166 F. 206 | 5th Cir. | 1909
Lead Opinion
On July 25, 1908, the appellees, the Macon Grocery Company and other domestic corporations in the state of Georgia, and certain partnerships and individuals having their principal places of business in the Southern district of Georgia and domiciled therein, and all alleging themselves to be citizens of that state, engaged as wholesale dealers in groceries, food products, and like commodities, exhibited to one of the judges of the Circuit Court of the Southern District of Georgia their bill of complaint against the appellants, the Atlantic Coast Line Railroad Company, a corporation and citizen of the state of Virginia, the Louisville & Nashville Railroad Company, a corporation and citizen of the state of Kentucky, the Nashville, Chattanooga & St. Louis Railway, a corporation and citizen of tlie state of Tennessee, the Southern Railway Company, a corporation and citizen of the state of Virginia, and the Cincinnati, New Orleans & Texas Pacific Railway Company, a corporation and citizen of the state of Ohio, and applied for and obtained from the judge an order whereby the appellants were required to he and appear before him at a time and place named in the order to show cause why an injunction pendente lite should not be granted as prayed for in the bill; and, in the meantime and until the further order of the court, were temporarily restrained from putting into effect the advance in freight rates, referred to in the bill, to be made effective August 1, 1908, in so far as all points in the state of Georgia are concerned.
In their bill the appellees allege, in substance, that the appellants are common carriers by railroad engaged in the transportation of interstate commerce, including grain and grain products, hay, and meats, from Ohio and Mississippi river crossings, Nashville, Tenn., and related points, to points in Southeastern territory, including the state of Georgia: that each of the appellants is a member of the Southeastern Freight Association, which, appellees, allege, was organized and is maintained under agreements and for purposes which constitute an illegal combination in restraint of interstate trade, and for fostering monopoly in the destruction of fair competition among carriers engaged in such trade; that the appellants the Atlantic Coast Line Railroad Company and the Nashville, Chattanooga & St. Louis Railway form a part of the Louisville & Nashville Railroad System, and the appellant Cincinnati, New Orleans & Texas Pacific Railway Company forms a part of the Southern Railway System; that these two systems have continuous lines from said crossings to Southeastern destinations and are natural competitors, so that any combination, agreement, or understanding between them whereby rates are advanced and maintained is in suppression of competition; that during the
Appellees further averred they were remediless under the strict rules of the common law, and could obtain relief only in a court of equity, and prayed for a rule against appellants to show cause why an injunction pendente lite should not be issued; that, in the meantime, appellants be temporarily restrained froth putting into 'effect the proposed increase in rates to be made effective August 1, 1908, from said crossings and Nashville and related points to all points within the state of Georgia affected by said advance; and that, on a final hearing, the court enter a decree perpetuating such injunction.
At the time and place named in the rule, each of the appellants entered a special appearance for the purpose of pleading to the jurisdiction of the court over the person of such appellant, and for no other purpose, and each filed its plea to the jurisdiction of the court, stating in substance, that it was not at the institution of the suit, nor then, a corporation organized or existing under the laws of the state of Georgia, or a citizen or inhabitant of that state, nor an inhabitant or resident of the Southern district of Georgia, but was, at the time of the institution of the. suit, and was then, a corporation organized and existing under the laws of the state named in the plea, and a citizen of such state, and an inhabitant of a certain district therein where its corporate meetings are held and its corporate business transacted; that this suit is a civil suit, 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 thereunder, and each of the appellants insisted upon its exemption from suit in that court, and claimed that the Circuit Court of the United States for the district of which it was an inhabitant, if any court, had jurisdiction of such appellant, and prayed hence to be dismissed.
The appellees demurred to these pleas, and for cause of demurrer averred that the controversy presented by the bill is wholly between citizens of different states, and is solely founded upon diversity of citizenship.
The court sustained appellees’ demurrers, and overruled appellants’ pleas.
