Reese v. Holm

• Decision Date: 23 February 1940
• Docket Number: No. 134.,134.
• Citation: 31 F. Supp. 435
• Parties: REESE v. HOLM.
• Court: U.S. District Court — District of Minnesota

31 F. Supp. 435

REESE v. HOLM.

No. 134.

District Court, D. Minnesota, Third Division.

February 23, 1940.

Before SANBORN, Circuit Judge, and NORDBYE and SULLIVAN, District Judges.

C. U. Landrum and D. N. Lindeman, both of Detroit Lakes, Minn., for plaintiff.

J. A. A. Burnquist, Atty. Gen., Chester S. Wilson, Deputy Atty. Gen., and George B. Sjoselius, Sp. Asst. Atty. Gen., for defendant.

PER CURIAM.

This cause came on to be heard at St. Paul, Minnesota, on the 12th day of January, 1940, before JOHN B. SANBORN, United States Circuit Judge, GUNNAR H. NORDBYE, United States District Judge, and GEORGE F. SULLIVAN, United States District Judge, sitting as a statutory three-judge court, upon the application of the plaintiff for a preliminary injunction enjoining the defendant from enforcing against the plaintiff the provisions of Chapter 284, Session Laws of Minnesota for 1939.

The plaintiff brings this suit to enjoin Mike Holm, individually and as Registrar of Motor Vehicles and Secretary of State of the State of Minnesota, from enforcing against the plaintiff, a dealer in used motor vehicles, the provisions of Chapter 284, Session Laws of Minnesota for 1939,¹ which act is asserted by the plaintiff to be violative of the Constitution of the United States.

It is the contention of the plaintiff that said law is repugnant to Article I, Section 8, Clause 3, the commerce clause of the Constitution, U.S.C.A., in that it is a burden on interstate commerce; that it attempts to deprive the plaintiff of his liberty and property without due process of law and denies to him the equal protection of the laws in violation of Section 1 of the Fourteenth Amendment, and, further, that the act, in its requirements, results in the taking of the property of this plaintiff without just compensation, and contrary to the Constitution of the United States. It is the plaintiff's further contention that said law, and the rules and regulations that the defendant has made pursuant thereto, are repugnant to Article I, Section 10, of the Constitution of the United States in that they impair the obligation of contracts and limit the right of contract in connection with a lawful undertaking.

A statutory court of three judges was convened in accordance with Title 28, United States Code Annotated, Section 380, to pass upon the application of the plaintiff for an interlocutory injunction.

Subsequent to the service of the summons and complaint and notice of motion, the defendant made a motion to dismiss said proceeding on the ground that the Court is without jurisdiction of the controversy in that the amount in controversy is less than $3,000, exclusive of interest and costs (28 U.S.C.A. § 41(1), and on the further ground that a plain, speedy and efficient remedy may be had at law or in equity in the courts of the State of Minnesota.

By order of this Court, final disposition of said motion to dismiss was deferred until the hearing upon the application of the plaintiff for an interlocutory injunction. See Rule 12(d), Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Upon the hearing for an interlocutory injunction, evidence in the form of affidavits was submitted.

The plaintiff is a resident and citizen of the State of Minnesota, as is the defendant. The complaint alleges that the amount involved exceeds the sum of $3,000, exclusive of interest and costs, and that the right of the plaintiff herein sought by this action to be established, maintained and protected, is of the value to him of a sum in excess of $3,000, exclusive of interest and costs. The complaint further states that during the month of October, 1939, the plaintiff brought a used or secondhand vehicle into the State of Minnesota for the purpose of sale, or resale, and not to be used as a trade in on a new motor vehicle or as a trade in on another used car of greater value, having purchased the motor vehicle in the City of Chicago, State of Illinois; that he filed with the defendant a proper listing for taxation and proper application for the registration of such vehicle, which was accompanied by an offer to then and there pay the motor vehicle tax thereon; that the defendant, according to the information and belief of the plaintiff, filed no legal objections to the listing for taxation and registration of said motor vehicle in the State of Minnesota, but refused to list or register the same, basing his refusal upon the ground that said Chapter 284 of the Session Laws of Minnesota, 1939, forbade him to list said motor vehicle for taxation, or to register the same, for the reason that the surety bond referred to in said Chapter 284 was not executed, filed and approved, and no fee for approval of said bond was paid. The complaint contains a formal allegation to the effect that the amount in controversy is in excess of $3,000, exclusive of interest and costs.

