Dodd v. Fawcett Publications, Inc., 7418.

Decision Date10 March 1964
Docket NumberNo. 7418.,7418.
Citation329 F.2d 82
PartiesCarl DODD, Appellant, v. FAWCETT PUBLICATIONS, INC., a corporation, and Mid-Continent News Company, a corporation, Appellee.
CourtU.S. Court of Appeals — Tenth Circuit

Robert G. Grove, Oklahoma City, Okl. (Leo Winters, of Grove, Winters & Cloud, Oklahoma City, Okl., on the brief), for appellant.

Don H. Reuben, Chicago, Ill. (Lawrence Gunnels, of Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, Ill., and Gus Rinehart, of Rinehart, Morrison & Cook, Oklahoma City, Okl., on the brief), for appellees.

Before PICKETT and LEWIS, Circuit Judges, and KERR, District Judge.

LEWIS, Circuit Judge.

This appeal, taken pursuant to 28 U.S. C.A. § 1292(b), is from an interlocutory order of the district court denying plaintiff-appellant's motion to remand the cause to the Oklahoma state court. The dispositive question is whether the decision of the Oklahoma Supreme Court in Fawcett Publications, Inc. v. Morris, 377 P.2d 42, has made the joinder of the co-defendant Mid-Continent News Company fraudulent in law so as to now vest complete diversity jurisdiction in the federal court. The Morris case, the case at bar, and eleven other pending cases all arise from a single identical factual incident.

In March, 1958, Fawcett Publications, Inc., published in its magazine True an article entitled "The Pill That Can Kill Sports" wherein reference was made to the 1956 University of Oklahoma varsity football team. Alleging the article to be libelous per se, thirteen members of the Oklahoma team, each being a citizen of that state, filed separate actions for damages in the Oklahoma state court naming Fawcett, a foreign corporation, and Mid-Continent as co-defendants. Mid-Continent is a Delaware corporation with principal place of business located in Oklahoma City and is a distributor of True and other magazines. An attempt at that time by the co-defendants to remove the actions to federal court failed, it appearing that each plaintiff and the defendant Mid-Continent, since its principal place of business was at Oklahoma City, were citizens of Oklahoma, 28 U.S.C.A. § 1332(c), and that plaintiffs were each seeking a joint judgment against the co-defendants. The orders of remand were entered and the actions were severally returned to the jurisdiction of the state court.

The Morris case proceeded to trial before a state district court sitting with a jury. At the conclusion of the evidence the trial judge instructed the jury to return a verdict against Fawcett leaving only the amount of damages to be determined. The trial court also directed a verdict in favor of the co-defendant Mid-Continent. The jury returned a verdict for $75,0001 in favor of plaintiff Morris and against defendant Fawcett. Both Fawcett and Morris appealed the judgment to the Oklahoma Supreme Court, Morris' appeal being limited to a claim of error in the trial judge's directed verdict in favor of Mid-Continent. The Oklahoma high court affirmed the judgment in all respects, 337 P.2d 42, and its judgment is now final as it affects Mid-Continent.2 It is against this background of the Morris case that the co-defendants in the case at bar bottomed their instant petition for removal and upon which, after pertinent inquiries made of counsel at a hearing, the federal district court based its denial of remand.

Plaintiff's counsel were also plaintiff's counsel in the Morris case. As indicated by the noted colloquy3 between court and counsel occurring at the hearing on motion to remand, the court concluded that plaintiff Dodd's evidence affecting the liability of Mid-Continent would have the same legal substance as that given in the Morris case and that the non-liability of Mid-Continent had thus been judicially established to that extent. And upon appeal, present plaintiff's argument in opposition to the ruling of the court is largely the same as advanced in the noted discussion in the trial court.

The determination of the non-liability of Mid-Continent made in the Morris case cannot be applied in the case at bar under either the doctrine of res judicata or estoppel, for, as plaintiff Dodd properly asserts, the cases lack identity of parties. In fact, the judgment in the Morris case, as such, is in no way binding upon the parties in this action. However, the law of Oklahoma as determined in the Morris case is binding upon the federal court not only in this case but in any diversity case. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188. And, although, as plaintiff Dodd again correctly contends, the opinion in Morris does not spell out the liability of a distributor of magazines containing libelous matter, nevertheless the case does determine that Mid-Continent was not liable under the evidence produced in that case. Whatever the liability of a magazine distributor may be in Oklahoma such liability is not established by evidence having only the legal substance contained in Morris. To such extent Morris is pertinent to and binding upon the federal court in the instant case and the trial court did not err in so holding.4

In many cases, removability can be determined by the original pleadings and normally the statement of a cause of action against the resident defendant will suffice to prevent removal. But upon specific allegations of fraudulent joinder the court may pierce the pleadings, Chesapeake & O. Ry. v. Cockrell, 232 U.S. 146, 34 S.Ct. 278, 58 L.Ed. 544; Nunn v. Feltinton, 5 Cir., 294 F.2d 450; Morris v. E. I. DuPont DeNemours & Co., 8 Cir., 68 F.2d 788, consider the entire record, and determine the basis of joinder by any means available, McLeod v. Cities Serv. Gas Co., 10 Cir., 233 F.2d 242. The joinder of a resident defendant against whom no cause of action is stated is patent sham, Parks v. New York Times Co., 5 Cir., 308 F.2d 474, and though a cause of action be stated, the joinder is similarly fraudulent if in fact no cause of action exists, Lobato v. Pay Less Drug Stores, Inc., 10 Cir., 261 F.2d 406. This does not mean that the federal court will pre-try, as a matter of course, doubtful issues of fact to determine removability; the issue must be capable of summary determination and be proven with complete certainty. McLeod v. Cities Serv. Gas Co., supra.

Applying these rules to the case at bar it seems clear that the trial court properly refused to remand. The Oklahoma Supreme Court has judicially determined that unrecited but specific proof occurring in the Morris case was insufficient to impose liability upon Mid-Continent. Without material addition that same proof appears with complete...

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