Johnson v. Alexandria Scrap Corp.

• Decision Date: 19 December 1977
• Docket Number: Civ. No. K-77-66.
• Citation: 445 F. Supp. 1171
• Parties: Ejner J. JOHNSON, Motor Vehicle Administrator v. ALEXANDRIA SCRAP CORPORATION.
• Court: U.S. District Court — District of Maryland

445 F. Supp. 1171

Ejner J. JOHNSON, Motor Vehicle Administrator v. ALEXANDRIA SCRAP CORPORATION.

Civ. No. K-77-66.

United States District Court, D. Maryland.

December 19, 1977.

Francis B. Burch, Atty. Gen. of Md., William M. Huddles, Glenn E. Bushel, Thomas C. Lederman, Asst. Attys. Gen., Baltimore, Md., for plaintiff.

Norman P. Ramsey, H. Thomas Howell and Semmes, Bowen & Semmes, Baltimore, Md., for defendant.

FRANK A. KAUFMAN, District Judge.

On March 12, 1975, in Alexandria Scrap Corporation v. Hughes, 391 F.Supp. 46 (D.Md.1975), sometimes referred to herein as the 1974 case, a three-judge court enjoined defendants therein. Those defendants were officials of the State of Maryland, one of whom is the Administrator of the Motor Vehicle Administration of the State of Maryland, plaintiff herein. The defendants in the 1974 case were enjoined from enforcing certain provisions of a Maryland statute which would otherwise have rendered plaintiff in that case, Alexandria Scrap Corporation (Alexandria), defendant herein, ineligible to receive certain payments from the State of Maryland. The state officials successfully appealed from that injunction, in the 1974 case, to the Supreme Court of the United States, which, on July 21, 1976, issued its mandate reversing the said March 12, 1975 judgment and remanding the 1974 case "for further proceedings in conformity with the opinion of this Court."¹ Thereafter, a dispute arose regarding the rights of the State of Maryland to recover payments made by it, in accordance with this Court's erroneous decree, to Alexandria during the period between March 12, 1975 and July 21, 1976. The three-judge Court, on July 22, 1977, dissolved itself and assigned those issues to the undersigned Judge of this Court, sitting as a single District Judge, holding, inter alia:

The question of the constitutionality of the Maryland statutory provisions originally challenged by plaintiff has been settled by the Supreme Court, and there remain for decision only damage-type issues, none of which would give rise to injunctive relief against the enforcement of a state statute. Thus, the final disposition of the remaining issues which this case presents does not require the continued existence of a three-judge court.

Meanwhile, on December 23, 1976, plaintiff Johnson, in his official capacity as the Motor Vehicle Administrator of the State of Maryland, instituted the within new case against Alexandria in the Circuit Court for Anne Arundel County, Maryland, alleging that "Plaintiff, on behalf of the Motor Vehicle Administration, is entitled to restitution from the Defendant Alexandria in the amount of $130,624.00, which sum represents monies paid to the defendant by the Motor Vehicle Administration pursuant to an injunction which was determined by the Supreme Court of the United States to have been wrongfully issued by the United States District Court" and contending that "in light of the Supreme Court's reversal of the District Court's decision, the Defendant must, in equity and good conscience, restore the Motor Vehicle Administration to everything of value which was obtained as a result of the District Court's erroneous judgment."

On January 7, 1977, defendant, relying upon 28 U.S.C. § 1441, removed the within case to this Court. Subsequently, plaintiff timely moved to remand to the Circuit Court for Anne Arundel County. Alexandria opposes that motion to remand, asserting that the removal is proper.²

28 U.S.C. § 1441 provides:

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

(c) Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.

Alexandria is a Virginia corporation. Seemingly, its principal place of business is not in Maryland. In this instance, however, it is not necessary to determine whether removal is authorized by the second sentence of section 1441(b) since herein this Court holds that the first sentence of section 1441(b) is applicable.

