National Mut Ins Co of District of Columbia v. Tidewater Transfer Co Inc

• Decision Date: 20 June 1949
• Docket Number: No. 29,29
• Parties: NATIONAL MUT. INS. CO. OF DISTRICT OF COLUMBIA v. TIDEWATER TRANSFER CO., INC
• Court: U.S. Supreme Court

337 U.S. 582

69 S.Ct. 1173

93 L.Ed. 1556

NATIONAL MUT. INS. CO. OF DISTRICT OF COLUMBIA

v TIDEWATER TRANSFER CO., INC.

No. 29.

Argued Nov. 8, 1948.

Decided June 20, 1949.

Mr. David G. Bress, Washington, D.C., for petitioner.

Messrs. Wendell D. Allen and Francis B. Burch, Baltimore, Md., for respondent.

Sol. Gen. Philip B. Perlman, Washington, D.C., for the United States, as amicus curiae, by special leave of Court.

Mr. Justice JACKSON announced the judgment of the Court and an opinion in which Mr. Justice BLACK and Mr. Justice BURTON join.

This case calls up for review a holding that it is unconstitutional for Congress to open federal courts in the several states to action by a citizen of the District of Columbia against a citizen of one of the states. The petitioner, as plaintiff, commenced in the United States District Court for Maryland an action for money judgment on a claim arising out of an insurance contract. No cause of action under the laws or Constitution of the United States was pleaded, jurisdiction being predicated only upon an allegation of diverse citizenship. The diversity set forth was that plaintiff is a corporation created by District of Columbia law, while the defendant is a corporation chartered by Virginia, amenable to suit in Maryland by virtue of a license to do business there. The learned District Judge concluded that, while this diversity met jurisdictional requirements under the Act of Cognress,¹ it did not comply with diversity requirements of the Constitution as to federal jurisdiction, and so dismissed.² The Court of Appeals, by a divided court, affirmed.³ Of twelve district courts that had considered the question up to the time review in this Court was sought, all except three had held the enabling Act unconstitutional,⁴ and the two Courts of Appeals which had spoken on the subject agreed with that conclusion.⁵ The controversy obviously was an appropriate one for review here and writ of certiorari issued in the case.⁶

The history of the controversy begins with that of the Republic. In defining the cases and controversies to which the judicial power of the United States could extend, the Constitution included those 'between citizens of different States.'⁷ In the Judiciary Act of 1789, Congress created a system of federal courts of first instance and gave them jurisdiction of suits 'between a citizen of the State where the suit is brought, and a citizen of another State.'⁸ In 1804, the Supreme Court, through Chief Justice Marshall, held that a citizen of the District of Columbia was not a citizen of a State within the meaning and intendment of this Act.⁹ This decision closed federal courts in the states to citizens of the District of Columbia in diversity cases, and for 136 years they remained closed. In 1940 Congress enacted the statute challenged here. It confers on such courts jurisdiction if the action 'is between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory.' ¹⁰ The issue here depends upon the validity of this Act, which, in substance, was reenacted by a later Congress¹¹ as part of the Judicial Code.¹²

Before concentrating on detail, it may be well to place the general issue in a larger perspective. This constitutional issue affects only the mechanics of administering justice in our federation. It does not involve an extension or a denial of any fundamental right or immunity which goes to make up our freedoms. Those rights and freedoms do not include immunity from suit by a citizen of Columbia or exemption from process of the federal courts. Defendant concedes that it can presently be sued in some court of law, if not this one, and it grants that Congress may make it suable at plaintiff's complaint in some, if not this, federal court. Defendant's contention only amounts to this; that it cannot be made to answer this plaintiff in the particular court which Congress has decided is the just and convenient forum.

