165 F. 1 | 9th Cir. | 1908
(after stating the facts as above). The appellees moved to dismiss the appeal on the grounds, first, that jurisdictional questions only are presented, and that therefore, if the order is appealable, the appeal lies to the Supreme Court alone; and second, that the order appealed from was made ex parte and not upon “a hearing in equity,” and is therefore not appealable. To the first ground of the motion, the answer is that by the act of April 14, 1908, c. 1627, 34 Stat. 116 (U. S. Comp. St. Supp. 1907, p. 209), amending the seventh section of the act of March 3, 1891, c. 517, 26 Stat. 828 (U. S. Comp. St. 1901, p. 550), to establish the Circuit Courts of Appeals, appellate jurisdiction is given to this court from an interlocutory or
Nor is the appeal subject to dismissal on the ground that the order appealed from was not had upon a “hearing in equity.” After the bill had been filed, the court, on October 1, 1907, issued an order upon the defendants therein to show cause on October 29th why the injunction should not issue as prayed for, and directed that a copy of the bill and of the order be served upon each of the defendants in the suit at least five days before the day so “set for the hearing.” The injunction order made on October 31st recites that tlie cause came on to be heard, pursuant to said rule to show cause, that the complainants appeared by their counsel, that the defendants appeared specially by counsel to move for the dismissal of the bill on the ground that they were corporations foreign to the state of Washington, and were entitled to be sued only in the Circuit Court of the United States for the district of which they were respectively inhabitants, and that they also appeared specially to file pleas to the same effect. It recites further that the court heard arguments upon the complainant’s application for an injunction, and arguments of the counsel for the defendants as amici curia:. This sufficiently shows that there was “a hearing in equity,” such as the act of April 14, 190(5, contemplates. The defendants to the bill each had notice and opportunity to appear and present all objections to the issuance of the injunction order, and we may assume that their counsel as amici curiae did present every available objection. This view of the statute is in harmony with our decision in Pacific Northwest Packing Co. v. Allen, 109 Fed. 515, 48 C. C. A. 521. The motion to dismiss will be denied.
Had the Circuit Court jurisdiction of the subject-matter of the suit? The Constitution declares that the judicial power of the United States shall extend to all cases in law and equity arising under the Constitution and the laws of the United States. By the terms of section 22 of the Interstate Commerce Act (Act Feb. 4, 1887, c. 104, 24 Stat. 387 [U. S. Comp. St. 1901, p. 3170]), existing legal remedies were expressly preserved. Prior to its enactment, the equitable jurisdiction to enjoin excessive charges and discriminations by common carriers on the ground that the wrong was a constantly recurring one, for which there was no adequate remedy at law, was generally recognized. High on Injunctions, § 616; Menacho v. Ward (C. C.) 27 Fed. 529; Southern Express Co. v. Memphis, etc., Ry. Co. (C. C.) 8 Fed. 799; Coe v. Louisville & Nashville R. Co. (C. C.) 3 Fed. 775; Vincent v. Chicago & A. R. Co., 49 Ill. 33; American Coal Co. v. Consolidation Coal Co., 46 Md. 15; Rogers L. & M. Works v. Erie Ry. Co., 20 N. J. Eq. 379. Tlie question here is whether by implication the equitable remedy is, by the interstate commerce act, held in abeyance and post
“For if, without previous action by the commission, power might be exerted by courts and juries generally to determine the reasonableness of an established rate, it would follow that, unless all courts reached an identical conclusion, a uniform standard of rates in the future would be impossible, as the standard would fluctuate and vary, dependent upon the divergent conclusions -reached as to reasonableness by the various courts called upon to consider the subject as an original question. Indeed the recognition of such a right is wholly inconsistent with the administrative power conferred upon the commission, and with the duty, which the statute casts upon that body, of seeing to it that the statutory requirement as to uniformity and equality of rates is observed. Equally obvious is it that the existence of such a power in the courts, independent of prior action by the commission, would lead to favoritism, to the enforcement of one rate in one jurisdiction and a different one in another, would destroy the prohibitions against preferences and discrimination, and afford, moreover, a ready means by which, through collusive proceedings, the wrongs which the statute was intended to remedy could be successfully inflicted. Indeed no reason can be perceived for the enactment of the provision endowing the administrative tribunal, which the act created, with power, on due proof, not only to award reparation to a particular shipper, but to command the carrier to desist from violation of the act in the future, thus compelling the alteration of the old or the filing of a now schedule, conformably to the action of the commission, if the power was left in courts to grant relief on complaint of any shipper, upon the theory that the established rate could be .disregarded and bo treated as unreasonable, without reference to previous action by the commission in the premises. This must he, because, if the power existed in both courts and the commission to originally hear complaints on this subject, there might be a divergence between the action of the commission and the decision of a court. In other words, the established schedule might be found reasonable by the commission in the first instance and unreasonable by a court acting originally, and thus a conflict would arise which would render the enforcement of the act impossible.”