In fortification of the formal allegation in the complaint, and to sustain the claim that the amount involved in the controversy is in excess of $3,000, exclusive of interest and costs, the plaintiff offers his affidavit, which, inter alia, recites "that affiant has been in the used car business for several years and can accurately gauge the effect of this law upon his business. That the law went into effect April 17, 1939, and affiant immediately noticed its effect upon his business. That although 1939 was a much better year for business in Detroit Lakes Minnesota, the location of his business, than was 1938, affiant's net profit for the period from May 1, 1939, to December 1, 1939, was $2445.00 less than for the same period in 1938, a loss of approximately $360 a month. That such actual loss, if figured for a twelve-month period, would amount to at least $4320.00." And in his affidavit he further states: "Affiant states that said law is causing irreparable loss and damage to his said business and that loss is explained as follows: That the added expense to each car is $15.00. No bond may be secured for a premium of less than $10.00. When to that is added the $5.00 fee for approval of said bond, the total additional cost is $15.00. But the added $15.00 a car expense is not the only effect of this law. When affiant undertakes to sell a car, whether it comes from outside the State of Minnesota or not, he has competition. Affiant's competitors tell his prospective purchasers that affiant is so crooked that he has to give bond to Mike Holm and thus cause affiant loss of many sales." He further states: "Affiant states that it is a well-known fact that there is a limit to the amount of bonds a person may be under. Bonding companies are already inquiring as to the amount of bonds given by this affiant. Should the limit of the bonds which this affiant can secure be reached this affiant would be unable to do business. Affiant knows the value of his business. That said business is of the worth and value of $10,000.00. That should the decision of this matter be held up for a year and this law be enforced for that time affiant's business would be entirely wiped out, gone and worthless and affiant's damage would be at least $10,000.00. That even though affiant could stick it out and continue in business for a year the loss to him would exceed $4000.00 in net profit alone." The plaintiff, in his affidavit, further avers that his records disclose that since the passage of this act, his loss has been $360 a month, and that said loss has been wholly due to this law.

At the outset we are concerned with the question of jurisdiction.

It is the contention of the plaintiff that this Court has jurisdiction of the cause: First, under the provisions of subsection 14, section 41, 28 U.S.C.A. (R.S. § 563); second, that it is a suit where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and arises under the Constitution of the United States.

Taking up the first contention which plaintiff makes for the jurisdiction of this Court, the law provides that district courts shall have original jurisdiction, without regard to the sum or value of the matter in controversy, among other enumerated cases of: "Suits to redress deprivation of civil rights. * * * Of all suits at law or in equity authorized by law to be brought by any person to redress the deprivation, under color of any law, statute, ordinance, regulation, custom, or usage, of any State, of any right, privilege, or immunity, secured by the Constitution of the United States, or of any right secured by any law of the United States providing for equal rights of citizens of the United States, or of all persons within the jurisdiction of the United States." 28 U.S.C.A. § 41(14). The plaintiff urges that the sum or value of the matter in controversy is of no concern in determining jurisdiction, since the present suit is within the purview of said subsection 14, in that the challenged statute deprives him of rights and privileges secured to him by the Constitution of the United States.

The rights of persons to have legislation of a State conform to the mandate of the Constitution in that the obligation of contracts be not impaired, that property be not taken without due process of law, and that the field of legislation with respect to interstate commerce be only entered by the United States, are not such rights as are contemplated by subsection 14. The challenged statute does not deprive the plaintiff from exercising any of the rights enumerated in Chapter 3, Civil Rights, Section 41, Title 8, U.S.C. A., nor any of the specific rights granted to persons under the Constitution of the United States.²

In Holt v. Indiana Manufacturing Company, 176 U.S. 68, 20 S.Ct. 272, 273, 44 L.Ed. 374, complainant rested jurisdiction on the sixteenth clause of Section 629, of the Revised Statutes (same as Sec. 41 (14), 28 U.S.C.A.). The court said, in reference to the basis for jurisdiction: "* * * it is sufficient to say that they refer to civil rights...