B. Coleman Corporation v. Walker, 75 C 353.

• Decision Date: 12 September 1975
• Docket Number: No. 75 C 353.,75 C 353.
• Citation: 400 F. Supp. 1355
• Parties: B. COLEMAN CORPORATION, an Illinois Corporation, Individually, and as Agent of American Express Company, Inc., a New York Corporation, and as Agent of Travellers Express Company, Inc., a Minnesota Corporation, Plaintiff, v. Daniel J. WALKER, Governor of the State of Illinois, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

400 F. Supp. 1355

B. COLEMAN CORPORATION, an Illinois Corporation, Individually, and as Agent of American Express Company, Inc., a New York Corporation, and as Agent of Travellers Express Company, Inc., a Minnesota Corporation, Plaintiff, v. Daniel J. WALKER, Governor of the State of Illinois, et al., Defendants.

No. 75 C 353.

United States District Court, N. D. Illinois, E. D.

September 12, 1975.

William Henning Rubin, Chicago, Ill., for plaintiff.

Jerome Webb, Asst. Ill. Atty. Gen., Alan L. Fulkerson, Asst. State's Atty., Donald S. Carnow, Chicago, Ill., for defendants.

MEMORANDUM OPINION and ORDER

AUSTIN, District Judge.

Plaintiff filed the complaint¹ in this case on February 4, 1975, challenging the constitutionality of the Illinois Community Currency Exchange Act, Ill.Rev. Stat., Ch. 16½, §§ 30-56.3 (1974), and seeking an injunction to restrain Defendants from enforcing the Act against it. Plaintiff, as an agent of American Express Company and Travellers Express Company, sells money orders and cashes checks for a fee. If regulated by the Act, Plaintiff argues that it will be denied equal protection of the law.

I.

On February 11, 1975, Plaintiff filed its application for a temporary injunction and requested that a three-judge court be convened to hear the case. Both motions were denied and the proceedings were continued. Plaintiff immediately attempted to file an interlocutory appeal, but on March 20 the Court of Appeals denied it as premature. On February 26, while the matter was before the Court of Appeals, the State's Attorney of Cook County, one of the Defendants, instituted criminal proceedings against Plaintiff and its officers.

Defendants have filed motions to dismiss and argue, among other things, that the federal court may not interfere with ongoing state criminal proceedings. In Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and Samuels v. Mackell, 401 U.S. 66, 91 S.Ct. 764, 27 L.Ed.2d 688 (1971), the United States Supreme Court held that "a federal court should not enjoin a state criminal prosecution begun prior to the institution of the federal suit except in very unusual situations, where necessary to prevent immediate irreparable injury." 401 U.S. at 69, 91 S.Ct. at 766. If the threat to the plaintiff's federal protected rights can be eliminated by the defense of a single criminal prosecution, there is ordinarily no irreparable injury. 401 U.S. at 46, 91 S.Ct. 746. For a federal injunction to issue plaintiff must show "bad faith, harassment, or any other unusual circumstance that would call for equitable relief." 401 U.S. at 54, 91 S.Ct. at 755.

Younger differs from the case at bar in that the former involved criminal proceedings instituted prior to a federal suit, while the criminal action here was filed 22 days after Plaintiff filed its civil complaint. In two cases decided only last term, however, the Supreme Court extended application of the Younger principles to some federal proceedings initiated prior to a state criminal action. Hicks v. Miranda, 422 U.S. 332, 95 S.Ct. 2281, 45 L.Ed.2d 223 (1975); Doran v. Salem Inn, 422 U.S. 922, 95 S.Ct. 2561, 43 L.Ed.2d 648 (1975). In Hicks the Court held:

Where state criminal proceedings are begun against the federal plaintiff after the federal complaint is filed but before any proceedings of substance on the merits have taken place in the federal court, the principles of Younger v. Harris should apply in full force. 422 U.S. at 333, 95 S.Ct. at 2284.

The question here, then, is whether "any proceedings of substance on the merits" had taken place in the federal court before the criminal proceedings were instituted against Plaintiff and its officers. In Hicks, the court found no proceedings of substance where a request for a temporary restraining order had been denied and a three-judge court had been designated. In Doran, where the district court had denied a restraining order and set a hearing on a preliminary injunction, the Court found Younger applicable because the federal litigation was still in an "embryonic stage and no contested matter had been decided." 422 U.S. at 929, 95 S.Ct. at 2566.

The federal proceedings in the present case include denial of a preliminary injunction and a premature appeal therefrom. Neither federal court has conducted a substantive proceeding upon the merits of Plaintiff's constitutional claim, and no contested matter has been decided. These proceedings do not differ significantly from those in Hicks and Doran. I conclude, therefore, that the principles of Younger v. Harris must apply.

Plaintiff has made no showing of bad faith, harassment, or any other unusual circumstance that would except this case from the general rule of Younger. If the state proceeding goes forward Plaintiff will suffer no immediate irreparable injury, and the threat to its federally protected rights can be eliminated by a successful defense. The federal court may not, therefore, enjoin the state prosecution and must abstain.

II.

The remaining issue is whether a district court judge may, without convening a three-judge court, dismiss on Younger grounds a complaint seeking to enjoin a state statute challenged as unconstitutional.

Where there is no justiciable case or controversy or where there is no subject matter jurisdiction, a single judge may properly dismiss an action challenging the constitutionality of a statute. Ex parte Poresky, 290 U.S. 30, 31, 54 S.Ct. 3, 78 L.Ed. 152 (1933). In Gonzalez v. Automatic Employee Credit Union, 419 U.S. 90, 95 S.Ct. 289, 42 L. Ed.2d 249 (1974), the Supreme Court held that lack of standing is a ground upon which a single judge may dispose of a constitutional challenge without convening a three-judge court. In its most recent decision on the subject, MTM, Inc. v. Baxley, 420 U.S. 799, 95 S.Ct. 1278, 43 L.Ed.2d 636 (1975), the Court held that "a direct appeal will lie to this Court under 28 U.S.C. § 1253 from the order of a three-judge court denying interlocutory or permanent injunctive relief only where such order rests upon the resolution of the merits of the constitutional claim presented below." The three-judge court in Baxley had dismissed the...