Louisville & N.R. Co. v. Western Union Telegraph Co.

• Decision Date: 28 September 1914
• Docket Number: 758.
• Citation: 218 F. 91
• Parties: LOUISVILLE & N.R. CO. v. WESTERN UNION TELEGRAPH CO.
• Court: U.S. District Court — Eastern District of Kentucky

218 F. 91

LOUISVILLE & N.R. CO. v. WESTERN UNION TELEGRAPH CO.

No. 758.

United States District Court, E.D. Kentucky.

September 28, 1914

E. S Jouett, Henry L. Stone, and Jas. B. Wright, all of Louisville, Ky., for plaintiff.

Richards & Harris and Humphrey, Middleton & Humphrey, all of Louisville, Ky., for defendant.

COCHRAN District Judge.

This cause is before me on plaintiff's motion to remand. It is a civil suit at law, brought in the circuit court of Fayette county, Ky., in this district, and removed thence to this court by the defendant. The plaintiff seeks therein to recover of the defendant $682,972.95 and interest from August 17, 1913. Question is made as to the exact nature of plaintiff's cause of action as set forth in its petition. But for the purposes of this motion I will accept it to be as plaintiff claims it is; that is, a suit to recover that sum as a reasonable rental for one year from August 17, 1912, for the use and occupation of its right of way and other property located in 13 different states by the defendant for its telegraph line and apparatus. The ground of the removal was the diversity of citizenship between the parties.

The plaintiff is a Kentucky corporation and citizen, and the defendant is a New York corporation and citizen. No question is made as to the regularity of the removal proceedings. The sole ground of the motion to remand is that the cause was not removable; and the ground upon which it is contended that it was not removable is that it could not have been brought originally in this court.

It is clear that the suit could not have been brought originally in this court, notwithstanding the diversity of citizenship between the parties. This is so because of the 'but' clause of section 51 of the Judicial Code (Comp. St. 1913 Sec. 1033), which is in these words:

'But where the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or the defendant.'

This district is not the district of the residence of the defendant, because it is a foreign corporation. Shaw v. Quincy Mining Co., 145 U.S. 444, 12 Sup.Ct. 935, 36 L.Ed. 768. It is not the district of the residence of the plaintiff, for, though a large part of plaintiff's railroad system is located in this district, its principal office is at Louisville, in the Western district of this state. Galveston, H. & S.A.R. Co. v. Gonzales, 151 U.S. 496, 14 Sup.Ct. 401, 38 L.Ed. 248. This decision is not only an authority for the position that the district of the plaintiff's residence is the Western district, and not this, but also for the position that, this being so, the suit could not have been brought originally in this court.

It follows, then, that the removability of the suit and the decision of the motion to remand depend solely on the question whether the circumstance that the suit could not have been brought originally in this court rendered it nonremovable, or, more specifically, whether the place where a suit is required to be brought, if brought in the federal court, is an element in determining its removability when brought in the state court. And on this question the decision of the Supreme Court in the case of Ex parte Wisner, 203 U.S. 449, 27 Sup.Ct. 150, 51 L.Ed. 264, is a direct authority in support of the position that it is. It was there held that a civil suit at law, brought by a citizen and resident of Michigan against a citizen and resident of Louisiana in a state court of Missouri within the Eastern district thereof, and removed by defendant to the Circuit Court of that district, was nonremovable, and a mandamus was awarded against that court, which had assumed jurisdiction of the suit, commanding it to remand the suit to the state court. It was so held, because the suit could not have been brought originally in the Circuit Court, or, in other words, that district was not the place in which it could have been brought, if brought in a federal court, instead of a state court.

There is just one particular in which that case, in its facts, differs from the one in hand, and that is that there the plaintiff was a nonresident and noncitizen of the state where the suit was brought, whereas here the plaintiff is a citizen and resident of the state where the suit was brought. But there is nothing in this difference calling for a difference in decision. For here, as there, the suit was brought in a district of which the plaintiff was a nonresident, and because of this circumstance the suit could not have been brought originally in this court, and the decision in the Wisner Case was placed, and could only have been placed, on the ground that in no case can a suit be removed to a federal court that could not have been brought originally in that court. And in the cases of Shawnee National Bank v. M., K. & T. Ry. Co. (C.C.) 175 F. 458, and Wheeler v. A., T. & S.F. Ry. Co. (not reported), the decision in the latter case being quoted in that of Stone v. C., B. & Q. Ry. Co. (D.C.) 195 F. 832, which in their facts are exactly like those of the case in hand, the Wisner Case was followed and the suits were held nonremovable.

