Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Docket Number
Attorney(S)
Judges
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Docket Number
Attorney(S)
Judges
Smart Summary

Wilson v. Republic Iron Steel Company et al.

Court: Supreme Court of the United States

Procedural posture: Direct writ of error to the U.S. District Court for the Northern District of Alabama to determine the District Court’s jurisdiction to retain a case removed from state court.

Argued: October 6–7, 1921; Decided: November 7, 1921

Factual and Procedural Background

The case began as an Alabama state-court action by an employee against his employer and a coemployee seeking damages for personal injuries allegedly sustained when the plaintiff complied with an order negligently given by the coemployee. The injuries occurred in Alabama. The complaint was pleaded in a single count and treated the employer (alleged liable under Ala. Code, 1907, § 3910, cl. 3) and the coemployee (alleged liable at common law) as jointly liable.

The employer timely filed a verified petition and bond for removal to federal court. The petition asserted, among other things, diversity between plaintiff (Alabama) and employer (New Jersey), an amount in controversy exceeding $3,000 (exclusive of interest and costs), and that the resident coemployee (Alabama) was fraudulently joined to defeat removal. The petition also recounted that the plaintiff had previously sued the employer alone in the federal district court for the same injuries, took a voluntary nonsuit during trial, and then filed the present state-court action adding the coemployee; it further alleged specific facts asserting the coemployee had no responsibility for the injury.

After removal was completed, the plaintiff moved to remand, asserting lack of jurisdiction because the plaintiff and coemployee were citizens of the same state and asserting removal was for delay, but the plaintiff did not traverse any factual allegations of fraudulent joinder in the removal petition. The motion to remand was heard on the then-existing record, with an admission as to citizenship and amount in controversy as stated in the removal petition, and without affidavits or other evidence. The District Court denied remand.

The District Court later ordered the plaintiff to pay costs from the earlier federal action in which he had taken a voluntary nonsuit, warning that failure to pay would result in dismissal. The plaintiff did not comply, and the District Court dismissed the case. The plaintiff then sought a direct writ of error limited to review of the jurisdictional ruling on removal; the District Court certified the jurisdictional question as whether it had jurisdiction to retain and proceed, or was required to remand.

