Parks v. New York Times Company

Decision Date19 November 1962
Docket NumberNo. 19112.,19112.
Citation308 F.2d 474
PartiesFrank W. PARKS and John Patterson, Appellants, v. The NEW YORK TIMES COMPANY, Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

M. Roland Nachman, Jr., Sam Rice Baker, Ralph Smith, Jr., Clinton E. Moore, R. E. Steiner, III, Montgomery, Ala., for appellants, Steiner, Crum & Baker, Calvin M. Whitesell, Montgomery, Ala., of counsel.

T. Eric Embry, Birmingham, Ala., Thomas F. Daly, New York City, Beddow, Embry & Beddow, Birmingham, Ala., Lord, Day & Lord, New York City, for appellee, New York Times Co., Herbert Wechsler, Saul L. Sherman, Ronald S. Diana, New York City, Roderick MacLeod, Birmingham, Ala., of counsel.

Before BROWN and BELL, Circuit Judges, and AINSWORTH, District Judge.

GRIFFIN B. BELL, Circuit Judge.

This appeal is from an interlocutory order of the District Court pursuant to Title 28 U.S.C.A. § 1292(b) denying motions to remand. The opinion of the District Court which accompanied the order is reported in 195 F.Supp. 919 (M.D. Ala., 1961). The separate cases of the two appellants were consolidated for hearing in the District Court and here on appeal.

Appellant Parks sued The New York Times Company, a non-resident of Alabama and four individual residents in the Circuit Court of Montgomery County, Alabama for libel growing out of an advertisement appearing in the March 29, 1960 issue of The New York Times. The names of the resident defendants appeared as endorsers of the material contained in the advertisement. The suit of appellant Patterson was in the same court and on the same basis. A more complete statement of the background facts is set out in our decision on a suit brought by the resident defendants against appellant Patterson seeking relief, inter alia, from the consequences of these and other libel suits. Abernathy et al. v. Patterson, 5 Cir., 1961, 295 F.2d 452.

The question before us is whether appellee, The New York Times Company, could remove the suits of appellants to the Federal Court. The statutory period within which to remove had long since expired. Title 28, § 1446(b). Removal was sought under the doctrine of fraudulent joinder of the resident defendants. And, of course, the merits of the case including whether the advertisement was in fact libelous are not before us.

Five libel suits arose from the advertisement. All were filed in the state court against appellee and the four individual defendants, except that in the Patterson suit a Georgia resident was also named as a party defendant. The plaintiffs in the respective suits were Patterson, the Governor of Alabama, three city commissioners of Montgomery, Messrs. Sullivan, James and Parks, and Sellers, a former city commissioner.

The Sullivan and James cases have been tried. A $500,000 verdict for plaintiff against all of the defendants was rendered in the Sullivan case on November 3, 1960. A like verdict was rendered in the James case February 1, 1961. A motion for new trial filed by The Times was denied on March 17, 1961 and that case is now on appeal in the Supreme Court of Alabama. New York Times Co. v. Sullivan, 114 So.2d 25. A similar motion in the James case was pending when these cases were removed on April 13, 1961.

The petition for removal was based on diversity of citizenship between the plaintiffs in each case and The New York Times Company, Title 28, § 1441(a). We are not concerned with removal of an action based on the constitution or laws of the United States, nor is there any claim of a separate or independent claim being joined. Title 28 U.S.C. A. § 1441 (b), (c). It was the position of The Times that it did not know of the fraudulent joinder until after the trials of the Sullivan and James cases in the state court when it became clear from uncontroverted evidence that the resident defendants had not in any manner authorized or consented to the using of their names as endorsers of the advertisement which gave rise to the alleged libel. The motions to remove set out explicitly that it became apparent to The Times after these trials and after the argument of counsel for plaintiffs to the juries therein that the theory of liability against the resident defendants was based on an assumed duty on the part of the resident defendants to disavow any connection with the advertisement.

The District Court determined that there had been a fraudulent joinder and denied the motions to remand. The evidence before the court on the motions was that adduced in the Sullivan case, as contained in a transcript of that trial introduced by agreement, the deposition of the Georgia defendant in the Patterson case which the trial court ordered taken ex moro motu by a court appointed amicus curiae. He also concluded that The Times had acted timely in the premises, a question we do not reach.

