American Dredging Co. v. Local 25, Marine Div., Int. U. Op. Eng.

• Decision Date: 30 October 1964
• Docket Number: No. 14710.,14710.
• Parties: AMERICAN DREDGING COMPANY, Appellant v. LOCAL 25, MARINE DIVISION, INTERNATIONAL UNION OF OPERATING ENGINEERS, AFL-CIO and Stephen J. Leslie, Joseph F. Erhmann, William F. Zenga and Vincent Motzel, Individually and as Trustees.
• Court: U.S. Court of Appeals — Third Circuit

338 F.2d 837 (1964)

AMERICAN DREDGING COMPANY, Appellant v. LOCAL 25, MARINE DIVISION, INTERNATIONAL UNION OF OPERATING ENGINEERS, AFL-CIO and Stephen J. Leslie, Joseph F. Erhmann, William F. Zenga and Vincent Motzel, Individually and as Trustees.

No. 14710.

United States Court of Appeals Third Circuit.

Argued February 20, 1964.

Decided October 30, 1964.

Rehearing Denied December 14, 1964.

Harvey B. Levin, Lazarus & Levin, Philadelphia, Pa. (Krusen Evans & Byrne, Philadelphia, Pa., on the brief), for appellant.

Marshall J. Seidman, Weiner, Basch, Lehrer & Cheskin, Philadelphia, Pa., for appellee.

Before KALODNER and HASTIE, Circuit Judges and KIRKPATRICK, District Judge.

KALODNER, Circuit Judge.

The District Court here¹ denied the plaintiff's motion to remand to the state court from which it had been removed, a suit, based solely on a state-created right, to enjoin the defendant union's violation, in the course of a labor dispute, of the "no-strike" provision of its collective bargaining agreement, and subsequently denied the plaintiff's motion for injunctive relief.² It premised its denial of remand on the ground that it had original jurisdiction under § 301(a) of the Labor Management Relations Act,³, ⁴ of a suit for violation of a labor contract, and § 1441 of the Removal Statute⁵ permits the removal to a federal district court of a civil action of which it has original jurisdiction under a law of the United States. It based its denial of plaintiff's motion for an injunction on the ground that it was "without power to grant injunctive relief because of § 4 of Norris-LaGuardia Norris LaGuardia Act,⁶ since this is a `case involving or growing out of a labor dispute,'⁷ within the meaning of the Act. Sinclair Refining Co. v. Atkinson, 370 U.S. 195, 182 S. Ct. 1328, 8 L.Ed.2d 440 (1962)."

The sum of the District Court's view⁸ is that the Norris-LaGuardia limitations on jurisdiction of federal district courts, which the Supreme Court held in Sinclair extends to § 301 in cases growing out of labor disputes, do not divest these courts of subject matter jurisdiction of such cases, viz., the capacity to take cognizance of, or to entertain, but merely strip them of power to grant injunctive relief.

The view stated disregards the critical fact that in Sinclair, the Supreme Court, in holding that the jurisdiction conferred by § 301 was subject to the jurisdictional limitations enacted by the earlier Norris-LaGuardia Act, expressly ruled at page 215, 82 S.Ct. at page 1339:

"The District Court was correct in dismissing Count 3 of petitioner\'s complaint for lack of jurisdiction under the Norris-LaGuardia Act."⁹ (emphasis supplied)

We can only construe the phrase "lack of jurisdiction" as embracing within its ambit subject matter jurisdiction and accordingly hold that the District Court erred in failing to grant the motion to remand in the instant case on its reasoning that it had subject matter jurisdiction under § 301 within the "original jurisdiction" provisions of § 1441. It merits observation that the background factual situation which constituted the basis of the injunctive action in Sinclair was on all fours with that existing here, as appears in Note 9.

It may be pointed out anent the holding in Sinclair, that the Supreme Court, some 36 years earlier, in General Investment Company v. New York Central Railroad Company, 271 U.S. 228, p. 230, 46 S.Ct. 496, p. 497, 70 L.Ed. 920 (1926) succinctly defined jurisdiction as follows:

"By jurisdiction we mean power to entertain the suit, consider the merits and render a binding decision thereon * * *." (emphasis supplied)

It is fair to assume that Congress in its use of the word "jurisdiction" in the Norris-LaGuardia Act in 1932 was aware of the Supreme Court's definition of "jurisdiction" six years earlier, in the foregoing case.

The Norris-LaGuardia Act in its title declared that it was:

"AN ACT

"To amend the Judicial Code and to define and limit the jurisdiction of courts sitting in equity, and for other purposes."^*

In Section 2 — "Declaration of the public policy of the United States" — it was stated in relevant part:

"In the interpretation of this Act and in determining the jurisdiction and authority of the courts of the United States, as such jurisdiction and authority are herein defined and limited, the public policy of the United States is hereby declared as follows:

"* * * therefore, the following definitions of, and limitations upon, the jurisdiction and authority of the courts of the United States are hereby enacted." (emphasis supplied).

