Macon Grocery Company v. Atlantic Coast Line Railroad Company

• Decision Date: 17 January 1910
• Docket Number: No. 351,351
• Citation: 54 L.Ed. 300,30 S.Ct. 184,215 U.S. 501
• Parties: MACON GROCERY COMPANY et al., Appts., v. ATLANTIC COAST LINE RAILROAD COMPANY et al
• Court: U.S. Supreme Court

215 U.S. 501

30 S.Ct. 184

54 L.Ed. 300

MACON GROCERY COMPANY et al., Appts.,

v ATLANTIC COAST LINE RAILROAD COMPANY et al.

No. 351.

Argued October 20, 21, 1909.

Decided January 17, 1910.

Messrs. William A. Wimbish and Edgar Watkins for appellants.

Messrs. Henry L. Stone and Claudian B. Northrop for appellees.

Mr. Justice White delivered the opinion of the court:

This litigation was commenced on the equity side of the circuit court of the United States for the southern district of Georgia, by the filing on July 25, 1908, of a bill on behalf of the present appellants, all citizens of the state of Georgia, who are wholesale dealers in groceries and food products and like commodities. The defendants named in the bill are the appellees in this court, railroad corporations of states other than Georgia, viz., the Atlantic Coast Line Railroad Company, the Louisville & Nashville Railroad Company, the Nashville, Chattanooga, & St. Louis Railway Company, the Southern Railway Company, and the Cincinnati, New Orleans, & Texas Pacific Railway Company.

Briefly stated, the object of the bill was to restrain the putting into effect, by the interstate carriers just named, of proposed advances in rates on fresh meats, grain products, hay, and packing-house products within the territory of what is known as the Southeastern Freight Association. That territory, roughly described, embraces the states of South Carolina, Florida, Georgia, points in Tennessee, and that portion of Alabama east of a line drawn from Chattanooga through Birmingham, Selma, and Montgomery to Pensacola. It was averred that freight tariffs embodying the proposed advances in rates had been filed with the Interstate Commerce Commission, that notice had been given that such tariffs would become effective on August 1, 1908, and that practically every interested line of railroad within the territory in question had joined in such tariffs as participating carriers. The advance in rates was averred to be an 'arbitrary and unlawful exaction,' and to be the direct outcome of understandings and agreements in suppression of competition and in unlawful combination in restraint of interstate trade, arrived at and made effective through the agency of the Southeastern Freight Association and other affiliated associations, and that the acts of such combinations in making the advance of rates complained of was the result of a conspiracy unlawful as well at common law as under the statutes of the United States. Averring that to permit the going into effect of the proposed unjust and unreasonable rates would entail irreparable loss and injury to complainants and others similarly situated, would operate to the prejudice of the public interest, and would bring about a multiplicity of suits for reparation, the bill prayed the allowance of an injunction pendente lite, restraining the putting into effect of the proposed advances, and that, upon a final hearing, a decree might be awarded perpetually enjoining such advances.

Specially appearing for the purpose, the various defendants respectively filed a plea to the jurisdiction, each defendant asserting in substance an exemption from being sued in a district of which it was not an inhabitant. Demurrers to the pleas to the jurisdiction were sustained. Thereupon, without waiving the benefit of the pleas, defendants jointly demurred to the bill upon mumerous grounds. Without specifically passing on the demurrer, the court heard the application for an injunction upon affidavits and documents submitted on behalf of the complainants, and on August 1, 1908, announced its opinion sustaining the contention of the complainants, and directing the injunction prayed to issue upon the condition that complainants should, within ten days, present their complaint to the Interstate Commerce Commission for investigation and determination of the reasonableness of the rates involved. 163 Fed. 738. Two days afterwards an order was entered, in which among other statements, it was recited——'that the complainants, together with other persons in the cities of Atlanta, Columbus, Rome, and Athens, Georgia, have this day filed with the Interstate Commerce Commission their complaint, praying the Commission to investigate and determine the reasonableness of the rates involved, also to declare what are just and reasonable maximum rates.'

