82
, RDlCRAL REPORTER,
vol. 4.5.
DEY et al" Railroad Commissioners; 11. CHICAGO, M.& ST;P.,Ry. Co. {OircuU Court, N. D. Iowa, E. D. February 19, 1891.} REMOVAL 01/ CAUSEs-J"URISDICTION-RAILBOAD COMMISSION.
, ·A 'suit brought by the state railroad commissioners to compel a railway company to 'obey the regulations of the commissioners cannot, be, removed to the federal court8\even though, the parties are citizells.of different, states,alld the answer raises a federal,questionj since such a suit, being in effect all 'attempt by the state to execute its laws, coula not have been originally brought in a federal court.
'.
in Equity. On motion to Bill to enforce orders of the railroad John Y. Stone, Atty. Gen., and Fou{ce,& John W. Carey, for defendant.
, ,', '" complainants.
SHmASj J . The statutes of the state of Iowa pro¥ide for the election of three persons to ioonstitute" the of, railroad: eommissionersof the state:oi Iowa," and among other powers and: conferred upon them it is provided .thaV'said pervision ofall railroadsin the state opE¥'ateq a,nd shall inquire into any negleot or 'violation of the lawln)f this state by, I\l)y railroad cor. porationdoing, therein," etc. It.is enacted that any person; firm, pr,corpora,tion complaining of anything' dOM or omitted ,tp be done by any,co,mmon,c8l'l'ier, subjecHo the statute, , may ,apply' to thecommissidners by petition, setting forth the :wrongs ,complained ofjand .it is· ma.de. thE;l dutyof sucJ;l complaint;:and .to make. a· . report in writing thereon of the facts ·in, the premises, and the madetbereon, by the boafd,a. C9PY ,of whichjs required to be served;,;lpon the COJ;Ximon carrier, anq:if,the carrier.refuses or neglects to obey the; order or.requ,iremellit of the-board, tbenit is made the duty of the cOJDmiSsionel'$to' apply, to the dis, trict or superior court in the county: wherein the prinaipaloffice of ,the ,"common carrier is keptjor of'ttny county in which the road is operated, , for the entry of a decree against tQe clirt?:ef'fol',the enforc,ement of the order of the board., , is rnadefor givingtioticll to the company of such fbr testimony and hearing in a summary }way, and for the issuan'ea ()f \v·rits ofinj unctionofotaerprocess' for ,'pelling obedience to toe mlder 'of the board; in case thai same is affirmed, and for the, imposition: in case'ofdisobedience to, the'injnne'tion issued,:"hieh court, aret6 be paid 'into the trea!llity, 'and 'onfloltilllfthereofis then to be 'paidrby'the countY treasurer to the state t r e a s u r e r , ' " ., Acting under the provisions of this statute, oneJE;:.;r. ;Little,iof Lima, Ohio, representing the Niagara Fuel Company of that place, filed a complaint before the board of commissioners of Iowa, alleging that the defendant company had wrongfully refused to transport certain tanks of oil from the station of the Chicago, St, Paul & Kansas City Railway Company in Dubuque to Eagle Point, where was situated the place of busi-
corn-
DEY". CHICAGO, :M. ,& ST·. P.RY. CO.
