 738),"
"When a question to which the judicial power of the Union is
extended by the Constitution forms an ingredient of the original
cause, it is in the power of Congress to give the circuit courts
jurisdiction of that cause, although other questions of fact or of
law may be involved in it."
"And a case arises under the laws of the United States when it
arises out of the implication of the law."
In cases of the character of the one at bar, the rulings of the
lower federal courts have uniformly been to the effect that they
arose under the Constitution and laws of the United States.
Tift v. Southern Railway Co., 123 F. 789, 793;
Northern Pacific Ry. Co. v. Pacific &c. Ass'n, 165 F.
1, 9;
Memphis Cotton Oil Co. v. Illinois Central R. Co.,
164 F. 290, 292;
Imperial Colliery Co. v. Chesapeake & O.
Ry. Co., 171 F. 589.
And see Sunderland Bros. v. Chicago,
R.I. & P. Ry. Co., 158 F. 877;
Jewett Bros. v. C., M.
& St.P. Ry. Co., 156 F. 160. We are of opinion that the
case before us may properly be said to be one arising under a law
or laws of the United States. As said by Taft, Circuit Judge, in
Toledo, A. A. & N.M. Ry. Co. v. Pennsylvania Co., 54
F. 730:
"It is immaterial what rights the complainant would have
Page 215 U. S. 508
had before the passage of the interstate commerce law. It is
sufficient that Congress, in the constitutional exercise of power,
has given the positive sanction of federal law to the rights
secured in the statute, and any case involving the enforcement of
those rights is a case arising under the laws of the United
States."
The object of the bill was to enjoin alleged unreasonable rates,
threatened to be exacted by carriers subject to the Act to Regulate
Commerce. The right to be exempt from such unlawful exactions is
one protected by the act in question, and the purpose to avail of
the benefit of that act, as well as of the antitrust act, is
plainly indicated by the averments of the bill. Of necessity, in
determining the right to the relief prayed for, a construction of
the Act to Regulate Commerce was essentially involved.
The jurisdiction of the circuit court not being invoked solely
upon the ground of diversity of citizenship, it inevitably follows
that, as there was no waiver of the exemption from being sued in
the court below, that court was without jurisdiction of the persons
of the defendants.
In re Keasbey & Mattison Co.,
160 U. S. 221;
In re Moore, 209 U. S. 490;
Western Loan Co. v. Butte & Boston Min. Co.,
210 U. S. 368. In
the first case, the question involved was as to the jurisdiction of
the United States Circuit Court for the Southern District of New
York over an action brought in that court by a corporation of
Pennsylvania against a corporation of Massachusetts, having its
principal place of business in New York City, for infringement of a
trademark. In the course of the opinion it was said (pp.
160 U. S.
228-230):
"But when this suit was brought, the first section of the
Judiciary Act of 1875 had been amended by the act of March 3, 1887,
c. 373, as corrected by the Act of August 13, 1888, c. 866, in the
parts above quoted, by substituting for the jurisdictional amount
of $500, exclusive of costs, the amount of $2,000, exclusive of
interest and costs, and by striking out, after the clause, 'and no
civil suit shall be brought before
Page 215 U. S. 509
either of said courts against any person by any original process
or proceeding in any other district than that, whereof he is an
inhabitant,' the alternative, 'or in which he shall be found at the
time of serving such process or commencing such proceeding,' and by
adding, 'but where the jurisdiction is founded only on the fact
that the action is between citizens of different states, suit shall
be brought only in the district of the residence of either the
plaintiff or the defendant.' 24 Stat. 552; 25 Stat. 433."
"The last clause is added by way of proviso to the next
preceding clause, which, in its present form, forbids any suit to
be brought in any other district than that of which the defendant
is an inhabitant, and the effect is that, in every suit between
citizens of the United States, when the jurisdiction is founded
upon any of the grounds mentioned in this section, other than the
citizenship of the parties, it must be brought in the district of
which the defendant is an inhabitant; but when the jurisdiction is
founded only on the fact that the parties are citizens of different
states, the suit shall be brought in the district of which either
party is an inhabitant. And it is established by the decisions of
this Court that, within the meaning of this act, a corporation
cannot be considered a citizen, an inhabitant, or a resident of a
state in which it has not been incorporated; and, consequently,
that a corporation incorporated in a State of the Union cannot be
compelled to answer to a civil suit at law, or in equity, in a
circuit court of the United States, held in another state, even if
the corporation has a usual place of business in that state.
McCormick Co. v. Walthers, 134 U. S.
41,
134 U. S. 43;
Shaw v.
