1. A suit against a railroad by a minority stockholder to enjoin
the company from carrying out an agreement for obtaining additional
equipment and issuing certificates therefor as permitted by an
order of the Interstate Commerce Commission which the plaintiff
assails
Page 271 U. S. 128
as invalid is essentially a suit to set aside the order, of
which a state court has no jurisdiction. P.
271 U. S.
128.
2. Suit to set aside orders, mandatory or permissive, of the
Interstate Commerce Commission can be brought only against the
United States, and only in the federal courts. P.
271 U. S.
130.
Affirmed.
Appeal from a decree of the district court dismissing an
injunction suit for want of jurisdiction.
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
This is an appeal from a decree of a federal district court
dismissing a suit for want of jurisdiction. The suit was begun in a
state court, and then removed into the federal court, on the
defendant's petition, by reason of the diverse citizenship of the
parties. Want of jurisdiction was adjudged because the court was of
opinion that the suit was essentially one to annul or set aside an
order of the Interstate Commerce Commission made under § 20a of the
Interstate Commerce Act, as added by Act Feb. 28, 1920, c. 91, 41
Stat. 494, § 439, that the United States was a necessary defendant
and had not consented to be sued in a state court, and that the
removal did not give the federal court jurisdiction when the state
court had none.
A short description of the suit as displayed in the plaintiff's
amended bill will suffice to show its nature. The plaintiff is a
minority stockholder of a railway company which owns and operates
an interstate railroad, and that company is the sole defendant. The
purpose with which the suit is brought is to enjoin the defendant
company from carrying out an agreement with two other railroad
companies under which the three, collectively
Page 271 U. S. 129
styled "New York Central Lines," are to acquire a large number
of locomotives for use on their respective roads in both interstate
and intrastate commerce, are to obtain money to pay for this
equipment by issuing certificates, payable at intervals during a
period of 15 years, with semiannual dividend warrants representing
interest, and are to covenant jointly and severally to pay rentals
for the equipment sufficient to pay the certificates and dividend
warrants as they mature. On application by the three companies
pursuant to § 20a, the Interstate Commerce Commission, after notice
and investigation, made an order approving the agreement and
authorizing the acts contemplated therein. The order was made the
day before the suit was begun.
The plaintiff alleges in his amended bill that to issue the
certificates and provide for their payment in the manner proposed
will be in violation of the laws of the state wherein the defendant
company was incorporated and of the other states into which its
road extends unless the approval of designated agencies of those
states be secured, that such approval has not been and is not
intended to be secured, and that the defendant company is relying
on the order of the Interstate Commerce Commission, and is
proceeding to carry out the agreement as approved by that order. He
also alleges that the order, and the provisions of § 20a under
which it was made transcend the limits of federal power, and
encroach on the power of the states before named. The prayer is
that the defendant company be enjoined from carrying out the
agreement notwithstanding its approval by the Interstate Commerce
Commission under that section.
The defendant challenged the court's jurisdiction by a motion to
dismiss on the grounds before stated, and it was on consideration
of that motion that the decree of dismissal was entered. The decree
was entered and the
Page 271 U. S. 130
present appeal was allowed prior to the change made in our
appellate jurisdiction by the Act of February 13, 1925.
By § 20a, the Commission is empowered to entertain an
application by any carrier by railroad engaged in interstate
commerce for authority to issue bonds or other evidences of
indebtedness, or to assume obligations or liabilities as a lessor
or lessee, or as a guarantor or surety of another carrier, and is
further empowered, after notice to "the Governor of each state in
which the applicant carrier operates," and, on due investigation,
to grant or refuse such authority in whole or in part, and
thereafter, for good cause shown, to make such supplemental orders
in the premises as it may deem necessary or appropriate. The
section also provides:
"(7) The jurisdiction conferred upon the Commission by this
section shall be exclusive and plenary, and a carrier may issue
securities and assume obligations or liabilities in accordance with
the provisions of this section without securing approval other than
as specified herein."
We agree with the court below that the suit is essentially one
to annul or set aside the order of the Commission. While the
amended bill does not expressly pray that the order be annulled or
set aside, it does assail the validity of the order and pray that
the defendant company be enjoined from doing what the order
specifically authorizes, which is equivalent to asking that the
order be adjudged invalid and set aside.
Lambert Run Coal Co.
v. Baltimore & Ohio R. Co., 258 U.
S. 377,
258 U. S. 380,
382. Such a suit must be brought against the United States as the
representative of the public, and may be brought only in a federal
district court. Judicial Code, §§ 208, 211; Act Oct. 22, 1913, c.
32, 38 Stat. 219;
Illinois Central R. Co. v. State Public
Utilities Commission, 245 U. S. 493,
245 U. S.
504-505;
North Dakota v. Chicago & Northwestern
Ry. Co., 257 U. S. 485, 487
[argument of counsel -- omitted];
Texas v.
Interstate Commerce
Page 271 U. S. 131
Commission, 258 U. S. 158,
258 U. S. 164;
Lambert Run Coal Co. v. Baltimore & Ohio R. Co.,
supra. That the order is not mandatory, but permissive, makes
no difference in this regard.
Chicago Junction Case,
264 U. S. 258,
264 U. S. 263.
And, as the state court was without jurisdiction, the federal court
acquired none by the removal.
Lambert Run Coal Co. v. Baltimore
& Ohio R. Co., supra.
The plaintiff cites
Louisville & Nashville R. Co. v.
Cook Brewing Co., 223 U. S. 70, and
Texas v. Eastern Texas R. Co., 258 U.
S. 204, as showing jurisdiction below; but neither case
is open to such an interpretation. In the first, no order of the
Commission was involved either directly or indirectly. In the
second, this Court dealt in a single opinion with two distinct
proceedings. One was a suit to set aside an order of the
Commission, and was brought against the United States and a
railroad company in the proper federal district court. The other
was a prior and related suit brought in a state court against the
railroad company and removed into another federal district court
before the order was made by the Commission. Afterwards, when the
order was made, its interpretation and operation were drawn in
question in that suit. The question of jurisdiction with which we
are concerned here was not raised there, and there is doubt that it
could have been.
We hold that the dismissal for want of jurisdiction was
right.
Decree affirmed.