Case Name: CENTRAL STATES CO-OPS. v. WATSON BROS. TRANSP. CO.
Court: United States Court of Appeals for the Seventh Circuit
Jurisdiction: United States
Decision Date: 1947-12-12
Citations: 165 F.2d 392
Docket Number: No. 9291
Parties: CENTRAL STATES CO-OPS. v. WATSON BROS. TRANSP. CO.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 165
Pages: 392–405

Head Matter:
CENTRAL STATES CO-OPS. v. WATSON BROS. TRANSP. CO.
No. 9291.
Circuit Court of Appeals, Seventh Circuit.
Dec. 12, 1947.
Rehearing Denied Jan. 20, 1948.
EVANS, Circuit Judge, dissenting.
Theodore R. Sherwin, and Julius L. Sherwin, both of Chicago, 111., for appellant.
Thomas G. McBride and Brenner & McBride, all of Chicago, 111., for appellee.
Before EVANS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

Opinion:
MAJOR, Circuit Judge.
This appeal is from a judgment awarding to plaintiff the right to possession of certain property, in an action based upon the forcible entry and detainer statute of the State of Illinois. The judgment was entered upon a jury verdict directed by the court at the close of the defendant's evidence. The cause was instituted in the Municipal Court of the City of Chicago and removed on petition of the defendant to the District Court.
We are first met with the question of the jurisdiction of the District Court. This jurisdictional issue is raised in this court for the first time by the defendant, after having invoked the jurisdiction of the District Court and obtained an adverse judgment at its hands.
Plaintiff is a corporation and a citizen of the District of Columbia, while the defendant is a corporation and a citizen of the State of Nebraska. The court's jurisdiction, if such it had, is dependent upon Sec. 24 (1) of the Judicial Code, as amended by Congress in 1940, 54 Stat. 143, Act April 20, 1940, 28 U.S.C.A. § 41 (1), which so far as here material provides :
"The district courts shall have original jurisdiction as follows: First. Of all suits of a civil nature, where the matter in controversy (b) is between citizens of different States, or citizens of the District of Columbia, the TerrC iory of Hawaii, or Alaska, and any State or Territory
The italicized portion of the provision just quoted was added by the amendment of 1940. More specifically, the court prior to the 1940 amendment had jurisdiction only of controversies between citizens of different states. By the amendment that jurisdiction was enlarged to include controversies between the citizen of a state and one of the District of Columbia.
A decision as to the jurisdictional issue is dependent solely upon the constitutionality of the 1940 amendment. This issue poses the question as to whether Congress was empowered to thus enlarge the jurisdiction of Federal courts.
We need no more than mention the firmly established rule that a jurisdictional question may be raised at any stage of the proceedings. In fact, it is the duty of a reviewing court on its own volition and irrespective of whether the question has been raised by the parties to examine into the matter of jurisdiction. Treinies v. Sunshine Mining Co., 308 U.S. 66, 70, 60 S.Ct. 44, 84 L.Ed. 85; Texas v. Florida, 306 U.S. 398, 405, 59 S.Ct. 563, 83 L.Ed. 817, 121, A.L.R. 1179. Jurisdiction cannot be waived; neither can it be acquired by assent of the parties. United States v. Corrick, 298 U.S. 435, 440, 56 S.Ct. 829, 80 L.Ed. 1263; Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 79 L.Ed. 338. Jurisdiction is subject to the same test where the case is before the court on removal from a State court as though it had been originally brought in the Federal court. Employers Reinsurance Corp. v. Bryant, 299 U.S. 374, 57 S.Ct. 273, 81 L.Ed. 289.