We take as a general guideline the admonition of the Supreme Court in Shamrock Oil & Gas Corp. v. Sheets, 1940, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214, a unanimous opinion, in reference to the administration of the removal statutes:

"* * * The power reserved to the states under the Constitution to provide for the determination of controversies in their courts, may be restricted only by the action of Congress in conformity to the Judiciary Articles of the Constitution. `Due regard for the rightful independence of state governments which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the statute has defined.\' Healy v. Ratta, 292 U.S. 263, 270 78 L.Ed. 1248, 1253, 54 S. Ct. 700."

And the rule applicable to fraudulent joinder as it obtains in this case was set out for this court in an opinion by Judge Sibley in Dudley v. Community Public Service Co., 5 Cir., 1939, 108 F. 2d 119, a case involving a petition for removal where a resident was joined with a non-resident defendant and doubt existed as to the liability of the resident defendant because of lack of exact precedent:

"* * * We therefore hold that on the allegations of the petition there appears to be a probable case in law against Short, as well as against the Community Public Service Company, notwithstanding the application to them of the Compensation Act. By consequence it does not appear that Short was fraudulently joined. See Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 34 S.Ct. 278, 58 L.Ed. 544. That the defeat of removal might have been a motive in joining Short is not important, if in good faith he is sought to be held liable. Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S.Ct. 84, 76 L.Ed. 233, 77 A.L.R. 904, and cases cited. Though for lack of an exact precedent there may be doubt whether Short is legally liable, that would not render his joinder fraudulent. Morris v. E. I. Dupont Co., 8 Cir., 68 F.2d 788; Wells v. Missouri Pac. R. Co., 8 Cir., 87 F.2d 579. The case ought to have been remanded for trial in the State courts."

Cf. Stone v. Foster, N.D.Ark., 1958, 163 F.Supp. 298, where removal on the basis of fraudulent joinder was premised on the fact that no case was made out in the state court where the trial resulted in a mistrial against the defendants. The motion to remand was granted principally because the case against the resident defendant was submitted by the court to the jury. There was no directed verdict in his favor and the court felt that there must have been some testimony sufficient in the opinion of the Arkansas State Court to sustain a verdict for the plaintiff against the resident defendant.

In Chicago, Rock Island & Pacific Ry. Co. v. Schwyhart, 1913, 227 U.S. 184, 33 S.Ct. 250, 57 L.Ed. 473, Mr. Justice Holmes speaking for the court in an unanimous opinion laid down the following applicable rule:

"On the question of removal we have not to consider more than whether there was a real intention to get a joint judgment and whether there was a colorable ground for it shown as the record stood when the removal was denied."

Morris v. E. I. Dupont de Nemours & Company, 8 Cir., 1934, 68 F.2d 788 teaches that the determination of fraudulent joinder is to be based on whether there was a real intention on colorable grounds to procure a joint judgment. Doubt as to whether under the state law a case of joint liability is stated, or doubt with respect to the allegations concerning the resident defendants being false as when the question depends upon the credibility of witnesses or the weight of evidence will not render the joinder fraudulent. On the other hand, there must be some reasonable basis for believing that there is joint liability. The joinder is fraudulent if it is clear that, under the law of the state in which the action is brought, the facts asserted by the plaintiff as the basis for the liability of the resident defendant could not possibly create such liability so that the assertion of the cause of action is as a matter of local law plainly a sham and frivolous. And a joinder is fraudulent if the facts asserted with respect to the resident defendant are shown to be so clearly false as to demonstrate that no factual basis existed for any honest belief on the part of plaintiff that there was joint liability.

Wells v. Missouri Pacific R. Co., 8 Cir., 1937, 87 F.2d 579, holds that the burden on a motion to remand to the state court is on the party who removed to the federal court, and that a complaint in the state court is good as against a motion to remove if it evidences a real intention to get a joint judgment, and if colorable ground for such judgment is shown. It follows Morris v. Dupont, supra, in the view that doubtful issues of law due to absence of definite pronouncements by the state supreme court are to be tried in the court having original jurisdiction of the case and are not to be determined in a removal proceeding.

The doctrine is stated as follows in Moore's Commentary on the United States Judicial Code, Par. 0.03 (35), p. 234-236:

"* * * The usual case

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