Employers Reinsurance Corporation v. Bryant

• Decision Date: 04 January 1937
• Docket Number: No. 155,155
• Citation: 81 L.Ed. 289,299 U.S. 374,57 S.Ct. 273
• Parties: EMPLOYERS REINSURANCE CORPORATION v. BRYANT
• Court: U.S. Supreme Court

299 U.S. 374

57 S.Ct. 273

81 L.Ed. 289

EMPLOYERS REINSURANCE CORPORATION

v BRYANT.

No. 155.

Argued Nov. 20, 1936.

Decided Jan. 4, 1937.

Where service of process against defendant, removing cause to federal court for diversity of citizenship was invalid and defendant declined to appear voluntarily and had no agent on which service could be had within district where suit was pending, federal court was without jurisdiction to proceed with suit.

Messrs. J P. Adoue, of Houston, Tex., and John D. Watkins, of St. Louis, Mo., for petitioner.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This case involves an effort to obtain by mandamus and prohibition a re-examination and vacation of an order of a federal District Court remanding to a state court a suit theretofore removed into the former from the latter.

A citizen of Texas sued a corporate citizen of Missouri in a state court of Gregg county, Tex., to recover a sum in excess of $3,000, exclusive of interest and costs, upon a policy of workmen's compensation insurance, and caused process to be issued out of that court and served upon an alleged agent of the defendant. Without otherwise appearing in the state court, the defendant in due time and mode caused the suit to be removed, by reason of the diverse citizenship of the parties, into the federal court for the Eastern District of Texas, which includes Gregg county.

After the removal the defendant, appearing specially, showed that the alleged agent upon whom process had been served prior to the removal was not in fact its agent, and the federal court set aside the service. At the plaintiff's instance further process was issued out of that court and served upon an agent of the defendant within the Western—not Eastern—District of Texas. Again appearing specially, the defendant challenged this service because made outside the court's territorial jurisdiction, and the service was set aside.

Obtaining the removal from the state court into the federal court did not operate as a general appearance by the defendant¹ and, as the service of process against it proved invalid and it declined to appear voluntarily, the federal court plainly was without personal jurisdiction of the defendant, although in other respects having jurisdiction of the suit.

The defendant had been admitted to do, and was doing, business in Texas, had an agent within the Western District upon whom process could be served in that district, but had no agent within the Eastern District where the suit was pending.

The suit was in personam and not within any exceptional provision empowering the federal court to send its process outside its district. Therefore that court's process could be effectively served only within the district.² But the state court was not subject to such a limitation and could send its process to any part of the state.

In these circumstances the plaintiff moved that the suit be remanded to the state court because the federal court was without, and unable to obtain, personal jurisdiction of the defendant; and in support of the motion the plaintiff asserted that the defendant had not been effectively served with process, had not voluntarily appeared, and had no agent within the district upon whom process could be served. Coming to act upon this motion, the federal court construed section 80, title 28, U.S.Code (28 U.S.C.A. § 80), as authorizing it either to dismiss the suit or to remand the same to the state court, as justice might require; concluded that justice required a remanding order because 'an order of dismissal would prevent plaintiff from refiling (beginning anew) his suit within the time permitted by the statute of Texas and would amount to a complete denial of his right to litigate the claim'; and accordingly entered an order remanding the suit to the state court.

The defendant, conceiving that the remanding order was wrongly made, petitioned the Circuit Court of Appeals for writs of mandamus and prohibition commanding the judge of the District Court to vacate that order and prohibiting him from giving any effect to it. The Circuit Court of Appeals entertained the petition, ordered the judge to show cause why the requested writs should not issue, received and considered his return disclosing the proceedings and matters already recited, and denied the petition. In re Employers Reinsurance Corporation, 82 F.(2d) 373. The case is here on certiorari.

We are of opinion the petition was rightly denied, first, because the remanding order was not subject to appellate re-examination on petition for mandamus or otherwise, and, secondly, because even if open to re-examination on petition for mandamus, the order was made in the exercise of lawful authority and was appropriate to the situation in which it was made.