Legal Issues Presented

  1. Whether, under Judicial Code § 238, the Supreme Court may review by direct writ of error (after final judgment) a District Court decision sustaining jurisdiction to retain a removed case rather than remand it to state court.
  2. Whether the District Court properly retained jurisdiction after removal where the employer alleged—by verified petition with factual statements—that the resident coemployee was fraudulently joined to defeat removal, and the plaintiff did not traverse those allegations in a motion to remand or otherwise.
  3. Whether the plaintiff’s assertion that removal was for delay affects the District Court’s jurisdiction to retain the case.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Powers v. Chesapeake Ohio Ry. Co., 169 U.S. 92, 96 Direct review under Judicial Code § 238 is available where jurisdiction is sustained on the question whether a removed case may be retained or must be remanded. Supported the Court’s conclusion that it had power to review the District Court’s decision sustaining jurisdiction to retain the removed case.
McAllister v. Chesapeake Ohio Ry. Co., 243 U.S. 302, 305 Same jurisdictional-review principle concerning retained removal jurisdiction under § 238. Reinforced reviewability of the jurisdictional ruling by direct writ after final judgment.
Jud. Code, § 28; Missouri Pacific Ry. Co. v. Fitzgerald, 160 U.S. 556, 580-583 If a cause is remanded, the remand order is not open to review. Noted as a limit on reviewability, distinguishing remand orders from orders sustaining jurisdiction.
German National Bank v. Speckert, 181 U.S. 405 Remand orders are not open to review. Cited alongside § 28 and other authority to describe limits on review.
McLish v. Roff, 141 U.S. 661 (1) Review under § 238 is only after a final judgment; (2) electing direct review on jurisdiction alone limits review to that question. Used to confirm final-judgment requirement and to explain that the Court could not consider non-jurisdictional issues (like costs) on this direct writ.
Wecker v. National Enameling Stamping Co., 204 U.S. 176, 181-182 A dismissal judgment can be “final” for review purposes even if it leaves merits undetermined and is not a bar to another action. Supported treating the District Court’s dismissal as a final judgment enabling review.
Detroit Mackinac Ry. Co. v. Michigan Railroad Commission, 240 U.S. 564, 570 Dismissal can have requisite finality for review. Reinforced finality of the dismissal.
Colorado Eastern Ry. Co. v. Union Pacific Ry. Co., 94 F. 312 Dismissal can constitute a final judgment for review. Cited as additional authority for finality.
United States v. Jahn, 155 U.S. 109 On direct review limited to jurisdiction, other issues are not reviewable. Supported the Court’s refusal to consider the costs-dismissal propriety.
Robinson v. Caldwell, 165 U.S. 359 Same limitation: only jurisdictional question is before the Court under § 238 certification. Reinforced waiver/limitation to jurisdiction-only review.
Hennessy v. Richardson Drug Co., 189 U.S. 25, 33 Same limitation on scope of review when jurisdiction alone is certified. Supported declining to consider non-jurisdictional assignments of error.
Wecker v. National Enameling Stamping Co., 204 U.S. 176, 185-186 Fraudulent joinder of a resident defendant cannot defeat removal; removal right is protected against sham joinder. Used to frame the governing principle that fraudulent joinder does not bar removal/retention.
Chesapeake Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152 Fraudulent joinder must be shown by factual allegations, not mere conclusions or deductions. Provided the standard for evaluating whether the removal petition’s fraudulent-joinder showing was adequately factual.
Illinois Central R.R. Co. v. Sheegog, 215 U.S. 308, 316 A verified removal petition’s statements must be taken as true by the state court. Supported acceptance of the verified petition’s factual allegations at the removal stage.
Stone v. South Carolina, 117 U.S. 430, 432 If plaintiff traverses removal-petition allegations after removal, the District Court must hear and determine the resulting issues. Cited to describe the procedure available to contest fraudulent-joinder allegations.
Chicago, Rock Island Pacific Ry. Co. v. Dowell, 229 U.S. 102, 113 Same procedural point: District Court determines contested factual issues raised against the removal petition. Explained what would have occurred if the plaintiff had taken issue with the petition.
Carson v. Dunham, 121 U.S. 421, 425-426 When allegations are traversed, the removing defendant bears the burden of proof. Used to state the burden allocation in a contested fraudulent-joinder inquiry.
Kentucky v. Powers, 201 U.S. 1, 33-34, 35 If the plaintiff does not take issue with allegations in the removal petition, the plaintiff is deemed to assent to their truth and the removing defendant need not produce proof. Central to holding that, because plaintiff did not traverse the petition’s factual allegations, no evidentiary showing was required.
Dow v. Bradstreet Co., 46 F. 824, 828 Additional authority referenced (“And see”) regarding treatment of untraversed fraudulent-joinder allegations in removal practice. Listed as supporting authority without further application detail.
Durkee v. Illinois Central R.R. Co., 81 F. 1 Additional supporting authority (“And see”) in removal/fraudulent-joinder procedure. Listed without additional explanation.
Dishon v. Cincinnati, New Orleans Texas Pacific Ry. Co., 133 F. 471, 474-476 Additional supporting authority (“And see”) in removal/fraudulent-joinder procedure. Listed without additional explanation.
Donovan v. Wells, Fargo Co., 169 F. 363, 368-369 Additional supporting authority (“And see”) in removal/fraudulent-joinder procedure. Listed without additional explanation.
Hunter v. Illinois Central R.R. Co., 188 F. 645, 648 Additional supporting authority (“And see”) in removal/fraudulent-joinder procedure. Listed without additional explanation.
Jones v. Casey-Hedges Co., 213 F. 43, 46-47 Additional supporting authority (“And see”) in removal/fraudulent-joinder procedure. Listed without additional explanation.
Wecker v. National Enameling Stamping Co., supra, p. 183 Fraudulent joinder renders questions about potential joint liability under local law immaterial to removal/retention. Used to support the Court’s decision not to resolve whether Alabama law supported joint liability where the joinder was found sham and fraudulent.
Chicago, Rock Island Pacific Ry. Co. v. Schwyhart, 227 U.S. 184, 194 Related support for treating sham/fraudulent joinder as controlling regardless of local-law joint-liability debate. Cited to confirm that the result is the same whether local law supports joint liability when joinder is sham and fraudulent.

Court's Reasoning and Analysis

The Court first addressed reviewability. Under Judicial Code § 238, it may directly review, after final judgment, a District Court decision in which jurisdiction is in issue, but only the jurisdictional question may be certified and decided. The Court held that whether a federal court may retain a removed case or must remand is a jurisdictional question reviewable by direct writ when the District Court sustains jurisdiction. The Court also held the dismissal entered by the District Court was a final judgment for purposes of review because it terminated the particular case, even though it did not adjudicate the merits and might not bar a later action.

Because the plaintiff invoked § 238 review limited to jurisdiction, the Court refused to consider the plaintiff’s challenge to the District Court’s dismissal for failure to pay costs from an earlier federal action; by taking jurisdiction-only review, the plaintiff waived review of non-jurisdictional matters on this direct writ.

