Interborough Rapid Transit Co. v. Gilchrist

• Decision Date: 15 March 1928
• Citation: 25 F.2d 164
• Parties: INTERBOROUGH RAPID TRANSIT CO. v. GILCHRIST et al.
• Court: U.S. District Court — Southern District of New York

25 F.2d 164 (1928)

INTERBOROUGH RAPID TRANSIT CO. v. GILCHRIST et al.

District Court, S. D. New York.

March 15, 1928.

William L. Ransom, Jacob H. Goetz, and James L. Quackenbush, all of New York City, for the motion.

Samuel Untermyer, of New York City (Clarence M. Lewis, George P. Nicholson, M. Maldwin Fertig, George H. Stover, and J. A. Devery, all of New York City, on the brief), opposed.

BONDY, District Judge.

This is an application by the plaintiff, the Interborough Rapid Transit Company, in an ancillary action, for an order enjoining the defendants the city of New York and the members of the Transit Commission from prosecuting two actions and a special proceeding against the plaintiff in the state courts.

On February 14, 1928, at 9:20 o'clock in the morning, the Interborough Rapid Transit Company filed a bill in the office of the clerk of this court, alleging, among other things, that limitations placed by or pursuant to acts of the Legislature of the state of New York on the rates of fare chargeable by the plaintiff were unreasonable and confiscatory, and deprive the plaintiff of its property without due process of law, in violation of its rights under the Constitution of the United States. The relief asked is an injunction, both interlocutory and permanent, restraining the defendants from enforcing against the plaintiff a rate of fare not exceeding five cents, and from interfering in any way with the alleged right of the plaintiff to charge a reasonable rate. Service of the complaint was made on all the defendants before noon of the same day.

At 1:55 o'clock in the afternoon of that day there were served on counsel for the Interborough Rapid Transit Company a petition in a summary proceeding and complaints in two actions brought in the state court, by the defendants, for the purpose of preventing the plaintiff from increasing the fare from 5 to 7 cents, as proposed in a tariff schedule filed by the plaintiff, and to compel the plaintiff to perform its alleged agreement not to charge more than a 5-cent fare. There were also served upon the plaintiff orders to show cause why an interlocutory injunction should not be granted, and an order directing the plaintiff to file its answer to the petition and proceed with a summary trial on February 20th, and orders restraining the plaintiff, pending the hearing of the motions, from doing any of the acts as to which relief was demanded in the complaints and petition.

Thereafter, and on February 17th, the plaintiff filed its ancillary bill, setting forth the foregoing facts and alleging that the defendants are interfering with the primary and exclusive jurisdiction of this court over the subject-matter of the action first brought in this court, and made this application for an order restraining the defendants from prosecuting the two actions and the special proceeding in the state court.

The defendants oppose the granting of an interlocutory injunction in the ancillary action, principally on the grounds that the complaint in the original action fails to state facts sufficient to constitute a cause of action or to confer jurisdiction on the federal court; that the complaint in the original action involves rates that have been fixed by a contract entered into by parties, duly authorized by legislation giving them the right to fix the rates, and does not involve rates subject to regulatory power of the Legislature; that the filing of the original bill before the commencement of the actions and special proceeding in the state court, under the circumstances shown, gave this court no primary or exclusive control of the litigation as against the state court; and that only a statutory court, consisting of three judges, has the power to issue the interlocutory injunction demanded in the ancillary action, because such injunction would have the same effect as an interlocutory injunction, if issued in the original action.

A suit in equity in a court of the United States is commenced by the filing of the bill of complaint, and upon the filing of the bill the jurisdiction of the federal court attaches to the cause of action. Farmers' Loan & Trust Co. v. Lake Street Elevated Railroad Co., 177 U. S. 51, 20 S. Ct. 564, 44 L. Ed. 667; Humane Bit Co. v. Barnet (C. C.) 117 F. 316; Farbwerke Vormals Meister Lucius & Bruning v. Diarsenal Co. (D. C.) 21 F.(2d) 588. An action is commenced in the Supreme Court of the state of New York by service of a summons. Civil Practice Act, § 218. It therefore follows that the original action was begun by the plaintiff against the defendants in the federal court before the transit commission and the city of New York brought their actions and proceedings against this plaintiff in the state court.

Notwithstanding this, defendants contend that plaintiff's action in filing its bill before the transit commission had acted on the proposed new tariff schedule was precipitate, and that plaintiff's alleged "unseemly scramble" to get into court first requires this court to yield to the state court the primacy and exclusive control of the litigation, and to stay all proceedings in this court.

In Willcox v. Consolidated Gas Co. of New York, 212 U. S. 19, 39, 29 S. Ct. 192, 195 (53 L. Ed. 382, 15 Ann. Cas. 1034, 48 L. R. A. N. S. 1134), the Supreme Court said: "At the outset it seems to us proper to notice the views regarding the action of the court below, which had been stated by counsel for the appellants, the Public Service Commission, in their brief in this court. They assume to criticize that court for taking jurisdiction of this case, as precipitate, as if it were a question of discretion or comity, whether or not that court should have heard the case. On the contrary, there was no discretion or comity about it. When a federal court is properly appealed to in a case over which it has by law jurisdiction, it is its duty to take such jurisdiction (Cohens v. Virginia, 6 Wheat. 264, 404 5 L. Ed. 257), and in taking it that court cannot be truthfully spoken of as precipitate in its conduct. That the case may be one of local interest only is entirely immaterial, so long as the parties are citizens of different states, or a question is involved which by law brings the case within the jurisdiction of a federal court. The right of a party plaintiff to choose a federal court, where there is a choice, cannot be properly denied."

In Harkrader v. Wadley, 172 U. S. 148, 19 S. Ct. 119, 43 L. Ed. 399, the Supreme Court said: "When a state court and a court of the United States may each take jurisdiction of a matter, the tribunal where jurisdiction first attaches holds it, to the exclusion of the other, until its duty is fully performed and the jurisdiction involved is exhausted; and this rule applies alike in both civil and criminal cases."

In Prout v. Starr, 188 U. S. 537, 545, 23 S. Ct. 398, 401 (47 L. Ed. 584), the same court spoke as follows: "The jurisdiction of the Circuit Court could not be defeated or impaired by the institution, by one of the parties, of subsequent proceedings, whether civil or criminal, involving the same legal questions, in the state court."

In Kline v. Burke Construction Co., 260 U. S. 226, 229, 43 S. Ct. 79, 81 (67 L. Ed. 226, 24 A. L. R. 1077), the court said: "It is settled that, where a federal court...