Structural Steel and Forge Co. v. Union Pacific R. Co.

• Decision Date: 08 July 1959
• Docket Number: No. 6080.,6080.
• Citation: 269 F.2d 714
• Parties: STRUCTURAL STEEL AND FORGE COMPANY, The American Foundry and Machine Company, Island Ranching Company, Calvin L. Rampton, and Pugsley, Hayes, Rampton & Watkiss, a partnership, Appellants, v. UNION PACIFIC RAILROAD COMPANY, The Denver and Rio Grande Western Railroad Company, The Western Pacific Company and Bamberger Railroad Company, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

269 F.2d 714 (1959)

STRUCTURAL STEEL AND FORGE COMPANY, The American Foundry and Machine Company, Island Ranching Company, Calvin L. Rampton, and Pugsley, Hayes, Rampton & Watkiss, a partnership, Appellants, v. UNION PACIFIC RAILROAD COMPANY, The Denver and Rio Grande Western Railroad Company, The Western Pacific Company and Bamberger Railroad Company, Appellees.

No. 6080.

United States Court of Appeals Tenth Circuit.

July 8, 1959.

Calvin L. Rampton, Salt Lake City, Utah, for appellants.

Elmer B. Collins, Omaha, Neb., and A. U. Miner, Salt Lake City, Utah (James H. Anderson, Omaha, Neb., Bryan P. Leverich, S. N. Cornwall, Wood R. Worsley, Clair G. Andersen, Salt Lake City, Utah and E. G. Knowles, Denver, Colo., were with them on the brief), for appellees.

Before MURRAH, PICKETT and BREITENSTEIN, Circuit Judges.

MURRAH, Circuit Judge.

This is an appeal from an order of the District Court enjoining appellants, Utah intrastate shippers, from prosecuting a state court class action against appellee railroads, to recover intrastate freight charges paid under an order of the Interstate Commerce Commission, which was ultimately vacated for further proceedings. See Public Service Commission of Utah v. United States, 356 U.S. 421, 78 S.Ct. 796, 2 L.Ed.2d 886.

The challenged stay order was entered in a removed action by other shippers similarly situated but with separate and distinct claims. As a stay of state court proceedings, the order can be justified only insofar as it is necessarily in aid of the exercise of federal court jurisdiction in the removed case. Section 2283, Title 28 U.S.C.A. See also Looney v. Eastern Texas R. Co., 247 U.S. 214, 38 S.Ct. 460, 62 L.Ed. 1084; Amalgamated Clothing Workers of America v. Richman Bros., 348 U.S. 511, 75 S.Ct. 452, 99 L. Ed. 600.

Removability of the removed case was challenged on motion to remand in the trial court, and the point is again urged here. The appellees on the other hand invoke the well-known rule against appealability of orders denying motions to remand. But, this appeal is not from the order denying remand of the removed case. Instead, it is an appeal from an order granting injunctive relief in that case, and such orders are appealable under Section 1292, Title 28 U.S.C.A. In reviewing the issues raised on appeal from the injunctive order, we must inquire into the jurisdiction of the court to grant any such order. Riverbank Laboratories v. Hardwood Products Corp., 7 Cir., 220 F.2d 465; Willoughby v. Sinclair Oil & Gas Co., 10 Cir., 188 F.2d 902.¹ The basic question is therefore whether the case was removable, for if not, there was no jurisdiction to aid or protect, and the stay order must surely fail.

The matter is presented on these relevant facts. Pursuant to a proceedings under Section 13(3, 4) of the Interstate Commerce Act, 49 U.S.C.A. § 13(3, 4) the Interstate Commerce Commission granted a 15 per cent increase in intrastate freight rates to railroads operating in Utah in conformity with the general level of interstate rates over the same routes. See Utah Intrastate Freight Rates & Charges, 297 I.C.C. 87. The Commission's order was sustained by a three-judge court in Public Service Commission of Utah v. United States, D.C., 146 F.Supp. 803, and the increased rates were thereupon put into effect. On appeal, however, the rate order was set aside and the cause remanded to the Interstate Commerce Commission for further proceedings in conformity with the opinion of the court. Public Service Commission of Utah v. United States, supra. Thermoid Western Company and four other similarly situated intrastate shippers thereupon brought a state court class action against the appellee railroads to recover various amounts alleged to have been paid by them pursuant to and during the time the order of the Interstate Commerce Commission was effective to increase intrastate rates in Utah.

The complaint alleged the order of the Interstate Commerce Commission increasing intrastate rates in Utah and its ultimate reversal by the Supreme Court on the grounds of insufficiency of the evidence to warrant Interstate Commerce Commission jurisdiction of intrastate rates in Utah. It was then alleged that the order of the Interstate Commerce Commission raising intrastate rates in Utah was void; that any freight rates and charges assessed and collected by the appellee carriers from the plaintiff shippers in intrastate commerce in Utah over and above those prescribed by the tariff filed with and approved by the Public Service Commission of Utah were unlawful. The plaintiff shippers prayed accordingly.

The railroad defendants timely removed the action to the United States District Court of Utah on their allegation to the effect that the action arose under an act of Congress regulating commerce, and as such was a civil action or proceedings of which the District Court had original jurisdiction. The motion to remand was denied and the trial of the case was "continued without date pending outcome of proceedings before the Interstate Commerce Commission."

Thereafter the appellant Structural Steel and Forge Company and other similarly situated intrastate shippers brought the class action in the Utah state court, the prosecution of which was enjoined by the order in the removed Thermoid case, from which this appeal is taken. The suit was against the same railroads to recover rate charges assessed and collected under authority of the vacated order of the Interstate Commerce Commission as in the removed case. Without making any reference to the order of the Interstate Commerce Commission, the complaint merely alleged that the rates charged and collected while the order of the Interstate Commerce Commission was in effect were in excess of those provided in the schedules of the defendant railroads on file with the Public Service Commission of Utah and therefore excessive and illegal, and that the complainants were entitled to recover such excessive charges.

Without attempting to remove the latter action to the federal court, the railroads in the removed case moved to enjoin the parties from prosecuting the state court action, on the grounds that the attorneys in the removed action had also filed the subsequent class action in the state court and had threatened to file numerous like suits; that said suits were "unnecessary, vexatious, burdensome, and would cause defendants irreparable damages in expenses they would necessarily have to incur in defending such action, and would circumvent, impair and render futile the jurisdiction of this court in the instant case."

Upon statement of counsel, the court seemed to think that the filing of the state court litigation as a class action with an invitation to other parties similarly situated to intervene, was a plan and scheme to frustrate federal court jurisdiction. These considerations apparently prompted the court to enter the challenged injunctive order. At the bar of the court, and by subsequent pleadings, the appellants have waived any defect in service and entered their appearance in the action for the purpose of testing the jurisdiction and propriety of the court to enjoin the state court litigation.

Except as otherwise expressly provided, "any civil action brought in a State court of which the...