Westbrook v. Director General of Railroads

• Decision Date: 29 January 1920
• Citation: 263 F. 211
• Parties: WESTBROOK et al. v. DIRECTOR GENERAL OF RAILROADS.
• Court: U.S. District Court — Northern District of Georgia

263 F. 211

WESTBROOK et al. v. DIRECTOR GENERAL OF RAILROADS.

United States District Court, N.D. Georgia.

January 29, 1920

Reuben R. Arnold, of Atlanta, Ga., for plaintiffs.

Tye Peeples & Tye, of Atlanta, Ga., for defendant.

SIBLEY District Judge.

Four suits, each for $25,000, were brought in the state court, for personal injuries and homicides inflicted during federal control, against 'the Director General of Railroads of the United States, appointed by the President of the United States and acting under an act of Congress, and engaged in the operation of the line of the Louisville & Nashville Railroad Company. ' They were removed on the grounds: (1) That plaintiffs are citizens and residents of Georgia, and the Louisville & Nashville Railroad Company, to whom the defendant succeeded in operating the railroads, is a citizen of Kentucky, and would before federal control have been entitled to remove for diverse citizenship; (2) that the cases arise under the Constitution and laws of the United States and orders of the Director General made in pursuance thereof, and are controversies to which the United States are a party. Motions to remand, while admitting the facts claimed, deny the jurisdiction of this court, because diverse citizenship is not shown, and because the cases, if arising under the laws of the United States, are claims against the United States for more than $10,000, of which this court is denied jurisdiction by Judicial Code, Sec. 24 (20), Comp. St Sec. 9919

1. The Louisville & Nashville Railroad Company is neither a party of record nor in interest, and its citizenship is immaterial as a direct ground of jurisdiction. Since the District Court exercises only that jurisdiction which Congress within the constitutional limits grants, even where diversity of citizenship exists, jurisdiction may be denied, as in Judicial Code, Sec. 24 (1), where the original parties to an assigned chose in action are not citizens of different states. But it does not follow that a fictitious diverse citizenship, based on that of some person who might have been, but is not, sued or suable, will avail. Congress could not make suits against the Director General removable merely because they would have been if brought against the railroad company owning a railroad.

The Director General of Railroads is not here sued as an individual, or even by name, but as an officer, and stands for the United States, as both parties concede. An officer of the government is not individually liable for his acts within his authority.

'We are not aware that it is disputed that, when the act of a public officer is authorized or has been adopted by the sovereign power, whatever the immunities of the sovereign the agent thereafter cannot be pursued. ' The Paquete Habana, 189 U.S. 465, 23 Sup.Ct. 594, 47 L.Ed. 900.

See, also, Spalding v. Vilas, 161 U.S. 483, 16 Sup.Ct. 631, 40 L.Ed. 780.

When sued officially, neither is the officer nor the government a citizen of any state. No jurisdiction on account of diverse citizenship exists in these cases.

2. But there is a 'case at law arising under the laws of the United States. ' Each petition avers that the defendant was acting under an act of Congress in operating the railroad, and is for that reason liable. The liability depends on the construction and application of this act. Pacific Removal Cases, 115 U.S. 1, 5 Sup.Ct. 1113, 29 L.Ed. 319; T. & P.R.R. v. Cody, 166 U.S. 606, 17 Sup.Ct. 703, 41 L.Ed. 1132; Railroad v. Mississippi, 102 U.S. 135, 26 L.Ed. 96. Moreover, these are 'controversies to which the United States are a party. ' Though in name against an officer, in fact they assert a liability of the government, and a judgment will be paid out of its funds. On a question of jurisdiction they will be treated as suits against the United States.

'It may be said that the United States is not named as a defendant, and therefore cannot be considered a party to the controversy. * * * The controversy is made by the act of 1901 one to which the United States is a party in interest, to be directly affected by the result, and therefore the case is within the first paragraph, as one to which the judicial power of the United States extends. * * * And the United States is to be taken, for the purposes of this case, as the real party in interest adverse to the state. We are of the opinion, therefore, that this court has jurisdiction of this controversy, and is called upon to determine the case on its merits. ' Minnesota v. Hitchcock, 185 U.S. 373, 386, 388, 22 Sup.Ct. 650, 655, 656 (46 L.Ed. 954).

