Schroeder v. Davis

• Decision Date: 09 April 1929
• Docket Number: No. 8121.,8121.
• Citation: 32 F.2d 454
• Parties: SCHROEDER v. DAVIS, Agent.
• Court: U.S. Court of Appeals — Eighth Circuit

32 F.2d 454 (1929)

SCHROEDER v. DAVIS, Agent.

No. 8121.

Circuit Court of Appeals, Eighth Circuit.

April 9, 1929.

S. T. G. Smith, of St. Louis, Mo. (Maurice L. Stewart, of St. Louis, Mo., on the brief), for plaintiff in error.

Homer Hall, of St. Louis, Mo. (N. S. Brown and L. H. Strasser, both of St. Louis, Mo., on the brief), for defendant in error.

Before STONE and KENYON, Circuit Judges, and JOHNSON, District Judge.

KENYON, Circuit Judge.

This is an action brought by Paul B. Schroeder, as plaintiff in the circuit court of the city of St. Louis, against James C. Davis, duly designated Agent, under the Transportation Act of 1920 (49 USCA), operating the properties of the Wabash Railway Company, claiming damages for personal injuries suffered in February, 1918, by reason of alleged negligence of the United States Railroad Administration operating through the Director General of Railroads. Defendant in error filed petition for removal of the cause to the federal court. The state court of Missouri granted the prayer of the petition, and the case was removed to the United States District Court for the Eastern Division of the Eastern Judicial District of Missouri. Plaintiff in error filed motion to remand the case to the circuit court of St. Louis. The motion was overruled. The court filed a memorandum opinion in which it held that the cause was not removable as arising under the laws of the United States or because of the diversity of citizenship between the plaintiff and the designated Agent, but was removable because of the diversity of citizenship between the plaintiff and the carrier, Wabash Railway Company. When the cause came on for hearing plaintiff again filed motion to remand, which was overruled. Plaintiff refusing to put in any evidence, the court dismissed the cause of action and rendered final judgment, and filed a certificate certifying that it had jurisdiction of said cause; that it was properly removed from the circuit court of the city of St. Louis, Mo., to the United States District Court; that it had refused to remand it to the state court, and that the dismissal was a final disposition of the cause in that court.

The action was not removable as one arising under the laws of the United States, Blevins v. Hines (D. C.) 264 F. 1005; Walters v. Payne (C. C. A.) 292 F. 124; Davis v. Slocomb, 263 U. S. 158, 44 S. Ct. 59, 68 L. Ed. 226, nor was it removable because of diversity of citizenship between the plaintiff and the designated Agent. The designated Agent was merely a nominal party acting for the Government. There was no personal liability upon him — the suit was in effect against the government and not against him. Therefore his citizenship is unimportant. See the late case of State Highway Commission of Wyoming v. Utah Co., 278 U. S. 194, 49 S. Ct. 104, 73 L. Ed. ___; also Kansas v. United States, 204 U. S. 331, 27 S. Ct. 388, 51 L. Ed. 510.

Was the court correct in holding that the diversity of citizenship between the plaintiff and the Wabash Railway Company was sufficient under the law pertaining to removal of causes? This is the pivotal question here.

After such an unusual exercise of sovereignty as taking over the control and operation of the railroad systems of the country, numerous and vexatious legal questions were bound to arise, the decision of which Congress could not accurately anticipate. The courts have held that the operation of each particular railroad system was in the nature of a general receivership of the company, Missouri Pac. R. Co. v. Ault, 256 U. S. 554, 41 S. Ct. 593, 65 L. Ed. 1087; that the operation was under a right in the nature of eminent domain, North Carolina R. Co. v. Lee, 260 U. S. 16, 43 S. Ct. 2, 67 L. Ed. 104.

Much confusion naturally arose as to the proper parties against whom suits should be brought, and in the removal of cases from the state to the federal courts. Some matters relating thereto were settled, and may as well be stated at this stage of the opinion.

An action such as this to recover damages for personal injuries alleged to have been caused in the operation of a railroad under federal control is in fact one against the government represented by the designated Agent under the Act of February 28, 1920, known as the Transportation Act. Hines v. Dahn (C. C. A.) 267 F. 105; Dahn v. Davis, 258 U. S. 421, 42 S. Ct. 320, 66 L. Ed. 696; Davis v. O'Hara, 266 U. S. 314, 45 S. Ct. 104, 69 L. Ed. 303.