83'
ness of the consignees of the oil, the same being within the corporate limits oftha eiJty'ofDubuquei Iowa, alid upon the line of the defendant company, the said tanks of oil having been forwarded from Lima, Ohio. Notice of the filing of this complaint before the commissioners was given to the railway company, and an answer filed by it, setting forth, among otber things, that the transportation of the oil in question wail a matter of interstate Commerce, and not subject to the order or control of the board of commissioners of the state of Iowa. One oCthe matters in controversy was wQether the transportation of the tank cars from the depot of the Chicago, St. Paul & Kansas City road in Dubuque to Eagle Point, likewiseiu Dubuque, was a switching service, to be paid for at the rate established by the commissioners for such service, or was part of the original transportation. from Lima, Ohio, in such sense that the defendof a connecting company with the ant company stood in the Chicago, St; Paul & Kansas City road. Upon the hearing the commissioners held that the contract of the Chicago, St. Paul & Kansas City company was to forward, the tank cars to Dubuque; that this contract was fulfilled when the cars reached the depot of that company in Dubuque; that the transportation of the cars from that depot to the plll.ce of business of the consignees at Eagle Point, a distance of about three miles, was merely a'switching service, and for the performance thereof the Milwaukee & St. Paul Railway Company was entitled to charge the rates fixed for such service by the commissioners, and no more. The. company refusing to obey the order made, the board of commissioners filed a petition in the district court of Dubuque county, for the purpoee. of procuring a decree requiring and compelling the company to obey the order named. To this petition the company filed its answer, setting ,UPi among other things, that the transportation of the cars in question was a matter of mterstate commerce, and therefore not within the jurisdiction of the board of railroad commissioners of the state of Iowa, and thereupon filed its pE1tition to remove the cause into the federal court, sE'tting forth therein that the controversy is wholly between citizens of different states, the defendant being a corporation created der the laws of th" state of Wisconsin and the complainants being all citizens of Iowa; that the,matter involved exceeds in amonnt, exclusive of costs .and interest, the sum of $2.000, and that the case presents questionsnrising under· the constitution and laws of the United States, necessllryto be heard and, determined in the disposition of the cause. The:transcript having been ;filed in this court, thereupon the complainants filed a, motion to remand, on several grounds. Upon the argument of this ;motion the court suggested that it would hear ('ounsel upon the question :whether, admittiNg that the reeord showed that a federal question was involved, cases of this nature come within the jurisdiction of this court, so as to authorize a removal thereof for the purposes of an original trial; and, thebciels of counsel having been submitted, this questiOnienow to be determined. Upon ,parto( the defendant itia submitted that the controversy is civil
84
FEDERAL REPORTER,
vol. 45.
zens of different statp.s; that it involves over $2,000 in amount; and that therefore it is brought clearly within the provisions of the removal statute. If'by reason of these facts the case is a removable one, then it could have been brought originally in this court, because the statute, in express terms, confers the right of removal, on the ground of diverse citizenship, only in 'cases which, under the first section of the act, might have been originally brought in a circuit court of the United States. The real question to be solved is therefore whether a circuit court of the United States can entertain jurisdiction of a proceeding brought under the provisions of the state statute to enforce by decree the orders made by the board of railroad commissioners, touching the· management and operation of the railways within the state of Iowa. In determining whether jurisdiction in the federal court exists, regard must be had, not only to the form of the particular proceeding, but also to the nature, source, and purpose of the right sought to be enforced, and if it appears that the controversy, in substance, involves a matter not within the federal jurisdiction, then the court must refuse to entertain it, even though in mere form the suit may be between citizens of different states, and for an amount exceeding the jurisdictional limit named in the statute. Thus, in Wiscon.'lin v. Insurance 00., 127 U. S. 265-292, 8 Sup. Ct. Rep. 1370, it is said by the supreme court that "the essential nature and real foundation of a cause of action are not changed by recovering a judgment upon it; and the technical rules, which regard the original claim as merged in the judgment, and the judgment as implying a promise by the defendant to pay it, do not preclude a court, to which a judgment is presented for affirmative action, (while it cannot go behind the judgment for the purpose of examining into the validity of the claim,) from ascertaining whether the claim is really one of such a nature that the court is authorized to enforce it." In that case an action was brought originally in the supreme court of the United States by the state of Wisconsin against the Pelican Insurance Company of Louisiana, upon a judgment rendered in the circuit court of Dane county, Wis., against the insurance company, Jor the sum of $8,500 and costs. The form of the action was civil, being in debt upon the judgment 'record, but the supreme court, looking beyond the mere form of the action, found that the judgment sued on was for fines assessed against the insurance company for violations of the statutes of Wisconsin regulating the business of insurance within the state, and refused to entertain jurisdiction. While the ultimate judgment of the court in that case is placed upon the ground that" the courts of no country execute the penallaws of another," yet is it not entirely clear, from the line of reasoning pursued, that if the state of Wisconsin had filed a bill in equity in the supreme court of the United States against the insurance company, for the purpose of compelling obedience to some requirement of the state statute regulating the . business of insurance within the state"the court would have held adversely to the jurisdiction, on the ground that courts of the United States are not clothed with jurisdiction to undertake the ordinary admipistration of the laws of several states regulating matters of purely ;state con-
DEY V. CHICAGO, M.
&;
ST. P. BY. CO.