Thereupon the appellants, without waiving their pleas, but still relying and insisting on them, filed their joint demurrer to the bill, specifying numerous grounds not necessary to be here set out, all of which the court disregarded, and proceeded to hear the application for injunction and the. affidavits and documents offered in support of it. The appellants offered no counter affidavits or evidence, but stood on their demurrers and pleas. Thereafter the judge made the following order:
“The above-entitled canse came on to be beard on July 29, 1908, on the rule issued against the-defendants to show cause why an injunction pendente lite should not be granted.
“Defendants, and each of them, appeared specially and objected to the jurisdiction of the court over the persons of the defendants; and the court being of the opinion that the court did have jurisdiction over the persons of*211 the1 «IcfoiKbmte in this cause, and so announcing, thereupon the defendants, and each of them, filed a joint and several demurrer, and presented the same as cause in law why the relief prayed should not he granted.
“Thereupon proof was submitted in behalf of complainants in support of the averments of their bill, and the cause was argued by counsel for the respective parties.
“At the conclusion of the hearing on July 30, 1008, the court took the matter under advisement until August 1, 1008, when the opinion of the court was handed down sustaining the contention of the complainants, and directing an issuance of the injunction prayed for 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.
“And it appearing that the complainants, together with other persons in the cities, of Atlanta, Columbus, Rome, and Athens, Ga., have this (lay 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:
“The court being now fully advised in the premises, it is thereupon considered, ordered, and decreed as follows, to wit.:
“That the defendants, the Atlantic Coast Line Itailroad Company, the Louisville & Nashville Railroad Company, Nashville, Chattanooga & St. Louis Railway, Southern Railway Company and Cincinnati, New Orleans & Texas Pacific Railway Company, and each of them, be and they are hereby jointly and severally enjoined from enforcing collection of the advance in rates made effective August 1, 1908, from Ohio and Mississippi river crossings. Nashville, Tenn., and points with relation thereto, to all points within the slate of Georgia, on classes B, C, D. and F, fresh meats, C. L., grain products, hay, and packing-house 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.
“Dated and signed this August 3, 1908.”
Thereupon this appeal was taken.
The substance of the numerous specifications of error assigned is that the court below in this suit had no jurisdiction over the persons of the appellants, and had no jurisdiction of the subject-matter.
It is unnecessary to quote the familiar language of the statute now in force providing in what districts parties may be sued in the Circuit Court. It seems to be conceded by the appellees, at least, we think, it cannot be controverted, that' their right to sue in the district of their residence must rest upon the ground that the controversy presented by tlieir bill is wholly between citizens of different states and is solely founded upon diversity of citizenship. There is no dispute as to the controversy being between citizens of different states. Whether it is solely founded upon diversity of citizenship leads to such a consideration of the subject-matter of their bill and an inquiry as to the jurisdiction of the Circuit Court to entertain the bill at all as* will answer the question as to the liability of appellants to be sued out of the district of their residence. The object of the bill was to obtain an injunction against the appellants from putting into effect an advance of rates for carriage of commodities' in the conduct of interstate commerce ■throughout a large area, embracing parts of several different states. They charge that the appellants are common carriers by railroad engaged in the transportation of interstate commerce, including the commodities on which advanced rates are proposed to be charged; that
In the organization of our government the Congress was given power to regulate interstate commerce. As commerce was then conducted upon public waters and public roads, the free competition between carriers, with rare exceptions, adequately regulated rates for carriage. When railroads began to be constructed and articles of commerce carried thereon, their operation for many years was confined to the state in which each originated and to the carrying of intrastate commerce, subject to the regulations of their respective states. When, however, the intrastate lines began to be linked up into interstate lines, and commercial dealings so extended that interstate commerce acquired controlling magnitude, efforts began to be made to get Congress to exercise its power of regulating rates and other features of railroad carriage engaged in interstate commerce. The jealousy of the states and the opposition of the carriers prevented the passage of any general act until 1887, when the act to regulate commerce went into effect. It was the initial step in the public policy which has ever since challenged the attention of political, commercial, and industrial leaders. Much contrariety of thought was evolved in the effort to apply and enforce its various provisions. The administrative tribunal, as first ordained, established, and empowered, proved inadequate to the task of exercising the necessary control o.f the railroad carriers. The powers of this tribunal have been increased by successive amendments of the original act, and statutory rules and penalties for their infraction have been laid upon the carriers until we have the law now in force. It requires every common carrier, subject to -its provisions,
Section 8 (Act Feb. '1, 1887, c. 104, 24 Stat. 382 [U. S. Comp. St. 1901, p. 3159]) provides that the carriers violating any of the provisions of the act shall be liable to the person or persons injured to the full amount of damages sustained in consequence of such violation, together with a reasonable counsel or attorney’s fee.
