Court Opinion

ID: 8755651
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:45:36.55232+00
Date Added: 2024-06-11T17:01:14.373675
License: Public Domain

HANEY, Circuit Judge
(dissenting).
A hundred years ago, it was announced that when an objection to jurisdiction “has been made, or may be made, in any cause, in an inferior or appellate court of the United States, it must be considered and decided, before any court can move one further step in the cause; as any movement is necessarily the exercise of jurisdiction.” Rhode Island v. Massachusetts, 37 U.S. 657, 12 Pet. 657, 718, 9 L.Ed. 1233. That rule, not having been modified, is as effective today as it was then. KVOS, Inc., v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 81 L.Ed. 183. Such a step has been taken here, for an interlocutory injunction has been denied on the merits without considering whether the court has power to do so. Believing that the bill fails to set forth facts showing our jurisdiction, I think we are precluded from making a decision on any other point.
We have no jurisdiction unless “the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000.” 28 U.S.C.A. § 41. A general allegation that such amount is involved “is sufficient, unless the bill contains others which qualify or detract from it in such measure that when all are considered together it cannot fairly be said that jurisdiction appears on the face of the complaint, in which case the suit should be dismissed by the court sua sponte or upon the defendant’s motion.” KVOS, Inc., v. Associated Press, supra, page 277, 57 S.Ct. at page 200.
“Enclaves: Problems Raised by Federal Jurisdiction within the States.”
*365In all cases where regulation by a state is sought to be enjoined, the amount in controversy is the value of the right to be free of the challenged regulation, and the value of such right is the loss to complainant which would follow enforcement of the regulation. Kroger Grocery Co. v. Lutz, 299 U.S. 300, 301, 57 S.Ct. 215, 81 L.Ed. 251; McNutt v. General Motors etc. Corp., 298 U.S. 178, 181, 56 S.Ct. 780, 80 L.Ed. 1135; Cf. KVOS, Inc. v. Associated Press, 299 U.S. 269, 277, 57 S.Ct. 197, 81 L.Ed. 183.
Regulation may assume different forms. One form of regulation is by levying a tax. By that form the taxpayer does business as usual, and his profit therefrom is ordinarily reduced only by the amount he has to pay for the tax. By enforcement of the regulation his loss is only the amount of the tax, and penalty already accrued for nonpayment, which is “the value of the right to be free of the challenged regulation.” Healy v. Ratta, 292 U.S. 263, 268, 54 S.Ct. 700, 78 L.Ed. 1248; Henneford v. Northern Pacific R. Co., 303 U.S. 17, 19, 58 S.Ct. 415, 82 L.Ed. 619.
Another form of regulation is by suppressing a business entirely, in which case the value of the right to be free of the regulation is the resulting loss of profit by not being able to carry on the business. Healy v. Ratta, supra, page 269, 54 S.Ct. page 700. It can be seen, however, that in such case, not only is complainant’s profit destroyed, but possibly other things also may be lost, such as good will or fixtures which have no value for anything else.
Still another form of regulation is by restricting a complainant’s business, such as by fixing a selling price of a commodity (Kroger Grocery Co. v. Lutz, 299 U.S. 300, 57 S.Ct. 215, 81 L.Ed. 251) or other restrictions of that nature. General Motors etc. Corp., supra. In such cases the value of the right to be free of the regulation can be described no better than by the words that such value is the loss to complainants resulting from compliance with the regulation. In such cases, complainant’s profit may or may not be lessened, depending on the effect of the regulation on his business.
Still another form of regulation is compelling a complainant to furnish information, safety devices or other materials. In such cases, complainant’s business continues as usual, his income is the same, but his profit may or may not be lessened by complying with the regulation. If it appears that the profit will be lessened by the expense of compliance, then such expense is the value of the right to be free of the regulation. Petroleum Exploration Co. v. Public Service Comm., 304 U.S. 209, 216, 58 S.Ct. 834, 82 L.Ed. 1294. However, it is conceivable that such an expense might lead to greater profit, in which event the value of the right to be free of the regulation would be nil.
The declared purpose of the Oregon Liquor Control Act is, in general, to regulate the manufacture, sale and disposal of alcoholic beverages. It, so far as is complained of, requires complainant to procure licenses and permits in order to sell beer within the Park. The expense of the licenses and permits is the value of the right to be free of the regulation. The amended bill contains the new allegations that defendants’ threats of prosecution and confiscation have lessened sales of commodities in general by more than $100 a day, and that “the total amount lost” by reason thereof “at the present time exceeds the value of $3,000.00.” But that loss is the consequence of a failure to procure the licenses and permits and is not the value of the right to be free of the regulation. Healy v. Ratta, supra, page 268, 269, 54 S.Ct. page 700; cf. McNutt v. General Motors etc. Corp., supra, page 181, 56 S.Ct. page 780. Such loss does not result from procuring the licenses and permits, which is the regulation, but from the failure to procure such licenses and permits. As before said, the value of the right to be free of the regulation is the complainant’s loss, which is the expense of the licenses and permits, the amount of which is less than $3,000.
For these reasons I dissent from the holding of the majority opinion, and think that the bill should be dismissed on the ground that our jurisdiction is not alleged.