Plaintiff in this case seeks restitution of monies paid pursuant to this Court's prior erroneous injunction. That claim in and of itself states a federal question which brings into existence subject matter jurisdiction under 28 U.S.C. § 1331. Simply stated, a federal district court has jurisdiction in the same case or in a subsequent case to correct its own errors, particularly when it is directed so to do by the Supreme Court of the United States. That direction, originally issued to the three-judge Court, now is imposed, following the self-dissolution of that Court, on this single-judge District Court. See Public Service Commission of Missouri v. Brashear Freight Lines, Inc., 312 U.S. 621, 61 S.Ct. 784, 85 L.Ed. 1083 (1941).³

In Arkadelphia Milling Co. v. St. Louis Southwestern Railway Co., 249 U.S. 134, 39 S.Ct. 237, 63 L.Ed. 517 (1919), a federal district court, in two suits filed by two railway companies, enjoined enforcement of certain railroad rates set by a state regulatory commission. The Supreme Court reversed the injunctions and remanded the case to the district court with directions "to dismiss the bill" and to conduct such further proceedings as "`ought to be had.'" 249 U.S. supra at 139, 39 S.Ct. 237. The district court conducted such proceedings and subsequently ordered the railroad companies to make certain refunds to customers. The parties aggrieved by that order sought to appeal directly to the Supreme Court. In permitting that direct appeal the Supreme Court wrote (at 142, 39 S.Ct. at 240):

The present appeals relate to a decree made in a subordinate action ancillary to the main causes, in which, as has been stated, the federal jurisdiction was invoked solely upon the ground that the cases arose under the Constitution of the United States. It has been held repeatedly that jurisdiction of subordinate actions is to be attributed to the jurisdiction upon which the main suit rested, and hence that where jurisdiction of the main cause is predicated solely on diversity of citizenship and the decree therein is for this reason made final in the circuit court of appeals, the judgments and decrees in the ancillary litigation also are final. * * citations omitted

The proceeding out of which the decree now in question arose was not merely ancillary but was in effect a part of the main causes, taken for the purpose of carrying into effect the decrees of this court reversing the final decrees in the main causes and, at the same time, for the purpose of giving effect to a reservation of jurisdiction by the court below as contained in those final decrees. The supplementary decree that is now before us, since it simply brings to a conclusion those former suits pursuant to our decrees therein, must be treated as involving the construction and application of the Constitution of the United States and as being made in a case in which a state law was claimed to be in contravention of the Federal Constitution, within the meaning of § 238, Judicial Code.

In the course of discussing the merits of the case, Mr. Justice Pitney further held (at 145-46, 39 S.Ct. at 242) that the refund claims were:

allowable against the railway companies themselves upon the principle, long established and of general application, that a party against whom an erroneous judgment or decree has been carried into effect is entitled, in the event of a reversal, to be restored by his adversary to that which he has lost thereby. This right, so well founded in equity, has been recognized in the practice of the courts of common law from an early period. Where plaintiff had judgment and execution and defendant afterwards sued out a writ of error, it was regularly a part of a judgment of reversal that the plaintiff in error "be restored to all things which he hath lost by occasion of the said judgment"; and thereupon, in a plain case, a writ of restitution issued at once; but if a question of fact was in doubt, a writ of scire facias was first issued. Anonymous, Salk. 588; citing Goodyere v. Ince, Cro. Jac. 246; Sympson v. Juxon, Cro. Jac. 698; Vesey v. Harris, Cro. Car. 328; see also Lil. Ent. 641, 650; Arch. Append. 195, 200. The doctrine has been most fully recognized in the decisions of this court. Bank of the United States v. Bank of Washington, 6 Pet. 8, 17, 8 L.Ed. 299; Erwin v. Lowry, 7 How. 172, 184, 12 L.Ed. 655; Northwestern Fuel Co. v. Brock, 139 U.S. 216, 11 S.Ct. 523, 35 L.Ed. 151;

That a course of action so clearly consistent with the principles of equity is one proper to be adopted in an equitable proceeding goes without saying. It is one of the equitable powers, inherent in every court of justice so long as it retains control of the subject-matter and of the parties, to correct that which has been wrongfully done by virtue of its process. Northwestern Fuel Co. v. Brock, 139 U.S. 216, 219 11 S.Ct. 523, 35 L.Ed. 151; Johnston v. Bowers, 69 N.J.L. 544, 547, 55 A. 230.

See also Atlantic Coast Line Railroad Co. v. Florida, 295...