Court Opinion

ID: 6836576
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:06:37.587475+00
Date Added: 2024-06-11T16:04:43.255972
License: Public Domain

SCOTT, District Judge
(dissenting). I regret that I am unable to concur with the majority of the court in its opinion sustaining the jurisdiction of the District Court. I am constrained to the conclusion that the State Highway Commission of Wyoming is not a corporation. The aet of the Wyoming Legislature creating the board does not purport to create a corporation, but in my opinion a mere commission to which is committed the execution of particularly described duties. It is designed to hold no title to property. It can have no financial interests of any character, and neither it nor its members are in any true sense trustees. The state legislation respecting this body as well as the aet of Congress known as the Federal Highway Aet, seems to contemplate mutual transactions between the national government and states. In my opinion the case was one essentially against the state of Wyoming. The ease was an action at law to recover a money judgment for increased compensation for construction of the highway, and alleged to have been occasioned by a change of survey. It is conceded in the majority opinion that the State Highway Commission of Wyoming has nothing from which the judgment could be paid, and it is likewise conceded that the plaintiff can recover nothing from the individual members of the board. It is further conceded that in the event of recovery “it will be entirely optional with the state as to what, if anything, it will do in the premises.” It seems to me that such an adjudication would be a mere gesture.
The case of Port of Seattle v. Oregon & W. R. R., 255 U. S. 56, 41 S. Ct. 237, 65 L. Ed. 500, cited in the majority opinion, seems to me to be clearly distinguishable. In that case the Port of Seattle was expressly created as a municipal corporation, and was empowered to hold property and receive revenue in its own legal right. As the Supreme Court there said: “The port has thus an independent financial interest in this controversy; and although the state has also an interest,' suit against the port would not be prevented by the Eleventh Amendment.”
I also think the ease of Thomas v. Board of Trustees, 195 U. S. 207, 25 S. Ct. 24, 49 L. Ed. 160, also cited in the majority opinion, clearly distinguishable. In that ease, while it was held that the bill did not allege facts showing the incorporation of the board, the bill did disclose that the board was in reality a board of trustees, “and to have the general supervision of all lands, buildings and other property belonging to said college, and of receiving by gift, devise or bequest, moneys, lands and other properties for its benefit and for the benefit of those under its charge,” ete. Had the necessary diversity of citizenship been alleged and the individual members of the board been named as defendants as in the instant case, the opinion of the Supreme Court to my mind indicates that the Circuit Court would have had jurisdiction. Indeed, the answers of the Supreme Court were certified with liberty to the Circuit Court of Appeals to authorize an amendment of the bill alleging the necessary diversity of citizenship of the individual members. With the appropriate amendment, I have no doubt that in that ease, as well as in the Port of Seattle Case, the court would have had jurisdiction to finally adjudicate the rights in question, and grant complete equitable or legal relief in accordance with the class of thé respective cases.
I think the principle laid down in Ex parte State of New York, No. 1, 256 U. S. 490, 41 S. Ct. 588, 65 L. Ed. 1057, and Smith v. Reeves, 178 U. S. 436, 20 S. Ct. 919, 44 L. Ed. 1140, is applicable to the ease at bar, and that the action here was merely one against the State Highway Commission arid its individual members as such. A brief interesting note will be found on the subject in 44 L. R. A. (N. S.) at page 196. I quote from the note: “In some of the cases the state agency or board is itself a corporation with general power to sue and be sued. In other eases the result in the main seems to depend upon the nature of the action or relief demanded. Thus, in the Lord Case, infra, it was a question of obtaining money out of the state treasury. * * * ” “In Lord & P. Chemical Co. v. Board of Agriculture, 111 N. C. 135, 15 S. E. 1032, it was held that an action would not lie against the Board of Agriculture, its Commissioner, and the State Treasurer to, recover taxes paid under protest to it, and turned over it seems to the State Treasurer, as the board was a department of *645the government, and that the action was an action against the state.”
