72 F. 818 | U.S. Circuit Court for the Southern District of Iowa | 1896
(orally). The courts of the United States have limited jurisdiction; that is, their jurisdiction extends only where the statute confers it. But when that jurisdiction once attaches, then these courts become courts of general jurisdiction thereunder. The great mass or portion of jurisdiction over controversies resides in the state courts; and properly so, since all powers not delegated by the constitution to the United States reside in the people of the states. Therefore, if jurisdiction is not clearly apparent in the federal courts, or if there arises reasonable doubt as to whether such courts have jurisdiction in any controversy, those courts should not assume jurisdiction. It is very important, at the; threshold of this action, that this question of jurisdiction be settled, for in the further progress of the action, in whatever appellate-
By the statutes (commonly termed the “Removal Acts”) of 1887 and 1888, the state courts are given. concurrent jurisdiction with the federal courts of certain matters therein included. Had plaintiff begun this action in the state court, instead of this court, that court would have had undoubted jurisdiction, and could have proceeded to judgment. The same allegations of fact which are made in bill herein as to violation of provisions of the constitution of the United States could have been there made; and if, in the progress of the litigation, the supreme court of the state had decided adversely to plaintiff’s claim, — that is, held the action of the city council valid, and not violative of the federal constitution, — plaintiff could have carried its contention as to this question to the supreme court of the United States for its authoritative, binding decision; and thus, through that channel of litigation, might the final decision have been reached in this controversy, and by the same tribunal wherein such final decision may be reached, if carried on in this court. This consideration makes the action of this court, if adverse to plaintiff on the subject of jurisdiction, not a deprivation of its right to have the controversy' heard, but merely compels plaintiff to pursue its remedy through another court. Since, therefore, this action will be hereafter dismissed, if in this court, or in any court to which the action may be carried, it is determined that this court is without jurisdiction herein, and since other courts are open to plaintiff where the jurisdiction is unquestioned, this court ought not to proceed further, but at the very threshold should stop and refuse to act on the merits of the controversy, unless this court is clearly satisfied that it has jurisdiction. All reasonable doubts on this subject must be solved against such jurisdiction. But if this court has jurisdiction, which plaintiff has chosen to invoke, as in such case it might properly do, — for of the two jurisdictions, if both are open to it, it may make its lawful selection, — then this court may not refuse to do its duty. The court must perform that which plaintiff had a right to demand, retain the action, proceed to the consideration of the merits of the controversy and the administration of justice between the parties, as under its view of the law and the evidence which may he submitted it may find the rights of the parties. That its docket is crowded with cases pressing for trial, and the time and strength of the court burdened with actions already submitted for decision, will not justify striking this cause from the calendar. For the purpose of present decision, which is merely as to the jurisdiction of this court, certain facts are conceded. I do not mean that the defendant city has in any manner waived-its defense on the merits of the action; but I may not now in any wise consider the merits involved in the action, until first is determined my right to attempt such consideration. If such right does not exist, then I may not hear testimony, nor consider the merits of the controversy. If, however, there is jurisdiction to hear
For the present consideration the following facts are conceded: Plaintiff, a corporation for pecuniary profit, organized under the laws of the state of Iowa, and the defendant city, a municipal corporation organized under the laws of said stale1, are both citizens of the state of Iowa. Under permission of the defendant city, plaintiff erected its works, and laid its gas mains in the streets of said city, and has been, and now is, distributing and selling its gas product to its consumers, residents of said city. In May, 1895, said city, by its city council, acting under the forms of law, and assuming as its authority therefor a statute of the state of Iowa (contained in the Session Laws of 1888) wherein authority is conferred upon it to “regulate the price of gas,” passed an ordinance which fixes the maximum prices which plaintiff might thereafter charge for the gas by it so distributed and sold. Previous to the passage of this ordinance, a contract had been in force between plaintiff and defendant, fixing the maximum rates plaintiff might charge for its gas. But the period by this contract provided for such rates had expired when the ordinance now in question was passed. Plaintiff now claims that the rates fixed by said 1895 ordinance are not reasonable, in that the same will not afford to plaintiff' a sufficient amount to enable plaintiff to pay the operating expenses of its plain, and its fixed charges, and afford a reasonable compensation 1 o plaintiff for the services by it performed in manufacturing and furnishing such gas; and that, because such rates are not reasonable, under the circumstances, such ordinance is invalid, as being in violation of the constitution of the United States, and should be so declared, and said city be enjoined and restrained from enforcing it. Defendant (‘encodes that, if the parties to this action were of diverse slate citizenship, this court would have jurisdiction, but claims such jurisdiction does not exist because both parties are citizens of the state of Iowa. It is, however, conceded that, if the hill presents or tenders a controversy arising under the constitution of the United ¡States, jurisdiction attaches to this court. The question to be now determined is, therefore, does the bill, with its exhibits, present or tender a controversy which arises under such constitution?
