Ohio ex rel. Seney v. Swift

270 F. 141 | 6th Cir. | 1921

DENISON, Circuit Judge

(after stating the facts as above). Upon this statement of facts, it is too clear for doubt that these Ohio laws could have no application to this property, which had remained in cold storage in the state only as an incident to its lawful interstate transportation, and that Swift & Co. was entitled to its immediate return. Indeed, relator now and here makes no contention to the contrary, but accepts the consequences of his deliberate election to stand upon the question of jurisdiction of the court below, and to refuse to file a reply or to litigate the merits of the case made by Swift & Co. If the relator had been able to and had seen fit to make it appear to the court below that the property was not in good faith merely stopped as incidental to an interstate trip, but was really Ohio property, kept in storage in violation of Ohio law, this case would have a different aspect ; but we must take- the record as we find it. The only question preserved and now in controversy in this court is whether the court below acquired jurisdiction by the petition for removal.

Removal is sought to be upheld because: (1) The controversy ife controlled by, and necessarily involves, the Constitution or laws of the United States; (2) defendant cannot enforce, in the judicial tribunals of Ohio, its equal, civil rights as a citizen of the United States; (3) the parties are citizens of different states.

[1] 1 .The laws of the United States. It is said that these are involved in three ways: (a) The property was in transit in interstate commerce, pursuant to and under the authority of the methods sanctioned by the Interstate Commerce Commission, and hence was not subject to seizure in the Ohio courts; (b) the procedure initiated by petition was a step in the taking of plaintiff’s property without due process of law, in violation of the Fourteenth Amendment; (c) the Eever Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115%e^3115%r), so called, had, for the time of the war, superseded the Smith Cold Storage Act, and the case, therefore, called for application and construction of the Lever Act.

It is enough to say of all these contentions that they present matters of defense, and that the suit or proceeding commenced by the petition plainly did not arise under the Interstate Commerce Act (24 Stat. •379), or the Fourteenth Amendment, or the Lever Act. It is well settled that the entry of a federal question into a case by way of defense, although it may present the controlling or the only disputed question, does not justify removal under section 28 of the Judicial Code (Comp. St. § 1010). In re Winn, 213 U. S. 458, 29 Sup. Ct. 515, 53 L. Ed. 873.^*

[2] 2. Denial of Civil Rights. Whether the situation, which defendant, by argument, undertakes to present on this subject, could in any event justify removal under section 31 of the Judicial Code (section 1013), we need not consider. The effort to support removal under this section is an afterthought. The removal petition has only one allegation which is now claimed to be pertinent on this point. It is to the effect that “certain courts” of the state of Ohio have construed the statutes and laws of Ohio so as to permit the seizure and taking of plaintiff’s property without due process of law, whereby “petitioner will be unable to enforce its rights under the laws of the United States.” This comes very far short of the full and exact statement of deprivation of civil rights which would be necessary, if it could be thought that section 31 has any reference to such a controversy as this. See Iron Mountain Co. v. Memphis, 96 Fed. 113, 122, 37 C. C. A. 410; Kentucky v. Powers, 210 U. S. 1, 26 Sup. Ct. 387, 50 L. Ed. 633, 5 Ann. Cas. 692.

[3] 3. Diverse Citizenship. Whether this gives ground of removal depends upon the question whether the suit in the state court should be treated by us as brought by the state of Ohio or by Mr. Seney. In the former case it is too plain for discussion that there could be no removal, because the court below would not have had jurisdiction of such a suit brought originally in that court, as well as for other reasons, and in the latter case the right to removal is too clear to be doubted; but the solution of the question as to who should, for the purpose of removal, be considered as the plaintiff, is full of complication and difficulty.

[4] The original petition does not make this clear. The title which is prefixed to the complaint names the state of Ohio as plaintiff, and Mr. Seney as relator; but a case has no existence, so as to have a title, until it has been commenced, and a purported title, unnecessarily indorsed upon a complaint, could hardly have any serious effect upon the question of who were the parties specified in the complaint. Plainly, an indorsement of title, giving the names of parties who were citizens of different states, would not make the cause removable, if the essential facts did not appear in the complaint; and the converse seems equally true. Pennover v. McConnaughy, 140 U. S. 1, 11 Sup. Ct. 699, 35 L. Ed. 363.