Section 9 provides that persons claiming to be damaged may make their complaint either to the Commission in the manner provided in the act, or by bringing suit on their own behalf for the recovery of damages for which such carrier may be liable under the provisions of the act in any District or Circuit Court of competent jurisdiction; and such persons shall not have the right to pursue both of these remedies, aud must elect which of the two methods of procedure herein provided for they will adopt. This does not warrant the conclusion that it was the purpose of Congress to confer power upon courts primarily to relieve from the duty of enforcing the established rate by finding that the same, as io particular persons, was so unreasonable as to be unlawful, and to prevent its enforcement by injunction. Texas & P. Ry. Co. v. Abilene Cotton Oil Co., 204 U. S. 441, 442, 27 Sup. Ct. 350, 51 L. Ed. 553.
Section 10 provides severe penalties for violations of the act by carriers.
Section 12 provides that the Commission have authority to inquire into the business of all common carriers subject to the provisions of the act, and keep itself informed as to the manner and method in which the same is conducted, specifying elaborately the means it may use to acquire that information.
Section 13 provides how and by whom complaints may be made to the Commission, and how served upon carriers, and if the carriers
Section 14 (amended by Act June 29, 1906, c. 3591, § 3, 34 Stat. 589 [U. S.. Comp. St. Supp. 1907, p. 899]) provides that, when such an investigation shall be made by the Commission, it shall be its duty to make a report in writing in respect thereto, which shall state the conclusions of the Commission, together with its decision, order, or requirement in the premises.
Section 15 (amended by section 4, 34 Stat. 589 [U. S. Comp. St. Supp. 1907, p. 900]) provides that the Commission is authorized and empowered, and it shall be its duty, whenever, after full hearing upon a complaint made as provided in section 13 of this act, or upon complaint of any common carrier, it shall be of the opinion that any of the rates or charges then demanded, charged, or collected by any common carrier or carriers, subject to the provisions of this act, for the transportation of persons or property as defined in the first section of this act, or that any regulations or practices whatsoever of any carrier or carriers affecting such rates are unjust or unreasonable, or unjustly discriminatory, or unduly preferential or prejudicial, or otherwise in violation of any of the provisions of this act, to determine and prescribe what will be the just and reasonable rate or rates, charge or charges, to be thereafter observed in such case as the maximum to be charged, and what regulation or practice in respect to such transportation is just, fair, and reasonable to be thereafter followed, and to make an order that the .carrier shall cease and desist from such violation, to the extent to which the Commission find the same to exist, and shall not thereafter publish, demand, or collect any rate or charge for such transportation in excess of the maximum rate or charge so prescribed, and shall conform to the regulation or practice so prescribed.