Quincy Mining Co., 145 U. S. 444;
Southern
Pacific Co. v. Denton, 146 U. S. 202. Those cases, it
is true, were of the class in which the jurisdiction is founded
only upon the fact that the parties are citizens or corporations of
different states. But the reasoning on which they proceeded is
equally applicable to the other class, mentioned in the same
section, of suits arising under the Constitution, laws, or treaties
of the United
Page 215 U. S. 510
States, and the only difference is that, by the very terms of
the statute, a suit of this class is to be brought in the district
of which the defendant is an inhabitant, and cannot, without the
consent of the defendant, be brought in any other district, even in
one of which the plaintiff is an inhabitant."
"
* * * *"
"This suit, then, assuming it to be maintainable under the act
of 1881, is one of which the courts of the United States have
jurisdiction concurrently with the courts of the several states.
The only existing act of Congress which enables it to be brought in
the circuit court of the United States is the act of 1888. The suit
comes within the terms of that act, both as arising under a law of
the United States and as being between citizens of different
states. In either aspect, by the provisions of the same act, the
defendant cannot be compelled to answer in a district of which
neither the defendant nor the plaintiff is an inhabitant. The
objection, having been seasonably taken by the defendant
corporation, appearing specially for the purpose, was rightly
sustained by the circuit court."
We are of opinion that the jurisdictional statute of 1888 is
applicable, even upon the assumption that the cause of action was
alone cognizable in a court of the United States, as the particular
venue of the action was not provided for elsewhere than in that
statute.
The pleas to the jurisdiction of the circuit court, having been
seasonably made, should have been sustained, and the bill dismissed
without prejudice for want of jurisdiction over the persons of the
defendants. As, however, practically the same result will be
reached by the decree entered in the circuit court of appeals,
which ordered the reversal of the decree of the circuit court and
remanded the cause, with instructions to dismiss the bill without
prejudice, we affirm that decree without expressing an opinion as
to the merits of the reasoning upon which it was based.
Affirmed.
Page 215 U. S. 511
MR. JUSTICE HARLAN, dissenting:
I cannot agree to the opinion in this case, and will briefly
state the reasons for my dissenting.
The plaintiffs in error, citizens of Georgia, brought this suit
in equity in the Circuit Court of the United States for the
Southern District of Georgia against the defendants in error,
corporations of several different states other than Georgia. The
relief sought was a decree enjoining those corporations from
putting in force and maintaining in Georgia certain rates
established by agreement among themselves. It seems to me that this
case could have been disposed of upon the authority of
Baltimore & Ohio Railroad Co. v. Pitcairn Coal
Company, recently decided,
ante, p.
215 U. S. 481, in
which the Court held in substance that shippers who complain of
rates adopted by interstate carriers cannot obtain relief by an
original suit brought in any court, federal or state, but must make
application at the outset to the Interstate Commerce Commission.
This, I think, is all that need have been said, for whatever
interpretation was given to the Judiciary Act of 1888, 25 Stat.
433, c. 866, the circuit court would have been required, under the
case just cited, to decline jurisdiction. But the Court, in its
wisdom, does not refer to this view of the case, and deems it
necessary to determine whether the plaintiffs, citizens of Georgia,
may, under the Judiciary Act of 1888, considered alone, invoke the
jurisdiction of the circuit court, held in that state, against the
defendant corporations of other states.
If I correctly interpret the opinion of the Court, it proceeds
on the theory that, if the action had been founded alone on
diversity of citizenship, the suit -- although the defendants were
corporations of other states -- could have been maintained in the
United States circuit court sitting in Georgia, that being the
state of the residence of the plaintiffs. But as the plaintiffs
were so unfortunate as to possess, and, in their pleadings, to
assert, in addition to diversity of citizenship, a federal right,
and to seek to have that right protected by the
Page 215 U. S. 512
federal court against the illegal acts of the defendant
corporations, they must now either go into a state court of
Georgia, in order to obtain the desired relief, or go to the
respective states, however distant, which incorporated the
defendants, and sue there. Certain cases are referred to as
requiring this construction of the act of 1888 --
McCormick
Harvesting Machine Co. v. Walthers, 134 U. S.
41;
Shaw v. Quincy Mining Company, 145 U.
