A suit by bondholders of a state drainage district to restrain
the enforcement of state statutes effecting changes in rates,
collection, and disposition of taxes on lands of the district, and
authority to issue bonds, etc., upon the ground that such changes
unconstitutionally impair the obligations of the plaintiffs'
contracts, cannot be tried under Jud.Code § 266 by a District Court
of three judges, nor be appealed directly to this Court, the
statutes attacked not being of general application, but affecting
exclusively the particular district of the State. P.
307 U. S.
211.
Jurisdiction is not conferred in such a case by joining as
defendants state officials whose duties under the statutes in
question are of local, not of statewide, concern.
24 F. Supp. 458 vacated.
Appeal from a decree of the District Court, constituted of three
judges, which dismissed a suit seeking an injunction against the
enforcement of certain Florida statutes alleged to be
unconstitutional.
See also s.c., 57 F.2d 1058. This Court,
finding itself without jurisdiction, vacates the decree and remands
the case to the District
Page 307 U. S. 209
Court for further proceedings to be taken independently of
Jud.Code § 266.
Opinion by MR. JUSTICE FRANKFURTER.
The case is here on appeal under § 238 of the Judicial Code as
amended, 28 U.S.C. § 345, to review a decree of a district court of
three judges convened under § 266 of the Judicial Code as amended,
28 U.S.C. § 380, denying an interlocutory injunction and dismissing
the bill and supplemental bills. The bills challenged the validity
of certain Florida statutes as impairments of the obligation of
contract between the Board of Commissioners of Everglades Drainage
District and the appellants, as holders of some of its outstanding
bonds. The decree of the district court was based on its conception
of the applicability of
Erie R. Co. v. Tompkins,
304 U. S. 64, but
this and other questions are not now open for consideration if §
266 does not cover a situation like the present. If there be a
jurisdictional barrier here, it binds us though not invoked by the
appellees.
The record is singularly obscure. This litigation, which has
extended over eight years, is but one phase of a complicated
controversy pursued in both state and federal courts.
Page 307 U. S. 210
The bill was filed on May 19, 1931. A supplemental bill was
filed July 4, 1931. The prayers of the bills were amended on
November 5, 1931. A district court of three judges was convened on
November 14, 1931. On September 17, 1932, orders were entered
denying a motion to dismiss, and granting an interlocutory
injunction conditioned on the filing of a bond for $50,000. Answers
were filed in October and November, 1932. The required bond was not
given, and, on February 23, 1933, an order was entered that the
interlocutory junction should be vacated. The matter then lay
dormant until a second supplemental bill was filed on July 19,
1937. It was not until August 2, 1938, that the order sought here
to be reviewed, denying the motion for an interlocutory injunction
and dismissing the bill, was made.
The facts will be summarized only to the extent necessary to
expose the jurisdictional problem. The Everglades Drainage District
(hereafter called District), comprising a large acreage in the
southern part of Florida, was established by Chapter 6456, Laws of
Florida, Acts of 1913. The administration of the District was
entrusted to a Board of Commissioners (hereafter called the Board),
a body corporate. The lands were originally part of a grant made by
Congress to Florida in 1850 whereby Florida undertook to apply the
lands and proceeds derived from them to drainage and reclamation
purposes. In fulfillment of this obligation, Florida, in 1885
(Chapter 610, Laws of Florida, Acts of 1855), vested the lands in
trustees of the Internal Improvement Fund (hereafter called
Trustees) consisting of designated state officials. Subsequent
legislation for the District made numerous changes affecting its
financial administration and the relations between the District and
the Trustees (Chapters 13633, 14717; 17902, Laws of Florida, 1929,
1931 and 1937). The changes concerned rates of taxes, disposition
of their proceeds, procedure in cases of tax delinquency, and
authorization of bond issues.