The particulars enumerated by plaintiff wherein, as it declares, the enforcement of the ordinance in question will violate constitutional provisions, are: , (1) As impairing the obligation of the contract existing between plaintiff and the defendant city and between plaintiff and the state of Iowa, growing out of plaintiff’s incorporation under the statute, and of the city ordinance giving the right to plaintiff to lay its mains and supply gas to the residents of said city; (2) as taking property of plaintiff for public use, without making just compensation therefor; (8) as depriving plaintiff of its property without due process of law; and (4) as denying to plaintiff the equal protection of the law. If such ordinance violates any of these constitutional provisions as properly applied to plaintiff and its rights thereunder, such ordinance is invalid, and must be so declared by any court having jurisdiction to hear and determine the
Another branch of the same general line of reasoning may be here stated. Assuming that whatever action the city council may take as to fixing rates is under the delegated authority conferred by the statute of 1888, above referred to, such regulating or fixing price
The test which shall determine the correctness of this reasoning is not of difficult application. Had the lawmaking power of the state by statute fixed the rates, and such rates were not reasonable, —and by the term “not reasonable” rate as I am herein using it is meant a rate so low as not to afford a proper and reasonable return, under the circumstances, for service performed, including gas furnished, — if the statute rates were not reasonable, manifestly the law might be decreed invalid, under the doctrine so clearly announced by Justice JBrewer in Ames v. Bailway Co., 04 Fed. 105, The general assembly — as the lawmaking power of the state — might have enacted a statute which by its terms would fix the rates in Des Moines to be charged for gas, and the reasonableness of those rates would be open to judicial investigation. But every statute, by the terms of the state constitution, must be a general la w, and be of uniform operation throughout the state. Const. Iowa, art. 3 (Leg. Dep.) § 30. Necessarily, and because of the great variety and large number of differing circumstances which enter into the local situations of the cities in the state, a general statute, fixing the price of gas, could scarcely be so drawn as satisfactorily to adapt itself to each city; and therefore, for convenience of exercise of power to fix rates, as well, perhaps, as to permit the rates to be fixed with greater flexibility, and with more special reference to what local situations might require, the general assembly delegated this power to fix these rates to the several municipal corporations, to be exercised through their respective city councils. That this delegation was a valid exercise of legislative power, is conceded by counsel herein. Indeed, if not such valid exercise, it might well be claimed that the defendant city would have no power to pass an ordinance fixing rates for gas. If, then, a statute enacted by the lawmaking department of the state is open to judicial examination as to reasonableness of rates therein fixed, how can it be that an ordinance so passed by a municipal corporation is not at least equally open to like examination? Is it possible that an immunity, a freedom of action, in this respect surrounds the municipal creature which is denied to the legislative creator? Had the general assembly so desired, it might have established a board of gas commissioners,' and (‘barged it with the duty of supervising gas companies, and of fixing rates to be charged by such companies for gas furnished, after the general method adopted in establishing the board of railway commissioners in this state. And since the general assembly could not itself, by valid statutes, have fixed other gas rates than such as are reasonable, it could not have conferred on its gas commissioners power to fix other than reasonable rates. Supposing, however, those gas commissioners should fix rates which are not reasonable, can
“The restrictions imposed by the constitution of the United States, which directly limit the legislative power of a state, rest equally upon all the instruments of government created by the state. * * * If a state cannot pass an ex post facto law, or law impairing the obligation of contracts, neither can any agency do so which acts under the state by delegated authority.”
