Clark v. Chicago, R.I. & P. Ry. Co.

• Decision Date: 09 March 1912
• Docket Number: 3,779.
• Citation: 194 F. 505
• Court: U.S. District Court — Western District of Missouri
• Parties: CLARK v. CHICAGO, R.I. & P. RY. CO. et al.

194 F. 505

CLARK v. CHICAGO, R.I. & P. RY. CO. et al.

No. 3,779.

United States District Court, W.D. Missouri, Western Division.

March 9, 1912

[Copyrighted Material Omitted]

Horace Kimbrell and Martin J. O'Donnell, for plaintiff.

M. A Low and Sebree, Conrad & Wendorff, for defendants.

VAN VALKENBURGH, District Judge.

The defendant railroad removed the cause to this court on the ground of diversity of citizenship, asserting that the defendant Murphy is neither a proper nor necessary party to the proceeding, but, on the contrary, that he was fraudulently joined with the defendant company to prevent removal to this court. In the petition for removal the defendant railroad company sets up the facts upon which this charge of fraudulent joinder is based, and alleges that the facts stated were well known to the plaintiff, and that plaintiff well knew, and must have known, that no cause of action existed against the defendant Murphy. Plaintiff has filed a plea to the jurisdiction of this court, in which he denies the allegations of fraud in the petition for removal and the facts upon which the same are based, and asserts that said allegations are merely conclusions of the pleader, and are insufficient to support the introduction of any testimony in support of the charge of fraud. At the hearing, upon the plea to the jurisdiction, the defendant railroad introduced the defendant Murphy and the plaintiff, and examined them with reference to the facts bearing upon the question of good faith of the plaintiff in making the joinder complained of.

Some confusion seems to exist in the minds of counsel as to what facts and circumstances will justify a federal court in reaching the conclusion that a fraud has been perpetrated or sought to be perpetrated to defeat its jurisdiction, and what may be the scope of its inquiry for the purpose of determining such facts and circumstances. This confusion arises, no doubt, from observations, made by the courts in the decided cases, called forth by the special facts of the case then under consideration.

There can be no doubt that fraud, if it exists, and is appropriately developed, justifies the court in disregarding a joinder otherwise fair upon its face, and that it is the duty of the court to guard against such frauds and evasions. As was said in Shaffer v. Union Brick Co. (C.C.) 128 F. 97:

'It is manifestly both unsafe and unsound to allow the ultimate determination of the right of removal from the state to the federal courts to rest upon the ingenuity of counsel drafting the pleadings; for, as said by Mr. Justice Miller in Board of County Com'rs v. Kansas Pac. Ry. Co., 4 Dill. 277 (Fed. Cas. No. 502): 'It would be a very dangerous doctrine-- one utterly destructive of the right which a man has to go into the federal courts on account of his citizenship-- if the plaintiff in the case, in instituting his suit, can, without any right or reason or just cause join persons who have not the requisite citizenship, and thereby destroy the rights of parties in federal courts. We must, therefore, be astute not to permit devices to become successful which are used for the very purpose of destroying that right.'

It may not be unprofitable to advert briefly to the attitude of the Supreme Court upon this question in order that a consistent and stable rule may be laid down for guidance in such cases. It will be sufficient to begin with the case of Chesapeake & Ohio Ry. Co. v. Dixon, 179 U.S. 131, 21 Sup.Ct. 67, 45 L.Ed. 121, where the railroad company sought to remove the case in which it was joined with its engineer and fireman as codefendants, and in which it was alleged that the 'negligence was the joint negligence of all the defendants, ' on the ground that its codefendants were 'neither necessary nor proper parties defendant to this cause, and that they were made parties defendant to this cause for the sole and single purpose to prevent a removal by petitioner of this cause to the Circuit Court of the United States for the District of Kentucky, and thereby unlawfully to deprive your petitioner of the right conferred upon it by the Constitution and laws of the United States. ' The state court overruled the petition for removal. The case was tried in the state court, resulting in a judgment for plaintiff, which was affirmed by the Court of Appeals of Kentucky. In considering the question whether the removal should have been granted by the court below, that court said:

'As, therefore, the appellant Chesapeake & Ohio Railroad Company neither sufficiently alleged nor attempted to prove that the defendants were wrongfully joined as such, the lower court properly refused to make the transfer.'