85
cern? In the enactment ofthe statutes regulating the railway business of the state it is the sovereign power of the state that is the foundation of the authority to enact the statute. The establishment and maintenance of the public highways of the country is a governmental duty, and railways are only the modern or improved highway furnished for the transportation of passengers and property over the same. Although the construction and operation of the railways within the state has been intrusted to corporations, yet that fact does not deprive the state of the power to supervise the operation of the railways, nor relieve it of the duty of so controlling the management thereof as to secure to the publio the use of such highways in such a manner as to fulfill the purpose for whicp the state authorized their construction. In the building, maintenance, and operation of the railway system of the state there was and is, of necessity, exerqised powers of a sovereign or governmental nature. Such are the right of. eminent domain and of taxation; and while the formal proceedings for the exeroise of these powers may have been had in the name of a particul!J.r corporation, nevertheless the power set in, motion thereby was that of the sovereign state, and its nature was not changed by the mere form of the means employed to call it into action. The taking of private property in the location and construotion of a railway, in the first instance, can only be sustained under the power of eminent domain, and the right to continue the operation of a railway over the property of the citizen calls for the continued exercise of the same sovereign power. which can only be justified upon the principle that the operation, as well as the original construction of a line of. railway, is the exercise of the public duty primarily imposed upon the state as the representative of the people, and in the performance of which the state ,may subject private property to the burden necessary to order to secure the building and operation of the highbe imposed way. In enacting statute's providing for the building, maintenance, operation anq management of railways as part of the public highways -of the state, the power exercised is sovereign or governmental, and the ,enforcement of the provisions of the statutes in these particulars belongs to the sovereignty enacting the statutes, and the agencies by it provided for that purpose, and no other government, state or national, can, either through its executive or judicial arm, undertake to administer such statutes. In undertaking the public duty of regulating the operation of the railways of the state of Iowa, the legislature has provided a system creating B. board of commissioners and authorizing such board to invoke the aid .of the courts of the state in administering the law regulating the railways, and in express terms the statute creates the mode of procedure to be followed when the aid of the courts is invoked, and power is conferred upon the courts, named iQ ,the statutes to grant writs of injunction and .other process as a means ofcompelling obedience to the rules established by the board of commissioners, if the same are confirmed by the court. By the laws of the .states of Wisconsin"Illinois, and other states, similar of are created, therein. ,No one would contend for
'FEDERAL REPORTER,
the attbfDey general of Iowa should apply; for instance, to dfWisconsiri, for an order di· the board of commissioners of reoted to the Chicago, Milwaukee & St. Paul Railway Company, requiring it to provision of the statute of Iowa ;regulating the railway business: in the latter state, that the Wisconsin board could entertain the sanie:on the 'ground that the Chicago, Milwaukee & St. Paul Railway Company was a corporation created under the laws of Wisconsin. The reply would be that the board of commissioners of the state of Wisconsin had no power to administer the laws of the state of Iowa; and would not the same be true if the applicatloflwas made to a court of the state of Wisconsin for a decree to enforce an order made by the Iowa commissioners? It isa well-known £actthat a large part of the railways of the state of Iowa are operated by corporations created under the laws of the states of Wisconsin and Illinois, and it certainly cannot be true that by reason of that or any other fact the attorney general of Iowa can file in the courts of those states petitions'for decrees compelling obedience to the rules and orders adopted by the Iowa commissioners. '1.'he Wisconsin corporations would be within the territorial jurisdiction orthe courts ofthat state, as woulcllikewise be true in Illinois, as to the corporations created in tbat state; but the subject-matter ofthe controversy would not be within the jurisdiction of the courts of either ofthe named states, and for that reason no'.relief could be had therein. The same must be tr116 of the federal courts, for the United Stlltes has no more power to undertake tbe administration of tbe local laws regulating tbe railways of Iowa than has tbe state of Wisconsin. We must not be misled by tbe fact that tbis court exercises its juris<lictionwithin the state of Iowa. It is nota question of territorial jurisdiction in tbe limited sense of the mere place of bringing suit; but of jurisdiction over tbe subject-matter. If tbe contention 'of counsel for delElDdant is sustainable, and it be held that the of the controversy is within