This ironclad rule takes no note of the apparent hardships and unfairness which its application may produce. Illustrative is the situation before us where the defendant, after invoking the jurisdiction of the Federal court, not only failed to call the attention of the court to the matter of its jurisdiction so that it might have an opportunity to rule thereon but raised no question until it had become the defeated party in the litigation. Plaintiff concedes that the jurisdictional question may be raised at any time but attempts to escape the rule by arguing that merely a constitutional question is presented which, like most other questions, cannot be raised for the first time on appeal. We need not cite or discuss the cases relied on by plaintiff in this respect for the reason that they are, in our judgment, beside the point. After all, the question here goes directly to the court's jurisdiction, and the fact that such jurisdiction involves the validity of the statute upon which it is predicated does not, in bur judgment, impair the right of a litigant or the duty of the court on its own motion to consider and decide the issue. None of the cases called to our attention makes any distinction between a case where jurisdiction is dependent upon the constitutionality of a law and one where it rests upon any other basis.
Defendant contends that the sole power of Congress relative to the 1940 amendment is lodged in Art. Ill of the Constitution, which provides, so far as here material:
"Section 1. The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.
"Section 2. The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, to Controversies between Citizens of different States
It has been firmly established, as plaintiff concedes, that a citizen of the District of Columbia is not a citizen of a State within the meaning of the constitu tional article lastly quoted. Hepburn v. Ellzey, 2 Cranch 445, 2 L.Ed. 332; Barney v. Baltimore City, 6 Wallace 280, 18 L.Ed. 825; Hooe v. Jamieson, 166 U.S. 395, 17 S.Ct. 596, 41 L.Ed. 1049; O'Donoghue v. United States, 289 U.S. 516, 53 S.Ct. 740, 77 L.Ed. 1356. It, therefore, appears plain that the amendment of 1.940 which conferred diversity jurisdiction of a controversy between a ctizen of a State and a citizen of the District of Columbia was in excess of the power granted by Art. Ill, which limited such jurisdiction to controversies between citizens of different states.
Plaintiff makes no argument to the contrary, in fact tacitly concedes that such is the situation, but contends that this excess power of Congress is to be found in Art. I, Sec. 8, which provides:
"The Congress shall have Power [Clause 17] To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, .
"[Clause 18] To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
It is argued that the power "To exercise exclusive Legislation in all Cases whatsoever, over such District" is sufficiently broad and comprehensive to permit Congress to provide for diversity jurisdiction between a citizen of the District of Columbia and one of a State, notwithstanding the limitation imposed by Art. III. It is urged that these two provisions of the Constitution must be construed together, and when so construed the requisite power exists for the 1940 amendment. The precise question before us has not been passed upon by the Supreme Court or by a Circuit Court of Appeals. It has, however, been given much attention and study by the District Courts, as is evidenced by the fact that the question has been considered, decided, and an opinion published by nine of such courts. The District Court of Virginia, in Winkler v. Daniels, 43 F.Supp. 265, and the District Court of California in' Glaeser v. Acacia Mut. Life Ass'n, 55 F.Supp. 925, held the amendment constitutional. On the other hand, a District Court of Pennsylvania, in McGarry v. City of Bethlehem, 45 F.Supp. 385, a District Court of Missouri in Federal Deposit Ins. Corp. v. George-Howard, 55 F.Supp. 921, a District Court of New York in Behlert v. James Foundation, etc., 60 F.Supp. 706, a District Court of Massachusetts in Ostrow v. Samuel Brilliant Co., 66 F.Supp. 593, a District Court of South Carolina in Wilson v. Guggenheim, 70 F.Supp. 417, a District Court of Maryland in Feeley v. Sidney S. Schupper Interstate Hauling System, D.C., 72 F.Supp. 663, and a District Court of Virginia in Willis v. Dennis, D.C., 72 F.Supp. 853, held the amendment unconstitutional. Thus is would seem that the District Courts of the country have experienced a "field day" in constitutional erudition. The score to date is two in favor of and seven opposed to constitutionality.
As a prelude to a consideration of the precise question before us, it may be pertinent to note two rather recent observations by the Supreme Court concerning Art. Ill (sometimes referred to as the Judiciary Article).