The complaint itself is not clear. It begins:

“Plaintiff, for his cause of action herein, says that he is the duly elected, qualified, and acting prosecuting attorney of Lucas county, Ohio, and that he brings this action in his oflicial capacity on behalf of the state of Ohio.”

All the further allegations and prayers of the complaint are introduced by “plaintiff says” or “plaintiff prays.” The complaint is signed, “Allen J. Seney, Prosecuting Attorney of Lucas County, Ohio,” and is verified by “Allen J. Seney.” He does not allege that any law authorizes Him to cause the state to sue or to be sued. The consent of the state to be a party is essential, and it can be given only by those authorized. Ordinarily, the state sues by the Attorney General, and' even he should point out his authority to implead the state.

[5] Citizens may often bring suit on behalf of a state, and the citizen may be and continue the plaintiff of record. The naming of the plaintiff’s office may well be that mere description of the person which does not affect plaintiff’s identity. In the general common-law suit by A., “for the use and benefit of B.,” A. is the party; B. is not. Would Mr. Seney be personally liable for the costs of this action; and, if so, does that indicate that he is plaintiff ? In any event, we think it right to say that it is not clear upon the face of the petition that it is a suit by the state of Ohio. It is not necessary to go farther in this direction, and we therefore omit any discussion of the common-law practice, the Ohio Code, and the Ohio decisions as to the real party in such a case.

[6] It is well settled that the right to remove on the ground of diverse citizenship is usually to be determined by the removal petition, but the record may be referred to to supplement the petition, where that is incomplete. Bondurant v. Watson, 103 U. S. 281, 286, 26 L. Ed. 447, McAllister v. Chesapeake, 243 U. S. 302, 305, 37 Sup. Ct. 274, 61 L. Ed. 735.¹ Certainly the petition to remove prevails, unless distinctly inconsistent with the record. Here we find the petition for removal distinctly and clearly alleging that the plaintiff is Allen J. Seney, who was and is a citizen of Ohio, and the defendant petitioner is Swift & Co., which was and is a citizen of Illinois, and that the controversy is between citizens of different states. If we should look no farther, we would be inclined to think that the removal petition, standing as an interpretation of a doubtful complaint, makes out a case of diverse citizenship; but this conclusion is not very important, because we must look farther.

[7] Whenever they become relevant from any aspect, we must take judicial notice of the decisions of the Supreme Court of Ohio,² and thus we have before us, just as if it were fully pleaded in the record, the decision of that court in the Columbus Packing Co. Case, and the whole situation with reference thereto which we have recited in the statement of facts.

[8] The complaint in this case is, with only the necessary changes, copied from that in the Columbus Case; it seeks the same relief, and it is in the same form as to the party plaintiff. While the matter of parties was not there expressly considered by the Ohio Supreme Court, its decision undoubtedly involves and affirms the proposition that the laws of Ohio authorize the prosecuting attorney to bring such a suit on behalf of the state; that in such a suit the state is exercising a part of its sovereign power; and hence that the state is, in truth, the party plaintiff. So, if we stopped here,' we must conclude that the action was not removable.

[9] However, we cannot stop here any more than we could stop when we had seen the face of the pleadings. We cannot take judicial notice of a part of the situation created by the Columbus Case to supplement the deficiency of the complaint in showing that the state was a party, and refuse to take notice of the remainder to supplement the imperfections of the removal petition as entitling defendant to claim that the state is not truly a party. When, considered in connection with the Columbus decision, the removal petition clearly shows the facts upon which defendant now stands in supporting the removal on the ground of diverse citizenship. This position is that the Ohio Anti-Trust and Cold Storage Acts, when interpreted as they have been by the Ohio court, and when applied as is sought by this complaint, lead to a taking of property without due process of law, and are in so far in violation of jhe federal constitution, and hence that a suit by the prosecuting attorney, even if it purports to be in enforcement of the state law, is not justified by such law, but is his personal act, so that he, and not the state, is the plaintiff. We therefore feel compelled to consider this proposition, just as if it were more formally and artificially set out in the removal petition.