The decision leaves untouched the question whether or not a.shipper may, since the passage of the act to regulate commerce, resort to equity to enjoin the promulgation of a new schedule of rates which are alleged to be unreasonable, extortionate, and ruinous to the shipper’s business. That this is so is expressly recognized by the subsequent decision of the court in Southern Railway Co. v. Tift, 206 U. S. 428, 27 Sup. Ct. 709, 51 R. Ed. 1061. In that case.the court had under review a de
"In the caso at bar, however, there are assignments of error based on the objections to the jurisdiction of the Circuit Court. These might present serious questions in view of our decisions in Texas & Pacific Railroad Company v. Abilene Cotton Oil Company, 204 U. S. 426, 27 Sup. Ct. 350, 51 L. Ed. 553, upon a different record than that, before us. 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 tlie 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 unreasonable rates or a change to unjust or unreasonable rates. The Circuit Court granted no relief prejudicial to appellants on the original bill. It sent the parties to the Interstate Commerce Commission, whore, upon sufficient pleadings identical with those be*8 fore the court, and upon testimony adduced upon the issues made, the decision was adverse to the appellants. This action of the commission, with its findings and conclusions, was presented to the Circuit Court, and it was upon these in effect the decree of the court was rendered.”
This language of the opinion must be deemed to have been used advisedly and with the approval of all the members of the court who participated in the decision: Evidently its purpose was to make it clear that the question of the jurisdiction of a Circuit Court to entertain such a bill as is here before us was not presented and had not been adjudicated in the Abilene Cotton Oil Company Case, and that its decision was not deemed essential to the disposition .of the case then before the court. So far as the Supreme Court is concerned, therefore, the question now under consideration is an open one.
Upon a careful consideration of the interstate commerce act, we find no ground on which to say that it impliedly denies the equitable jurisdiction to enjoin a threatened injury such as is alleged in the bill in the present case. It is true that the courts have no power to pronounce an interstate rate unreasonable or to declare what is a reasonable rate, but this is not to say that a court of equity may not enjoin the enforcement of a threatened ruinous schedule of rates which is -proposed to be adopted in the future. If such is the effect of the act, we have the anomalous situation of a threatened irreparable injury for which there is no remedy, for the Interstate Commerce Commission has no power to enjoin a proposed unreasonable new schedule of rates. Interstate Commerce Commission v. Railway Co., 167 U. S. 479, 17 Sup. Ct. 896, 42 L. Ed. 243. To what does the reservation of legal remedies in section 2.2 of the act refer if not to such a remedy as this? The case calls for the exercise of a power which is inherent in a court of chancery, the power to enjoin a proposed unlawful act. The exercise of that power does not invade the province of the Interstate Commerce Commission. It prohibits the enforcement of an alleged unreasonable rate only until the commission shall have had time and opportunity to adjudge the question of its unreasonableness. To afford such relief is not to fix rates or to change existing rates, or to decide on the reasonableness of established rates, or in any way to interfere with the functions of the Interstate Commerce Commission, nor does it result in the confusion or derangement of rates so forcibly pointed out as the ground of decision in the Abilene Cotton Oil Case. Such has been the decision of the federal courts in every case in which the question has arisen. Tift v. Southern Ry. Co. (C. C.) 123 Fed. 789; Jewett Bros. & Jewett v. Chicago, M. & St. P. Ry. Co. (C. C.) 156 Fed. 160; M. C. Kiser Co. v. Central of Georgia Ry. Co. (C. C.) 158 Fed. 193.