The order decreed that the defendants to the action and each of them—'be and they are hereby jointly and severally enjoined from enforcing collection of the advance in rates made effective August 1st, 1908, from Ohio and Mississippi river crossings, Nashville, Tennessee, and points with relation thereto, to all points within the state of Georgia, on classes B, C, D, and F, fresh meats, C, L, grain products, hay, and packing-house products; this injunction to continue and remain in force pending an investigation and determination of the reasonableness of the rates involved, by the Interstate Commerce Commission, or until further order of the court.'

Thereupon an appeal was taken to the circuit court of appeals for the fifth circuit. It was there held that the case presented 'for necessary consideration the proper construction of the act to regulate commerce,' and that the jurisdiction of the court did not rest solely upon diversity of citizenship of the parties. The court, being of opinion 'that the sound construction of the different provisions of the act to regulate commerce, as amended and now in force, necessarily forbids the exercise of the jurisdiction attempted to be invoked by the bill' , reversed the decree of the circuit court, and remanded the case to that court with instructions to dismiss the bill without prejudice.

Assignments of error, eighteen in number, have been filed, wherein, in various forms of statements, appellants assail the action of the circuit court of appeals in adjudging that the circuit court was without jurisdiction over the subject-matter of the bill. The appellees also, in the argument at bar, press upon our notice, as they did below, the claims made in the special pleas to the jurisdiction filed in the circuit court. It is, of course, the duty of this court to see to it that the jurisdiction of the circuit court was not exceeded (Louisville & N. R. Co. v. Mottley, 211 U. S. 149, 152, 53 L. ed. 126, 127, 29 Sup. Ct. Rep. 42, and cases cited), and we shall dispose of the case before us by considering and deciding the last-mentioned contention. The basis of the claim that the circuit court had not acquired jurisdiction over the person of the defendants was that none of the defendants was an inhabitant of the district in which the suit was brought, and that the suit being one 'wherein the jurisdiction is not founded only on the fact that the action is between citizens of different states, but is based also upon acts of Congress of the United States relating to interstate commerce, and alleged causes of action arising thereunder,' the defendant could not be sued outside of the district of which it was an inhabitant. As cause of demurrer to the pleas, the complainants stated 'that the controversy presented by the bill is wholly between citizens of different states, and is solely founded upon diversity of citizenship.' While sustaining the demurrer, the circuit court yet declared:

'It is true that, it this case, the illegality of the alleged increase in rates must necessarily, in large measure, be determined by the Federal law. The legality or illegality of the alleged combination in restraint of trade must be determined by the same law, and it seems to be conceded that, generally speaking, this court would not have jurisdiction of these questions finally except under conditions which do not exist here. That is to say, the court can only, for final determination, entertain the Federal question in the district of which the defendants are inhabitants.'

Despite these views, however, as the court considered, if the averments of the bill were taken as true, there was 'a threatened and immediate, violation of the Federal law of the gravest character to a large number of people,' irreparable injury would be occasioned if the increase in rates were allowed to go into effect, and as there was not time for those affected to have protection or seek recourse elsewhere, jurisdiction was entertained for the purpose of giving temporary relief.

The pertinent section of the statute regulating the original jurisdiction of circuit courts of the United States is the first section of the act of March 3, 1875, chap. 137, 18 Stat. at L. 470, as amended by the act of March 3, 1887, chap. 373, 24 Stat. at L. 552, as corrected by the act of August 13, 1888, chap. 866, 25 Stat. at L. 433, U. S. Comp. Stat. 1901, p. 508, reading as follows:

'That the circuit courts of the United States shall have original cognizance, concurrent with the court of the several states, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, and arising under the Constitution or laws of the United States . . . or in which there shall be a controversy between citizens of different states, in which the matter in dispute exceeds, exclusive of interest and costs, the sum or value aforesaid. . . . But . . . no civil suit shall be brought before either of said courts against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; 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.'

In Patton v. Brady, 184 U. S. 608, 46 L. ed. 713, 22 Sup. Ct. Rep. 493, discussing the question as to when a case may be said to arise under the Constitution of the United States, the court observed:

'It is said by Chief Justice Marsha...