There is another serious question going to the jurisdiction of a federal court; The Legislature of the state of Wyoming, in amending the original act, provided: “The commission shall have the power to sue in the name of the ‘State Highway Commission of Wyoming’ and may be sued by such name in the courts of this state and in no other jurisdiction upon any contract executed by it.” Laws 1927, c. 61.
The ease of Smith v. Reeves, supra, was one brought by an individual against Reeves as State Treasurer of California. Section 3669 of the Political Code of California provided, in case of actions against the State Treasurer for the recovery of taxes illegally collected, that, “at the time the Treasurer demurs or answers, he may demand that the action be tried in the superior court of the county of Sacramento.” It was contended in that case that by the section referred to the state had consented that its Treasurer might be sued in resp.ect to the matters specified. Mr. Justice Harlan, in delivering the opinion of the court, said:
“It is quite true the state has consented that its Treasurer may be sued by any party who insists that taxes have been illegally exacted from him under assessments made by the State Board of Equalization. But we think that it has not consented to be sued except in one of its own courts. This is not expressly declared in the statute, but such, we think, is its meaning. The requirement that the aggrieved taxpayer shall give notice of his suit to the Comptroller, and the provision that the Treasurer may at the time he demurs or answers ‘demand that the action be tried in the superior court of the county of Sacramento,’ indicate that the state contemplated proceedings to be instituted and carried to a conclusion only in its own judicial tribunals. If a Circuit Court of the United States can take cognizance of an action of this character, the right given to the Treasurer by the local statute to have the case tried in the superior court of Sacramento county would be of no value; for, as the jurisdiction and authority of a Circuit Court of the United States depends upon the Constitution and laws of the United States, it could not refuse to take cognizance of the case if rightfully commenced in it and to proceed to final decree, nor could it, merely in obedience to the laws of the state, transfer it to a state court upon the demand of the State Treasurer. A federal court can neither take nor surrender jurisdiction except pursuant to the Constitution and laws of the United States.
“In Beers v. Arkansas [20 How. 527, 15 L. Ed. 991] above cited, it was further said: ‘As this permission (to be sued) is altogether voluntary on the part of the sovereignty, it follows that it may prescribe the terms and conditions on which it consents to be sued, and the manner in which the suit shall be conducted, and may withdraw its consent whenever it may suppose that justice to the public requires it. Arkansas, by its Constitution, so far waived the privilege of sovereignty as to authorize suits to bo instituted against it in its own courts, and delegated to its General Assembly the power of directing in what courts, and in what manner, the suit might be commenced. And, if the law of 1854 [Acts Ark. 1854r-55, p. 17] had been passed before the suit was instituted, we do not understand that any objection would have been made to it. The objection is that it was passed after the suit was instituted, and contained regulations with which the plaintiff could not conveniently comply. But the prior law was not a contract. It was an ordinary act of legislation, prescribing the conditions upon which the state consented to waive the privilege of sovereignty. It contained no stipulation that these regulations should not be modified afterwards, if, upon experience, it was found that further provisions were necessary to protect the public interest; and no such contract can be implied from the law, nor can this court inquire whether the law operated hardly or unjustly upon the parties whose suits were then pending. That was a question for the consideration of the Legislature. They might have repealed the prior law altogether, and put an end to the jurisdiction of their courts in suits against the state, if they had thought proper to do so1, or prescribe new conditions upon which the suits might still be allowed to proceed. In exercising this latter power the state violated no contract with the parties; it merely regulated the proceedings'in its own courts, and limited the jurisdiction it had before conferred in suits when the state consented to be a party defendant.’ ”
Now the question occurs, if’ a state can restrict its suability or the suability of its Treasurer or other officer as such, why may it not likewise restrict the suability of its Commission from whom it has withheld corporate capacity?
I think the judgment of the District Court should have been affirmed.