309 U.S. 4 (1939), 19, Oklahoma Packing Co. v. Oklahoma Gas & Elec. Co.

Docket Nº:No. 19
Citation:309 U.S. 4, 60 S.Ct. 215, 84 L.Ed. 537
Party Name:Oklahoma Packing Co. v. Oklahoma Gas & Elec. Co.
Case Date:January 15, 1940
Court:United States Supreme Court

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309 U.S. 4 (1939)

60 S.Ct. 215, 84 L.Ed. 537

Oklahoma Packing Co.


Oklahoma Gas & Elec. Co.

No. 19

United States Supreme Court

Jan. 15, 1940

Argued October 17, 1939

Opinion on Petition for Rehearing delivered January 15, 1940




1. A Delaware corporation, pursuant to the laws of Oklahoma, designated an agent for service of process "in any action in the Oklahoma." Held, amenable to suit in the federal District Court in Oklahoma upon a cause of action arising in that State. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165. P. 6.

2. A determination of the Supreme Court of Oklahoma that its judgments, on appeal from rate orders of the Corporation Commission, were formerly legislative in character, and that they cannot be given the effect of res judicata by the retroactive influence of a later doctrine of that court characterizing such judgments as judicial, held binding on this Court. P. 7.

3. Where an action upon supersedeas bonds, given by a gas company for the security of one of its consumers in connection with its appeal from a rate order, was pending in a state court and defended by the company's answer upon the ground that the order violated the Federal Constitution, held that a subsequent suit by the company, on the same ground, to enjoin the consumer from prosecuting the action could not be entertained by a federal court. Jud.Code, § 265. P. 8.

100 F.2d 770 reversed.

Certiorari, 306 U.S. 629, to review the affirmance of a decree enjoining the prosecution of an action in the state court.

FRANKFURTER, J., lead opinion

[60 S.Ct. 216] MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

The case concerns a rate controversy which has been winding its slow way through state and federal courts for thirteen years.1 While the relationship of two utilities with Wilson & Co., a consumer of natural gas, complicates the situation, the legal issues before us may be disposed of as though this were a typical case of a utility resisting an order reducing its rates.2 Oklahoma Gas & Electric Company (hereafter called Gas & Electric) appealed to

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the Oklahoma Supreme Court from such an order by the Oklahoma Corporation Commission. The reduction was stayed pending the appeal, but, to protect Wilson & Co. against a potential overcharge, Gas & Electric gave a supersedeas bond. Gas & Electric lost its appeal, Oklahoma Gas & Electric Co. v. Wilson & Co., 146 Okl. 272, 288 P. 316, and Wilson & Co. brought suit on the bond. That suit was instituted on December 3, 1931, in one of the district courts of Oklahoma. To enjoin prosecution of the latter suit, Gas & Electric, on May 20, 1932, invoked the jurisdiction of the United States District Court for the Western District of Oklahoma.3 After a complicated series of moves in both state and federal courts, not necessary here to detail, this relief was granted by the District Court on September 10, 1937, and, on December 19, 1938, sustained by the Circuit Court of Appeals. Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 100 F.2d 770. Since the case in part was in conflict with the Second Circuit's decision in Neirbo Co. v. Bethlehem Shipbuilding Corp., 103 F.2d 765, and also presented novel aspects of important questions of federal law, we granted certiorari, 306 U.S. 629. We are not concerned with the merits of the Commission's order.

At the threshold, we are met by the procedural objection, seasonably made, that Wilson & Co., a Delaware corporation, was improperly sued in the District Court of the Western District of Oklahoma. The objection is

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unavailable. Prior to this suit, [60 S.Ct. 217] Wilson & Co. had, agreeable to the laws of Oklahoma, designated an agent for service of process "in any action in the Oklahoma." Both courts below found this to be, in fact, a consent on Wilson & Co.'s part to be sued in the courts of Oklahoma upon causes of action arising in that state. The Federal District Court is, we hold, a court of Oklahoma within the scope of that consent, and, for the reasons indicated in Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, Wilson & Co. was amenable to suit in the Western District of Oklahoma.

Petitioners further urge (1) that their plea of res judicata should have been sustained, and (2) that § 265 of the Judicial Act, Act of March 3, 1911, 36 Stat. 1162, 28 U.S.C. § 379, derived from § 5 of the Act of March 2, 1793, 1 Stat. 333, 335, was a bar to the suit.

The claim of res judicata is based on the prior determination in 1930 by the Supreme Court of Oklahoma that the contested order of the Corporation Commission was valid. Oklahoma Gas & Electric Co. v. Wilson & Co., 146 Okl. 272, 288 P. 316. The pronouncements of the Oklahoma Supreme Court concerning the character of such a determination -- whether, under the Oklahoma Constitution, it was a "legislative" or "judicial" review -- have, for a time, however, been ambiguous and fluctuating. After the present bill was filed but before the challenged injunction was decreed, the Oklahoma Supreme Court had held that its decision in cases like that of Oklahoma Gas & Electric Co. v. Wilson & Co. was a judicial judgment. Oklahoma Cotton Ginners' Assn. v. State, 174 Okl. 243, 51 P.2d 327. But, in Community Natural Gas Co. v. Corporation Commission, 182 Okl. 137, 76 P.2d 393, decided after the decree here in issue, the Oklahoma court formally characterized its review in cases prior to the decision in the Ginners' case as "legislative," refused

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to give that decision retroactive effect, and therefore deemed the res judicata doctrine inapplicable to these prior reviews. Hence, the plea of res judicata in this case must fail, for, on that issue, state law is determinative here. Union & Planters' Bank v. Memphis, 189 U.S. 71; Covington v. First National Bank, 198 U.S. 100; Wright v. Georgia Railroad & Banking Co., 216 U.S. 420.

There remains, therefore, the applicability of § 265 of the Judicial Code.4 That provision would operate as a bar upon the power of the District Court to enjoin proceedings previously brought in the state court on the supersedeas bond if "the only thing sought to be accomplished by this equitable action" is to stay the continuance of that action. Such was the construction placed upon the bill by the earlier District Court of three judges, and such was this Court's assumption when the latter decision came here on appeal. Oklahoma Gas & Electric Co. v. Oklahoma Packing Co., 6 F.Supp. 893, 865; Oklahoma Gas & Electric Co. v. Oklahoma Packing Co., 292 U.S. 386, 389. That case eliminated the Corporation Commission as party to the litigation. The District Court to which this Court remanded the matter summarized Gas & Electric's claim by way of answer to the action brought by Wilson & Co. in the state court as an attack upon the Commission's order "for substantially the same reasons as set out" in the present bill.

The present suit therefore is one for an injunction "to stay proceedings" [60 S.Ct. 218] previously begun in a state court. The decree below is thus within the plain interdiction of an Act of Congress, and not taken out of it by any of the exceptions which this Court has heretofore engrafted upon a limitation of the power of the federal courts dating

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almost from the beginning of our history and expressing an important Congressional policy -- to prevent needless friction between state and federal courts. Compare Madisonville Traction Co. v. St. Bernard Mining Co., 196 U.S. 239; Simon v. Southern Railway Co., 236 U.S. 115; Wells Fargo & Co. v. Taylor, 254 U.S. 175....

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