In Federal Radio Commission v. General Electric Co., 281 U.S. 464, at page 469, 50 S.Ct. 389, 390, 74 L.Ed. 969, the court, concerning its own jurisdiction, stated:
"It [the Supreme Court] was brought into being by the judiciary article of the Constitution, is invested with judicial power only, and can have no jurisdiction other than of cases and controversies falling within the classes enumerated in that article."
In Lockerty v. Phillips, 319 U.S. 182, at page 187, 63 S.Ct. 1019, 1022, 87 L.Ed. 1339, the court had before it a situation wherein Congress had restricted the jurisdiction of Federal courts in certain' matters. The court stated:
"All federal courts, other than the Supreme Court, derive their jurisdiction wholly from the exercise of the authority to 'ordain and establish' inferior courts, con ferred on Congress by Article III, § 1, of the Constitution. Article III left Congress free to establish inferior federal courts or not as it thought appropriate. It could have declined to create any such courts, leaving suitors to the remedies afforded by state courts, with such appellate review by this Cohrt as Congress might prescribe."
Plaintiff's argument that the congressional power over courts as contained in Art. Ill is implemented by the powers conferred upon it relative to the District of Columbia by Art. I so as to justify the amendment of 1940, is predicated almost entirely upon the reasoning of the District Court in Winkler v. Daniels, supra, and the authorities therein cited. For this reason, we shall briefly analyze the reasoning of that case as well as the authorities upon which it rests.
Much reliance is placed upon the congressional history of the amendment, and particularly the report of the sponsoring committee. 43 F.Supp. 265, at page 266. The committee report, after quoting and discussing Sec. 8, Art I of the Constitution, makes the following significant statement concerning Art. Ill:
"The purpose of article III was to create an independent judiciary with powers conferred directly by the Constitution. These powers cannot be taken away from Congress. The Constitution guarantees to certain persons the right to demand the exercise of these powers under certain circumstances. For example, a citizen of a State may do so when involved in a case or controversy with a citizen of another State. The mere fact that 'the Constitution guarantees this right to the citizens of a State in no way prohibits the Congress from extending that same privilege to others who are not technically citizens of a State. This does not mean that Congress may indiscriminately add to the jurisdiction or authority of the courts. .Its powers to so add must in any case be found in the Constitution."
This reasoning of. the committee that a citizen of a State has the constitutional right to invoke Federal jurisdiction of a controversy with a citizen of another State is, so we think, fallacious. Even Congress is not under any constitutional mandate to establish a Federal forum for litigants, either by reason of diversity of citizenship or otherwise. See quotation from Lockerty v. Phillips, supra. The citizen of a State is entitled to a Federal forum only under such circumstances and conditions as Congress in its discretion may provide. Moreover, even if the citizen of a State was entitled to such a forum as a matter of constitutional right, we fail to discern how that could be utilized as a basis for congressional power to confer the same right upon a citizen of the District of Columbia.
Neither do the authorities cited in the Winkler case and relied upon by the plaintiff here furnish any support for the constitutionality of the amendment. True, Stoutenburgh v. Hennick, 129 U.S. 141, 9 S.Ct. 256, 32 L.Ed. 637; District of Columbia v. Murphy, 314 U.S. 441, 62 S.Ct. 303, 86 L.Ed. 329, and Neild v. District of Columbia, 71 App.D.C. 306, 110 F.2d 246, demonstrate the broad congressional power over the affairs of the District of Columbia and its citizens conferred by Sec. 8, Art. I of the Constitution. There is, however, no support in these cases for the contention that Congress because of such power became the repository of power over the Federal courts of the entire country further than that prescribed by Art. III.
