State of Louisiana v. Morgan's Louisiana & TR & SS Co., 18644-18646

• Decision Date: 07 March 1927
• Docket Number: No. 280.,No. 18644-18646,18644-18646,280.
• Citation: 18 F.2d 645
• Parties: STATE OF LOUISIANA ex rel. SAINT, Atty. Gen., v. MORGAN'S LOUISIANA & T. R. & S. S. CO. SAME v. FRANKLIN & A. RY. CO. SAME v. LAKE CHARLES & N. R. CO. STATE OF LOUISIANA ex rel. SAINT, Atty. Gen., v. LOUISIANA WESTERN R. CO.
• Court: U.S. District Court — Eastern District of Louisiana

18 F.2d 645 (1927)

STATE OF LOUISIANA ex rel. SAINT, Atty. Gen., v. MORGAN'S LOUISIANA & T. R. & S. S. CO.

SAME v. FRANKLIN & A. RY. CO.

SAME v. LAKE CHARLES & N. R. CO.

STATE OF LOUISIANA ex rel. SAINT, Atty. Gen., v. LOUISIANA WESTERN R. CO.

Nos. 18644-18646, No. 280.

District Court, E. D. Louisiana, New Orleans Division, District Court, W. D. Louisiana, Lake Charles Division.

March 7, 1927.

March 7, 1927.

Percy Saint, Atty. Gen., Michael M. Irwin, Asst. Atty. Gen., and Francis Williams, Sp. Counsel, of New Orleans, La., for complainant.

Baker, Botts, Parker & Garwood and J. H. Tallichet, all of Houston, Tex., Henry H. Chaffe, of New Orleans, La., and Pujo, Bell & Hardin, of Lake Charles, La., for respondents.

DAWKINS, District Judge.

These are companion suits, brought by the Attorney General, on behalf of the state of Louisiana, in the courts of the state, seeking to enjoin the several defendants, railroad companies (Louisiana corporations), from leasing their lines to the Texas & New Orleans Railroad Company, a corporation under the laws of Texas. The grounds for injunctive relief are that the leases, copies of which are attached to the petitions, "do not provide and do not bind and oblige the Texas & New Orleans Railroad Company to maintain a domicile and main offices, for the Louisiana railroads to be leased under the aforesaid proposed lease, in the state of Louisiana"; that Act No. 74 of the General Assembly of the state of Louisiana for the year 1902, especially section 8, requires railroad companies availing themselves of the right to do business therein to maintain such offices within the state; that the president and auditor of the Texas & New Orleans Railroad Company had, at a hearing held before an assistant director of finance of the Interstate Commerce Commission, on November 26, 1926, admitted that it was the intention of the said proposed lessee to abolish the accounting department, "which now forms the major part of the general offices" within the state; that said general offices are necessary for the efficient and proper handling of the public's business by the Louisiana railroads sought to be leased, and that their removal to a point without the state would be not only a violation of said statute, but would also work great inconvenience and loss of time and money to the public of Louisiana, which uses these railroads, thereby working irreparable injury.

There are quoted in the petitions resolutions by the boards of directors of the several companies, authorizing their proper officers to execute the leases, "subject to the approval and authorization of the Interstate Commerce Commission." Petitioner also attaches to his bills of complaint, as Exhibit A, copy of an application by the Texas & New Orleans Railroad Company to the Interstate Commerce Commission for authority to lease said roads, together with other lines in the state of Texas. In said application is set out the form of lease to be executed, and which the applicant was seeking to have the Commission approve. Nothing is said in the lease about abandoning any offices within the state of Louisiana, but the tenth and concluding paragraph reads:

"This lease shall become effective on the 1st day of the month following the effective date of the order of the Interstate Commerce Commission approving the same, and shall continue in effect for one year and thereafter until terminated by thirty (30) days' notice in writing served by any or all of the lessors on the lessee, or by the lessee on any or all of the lessors."

What has been recited above is sufficient to show that the petitions and exhibits on their faces disclose that application for authority to make the leases had been made to the Interstate Commerce Commission. Their ultimate consummation depended upon the approval of that body. In other words, the contracts which the Attorney General seeks to enjoin would not be made, except upon the authority and order of the Commission.

The Attorney General has moved to remand the cases to the state courts upon the ground that this court is without jurisdiction; the contention being that there is no diversity of citizenship and that no issues exist involving a law or the Constitution of the United States. It is conceded that the state is not a citizen, within the meaning of the Constitution with respect to diversity of citizenship, and that the question of whether there is an issue arising under the Constitution or the laws of the United States must be determined upon the case presented by the petition or bill of complaint. It is well to note that the complainant does not seek to enjoin the removal of the offices alleged to be prohibited by the state statute, but asks that the execution of the leases in their entirety be restrained.

Of course, in construing a pleading, documents and exhibits annexed thereto and forming part thereof must be considered the same as the formal allegations of the complaint (Lewy v. Wilkinson, 135 La. 105, 64 So. 1003; Vincent v. Frelich, 50 La. Ann. 378, 23 So. 373, 69 Am. St. Rep. 436; Brumfield v. Mortee, 15 La. 116; Hall v. Ewing, 140 La. 907, 74 So. 190), and in doing so we find that the leases in question will not become effective unless and until the Interstate Commerce Commission has given its approval. The effect of the injunction issued in the state court and the ultimate determination of the right to make the leases will necessarily involve an interpretation of the order or ruling of the Commission.

It is contended by the defendants that the filing of the suits in the state courts was in anticipation of action by the Interstate Commerce Commission authorizing the leases. It was also stated in oral argument, and not denied, that the Commission had (on December 28, 1926) since granted the requisite authority. The complaint does show plainly that the application to the Commission was pending at the time of filing the suits, and that a hearing thereon had...