There is no liability upon the railway company to pay any judgment secured, the cause of action arising while the railway company was under the control of the United States and being operated by the Director General of Railroads. Missouri Pac. R. Co. v. Ault, 256 U. S. 554, 41 S. Ct. 593, 65 L. Ed. 1087; North Carolina R. Co. v. Lee, 260 U. S. 16, 43 S. Ct. 2, 67 L. Ed. 104; Davis v. L. L. Cohen & Co., 268 U. S. 638, 45 S. Ct. 633, 69 L. Ed. 1129.

The right to sue the United States under the Federal Control Act (40 Stat. 451) for negligence in operating a railway is the same as if the government were a railway corporation operating as a common carrier. Dahn v. Davis, 258 U. S. 421, 42 S. Ct. 320, 66 L. Ed. 696; Director General of Railroads v. Kastenbaum, 263 U. S. 25, 44 S. Ct. 52, 68 L. Ed. 146.

The United States cannot be sued without its permission specifically granted by Congress. Schillinger v. United States, 155 U. S. 163, 15 S. Ct. 85, 39 L. Ed. 108; Bigby v. United States, 188 U. S. 400, 23 S. Ct. 468, 47 L. Ed. 519: Turner v. United States, 248 U. S. 354, 39 S. Ct. 109, 63 L. Ed. 291; Nassau Smelting & Refining Works, Ltd., v. United States, 266 U. S. 101, 45 S. Ct. 25, 69 L. Ed. 190.

It goes without saying that the United States has no citizenship in any state, and that a suit against it cannot be removed on account of diversity of citizenship.

Without doubt this action can be brought only by reason of federal laws. Davis v. Slocomb, 263 U. S. 158, 44 S. Ct. 59, 68 L. Ed. 226. The government's immunity is waived only as expressed in statutes and orders of the Director General. Davis v. O'Hara, 266 U. S. 314, 45 S. Ct. 104, 69 L. Ed. 303. We therefore turn to the federal statutes on the subject.

The Federal Control Act of 1918, § 10 creates the right to sue the United States upon causes of action arising under federal control. It is as follows: "That carriers while under federal control shall be subject to all laws and liabilities as common carriers, whether arising under state or federal laws or at common law, except in so far as may be inconsistent with the provisions of this act or any other act applicable to such federal control or with any order of the President. Actions at law or suits in equity may be brought by and against such carriers and judgments rendered as now provided by law; and in any action at law or suit in equity against the carrier, no defense shall be made thereto upon the ground that the carrier is an instrumentality or agency of the federal government. Nor shall any such carrier be entitled to have transferred to a federal court any action heretofore or hereafter instituted by or against it, which action was not so transferable prior to the federal control of such carrier; and any action which has heretofore been so transferred because of such federal control or of any act of Congress or official order or proclamation relating thereto shall upon motion of either party be retransferred to the court in which it was originally instituted. But no process, mesne or final, shall be levied against any property under such federal control." 40 Stat. 456, c. 25, § 10.

Section 206(a) of the Transportation Act of 1920 provides for bringing action against the designated Agent: It is as follows: "Actions at law, suits in equity and proceedings in admiralty, based on causes of action arising out of the possession, use, or operation by the President of the railroad or system of transportation of any carrier (under the provisions of the Federal Control Act, or of the Act of August 29, 1916) of such character as prior to federal control could have been brought against such carrier, may, after the termination of federal control, be brought against an agent designated by the President for such purpose, which agent shall be designated by the President within thirty days after the passage of this act. Such actions, suits, or proceedings may, within the periods of limitation now prescribed by state or federal statutes but not later than two years from the date of the passage of this act, be brought in any court which but for federal control would have had jurisdiction of the cause of action had it arisen against such carrier." 41 Stat. 461, c. 91, § 206(a).

General Orders of the Director General Nos. 50 and 50A also bear somewhat on the same question. It is not necessary to set them out.

All of these statutes and orders emphasize the intention that an action at law for injury to persons growing out of the operation of the railroads by the government could be brought against the Director General or his successor, the designated Agent, if, were it not for federal control, it could have been brought against the carrier company.

It is the contention of plaintiff in error that this suit, sounding in tort — not being one covered by sections 24 and 28 of the Judicial Code (28 USCA §§ 41, 71), nor one in which the District Court of the United States has been given original jurisdiction — can be brought against the designated Agent only because of section 10 of the Federal Control Act, Davis v. Slocomb, supra, and that thereunder no action can be transferred to a federal court which was not transferable prior to federal control; that it is self-evident that this action was not removable prior to the passage of the law which created the right to bring it; that the word "carrier" as used in the act means the United States.

There are many provisions throughout the Federal Control Act and the Transportation Act showing that the term...