We ha.ve the less hesitation in passing by matters of form and coming to this substantial issue, because the only ultimately important matter is whether this .question — the effect of the Columbus decision to work a violation of the Fourteenth Amendment — should be initially decided by the state or federal trial court, and so, ultimately, reach the court of last resort through one or another channel, and this matter is practically removed from controversy by the existence in the court below of an equity suit, begun by Swift & Co. against Seney. In that case, the equity jurisdiction of the court below is invoked to enjoin this same action, brought by Mr. Seney in the state court, and it is fully and formally alleged that he is proceeding under color of an unconstitutional law. So far as we see (the point has not been argued), the jurisdiction of the court below to decide in that case this vital question of constitutionality is unassailable, and it would be a matter of little importance to any one to order remand of this case to the state court, and yet to leave the jurisdiction of the court below over the same controversy in the companion equity case unimpaired. Our hesitation is still less because, under the present statutes, the petition to remove might be amended, even in this court, so as to clear up all matters of form that now embarrass-. Judicial Code, §■ 274c, as amended March .3, 1915 (Comp. St. § 1251c).

[10] Upon the issue of unconstitutionality, defendant’s argument is this: The construction of state statutes by the state court is binding upon this court, and the acts must be read as if they contained express provisions and declarations that their force and effect are as declared in the Columbus Case. Even if that case is not merely a construction of statutes, but declares the common law, or general principles analogous to the common law, if the result is to deprive defendant of its property, that result is the action of the state, no less than if it were by express statute. The law of the -state, under which defendant’s property is being taken, is therefore that one who has stored pork for more than six months is conclusively presumed to have done so for the purpose of restraining trade, and may not be heard in any court to' deny this unlawful purpose or effect,³ and that his property shall be thereupon taken over into the possession of the state, and put upon the retail market and sold, returning to him the net. proceeds of the sale. This is the law, without regard to the quantity stored or its actual effect, or whether it has any effect, upon the market, without regard to the wholesomeness of the article at the end of the storage, without regard to the amount in existence or in storage by others, without regard to whether the property is in a condition which malees it incapable of public retail sale without practical confiscation, and without regard to the fact that the owner has not violated any provision found in the statutes (which do not forbid storage for more than six months, but only a sale — presumably in Ohio — after such period).

We do not intend either to adopt or deny any of these statements or inferences by reciting them. We have no need to do so. They certainly are sufficient to support and justify the conclusion that defendant is in good faith, and not merely formally, asserting the unconstitutionality of the Ohio laws in this respect, and hence asserting that Mr. Seney is not authorized under those laws to proceed by his complaint on behalf of the state, and hence that he is himself the party. Ex parte Young, 209 U. S. 123, 159, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764; Western Union v. Andrews, 216 U. S. 165, 30 Sup. Ct. 286, 54 L. Ed. 430; Home Co. v. Los Angeles, 227 U. S. 278, 33 Sup. Ct. 312, 57 L. Ed. 510; Truax v. Raich, 239 U. S. 33, 37, 36 Sup. Ct. 7, 60 L. Ed. 131, L. R. A. 1916D, 545, Ann. Cas. 1917B, 283; Cavanaugh v. Looney, 248 U. S. 453, 456, 39 Sup. Ct. 142, 63 L. Ed. 354; Greene v. Louisville, 244 U. S. 507, 37 Sup. Ct. 673, 61 L. Ed. 1280, Ann. Cas. 1917E, 88.

The good faith assertion of the unconstitutionality of the state law gives jurisdiction to a federal court, and this jurisdiction continues, both to decide the constitutional question, and to decide all other, even nonfederal, questions involved, and even though the court may conclude that the claim of unconstitutionality is unfounded, or may pass it without decision (Siler v. Louisville Co., 213 U. S. 175, 191, 29 Sup. Ct. 451, 53 L. Ed. 753); and if this same good faith assertion operates to determine that the state is not a party, it must likewise continue to have that effect, regardless of how it may be decided.