So the supreme court, speaking of a legislative grant of franchise (Wright v. Nagle, 101 U. S. 791), — and the principle applies equally in matters of fixing rates, — say:
“The legislature may exercise this authority by direct legislation, or through agencies duly established, having power for that purpose. The grant, when made, binds the public, and is, directly or indirectly, the act of the state. The easement is a legislative grant, whether made directly by the legislature itself or by any one of its properly constituted instrumentalities.”
I have not deemed it necessary, in passing upon the question now before us, to follow counsel into the interesting field of inquiry as
Counsel for the city have pressed with elaboration and great force the proposition that when the supreme court of the United States have once decided a question, that question is no longer a “controversy,” but must be considered settled; and that this court must and will assume that all courts, state as well as national, will thereafter acknowledge the binding force, under the constitution of the United States, of such decision as “the supreme law of the land,” and follow it. And therefore, as to such point, thereafter no such controversy remains as will of itself confer jurisdiction on this court where jurisdiction does not otherwise attach. The decision in Shreveport v. Cole, 129 U. S. 36, 9 Sup. Ct. 210, is cited as conclusively sustaining this proposition; and that, the supreme court having settled the point that rates such as those fixed in the ordinance in question must be reasonable rates, no controversy exists herein as to any constitutional question. Hence this court has no jurisdiction herein in this suit between citizens of the same state. The difficulty here experienced is not with the proposition, but with its proper application to the case now before the court. The experience is not uncommon that opposing counsel agree on a proposition of law, but radically disagree as to its proper application to the facts of a case. If counsel for the city limit the application of this proposition to a case wherein the ordinance or statute once construed by the supreme court is again involved in its application to the same state of facts, the proposition may be accepted as undoubtedly correct. For illustration, we may suppose the supreme court, at the suit of plaintiff herein, to have passed on and settled the questions presented by the bill herein, with regard to
The opinion delivered by Circuit Judge Thayer in Hastings v. Ames, 15 C. C. A. 628, 68 Fed. 726, 728, may assist in the determination of the question here involved. In some respects this opinion has peculiar application to the views so forcibly presented by counsel for the defendant city. From the decrees in Ames v. Railway Co., supra (and associated cases), appeal was taken to the circuit court of appeals for this circuit. The point decided in the opinion rendered in the Hastings’ Case was as to the jurisdiction of the circuit court of appeal^. And it will be noticed that this opinion deals squarely with the question, — here also presented by counsel for defendant,- — that whether the rates complained of and prescribed by the statute are unreasonable and unjust “is not a constitutional question, but an ordinary issue of fact.” After synop-
“It Is manifest, therefore, that the suits at bar are cases in which it was claimed that a law of a state contravenes the constitution of the United States. The relief prayed for by the plaintiffs was predicated on the express ground that the statute which the appellants were about to enforce was in violation of the federal constitution, and the relief sought was granted by the circuit court on that ground, and for no other reason. * * * In opposition to this view it has been suggested that the question which arises on these appeals is simply whether the rates prescribed by the Nebraska statute are unreasonable and unjust, and that this is not a constitutional question, but an ordinary issue of fact. It is true, no doubt, that the issue is one of fact. But a finding is required upon that issue solely for the purpose of deciding the ultimate question which arises in the several suits, — -whether the state statute prescribing the rates is constitutional or otherwise. When the validity of a statute is challenged on the ground that it violates the organic law, it is ordinarily the case that the question can be determined by a simple inspection of the statute; hut it may happen, as in the present case, that it can only be determined in the light of extrinsic facts which serve to demonstrate the necessary effect and operation of the statute. Now, it matters not, as we think, how a decision in such cases is to be reached; whether it be by a simple comparison of the statute with those limitations upon legislative power which are imposed by the constitution, or by an investigation and decision of a preliminary issue of fact. If, in a given suit, the ultimate question involved is whether a state statute is void, either because it impairs rights that are guarantied by the federal constitution or because the legislature of a state has assumed to exercise powers that have been surrendered to the general government, then the case is one which does not fall within the appellate jurisdiction of this court,” — citing several cases.
