1. Under Jud.Code § 238, as amended by Act of Feb. 13, 1925, a
decree of the district court is not appealable directly to this
Court on constitutional grounds alone, but only in cases falling
within the acts or parts of acts enumerated in that section as
amended. P.
272 U. S.
319.
2. Section 266, which is enumerated in and amended by § 238,
authorizes a direct appeal to this Court from the final decree of
the district court granting a permanent injunction in a suit to
Page 272 U. S. 318
restrain enforcement of an order of a state administrative board
upon the ground of unconstitutionality only where the case was, and
was required to be, heard before three judges because the
application for a preliminary injunction was pressed. P.
272 U. S.
320.
Appeal from
3 F.2d 652
dismissed.
Appeal from a final decree of the district court (one judge
sitting) granting a permanent injunction in a suit by indemnity
insurance companies to enjoin a state insurance commissioner from
carrying out a threat to annul their licenses for failure to obey
an order cancelling their authority to issue a certain kind of
policy. The prayer for a preliminary injunction was not
pressed.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
Three companies licensed to do business in Oregon brought this
suit against its insurance commissioner in the federal court for
that state. The bill alleges that a former commissioner had
authorized these companies to issue indemnity bonds, commonly
called "confiscation coverage," by which those who sell automobiles
on conditional sale are insured against loss arising from their
confiscation for violation of law; that the defendant has entered
an order cancelling this authorization on the ground that insurance
of this nature is void as against public policy because it serves
to encourage the transportation of intoxicating liquors in
violation of law, and that he has threatened to annul the
plaintiffs' licenses unless they refrain entirely from writing such
indemnity
Page 272 U. S. 319
bonds. The bill charges that the defendant's action is in excess
of the powers conferred upon him by the statutes of the state, and
that his wrongful acts will, unless restrained, deprive plaintiffs
of their property without due process of law in violation of the
Fourteenth Amendment. The bill prays for both a preliminary and a
permanent injunction.
The defendant moved to dismiss the bill on the ground that it
did not state facts sufficient to constitute a cause of action. The
motion was overruled. An answer was filed. Parts of it were
stricken out on plaintiff's motion. What remained admitted
substantially all the allegations of the bill. The case was then
heard further by a single judge, who, on May 18, 1925, entered a
final decree for an injunction. The constitutional question
presented by the bill was not passed upon. The decision was rested
solely upon the ground that the order complained of was in excess
of the powers conferred by the statutes upon the insurance
commissioner.
3 F.2d 652.
An appeal to this Court was allowed by the district judge. A motion
having been made to advance the case for argument, this Court, of
its own motion, entered a rule that the appellant show cause why
the appeal should not be dismissed for lack of jurisdiction in this
Court. Upon return to the rule, the case was set for argument.
The bill invoked the jurisdiction of the federal court on the
ground of diversity of citizenship, as well as on the ground that
plaintiffs' constitutional rights were threatened. Although the
constitutional question raised was not passed upon by the district
court, the allegations of the bill would have supplied the basis
for a direct appeal under § 238 of the Judicial Code, before that
section was amended by Act Feb. 13, 1925, c. 229, 43 Stat. 936,
938.
Compare Winchester v. Winchester Waterworks,
251 U. S. 192,
251 U. S. 193.
But § 238 was so far changed by that Act that now there is no right
to a
Page 272 U. S. 320
direct appeal on constitutional grounds alone; the right exists
now only in cases falling within the provisions enumerated in that
section as amended. Otherwise, the case must go in the first
instance to the circuit court of appeals, and may come here only
for review of that court's action.
See Application of
Buder, 271 U. S. 461.
The Act of 1925 applies, as the decree of which review is sought
was entered after May 13, 1925. Among the provisions enumerated in
§ 238 as amended is § 266 of the Judicial Code. It is contended
that this case falls within the latter section. It was amended by
the addition of the following provision:
"The requirement respecting the presence of three judges shall
also apply to the final hearing in such suit in the district court,
and a direct appeal to the Supreme Court may be taken from a final
decree granting or denying a permanent injunction in such
suit."
Appellant contends that this appeal lies under § 266, because
the order of the insurance commissioner is an order of an
administrative board, and the suit is one which seeks relief by way
of
"interlocutory injunction suspending or restraining the
enforcement . . . of an order made by an administrative board . . .
acting under and pursuant to the statutes of such state, . . . upon
the ground of unconstitutionality. . . ."
In the case at bar, there was an attack upon the order of the
insurance commissioner "upon the ground of unconstitutionality"
within the meaning of § 266.
Oklahoma Natural Gas Co. v.
Russell, 261 U. S. 290,
261 U. S. 292.
It may be assumed that the order was action of an administrative
board within the meaning of that section.
Compare Fidelity
& Deposit Co. v. Tafoya, 270 U. S. 426. But
the prayer for a preliminary injunction was not pressed, nor was
there any request that the case be heard by a court consisting of
three judges, which would have been necessary under § 266 if the
prayer had been pressed. That section, as originally enacted,
applied only where interlocutory relief was actually sought,
regardless of the
Page 272 U. S. 321
scope of the bill. Its purpose was to minimize, in an important
class of cases, the delay incident to a review of a decree granting
or denying an interlocutory injunction. The general purpose of the
Act of 1925 was to relieve this Court by limiting further the
absolute right to a review by it. There is nothing in the provision
added by that Act to § 266 which indicates a purpose to extend the
application of that §section -- either as to the requirement of
three judges or as to the right to a direct appeal -- to a case in
which an interlocutory injunction was not actually applied for. The
occasion for the provision was considered in the
Buder
case. It authorizes a direct appeal to this Court from the final
decree of the district court only where an application was made for
an interlocutory injunction and the case was heard before three
judges.
Dismissed.