City of Lawton, Oklahoma v. Chapman

• Decision Date: 04 September 1958
• Docket Number: No. 5760.,5760.
• Citation: 257 F.2d 601
• Parties: The CITY OF LAWTON, OKLAHOMA; and Charles M. Miller, City Health Officer for the City of Lawton, Oklahoma, Appellants, v. N. S. CHAPMAN, d/b/a Chapman Dairy, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

257 F.2d 601 (1958)

The CITY OF LAWTON, OKLAHOMA; and Charles M. Miller, City Health Officer for the City of Lawton, Oklahoma, Appellants, v. N. S. CHAPMAN, d/b/a Chapman Dairy, Appellee.

No. 5760.

United States Court of Appeals Tenth Circuit.

July 28, 1958.

Rehearing Denied September 4, 1958.

Warren F. Crisman, Lawton, Okl., for appellants.

Lee Humphrey, Wichita Falls, Tex., (Cund, Garvin & Baucum, Duncan, Okl., and Bullington, Humphrey, Humphrey & Fillmore, Wichita Falls, Tex., on the brief), for appellee.

Before MURRAH, PICKETT and LEWIS, Circuit Judges.

LEWIS, Circuit Judge.

The United States District Court for the Western District of Oklahoma, asserting diversity jurisdiction for the requisite amount, has permanently enjoined the City of Lawton, Oklahoma, its officers and agents, from interfering with the sale and distribution of milk by the Chapman Dairy within the corporate limits of Lawton. The City of Lawton appeals such order contending that the dairy operator, plaintiff below, failed in his proof that the jurisdictional amount was involved in the controversy and that as a consequence the federal court was without jurisdiction to consider the validity of the Lawton ordinance controlling milk distribution within that city.

N. S. Chapman, owner and operator of the Chapman Dairy, is a resident of Texas and operates a milk processing plant in the area of Wichita Falls, Texas, and in compliance with the Wichita Falls ordinance. Desiring to expand his business by selling milk in Lawton, Oklahoma, Chapman sought a permit to do so and was refused upon the ground that he had not met the requirements of the Lawton ordinance controlling milk distribution within the area subject to its police control. This action followed, Chapman alleging that those burdens of the Lawton ordinance¹ with which he was not complying were unreasonable and arbitrary as to him and asserting that his processing and sanitation methods, regulated under and in compliance with the Wichita Falls ordinance, were equal to or above the average of the milk distributors doing business in Lawton.

To support his allegation of the existence of more than $3,000 in dispute, Chapman offered evidence showing that, were he allowed to sell milk in Lawton, he could capture sufficient of the market to allow a profit reasonably anticipated to be more than $5,000 annually. Whether or not the value of the matter in controversy here can be properly measured by an estimate of the profits which could be anticipated from the sale of milk in Lawton is the jurisdictional question we consider.

It is a well established principle that where the complaint alleges a sufficient jurisdictional amount which is denied by the answer, the burden of proving jurisdiction rests upon the plaintiff. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L. Ed. 1135. And, since the courts of the United States are of limited jurisdiction, there is a presumption against jurisdiction which obtains throughout the trial of a case. Grace v. American Central Insurance Co., 109 U.S. 278, 3 S.Ct. 207, 27 L.Ed. 932. The reason for these guiding principles is, of course, that the federal courts must act with due regard for the rightful independence of state governments and scrupulously confine their own jurisdiction to the precise limits defined by statute. Healy v. Ratta, 292 U.S. 263, 54 S.Ct. 700, 78 L.Ed. 1248. The interpretation of a state statute or municipal ordinance is basically a problem for local authority and compliance with local law is the foundation of orderly government. When enforcement of such local law is sought to be restrained by resort to the federal court the rule of damages reflects this principle. The amount in controversy is to be determined by the damages which would result to the party requesting the injunction if he were required to comply with the statute or ordinance to carry on his business. McNutt v. General Motors Acceptance Corp., supra. In that case, the plaintiffs attempted to establish jurisdiction of the federal courts by an extensive showing of the net worth of its business in the state which enacted the statute. The court stated 298 U.S. 178, 56 S.Ct. 781:

"Respondent invokes the principle that jurisdiction is to be tested by the value of the object or right to be protected against interference. * * * But in the instant case, the statute does not attempt to prevent respondent from conducting its business. There is no showing that it cannot obtain a license and proceed with its operations. The value or net worth of the business which respondent transacts in Indiana is not involved save to the extent that it may be affected by the incidence of the statutory regulation. The object or right to be protected against unconstitutional interference is the right to be free of that regulation. The value of that right may be measured by the loss, if any, which would follow the enforcement of the rules prescribed. The particular allegations of respondent\'s bill as to the

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