[11] When the existence of a federal question through a claim of unconstitutionality determines the jurisdiction of the federal court, the same principles must apply — so far as we can see — whether the jurisdiction is invoked by original pleading or by removal petition. In either case, the prima facie jurisdiction of the state court is to be ousted by that of another tribunal which, for this purpose and to this extent, is dominant. The application of the same principles to both these situations was approved in Missouri Ry. v. Missouri Commissioners, 183 U. S. 53, 59, 22 Sup. Ct. 18, 46 L. Ed. 78.

[12] Whether the application of the laws of Ohio, proposed by Mr. Seney’s complaint, would work a violation of the Fourteenth Amendment, may depend in part upon questions of fact — e. g., whether the proposed sale would bring confiscation; whether the property involved was so impressed with an interstate character as to be beyond the declared policy of Ohio, etc. But if we were to pass this view, and assume that such violation depended wholly upon matters of law arising upon the undisputed facts, and upon the view to be taken of the state laws and the Columbus case, the result would be the same. It might be thought that, since every one is bound to know the law, a claim of unconstitutionality which was based upon mere application of legal principles to the conceded facts, would not support the federal jurisdiction after the claim had been found to be erroneous; but the cases seem to recognize no distinction between questions of constitutionality dependent on disputed facts and those dependent on mere observation of the state laws. See Caldwell v. Sioux Falls Co., 242 U. S. 559, 564, 37 Sup. Ct. 224, 61 L. Ed. 493 (“Blue Sky” Case); Tanner v. Little, 240 U. S. 369, 36 Sup. Ct. 379, 60 L. Ed. 691 (“Trading Stamp” Case).

[13] Principles analogous to those we have referred to — if not the identical ones — have been applied by the Supreme Court to develop a sufficient case of diverse citizenship in a removal petition (Missouri Ry. v. Missouri Commissioners, supra), and, if the question remains open to us after that decision, we see no escape from their due application there as elsewhere. The question which has been involved in numerous cases (e. g., Ex parte Young) is whether the real party defendant was the state, or was an officer of the state, who must be considered as acting in his personal capacity, because his claimed authority to act for the state failed. The principle is the familiar one of agency. An act done by the agent, on behalf of the principal and in the name of the principal, is the act of the principal, if there is due authority; otherwise, the act is that of the agent. The same rule must apply to a party plaintiff as to a party defendant, and when we find that because the constitutionality of the state law is at stake, the party is the individual, and not the state, this finding supports the conclusion of diverse citizenship equally well as it (loes the conclusion that the Eleventh Amendment does not protect.

[14] The decision of the state court to the effect that the state is the party plaintiff would bind the federal courts in so far as it was a construction of the statutes or of practice or pleadings, but its conclusion rests on the premise that the law is valid; and it is this very premise which Swift & Co. had a right to challenge in the federal courts through invoking the Fourteenth Amendment, and when this is done the conclusion fails. To say that the state court decision binds us as to who should, for the purposes of this suit, be considered the party, would be to say that the state court’s finding or assumption of constitutionality would forbid the kind of contest in the federal courts expressly sanctioned by Ex"parte Young, and that line of cases.

We therefore conclude that the petition for removal stated a good case therefor on the ground of diverse citizenship.

[15] The plaintiff further contests the removal because he says the action commenced by his complaint was not a civil action, but was rather one based upon and for the enforcement of the Ohio penal statutes. So far as concerns the form of the matter, this is plainly a civil action. It is not brought to cause imprisonment or to collect a penalty, but it is a proceeding in a court of equity, commenced by proper pleading, having a plaintiff and having defendants, seeking an injunction and a receiver, and, further, practically final relief through the receivership. This answers every description of a civil action, rather than of the criminal or penal actions with which those of a civil nature must be contrasted. Cases like those in which a city, which is a branch of the state government is undertaking to enforce its ordinances by injunction and at the same time to collect the tax and the penalty secured by the ordinance (City of Montgomery v. Postal Co. [D. C.] 218 Fed. 471) are distinguishable, as soon as stated.