The considerations which bid us strictly to apply the Constitution to congressional enactments which invade fundamental freedoms or which reach for powers that would substantially disturb the balance between the Union and its component states, are not present here. In mere mechanics of government and administration we should, so far as the language of the great Charter fairly will permit, give Congress freedom to adapt its machinery to the needs of changing times. In no case could the admonition of the great Chief Justice be more appropriately heeded—'* * * we must never forget, that it is a constitution we are expounding.'¹³

Our first inquiry is whether, under the third, or Judiciary, Article of the Constitution,¹⁴ extending the judicial power of the United States to cases or controversies 'between citizens of different States,' a citizen of the District of Columbia has the standing of a citizen of one of the states of the Union. This is the question which the opinion of Chief Justice Marshall answered in the negative, by way of dicta if not of actual decision. Hepburn and Dundas v. Ellzey, 2 Cranch 445, 2 L.Ed. 332. To be sure, nothing was before that Court except interpretation of a statute¹⁵ which conferred jurisdiction substantially in the words of the Constitution with nothing in the text or context to show that Congress intended to regard the District as a state. But Marshall resolved the statutory question by invoking the analogy of the constitutional provisions of the same tenor and reasoned that the District was not a state for purposes of the Constitution and, hence, was not for purposes of the Act. The opinion summarily disposed of arguments to the contrary, including the one repeated here that other provisions of the Constitution indicate that 'the term state is sometimes used in its more enlarged sense.' Here, as there, 'on examining the passages quoted, they do not prove what was to be shown by them.' 2 Cranch 445, 453, 2 L.Ed. 332. Among his contemporaries at least Chief Justice Marshall was not generally censured for undue literalness in interpreting the lan- guage of the Constitution to deny federal power and he wrote from close personal knowledge of the Founders and the foundation of our constitutional structure. Noe did he underestimate the equitable claims which his decision denied to residents of the District, for he said that 'It is true that as citizens of the United States, and of that particular district which is subject to the jurisdiction of congress, it is extraordinary that the courts of the United States, which are open to aliens, and to the citizens of every state in the union, should be closed upon them. But this is a subject for legislative not for judicial consideration.'¹⁶

The latter sentence, to which much importance is attached, is somewhat ambiguous, because constitutional amendment as well as statutory revision is for legislative, not judicial, consideration. But the opinion as a whole leaves no doubt that the Court did not then regard the District as a state for diversity purposes.

To now overrule this early decision of the Court on this point and hold that the District of Columbia is a state would, as that opinion pointed out, give to the word 'state' a meaning in the Article which sets up the judicial establishment quite different from that which it carries in those Articles which set up the political departments and in other Articles of the instrument. While the word is one which can contain many meanings, such inconsistency in a single instrument is to be implied only where the context clearly requires it. There is no evidence that the Founders, pressed by more general and mmediate anxieties, thought of the special problems of the District of Columbia in connection with the judiciary. This is not strange, for the District was then only a contemplated entity. But had they thought of it, there is nothing to indicate that it would have been referred to as a state and much to indicate that it would have required special provisions to fit its anomalous relationship into the new judicial system, just as it did to fit it into the new political system.

In referring to the 'States' in the fateful instrument which amalgamated them into the 'United States,' the Founders obviously were not speaking of states in the abstract. They referred to those concrete organized societies which were thereby contributing to the federation by delegating some part of their sovereign powers and to those that should later be organized and admitted to the partnership in the method prescribed. They obviously did not contemplate unorganized and dependent spaces as states. The District of Columbia being nonexistent in any form, much less as a state, at the time of the compact, certainly was not taken into the Union of states by it, nor has it since been admitted as a new state is required to be admitted.

We therefore decline to overrule the opinion of Chief Justice Marshall, and we hold that the District of Columbia is not a state within Article III of the Constitution. In other words, cases between citizens of the District and those of the states were not included in the catalogue of controversies over which the Congress could give jurisdiction to the federal courts by virtue of Art. III.

This conclusion does not, however, determine that Congress lacks power under other provisions of the Constitution to enact this legislation. Congress, by the Act in question, sought not to challenge or disagree with the decision of Chief Justice Marshall that the District of Columbia is not a state for such purposes. It was careful to avoid conflict with that decision by basing the new legislation on powers that had not been relied upon by the First Congress in passing the Act of 1789.

The Judiciary Committee of the House of Representatives recommended the Act of April 20, 1940, as 'a rea- sonable exercise of the constitutional power of Congress to legislate for the...