Lone Star Motor Import, Inc. v. Citroen Cars Corporation

аuthority procedure beyond power of sections Under the tern 11(b) 79x(a), SEC, appellant 24(a), should have com- U.S.C.A. § original permitted plained when the is- appeal order was from this order entry.3 There- sued. its after challenge says, any author- fore, to its Judgment affirmed. ity should have to affect Blackstone thus during period. been made appellant The extent to which precluded ap his failure have pealed from the 1950 order is be deter judi principles mined familiar of rеs Obviously, cata. that order did not out present plan particu

line the in all its agree lars. And we would that the in provisions plan clusion of unlawful in a IMPORT, LONE INC., STAR MOTOR justified saying simply by is not to be Appellant, plan aas whole satisfies the re quirements of the order. But the or CORPORATION, CITROEN CARS to, points compliance der with one fairly Appellee. of its stated can alternatives No. 18546. expected produce, plan with certain Appeals United States Court of characteristics, propriety basic then the Fifth Circuit. necessarily of those characteristics has March 1961. passed upon, parties been and interested protest then, must or never. The order permitted comply “by EUA to either dis posing causing disposition” gas properties. Conceivably might “dispos[e]” gas its interest by selling its Blackstone stock. One doubt whether such action was contemplation

within the reasonable parties, thereby as EUA would have per

lost control of 32 cent of the stock Montaup, supplier principal

electricity companies, for other two its complex and the entire would have been

fundamentally impaired.4 But we can way no

think of “causing available to EUA of disposition” ‍‌‌​​​​​​​​‌‌​​‌‌‌​‌‌‌​​‌‌‌​​​​‌‌​‌​​‌‌​‌‌‌‌​‌​‌​‍prop of this erty utilizing other than its owner

ship bring of Blackstone stock so disposition by

about a Blackstone. If merely expressly 2. 91 L.Ed. but The Commission had found 67 S.Ct. integrated have that he did not to. Blackstone was in an asserts included public-utility system electric with EUA at integrated opera potential “The core of 4. apex. Associates, Eastern Utilities system to be found in the EUA 1950, 31 S.E.C. * * *." Montaup Eastern Utilities meeting government’s Associates, Appellant, 31 S.E.C. protests, spite appellant’s argument, we are im makes no claim he opportunity argument appeal, pressed with the that even have cf. American system separation Light C., Cir., from the Power & E. S. Blackstone sever worse than the would be affirmed 329 U.S. gas ance of business. Ellis, Winston R. Hirsch & Westheim- Houston, er, Tex., appellant for Lone Import, Star Motor Inc. Jr., Arnold, W. N. Lowrey, Oían Hous- ton, (Fulbright, Tex. Crooker, Freeman, Jaworski, Bates & Houston, Tex., of counsel), appellee. TUTTLE, Before Judge, Chief BROWN, Judges. JONES and Circuit BROWN, Judge. Circuit JOHN R. presents case process of service non- a by corporate resident defendant effected Secretary pur- service declaring to a suant recent statute entering of a into contract with partial perform- Texas for a resident of requisite ance there constitutes engaging of, in, business. The Dis- applied literally trict Court held that (the contract subject breach of this suit) process would be a denial due Fourteenth Amendment.1 process Service of was therefore declared suit invalid and the ordered dismissed. permit Court declined to The alleging a amendment a num- Imports, D.C.S.D.Tex.1960, Corporation, 1. Lone Motor Star Inc. v. Citroen Cars F.Supp. 48. showing expressly provides further without activities of detailed