So far as concerns the substance of the matter, the question on this objection is the same as on the matter of diverse citizenship. If the action were one by the state of Ohio, it would have the color of, and it might be considered as, a proceeding in execution of its sovereignty rather than a mere civil action; but since the validity of the Ohio law is forcefully challenged under the Fourteenth Amendment, Mr. Seney cannot be heard to say that the action is by the state rather than by him.

[16] The plaintiff next contends that the removal was ineffective because the state court had granted plaintiff’s request to dismiss the action as against Swift & Co., and so there was nothing left to remove. It is not easy to see how an action in equity can rightly be dismissed as against that defendant who is the sole party substantially interested on the side of the defense; but that does not concern us. If the dismissal was effective, removal was not Swift & Co.’s remedy.

The petition and bond for removal (theretofore duly filed) were presented to the judge of the state court on September 3d, pursuant to notice theretofore given by plaintiff. The sufficiency of the bond has never been questioned, nor has that of the notice. The state court did not then, or ever, make any order of removal, but continued until September 5th the question as to whether it would make such order and the question whether it would grant plaintiff’s motion that the receiver be ordered to sell the property. Under these circumstances, the jurisdiction of the state court over Swift & Co. terminated not later than September 3d, and the order of dismissal made September 5th was void. Traction Co. v. Mining Co., 196 U. S. 239, and cases cited on page 244, 25 Sup. Ct. 251, 49 L. Ed. 462; Remington v. Central Co., 198 U. S. 95, 99, 25 Sup. Ct. 577, 49 L. Ed. 959; Chesapeake v. McCabe, 213 U. S. 207, 217, 29 Sup. Ct. 430, 53 L. Ed. 765; Chesapeake v. Cockrell, 232 U. S. 146, 154, 34 Sup. Ct. 278, 58 L. Ed. 544; Iowa v. Bacon, 236 U. S. 305, 310, 35 Sup. Ct. 357, 59 L. Ed. 591; Bank of Fritzlen (C. C. A. 8) 135 Fed. 650, 653, 68 C. C. A. 288; Donovan v. Wells Fargo (C. C. A. 8) 169 Fed. 363, 365, 94 C. C. A. 609, 22 L. R. A. (N. S.) 1250.

[17] We observe no defect in the jurisdiction of this court. If the final decree of the court below dismissing plaintiff’s petition had been based solely on the plaintiff’s refusal to acknowledge the jurisdiction of the court and refusal to proceed with his case in that court below, there would'have been no question, except that of jurisdiction; the situation would have been somewhat analogous to that in McAllister v. Chesapeake Co., 243 U. S. 302, 305, 37 Sup. Ct. 274, 61 L. Ed. 735, and it would have been necessary to consider whether the exclusive jurisdiction to review was vested in the Supreme Court. This was not what occurred. After the refusal of the plaintiff to proceed, the court, on its own motion, took testimony to satisfy it as. to what the right of the matter was. By this testimony it prima facie appeared that the property was in process of interstate transportation, resting under a storage in transit privilege, and never had been intended for sale in Ohio, and hence that, in the opinion of the court, the complaint should be dismissed, even if the Columbus Case were to be accepted as beyond criticism. The plaintiff might have contested these claims. It did not; and the final action of the court rested, in part, upon these findings of a sufficient affirmative defense. The failure of the plaintiff, on his appeal to this court, to assign error against or to contest these further findings of fact and conclusions of law, does not show that the final decree of which he complains involved only a question of jurisdiction; he might have raised these questions without prejudice to his insistence against the jurisdiction.

One further matter requires mention: When we were asked to suspend the decree of the court below in order that the appeal might be effective, we thought that the interests of all would-be best protected by allowing Swift & Co. to take its property and finish the manufacture before the material spoiled, but on condition that, if it failed in its contentions, it would restore the status quo by turning over equivalent property to the custody of the state court, and that it secure such restoration by a bond; and since it might not be apparent that the state would have any interest which would permit it to receive the penalty -of the bond, we devised a special form of condition which we thought would meet the situation, and which is quoted in the margin.⁴ So far as this penalty was made to become payable upon the adverse termination of the controversy over the right to remove this case, we made an error in accomplishing our intent. Our purpose was to require this action by Swift & Co., if it should ultimately be determined that the state court, rather than the court below, had the initial right to determine whether Swift & Co.'s property was being taken unlawfully, and we omitted.to observe that perhaps this controversy was as effectually removed from the state to the federal court by Swift & Co.’s bill in equity as by the removal petition. Since our present decision is subject to review, and resort to that bond may yet be necessary, it should be corrected, if the obligor desires, and should be, by the court below, surrendered up to be canceled on the presentation and filing of a bond the same in all respects, except that the condition, in place of the words “if it shall finally,” to and including the words “or be finally,” and, at the end-of the condition, shall contain the words specified in margin.⁵ The period of 30 days may also be changed to 90 days.