Further objection to the jurisdiction is presented in the argument that to afford the relief granted the appellees herein is to make discriminatory rates, since the court can act only as between the parties to the suit, and the result of its successful termination would be to give the appellees better rates than others similarly situated. The answer to this is that all persons subject to the payment of the advanced rate may, if they clioose, obtain the benefits of the order by -complying with its conditions. The injunction make's no discrimination. It sus
It is earnestly insisted that the court below bad no jurisdidion of the defendant corporations which were not inhabitants of the district in which the suit was brought, for the reason that the judiciary acts of March 3, 1887 (Act March 3, 1887, c. 373, 24 Stat. 552 [U. S. Comp. St. 1901, p. 508 ]), and August 13, 1888 (Act August 13, 1888, c. 866, 25 Stat. 133 [U. S. Comp. St. 1901, p. 508]), provide that no civil suit shall he brought before either the Circuit Court or the District Court “against any person by any original process or proceeding in any other district than that whereof he is an inhabitant.” The interstate commerce act was passed at a time when the judiciary act of 1875 (Act March 3, 1875, c. 137, 18 Stat. 170 [U. S. Comp. St 1901, p. 508]), was in force. Under that act a cause cognizable in the federal courts could be brought against a defendant in any district wherein he might he found at the time of serving process. The acts of 1887 and 1888, being limited to actions of which there is concurrent jurisdiction in state courts, do not apply to an action in which the federal jurisdiction is exclusive. United States v. Mooney, 116 U. S. 104, 6 Sup. Ct. 304, 29 L. Ed. 550; Atkins v. Disintegrating Co., 18 Wall. 272, 21 L. Ed. 841; In re Hohorst, 150 U. S. 653, 14 Sup. Ct. 321, 37 L. Ed. 1211; United States v. Standard Oil Co. (C. C.) 152 Red. 290; Southern Pac. Co. v. Earl, 82 Fed. 690, 27 C. C. A. 185; Westinghouse Air Brake Co. v. Great Northern Ry. Co., 88 Fed. 258, 31 C. C. A. 525. We have to inquire, therefore, whether the present suit is of a class of cases of which the state courts would have concurrent jurisdiction. The case is clearly one which presents a federal question. !t arises under the Constitution and laws of the United States. Its purpose is to compel compliance with the provisions of the interstate commerce act, and its correct decision depends upon the construction of that act. In re Rennon, 166 U. S. 548, 17 Sup. Ct. 658, 41 R. Rd. 1110; Toledo, A. A. & M. Ry. Co. v. Pennsylvania Co. (C. C.) 51 Fed. 730, 1.9 L. R. A. 387. It seems clear also that the jurisdiction of the federal courts over such a case must be exclusive. It is true that the remedy here sought is not one of those which are expressly provided for by the terms of the act. The act makes special provision for but two remedies, an appeal to the Interstate Commerce Commission and an action at law to recover damages for violation of the provisions of the act, which action, it is declared, shall he brought in “any District or Circuit Court of competent jurisdiction.’7 That the federal courts have exclusive jurisdiction of such actions has been held in Van Patten v. Chicago, M. & St. P. R. Co. (C. C.) 74 Fed. 981, and Sheldon v. Wabash R. Co. (C. C.) 105 Fed. 785. The express provision of the act for an action at law to recover damages should not have the effect to exclude resort to other remedies unless the intention so to do is manifestly expressed. In the act of August 7, 1888, c. 772, 25 Stat. 382 (U. S. Comp. St. 1901, p. 3583), requiring all railroads subsidized by the United States to maintain and operate telegraph lines, for governmental and other purposes, the only remedy expressly given was the right to bring mandamus to enforce the pro
