1. A bill by a minority stockholder against a railroad company
alleging domination by the defendant, through stock ownership, of
parallel and competing railroads engaged in interstate commerce,
charging continuous violations therein of the Sherman and Clayton
Acts, alleging resulting injury to plaintiff and other
shareholders, and praying an injunction held
arising under the laws of the United States and within the
jurisdiction of the district court. P. 271 U. S.
2. The court again points out the difference between
jurisdiction, on the one hand, and lack of merit or of capacity to
sue, on the other, as a ground for dismissing a suit.
Appeal from a decree of the district court dismissing a suit for
want of jurisdiction.
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
This is a suit in equity brought by a minority stockholder
against the New York Central Railroad Company
Page 271 U. S. 229
to enjoin it from dominating and controlling, through stock
ownership, certain other railroad companies. There are various
prayers in the bill, but all make for the attainment of the object
The suit was begun in the District Court of the United States
for the Northern District of Ohio June 20, 1924. Federal
jurisdiction was invoked on the grounds that the parties are
citizens of different states, the plaintiff a Maine corporation and
the defendant a corporation of Ohio and states other than Maine,
and that the suit is one arising under the laws of the United
States, there being also a showing that the value involved is
Shortly described, the bill charges that the defendant was
organized pursuant to a consolidation agreement between the New
York Central & Hudson River Railroad Company the Lake Shore
& Michigan Southern Railway Company, and nine companies
subsidiary to them; that the agreement was made in April, 1914, and
carried into effect the following December; that thereby the
defendant, besides acquiring the railroad lines of the immediate
parties to the agreement, became invested with large amounts of
stock in other railroad companies, including the Michigan Central
and Big Four, and was thus enabled to dominate and control them and
their subsidiaries; that these other companies have railroad lines
which are operated in both interstate and intrastate commerce, and
many of their lines are parallel and normally and potentially
competing; that, during the ten years since the agreement became
effective, the defendant, through its ownership of stock in these
other companies, has dominated and controlled and is now dominating
and controlling their properties and business, and that this stock
ownership, domination, and control is in violation of the Sherman
Anti-Trust Act, c. 647, 26 Stat. 209, of the Clayton Act, c. 323,
38 Stat. 730, and of the laws of Ohio and
Page 271 U. S. 230
other states, wherein the railroads lie, forbidding a common
control, through stock ownership or otherwise, of parallel or
The defendant moved to dismiss the bill on various grounds, and
the court, after a hearing on the motion, entered a decree of
dismissal. Afterwards and in due time, the court granted a
certificate stating that the dismissal was for want of jurisdiction
of the subject matter, and allowed a direct appeal in this Court
under § 238 of the Judicial Code, which at that time permitted such
an appeal where the jurisdiction of the district court was in
issue, but required the jurisdictional question to be certified and
limited the review to the ruling on that question.
In the bill, as we have shown, the plaintiff attempts with much
detail to set forth a continuing violation of the Sherman
Anti-Trust Act and the Clayton Act, asserts that this violation,
unless restrained, will be injurious to the plaintiff and other
stockholders, and prays for relief by injunction. Such a suit is
essentially one arising under the laws of the United States, and,
as the requisite value is involved, is one of which the district
courts are given jurisdiction. By jurisdiction, we mean power to
entertain the suit, consider the merits, and render a binding
decision thereon, and, by merits, we mean the various elements
which enter into or qualify the plaintiff's right to the relief
sought. There may be jurisdiction and yet an absence of merits
(The Fair v. Kohler Die Co., 228 U. S.
, 228 U. S. 25
Geneva Furniture Co. v. Karpen, 238 U.
, 238 U. S.
), as where the plaintiff seeks preventive relief
against a threatened violation of law of which he has no right to
complain, either because it will not injure him or because the
right to invoke such relief is lodged exclusively in an agency
charged with the duty of representing the public in the matter.
Whether a plaintiff seeking such relief has the requisite standing
is a question going to the
Page 271 U. S. 231
merits, and its determination is an exercise of jurisdiction.
Illinois Central R. Co. v. Adams, 180 U. S.
, 180 U. S. 34
Venner v. Great Northern Ry. Co., 209 U. S.
, 209 U. S. 34
it be resolved against him, the appropriate decree is a dismissal
for want of merits, not for want of jurisdiction.
A week or two before entering the decree of dismissal, the court
considered the motion to dismiss in a carefully prepared memorandum
found in the record. What was said in it shows that the court was
then of opinion, first, that, in view of §§ 4 and 7 of the Sherman
Anti-Trust Act, of §§ 7, 8, 11 and 16 of the Clayton Act, and of §
5(2) of the Interstate Commerce Act as amended by § 407 of the
Transportation Act, c. 91, 41 Stat. 480, the plaintiff, as a
private litigant, was without capacity or right to maintain the
bill in respect of the alleged restraint of interstate commerce
because the right to maintain such a bill against railroad carriers
was lodged exclusively in others who are charged with guarding the
public interest, and, secondly, that the interstate and intrastate
business of the carriers affected are so inextricably interwoven
that it would be impossible to award any relief reaching their
intrastate business without equally affecting their interstate
business, and therefore to permit the plaintiff to maintain the
bill in respect of the alleged violation of state laws would be
indirectly permitting a private litigant to do what in effect is
prohibited by federal law.
The questions considered in the memorandum pertain to the
merits, not to jurisdiction, and if the memorandum were definitive
of the grounds on which the court proceeded, we should regard the
bill as dismissed on the merits. But, as the decree was entered a
week or two later, and the court expressly certified that the
dismissal was for want of jurisdiction of the subject matter, we
have given effect to the certificate, and have examined the
question certified. Our conclusion is that the court had
Page 271 U. S. 232
jurisdiction of the subject matter, and therefore that the
decree of dismissal was put on an untenable ground.
MR. JUSTICE SUTHERLAND did not participate in the consideration
or decision of this case.