National Mut. Ins. Co. v. Tidewater Transfer Co., 5674.

• Decision Date: 29 March 1948
• Docket Number: No. 5674.,5674.
• Citation: 165 F.2d 531
• Parties: NATIONAL MUT. INS. CO. OF DISTRICT OF COLUMBIA v. TIDEWATER TRANSFER CO., Inc., OF VIRGINIA.
• Court: U.S. Court of Appeals — Fourth Circuit

165 F.2d 531 (1947)

NATIONAL MUT. INS. CO. OF DISTRICT OF COLUMBIA v. TIDEWATER TRANSFER CO., Inc., OF VIRGINIA.

No. 5674.

Circuit Court of Appeals, Fourth Circuit.

December 31, 1947.

Writ of Certiorari Granted March 29, 1948.

Theodore Sherbow, of Baltimore, Md., for appellant.

Wendell D. Allen and Francis B. Burch both of Baltimore, Md. (John C. Goddin, of Richmond, Va. on the brief), for appellee.

Before PARKER, SOPER and DOBIE, Circuit Judges.

Writ of Certiorari Granted March 29, 1948. See 68 S.Ct. 746.

DOBIE, Circuit Judge.

The National Mutual Insurance Company of the District of Columbia, a corporation of the District of Columbia, filed in the United States District Court for the District of Maryland a civil action against Tidewater Transfer Company, Incorporated, a corporation of the State of Virginia. On motion of the defendant, the District Court dismissed the action upon the ground that the Act of Congress of April 20, 1940, 54 Stat. 143, was unconstitutional insofar as it attempts to confer on the United States District Court for the District of Maryland jurisdiction over a civil action between a citizen of the District of Columbia, as plaintiff, and a citizen of the State of Virginia, as defendant. From this judgment, an appeal has been taken to us.

Section 24 of the Judicial Code, paragraph 1(b), 28 U.S.C.A. § 41(1) (b) gave to the United States District Courts jurisdiction of suits of a civil nature "between citizens of different States;" while the statute before us added the words "or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory."

As far as we have been able to ascertain, the constitutionality of the Act of April 20, 1940, has never been passed upon by a federal appellate court; while a clear cut division of opinion is found in the cases dealing with this problem in the United States District Courts. The constitutionality of the statute has been upheld in Winkler v. Daniels, D.C., E.D.Va., 43 F. Supp. 265; Glaeser v. Acacia Mutual Life Association, D.C., N.D.Cal., 55 F.Supp. 925; Duze v. Woolley, D.C., D. Hawaii, 72 F.Supp. 422. The statute was held to be unconstitutional in Willis v. Dennis, D. C., W.D.Va., 72 F.Supp. 853; Feely v. Sidney S. Schupper Interstate Hauling System, D.C., D.Md., 72 F.Supp. 663; Wilson v. Guggenheim, D.C., E.D.S.C., 70 F.Supp. 417; Ostrow v. Samuel Brilliant Co., D. C., D.Mass., 66 F.Supp. 593; Behlert v. James Foundation of New York, D.C., S.D.N.Y., 60 F.Supp. 706; McGarry v. City of Bethlehem, D.C., E.D.Pa., 45 F.Supp. 385.

We first consider whether Congress, in enacting the Act of April 20, 1940, proceeded under power outlined in Article 3, Section 2 of the federal Constitution which defines the limits of the judicial power of the United States, or whether Congress proceeded under Article 1, Section 8(17) of this Constitution. Article 3, Section 2 of the Constitution provides that the judicial power of the United States shall extend to controversies "between Citizens of different States", while Article 1, section 8 (17) of the Constitution gives Congress power "to exercise exclusive Legislation in all Cases whatsoever" over the District of Columbia. We think that Congress here proceeded under Article 3, Section 2 of the Constitution and that we must affirm the judgment of the District Court declaring the Act of April 20, 1940, unconstitutional. Even though Congress here is deemed to have acted under Article 1, Section 8(17) of the Constitution, we still think (for reasons subsequently set out) that the Act in question is invalid.

In Hepburn and Dundas v. Ellzey, 2 Cranch 445, 2 L.Ed. 332, Chief Justice Marshall denied the jurisdiction of the United States Circuit (now District) Court on the ground that a citizen of the District of Columbia was not a citizen of a State. Said the great Chief Justice: "This depends on the act of congress describing the jurisdiction of that court." While it is true that he was interpreting only a federal statute (all that was necessary for a decision of the case), it should be noted that both the Constitution and the statute used precisely the same phrase "between Citizens of different States", hence it would seem that the phrase has the same meaning in the statute that it has in the Constitution. Chief Justice Marshall further stated in this case: "But as the act of congress obviously uses the word `state' in reference to that term as used in the (federal) constitution, it becomes necessary to inquire whether (the District of) Columbia is a state in the sense of that instrument." We are convinced that he thought that the District of Columbia was not a State within the meaning of Article 3, Section 2, of the Constitution. Near the end of the brief opinion, he declared: "It is extraordinary that the courts of the United States, which are open to aliens, and to the citizens of every state in the union, should be closed upon them." (Citizens of the District of Columbia.)