Section 16 (amended by section.5_, 34 Stat. 590 [U. S. Comp. St. Supp. 1907, p. 902]) provides that if, after hearing on a complaint made as provided in section 13 of the act, the Commission shall determine that any party complaining is entitled to an award of damages under the provisions thereof, the Commission shall make an order directing the carrier to pay to the complainant the sum to which he is entitled on or before a day named. If the carrier does not comply with this order, the person for whose benefit such order was made may file in the Circuit Court of the United States in the district in which he resides, or' in which is located the principal operating office of the carrier, or through which the road of the carrier runs, a petition setting forth briefly the causes for which he claims damages, and the order of the Commission in the premises. Such suit shall proceed in all respects like other civil suits for damages, except that on the trial of such suit the findings and order of the Commission shall be prima facie evidence of the facts therein stated, and except that the petitioner shall not be liable for the costs in the Circuit Court or costs at
Section 16a (amended by section 6, 34 Stat. 593 [U. S. Comp. St. Supp. 190?, p. 906j) provides that, after a decision, order, or requirement has been made by the Commission in any proceeding, any party thereto may at any time make application for rehearing of the same, or any matter determined therein, and it shall be lawful for the Commission in its discretion to grant such rehearing if sufficient reason therefor be made to appear. No such application shall excuse any carrier from complying with or obeying any decision, order, or requirement of the Commission, or operate in any manner to stay or postpone the enforcement thereof, without the special order of the Commission. If, upon such rehearing, it shall appear that the original decision, order, or requirement is in any respect unjust or unwarranted, the Commission may reverse, change, or modify the same accordingly.
There is a provision in section 22 (Act Feb. 4, 188?, c. 10£, 24 Slat. 887 [U. S. Comp. St. 1901, p. 3171]) of the act that “nothing in this act contained shall in any way abridge or alter the remedies now existing at common law or by statute; but the provisions of this act are in addition to sttcli remedies.”
In reference to this provision we quote at length the concluding portion of the opinion of the Supreme Court in Texas & Pacific Railway
“This clause, however, cannot in reason he construed as continuing in shippers a common-law right, the continued existence of which would he absolutely inconsistent with the provisions of the act. In other words, the act cannot be held to destroy itself. The clause is concerned aloné with rights recognized in or duties imposed by the act, and the manifest purpose of the provision in question was do make plain the intention that any specific remedy given by the act should be regarded as cumulative, when other appropriate common-law or statutory remedies existed for the redress of the particular grievance or wrong dealt with in the act.
“The proposition that if the statute be construed as depriving courts generally, at the instance of shippers, of the power to grant redress upon the basis that an established rate was unreasonable without previous action by the Commission, great harm will result, is only an argument of inconvenience which assails the wisdom of the legislation or its efficiency, and affords no justification for so interpreting the statute as to destroy it. Even, however,if in any case we were at liberty to depart from the obvious and necessary intent of a statute upon considerations of expediency, we are admonished that the suggestions of expediency here advánced are not shown on this record to be justified. As we have seen, although the act to regulate commerce has been in force for many years, it appears that by judicial exposition and in practical execution it has been interpreted and applied in accordance with the construction which we give it. That the result of such long-continued, uniform construction has not been considered as harmful to the public interests is persuasively demonstrated by the fact that the amendments which have been madé to the act have not only not tended to repudiate such construction, but, on the contrary, have had the direct effect of strength-' ening, and making, if possible, more imperative, the provisions of the act requiring the establishment of rates and the adhesion by both carriers and shippers to the rates as established until set aside in pursuance to the provisions of the act. Thus, by section 1 of the act approved February 19, 1903. commonly known as the ‘Elkins Act’ (Act Feb.' 19, 1903, c. 708, 32 Stat. 847 [U. S. Comp. St. Supp. 1907, p. 880]), which, although enacted since the shipments in question, is yet illustrative, the willful failure upon the part of any carrier to file and publish ‘the tariffs or rates and charges,’ as required by the act to regulate commerce and the acts amendatory thereof, ‘or strictly to observe such tariffs until changed according to law,’ was made a misdemeanor, and it was also made a misdemeanor to offer, grant, give, solicit, accept, or receive any rebate from published rates or other concession or discrimination. And in the closing sentence of section 1 it was provided as follows:
“ ‘Whenever any carrier files with the Interstate Commerce Commission or publishes a particular rate under the provisions of the act to regulate commerce or acts amendatory thereof, or participates in any rates so filed or published, that rate as against such carrier, its officers, or agents in any prosecution begun under this act, shall be conclusively deemed to be the legal rate, and any departure from such rate or any offer to depart therefrom shall be deemed to be an offense under this section of this act.’
