City of Owatonna v. CHICAGO, ROCK ISLAND & PAC. RR CO.

Decision Date23 April 1969
Docket NumberNo. 1-69 Civ. 53.,1-69 Civ. 53.
Citation298 F. Supp. 919
PartiesCITY OF OWATONNA, Plaintiff-Respondent, v. CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY, Defendant-Appellant.
CourtU.S. District Court — District of Minnesota

George E. Dow, Jr., Owatonna, Minn., and Best, Flanagan, Lewis, Simonet & Bellows, by Harold C. Evarts, Minneapolis, Minn., for plaintiff-respondent.

Stringer, Donnelly & Sharood, by A. James Dickinson, St. Paul, Minn., for defendant-appellant.

NEVILLE, District Judge.

Presently before the court is a motion by the City of Owatonna to remand the above-entitled action to the District Court of the State of Minnesota, Steele County from whence it was removed.

It appears that the City of Owatonna, Minnesota, through its City Council and pursuant to Minn.Stat. ch. 429 ordered certain public improvements to be constructed, consisting generally of grading and paving a city public street along lands owned in part by the Chicago, Rock Island and Pacific Railroad Company. After notice to the Railroad, the City Council thereafter assessed a portion of the costs of these improvements against it as an owner of the benefited lands in the amount of $35,392.50. Other land owners along the same public street also were assessed. An assessment hearing was held before the Owatonna City Council on January 21, 1969. The Railroad appeared stating its objections to the assessment and to the amount thereof.

Being aggrieved as to the amount of the special assessment against its land, the Railroad, pursuant to Minn.Stat. § 429.081 (1968 Supp.) and provisions of the Owatonna City Charter, perfected a statutory appeal to the District Court of the State of Minnesota, Steele County by filing with the Clerk of that court what has been denominated as a "notice of appeal."1 Thereafter within thirty days, the Railroad being a citizen of a State other than Minnesota filed a petition for removal to federal court pursuant to 28 U.S.C. § 1441(a)2 and § 1446.3

The City of Owatonna has made several objections to the petition for removal in support of its motion to remand. It argues generally that assessment proceedings as they exist under Minnesota law are not removable to a federal court, claiming that state law controls the nature of the proceedings and that under Minnesota law assessment proceedings are legislative or administrative proceedings. Moreover, Owatonna argues that while this is a "civil" as opposed to "criminal" action, under Minn.Stat. § 429.081 (1968 Supp.) the court exercises appellate review in the nature of certiorari since it can only affirm the assessment or set it aside and order a re-assessment by the Owatonna City Council. Owatonna also argues that the Railroad is not a "defendant" for purposes of 28 U.S.C. § 1441(a) and that therefore the attempted removal to federal court is improper.

The Railroad, on the other hand, urges that actions arising out of City assessment proceedings are removable to federal court and that it has met the requirements for original jurisdiction in the federal courts under 28 U.S.C. § 1332, this being a civil action between citizens of different states where the amount in controversy exceeds $10,000. The Railroad admits that the above action could not have been originally commenced in federal court because of the statutory requirement under Minn.Stat. § 429.081 (1968 Supp.), but claims this fact to be immaterial. Finally, the Railroad claims that while it filed a "notice of appeal" in the state court, it is actually a party defendant under federal law. It contends the court must align the parties according to their actual interest and that such an alignment will show the Railroad to be a party defendant as it is defending an assessment charge initially commenced against it by the City of Owatonna.

Turning to the various points of law raised by the parties, the court is convinced that the above case is a civil action within the original jurisdiction of the federal courts. Original jurisdiction of the federal courts arises when there is before the court a civil action between citizens of different states wherein the amount in controversy exceeds $10,000. 28 U.S.C. § 1332. The right to removal is not affected by the particular state statutory procedure giving rise to the cause of action. Thus it consistently has been held that a civil action may be removed to a federal court notwithstanding the fact that matters of state procedure require the action to be initially commenced in a state court. See Commissioners of Road Improvement District No. 2 v. St. Louis Southwestern Ry., 257 U.S. 547, 561-562, 42 S.Ct. 250, 66 L.Ed. 364 (1922); Kirby v. Chicago & Northwestern R.R., 106 F. 551, 557 (C.C.S.D. Iowa 1900); City of Terre Haute v. Evansville & Terre Haute R.R., 106 F. 545, 548 (C.C.D.Ind.1901); and In re Stutsman County, 88 F. 337, 341 (C.C.D.N.D.1898).

