319 U.S. 448 (1943), 707, Freeman v. Bee Machine Co., Inc.

Docket Nº:No. 707
Citation:319 U.S. 448, 63 S.Ct. 1146, 87 L.Ed. 1509
Party Name:Freeman v. Bee Machine Co., Inc.
Case Date:June 01, 1943
Court:United States Supreme Court
 
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319 U.S. 448 (1943)

63 S.Ct. 1146, 87 L.Ed. 1509

Freeman

v.

Bee Machine Co., Inc.

No. 707

United States Supreme Court

June 1, 1943

Argued May 4, 5, 1943

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIRST CIRCUIT

Syllabus

1. A federal court having jurisdiction of a cause removed from a state court may allow such an amendment of the complaint as could have been made had the suit originated in the federal court, even though the amendment could not have been made had the suit remained in the state court. P. 451.

2. After removal to the federal District Court of an action for breach of contract, begun in a state court against a nonresident defendant upon whom process was personally served within the State, the defendant entered a general appearance, defended on the merits, and filed a counterclaim. Held that the defendant was "found" within the district so as to give the District Court power to allow the complaint to be amended by adding a cause of action under § 4 of the Clayton Act. P. 453.

3. The Rules of Civil Procedure, which permit joinder of claims, Rule 18, and provide for amendment of pleadings, Rule 15, are applicable to removed cases, and "govern all procedure after removal," Rule 81(c). P. 454.

4. Rule 5 of the Rules of Civil Procedure permits service of an amended complaint to be made upon the attorney for the defendant. P. 455.

131 F.2d 190 affirmed.

Certiorari, 318 U.S. 752, to review a judgment vacating a judgment of the District Court which granted a motion

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for a summary judgment for the defendant (petitioner here), 41 F.Supp. 461, and denied a motion of the plaintiff (respondent here) to amend the complaint, 42 F.Supp. 938, in a suit which had been removed from a state court.

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

It was held in Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 258 U.S. 377, 382, that where a sate court lacks jurisdiction of the subject matter or of the parties, the federal District Court acquires none on a removal of the case. And see General Investment Co. v. Lake Shore & M.S. Ry. Co., 260 U.S. 261, 288; Venner v. Michigan Central R. Co., 271 U.S. 127, 131; Minnesota v. United States, 305 U.S. 382, 389. That is true even where the federal court would have jurisdiction if the suit were brought there. Lambert Run Coal Co. v. Baltimore & Ohio R. Co., supra. As stated by Mr. Justice Brandeis in that case, "The jurisdiction of the federal court on removal is, in a limited sense, a derivative jurisdiction." 258 U.S. p. 382. The question in this case is whether the rule of those decisions is applicable to a situation involving the following facts:

Petitioner is a resident of Ohio; respondent is a Massachusetts corporation. Respondent brought an action at law against petitioner in the Superior Court of Massachusetts for breach of a contract. Petitioner was personally served when he happened to be in Boston.

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Petitioner appeared specially and caused the action to be removed to the federal District Court in Massachusetts, petitioner being a nonresident of Massachusetts and there being diversity of citizenship and the requisite jurisdictional amount. Judicial Code § 28, 28 U.S.C. § 71. Petitioner thereupon entered a general appearance1 -- he answered, interposing several defenses, including res judicata; he also filed a counterclaim. He then moved for a summary judgment. Shortly before that motion came on to be heard, respondent moved to amend its declaration by adding a complaint for treble damages under § 4 of the Clayton Act.2 38 Stat. 731, 15 U.S.C. § 15. The District Court granted petitioner's motion for summary judgment. 41 F.Supp. 461. But it denied respondent's motion to amend, being of the view that it had no jurisdiction to allow the amendment. 42 F.Supp. 938. In reaching that result, the District Court expressed doubts that the venue requirements of § 4 of the Clayton Act were satisfied. But it expressly declined to rest on that basis, and placed its decision solely on the Lambert Co. line of cases. On appeal, the Circuit Court of Appeals sustained the ruling of the District Court on the motion for summary judgment, but disagreed with its view on the motion to amend. 131 F.2d 190. The case is here on a petition for a writ of certiorari which we granted because of the importance of the problem and

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the contrariety of views which had developed concerning it.3

The Lambert Co. case and those which preceded4 and followed it merely held that defects in the jurisdiction of the state court either as respects the subject matter or the parties5 were not cured by removal, but could thereafter be challenged in the federal court. We see no reason in precedent or policy for extending that rule so as to bar amendments to the complaint, otherwise proper, merely because they could not have been made if the action had remained in the state court.6 If the federal court has jurisdiction of the removed cause, and if the amendment to the complaint could have been made had the suit originated in the federal court, the fact that the federal court acquired jurisdiction by removal does not deprive it of power to allow the amendment. Though this suit, as instituted, involved only questions of local law, it could have been brought in the federal court by reason of diversity of citizenship.7 The rule of Erie Railroad Co. v. Tompkins,

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304 U.S. 64, is, of course, applicable to diversity causes removed to the federal courts, as well as to such actions originating there. But if the federal court has jurisdiction of the removed cause (Mexican National R. Co. v. Davidson, 157 U.S. 201), the action is not more closely contained than the one which originates in the federal court. The jurisdiction exercised on removal is original, not appellate. Virginia v. Rives, 100 U.S. 313, 320. The forms and modes of proceeding are governed by federal law. Thompson v. Railroad Companies, 6 Wall. 134; Hurt v. Hollingsworth, 100 U.S. 100; West v. Smith, 101 U.S. 263; King v. Worthington, 104 U.S. 44; Ex parte Fisk, 113 U.S. 713; Northern Pacific R. v. Paine, 119 U.S. 561; Twist v. Prairie Oil & Gas Co., 274 U.S. 684; Rorick v. Devon Syndicate, Ltd., 307 U.S. 299. Congress has indeed provided that in a suit which has been removed the District Court shall

proceed therein as if the suit had been originally commenced in said district court, and the same proceedings had been taken in such suit in said district court as shall have been had therein in said State court prior to its removal.

Judicial Code § 38, 28 U.S.C. § 81. While that section does not cure jurisdictional defects present in the state court action, it preserves to the federal District Courts the full arsenal of authority with which they have been endowed. Included in that authority is the power to permit a recasting of pleadings or amendments to complaints in accordance with the federal rules. West v. Smith, supra; Twist v. Prairie Oil & Gas Co., supra, p. 687.

[63 S.Ct. 1149] It is said, however, that the amendment in question may not be made, since the cause of action authorized by § 4 of the Clayton Act may be brought only in a District

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Court in the district "in which the defendant resides or is found or has an agent." 15 U.S.C. § 15. That requirement relates to venue. But venue involves no more and no less than a personal privilege which "may be lost by failure to assert it seasonably, by formal submission in a cause, or by submission through conduct." Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168. On the face of the present record, it would seem that any objection to venue has been waived. There is no indication in the record before us that any such objection was "seasonably asserted." Commercial Ins. Co. v. Consolidated Stone Co., 278 U.S. 177, 179; Interior Construction Co. v. Gibney, 160...

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