federal jurisdiction, then as to the mere place of bringing suit tbe cboice is given, under the statute of 1888, of bringing the proceeding in tbe district whereineitber the plaintiff or the defendant resides, and this suit might have been brought in the federal court in Wisconsin. The argument that sustains the jurisdiction in the federal courts over the SUbject-matter must likewise sustain the jurisdiction of the federal court in Wisconsin, as well as that in Iowa. Can it be true that the United States courts in Wisconsin will undertake the duty of compelling tbe Wisconsin corporations to obey the rules and regulations of the state ofIowa touching the railway businessin Iowa? If however, the United States courts in Iowa can take jurisdiction of a pro- . ceeding of tbis nature on the of diverse citizenship, simply because the commissioners'are citizens of Iowa and the defendant It corporation created under the laws of Wisconsin, then it must follow that the proceeding might have been originally brought in the United States circuit court in Wisconsin, and' if tbere is nothing in the subject-matter of United States court in Wisconsin from the proceedipg there is nothing to preclude tbe state courts of undertaking Wisconsfu from doing: like\vise, and thus' the condusion would be reached
87 that the state of Iowa, actingthrQugh its board of 'commissioners, can impose upon its sister states, as well the United States, the duty and expense of administering the public law$of the state of Iowa, regulating its highways, and the operation and management thereof. A strong argument against the exercise of Jurisdiction by the federal pourt of a proceeding of this nature can be based upon the provisions oHhe statute regulating the method of procedure. The statute provides petition shall be filed in the district or superior court of the proper county; that it shall be a prOCeedillR in equity; that it shall be heard in a s.uul'InaI'yand inexpensive way; that the court shall have power to isrequiring obedience on part ""ueinjllnctions of, company, and employes', ,to the decree of the court,and to punish a violation therllof by a fine not exceeding &1,000, by imprisonment;. that the decree entered by the court .shllllremain in until the rule or order on which it. is based shall be modified, or ViaiJ8;1ed; by the commissioners.. If the federal court' can,. either originally.or byremoval,take jurisdiction ·of a petition filed by the board of commissiQllers under this statute, how is the same to be proceeded with? The statute, as well as the.Jilature of:the remedy,. requires the proceeding tobein equity. Can a federal court carry through a suit in equity in any other mode than is provided for in the rules of equity prescribed by the ,s:upremecourt.?Iftbe court requires the suit to be conduqted as thereillprovined, then the orders Qftheboard are not carried into.effect in.the suromlJ.ry and ineJtpensive wa.y· provided fQ! ·in the :state statute. the statute itselt poin-tslout thcLmethods, by tide and implisonment, by .which obe.dience to tbe decree. of the court, enforcing theorderof;thElcommissioners,is to be.secured.Canthe courts ofthe Unit;edSta,tea,enforce s\lcbpunis!unent? court orders tba ilaPrisonmentof A. B. as a means of enforcing obedience to its decree, the board of commissioners, by vacating the order made by .them" the decree of tbe United States' court and th us release: A· .B.fromimprisonment? . If fines are imposed by the United States court, or paid into the hands of the 'clerk, what· disposition is to pemade .thereof? Can the clerk, disregarding the provisions of the statutes, pay such fines to .the treasurer of the county undE!rtne. provisions of the state. statute? :These and ,other like difficulties ten,d .to .a\lpport the conclpsion that $ -proceeding of this nature, whether viewed in regard to the nature of tile, powersoughUo be exercised, or in regar4tothe: ;formoi the proceeding. Md: the .resUltetobe accomplished . ieone not within the. jutiadictiollioftbe federal courts under any statute QOw,jn, fOfce.. The distinc:tiM :wherein it is &.Ollghtto en(orceor protf;lot prh.aterights.andthose wherein -the sta,ie,ejther i;n its O:WO: n.flt)le or aget),Cy of officials, Cle.,WI'the,.AAW8 of. tIle InAte,:is enfol'ee;poolicrights,or fill public duties, must be "A failure, on the part of.:a common carrier to obey or observe some provision of the state statute may create a right of action, private in its on,. Qf"an ,individual of which the federal courts would have jurisdiction if the amount
88
at stake, and the citizenship of the parties litigant, was such as to conjurisdiction between the parties, but when the proceeding is brought under the state statute for the purpose of compelling the common carrier to m8.nage its business in the mode required by the rules or orders adopted by the commissioners, then the state is seeking to compel obedience to its public laws, and the state, whether the suit is in its own name, or in that of some board or official created by the laws of the state, is acting in its sovereign or governmental capacity, and in so doing it must act through agencies of its own creation. In the present case the state of Iowa, through its board of commissioners, has undertaken to regulate the method of switching cars between the different lines of railway terminating at the city of Dubuque, and has fixed the compensation to be paid therefor, and by the