See, also, Oregon v. Hitchcock, 202 U.S. 60, 26 Sup.Ct. 568, 50 L.Ed. 935; Naganab v. Hitchcock, 202 U.S. 473, 26 Sup.Ct. 667, 50 L.Ed. 1113; Kansas v. United States, 204 U.S. 331, 341, 27 Sup.Ct. 388, 391 (51 L.Ed. 510) where it is said:

'If whether the suit is one against the state is to be determined, not by the fact of the party named as defendant on the record, but by the result of the judgment or decree which may be entered, the same rule must apply to the United States. The question whether the United States is a party to the controversy is not determined by the merely nominal party on the record, but by the question of the effect of the judgment or decree which can be entered.'

This, while affording another ground of jurisdiction, is the occasion of further difficulty.

'The United States cannot be sued in their courts without their consent, and in granting such consent Congress has an absolute discretion to specify the cases and contingencies in which the liability of the government is submitted to the courts for judicial determination. Beyond the letter of such consent, the courts may not go, no matter how beneficial they may deem or in fact might be their possession of a larger jurisdiction over the liabilities of the government. ' Schillinger v. United States, 155 U.S. 163, 15 Sup.Ct. 85, 39 L.Ed. 108.

'Jurisdiction cannot be exercised by the Circuit Court in a suit against the United States, or against any other party, unless the plaintiff can bring his case within some act of Congress. ' United States v. Eckford, 6 Wall. 488 (18 L.Ed. 920).

See, also, Naganab v. Hitchcock, 202 U.S. 473, 26 Sup.Ct. 667, 50 L.Ed. 1113.

Under previous laws the United States were not suable for any tort. Bigby v. United States, 188 U.S. 400, 23 Sup.Ct. 468, 47 L.Ed. 519.

By an act of August 29, 1916 (Comp. St. Sec. 1974a), the President, in time of war, was empowered to take possession and assume control of any system of transportation and utilize the same as stated in the act. No details were prescribed and no provision made for a name under which the government activity was to be exercised as was done in the case of the Alaska railroads by the first sentence of section 1 of the act of March 12, 1914 (38 Stat. 305 (Comp. St. Sec. 3593a)). By the proclamation of December 26, 1917 (Comp. St. Sec. 1974a), the President did 'take possession and assume control of the systems of transportation,' and committed the 'possession, control, operation and utilization' of them to a Director General of Railroads, providing that 'said Director may perform the duties imposed upon him so tong and to such extent as he shall determine, through the boards of directors, receivers, officers and employes of said systems of transportation,' and until otherwise ordered these officers and employes were directed to 'continue the operation thereof in the usual and ordinary course of business of common carriers in the names of their respective companies. ' Existing laws were continued, but it was ordained that--

'Any orders, general or special, hereafter made by said Director General shall have paramount authority and be obeyed as such.'

Agreements with 'the several companies' were to be negotiated, looking to their compensation for the use of their property, based on their average 'net operating income' for the three years previous to June 30, 1917. The Federal Control Act of March 21, 1918 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Sec. 3115 3/4a et seq.), ratified the action of the President and left untouched or amplified the arrangements of the proclamation. 'Average annual railway operating income' for three years prior to June 30, 1917, was made the basis for compensation, ascertained under the system of accounting required by the Interstate Commerce Commission. A revolving fund of $500,000,000 was provided, to be combined with the operating income from the transportation systems and used 'to pay the expenses of federal control' and for other purposes. It was enacted (section 12) that--

'Moneys and property derived from the operation of the carriers during federal control are hereby declared to be the property of the United States.' The effect of the President's action and this act was not to take over the corporate owners of the transportation systems or their franchises, but only their properties. Postal Telegraph Co. v. Call, 255 F. 850, . . . C.C.A. . . . . The persons who had been officers and employes of the owning companies ceased in general to be such and became agents and employes of the Director General. Service of process upon them no longer bound their former employers. Southern Cotton Oil Co. v. A.C.L.R.R. Co. (D.C.) 257 F. 138; Wood v. Clyde S.S. Co. (D.C.) 257 F. 879. The federal control was exclusive and complete. Northern Pacific Railroad Co. v. North Dakota, 250 U.S. 135, 39 Sup.Ct. 502, 63 L.Ed. 897. Plainly, therefore, railroad operations became those of the United States, no matter in whose name carried on. They were for months carried on over each line of railroad in the name of its owner, but these names were all aliases of the United States. The inevitable confusion of names with rights...