Eickhof Construction Co. v. Great Northern Railway Co.

• Decision Date: 21 October 1968
• Docket Number: No. 6-67-Civ-10.,6-67-Civ-10.
• Citation: 291 F. Supp. 44
• Parties: EICKHOF CONSTRUCTION COMPANY, a Minnesota corporation, Plaintiff, v. GREAT NORTHERN RAILWAY COMPANY, a corporation, Defendant.
• Court: U.S. District Court — District of Minnesota

291 F. Supp. 44

EICKHOF CONSTRUCTION COMPANY, a Minnesota corporation, Plaintiff, v. GREAT NORTHERN RAILWAY COMPANY, a corporation, Defendant.

No. 6-67-Civ-10.

United States District Court D. Minnesota, Sixth Division.

October 21, 1968.

Kenneth Johannson, Padden, Dickel & Johannson, Crookston, Minn., for plaintiff.

D. E. Engle, St. Paul, Minn., for defendant.

MEMORANDUM AND ORDER

DEVITT, Chief Judge.

In this action for damages, plaintiff seeks to recover for a loss arising out of a misquotation of freight rates by defendant, an interstate carrier. The action was originally commenced in the Ninth Judicial District of the State of Minnesota, but upon defendant's petition, was removed to this court where it is before us on a Stipulation of Fact. Federal jurisdiction appears doubtful.

Essentially, the following facts were stipulated: In December, 1964, plaintiff was negotiating with the United States Army Corps of Engineers for a competitive contract to repair, load, and transport various machinery and equipment from Minot, North Dakota to Norfolk, Virginia. In preparation for submission of its bid, plaintiff contacted defendant to obtain interstate freight charge quotations. The quotations supplied were mistakenly based on a rate far below the lawful published rate on file with the Interstate Commerce Commission. Relying on this misquotation, plaintiff bid for and won the shipping contract. After the shipment was completed, defendant discovered, and informed plaintiff of, its error. In 1966, plaintiff paid to defendant the full amount of freight charges at the lawful published rate and received from defendant its paid freight bill. These paid charges exceeded the originally quoted charges by $6,807.07, which amount, it is agreed, the plaintiff is entitled to recover if its cause succeeds.

The main punch of plaintiff's action is that the defendant negligently breached its duty to provide accurate quotations of freight rates to shippers, and that as a result of such negligence, plaintiff was compelled to make unanticipated payments resulting in damages in the amount above mentioned. The plaintiff also contends that the original rate quotation constituted a binding contract which defendant breached. Defendant's major defense is that the only lawful rates are those on file with the Interstate Commerce Commission, that both shippers and carriers are charged with notice of, and bound by, such rates, and that a carrier is not liable for damages resulting from a misquotation of rates notwithstanding the reliance of a shipper.

But before a federal court may decide a case brought before it, it must be assured of its jurisdiction over the subject matter of the action. While the removal and supporting jurisdiction were not challenged by the plaintiff, the court may, and indeed has a duty, on its own to examine its authority to decide a case. Treinies v. Sunshine Mining Co., 308 U.S. 66, 60 S.Ct. 44, 84 L.Ed. 85 (1946).

The authority for the removal of this action must be found, if it exists, in Title 28 U.S.C.A. § 1441(a) and (b). That statute makes removal dependent upon whether the action would have been within the original jurisdiction of a federal district court. See, 1 Barron & Holtzoff, Federal Practice and Procedure § 102 (1960); Jays Foods, Inc. v. Local Union No. 1, Amer. Bakery and Confectionary Workers', etc., 255 F.Supp. 822 (N.D.Ill. 1966); Alaska Bar Ass'n v. Dickerson, 240 F.Supp. 732 (D.Alas.1965). So, we must look to the scope of original jurisdiction to discover whether this court could have heard this case in the first instance.

Because the agreed value of the interest involved is less than $10,000, jurisdiction cannot be based on general federal question jurisdiction, 28 U.S.C.A. § 1331, or on diversity of citizenship, 28 U.S.C.A. § 1332. It appears that the only plausible source of jurisdiction is § 1337 of Title 28 U.S.C.A., which reads:

"The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies."

No jurisdictional amount is required under this section. Bloomfield Steamship Co. v. Sabine Pilots Ass'n, 262 F.2d 345 (5th Cir. 1959). It is generally assumed that the phrase "arising under" in § 1337 is to be given the same breadth and limit as the synonymous phrase of § 1331 governing general federal question jurisdiction. See, 1 Moore's Federal Practice, § 0.608.-3.

The case reports are saturated with attempts to describe the attributes of a case that "arises under" the laws or Constitution of the United States in the sense required by 28 U.S.C.A. §§ 1331 and 1337. For example, it is said that:

"To give rise to Federal jurisdiction under § 1337 * * * the basis of the action must concern the validity, construction or enforcement of a statute regulating commerce." Adams v. International Brotherhood of Boilermakers, etc., 262 F.2d 835, 839 (10th Cir. 1959).