proceeding filed in the district court of Dubuque county seeks a decree of court to compel the defendant company to obey the rule thus established. The purpose ·of the proceeding is not to establish or protect any private right, or to recover damages for a wrong done to an individual, but solely to compel the railway company to yield obedience to the laws of the state regulating the railway business of thestatej and of such a proceeding the courts of the United 'States are not authorized by the statutes now in force t<r take jurisdiction, either originally or by removal. It is further urged, in support of the jurisdiction, that upon the face of the record it is made to appear that there. is a federal question involved in the contro,versy, and on this ground the jurisdiction can be sustained. If it be admitted tblt the facts pleaded in the answer of the defendant company do present a question arising under the constitution and laws of the United States, that does not change or affect the inherent nature of the proceeding. If the subject-matter of the petition filed is without the jurisdiction of the circuit court, for the reasons already assigned, pleading a defense thereto, based upon the constitution of the United States, cannot confer the power to grant the relief sought by the petition in case the defense is overruled. The remedy in such cases is to set up in the state court the defense presenting the federal question, and if the ruling therein is adverse to the right asserted under the federal constitution, then this question can be taken from the court of last resort in the state to the supreme court ofthe United States. In this way the administration of the public laws of the state is left to the state tribunals, although the federal question is, decided by the highest federal court. The conclusion reaehed is that the sub.iect-matter of the proceeding originally hrought in the district,court of Dubuque county is 110t within federal cognizancejthat' the pleading a defense, based upon the federal constitution and laws,does not change the character of the controversy, and therefore the proceeding is not one of which the circuit court of the United States can takejurisdiction, by removal or otherwise. The motion to remand must therefore be sustained. CALDWELL,
J., concurs.
UNITED STATES fl. WHITCOMB METALLIC BEDSTEAD CO.
89
UNITED STATES
v.
WHITCOMB METALLIC BEDSTEAD
Co.
(District Court, D. Connect£cut. February 18, 1891.) 1. DISTRICT COURTS-JURISDICTION-SUITS FOR IMpORTING LABOR UNDER CONTRACT.
Act Congo Feb. 26, 1&85, prescribing a penalty of *1,000 for importing foreigners under contract to perform labor, and providing that the llenalty may be sued for and recovered "as debts of like amount are now recovered in the circuit courts," does not give the circuit courts exclusive jurisdiction of such suits. The district courts have concurrent jurisdiction under Rev. St. U. S. § 568, which gives them jurisdiction of" all suits for penalties and forfeitures incurred under any law of the United States. "
2.
SAME.
Such jurisdiction is not taken from the district courts by Act Congo Aug. 18, 1888, providing that the circuit courts shall have orginal cognizances of "all suits of a civil nature," where the amount involved exceeds $2,000; since a suit to recover the.. penalty under the act of February 26, 1885, is of a penal and quasi criminal nature.
At Law. The act of congress of August 13, 1888, (25 St. 434,) provides that "the circuit courts of the United States shall have original cognizances '" * * of !ill suits of a civil nature at common law or inequity where the matter in suit exceeds, exclusive of interest and costs, the .,um or value of $2,000," etc. George G. Sill, U. S. Atty. Edwin B. Gager, for defendant. SHIPMAN,J. This is an action of debt to recover a penalty of $2,000 for a violation of the provisions of the act of February 26, 1885, which prohibited the importation of foreigners under contract to perform labor in the United States. 23 St. at Large, 332. The only question now to be considered is that of the jurisdiction of the district court. The third section of the act provides that the offender"Shall forfeit and pa)' for every such offense the sum of one thousand dollars, which may be sued for and recovered by the United States, or by any person who shall first bring his action therefor, '" '" '" as debts of like amount are now recovered in the circuit courts of the United States; the pro(leeds to be paid into the treasury of the United States." The defendant contends that the circuit court has exclusive jurisdiction of suits under this statute. The government insists that the jurisdiction of. the district court was originally concurrent with that of the circuit court, and that by reason of the first section of the act of August 13, 1888, the circuit court has no longer jurisdiction of such actions, unlass the matter in dispute exceeds $2,000. That the sum sought to be recovered is a penalty for the alleged violation of a statute, and for the commission of an act which the legislature has declared to be an ofJense, there can be no doubt. The ninth section of the judiciary act of 1789 provided that the district courts should have exclusive original cognizance "of all suits for penalties and forfeitures incurred under the laws of the United States." Subsequently, statutes were passed from time to time which imposed pecuniary penalties for the commission of
