STRACHMAN v. PALMER et al., 177 F.2d 427

CONNOR, District Judge. ■ Plaintiff filed a complaint in the United States District Court for the District of Massachusetts against Howard S. Palmer, James Lee Loomis and Henry B. Sawyer, Trustees of New York, New Haven and Hartford Railroad Company, the Boston and Maine Railroad, and the Canadian Pacific Railway Company, under the Interstate Commerce Act, Title 49 U.S.C.A. Ch. 1, § 20(11), to recover for damages to livestock, alleged to have occurred while said livestock was being transported by rail from Canada to Massachusetts.

A trial was had, and evidence was introduced on the question of defendants’ liability for the alleged damage, both under said statute and at common law. The district court assumed jurisdiction of the cause, dismissed on the merits the action as to all defendants on the question of their liability under the statute, adjudging that Title 49 U.S.C.A. Ch. 1, § 20(11), did not apply to the shipment in question, in the transportation of livestock from Canada to Massachusetts.

Further holding that it did not have jurisdiction to decide the question of the common law liability of the defendants solely by reason of its jurisdic-: tion to decide the question of the statutory liability, the court dismissed the action as to defendants Boston and Maine Railroad and the trustees of the New York, New Haven and Hartford Railroad.

Jurisdiction, however, on the basis of diversity of citizenship, was found over defendant Canadian Pacific, and judgment was awarded the plaintiff in the amount of $150 plus interest against said defendant, by reason of its common law liability for damage occurring to said livestock while being transported over its rails. The action is here on the plaintiff’s appeal from the decision of the district court, he contending that:

(1) Title 49, U.S.C.A. § 20(11) applies to the shipment of livestock from Canada to Massachusetts, (2) the U. S. District Court had and should have exercised jurisdiction to determine the entire controversy. The district court had jurisdiction by virtue of the existence of a substantial federal question. “Jurisdiction is the power to decide a justiciable controversy, and includes questions of law as well as of fact.

A complaint, setting forth a substantial claim under a federal statute presents a case within the jurisdiction of the court as a federal court, and this jurisdiction cannot be made to stand or fall upon the way the court may chance to decide an issue as to the legal sufficiency of the facts alleged any more than upon the way it may decide as to the legal sufficiency of the facts proven.

Its decision either way upon either question is predicated upon the existence of jurisdiction, not upon the absence of it Jurisdiction, as distinguished from merits, is wanting only where the claim set forth in the complaint is so unsubstantial as to be frivolous or, in other words, is plainly without color or merit. * * * In that event the claim of federal right under the statute, is a mere pretence and, in effect, is no claim at all.” Binderup v. Pathé Exchange, 263 U.S. 291, 305, 44 S.Ct. 96, 98, 68 L.Ed. 308; Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 105, 53 S.Ct. 549, 77 L.Ed. 1062; St.

Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845. The allegations are not plainly unsubstantial or frivolous, and the complaint "does in fact raise serious questions, both of law and fact, which the district court can decide only after it has assumed jurisdiction over the controversy.” Bell v. Hood et al., 327 U.S. 678, 683, 66 S.Ct. 773, 776, 90 L.Ed. 939. In the light of the above holding, the district court assumed jurisdiction and rendered its decision on the merits.

The federal claim alleged was clearly not so unsubstantial or frivolous as to present no federal question, and jurisdiction of the cause was properly assumed. We are in accord with the conclusion of the district court that Section 20(11) of Title 49 U.S.C.A. does not apply to the instant case, a shipment of livestock originating in Canada and carried into Massachusetts, for the reasons given in its opinion, adopting the view expressed in the case of Alwine et al., v. Pennsylvania R. Co., 141 Pa.Super. 558, 15 A.2d 507; Reider v. Thompson, Trustee, Missouri-Pacific R. R. Co., Debtor, 1949, 5 Cir., 176 F.2d 13.

The test of applicability is concisely stated by the district court [82 F.Supp. 161, 165]: “Thus, the test of the application of these amendments is two-fold: first, is the carrier’s operation such as to bring the carrier within the general coverage of the Interstate Commerce Act; second, is the direction of the movement of the specific shipment in question from a point in the United States to a point either in the United States or in an adjacent country.