1. For a long period an order of a federal court remanding a cause to the state court whence it had been removed could not be re-examined on writ of error or appeal, because not a final judgment or decree in the sense of the controlling statute.³ But in occasional instances such an order was re-examined in effect on petition for mandamus, and this on the theory that the order, if erroneous, amounted to a wrongful refusal to proceed with the cause and that in the absence of other adequate remedy mandamus was appropriate to compel the inferior court to exercise its authority.⁴

By the Act of March 3, 1875, c. 137, 18 Stat. 472, dealing with the jurisdiction of the circuit (now district) courts, Congress provided, in section 5, that if a circuit court should be satisfied at any time during the pendency of a suit brought therein, or removed thereto from a state court, that 'such suit does not really and substantially involve a dispute or controversy properly within' its 'jurisdiction,' the court should proceed no further therein, but should 'dismiss the suit or remand it to the court from which it was removed as justice may require.'⁵ Thus far this section did little more than to make mandatory a practice theretofore largely followed, but sometimes neg lected, in the circuit courts.⁶ But the section also contained a concluding paragraph, wholly new, providing that the order 'dismissing or remanding said cause to the State court' should be reviewable on writ of error or appeal. This provision for an appellate review continued in force until it was expressly repealed by the Act of March 3, 1887, c. 373, § 6, 24 Stat. 552, ⁷ which also provided that an order remanding a cause to a state court should be 'immediately carried into execution' and 'no appeal or writ of error' from the order should be allowed.⁸

The question soon arose whether the provisions just noticed in the Act of March 3, 1887, should be taken broadly as excluding remanding orders from all appellate review, regardless of how invoked, or only as forbidding their review on writ of error or appeal. The question was considered and answered by this Court in several cases, the uniform ruling being that the provisions should be construed and applied broadly as prohibiting appellate re-examination of such an order, where made by a circuit (now district) court regardless of the mode in which the re-examination is sought.⁹ A leading case on the subject is In re Pennsylvania Company, 137 U.S. 451, 11 S.Ct. 141, 34 L.Ed. 738, which dealt with a petition for mandamus requiring the judges of a circuit court to reinstate, try, and adjudicate a suit which they, in the circuit court, had remanded to the state court whence it had been removed. After referring to the earlier statutes and practice and coming to the Act of March 3, 1887, this Court said (137 U.S. 451, at page 454, 11 S.Ct. 141, 142, 34 L.Ed. 738):

'In terms, it only abolishes appeals and writs of error, it is true, and does not mention writs of mandamus; and it is unquestionably a general rule that the abrogation of one remedy does not affect another. But in this case, we think, it was the intention of congress to make the judgment of the circuit court remanding a cause to the state court final and conclusive. The general object of the act is to contract the jurisdiction of the federal courts. The abrogation of the writ of error and appeal would have had little effect in putting an end to the question of removal, if the writ of mandamus could still have been sued out in this court. It is true that the general supervisory power of this court over inferior jurisdictions is of great moment in a public point of view, and should not, upon light grounds, be deemed to be taken away in any case. Still, although the writ of mandamus is not mentioned in the section, yet the use of the words, 'such remand shall be immediately carried into execution,' in addition to the prohibition of appeal and writ of error, is strongly indicative of an intent to suppress further prolongation of the controversy by whatever process. We are, therefore, of opinion that the act has the effect of taking away the remedy by mandamus as well as that of appeal and writ of error.'

The provisions in the act of 1887 on which that decision and others to the same effect were based are still in force as parts of sections 71 and 80, title 28, U.S.Code (28 U.S.C.A. §§ 71, 80). They are in pari materia, are to be construed accordingly rather than as distinct enactments, and, when so construed, show, as was held in Morey v. Lockhart, 123 U.S 56, 58, 8 S.Ct. 65, 31 L.Ed. 68, that they are intended to reach and include all cases removed from a state court into a federal court and remanded by the latter.

It follows that the remanding order of the District Court was not subject to re-examination by the Circuit Court of Appeals on the petition for mandamus.

2. It is conceded, and rightly so, that the District Court was without personal jurisdiction of the defendant, and that in the absence of such...