Litvak Meat Company v. Baker

• Decision Date: 12 July 1971
• Docket Number: No. 453-70.,453-70.
• Citation: 446 F.2d 329
• Parties: LITVAK MEAT COMPANY, Plaintiff-Appellant, v. George P. BAKER et al., Defendant-Appellee, and Scott Truck Line, Inc., a Nebraska Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

446 F.2d 329 (1971)

LITVAK MEAT COMPANY, Plaintiff-Appellant, v. George P. BAKER et al., Defendant-Appellee, and Scott Truck Line, Inc., a Nebraska Corporation, Defendant-Appellant.

No. 453-70.

United States Court of Appeals, Tenth Circuit.

July 12, 1971.

Harold A. Feder, Denver, Colo., for plaintiff-appellant.

Douglas McHendrie, Denver, Colo., for defendant-appellee.

Roger Sollenbarger, Denver, Colo., for defendant-appellant.

Before LEWIS, Chief Judge, and ALDISERT^* and BARRETT, Circuit Judges.

ALDISERT, Circuit Judge.

Four claims for damage to fresh meat shipments were brought by a shipper against two common carriers, the Penn Central Railroad and the Scott Truck Lines. Following a motion by the railroad to quash service on the grounds that the minimum contacts required for in personam jurisdiction in Colorado were not present, the claims against Penn Central were dismissed. This appeal by both the shipper and the motor truck carrier¹ presents three separate questions of jurisdiction:

(1) Whether Penn Central met the appropriate tests of doing business in Colorado to make it there amenable to service of process in a diversity suit based on negligence;

(2) Whether the alleged amount in controversy meets the statutory requirement in diversity cases. 28 U.S.C. § 1332;

(3) Alternatively, whether liability of a carrier for damage to an interstate shipment is governed exclusively by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 20(11), thus immunizing Penn Central from suit in Colorado because it does not operate a line of railroad in that state.

The complaint charged that plaintiff delivered the chilled meat to Scott in Adams County, Colorado, where it was placed in Scott's trailers and thence trucked to Chicago, Illinois, where the trailers were placed in Penn Central's flatcars for shipment east; that the meat arrived at its destination in a "tainted, sour, or putrid condition," (first claim), "partially frozen" (second claim); "dark in color, sticky in places, dull in appearance," (third and fourth claims). Both defendants were charged with negligence in failing to provide the meat with proper refrigeration facilities while in transit (all claims); the railroad with use of defective flatcars and improper shifting thereof resulting in delivery delays (third and fourth claims). Although each claim sounded in negligence based on diversity jurisdiction against both defendants, it was additionally averred that plaintiff "relies in part" upon provisions of the Carmack Amendment and that the parties "have in their possession copies of all relevant documents relating to the subject matter of this claim including inter alia the uniform order bill of lading."

I.

The first question is whether the district court erred in finding insufficient contacts in Colorado to render Penn Central amenable to service in that state. From affidavits filed in support of the railroad's motion to dismiss under Rule 12(b) and answers to interrogatories, it appears that Penn Central maintains a Denver, Colorado, office, which is listed in both the white and yellow pages of the telephone directory and is staffed by three employees — a district sales manager, a sales representative, and an office manager — who from there solicit business for the company in Colorado, Wyoming and Utah. In addition, the Denver staff keeps records, charts Colorado business trends and conditions, and responds to inquiries relating to company services, including routings, rates, movements, and handling of freight. Office rent and staff salaries are paid by the railroad company, which also sends its vice-president and vice-president in charge of sales several times a year to visit Colorado on business. The railroad has 399 clients or accounts located in Colorado. Approximately 9,000 freight cars annually originate in that state destined for Penn Central carriage. Personal property taxes are paid by the railroad to the City and County of Denver.

