Pacific Gas & Electric Co. v. Fibreboard Products

Decision Date05 November 1953
Docket NumberNo. 32848.,32848.
Citation116 F. Supp. 377
CourtU.S. District Court — Northern District of California

Robert H. Gerdes, Frederick W. Mielke, Jr., William T. Bagley, San Francisco, Cal., Carlson, Collins, Gordon & Bold, Richmond, Cal., for plaintiff.

Gregory A. Harrison, Theodore R. Meyer, Malcolm Tuft and Brobeck, Phleger & Harrison, San Francisco, Cal., T. H. DeLap, Tinning & DeLap, Richmond, Cal., for defendant.

OLIVER J. CARTER, District Judge.

Plaintiff, a California corporation, commenced this action in the Superior Court of the State of California in and for the County of Contra Costa. At that time the complaint named only one defendant, Fibreboard Products, Inc., another corporation. That defendant, hereinafter referred to as "Fibreboard", seasonably removed the action to this court upon the ground that the parties are citizens of different States.1

After removal had been effected and before Fibreboard had answered, plaintiff filed an amended complaint. The amended complaint named as defendant, not only Fibreboard, but also C. R. P. Cash, Claude M. Stitt, and three fictitiously-named Does. The amended complaint contained no allegations as to the citizenship or residence of the parties.

Both complaints, original and amended, pray for damages and injunctive relief, alleging that plaintiff's right thereto arises from the operation of a pulp and paper plant owned and operated in the County of Contra Costa, State of California, by Fibreboard. The theory of plaintiff's right is the same in both complaints. The difference in the two complaints, however, is that the conduct alleged to have invaded plaintiff's right is, by the original, attributed only to Fibreboard, whereas in the amended it is attributed to "defendants" jointly. It is assumed, but without so deciding, that the amended complaint alleges sufficient facts to characterize all of the defendants named therein as joint tort-feasors.2

Fibreboard answered the amended complaint and moved: (1) to dismiss the action as to all defendants other than itself; and, (2) to strike certain portions of the amended complaint. Subsequently, plaintiff moved to remand the action to the state court from which it was removed. Fibreboard then countered with a motion to dismiss the amended complaint. Plaintiff met this latter defense motion with its own "conditional motion" to amend its original complaint by adding parties thereto, if the court should decide that the amended complaint had not been properly filed, or if the court should prefer to make such an order in lieu of making a decision as to the amended complaint.

Basic to all of these motions, except the one to strike, is the determination of the scope of the jurisdiction of this court with respect to this action.

Section 1441 of Title 28, U.S.C., provides this court with jurisdiction to remove certain actions from state courts. That section 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."

Section 1332 of Title 28, U.S.C., so far as it here applies, provides:

"(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $3,000 exclusive of interest and costs, and is between:
"(1) Citizens of different States:"3

The right of removal is to be determined from the plaintiff's pleading at the time of the petition for removal. Pullman Co. v. Jenkins, 305 U.S. 534, 537, 59 S.Ct. 347, 83 L.Ed. 334; and cases there cited. At the time the petition for removal was filed herein, plaintiff's complaint named only Fibreboard as defendant. The petition for removal alleges, and plaintiff concedes, that plaintiff is a citizen of the State of California and that Fibreboard is a citizen of the State of Delaware. The amount in controversy is in excess of $3,000.00.4 Therefore, the action was properly removed to this court as one over which the court would have had original jurisdiction.

Plaintiff contends, however, that jurisdiction was destroyed by the amending of its complaint to add C. R. P. Cash and Claude M. Stitt as defendants. An affidavit executed by one of plaintiff's attorneys and filed in support of the motion to remand states that both Cash and Stitt are citizens and residents of the State of California.

The position of Fibreboard, with respect to the amended complaint, is as follows:

(1) The amended complaint added no parties to this action, because parties can be added only by order of the court under the authority of Rule 21, F.R.C.P., 28 U.S.C., and cannot be added by an amendment of the complaint, as a matter of right, under Rule 15(a), F.R.C.P.

(2) Plaintiff has no right to amend his complaint so as to destroy the jurisdiction of the court.

(3) Even if plaintiff does have the right to amend his complaint so as to destroy the jurisdiction of this court, the exercise of that right is, by the terms of Rule 21, F.R.C.P., subject to the discretion of the court; and a wise discretion requires that the court here deny plaintiff that right.

(4) The jurisdiction of this court, once established by the proper removal of an action from a state court, is not destroyed by an amendment to plaintiff's complaint which adds defendants who are citizens of the same State as plaintiff and alleges that such defendants are jointly liable, with the original defendant who is a citizen of a different State, for the relief demanded.

There are precedents in support of the proposition urged by plaintiff. Holding that a plaintiff may amend his complaint to add a defendant whose presence will destroy diversity of citizenship and the federal jurisdiction which rests thereon are: Highway Construction Co. v. McClelland, 8 Cir., 15 F.2d 187; Galbraith v. Bond Stores, Inc., D.C.W.D. Mo., 4 F.R.D. 319; Roecker v. Railways Express Agency, Inc., D.C.W.D.Mo., 63 F.Supp. 5; Cummings v. Riley Stoker Corp., D.C.W.D.Mo., 6 F.R.D. 5; Schindler v. Wabash Ry. Co., D.C.W.D.Mo., 84 F.Supp. 319; Rowland v. Sellers, D.C. E.D.Tenn., 111 F.Supp. 5; and Heintz v. Ohio Cas. Ins. Co., D.C.S.D.Cal., 112 F.Supp. 199. To the contrary is Blum v. Postal Telegraph, D.C.W.D.Pa., 54 F. Supp. 898. See also Blum v. Postal Telegraph, D.C.W.D.Pa., 60 F.Supp. 237. No lengthy discussion of these cases is required. It suffices to say that none of these decisions are authority which binds this court and that none of them considers the principles which this court considers controlling.

The proposition of whether or not a plaintiff could deliberately oust a federal district court of jurisdiction over his action by voluntarily changing his position therein was discussed by the Supreme Court of the United States in St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845. It was there said, 303 U.S. at pages 292-295, 58 S.Ct. at page 592:

"* * * And though, as here, the plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction.
* * * * * *
"We think this well established rule is supported by ample reason. If the plaintiff could, no matter how bona fide his original claim in the state court, reduce the amount of his demand to defeat federal jurisdiction the defendant's supposed statutory right of removal would be subject to the plaintiff's caprice. The claim, whether well or ill founded in fact, fixes the right of the defendant to remove, and the plaintiff ought not to be able to defeat that right and bring the cause back to the state court at his election. If he does not desire to try his case in the federal court he may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove.
"This view is further supported by the authorities as to causes in which jurisdiction depends on diversity of citizenship. It uniformly has been held that in a suit properly begun in the federal court the change of citizenship of a party does not oust the jurisdiction. The same rule governs a suit originally brought in a state court and removed to a federal court.
"The decisions as to remand of a cause removed because it involves a separable controversy are not inconsistent with those concerning remand for lack of jurisdictional amount. In the case of a separable controversy, if, after removal, the plaintiff discontinues or dismisses as to the defendant who removed, so that there no longer exists any separable controversy, the cause must be remanded. If a cause be removed on this ground the whole case, including the controversy between citizens of the same state, is taken over by the federal court only because one or more of the defendants is entitled to invoke its jurisdiction. The basis of

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