Texas Employers Ins. Ass'n v. Felt
| Decision Date | 21 June 1945 |
| Docket Number | No. 11234.,11234. |
| Citation | 150 F.2d 227 |
| Parties | TEXAS EMPLOYERS INS. ASS'N v. FELT. |
| Court | U.S. Court of Appeals — Fifth Circuit |
COPYRIGHT MATERIAL OMITTED
M. L. Cook, of Houston, Tex., for appellant.
F. Fox Benton, of Houston, Tex., for appellees.
Before HOLMES, McCORD, and WALLER, Circuit Judges.
This appeal is from a judgment under the workmen's compensation law of Texas, awarding compensation to the appellees for the death of their husband and father. The action was brought by appellees in a Texas state court against three compensation insurance carriers incorporated under the laws of California, Connecticut, and Texas, respectively.
The deceased operated a tractor for various persons engaged in heavy excavation work; they severally rented the machine and severally employed the operator. Because it was uncertain for whom, if anyone, the deceased was working when killed, claims were presented against all three of the parties who were employing him at the crucial period. This action was filed against the several defendants, it being alleged in the alternative that the deceased was employed by each of the three persons to whom the defendants had issued insurance policies.
Upon the petition of one of the non-resident defendants, alleging a separable controversy and other requisite jurisdictional facts, the entire suit was removed to the United States district court. No motion to remand was made; no order for separate trials was sought,1 and no jurisdictional question was raised until after the return of the verdict. It was then claimed that, since the court below peremptorily instructed a verdict for the two non-resident defendants, it had no jurisdiction to render judgment against the resident defendant.
Since there was no voluntary dismissal by the plaintiffs,2 and the peremptory instruction was granted at the request of the non-resident defendants in a trial upon the merits, we think the court below did not lose jurisdiction to dispose of the entire suit. It is true that ancillary jurisdiction fails when jurisdiction over the principal controversy fails, but the principal jurisdiction did not fail in this instance. Only one verdict was rendered; it was against the resident and in favor of the non-resident defendants. Only one judgment was entered; it adjudicated the rights and liabilities of all parties, including the non-resident defendants.
If federal jurisdiction once rightfully attached in this entire suit, it was not so precarious as to depend upon the result of a trial upon the merits.3 The statutory provision for remand or dismissal at any time, if it shall appear to the satisfaction of the court that the suit does not really and substantially involve a dispute or controversy properly within its jurisdiction,4 does not give countenance to the idea that the proceeding is to be retained in the federal court until final adjudication on the merits as to the non-resident and then remanded to the state court without deciding the remaining issues between resident parties who were removed thereto in invitum.5
A more difficult question is whether the entire suit was removable. This depends upon whether, at the time the petition for removal was filed, there was a single suit containing a separable controversy wholly between citizens of different states or whether there were three separate suits consolidated in a single proceeding.6 A suit may, consistently within the rules of pleading, embrace several distinct controversies.7 Separate defenses do not create separable controversies.8 To entitle one to removal on the ground of a separable controversy, two or more causes of action (one of which would be removable if separately filed) must be united in one suit.9
The right of removal on the ground of a separable controversy, if claimed in the mode prescribed by statute, depends upon the case as disclosed by the pleadings in the state court as they stood at the time the petition for removal was filed. The petition ought not to be denied by the state court upon the ground that, in its opinion, the plaintiff has united causes of action which should have been asserted in separate suits. This issue and all questions of misjoinder or multifariousness are matters for the determination of the federal court after the cause is removed thereto. If that court finds that any such objection is well taken, it may require the pleadings to be reformed, and dismiss or remand the entire suit or a portion thereof as justice requires.10
All three contracts of employment with the deceased were made and performed in Texas; the injury and death occurred in Texas; the substantive rights and liabilities of the parties were governed by the law of Texas. The Texas procedure relative to alternative actions is identical with Rule 20 of the Federal Rules of Civil Procedure.11 Therefore, we do not need to distinguish between state and federal procedural law except to say that removal procedure is governed by federal statutes and that after the cause has been removed the procedure is governed by the federal rules.12
Rule 20 provides that all persons may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction or occurrence and if any question of law or fact common to all of them will arise in the action. This rule does not affect jurisdiction,13 but it regulates procedure where the court already has jurisdiction, and in this case it effectively disposes of any pertinent question as to the misjoinder of defendants who are sued only in the alternative.14 The option given by Rule 20 to join the defendants in one action did not create joint liability. The permitted joinder is procedural and not substantive.15
A better illustration of the procedural advantage of the right to seek alternative relief in one action against several defendants could scarcely be found than the very case before us on this appeal. Without this remedy, three trials before different juries, one in the state court and two in the federal court, might have been necessary. If all the defendants had been citizens of Texas, this suit would have remained in the state court and have been triable in one action;16 if all the defendants had been non-residents, a single action might have been brought in the federal court, which would have been triable as one suit;17 from this it follows that there is no procedural reason why a single suit may not be maintained in the federal court if the plaintiff's right to relief arises out of the same transaction and presents a question of law or fact common to all of the defendants. Let us see if the complaint herein meets these requirements for a united action in the alternative.
Immediately prior to his death, the deceased was under separate contracts of employment to operate the tractor for each of his employers. The disputed questions of fact common to all the defendants in this case are: By whom, if anyone, was the deceased employed at the time of his death, and was he fatally injured in the course of his employment? There is no other issue of fact in the case. The determination of this one issue will fix the liability or non-liability of all the defendants. In tort cases, plaintiffs have an optional joint right as well as joint remedy;18 here the optional joinder is only procedural; the right remains several. There was only one cause of action, one claim for compensation under the law and the facts, but there were three separate controversies with the defendants as to which of them was bound to pay the amount claimed. These several controversies, within the rules of pleading, were united in one action and tried together. Two of the controversies were wholly between citizens of different states, and each involved the requisite federal jurisdictional amount; the other was wholly between citizens of the same state, and by itself would not have been removable to the federal court.
Because only one recovery can be had,19 it is suggested that only one controversy is alleged by the plaintiffs in their suit. A reading of the complaint discloses three separate and distinct controversies, one against each of the defendants, alleged in the alternative. All three controversies appear upon the face of the complaint, and were so real and substantial that no defendant interposed a motion to dismiss the action as to itself. The theory that only one controversy is asserted is the antithesis of the contention previously discussed that three separate suits are embraced in a single proceeding. If the complaint contained only one controversy, no part of the suit was removable; if there were three separate suits in a single proceeding, the action should have been divided, two removed to the federal court, and one left in the state court; if there were three controversies in one suit, as we think, the entire suit was removable. In the absence of a fraudulent joinder, the separable-controversy provision of the removal statute is broad enough to embrace alternative separable controversies.
The specific remedy in the alternative given by the new rules of federal procedure affects the exercise of jurisdiction in removal cases, notwithstanding the provision that these rules may not be construed to extend or limit federal jurisdiction. Rule 82 means that the statutory jurisdiction of the district courts of the United States, and the venue of actions therein, were not changed by adoption of the rules; it does not mean that the exercise of federal removal jurisdiction may not be indirectly affected by the choice of remedies afforded plaintiffs. The removal statute does not ignore local rights and remedies. It deals with controversies within a suit pending in a state court. Plaintiffs may sue jointly, severally, or in the alternative. The whole case is removable if in one suit in a state court a separable...
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