Then he concluded: "But this is a subject for legislative, not for judicial consideration." Counsel for appellant derive great satisfaction from this sentence and contend that the Chief Justice thereby meant that Congress had power, under Article 3, Section 2, of the Constitution, by appropriate legislation, such as the Act of April 20, 1940, to give jurisdiction to the federal courts of suits involving citizens of the District of Columbia.

We cannot adhere to this contention of counsel for appellant. In Willis v. Dennis, D.C., 72 F.Supp. 853, 855, Judge Paul said: "I have little idea that the great Chief Justice intended any such meaning or that he held any such view. I have no doubt that the term `legislative' was used in its broader sense and to emphasize the distinction between the power to make the law and the power to interpret it, which latter only is entrusted to the judiciary. In such a sense the formulation of all laws, whether they be embodied in the Constitution or be by enactment of Congress, are legislative functions. The opinion makes it clear that the Chief Justice found the barrier to be the Constitutional provision, not the mere inaction of Congress; and it is notable that for the 136 years following this was accepted as the basis of this decision."

Judge Paul, we believe, correctly interpreted the words in the Hepburn case, and those words, even though they may be classified as dicta, are entitled to no little weight.

In Corporation of New Orleans v. Winter, 1 Wheat. 91, 94, 4 L.Ed. 44, Chief Justice Marshall stated: "It has been attempted to distinguish a territory from the district of Columbia; but the court is of opinion that this distinction cannot be maintained. They may differ in many re- spects, but neither of them is a state in the sense in which the term is used in the constitution." (Italics ours.)

Said Chief Justice Fuller, in Hooe v. Jamieson, 166 U.S. 395, 397, 17 S.Ct. 596, 597, 41 L.Ed. 1049: "We see no reason for arriving at any other conclusion than that announced by Chief Justice Marshall in Hepburn and Dundas v. Ellzey, 2 Cranch 445, 2 L.Ed. 332, (Feb. term, 1805), `that the members of the American confederacy only are the states contemplated in the constitution'; that the District of Columbia is not a state within the meaning of that instrument, and that the courts of the United States have no jurisdiction of cases between citizens of the District of Columbia and citizens of a state." (Italics ours.)

In Downes v. Bidwell, 182 U.S. 244, 259, 21 S.Ct. 770, 776, 45 L.Ed. 1088, Mr. Justice Brown said: "The earliest case is that of Hepburn and Dundas v. Ellzey, 2 Cranch 445, 2 L.Ed. 332, in which this court held that, under that clause of the Constitution limiting the jurisdiction of the courts of the United States to controversies between citizens of different states, a citizen of the District of Columbia could not maintain an action in the circuit court of the United States." (Italics ours.)

Then, in O'Donoghue v. United States, 289 U.S. 516, 543, 53 S.Ct. 740, 747, 77 L.Ed. 1356, we find this statement of Mr. Justice Sutherland: "After an exhaustive review of the prior decisions of this court relating to the matter, the following propositions, among others, were stated as being established: "`1. That the District of Columbia and the territories are not states within the judicial clause of the Constitution giving jurisdiction in cases between citizens of different states.'" (Italics ours.)

These cases seem to establish the doctrine that Congress, when it acts under Article 3, Section 2 of the federal Constitution has no power to confer upon the District Courts of the United States jurisdiction over civil actions based upon the fact that some of the litigants are citizens of the District of Columbia. Indeed, we go further and assert that, whatever practical inconveniences or injustices may be thereby entailed, this doctrine is sound in principle.

The cases in the District Courts, holding the Act of April 20, 1940, constitutional seem to concede that this Act cannot be sustained under Article 3, Section 2, of the federal Constitution. These cases are grounded in the doctrine that Congress here proceeded under Article 1, Section 8, of the Constitution, which gives to Congress power "To exercise exclusive Legislation in all Cases whatsoever, over" the District of Columbia, and that the Act of April 20, 1940, is valid as an exercise of Congressional power under Article 1, Section 8, of the Constitution. Winkler v. Daniels, D.C., 43 F.Supp. 265; Glaeser v. Acacia Mutual Life Association, D.C., 55 F.Supp. 925. With this doctrine we cannot agree.

True it is that the legislative power of Congress over the District of Columbia under Article 1, Section 8, of the Constitution is plenary and far-reaching. Said Mr. Justice Shiras in Shoemaker v. United States, 147 U.S. 282, 300, 13 S.Ct. 361, 391, 37 L.Ed. 170: "* * * the United States possess full and unlimited...