ber showing dealings by “entering mail non- contract into actual course “foreign corporation” corporate the or otherwise” resident defendant “a is “to resident Texas” which Texas. State of performed part or in whole Texas State suit filed The party” either doing in Texas “shall be deemed Inc., Import, Motor s.2 in” Texa defendant of Texas. The resident foreign precision Corporation, cor- of this statute Citroen Cars poration. pleaded one of case to and claim eliminated Citroen removed the inquiries ordinarily presented in two the Federal The State Court Court. determining petition this situation. “In ciency the suffi for- that Citroen was a reflected eign process corporation ad- of of had not been service which foreign corporation Texas, aon do nor had under laws of mitted business in to state, agent problem forum it appointed process. divides it It was along alleged, self however, lines of and national “does busi- state part interest. ‍‌‌​​​​​​​​‌‌​​‌‌‌​‌‌‌​​‌‌‌​​​​‌‌​‌​​‌‌​‌‌‌‌​‌​‌​‍The first is to in the and that ascertain ness State of Texas” by whether state encom out of done petition law means to suit arises business “this challenged pass ques in This this state.” The service. [Citroen] diversity tion—at least did not undertake describe the acts to cases which to constituting “doing wholly one this law, a such business” ex- is—is matter of state allege Package cept Balti Car to that Lone Star and Citroen Co., Cir., 1954, more & into Ohio R. 5 212 “entered a written contract” for the * * *. F.2d 153 in exclusive distribution of Citroen cars The second copy conditioned on an A an- affirmative answer to Texas. thе contract was of first, presents problem petition and then to the nexed an exhibit. as by applied whether the state Breach of this contract law as thus Citroen after performance by offends the Federal substantial Constitution.” Stan Lone Star ga Shipping Corporation, v. McCormick within the State of Texas the sub- was Cir., ject damages. of the suit for F.2d was, “doing can be no contro this Here there business” of versy claimed the first—the area showing, confined the mak- to thereforе highly brought Indeed, by ing single it seems This the state law. contract. of legisla- that, likely similar as is true for play Art. Tex.Civ.Stat. into 2031b 2. Article 2031b: dent ing or a place * ice business respective tary arising deemed tary whom any such out of such State, non-resident “Act “Sec. * * equivalent designation engages action, of State designated agent agents, foreign corporation the act service of of State as out equivalent be made regular or non-resident engaging of such business suit natural in any Any foreign or acts of of Texas as business in this or maintenance agent process may Statute appointment business does not maintain in business person proceedings done in this upon causes of action engaging appointment or law natural in * * * of the Secre- whom serv- done in agent upon corporation be made this State, shall be in respect- in such person arising Secre- State, State state resi- ir- non-resident and without wherein whole McGee v. into eign whole or Article long Court’s decision may resident dent State, Civ.Stat. Ed.2d 223. (effective “Doing “Sec. party. contract corporation constitute after natural business 355 U.S. or in or the 2031b sucb of Texas to art. 2031b business in International For the the United States part by natural part including was corporation committing person in doing mail of December 1957 this State * * * later). adopted purpose (Vernon person either or otherwise state; business, any this state.” shall be other acts S.Ct. Life Ins. May performed ^[*] party or of this Supp.1960). any definition ^[*] noр-resi- Supreme * * was entering deemed tort in this with a ^[*] 2 L. Tex. Act, for- or in in * Denckla, 1958, g., what states, e. Hanson v. many see Corpora- Shipping S.Ct. 2 L.Ed.2d Stanga v. McCormick 550; Bluff page McGee. This has likewise been tion, supra, 268 F.2d at arguments center But Green, of the before us. Creek Oil Co. to ex- because purpose of other factors do reach was we F.2d intriguing per- questions. these fullest ploit maximum the constitu- federal reach missible opinion the of the In the course also, it It restraints.3 tional pоsi pointed District