Page 307 U. S. 211
Appellants sued as holders of bonds issued prior to these latter
statutes, claiming that they impaired obligations created by such
bonds as defined by § 23 of the Act of 1913, which specifically
provided that the terms of that Act should constitute "an
irrepealable contract" between bondholders and the District. In
substance, the bill and the supplemental bills alleged a reduction
of the available taxes below those in effect at the time the bonds
were issued, an adverse change in the debt service, and a diversion
of revenues to purposes other than those required by the Act of
1913. The bills also complained of important changes effected by
the later Acts regarding tax delinquencies on the lands in the
District. It was alleged that, under the earlier Act, lands on
which taxes were delinquent were to be sold at auction, and, for
want of bidders for the amount of taxes plus costs, were to be bid
off to Trustees who were under a duty to pay for tax certificates
as well as the drainage taxes in the future. Violation of
contractual rights were alleged in that Trustees had ceased paying
for the tax certificates as well as the drainage taxes, and that §
65 of the 1931 statute had declared that Trustees held the
certificates in trust for the District, and required them to
transfer the certificates to the District. Further violations of
the contract were attributed to powers given to the District, after
1913 whereby it was authorized to compromise taxes, to accept bonds
for redemption of lands, and to cancel tax liens on lands which
came into the ownership of the United States. Finally, a claim of
impairment of contract was based on changes in the membership of
the District after 1913.
The Board of Commissioners, the Trustees, and various county tax
officials were named as defendants in the suit. The bills sought to
enjoin the defendants distributively, and with much particularity,
from effectuating the various modifications made by the Acts of
1929, 1931, and 1937 concerning the rates of taxes, the disposition
of
Page 307 U. S. 212
their proceeds, the procedure in cases of tax delinquency, the
authorization of bond issues, and the internal relations between
the District and the Trustees as all these were claimed to be
originally defined by the Act of 1913.
This appeal is properly here only if the present suit required
the convening of a district court of three judges under § 266. We
do not think that this was such a suit, because the state statutes
from which relief was sought do not constitute legislation "of
general application,"
Ex parte Collins, 277 U.
S. 565.
Ex parte Collins, supra, reinforced by
Ex parte
Public National Bank, 278 U. S. 101,
authoritatively established the restricted class of cases to which
the special procedure of § 266 must be confined. "Despite the
generality of the language" of that section, it is now settled
doctrine that only a suit involving "a statute of general
application," and not one affecting a "particular municipality or
district," can invoke § 266. Plainly, the matter here in
controversy is not one of statewide concern, but affects
exclusively a particular district in Florida. This Court in effect
so held in denying a motion for leave to file a petition for writ
of mandamus to convene a court under § 266 made by the Board of
Commissioners in a suit by a bondholder claiming impairment of the
obligation of contracts existing under the 1913 Act.
Ex parte
Everglades Drainage District, 293 U.S. 521. The present suit
differs from the earlier case in that here, the Trustees of the
Internal Improvement Fund were made defendants. But what is
decisive under § 266 is not the formal status of the officials
sued, but the sphere of their functions regarding the matter in
issue. An official, though localized by his geographic activities
and the mode of his selection, may, when he enforces a statute
which "embodies a policy of statewide concern," be performing a
state function within the meaning of § 266.
Spielman Motor
Sales Co. v. Dodge, 295 U. S. 89.
Conversely, a
Page 307 U. S. 213
state official charged with duties under a statute not of
statewide concern is not a state functionary within the purposes
for which § 266 was designed. What was matter of local concern in
Ex parte Everglades Drainage District, supra -- the
administration of the affairs of the District -- remains matter of
local concern in the present suit. The nature of the controversy --
legislation affecting a locality "as against a policy of statewide
concern" -- has remained unchanged even though the present bills
made it pertinent to join the Trustee. This suit thus fails to
satisfy an essential requirement of § 266.
Since the time for appeal to the Circuit Court of Appeals has
expired, and since the jurisdictional problem determined in this
case had not been fully settled prior to this decision, we will not
terminate the litigation by dismissing the appeal, but, in
accordance with the practice followed in
Oklahoma Gas &
Electric Co. v. Oklahoma Packing Co., 292 U.
S. 386, we will order the decree vacated and the cause
remanded to the district court for further proceedings to be taken
independently of § 266 of the Judicial Code.
Decree vacated.
MR. JUSTICE DOUGLAS took no part in the consideration or
disposition of this case.