“And, by section 3, power was conferred upon the Interstate Commerce Commission to invoke the equitable powers of a Circuit Court of the United States to enforce an observance of the published tariffs.
“Concluding, as we do, that a shipper seeking reparation predicated upon the unreasonableness of the established rate must, under the act to regulate commerce, primarily invoke redress through the Interstate Commerce Commission, which body alone is vested with power originally to entertain proceedings for the alteration of an established schedule, because the rates fixed therein are unreasonable, it is unne’cessary for us to consider whether the court below would have had jurisdiction to afford relief if the right asserted had not been repugnant to the provisions of the act to regulate commerce. It follows, from what we have said, that the court below erred in the construction which it gave to the act to regulate commerce.”
It has been suggested that the later case of Southern Railway Co. v. Tift, 206 U. S. 428, 27 Sup. Ct. 709, 51 L. Ed. 1121, indicates that the authority and reasoning in the Abilene Case is not fully applicable to the case at bar. The original bill in the Tift Case was filed April 1Í, 1900, and a temporary restraining order was issued. On May 8th the bill was amended. The defendants appeared and filed a demurrer to the amended bill for want of jurisdiction in the court as a court of equity and as a court of the United States, but made no objection on the ground that they were not liable to suit in that district. The demurrer was overruled, but the temporary injunction was dissolved. The appellants in that case took the steps prescribed by the interstate commerce act to put the advanced rates into effect, and the appellees, on june 23, 1903, filed a petition before the Interstate Commerce Commission charging that, in promulgating the tariff of increased rates and maintaining and enforcing the same, the appellants were acting in concert with each other and with other lumber-carrying roads, who with them were co-members of the Southeastern Freight Association. The carriers appeared before the Commission and filed a joint and several answer, in which they traversed the allegations of the petition and pleaded justification by the conditions affecting the roads and the traffic. A great deal of testimony was taken on the issues presented, and the Commission found and concluded that the advance in rates was not warranted by the testimony, and that the increased rates put in force June 22, 1903, were, unreasonable and unjust. Pending the proceedings before the Commission, complainants in the original bill filed an amended bill and again moved the Circuit Court for an injunction. This motion for injunction was dismissed. The Commission made its order on the 7th of February, 1905. and on March 17, 1905, the complainants in the original bill presented a petition to the Circuit Court stating the substance of the findings of the Commission and attaching a copy of its report and opinion, filien another order to show cause was issued, and on June 3, 1905, the parties cited to show cause appeared and answered. Complainants tiled a supplemental bill, the purpose of which was to obtain restitution of excess of rates charged over those which were alleged to he unreasonable. By stipulation between the parties the testimony taken before the Interstate Commerce Commission was filed in the Circuit Court, subject only to objections to its relevancy. In addition to that testimony, other evidence was submitted to the Circuit Court, and that court, after these proceedings, rendered a decree July 5th that the
“We are not required to say, however, that because an action at law for damages to recover unreasonable rates which have been exacted in accordance with the schedule of rates as filed is forbidden by the interstate commerce act, a suit in equity is also forbidden to prevent a filing or enforcement of a schedule of unreasonable rates or a change to unjust or unreasonable rates.”
As that question was not before them, they were not required to pass upon it, and .did not.