I am not unmindful of the force of the argument that great inconvenience may result to the courts, in the loading of their dockets with cases, under the view I am now presenting. Yet, if such be the result, is not that a minor matter, when compared with the righr of a citizen of the United States to have his controversy heard and determined in accordance with law? Is such inconvenience to the court to be accepted as sufficient reason why such court shall decline to entertain and decide the controversy, if such duty is imposed by the constitution and the statutes enacted thereunder? After all, is such inconvenience a serious one? Is it not imaginary, rather than mil? For the amount involved must exceed $2,000 before the courts of the United States are open to such controversy. When qongress has opened the door of the court to a litigant, may the court bar his entrance because of mere inconvenience or heavy burden to the court?
It may not be improper here to notice the statement of Justice 'Miller, found in Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 419, 10 Sup. Ct. 462, 702, as to the proper method which is to be pursued in matters such as are presented in the bill herein. The question under consideration related to rates which had been fixed by the railway commissioners of the state of Minnesota as maximum rates for the railways within that state. Having remarked that, “until the judiciary has been appealed to to declare the regulation
“The proper, if not the only, mode of judicial relief against the tariff of rates established by the legislature or by its commission is by a bill in chancery, asserting its unreasonable character and its conflict with the constitution of the United States, and asking a decree of the court forbidding the corporation from exacting such fare as excessive, or establishing its rights to collect the fare as being within the limits of just compensation for the service rendered.”
The bill in suit appears to have been framed on the line marked out in the extract just given.
In the course of the discussion counsel has submitted, in manuscript, unpublished opinions of Judges Jackson and Phillips, as to questions of jurisdiction in suits pending before them. Such suits appear to have been, in each case, brought by a gas company, a citizen of the same state with the defendant therein, against a city, to enjoin the .city from enforcing ordinances fixing gas rates, on the same grounds which plaintiff herein alleges in the pending action. The decision of Circuit Judge (afterwards Justice) Jackson appears to have been orally given in 1881; that of Judge Phillips in 1895. In neither of these opinions is the question as presented in the pending action discussed at length. But both opinions, as applied to the suit at bar, would seem to sustain the jurisdiction of this court. In the brief time permitted since the close of the argument upon yesterday I have again examined the many cases cited by counsel, but find nothing therein which would justify a different conclusion from that herein reached. These cases are many, and have extended over a wide range of discussion. I have not the time at my command for a review of these authorities this morning. , Nor do I believe any such special benefit would result from attempting a review of them as to justify the delay in the present hearing, which would necessarily result. The conclusion reached is that the bill in this suit presents a controversy arising under the constitution of the United States, so involving a construction of the constitution as, in my judgment, to clearly give the court jurisdiction herein. The demurrer of defendant as to jurisdiction must be overruled, to which defendant excepts.
If consistent with my views of duty, I would gladly have accepted relief from the labor which necessarily must attend the consideration of this suit. My hands are already, filled and my time burdened with other important pressing matters. But I may not consult personal convenience, and am now ready to enter on the consideration of the merits of the pending hearing.