Upon writ of error to the Supreme Court of the United States, respecting this same question, Mr. Chief Justice Fuller said:

'If the liability of defendants, as set forth in that pleading, was joint, and the cause of action entire, then the controversy was not separable as matter of law, and plaintiff's purpose in joining Chalkey and Sidles was immaterial. The petition for removal did not charge fraud in that regard or set up any facts and circumstances indicative thereof, and plaintiff's motive in the performance of a lawful act was not open to inquiry.'

In Alabama Great Southern Railway Co. v. Thompson, 200 U.S. 206, 26 Sup.Ct. 161, 50 L.Ed. 441, 4 Ann.Cas. 1147, the railroad company was in like manner joined with its engineer and conductor. The case was removed upon the sole ground that a separable controversy existed between the petitioner and the plaintiff as to whom diversity of citizenship existed. The case reached the Supreme Court upon questions certified by the Circuit Court of Appeals for the Sixth Circuit. In sustaining the state jurisdiction, that court, through Mr. Justice Day, said:

'It is equally well settled that in any case the question whether there is a separable controversy which will warrant a removal is to be determined by the condition of the record in the state court at the time of the filing of the petition for removal, independently of the allegations in that petition or in the affidavit of the petitioner, unless the petitioner both alleges and proves that the defendants were wrongfully made joint defendants for the purpose of preventing a removal into the federal court. * * * In other words, the right to remove depended upon the case made in the complaint against both defendants jointly, and that right, in the absence of a showing of fraudulent joinder, did not arise from the failure of the complainant to establish a joint cause of action. * * * It is to be remembered that we are not now dealing with joinders, which are shown by the petition for removal, or otherwise, to be attempts to sue in the state courts with a view to defeat federal jurisdiction. In such cases entirely different questions arise, and the federal courts may and should take such action as will defeat attempts to wrongfully deprive parties entitled to sue in the federal courts of the protection of their rights in those tribunals. * * * The test of such controversy, as this court has frequently said, is the cause of action stated in the complaint. That is joint in character, and there is no attack upon the good faith of the action. In such case we hold that no separable controversy is presented within the meaning of the act of Congress.'

In Illinois Central Railroad Co. v. Sheegog, 215 U.S. 308-316, 30 Sup.Ct. 101, 102 (54 L.Ed. 208), the court said:

'Of course, if it appears that the joinder was fraudulent as alleged, it will not be allowed to prevent the removal. Wecker v. National Enameling & Stamping Co., 204 U.S. 176 (27 Sup.Ct. 184, 51 L.Ed. 430, 9 Ann.Cas. 757). And, further, there is no doubt that the allegations of fact, so far as material, in a petition to remove, if controverted, must be tried in the court of the United States, and therefore must be taken to be true when they fail to be considered in the state courts. Crehore v. Ohio & Mississippi Ry. Co., 131 U.S. 240-244 (9 Sup.Ct. 692, 33 L.Ed. 144); Chesapeake & Ohio Ry. Co. v. McCabe, 213 U.S. 207 (29 Sup.Ct. 430, 53 L.Ed. 765). On the other hand, the mere epithet 'fraudulent' in a petition does not end the matter. In the case of a tort which gives rise to a joint and several liability the plaintiff has an absolute right to elect and to sue the tort-feasors jointly if he sees fit, no matter what his motive, and therefore an allegation that the joinder of one of the defendants was fraudulent, without other ground for the charge than that its only purpose was to prevent removal, would be bad on its face.'

This statement from the opinion of Mr. Justice Holmes is frequently urged by counsel as authority for the claim that a mere allegation of fraud without facts other than such as disclose an intention to defeat the federal jurisdiction is insufficient, that there must be present facts which justify a deduction of fraud in its broader legal acceptance; such perhaps, as would involve moral turpitude apart from the mere effort to defeat the removal act. It must be noted, however, that this case cites with approval the decision in Alabama Great Southern Railway v. Thompson, supra, which has already been considered, and the later case of Wecker v. National Enameling & Stamping Co., 204 U.S. 176, 27 Sup.Ct. 184, 51 L.Ed. 430, 9 Ann.Cas. 757. In the latter case the plaintiff had joined a draftsman in the office of the chief engineer, and in his petition alleged it to be his belief that this draftsman was responsible for the defects in structure of the apparatus causing the injury to such an extent as to render him liable to the plaintiff therefor. At the hearing, upon conflicting evidence, it appeared that there was no reasonable ground for the...