Neither does the case of O'Donoghue v. United States, supra, so strongly relied upon, aid the plaintiff's contention but points strongly in the opposite direction. The court there was considering the power of Congress with reference to the courts of the District of Columbia and held that its power in that respect was greater than its powers over the courts of the country generally. The court stated 289 U.S. at page 546, 53 S.Ct. at page 748, 77 L.Ed. 1356:
"If, in creating and defining the jurisdiction of the courts of the District, Congress were limited to article 3, as it is in dealing with the other federal courts, the administrative and other jurisdiction spoken of could not be conferred upon the former. But the clause giving plenary power of legislation over the District enables Con gress to confer such jurisdiction in addition to the federal jurisdiction which the District courts exercise under article 3, notwithstanding that they are recipients of the judicial power of the United States under, and are constituted in virtue of, that article." (Emphasis ours.)
Thus, the court apparently recognized that the power of Congress as to Federal courts other than those of the District of Columbia is limited by Art. Ill, but as to the latter, it has been granted a power additional to that conferred by Art. III. This recognition further appears from the following statement of the court (same page) :
"Since Congress, then, has the same power under article 3 of the Constitution to ordain and establish inferior federal courts in the District of Columbia as in the states, whether it has done so in any particular instance depends upon the same inquiry, Does the judicial power conferred extend to the cases enumerated in that article? If it does, the judicial power thus conferred is not and cannot be affected by the additional congressional legislation, enacted under Article 1, § 8, cl. 17, imposing upon such courts other duties, which, because that special power is limited to the District, Congress cannot impose upon inferior federal courts elsewhere. The two powers are not incompatible; and we perceive no reason for holding that the plenary power given by the District clause of the Constitution may be used to destroy the operative effect of the judicial clause within the District, where, unlike the territories occupying a different status, that clause is entirely appropriate and applicable." (Emphasis ours.)
The court further evidenced the distinction to be drawn between the power of Congress over courts of the District of Columbia and other Federal courts of the country. In discussing the former, the court stated 289 U.S. at page 547, 53 S.Ct. at page 749, 77 L.Ed. 1356:
" that it drew its power from the same source, even though it was necessary it should have recourse to another provision of the Constitution in order to clothe the courts at the seat of government with other and additional authority not permissible under article 3."
It is also pertinent to keep in mind that the 1940 amendment does not confer only a benefit or right upon the citizens of the District of Columbia. It also imposes a burden in that they may become defendants as well as plaintiffs in diversity cases. Of greater importance is the fact that the reach of its terms is not confined to the citizens of the District of Columbia but includes with equal effect the citizens of all the States. It is hardly conceivable that Congress, broad as its powers may be with reference to the District of Columbia, can under the claim of exercising such powers legislate for the entire nation. Especially is this so concerning the judiciary, where its power is expressly limited by Art. III.
The argument that the citizens of the District of Columbia are entitled to thcsame rights and privileges as those of the States, including that provided by the amendment with which we are now concerned, is appealing, but it is of little if any consequence relative to the question with which we are now confronted. In response to a similar argument, the court in Feeley v. Sidney S. Schupper Inter-State Hauling System, supra, stated D.C. 72 F.Supp. at page 667
"The District of Columbia, by reason of its being the seat of the national government and under the exclusive jurisdiction of Congress by Article I, Section 8, Clause 17, is totally unlike any other governmental area in our union. It is not like a State. It is not like a territory. It is an area that is in a class by itself. Its anomalous position has been repeatedly recognized by the Courts. [Citing cases.] The prima facie discrimination against residents of the District, therefore, loses substance when it is considered in the light of a wholly exceptional situation, created by the framers of the Constitution out of necessity for a national capítol, from whose very nature flow many unusual consequences."
We conclude that the power of Congress over the inferior Federal courts of the country other than those of the District of Columbia (and perhaps certain territories) is limited to that conferred by-Art. Ill of the Constitution. It follows that Congress in the enactment of the 1940 amendment exceeded its power and that the amendment is unconstitutional.
The judgment is therefore reversed and remanded, with directions that the District Court remand the cause to the State court from which it was removed.