On the merits of removal jurisdiction, the Court reiterated that a diverse, amount-qualified case may be removed by a nonresident defendant, and that fraudulent joinder of a resident defendant cannot defeat removal. A joinder that is facially proper may still be shown fraudulent by a verified removal petition alleging specific facts (not mere conclusions), which the state court must accept as true. After removal, the plaintiff may traverse the petition’s allegations by motion to remand, plea, or answer; if the plaintiff does so, the District Court must resolve the factual issues and the removing defendant bears the burden of proof. However, if the plaintiff does not take issue with the petition’s factual allegations, the plaintiff is deemed to assent to their truth and the removing defendant need not produce evidence.

Applying these principles, the Court found that absent the coemployee’s joinder the employer had a clear right to remove on diversity grounds. The verified petition alleged facts supporting the conclusion that the coemployee was joined without any good-faith intent to prosecute and solely to defeat removal, including assertions that the coemployee was not present and did not cause or contribute to the injuries. Because the plaintiff’s motion to remand did not traverse or contest those factual allegations and the hearing proceeded without evidence, the plaintiff was deemed to have assented to the petition’s truth and the employer was not required to prove the allegations. The Court held the alleged facts were legally sufficient to establish sham and fraudulent joinder, so the joinder did not bar removal or the District Court’s retention of the case.

The Court stated it was unnecessary to decide whether Alabama law gave “color” for joint liability where one defendant’s liability was statutory and the other’s was common-law, because the fraudulent nature of the joinder made the result the same either way. Finally, the Court held that an assertion that removal was for purposes of delay had no jurisdictional bearing and, in any event, was not proven.

Holding and Implications

AFFIRMED. The Supreme Court held that it had authority under Judicial Code § 238 to review, after final judgment, the District Court’s jurisdiction to retain the removed case; that the District Court’s dismissal was sufficiently final for such review; and that the District Court properly retained jurisdiction because the verified removal petition sufficiently alleged fraudulent joinder and the plaintiff failed to traverse those allegations.

The direct effect was to uphold federal jurisdiction over the removed action and leave in place the District Court’s disposition. The Court also made clear that, on a § 238 direct review limited to jurisdiction, it would not consider the propriety of the District Court’s separate ruling dismissing for nonpayment of prior costs. No broader implications beyond the removal/jurisdiction framework described in the opinion were stated.

WILSON v. REPUBLIC IRON STEEL COMPANY ET AL.

1. Whether a District Court into which a case has been removed from a state court may retain the case and proceed to its adjudication, or must remand it to the court whence it came, is a jurisdiction question a decision of which sustaining the jurisdiction may be reviewed here by direct writ of error, under Jud. Code, § 238, after final judgment. P. 95. 2. A judgment of the District Court dismissing an action after removal, for failure of the plaintiff to pay the costs in an earlier one brought in that court upon the same cause of action, wherein he had taken a voluntary nonsuit, is a final judgment, for purposes of review, even though not a bar to another action. P. 96. 3. But upon a direct review under Jud. Code, § 238, involving the District Court's jurisdiction to retain the case after removal, the propriety of its action in dismissing it for failure to pay such costs cannot be considered. P. 96. 4. The fact that a joinder of a resident defendant, fair on its face, is a fraudulent device to prevent removal, may be shown by a verified petition alleging the facts as distinct from conclusions; and the statements so made must be accepted by the state court as true. P. 97. 5. After removal, the plaintiff, by motion to remand, plea or answer, may traverse the allegations of the petition, and then the issues so arising must be heard and determined by the District Court, and the petitioning defendant must carry the burden of proof, but, if the plaintiff fail to take issue with them he must be deemed to assent to the truth of what is stated in the petition and the petitioning defendant need not produce any proof to sustain it. P. 97. 6. Where a petition to remove an action for personal injuries brought by an employee against an employer and a coemployee, aptly and clearly showed that the coemployee was joined without any purpose to prosecute the action in good faith against him and with the purpose of fraudulently defeating the employer's right of removal, held, that a motion to remand for want of jurisdiction merely specifying as grounds that the plaintiff and the coemployee were citizens of the same State and that the object of the removal was to delay the trial, did not put in issue the facts averred in the petition, and that the question whether an employer and a coemployee might be jointly liable, under the state law, for the same injury, although the liability of the one was statutory and of the other at common law, was irrelevant. P. 98. 7. The fact that a removal was made for delay does not affect the jurisdiction of the District Court to retain the case. P. 99. Affirmed.

MR. JUSTICE VAN DEVANTER delivered the opinion of the court.

