McCarter v. Am. News-Paper Guild

• Decision Date: 23 March 1935
• Citation: 177 A. 835
• Parties: McCARTER et al. v. AMERICAN NEWS-PAPER GUILD et al.
• Court: New Jersey Court of Chancery

177 A. 835

McCARTER et al.

v. AMERICAN NEWS-PAPER GUILD et al.

Court of Chancery of New Jersey.

March 23, 1935.

Syllabus by the Court.

1. The question of the removability of a cause from this court to the federal court pursuant to section 71, title 28, U. S. C. (28

USCA § 71), is one for the determination of the state court in the first instance. It is not only the right, but the duty, of this court to inspect the record and determine whether or not such record, upon its face, shows the cause to be removable.

2. For the purposes of such determination, all the allegations in the bill of complaint are to be considered and taken as confessed.

3. Whether or not the state court makes an order for removal, the party seeking it may accomplish such removal by filing in the federal court a transcript of the proceedings in the state court, and complying with the requirements of the statute.

4. The mere filing of the transcript does not effect a prohibition of proceedings in this court; they may continue until it is judicially informed that its power over the cause has been suspended by operation of law.

5. Upon the filing of such transcript in the federal court, the question of removability may be there determined unaffected by any decision of this court.

6. To justify removal upon the grounds of a separable controversy and diverse citizenship, there must be shown to be a controversy wholly between citizens of different states which can be fully determined as between them, and complete relief afforded as to the separate cause of action without the presence of the resident defendants. In deciding whether such a separable controversy exists, the cause of action alleged in the plaintiff's pleading must be accepted as the only criterion of the decision, and, if it is there alleged that the cause of action is joint, and if it appears that some of the defendants are citizens of the same state with the plaintiff, it must be held that the suit is not removable.

7. The mere averment that a particular defendant has been joined for the fraudulent purpose of defeating removal will not suffice to avoid the rule stated; the showing must be such as compels the conclusion that the joinder is without right and made in bad faith.

8. The question as to whether or not the cause of action stated in the bill arose under the Federal Constitution must be determined from complainant's statement of his own claim unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose.

Suit by George W. C. McCarter and another, trustees, etc., and others against the American Newpaper Guild, Heywood Broun, and others. On petition by Heywood Broun to remove cause to United States District Court.

Order in accordance with opinion.

Abraham J. Isserman and Arthur T. Vanderbilt, both of Newark, for petitioner and consenting defendants.

Morris H. Cohn, of Newark, for complainants.

BERRY, Vice Chancellor.

The petition is filed by Heywood Broun, a nonresident defendant, and seeks the removal of the cause to the United States District Court for the District of New Jersey upon the grounds, as stated in the brief, (1) that it is a suit over which the United States District Court would have original jurisdiction under section 41 of title 28, U. S. Code (28 USCA § 41), and in which there is a controversy wholly between citizens of different states; and (2) that it is a suit in which the United States District Court would have original jurisdiction under section 41 and arises under the provisions of the Constitution of the United States.

The bill may be considered as one to restrain unlawful acts arising out of a labor strike, although so far as the trustee.complainants are concerned there may be material points of difference between the present suit and those injunction suits usually arising out of labor controversies. There are sixty-three defendants named in the bill; sixty-one of them, including the petitioner, are individual defendants, and two, the American Newspaper Guild and Newark Newspaper Guild, are voluntary unincorporated associations. It appears from the petition and annexed pleadings that the only nonresident defendant is the petitioner, Heywood Broun, but all of the other defendants have filed a "consent and joinder" to the petition. Upon the filing of the bill, an order to show cause with preliminary restraint was issued, and the present petition was filed with the court on the return day of the order to show cause. At the oral argument it was asserted by counsel for the petitioner that on presentation of this petition this court had no alternative but. to advise an order transferring the cause to the federal court This assertion was startling to say the least, and finds no support in our decisions. The rule is to the contrary. Upon the filing of such a petition it is not only the right, but "a duty which this court cannot escape," to inspect the record and to determine whether or not such record upon its face shows that the cause is removable. National Docks & N. J. Junction Connecting Railway Co. v. Pennsylvania Railroad Co., 52 N. J. Eq. 58, 59, 28 A. 71, affirmed 52 N. J. Eq. 590, 33 A. 50; National Union Bank v. Dodge, 42 N. J. Law, 316; Vermeule v. "Vermeule, 67 N. J. Law, 219, 54 A. 99; Holcombe v. Ames, 87 N. J. Eq. 486,