In State of Minnesota v. Northern Securities Company, 194 U.S. 48, 24 S.Ct. 598, 48 L.Ed. 870 (1904) the Supreme Court made it clear that the term jurisdiction as used in the Removal Statute means the power to take cognizance of the case upon removal from a state court and to decide it upon its merits. There, an action was brought by the State of Minnesota against the defendants, to annul an agreement and suppress a combination alleged to exist between the defendant corporations, upon the grounds that the agreement and combination were in violation of the laws of Minnesota, and of the anti-trust laws of the United States. The action was removed from the state court to the circuit court of Minnesota on the ground that it was "one arising under the Constitution and laws of the United States," and was subsequently dismissed by the circuit court on its merits.

The Supreme Court sua sponte raised the question as to whether the case was removable although all the parties to the action "deemed the case a removable one."

In so doing it stated at page 63, 24 S.Ct. at page 601:

"If the record does not affirmatively show jurisdiction in the circuit court, we must, upon our own motion, so declare, and make such order as will prevent that court from exercising an authority not conferred upon it by statute. * * *

"We proceed, therefore, to inquire whether the circuit court could take cognizance of this case upon removal from the state court, and make a final decree upon the merits." (emphasis supplied)

After noting that it was the "general policy of these acts removal statutes, manifest upon their face, and often recognized by this court, to contract the jurisdiction of the circuit district courts of the United States", it was said at pages 64-65, 24 S.Ct. at page 602:

"These cases establish, beyond further question in this court, the rule that, under existing statutes regulating the jurisdiction of the courts of the United States, a case cannot be removed from a state court as one arising under the Constitution or laws of the United States, unless the plaintiff\'s complaint, bill, or declaration shows it to be a case of that character. `If it does not appear at the outset,\' this court has quite recently said, `that the suit is one of which the circuit court at the time its jurisdiction is invoked could properly take cognizance, the suit must be dismissed.\' Third Street & Suburban R. Co. v. Lewis, 173 U.S. 457, 460, 43 L.ed. 766, 767, 19 Sup.Ct. Rep. 451." (emphasis supplied)

It is of compelling significance here that in Northern Securities, the Supreme Court reversed the denial of remand below on the ground that the removed action did not "really and substantially involve a dispute or controversy within the jurisdiction of the circuit court for the purposes of a final decree * * *" and, "That being the case, the circuit court, following the mandate of the statute predecessor of the present § 1447 (c), should not have proceeded therein, but should have remanded the cause to the state court." (emphasis supplied)

In the instant case the complaint alleged that the union had violated the "no-strike" clause of its collective bargaining agreement in the course of a labor dispute, and thus it appeared "at the outset" that the District Court could not, under Sinclair, "properly take cognizance of this case upon removal from the state court, and make a final decree upon the merits."

It cannot be gainsaid that had the plaintiff initially brought suit in the District Court under § 301, alleging in its complaint a cause of action for breach of its collective bargaining agreement, in the course of a labor dispute, and praying for injunctive relief, that the action would have been dismissed for lack of jurisdiction under Sinclair.

To say then that a District Court has subject matter jurisdiction¹⁰ of a cause of action, so as to authorize it to take cognizance of it under the provisions of the Removal Statute, when it does not in the first place have jurisdiction to entertain and decide it upon its merits, is to give sanction to an exercise in futility.

Or putting it another way, for a court to say that it has subject matter jurisdiction enabling it to take cognizance of a case, and then to rule that although the case has merit, it is without judicial power, viz., jurisdiction, to grant a final decree on the merits, is to pursue, what Mr. Justice Frankfurter once characterized, in another context, "a fox-hunting theory of justice that ought to make Bentham's skeleton rattle,"¹¹ and to do violence to the holding in General Investment Company v. New York Central Railroad Company, supra, that "By jurisdiction we mean power to entertain the suit, consider the merits and render a binding decision thereon."¹²

It has been settled for almost a century that federal statutes should be construed and applied so as to avoid "injustice" or "absurd consequences."

In United States v. Kirby, 7 Wall. 482, pp. 486, 487, 74 U.S. 482, pp. 486, 487, 19 L.Ed. 278 (1869) it was said:

"All laws should receive a sensible construction. General terms should be so limited in their application as not to lead to injustice, oppression, or an absurd consequence. * * * The reason of the law, in such cases, should prevail over its letter."¹³

In United States v. Katz, 271 U.S. 354, p. 357, 46 S.Ct. 513, p. 514, 70 L.Ed. 986 (1926) in which Kirby was cited...