This was an action by an employee against his employer and a coemployee to recover for injuries sustained by the plaintiff by reason, as was alleged, of his conforming to an order or direction negligently given to him by the coemployee and to which he was bound to conform. The injuries were sustained in Alabama and the action was brought in a court of that State. The employer's liability was based on an Alabama statute, Ala. Code, 1907, § 3910, cl. 3, and that of the coemployee on the common law. The complaint was in a single count and treated the defendants as jointly liable.

In due time the employer presented to the state court a petition and bond for the removal of the cause to the District Court of the United States, and the removal was ordered and completed. The petition was properly verified and as grounds for the removal stated in substance, that the amount in controversy exceeded three thousand dollars, exclusive of interest and costs; that the plaintiff and the employer were citizens of different States, the former of Alabama and the latter of New Jersey; that the controversy between them was separable and properly could be fully determined without the presence of any other party; that the coemployee was a citizen of Alabama and was wrongfully and fraudulently joined as a defendant with the sole purpose of preventing a removal of the cause to the District Court; that it was not the purpose of the plaintiff to prosecute the action in good faith against the coemployee and the joinder of the latter was merely a sham or device to prevent an exercise of the employer's right of removal; that the plaintiff had brought an earlier action in the District Court against the employer alone to recover for the same injuries and on the trial had taken a voluntary nonsuit because it appeared that he probably could not recover in that court on the evidence presented; that soon thereafter the present action, with the coemployee joined as a defendant, was begun in the state court; that the plaintiff personally and intimately knew every person who could by any possible chance have caused his injuries and knew the coemployee was not in any degree whatsoever responsible therefor; and that, as the plaintiff well knew all along, the coemployee was not guilty of any joint negligence with the employer, was not present when the plaintiff's injuries were received, and did no act or deed which caused or contributed to such injuries.

Shortly after the removal the plaintiff filed in the District Court a motion to remand the cause to the state court. This motion challenged the jurisdiction of the District Court on the grounds that one of the defendants, the coemployee, was a citizen of the same State as the plaintiff and that the removal was taken for the purpose of delaying the trial of the cause; but the plaintiff did not by the motion or in any wise traverse or take issue with any of the allegations of the petition for removal. The motion was heard on the record as it then stood with an admission that the citizenship of the parties and the amount in controversy were as stated in the petition for removal, neither party producing any affidavits or other evidence. As a result of the hearing the motion was denied because, as the order recites, the court was of opinion that "the grounds of said motion are not well taken." The plaintiff excepted. Then, on the motion of the employer, the court made an order requiring the plaintiff, within a fixed time, to pay the costs in the earlier action wherein he had taken a voluntary nonsuit, — in default of which the present action was to be dismissed. The plaintiff excepted to this order and also failed to comply with it. After the time for compliance had passed the court, conforming to the prior order, entered a judgment of dismissal.

To obtain a review of the ruling on the jurisdictional question presented by the motion to remand the plaintiff sought and obtained this direct writ of error; and in that connection the District Court certified that the jurisdictional question presented to and decided by it was whether in the circumstances already stated it had jurisdiction to retain the cause and proceed to a determination thereof in regular course, or was required to remand the same to the state court.

Our power, on this direct writ, to review the ruling on the question indicated, although challenged, is altogether plain.

Section 238 of the Judicial Code provides for a review by us, on a direct appeal or writ of error, of the decision of a District Court "in any case in which the jurisdiction of the court is in issue," and then adds, "in which case the question of jurisdiction alone shall be certified to the Supreme Court from the court below for decision."

Whether a District Court into which a case has been removed from a state court may retain the same and proceed to its adjudication or must remand it to the court whence it came is a jurisdictional question the decision of which, where the jurisdiction is sustained, may be reviewed under that section. Powers v. Chesapeake Ohio Ry. Co., 169 U.S. 92, 96; McAllister v. Chesapeake Ohio Ry. Co., 243 U.S. 302, 305.

If the cause be remanded the order is not open to review. Jud. Code, § 28; Missouri Pacific Ry. Co. v. Fitzgerald, 160 U.S. 556, 580-583; German National Bank v. Speckert, 181 U.S. 405.

Of course, the review can be had only after a final judgment. McLish v. Roff, 141 U.S. 661. But a judgment of dismissal, such as is shown here, is a final judgment. That it leaves the merits undetermined and may not be a bar to another action does not make it interlocutory. It effectually terminates the particular case, prevents the plaintiff from further prosecuting the same and relieves the defendant from putting in a defense. This gives it the requisite finality for the purposes of a review. Wecker v. National Enameling Stamping Co., 204 U.S. 176, 181-182; Detroit Mackinac Ry. Co. v. Michigan Railroad Commission, 240 U.S. 564, 570; McAllister v. Chesapeake Ohio Ry. Co., supra; Colorado Eastern Ry. Co. v. Union Pacific Ry. Co., 94 F. 312.