The decree and order below are affirmed, but the order of affirmance will include a direction for substitution of bond in accordance herewith.

* But see Smith v. Kansas City Title & Trust Co. (Feb. 28, 1921) 254 U. S. -, 41 Sup. Ct. 243, 65 L. Ed. -

1 The cases which confine us to the complaint in determining the right of removal (Bankers’ Co. v. Railway, 192 U. S. 371, 383, 24 Sup. Ct. 325, 48 L. Ed. 484) are those involving only the question whether the suit was one •“arising under the laws of the United States.” It seems obvious enough that the means by which an action takes on form and substance and thus comes into existence must be the sole criterion of how it “arises.” Not so when other characteristics of the action — as the citizenship of the parties — are to be determined.

2 True it was said in Mountainview Co. v. McFadden, 180 U. S. 533, 535, 21 Sup. Ct. 488, 45 L. Ed. 656, that the court will not take judicial notice of an net of Congress, in order to ascertain that the suit was really one arising under the laws of the United States, when the plaintiff’s pleadings made no such claim. Plainly, this is not to say that we cannot take notice of the laws and decisions of a state to aid us in determining whether diverse citizenship exists.

3 See McFarland v. American Co., 241 U. S. 79, 36 Sup. Ct. 498, 60 L. Ed. 899.

4 “If it shall finally be determined either that the action commenced in the common pleas court of Lucas county, Ohio, on August 27, 1919, by Allen J. Seney, purporting to act for and on behalf of the state of Ohio, against Swift & Company and the Northern Refrigerating Company, was not duly removed to the District Court of the United States for the Northern District ■of Ohio, Western Division, and should be remanded, or be finally determined that the petitioner in that action, or the state of Ohio, has a right to the substantial relief sought by the petition, then, and in that event, Swift & Company shall, within thirty days, return to the receiver in said action, or otherwise to the custody of the court where such action then pends, either the same property which is to be delivered to it by the receiver upon the filing of this bond, or else the equivalent thereof in the same form, or in its further completed form of manufacture (without regard to additional value by reason of further treatment). The property so to be returned is to stand in place of that now taken from the receiver, and is to be disposed of as the court then in charge of such action shall direct.

■ “In case of default in such delivery, Swift & Company shall pay to the state of Ohio the sum of the penalty of this bond, as liquidated damages, such sum to be subject to such disposition as the present or future laws of Ohio may direct.

“It is definitely understood that this is a voluntary bond given by Swift & Company and the surety, pursuant to the offer of Swift & Company and as a condition of obtaining discretionary court action, and that the question of the right of the state to receive the money, if the bond is forfeited, cannot be raised in any court.”

5 “If it shall finally be determined that on the 8th day of October, 1919, the court of common pleas of Lucas county, Ohio, rather than the District Court of the United States, at law or in equity, for the Northern District of Ohio, was vested with the dominant jurisdiction to determine initially whether the property of Swift & Co. was rightly subject to seizure, as demanded by the petition of Allen J. Seney, purporting to act for and on behalf of the state of Ohio, filed in the common pleas court on August 27, 1919, against Swift & Co. and the Northern Refrigerating Company, or shall be finally.”

At the end of the condition, the words “This bond is given nunc pro tune in substitution for one filed-, 1919, and speaks as of that date.”

Case Details

Case Name: Ohio ex rel. Seney v. Swift

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Jan 17, 1921

Citation: 270 F. 141

Docket Number: No. 3347

Court Abbreviation: 6th Cir.