Plaintiff in the case at bar meets the first but not the second test.” The further point raised by the plaintiff is whether the district court having recognized and accepted jurisdiction of the cause, based on the existence of a substantial federal question which is decided adversely to the plaintiff, has jurisdiction to determine the question of common law liability. The U. S. Supreme Court in the case of Hurn v. Oursler, 289 U.S. 238, 243, 245, 247, 53 S.Ct. 586, 588, 77 L.Ed. 1148, restating the rule established in the case of Siler v. Louisville and Nashville R.

Co., 213 U.S. 175, 191, 29 S.Ct. 451, 53 L.Ed. 753, said: “This court held that the Circuit Court, having acquired jurisdiction by reason of the federal questions involved, ‘had the right to decide all the questions in the case, even though it decided the Federal questions adversely to the party raising them, or even if it omitted to decide them at all, but decided the case on local or state questions only.’ ” Further: “But the rule does not go so far as to permit a federal court to assume jurisdiction of a separate and distinct nonfederal cause of action because it is joined in the same complaint with a -federal cause of action.

The distinction to be observed is between a case where two distinct grounds in support of a single cause of action are alleged, one only of which presents a federal question, and a case where two separate and distinct causes of action are alleged, -one only of which is federal in character.

In the former, where the federal question averred is not plainly wanting in substance, the federal court, even though the federal ground be not established, may nevertheless retain and dispose of the case upon the nonfederal ground; in the latter it may not do so upon the nonfederal cause of action. * * * We do not mean by what has just been said to lay down a hard and fast test by which to determine in all situations what constitutes a cause of action. ‘A “cause of action” may mean one thing for one purpose and something different for another,’ * * *; but, for the purpose of determining the bounds between state- and federal jurisdiction, the meaning should be kept within the limits indicated.” Southern Pacific Co. v.

Van Hoosear, 9 Cir., 72 F.2d 903, 911, 912; Treasure Imports, Inc. v. Henry Amdur & Sons, Inc., et al., 2 Cir., 127 F.2d 3, 5; Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 305 U.S. 315, 324, 59 S.Ct. 191, 83 L.Ed. 195; Moore v. New York Cotton Exchange, 270 U.S. 593, 607-610, 46 S.Ct. 367, 70 L.Ed. 750, 45 A.L.R. 1370; Railroad Commission of State of California et al. v. Pacific Gas & Electric Co., 302 U.S. 388, 58 S.Ct. 334, 82 L.Ed. 319; Siler v. Louisville and Nashville R. Co., supra. The plaintiff sought recovery on one cause of action.

The effect of the statute was not to establish a new cause of action against the carrier, but to provide a more certain remedy for the shipper. “The effect of the Amendment was therefore not to change the liabilitjr of carriers, but to provide a new remedy for shippers. It denied the initial carrier the right to limit its own liability to carriage over its own lines, and it made connecting carriers the agents of the initial carrier.

But, as between initial and connecting carriers, it expressly left the loss to fall on the carrier primarily responsible, by subrogating the initial carrier, forced to pay a shipper’s claim, to whatever right that shipper had against the defaulting carrier * * Acme Fast Freight v. Chicago, M., St. P. & P. R. Co., 2 Cir., 166 F.2d 778, 782; Mexican Light & Power Co. v. Texas Mexican R. Co., 331 U.S. 731, 733, 67 S.Ct. 1440, 91 L.Ed. 1779. The facts necessary to be established for recovery on either statutory or common law grounds are practically identical and were before the court on both theories.

The record indicates that, by the implied consent of the parties, testimony was received and arguments made, not only on the issue whether the plaintiff could recover under the Interstate Commerce Act, but also on the issue whether he could recover at common law if the Act was inapplicable. Applying the test established in Hurn v.

Oursler, supra, we conclude that the plaintiff alleged one cause of action for negligent damage to his livestock in course of shipment, seeking to recover by either of two remedies apparently available to him, statutory or common law, and the case is one wherein the district court “had the right to decide all the questions in the case, even though it decided the Federal questions adversely to the party raising them, * * Siler v. Louisville and Nashville R. Co., supra [213 U.S. 175, 29 S.Ct. 455].

In the light of this rule and on the state of the record, we are of the view that judicial economy and convenience of the parties would be best served and piecemeal litigation avoided in the disposal of the non-federal question. The judgment of the district court is vacated as to the Boston and Maine Railroad and the trustees of the New York, New Haven and Hartford Railroad Company, and the case is remanded for further proceedings not inconsistent with this opinion; the appellant recovers costs in this court.