out that states, avoid- means of been for other Star, plaintiff, Lone tion taken tying ing the difficulties troublesome that, unique. Perhaps than more amendability process of service position implied that for he almost foreign taxability corporation, aof At least one of calculated boldness. denying re- access the courts rested Lone Star seems bold because regulation problems of the lated of the solely the basis right do business. and did not cоntract allege sharply posed the second under to that either left undertake But this Citroen, con- federal the with contract otherwise problem compliance such — engaged actually the defendant, this requirements. On in mani stitutional constitu- Trial the statute activities in Texas.4 The Court held fold District holding parties in briefs tionally opinion in As the statute invalid. the Court’s 2, de- in its June 1960. Al District Court valid and the announced immediately 8) center question (on to veloped is seemed most June Lone the Star Life Ins. International filed a motion for amend its McGee v. to around 199, adding 220, by complaint proposed specific 2 Co., 1957, 78 S.Ct. al 355 U.S. legations phases had covering that decision what the omitted and L.Ed.2d epitomized upon by Court, in Pen- and the note to the notions commented done noyer Neff, 1877, 4, supra. Up 24 L. that time no order or to 5 judgment entry 565. And the consideration had been submitted for Ed. by inescapably further one as to the or entered the Court. On June led apparently Legislaturе important contract created a Texas continu- 3. The question plaintiff ing relationship to answer the between and undertaken de- Package many involving in Star Car such Court Lone fendant acts of do- Co., Cir., yet ing business, alleged, 5 Baltimore & O. R. none of them are Co. v. hoped by 212 note had substantiated P.2d 153 much less affidavits or discovery. Instead, pre- the Texas courts all the would be answered Engineers, in Acme Inc. with is a contract but had noted sented entered into Co., Cir., 1958, Engineering plaintiff, Tеxas, a resident of v. Poster to be likely performed part was not due to in whole or in special appear doing in Texas of a act of the absence state. No de- present alleged beyond procedure. entry outlook On the ance fendant into * * F.Supp. amicus curiae route is unavailable this contract. at process. page of service of Nick test Ajax Tex.Civ.App. Co., Electric las v. opinion concluded: 5. The “Defendant’s 337 S.W.2d quash comрlaint motion to summons and alleged granted. notify “Plaintiff could have other acts The clerk will will doing judgment that would and of defendant constitute counsel to draft submit accordingly.” business within the court The trial court’s state. direc many contemplated wonders how automobiles were some fur shipped by contract, therefore, not, under act. This was defendant ther many equivalent entry Texas, in of an how were delivered agents 58, 28 U.S.C.A. whether defendant’s ever entered F.R.Civ.P. United negotiate contract, Brewing Co., & M. Texas render v. F. Schaefer States assistance, plaintiff’s 78 S.Ct. technical instruct U.S. L.Ed. Erstling ‍‌‌​​​​​​​​‌‌​​‌‌‌​‌‌‌​​‌‌‌​​​​‌‌​‌​​‌‌​‌‌‌‌​‌​‌​‍721; mechanics in the mechanism of the auto- 2d Southern Bell Tele closely phone Telegraph Cir., & mobiles. How defendant su- pervise alleged Campbell, 93. See also Carter v. establishment of a F.2d dealership organization? Clearly 285 F.2d 68. such reply opposition in At time the written perfunctory contract. Citroen made gave, accepted, in as Lone order Star and Citroen proffered a formal 6 shipment of six Texas an order for the entered first directed7 which the There- cars to in Texas. be delivered 23.8 later June into shipped after Citroen cars over (1) analysis If demonstrates During period Texas. the contract alleged in the on the facts Citroen maintained warehouse over exist amendment would Houston plated contem- where it stored cars defendant, person supplement to the a written (2) afforded have the Court should required Stаr, main contract.9 by Lone opportunity establish contract, a con- “in maintained deci that a them, perfectly obvious it is spicuous place” showrooms at actually required sion “signs bearing trade- va the constitutional initial During pendency