Thompson v. Standard Oil Co. of New Jersey

• Decision Date: 10 November 1931
• Docket Number: No. 2595.,2595.
• Court: U.S. District Court — District of South Carolina
• Parties: THOMPSON v. STANDARD OIL CO. OF NEW JERSEY et al.

60 F.2d 162 (1931)

THOMPSON v. STANDARD OIL CO. OF NEW JERSEY et al.

No. 2595.

District Court, E. D. South Carolina.

November 10, 1931.

S. M. Wolfe, of Gaffney, S. C., M. L. Smith, of Camden, S. C., and A. F. Spigner and C. T. Graydon, both of Columbia, S. C., for plaintiff.

Buist & Buist, of Charleston, S. C., and Benet, Shand & McGowan, of Columbia, S. C., for defendants.

ERNEST F. COCHRAN, District Judge.

The plaintiff brought a suit in the United States District Court for the Western District of South Carolina against the Standard Oil Company for an alleged breach of contract, and that case has not yet been tried. The Standard Oil Company filed in the clerk's office of the District Court of the United States for the Western District an answer which was verified by J. C. King, who, although not a party to the action, verified the answer as an officer or agent of the defendant therein, the Standard Oil Company.

The plaintiff made a motion before the judge of the District Court for the Western District to strike out certain portions of the answer, on the ground that they were impertinent and irrelevant. That court struck out a certain portion, and refused to strike out the remaining portions of which the plaintiff complained. Thereupon the plaintiff instituted this suit in the state court of Richland county, S. C., against the Standard Oil Company and J. C. King; alleging in substance that that portion of the answer in the suit pending in the Western District of South Carolina which was stricken out by order of that court, and also certain other portions which that court refused to strike out, were libelous, and that, by the filing of said answer in the District Court for the Western District of South Carolina, the Standard Oil Company and J. C. King had committed a joint and concurrent tort. Thereupon two petitions were presented to the state court of Richland county, praying for the removal of the cause into this court; namely, the United States court for the Eastern District of South Carolina. One of these petitions was presented on behalf of both defendants, and was based on the ground that the action arose under the Constitution and laws of the United States. The other petition was presented by the Standard Oil Company alone, and was based on the ground that there was a separable controversy between the plaintiff and the Standard Oil Company alone, which could be decided without the presence of J. C. King. The state court, upon motion, refused to pass an order transferring the case to the United States court for the Eastern District of South Carolina. The plaintiff has now made a motion in this court to remand the case to the state court for Richland county, on the ground, first, that the case does not arise under the Constitution and laws of the United States; and, secondly, that no separable controversy is presented. The motion has been fully argued before me. Except for the earnest presentation by the learned counsel for the plaintiff of the questions involved, and except for the decision of the state judge who refused to transfer the case (for whose opinion I have the highest regard), I would not have deemed it necessary to make any study of the case or to write an opinion; but would have decided the question immediately upon the conclusion of the oral argument; for I felt then that the principles governing the removal sought here are so well settled and so plain as to lead to no other conclusion but that the case should not be remanded. From deference, however, to the views of the able counsel for the plaintiff and the learned judge of the state court, I have made a careful study of the question and the controlling authorities.

It is not necessary to cite authorities to show that, while the opinion of the state judge in refusing to transfer the case may be of highly persuasive force, nevertheless it is not binding upon this court, which must decide the case upon its own final judgment.

I will consider only the question as to whether or not the case arises under the laws or Constitution of the United States. The action is one based upon alleged libelous matter contained in an answer filed in a federal court. The plaintiff claims that the alleged matter is libelous, and is not privileged because, as he asserts, it was impertinent and irrelevant to the issues presented. The defendants claim that the matter alleged is not libelous, not impertinent, not irrelevant, and was privileged. The precise question before me now for consideration is not whether the matter was either libelous or privileged, but whether the determination of these questions makes a case arising under the Constitution and laws of the United States. Aside from any authority upon the question, it seems to me that upon reason alone there can be but one answer. The decision in the case will involve the question of the jurisdiction of a court of the United States; the powers and functions of that court; and the rights, duties, and privileges of a litigant therein. If those questions do not arise out of the laws of the United States, then they do not arise out of any laws. All the powers and functions of a federal court arise from federal statutes and the Constitution of the United States, and likewise all the rights, duties, and privileges of a litigant in that court flow from and are protected by the laws of the United States. The mere fact that questions as to those rights and privileges may depend for their solution upon an application of the common law in no way negatives the proposition that the rights and privileges claimed flow from and arise out of the laws and Constitution of the United States.

A consideration of the rules that have been laid down to determine whether a case arises under the laws and Constitution of the United States will demonstrate that the case at bar is such a case. It has been repeatedly held that a case arises under a law of the United States whenever its correct decision depends on the construction of the law or it appears that some title, right, privilege, or immunity on which the recovery depends will be defeated by one construction of the law or sustained by the opposite construction. Only a few decisions need be cited to this proposition. See Cohens v. Virginia, 6 Wheat. 264, 5 L. Ed. 257; Starin v. N. Y., 115 U. S. 248, 6 S. Ct. 28, 29 L. Ed. 388; Germania Ins. Co. v. Wisconsin, 119 U. S. 473, 7 S. Ct. 260, 30 L. Ed. 461.

The Supreme Court has also held that cases arising under laws of the United States are such as grow out of the legislation of Congress, whether they constitute the right or privilege or claim or protection or defense of the party, in whole or in part, by whom they are asserted. Bock v. Perkins, 139 U. S. 628, 630, 11 S. Ct. 677, 35 L. Ed. 314; Tennessee v. Davis, 100 U. S. 257, 264, 25 L. Ed. 648; New Orleans, M. & T. R. R. Co. v. Mississippi, 102 U. S. 135, 141, 5 S. Ct. 19, 28 L. Ed. 619.

And a case arises under the laws of the United States when it arises out of the implication of the law. As was said by Mr. Chief Justice Marshall in Osborn v. Bank of United States, 9 Wheat. 738, 6 L. Ed. 204, infra: "It is not unusual, for a legislative act to involve consequences which are not expressed. An officer, for example, is ordered to arrest an individual. It is not necessary, nor is it usual, to say that he shall not be punished for obeying this order. His security is implied in the order itself. It is no unusual thing, for an act of congress to imply, without expressing, this very exemption from state control." Tennessee v. Davis, supra; Osborn v. Bank of United States, 9 Wheat. 738, 6 L. Ed. 204.

In the case at bar, the powers and functions of a court of the United States, and the rights, duties, and privileges of a litigant therein, while they may not be specifically defined and expressed in the acts of Congress constituting such courts, nevertheless arise out of those acts by implication of the law.

If we examine the facts of only a few of the numerous cases which have been held to arise under the laws and Constitution of the United States, it will be perceived that there is no escape from the conclusion that the facts of the present case constitute a case arising under those laws.

A long line of cases hold that a corporation deriving its powers from acts of Congress is entitled to have suits brought against it in the state court, removed to the circuit courts...