Greif v. Sears, Roebuck & Co.

• Decision Date: 21 January 1943
• Docket Number: No. 1518.,1518.
• Citation: 48 F. Supp. 242
• Parties: GREIF v. SEARS, ROEBUCK & CO. et al.
• Court: U.S. District Court — District of Idaho

48 F. Supp. 242

GREIF v. SEARS, ROEBUCK & CO. et al.

No. 1518.

District Court, D. Idaho, Central Division.

January 21, 1943.

Cox, Ware & Stellmon, of Lewiston, Idaho, for plaintiff.

Durham & Hyatt, of Lewiston, Idaho, for defendant, Sears, Roebuck & Co.

Earle W. Morgan, of Lewiston, Idaho, for defendant Falk Mercantile Co., Ltd.

SCHWELLENBACH, District Judge.

This action was commenced in the district court of the State of Idaho. The defendant Sears, Roebuck and Co. (hereafter referred to as Sears) removed it to this court. Plaintiff now seeks to have it remanded back to the state court. Plaintiff is a resident of the State of Idaho. Sears is a corporation created under the laws of a state other than Idaho. Defendant Falk Mercantile Company, Ltd., is an Idaho corporation. The plaintiff alleges that his business is that of the promotion and sale of musical instruments in the States of Idaho, Washington and Oregon. He alleges that he sells such instruments under the trade mark or name of "Crusader," and that through his promotion, advertising and sales efforts he had acquired the exclusive right to the use of such name in the three Pacific Northwest states. He further alleges that the defendants have attempted to and are now attempting to pre-empt his right to the use of such trade name in the three Pacific Northwest states. He further alleges that the defendants have attempted to and are now attempting to pre-empt his right to the use of such trade name in the three states by advertising and sale of musical instruments inferior in quality to his through the use of his trade name "Crusader." He asserts that he has been damaged in the amount of $25,000 and seeks to recover that sum from the defendants and also seeks to enjoin the defendants and their agents, servants and employees from advertising, offering for sale or selling musical instruments in what he describes as his trade territory under the name "Crusader."

Sears resists the motion to remand contending that it has a separable controversy with the plaintiff to the proper adjudication of which the defendant Falk Mercantile Company is not a necessary or indispensable party. The applicable statute, Tit. 28 U.S.C.A. § 71, provides: "* * * And when in any suit mentioned in this section there shall be a controversy which is wholly between citizens of different States, and which can be fully determined as between them, then either one or more of the defendants actually interested in such controversy may remove said suit into the district court of the United States for the proper district. * * *"

The legal questions involved in a decision on this motion must be approached with an appreciation of the extremely restricted jurisdiction of this court. "Not only does the language of the Act of 1887 evidence the Congressional purpose to restrict the jurisdiction of federal courts on removal, but the policy of the successive acts of Congress regulating the jurisdiction of federal courts is one calling for the strict construction of such legislation. The power reserved to the states under the Constitution to provide for the determination of controversies in their courts, may be restricted only by the action of Congress in conformity to the Judiciary Articles of the Constitution." Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 872, 85 L.Ed. 1214. The question is to be determined by the plaintiff's pleading and where, in the absence of clear proof of bad faith in the joinder, concurrent acts are alleged on the part of the defendants, a separable controversy is not presented and the fact that the defendants might have been sued separately affords no ground for removal. Pullman Company v. Jenkins, 305 U.S. 534, 59 S. Ct. 347, 353, 83 L.Ed. 334. The rationale of the federal policy of strictly construing its jurisdictional limits is succinctly stated by Mr. Justice Black in his concurring opinion in Pullman Company v. Jenkins, supra, as follows: "The constitutional division of powers between the States and the National government makes it necessary that the jurisdictional policy declared by Congress be scrupulously observed. This is especially so in view of the fact that after removal of a cause from a State court by reason of diversity of citizenship, the Federal court must proceed under State law and practice. Questions of State constitutional, statutory and general law which have not been clearly and finally determined by the State's highest court may arise in the Federal court. The State court need not thereafter, in other litigation, follow the Federal court's decision on such questions. However, cases for which Congress has not authorized removal from a State court can be appealed to the State's highest judicial tribunal, thus giving each litigant a final determination of his rights under State laws by the body vested with final authority to interpret those laws." See, also, Healy v. Ratta, 292 U.S. 263, 54 S.Ct. 700, 78 L.Ed. 1248; Kline v. Burke Construction Co., 260 U.S. 226, 43 S.Ct. 79, 67 L. Ed. 226, 24 A.L.R. 1077; Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L. Ed. 447.

In the absence of actual fraud, there is no federal jurisdiction if a joint cause of action is stated and the complaint by any reasonable construction shows that the joinder was properly made. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 134. If a joint cause of action is stated, the motive for joinder is immaterial even if it is to prevent removal and oust the federal court from jurisdiction. Chicago, Burlington & Quincy Railway Company v. Willard, 220 U.S. 413, 31 S.Ct. 460, 55 L.Ed. 521; Illinois Central Railroad Company v. Sheegog, 215 U.S. 308, 30 S.Ct. 101, 54 L.Ed. 208. If the state law permits the assertion of a joint liability, there is an "absolute right to enforce it" whatever the reason motivating the assertion of the right. Chicago, Rock Island & Pacific Railway Company v. Schwyhart, 227 U.S. 184, 33 S.Ct. 250, 251, 57 L.Ed. 473. The mere fact that the cause of action may involve separate acts does not create a separable controversy. It is not the group of acts alleged in the complaint but the result and the legal wrong, the existence of which they show, that creates the right of action. Baltimore Steamship Company v. Phillips, 274 U.S. 316, 47 S.Ct. 600, 71 L.Ed. 1069. The fact that each defendant may have a separate defense does not create a separate controversy as to him. Rosenthal v. Coates, 148 U.S. 142, 13 S. Ct. 576, 37 L.Ed. 399. In order to be separable, the complaint must set forth two or more causes of action, one of which is wholly between citizens of different states. City of St. Anthony v. Mason, D.C., 22 F.2d 306. The Circuit Court of Appeals for the Ninth Circuit has emphasized the principle that the right of removal depends on the case disclosed by the pleadings when the petition for removal is filed. Von Herberg v. City of Seattle, 27 F.2d 457, 459. See, also, Kataoka v. May Department Stores Co., 9 Cir., 115 F.2d 521; Atchison, T. & S. F. Ry. Co. v. Francom, 9 Cir., 118 F.2d 712.

In the light of the foregoing rules, it is necessary only to examine two paragraphs of plaintiff's complaint to ascertain that this court has no jurisdiction in this case. In paragraph two, plaintiff alleges: "That at all times herein mentioned the defendant, Falk Mercantile Company, was and is an agent and employee of said defendant, Sears Roebuck and Co., and at all...