100 A. 609; Smathers v. Leith, 92 N. J. Eq. 165, 111 A. 406; Bilecki v. Erie Railroad Co.,

101 N. J. Law, 17, 127 A. 328; Eckel v. Shell Products, Inc., 113 N, J. Eq. 498, 167 A. 869. This question is one for decision of the state trial court in the first instance. National Docks & N. J. Junction Connecting Railway Co. v. Pennsylvania Railroad Col, supra; Noble v. Massachusetts Beneficial Association (C. C. N. X. 1891) 48 F. 337; Springer v. Howes (C. C. N. C. 1895) 69 F. 849; State v. Mosman, 231 Mo. 474, 133 S. W. 38. That court is at liberty to decide that the petition does not show a removable cause or is insufficient, upon its face, and for the purposes of the decision of that question all the allegations in the bill of complaint are to be considered and taken as confessed (National Docks & N. J. Junction Connecting Railway Co. v. Pennsylvania Railroad Co., supra; title 28, § 71, USCA note 565), although no action of the state court can confer or take away the right to remove a cause to a federal court. Whether or not the state court makes an order for removal, the party seeking it may accomplish such removal by filing in the federal court a transcript of the proceedings in the state court and complying with the requirements of the statute. Clippinger v. Missouri Valley Life Insurance Co. (C. C. Ohio, 1876) Fed. Cas. No. 2,901. But he does so at his peril. The mere filing of the transcript does not effect a prohibition of proceedings in this court; they may continue until it is judicially informed that its power over the cause has been suspended by operation of law. Eckel v. Shell Products, Inc., supra.

Upon the filing of a transcript in the federal court, the question of removability may be there determined upon a motion to remand. The jurisdiction of that court depends upon compliance or noncompliance with the federal law and not upon the decision of the state court Title 28, § 72 USCA note 373, and cases.

But to justify the removal upon the grounds of a separable controversy and diverse citizenship there must be shown to be a controversy wholly between citizens of different states which can be fully determined as between them, and complete relief afforded as to the separate cause of action with out the presence of the resident defendants. In deciding whether such a separable controversy exists, the cause of action alleged in the plaintiff's pleading must be accepted as the only criterion of the decision, and, if it is there alleged that the cause of action is joint, and if it appears that some of the defendants are citizens of the same state with the plaintiff, it must be held that the suit is not removable. National Docks & N. J. Junction Connecting Railway Co. v. Pennsylvania Railroad Co., Smathers v. Leith, Holcombe v. Ames, supra.

As above noted, petitioner asserts two grounds for removal. The first is that this is a suit of which the United States District Court would have original jurisdiction under section 41 (28 USCA), and in which there is a controversy wholly between citizens of different states.

Bearing in mind that for the purpose of this application it is necessary to treat the allegations of the bill of complaint as confessed, this point may be disposed of by noting that the bill alleges, in effect, a conspiracy. It matters not whether the term "conspiracy" is used in the bill; what is important is that the allegations of the bill import a conspiracy. Jonas Glass Co. v. Glass Bottle Blowers' Association, 72 N. J. Eq. 653, 66 A. 953; Baldwin Lumber Co. v. International Brotherhood, 91 N. J. Eq. 240, 109 A. 147; Lehigh Structural Steel Co. v. Atlantic Smelting...