mark.” “doing statutory lidity business” of a service contract three Citroen sent solely of a based on the they representatives into Texas where tempta contract. Whatever (appointed previously instructed dealers inаbility them— tions—or the resist contract) pursuant Lone Star adjudicating ordinary either matters repair proper servicing in the statutory courts construction fact foreign Similarly, these Citroen’s cars. against the de especially are cautioned manager top officials came questions termination constitutional Texas to stimulate sales presented some inescapably where through dealers. its actually profound is less other basis acts, established, These if fаr reflect disposition. ground of available as making more than the mere aof 1960, Office,Ltd., Clay Insurance v. Sun contract They the orders. solicitation of 1222, 4 L.Ed.2d 363 U.S. 1170; S.Ct. adequate are more the than to show Matteo, 1957, 355 U.S. Barr v. satisfy minimal contracts with Texas 179; v. Harmon 2 L.Ed.2d 78 S.Ct. Brucker, play the “traditional notions of fair and 78 S.Ct. justice,” substantial International Shoe 2 L.Ed.2d 503. Washington, argument beyond (1) is it As to 310, 316, U.S. S.Ct. 90 L.Ed. pro allegations of the factual the that Much 95. less was sufficient deemed ample actual showed posed amendment Engineers, us in Acme Inc. Foster with corporate activity defendant Engineering the synopsis suffice. will A brief in Texas. vice executive Citroen’s April 1958 brings question manager us then to came That together its president ought (2) The the Trial negotiate whether a contract. to Texas understanding amendment order the which to have allowed an parties reached opportunity of Star the incorporated afford Lone substantially thereafter would quent cause, “ “That U * opposition si: * * to amend show: ^[*] and, v such Citroen therefore, motion Court’s * “II. ** * not filed date comes * * decision and being late.” files * until June grounds in said subse- ** 8. The ant, Citroen Cars 2, 1960.” Ordered, same by dismissed.” the Court’s summons said cause be order that hereby Adjudged the motion of the defend- read: opinion and the same is here- Corporation, complaint be and and Decreed all “Accordingly, things * * * sustained, quash it June is Star, car Done proposed each ordered For 5, supra. A order note 7. See agreed an identical ve- opposition. to store Citroen Citroen’s attached in Texas. hicle contained instruction “Pursuant Perhaps allegations thing. establishing empty of the amendment was an truth Lines, Inc., have alkiewicz held above—would v. Farrell which—we have Sz way D.C.S.D.N.Y.1956, phrase it this been sufficient. We F.Supp. ultimate so puts premium of the held. But rather than in the terms this Judge e., form. We have no that test —i. of discretion—because doubt abuse below, approach Citroen, demonstrates think we understood that was offered the that no reason existed amendment Lone ex pected why should to be leave to file the amendment able to show my so, substan- upon be denied. absence the former order would fall showing being Next, tial test. factual reason satisfies the made. that, asserts in its brief since 15(a) First, declares F.R.Civ.P. initially allege Lone Star did not emphatic policy terms. affirmative facts statute, and relied on the Texas Requiring first amendment that after * * * appеllee “forced to do ex subsequent made amendments prepare tensive research to a trial brief only by byor con leave of court written constitutionality party, sent of the adverse states * * Texas statute Worse than given justice freely when “leave shall be “ * * * that energies the court’s time and course, requires.” so is not Of expended had to preparing mechanical and the circum absolute independent re such leave stances and terms * * search it, This lеads without given” “freely to be committed just further demonstration of how it is informed, dis careful damaged, to conclude that this "course super he cretion of Trial prejudicial of conduct has been to both development intends of a cause to * * *." appellee and the court disposition. ward That its ultimate however, contemplates, there be preju We can see no such reason or some factor some reasonably hand, dice. On the other we see much necessary that conditions