Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-05-22


that the matter in controversy eH-
ceeds the sum or value OF $4,000.
The old rule, which has been IN
effect for many years, made 1t nee
essary for the defendant-and IN THIS
instance it was the State OF Indiana
whose statute was being challenged
to prove to the court that the actual
loss involved was too little 10 allow
the Federal courts to intervene.
Fostered Many Cases.
Under the ruling which has just
been reversed, the Federal courts were
more or less compelled to take juris-
diction in. every case involving conSu-
tutional questions where there was
merely an allegation that the amount
In controversy exceeded $4,000, unless
of course, the defendant was able TO
Grove this was not so.
1t was possible under the old rule
for parties to obtain a test OF the
constitutionality of State law IN
moot case. 1t could be done by what
might be termed collus1Ve agree
nent between the complainant and
the defendant to bring about a trial
of the issue. The court will now in
uuire of its own motion into the facts
concerning the taking of jurisdiction
The new announcement will limit
the number of cases because, when 1t
becomes necessary to prove actual
damage resulting from the enforce
r1ent of a State law instead of merely
alleging that the net worth of busi-
ness affected is more than $4,000, few
er cases will be brought to court.
May Delay Filing.
80 It is not always possible to prove
actual loss from the operation OF a
Federal or State law before the statute
goes into effect, though the COM
planning parties may be absolutely
sure that damage in excess Of $4,000
will result. The complainant isn't
prevented from coming into court and
contending that his business will be
damaged but he can no longer merely
make the claim and leave it to the
Federal or State governments to prove
through the district attorneys that
this ISN'T going to happen.
Constitutional proceedings, there
fore, are likely to be delayed until a
statute comes into operation more
fully, and when damage has actually
occurred. The new rule may work
hardship in some instances, but, on
the other hand, complaining ccm-
pany which cannot satisfy a court
that it is going to be damaged in
excess of $4,000 has no right appar-
emily to be cluttering up the Federal
courts with test suits, so many of
which ultimately have to come to the
Supreme Court for final decision any
way.
Petition Dismissed.
Chief Justice Hughes announced the
new rule on behalf of a unanimous
Supreme Court. The case at issue
was an attack on the Indiana statute
which dealt with rates that could
be charged in retail installment sales.
The dealer who brought the suit had
not attempted through his attorneys
TO show that the damage would ex-
seed $4,000 for the simple reason that
the State of Indiana, in denying the
allegation, did not submit any proof
and heretofore it hasn't been neces-
sary for the complaining company to
do it.
Without deciding the merits of the
indiana law itself-though the Cir
cult Court of Appeals had declared
the law nconstitutional-the Su-
preme Court dismissed the suits for
lack of jurisdiction. AS the rule now
has been Interpreted by Chief Justice
Hughes. the complaining company
must show that its loss has amounted
TO more than $4,000 or that it is en-
tirely prevented from doing business.
Copyright, 1880