In the Shawnee National Bank Case a suit was brought in a court of the state of Oklahoma within the Eastern district thereof by a citizen of that state resident in the Western district against a foreign corporation; i.e., a corporation of Kansas, and removed to the Circuit Court of the Eastern district by the defendant. It was held that the suit was nonremovable, and it was remanded to the state court. In the Wheeler Case a suit was brought in a court of the state of Missouri within the Western district thereof by a citizen of that state, resident in the Eastern district, against a foreign corporation--i.e., a corporation of Kansas-- and removed to the Circuit Court of the Western district by the defendant. There it was likewise held that the suit was nonremovable, and it was remanded to the state court. I think that there is no escaping the conclusion that, if the Wisner Case is binding on the point decided therein, these two cases were decided as they should have been.

The result of this reasoning is to bring us square up against the decision of the Supreme Court in the Wisner Case. Ordinarily a lone District Judge, when confronted with such a situation as this, has nothing to do but to obey. But here I am going to treat the matter as open for discussion as to whether it is incumbent on me to follow this decision. And, before dealing directly with it, certain preliminary matters call for consideration.

In the first place I would note the state of opinion prior to the decision of that case. There had been no decision of the Supreme Court dealing with that question prior thereto, but there had been numerous cases in the lower federal courts in which it had been considered and decided. And there had been some conflict in the decisions. Judge Keller of the Southern district of West Virginia, in his opinion in the case of Foulk v. Gray (C.C.) 120 F. 156, where the decision was against the removability of the suit, cites, as in accord therewith, the following decisions of the lower federal courts, to wit: Yuba County v. Pioneer Gold Mining Co. (C.C.) 32 F. 183; Telegraph Co. v. Brown (C.C.) 32 F. 337; Pitkin Mining Co. v. Markell (C.C.) 33 F. 386; Harold v. Mining Co. (C.C.) 33 F. 529; Tiffany v. Wilce (C.C.) 34 F. 230; Cooley v. McArthur (C.C.) 35 F. 372; Central T. Co. v. Virginia, etc., Co. (C.C.) 55 F. 769.

But, as I read these decisions, none of them but the cases of Yuba County v. Pioneer Gold Mining Co. and Harold v. Mining Co. involved the question or were relevant thereto. The decision in the Yuba Co. Case was by Judge Sawyer, concurred in by Justice Field and Judge Sabin. It went so far as to hold that a suit could not be removed by the nonresident defendant, even though it had been brought in the district of plaintiff's residence. That in the Harold Case was by Judge Hallett, concurred in by Judge (afterward Justice) Brewer. But these cases were subsequently overruled. The Yuba County Case was overruled by that of Wilson v. Telegraph Co. (C.C.) 34 F. 561, in which the opinion was delivered by Justice Field and concurred in by Judge Sawyer. In referring to the Yuba County Case he said:

'The opinion in the case was written by my associate, the Circuit Judge; but I concurred in it, and the judgment which followed. I have, however, long been satisfied that we fell into an error, and I am happy that we have so early an opportunity of correcting it.'

The Harold Case was overruled in the case of K.C. & T. Ry. Co. v. Interstate Lumber Co. (C.C.) 37 F. 3, in which the opinion was delivered by Judge Brewer. In referring to the Harold Case he said:

'I am aware that in the case of Harold v. Mining Co. (C.C.) 33 F. 529, I concurred with Judge Hallett in an opinion different from that herein expressed; but further reflection, after hearing the question discussed at length and frequently, has satisfied me that that opinion was erroneous.'

Judge Keller also cites as against the removability of the suit these two decisions of the Supreme Court, to wit: Shaw v. Mining Co., 145 U.S. 444, 12 Sup.Ct. 935, 36 L.Ed. 768; Mexican, etc., Ry. Co. v. Davidson, 157 U.S. 201, 15 Sup.Ct. 563, 39 L.Ed. 672. But here also, as I read these decisions, neither one of them involved the question, and the Shaw Case is not relevant thereto. The Davidson Case is relevant thereto, and further note of it will be taken in the course of the discussion.

After the case of Foulk v. Gray, and prior to the Wisner Case there was no case in the lower federal courts, as far as my reading goes, in which it was...