The appellants rely on In re Keasbey & Mattison Co., 160 U. S. 221, 16 Sup. Ct. 373, 40 L. Ed. 402, to sustain their contention that the provisions of the acts of 1887-1888 limiting- the place of suit to the district whereof the defendants are inhabitants, is applicable to the present case. But in that case those provisions were held to be applicable for the reason that the jurisdiction of the federal courts in that class of cases was concurrent and not exclusive. The case was an original proceeding in the Supreme Court for mandamus to the judges of the Circuit Court for the Southern District of New York, requiring them to take jurisdiction of a suit brought against a corporation created under the laws of the state of Massachusetts for infringement of a trade-mark under the act of 1881 (Act March 3, 1881, c. 138, 31 Stat. 502 [U. S. Comp. St. 1901, p. 3401]), providing for the registration in the Patent Office of trade-marks used in commerce with foreign nations or with Indian tribes, and providing for an action for damages, or a suit in equity to protect such trade-mark in any court having jurisdiction over the person guilty of such unlawful act,
Objection is made to the jurisdiction on the ground that it does not appear from the hill that the necessary jurisdictional amount is in controversy. The bill alleges that the matter in controversy “exceeds, exclusive of interest and costs, the sum and value of $2,000.” In Wetmore v. Rymer, 169 U. S. 115, 18 Sup. Ct. 293, 42 L. Ed. 682, it was held that a suit cannot properly he dismissed by a Circuit Court as not involving a controversy of an amount sufficient to come within its jurisdiction unless the facts appear upon the record to create a legal certainty of that conclusion. In Lee v. Watson, 1 Wall. 339, 17 L. Ed. 557, it was said:
“By ‘matter in dispute’ is meant the subject of ¡lie litigation--the matter for which the suit is brought and upon which issue is joined, and in relation to which jurors are called and witnesses examined.”
The matter in dispute in the present suit is the right of the appellants to enforce a proposed schedule of rates. Railroad Co. v. Ward, 2 Black, 485, 17 E. Ed. 311. In principle the case is similar to Washington Market Co. v. Hoffman, 101 U. S. 118, 25 L. Ed. 782, a suit in which a number of complainants whose several interests did .not equal the jurisdictional amount sought to enjoin the market company from interfering with their right to occupy their respective stalls. The court said:
“The case Is one of two hundred and six complainants suing jointly. Tim decree is a single one in favor of them all and in denial of the right claimed by the company, which is of far greater value than the sum which, by the act of Congress, is the limit below which an -appeal is not allowable.”
In Brown v. Trousdale, 138 U. S. 389, 11 Sup. Ct. 308, 34 L. Ed. 987, the complainants were taxpayers who sought to restrain the collection of interest and principal on bonds -alleged to have been unlawfully issued by the count}'. The court said:
“Tire rule applicable to plaintiffs each claiming under a separate and distinct right in respec-t to a separate and distinct liability and that contested by the adverse party is not applicable here.”
So in City of Ottumwa v. City Water Supply, 119 Fed. 315, 56 C. C. A. 219, 59 R. R. A. 604, in a suit by a taxpayer to enjoin the city from issuing bonds, it was held that the power of the city to issue sudi bonds is the matter in dispute for the purpose of ascertaining the amount or value in controversy, and not the tax to which the complainant would be subjected. Other cases in point are Texas & P. Ry. Co. v. Kuteman, 54 Fed. 548, 4 C. C. A. 503; American Fisheries Co. v. Rennen (C. C.) 118 Fed. 869. But if it is necessary that the bill aver the requisite amount in controversy as to each complainant, it is evident from the facts stated that such an averment can be made by amendment, and its absence from the bill is not ground for reversing
The order appealed from is affirmed.
