Source: https://supreme.justia.com/cases/federal/us/260/226/
Timestamp: 2019-04-19 10:38:37+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 260 › Kline v. Burke Construction Co.
The court that first receives proper jurisdiction over an in rem case, whether that is a state or a federal court, retains exclusive authority to decide it.
Burke sued Kline for a breach of contract in a federal court, based on diversity jurisdiction. Kline then sued Burke in an equity action in state court, arguing that Burke had abandoned the same contract that was the basis of the federal court case. Both cases arose from the same events and were based on the same cause of action, but the case in state court included additional parties. After the federal court case resulted in a mistrial, Burke sought an injunction from the federal court against the proceedings in state court. The lower court denied this request, but the intermediate appellate court ruled that the injunction should be issued.
An action based on in rem jurisdiction remains within the exclusive authority of the first court that receives it, while an action based on personal jurisdiction may give rise to multiple cases in multiple jurisdictions. An injunction by a federal court is proper for in rem cases if the federal court has taken jurisdiction before the state court, such that allowing both cases to proceed would cause friction between the court systems. This case is based on personal jurisdiction, however, and the plaintiff seeks money damages rather than equitable relief. There is no constitutionally protected right to bring a federal court case under diversity jurisdiction, so it cannot be infringed by the res judicata effect of a judgment in the state court.
If state and federal courts were allowed to exercise jurisdiction over claims relating to the same matter, the risk of inconsistent judgments and encouraging forum-shopping would undermine the judicial interests of fairness and finality.
1. Where a federal court has first acquired jurisdiction of the subject matter of a cause, it may enjoin the parties from proceeding in a state court of concurrent jurisdiction where the effect would be to defeat or impair the jurisdiction of the federal court. P. 260 U. S. 229.
2. But where the actions in both causes are in personam, seeking only money judgments, jurisdiction in the one is not affected by the other, and there is no basis for such an injunction. P. 260 U. S. 230.
See Julian v. Central Trust Co., 193 U. S. 93, 193 U. S. 112; Lanning v. Osborne, 79 F. 657, 662. It is settled that, where a federal court has first acquired jurisdiction of the subject matter of a cause, it may enjoin the parties from proceeding in a state court of concurrent jurisdiction where the effect of the action would be to defeat or impair the jurisdiction of the federal court. Where the action is in rem, the effect is to draw to the federal court the possession or control, actual or potential, of the res, and the exercise by the state court of jurisdiction over the same res necessarily impairs, and may defeat, the jurisdiction of the federal court already attached. The converse of the rule is equally true -- that, where the jurisdiction of the state court has first attached, the federal court is precluded from exercising its jurisdiction over the same res to defeat or impair the state court's jurisdiction.
And the same rule applies where a person is in custody under the authority of the court of another jurisdiction. Ponzi v. Fessenden, 258 U. S. 254.
But a controversy is not a thing, and a controversy over a mere question of personal liability does not involve the possession or control of a thing, and an action brought to enforce such a liability does not tend to impair or defeat the jurisdiction of the court in which a prior action for the same cause is pending. Each court is free to proceed in its own way and in its own time, without reference to the proceedings in the other court. Whenever a judgment is rendered in one of the courts and pleaded in the other, the effect of that judgment is to be determined by the application of the principles of res adjudicata by the court in which the action is still pending in the orderly exercise of its jurisdiction, as it would determine any other question of fact or law arising in the progress of the case. The rule therefore has become generally established that, where the action first brought is in personam and seeks only a personal judgment, another action for the same cause in another jurisdiction is not precluded. Stanton v. Embrey, 93 U. S. 548; Gordon v. Gilfoil, 99 U. S. 168, 99 U. S. 178; Hunt v. New York Cotton Exchange, 205 U. S. 322, 205 U. S. 339; Insurance Co. v.
Brune's Assignee, 96 U. S. 588, 96 U. S. 592; Merritt v. American Steel Barge Co., 79 F. 228; Ball v. Tompkins, 41 F. 486; Holmes County v. Burton Construction Co., 272 F. 565, 567; Standley v. Roberts, 59 F. 836, 844, 845; Green v. Underwood, 86 F. 427, 429; Ogden City v. Weaver, 108 F. 564, 568; Zimmerman v. So Relle, 80 F. 417, 419, 420; Baltimore & Ohio R. Co. v. Wabash Railroad Co., 119 F. 678, 680; Guardian Trust Co. v. Kansas City Southern Railway Co., 146 F. 337, 340; Guardian Trust Co. v. Kansas City Southern Railway Co., 171 F. 43; Woren v. Witherbee, Sherman & Co., 240 F. 1013; W. E. Stewart Land Co. v. Arthur, 267 F. 184.
actions which deal either actually or potentially with specific property or objects. Where a suit is strictly in personam, in which nothing more than a personal judgment is sought, there is no objection to a subsequent action in another jurisdiction, either before or after judgment, although the same issues are to be tried and determined, and this because it neither ousts the jurisdiction of the court in which the first suit was brought nor does it delay or obstruct the exercise of that jurisdiction, nor lead to a conflict of authority where each court acts in accordance with law. Stanton v. Embrey, 93 U. S. 548."
the duty of the state court to take the case and proceed to judgment. There can be no question of judicial supremacy, or of superiority of individual right. The well established rule, to which we have referred, that, where the action is one in rem that court -- whether state or federal -- which first acquires jurisdiction draws to itself the exclusive authority to control and dispose of the res, involves the conclusion that the rights of the litigants to invoke the jurisdiction of the respective courts are of equal rank. See Heidritter v. Elizabeth Oil Cloth Co., 122 U. S. 294, 122 U. S. 305. The rank and authority of the courts are equal, but both courts cannot possess or control the same thing at the same time, and any attempt to do so would result in unseemly conflict. The rule, therefore, that the court first acquiring jurisdiction shall proceed without interference from a court of the other jurisdiction is a rule of right and of law based upon necessity, and where the necessity, actual or potential, does not exist, the rule does not apply. Since that necessity does exist in actions in rem and does not exist in actions in personam, involving a question of personal liability only, the rule applies in the former, but does not apply in the latter.

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