As classic as any is the statement that,

"where it appears from the bill or statement of the plaintiff that the right to relief depends upon the construction or application of the Constitution or laws of the United States, and that such federal claim is not merely colorable, and rests upon a reasonable foundation, the District Court has jurisdiction under this provision." Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199, 41 S.Ct. 243, 245, 65 L. Ed. 577 (1921).

Some attempt at refinement is illustrated by the corollary that:

"The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another." Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936).

See also, Wheeldin v. Wheeler, 373 U.S. 647, 649, 83 S.Ct. 1441, 10 L.Ed.2d 605 (1963); Martin v. Wyzanski, 262 F.Supp. 925 (D.Mass.1967). Careful reading of cases which involve federal question jurisdiction helps to shade the often broadly sketched outlines of the "arising under" concept. One court has warned that,

"Caution should be exercised in the use of such abstract definitions without reference to the facts and circumstances of the particular case, for the determination of the question of such jurisdiction must be made upon a common sense basis and a distinction must be made between controversies that are basic and necessary and those which are collateral and merely possible." Walker v. Savell, 243 F.Supp. 478, 480 (N.D.Miss.1965).

Thus whether the dominant aspect of the case is state or federal may be significant. Pollio & Son, Inc. v. International Brotherhood of Teamsters, etc., 242 F. Supp. 684 (E.D.N.Y.1965). It is also important to consider whether the social area which the litigation most closely touches is one wherein the federal interest and its concomitant need of uniformity predominate. International Ass'n of Machinists, etc. v. Central Airlines, Inc., 372 U.S. 682, 83 S.Ct. 956, 10 L.Ed.2d 67 (1963); McFaddin Express, Inc. v. Adley Corp., 346 F.2d 424 (2d Cir. 1965), cert. denied 382 U.S. 1026, 86 S.Ct. 643, 15 L.Ed.2d 539; T. B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir. 1964), cert. denied 381 U.S. 915, 85 S.Ct. 1534, 14 L.Ed.2d 435. Artificial division of jurisdiction is to be avoided where practicable. Sylgab Steel & Wire Corp. v. Strickland Trans. Co., 270 F.Supp. 264 (E.D.N.Y. 1967). Where, for example, Congress has specifically legislated, such as to provide a standard of care of goods for interstate carriers, even though a common law action is well established, federal jurisdiction is proper. Peyton v. Railway Express Agency, Inc., 316 U.S. 350, 62 S.Ct. 1171, 86 L.Ed. 1525 (1942); Great Northern R. Co. v. Galbreath Cattle Co., 271 U.S. 99, 46 S.Ct. 439, 70 L.Ed. 854 (1926); Sylgab Steel & Wire Corp. v. Strickland Trans. Co., supra. But,

"the mere fact that Interstate Commerce is involved and may be affected, is not sufficient to justify jurisdiction of a private suit seeking protection of such commerce." Toledo, P. & W. R. Co. v. Brotherhood of Railroad Trainmen, etc., 132 F.2d 265, 268 (7th Cir. 1942).

See also, Chicago & N. W. R. Co. v. Toledo, P. & W. R. Co., 324 F.2d 936 (7th Cir. 1963).

Moreover, the mere existence of a question of federal law somewhere within the controversy is not enough. It is singularly pertinent to the case at hand to know that the basis for jurisdiction must appear from the well pleaded facts of the complaint standing alone and unaided by anticipated defenses, the answer, or the petition for removal. Peyton v. Railway Express Agency, Inc., supra; Louisville & N. R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908); Florida E. C. R. Co. v. Jacksonville Terminal Co., 328 F.2d 720 (5th Cir. 1964), cert. denied 379 U.S. 830, 85 S.Ct. 59, 13 L.Ed.2d 38; Dickson v. Edwards, 293 F.2d 211 (5th Cir. 1961); Olsen v. Doerfler, 225 F.Supp. 540 (E.D.Mich. 1963); Levitt & Sons, Inc. v. Prince Geo. Cty. Cong. of Racial Equality, 221 F. Supp. 541 (D.Md.1963).

An analysis of cases involving freight rates in interstate commerce will further focus the principles that ought to be applied here.

A suit by a carrier to recover additional transportation charges due is within the ambit of § 1337, Title 28 U.S.C.A. Bernstein Bros. Pipe & Machinery Co. v. Denver & R. G. W. R. Co., 193 F.2d 441 (10th Cir. 1951). Thus, had the defendant in the instant case been forced to sue plaintiff for the difference between the legal and the misquoted rates, this court would have had jurisdiction. There is also authority for the position that suits by a shipper based on exaction of allegedly incorrect or discriminatory rates is within the jurisdiction of a federal district court. S. Patti Construction Co. v. Union P. R. Co., 72 F.Supp. 101 (W.D.Mo. 1947); National Elevator Co. v. Chicago, M. & St. P. R. Co., 246 F. 588 (8th Cir. 1917).¹

Yet,...