prejudice, perhaps irreparable, if leave restrictions be attached. granted. is not certainly or not an instance Here none were found even This was charged anyone dila- the Court. The can be with mentioned District which tory neglect. simply proffered contrary, cause the order. On the the entered dispatch.10 opposition proceeded remarkable The defendant Citroen’s was through perfunctory be true dоwn one that the to motion This continued late,” 6, supra. motion for If of Lone Star’s leave “comes see note singular inadvertent, pro It was filed with- it is that the the amendment. to file merely opinion days of the Court’s well test the motion “comes in 6 period “too of 10 allowed as late” and not late.” its natural within the support right 59(a) (b) exculpatory of F.R.Civ.P. enthusiastic dismissal, under rehearing. course, Actually, of it adds little more here. Citro for suggests any judgment that until the order of whatso- en dis filed before was aside, nothing or “entered” missal set there was rendered was ever was 7, supra. 5 and amend a motion for to see notes to so leave file an F.R.Civ.P. 10. This is time table: November Suit filed State 15, 1959 December Suit to removed Federal quash December Citroen’s motion to April 15, quash bring to on motion Notice to May 2, 1960 Motion reached on motion calendar under local rule June Court’s memorandum June Lone Star’s motion leave to file amendment opposition reply Citroen’s June 23, 1960 Final June of dismissal complicated if, out of come more on the trial counsel it a which Nor case forum, profession- the merits in a some non-Texas indifference carelessness phases duty contractual and breach incompetence essential out some leaves al allegations. im- arose out of collateral non-written plied Texas a Here agreements undertakings ain through lawyer a which filed suit a Texas lawyer two- Texas was would be bаrred under the Texas Texas Court. year four-year statute, was rather than ‍‌‌​​​​​​​​‌‌​​‌‌‌​‌‌‌​​‌‌‌​​​​‌‌​‌​​‌‌​‌‌‌‌​‌​‌​‍the which statute Texas with a faced covering like advantageous statute written contracts.12 obviously himto the statute time as Until such suitors. hand, On the other extent perfect invalid, had a he declared was legal completely from the the cause was safe right Cer- to its benefits. resort to perils judicata of limita- of res or statute tainly right it in a bona test a he had tions, proposed amend- allowanсe of the controversy. didHe case fide sensible, a con- ment all the was more held it would be assume that have to trary course, all unfounded. the more think— reason to invalid. He some had hypothesis, For on this all might be hope least or at had file a —that not to do was new suit an unreasonable It sustained.11 pro- Court and set out facts of its lawyer action, then, stand for the posed Whereupon Citroen amendment. initially Cer- statute. recog- again If Citroen remove. would penalize tainly as to much so it was not so quash that motion would be nized unavailing showing forbidding litigant by on the merits an answer thought itself the District Court If more. would filed without be available, note must have been see thought inadequate under facts still supra. concepts, mo- International Shoe another quash To sustain would filed. to motion, be hand, there other On the then have Citroen would prejudice lurking here likelihood legal engage research in the travail of 8, supra, order, note see Lonе Star. The undergo briefing. It would thus dismissing the case. one very urges a theoretical labor it now ruling earmarks of all of the deny- Trial action basis Court’s plea res To merits. overcome ing leave. brought in subsequent judicata suit in a state, burden would ground, some noOn substantial more troublesome Even Lone Star. therefore, was the denial might question of statutes Emery supportable. Neeff v. amend light especially in the limitations Transportation Co., F. and as when choice-of-law-rules a rule 2d 432. In the оf which face freely pursued in some other “shall be that leave commands conceivably given justice requires” be- could jurisdiction. when so example, g., v. For See, Oil Co. in the various circuits. Bluff Creek 11. e. 83, Cir., 1968, Hanson Green, F.2d 85- 257 the 7th Circuit looked 5 Corp. insurance, Trippe Appliance limiting 