The jurisdictional question is all that is before us. The propriety of the ruling respecting the costs of the prior action is challenged in the assignments of error but cannot be considered. The plaintiff was at liberty to take the whole case to the Circuit Court of Appeals or to bring it here on the question of jurisdiction alone. He took the latter course and by doing so waived all right to a review of the ruling on the other matter. McLish v. Roff, supra; United States v. Jahn, 155 U.S. 109; Robinson v. Caldwell, 165 U.S. 359; Hennessy v. Richardson Drug Co., 189 U.S. 25, 33.

A civil case, at law or in equity, presenting a controversy between citizens of different States and involving the requisite jurisdictional amount, is one which may be removed from a state court into the District Court of the United States by the defendant, if not a resident of the State in which the case is brought, § 28 Jud. Code; and this right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy. Wecker v. National Enameling Stamping Co., 204 U.S. 176, 185-186. If in such a case a resident defendant is joined, the joinder, although fair upon its face, may be shown by a petition for removal to be only a sham or fraudulent device to prevent a removal; but the showing must consist of a statement of facts rightly leading to that conclusion apart from the pleader's deductions. Chesapeake Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152. The petition must be verified, § 29 Jud. Code, and its statements must be taken by the state court as true. Illinois Central R.R. Co. v. Sheegog, 215 U.S. 308, 316. If a removal is effected, the plaintiff may, by a motion to remand, plea or answer, take issue with the statements in the petition. If he does, the issues so arising must be heard and determined by the District Court, Stone v. South Carolina, 117 U.S. 430, 432; Chicago, Rock Island Pacific Ry. Co. v. Dowell, 229 U.S. 102, 113; Chesapeake Ohio Ry. Co. v. Cockrell, supra, pp. 152, 154, and at the hearing the petitioning defendant must take and carry the burden of proof, he being the actor in the removal proceeding. Carson v. Dunham, 121 U.S. 421, 425-426. But if the plaintiff does not take issue with what is stated in the petition, he must be taken as assenting to its truth and the petitioning defendant need not produce any proof to sustain it. Kentucky v. Powers, 201 U.S. 1, 33-34, 35.

And see Dow v. Bradstreet Co., 46 F. 824, 828; Durkee v. Illinois Central R.R. Co., 81 F. 1; Dishon v. Cincinnati, New Orleans Texas Pacific Ry. Co., 133 F. 471, 474-476; Donovan v. Wells, Fargo Co., 169 F. 363, 368-369; Hunter v. Illinois Central R.R. Co., 188 F. 645, 648; Jones v. Casey-Hedges Co., 213 F. 43, 46-47.

Here but for the joinder of the coemployee the case plainly was one which the employer was entitled to have removed into the District Court on the ground of diverse citizenship; and, if the showing in the petition for removal be taken as true, it is apparent that the coemployee was joined as a defendant without any purpose to prosecute the action in good faith as against him and with the purpose of fraudulently defeating the employer's right of removal. This is the rational conclusion from the facts appropriately stated, apart from the pleader's deductions. The petition was properly verified and the plaintiff, although free to take issue with its statements, did not do so. He therefore was to be taken as assenting to their truth, relieving the employer from adducing evidence to sustain them, and merely challenging their sufficiency in point of law. We hold they were sufficient, in that they disclosed that the joinder was a sham and fraudulent and hence was not a legal obstacle to the removal or to the retention of the cause by the District Court.

The briefs disclose that the parties differ as to whether the local law gives any color for treating the employer and the coemployee as jointly liable, — the asserted liability of one resting on a statute and that of the other on the common law. But we do not find it necessary to solve this question. As the joinder was a sham and fraudulent — that is, without any reasonable basis in fact and without any purpose to prosecute the cause in good faith against the coemployee — the result must be the same whether the local law makes for or against a joint liability. See Wecker v. National Enameling Stamping Co., supra, p. 183; Chicago, Rock Island Pacific Ry. Co. v. Schwyhart, 227 U.S. 184, 194.

In his motion to remand the plaintiff asserted that the removal was obtained for purposes of delay. But this had no jurisdictional bearing, no attempt was made to prove it and it is not relied on here.

We think the District Court rightfully sustained its jurisdiction under the removal.

Judgment affirmed.

Use AI to get other relevant cases.

Comments

WILSON v. REPUBLIC IRON CO
(Nov 7, 1921)