S. 444, and
In re Keasbey & Mattison Co.,
160 U. S. 221. But
I cannot perceive that there was in either of those cases such a
question as the one just stated. Neither of them actually involved
or decided any such question. The
McCormick case was a
suit in the circuit court of Nebraska by a citizen of that state
against an Illinois corporation having an agent in Nebraska. The
defendant pleaded that, as it was not an inhabitant of Nebraska, it
could not, under the act of 1888, be sued in that state. But this
plea was overruled by the court below, and this Court held that the
McCormick Company, although not an inhabitant of Nebraska, was
liable to be sued in the federal court held in the state of the
plaintiff's residence. Nothing more was involved or decided in that
case. The
Shaw case was a civil suit brought in the
federal court sitting in New York by a citizen of Massachusetts
against a citizen of Michigan. But, although the parties were
citizens of different states, neither the plaintiff nor the
defendant resided in or was a citizen of the state in which the
suit was brought. What was really involved in that case, and what
was decided, appears from the last paragraph of the opinion of this
Court, as follows (p.
145 U. S.
453):
"All that is now decided is that, under the existing act of
Congress, a corporation incorporated in one state only cannot be
compelled to answer in a circuit court of the United States held in
another state, in which it has a usual place of business, to a
civil suit at law or in equity,
brought by a citizen of a
different state."
In the
Keasbey-Mattison case, it appears that the suit
was brought in the federal court of New York by a Pennsylvania
corporation against a Massachusetts corporation. What
Page 215 U. S. 513
the Court said leaves no doubt as to what was intended to be
decided. It said:
"This suit, then, assuming it to be maintainable under the act
of 1881, is one of which the courts of the United States have
jurisdiction concurrently with the courts of the several states.
The only existing act of Congress, which enables it to be brought
in the circuit court of the United States, is the act of 1888. This
suit comes within the terms of that act, both as arising under a
law of the United States and as being between citizens of different
states. In either aspect, by the provisions of the same act, the
defendant cannot be compelled to answer in a district of which
neither the defendant nor the plaintiff is an
inhabitant."
Whatever general expressions are to be found in the opinions in
the cases cited, neither of those cases is an authority for the
broad, unqualified statement that the United States circuit court
held in a state of which the plaintiff is a citizen may not take
cognizance of a suit brought by him in a federal court against a
corporation of another state, where such suit presents a
controversy between citizens of different states and,
in
addition, discloses the fact that the plaintiff claims a
federal right which needs to be protected against the wrongful or
illegal acts of the defendant corporation. This proposition is, of
course, subject to the condition that the foreign corporation, by
having an agency in Georgia or otherwise, can be reached by some
process and brought into the federal court sitting in Georgia. It
is inconceivable, I think, that Congress intended to deprive the
federal court sitting in the state of the plaintiff's residence of
jurisdiction to protect his federal right simply because it appears
from the record that the defendant and the alleged wrongdoer are
citizens of different states. It necessarily follows from the
opinion of the Court in this case that, where a citizen of another
state is sued in a state court, and the suit involves a federal
right claimed by the plaintiff, the defendant cannot remove the
case to the federal court, but must remain in the state court of
original jurisdiction, and there defend his asserted federal right.
The state court might well say, under
Page 215 U. S. 514
the opinion just delivered, that, although the controversy
between the parties involves federal rights, and presents a
controversy between citizens of different states, as well as one
arising under the Constitution and laws of the United States, it is
a suit of which the federal court could not take cognizance by
removal. We so say because such a case could not, under the Court's
present view of the act of 1888, have been originally brought in
that court, and because, according to the settled doctrines of this
Court, no case can be removed from a state court to a federal court
which could not have been originally brought in the latter court.
Tennessee v. Union & Planters' Bank, 152 U.
S. 454;
Arkansas v. Coal Co., 183 U.
S. 185;
Joy v. St. Louis, 201
U. S. 340,
201 U. S.
341.
I recognize the fact that the act of 1888 was not drawn with
precision. But I am of opinion that, as the act gives the circuit
court original jurisdiction, concurrent with the courts of the
several states,
"of all suits of a civil nature at common law or in equity,
where the matter in dispute exceeds, exclusive of interest and
costs, the sum or value of $2,000 . . . in which there shall be a
controversy between citizens of different states,"
the intention of Congress would be best effectuated by holding
that the jurisdiction of the circuit court is not excluded, in a
controversy between citizens of different states, simply because
the plaintiff, who sued in the federal court held in the state of
his residence, asserts a federal right and seeks to have it
protected against the illegal acts of the defendant, a citizen of
another state provided always that the defendant, if a corporation
of another state, may, through agents conducting its business in
the state where the suit is brought, be reached by the process of
the court, and subjected to its authority. The presence in the case
of a federal right asserted by the plaintiff ought not to prejudice
him, and does not, I think, alter the fact that the controversy is
one of which a circuit court may take cognizance, because it is a
controversy between citizens of different states.