86, McGee National Gas and Manufacturing Spencer Inc., Cir., Electrolux, 1959, Gifts, 270 F. Co. v. 7 AB v. 822, 821, sustaining Cir., 1959, Illinois 7 270 F.2d where a recent 2d Skipping expressed Stanga statute; view that tke Su as we v. McCormick preme “majority Cir., did not indiсate Corp., F.2d 549- 268 5 taking anything very VI; de- back said in and tke that it was V and Parts McGee, or Van International Shoe Co. Barnes for the discussion tailed Vanderbilt, v. [Vanderbilt Reeder Contractors derbilt in D. L. 9tk Circuit Industries, L.Ed.2d Higgins Inc., 1456] S.Ct. U.S. v. Arizona * * *." v. Drill Well Oil Roumel F.2d 768. figure Cutting big fore- in counsel’s impact of Mc- was tke cast any, arts. 5526 and 5527. impact, Han- Tex.Civ.Stat. Gee, counter up being son, built tke case law then and amend order of dismissal leave to without bur- negative Lone Star’s satisfied record Dowdy v. Proc- would have error. out- beеn consequences anof den. With right Manufacturing Company, perhaps ter & Gamble and so decisive dismissal prin- Cir., 1959, 5 ciples These done 267 F.2d 827. required, final, as was the minimum my and, part, deter- McCormick,13 settled Stanga are in us right to amend. mine the opportunity of ob- give plaintiff an say ques- I that see reason to more on taining no defendant. over the allowing tion. form Here takes the filing proposed amendment. majority Whether, deter- 15(a) mined, “an affirma- Rule declares respect is com the case In this policy,” in terms tive and whether the judgment of parable in which a to one “emphatic,” it seems does so are is a claim state dismissal for failure to although unimportant, it to me to be 12(b) (6). In ordered under F.R.Civ.P. might be to find the difficult source plain unsuccessful most of such cases the emphasis dramatic to this attributed given op be tiff or defendant must particular The first clause the Rules. portunity unless an amendment only ap- and amendment tendered reasonably apрears certain pellant district one which the accepted no evidence is available test Why ma- court disallowed. then does the Moore, or defense. 3 to make out a claim jority necessary say that, find where Practice 15.10. Federal § required, leave to file an amendment is Consequently, the of dis- provision of that “leave shall the rule missal must be aside and cause set freely given” not a “mechanical is remanded might phrase ?” I absolute add that this file amendment and for one which I have before encounter- is not appropriate proceedings. consistent ed. “Mechanical” do with tools or has to remanded. Reversed State, Mullinnix machines. Cf. Tex.Crim.R. 60 S.W. 768. In the Judge (concurring smaller dictionaries that most of use us JONES, Circuit adjective. the word “absolute” “Its is specially). signification ordinary most ‘unrestrict- saying of much for the I reason see no ” ed’ ‘unconditional.’ Columbia Wa- holding says majority that the ter-Power v. Columbia Electric permitted аppellant to amend. should Railway Light Street and Power Com- party to amend once as a A is entitled pany, 43 L.Ed. S.Ct. any before a of course at time matter metaphysics theology 15(a), responsive pleading filed. Rule perhaps physics, chemistry, Civ.Proc., Mo- Fed.Rules U.S.C.A. sciences, others of the more exact “ab- pleadings. responsive 1 A are tions meaning noun, solute” has but Holtzoff, Federal Practice and Barron.& germane. any sense here The task 443. The amendment Procedure § writing gloss the headnote for this supply the deficiencies was intended upon the rule envy him who has it. not mine I do not opin- noted the District ion. Note See majority. said, pos- The amendment was else tendered Much of what is while sibly logic, order of dismissal in law and before the was entered. sound does not preceded ‍‌‌​​​​​​​​‌‌​​‌‌‌​‌‌‌​​‌‌‌​​​​‌‌​‌​​‌‌​‌‌‌‌​‌​‌​‍Even if the order had to me to essential the ten- seem to the decision amendment, entry questions presented by appeal. der of the the of the Stanga Skipping Co., McCormick 268 F.2d 544. See Parts XII and XIII, page at

Case Details

Case Name: Lone Star Motor Import, Inc. v. Citroen Cars Corporation

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Mar 2, 1961

Citation: 288 F.2d 69

Docket Number: 18546_1

Court Abbreviation: 5th Cir.