There is formidable authority for the proposition that in diversity cases, state law determines whether a corporation is subject to process in the state and that federal decisions are important only in ascertaining whether the state law is within constitutional bounds. Arrowsmith v. United Press International, 320 F.2d 219 (2 Cir., 1963).² In Arrowsmith, the majority of the court, en banc, adopted the view originally propounded by Judge Goodrich of the Third Circuit,³ and overruled Jaftex Corp. v. Randolph Mills, Inc., 282 F.2d 508 (2 Cir. 1960), which had proclaimed a federal standard. Jaftex still commands the support of many commentators.⁴

We do not perceive this interesting procedural question to remain open in this circuit. In Walker v. General Features Corp., 319 F.2d 583, 585 (10 Cir. 1963), the court, speaking through Judge Hill, said that the question of "doing business" must "be resolved by application of state or local law rather than federal law." Moreover, the resolution of the state-federal issue would not be necessitated in the instant case because we are not convinced that there is a basic distinction between Colorado's liberal jurisdictional tests, Vandermee v. District Court, 164 Colo. 117, 433 P.2d 335 (1967); White-Rodgers v. District Court, 160 Colo. 491, 418 P.2d 527 (1966), and the landmark due process decisions of the Supreme Court, properly regarded also as expressions of federal amenability-to-process policy. Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); International Shoe v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).⁵

Upholding jurisdiction under Colorado's long arm statute in Vandermee, the court found minimum contracts present when a foreign corporation, though neither maintaining a sales office nor conducting direct sales within Colorado, nevertheless had a distributor who "has set up channels of sales promotion and distribution in Colorado for the purpose of selling products in Colorado." Likewise jurisdiction was held to lie in White-Rodgers, where an agent maintained a company office in his home, listed his home telephone as that of his company's, solicited orders and forwarded correspondence in furtherance of his company's interest. Indeed, the Colorado Supreme Court has expressly emphasized the liberality of the state's jurisdictional policy in Safari Outfitters v. Superior Court, 167 Colo. 456, 448 P.2d 783, 784 (Colo.1968): "By enacting the long arm statutes our legislature intended to extend the jurisdiction of our courts to the fullest extent permitted by the due process clause of the fourteenth amendment to the United States Constitution."⁶

We are persuaded that the facts presented in the instant case amply met the tests of Vandermee and White-Rodgers under a state amenability-to-process standard coextensive with federal standards and constitutional due process tests. We hold that the district court erred in its conclusion that there were insufficient minimal contacts to subject Penn Central to service of process.

II.

Apart from its attack on jurisdiction over the person, Penn Central advances a second contention designed to defeat subject matter jurisdiction. It argues that since the complaint consists of four separate claims, not one of which exceeds $10,000,⁷ plaintiff failed to meet the amount in controversy requirement of 28 U.S.C. § 1332.⁸ In contending that a single plaintiff bringing a multi-count complaint in a diversity action may not aggregate claims to satisfy this requirement, Penn Central seems to be arguing against a proposition that appears to have the persuasion of settled law both in this circuit, Kimel v. Missouri State Life Ins. Co., 71 F.2d 921 (10 Cir. 1934), and elsewhere.⁹ In Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), the landmark case prohibiting the aggregation of claims by two or more plaintiffs, even members of a class, the court was careful to observe: "Aggregation has been permitted * * * in cases in which a single plaintiff seeks to aggregate two or more of his own claims against a single defendant. * * *" Professor Wright comments: "If a single plaintiff is suing a single defendant, Rule 18 permits the plaintiff to join as many claims as he may have against the defendant, regardless of their nature, and the value of all the claims is added together in determining whether the jurisdictional amount is met," Wright, at 121. The only distinction between this principle and the instant case is that here there is a single plaintiff and two defendants. We perceive this to be a distinction without a difference where, as here, liability is asserted against both defendants in all four claims. We accept the conclusion reached in Siegerist v. Blaw-Knox Co., 414 F.2d 375, 381 (8 Cir. 1969), that the claims "were pressed against the defendants jointly and the aggregate value of these claims is the proper measure for determining jurisdiction under 28 U.S.C. § 1332(a). 1 Moore's Federal Practice, ¶ 0.97 2 (2d ed. 1964)."

III.

For its final argument Penn Central presents a second attack on jurisdiction over the person, contending that the Carmack Amendment to the Interstate Commerce Act ¹⁰ has preempted other substantive law in this field, and that, under its provisions, Penn Central may not be subject to process in Colorado because it does not operate a line of railroad in that state.¹¹

It is settled that the Carmack Act is constitutional, Atlantic Coast Line v. Riverside Mills, 219 U.S. 186, 31 S.Ct. 164, 55 L.Ed. 167 (1911), that it supersedes any state legislation on the same subject, Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913) and that any "rule, regulation, or other limitation of any character whatsoever" purporting to limit its effect are by its terms declared null and void, Missouri Pacific R.R. v. Elmore and Stahl, 377...