NOTE.' — The following is tlie opinion of Hanford, District Judge, on tlie motion to dismiss:
This suit is by individuals and corporations, who are citizens of ’Washington and California, against six railroad corporations engaged in interstate commerce, incorporated, respectively, in the states of Minnesota, Wisconsin, Iowa, Utah, and Oregon. The object of the suit'is to obtain a decree restraining the defendants from putting into effect a new schedule of rates on lumber to he carried from tills state to points of destination in tlie several states of the Mississippi Valley, which schedule increases the rates heretofore charged for similar services, and is alleged in the bill of complaint, to be unfair, excessive, and discriminatory. Each of the defendants lias appeared specially to contest the jurisdiction of 'the court, and the case has been submitted upon motions to dismiss the suit for lack of jurisdiction.
Jurisdiction cannot be maintained on the ground of diversity of citizenship, because the complainants are not all citizens nor inhabitants of the state of Washington, and all of the defendants have their legal domiciles in states other than the state of Washington. Smith v. Lyon, 133 U. S. 315, 10 Sup. Ct. 303, 33 L. Ed. 635; Shaw v. Quincy Mining Co., 145 U. S. 444, 12 Sup. Ct. 303, 33 L. Ed. 768. It is the opinion of the court, however, that the jurisdiction rests firmly and safely upon the ground that the suit is one arising under the laws of the United States, and that the restrictive clauses of Hie statute defining the jurisdiction of the United States Circuit Court are not applicable. This is so because the bill of complaint by positive and specific averments accuses the defendants of having entered into a combination to suppress competition in violation of the act of Congress commonly referred to as the “Sherman AntiTrust Law,” the fourth section of which provides: The several Circuit Courts' of tlie United States are invested with jurisdiction to prevent and restrain violations of this act. And section 5 provides: Whenever it shall appear to the court before which any proceeding under section 4 may lie pending that the ends of justice require that other parties shall be brought before the court, it may cause them to he summoned, whether they reside in the district in which the court is held or not. Act July 2, 1890, c. 647, 20 Stat. 209 (U. S. Comp. St. 1901, p. 3201).
Here wo have a suit, the object of which is to prevent and restrain violations of this law, and in express terms tlie law invests this court, as a Circuit Court of the United States, with power to grant the preventive relief which the complainants have sued for. The defendants say that they cannot he sued in this district because they are not inhabitants of the district: but the law provides that, when justice requires it, parties may he brought; before tlie court, whether they reside in the district or not, and certainly in this case justice does require the presence of all these defendants, because they are accused of having entered into an unlawful agreement to increase the cost of carrying on interstate commerce, and a decree which sustains or annuls that agreement will affect the pecuniary rights of every party to the agreement. Therefore they are all entitled to have their day iu court. They operate connecting lines of railways traversing state boundaries, and. to obtain adequate protection, exporters of lumber must bring them all into the same forum, in order to compel tlie carrier which receives a consignment in one state and the one which delivers it in another state to observe the same obligation with respect to the charge for the entire service.
It is apparent that the objection which the defendants are urging here might with equal' propriety he urged to' defeat the jurisdiction of any other Circuit Court in which a civil action may be instituted to restrain the defendants from violating the anti-trust law by adhering to the alleged unlawful combination. Therefore the clause of the jurisdiction statute which requires civil action to be commenced in the district of which the defendant is an inhabitant, if applicable to this case, is antagonistic to the statute which confers jurisdie
After deliberation and careful examination of the authorities to which my attention 1ms been directed, if is my opinion that the jurisdiction is not doubtful. Therefore the several motions to dismiss will be denied.