We are clear in our conviction that there is nothing in the Tift Case to support the jurisdiction of the Circuit Court in entertaining the bill exhibited by the appellees in this case, and because we find nothing-in the numerous decisions of the Supreme Court which we have examined to weaken the conviction we have expressed that the reasoning which is convincing and controlling against the entertaining of an action at law for damages occasioned by the enforcement of unreasonable rates which have been exacted in accordance with the schedule of rates as filed is forbidden by the interstate commerce act, for a stronger reason, a suit in equity is also forbidden to prevent a filing or enforcement of a schedule of rates, or a change to unjust or unreasonable rates, it is also forbidden by the interstate commerce act, because it would work an incalculably greater mischief.
We conclude that the bill in this case presents for necessary consideration the proper construction of the act to regulate commerce, and, therefore, the jurisdiction of the court does not rest solely upon
It follows thaL the decree appealed from must be reversed, and the cause remanded to the Circuit Court with instruction to dismiss the bill without prejudice.
Dissenting Opinion
(dissenting). As I understand the opinion just read, it is held that the Circuit Court has no jurisdiction of the case made by the bill, for the reason that it is deprived of jurisdiction by a “sound construction of the different provisions of the act to regulate commerce.” Section 22 (Act Feb. 4, 1887, c. 101, 24 Stat. 387 [U. S-. Com¡). St. 1901, p. 3171]) of the act provides that “nothing in this act contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this act are in addition to such remedies.” The words “common law” are here used in contradistinction to “statute law.” When so used, they include those doctrines of equity jurisprudence which have not been expressed in legislative enactments. The phrase “remedies now existing at common law or by statute” includes all existing remedies. Remedies existing by statute may be either legal or equitable, and remedies existing at common law — that is, remedies that have not been expressed by legislative enactment — may be either legal or equitable. 2 Words & Phrases Judicially Defined, 1329, and authorities there cited. A bill in equity to enjoin a wrong causing irreparable injury is a remedy a-t; common law, in the sense that it existed in England, independent eff statute, before the organization of this government, and exists in iliis country independent of statute. It is true that, although this remedy by bill is expressly reserved by the act, it would not continue to exist if its exercise “would be absolutely inconsistent with the provisions of the act. In other words, the act cannot be held to destroy itself.” Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U. S.
The clause of the act reserving remedies should not be disregarded except as to remedies that would defeat the operation and enforcement of the act — remedies that are absolutely inconsistent with the act. The remedy sought in this case, and the procedure thus far, as the record shows, are in harmony with the purposes of the act. The cases that have been decided since the decision of the Abilene-Case show that the rule there announced does not abrogate the clause quoted from-section 22 of the act, nor destroy the preventive jurisdiction of courts of equity; and that such jurisdiction may be exercised without in any way 'invading the domain of the Interstate Commerce Commission. Southern Railway Co. v. Tift, 206 U. S. 428, 27 Sup. Ct. 709, 51 L. Ed. 11.24; Northern Pacific Railway Co. et al. v. Pacific Coast Lumber Manufacturers’ Ass’n et al. (C. C. A.) 165 Fed. 1; M. C. Kiser Co. v. Central of Georgia Ry. Co. (C. C.) 158 Fed. 193; Jewett Bros. & Jewett v. Chicago, M. & St. P. Ry. Co. (C. C.) 156 Fed. 160.
I cannot concur in the decree dismissing the bill for want of jurisdiction of the subjectmatter of the suit.
Concurrence Opinion
(concurring). I fully concur in the opinion prepared by Judge McCORMICK and the conclusion reached thereunder, because:
First. I doubt if the lower court had jurisdiction ratione persons.
Second. The complainants have other full and adequate remedies through the Interstate Commerce Commission.
Third. The effect of an injunction in this case would be to throw the interstate rates of the whole Southeastern territory into disorder and confusion, resulting in greater evils than those suggested and alleged in the present bill.
Fourth. The initial regulation of interstate rates is placed by law in the hands of the Interstate Commerce Commission, and the courts should not interfere to restrain, compel, or regulate, except when invoked after final action by the Commission and in accordance with the rules prescribed in the laws regulating interstate commerce.
It is not necessary to amplify these views further than is done in Judge McCORMICK’S lucid statement of the case.