Assessment proceedings in Minnesota become a civil action when a notice of appeal is filed in the state district court, a court of general jurisdiction. It is an adversary proceeding between parties and a decision is made to enforce or not to enforce a liability against a landowner on past facts gathered by legislative or administrative officers. Commissioners of Road Improvement District No. 2 v. St. Louis Southwestern Ry., 257 U.S. 547, 42 S.Ct. 250 (1922); In re Chicago, Milwaukee, St. Paul & Pacific R.R., 50 F.2d 430 (D.Minn.1931); In re Judicial Ditch No. 24, 87 F.Supp. 198 (D.Minn. 1949). It is true that the proceedings for making local improvements and the subsequent assessment proceedings are initially legislative and administrative in nature. Yet it becomes one of judicial inquiry when an aggrieved person appeals to the district court objecting to the assessment pursuant to Minn.Stat. § 429.081 (1968 Supp.). The argument that assessment appeals lose their judicial characteristics because there is not a trial de novo in the district court is without merit. See In re Chicago, Milwaukee, St. Paul & Pacific R.R., 50 F.2d 430, 433 (D.Minn.1931); and Range Oil Supply Co. v. Chicago, Rock Island & Pacific R.R., 140 F.Supp. 283, 285 (D. Minn.1956), aff'd 248 F.2d 477, 479 (8th Cir.1957). In both of the above cases removal was allowed even though the court's review was limited to whether an order of the Railroad and Warehouse Commission was lawful and reasonable. The same scope of review is present in this action. See Village of Edina v. Joseph, 264 Minn. 84, 119 N.W.2d 809 (1962).

Finally the court holds that the Railroad is properly a defendant in this action for the purposes of removal. This is a question of federal law not state law and the parties must be aligned according to the facts and their respective interests. Mason City & Fort Dodge R.R. v. Boynton, 204 U.S. 570, 27 S.Ct. 321, 51 L.Ed. 629 (1907); Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Chicago, Rock Island & Pacific R.R. v. Stude, 346 U.S. 574, 74 S.Ct. 290, 98 L. Ed. 317 (1954); and In re Chicago, Milwaukee, St. Paul & Pacific R.R., 50 F.2d 430 (D.Minn.1931). In Mason City & Fort Dodge R.R. v. Boynton, supra, 204 U.S. at 580, 27 S.Ct. at 324, the Supreme Court commented as to condemnation proceedings:

"Looked at as a whole, the Iowa statutes provide a process by which railroads and others may acquire land for their purposes which the owner refuses to sell. The first step is the valuation. Whether it is part of the case or not, it is a necessary condition to the proceedings in court. Against the will of the owner the title to the land is not acquired until the case is decided and the price paid. The intent of the railroad the condemnor to get the land is the mainspring of the proceedings from beginning to end, and the persistence of that intent is the condition of their effect. The state is too considerate of the rights of its citizens to take from them their land in exchange for a mere right of action. The land is not lost until the owner is paid. Therefore, in a broad sense, the railroad the condemnor is the plaintiff, as the institution and continuance of the proceedings depend upon its will."

In the Mason City case, while Boynton, the landowner, had appealed from a commissioners' damage award and was nominally the plaintiff under state law, the Supreme Court looking at the proceedings as a whole and in their broadest sense held that Boynton was in fact a defendant. Our Minnesota federal court has followed this practice stating that "the mere fact that a party appeals from the order of an administrative and non-judicial body does not constitute that party a plaintiff." In re Chicago, Milwaukee, St. Paul & Pacific R.R., 50 F.2d 430, 434 (D.Minn.1931). In re Chicago involved an...

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  • Greenberg v. Veteran
    • United States
    • U.S. District Court — Southern District of New York
    • 17 Abril 1989
    ...a mere continuation of the administrative proceeding" and, thus, could not be removed). But see City of Owatonna v. Chicago, Rock Island & Pacific R.R. Co., 298 F.Supp. 919, 922 (D.Minn.1969) (and cases cited Despite our misgivings, we assume for present purposes that an Article 78 proceedi......
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    ...by local law definition or characterization of the subject matter to which it is to be applied." See also: City of Owatonna v. Chicago, R.I. & P.R.R., 298 F.Supp. 919 (D.Minn. 1969); Mason City & Ft. D.R. Co. v. Boynton, 204 U.S. 570, 27 S.Ct. 321, 51 L.Ed. 629 (1907); 1A Moore's Federal Pr......
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