NATIONAL MUTUAL INSURANCE CO. v. TIDEWATER TRANSFER CO., INC. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT. No. 29. Argued November 8, 1948.-Decided June 20, 1949. The Act of April 20, 1940, c. 117, 54 Stat. 143 (now 28 U. S. C. § 1332), conferred on the federal district courts jurisdiction of civil actions (involving no federal question) between citizens of the District of Columbia and citizens of a State. A District of Columbia corporation instituted in the Federal District Court for Maryland an action against a Virginia corporation, wherein the jurisdiction dépended solely on diversity of citizenship. The District Court held the Act unconstitutional and dismissed the complaint. The Court of Appeals affirmed. Held: The Act is constitutional and the judgment is reversed. Pp. 583-585, 604. 165 F.2d 531, reversed. A District of Columbia corporation sued a Virginia corporation in the Federal District Court for Maryland, the jurisdiction depending solely on diversity of citizenship. The District Court dismissed the complaint. The Court of Appeals affirmed. 165 F. 2d 531. This Court granted certiorari. 333 U. S. 860. Reversed, p. 604. David G. Bress argued the cause for petitioner. With him on the brief were Alvin L. Newmyer and Sheldon E. Bernstein. By special leave of Court, Solicitor General Perlman argued the cause for the United States, as amicus curiae, urging reversal. With him on the brief were Assistant Attorney General Morison, Arnold Raum, Paul A. Sweeney and Harry I. Rand. Wendell D. Allen and Francis B. Burch argued the cause and filed a brief for respondent. 582 Opinion of JACKSON, J. MR. JUSTICE JACKSON announced the judgment of the Court and an opinion in which MR. JUSTICE BLACK and MR. JUSTICE BURTON join. This case calls up for review a holding that it is unconstitutional for Congress to open federal courts in the several states to action by a citizen of the District of Columbia against a citizen of one of the states. The petitioner, as plaintiff, commenced in the United States District Court for Maryland an action for a money judgment on a claim arising out of an insurance contract. No cause of action under the laws or Constitution of the United States was pleaded, jurisdiction being predicated only upon an allegation of diverse citizenship. The diversity set forth was that plaintiff is a corporation created by District of Columbia law, while the defendant is a corporation chartered by Virginia, amenable to suit in Maryland by virtue of a license to do business there. The learned District Judge concluded that, while this diversity met jurisdictional requirements under the Act of Congress,' it did not comply with diversity requirements of the Constitution as to federal jurisdiction, and so dismissed. The Court of Appeals, by a divided court, affirmed. Of twelve district courts that had considered the question up to the time review in this Court was sought, all except three had held the enabling Act unconstitutional,' and the two Courts of Appeals which had 1 Act of April 20, 1940, c. 117, 54 Stat. 143. For terms of the statute see note 10. 2 No opinion was filed by the District Court, which in dismissing the complaint for lack of jurisdiction relied upon its former decision and opinion in Feely v. Sidney S. Schupper Interstate Hauling System, Inc., 72 F. Supp. 663. 3 165 F. 2d 531. The Act had been upheld in Winkler v. Daniels, 43 F. Supp. 265; Glaeser v. Acacia Mutual Life Association, 55 F. Supp. 925; and in Duze v. Woolley, 72 F. Supp. 422 (with respect to Hawaii). It Opinion of JACKSON, J. 337 U.S. spoken on the subject agreed with that conclusion." The controversy obviously was an appropriate one for review here and writ of certiorari issued in the case. The history of the controversy begins with that of the Republic. In defining the cases and controversies to which the judicial power of the United States could extend, the Constitution included those "between Citizens of different States." In the Judiciary Act of 1789, Congress created a system of federal courts of first instance and gave them jurisdiction of suits "between a citizen of the State where the suit is brought, and a citizen of another State." In 1804, the Supreme Court, through Chief Justice Marshall, held that a citizen of the District of Columbia was not a citizen of a State within the meaning and intendment of this Act. This decision closed federal courts in the states to citizens of the District of Columbia in diversity cases, and for 136 years they remained closed. In 1940 Congress enacted the statute challenged here. It confers on such courts jurisdiction if the action "Is between citizens of different States, or had been held unconstitutional in the District Court in the instant case; in Central States Co-operatives v. Watson Bros. Transportation Co., affirmed 165 F. 2d 392, and in McGarry v. City of Bethlehem, 45 F. Supp. 385; Behlert v. James Foundation, 60 F. Supp. 706; Ostrow v. Samuel Brilliant Co., 66 F. Supp. 593; Wilson v. Guggenheim, 70 F. Supp. 417; Feely v. Sidney S. Schupper Interstate Hauling System, 72 F. Supp. 663; Willis v. Dennis, 72 F. Supp. 853; and in Mutual Ben. Health & Acc. Assn. v. Dailey, 75 F. Supp. 832. The Act had been held invalid by the Court of Appeals for the Fourth Circuit in the instant case, 165 F. 2d 531, with Judge Parker dissenting; and by the Court of Appeals for the Seventh Circuit in Central States Co-operatives v. Watson Bros. Transportation Co., 165 F. 2d 392, with Judge Evans dissenting. 6333 U. S. 860. "U. S. Const. Art. III, § 2, cl. 1. 8 § 11 of the Act of Sept. 24, 1789, c. 20, 1 Stat. 73, 78. 9 582 Opinion of JACKSON, J. 99 10 citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory.' The issue here depends upon the validity of this Act, which, in substance, was reenacted by a later Congress " as part of the Judicial Code.12 11 Before concentrating on detail, it may be well to place the general issue in a larger perspective. This constitutional issue affects only the mechanics of administering justice in our federation. It does not involve an extension or a denial of any fundamental right or immunity which goes to make up our freedoms. Those rights and freedoms do not include immunity from suit by a citizen of Columbia or exemption from process of the federal courts. Defendant concedes that it can presently be sued in some court of law, if not this one, and it grants that Congress may make it suable at plaintiff's complaint in some, if not this, federal court. Defendant's contention only amounts to this: that it cannot be made to answer this plaintiff in the particular court which Congress has decided is the just and convenient forum.. The considerations which bid us strictly to apply the Constitution to congressional enactments which invade fundamental freedoms or which reach for powers that would substantially disturb the balance between the Union and its component states, are not present here. In mere mechanics of government and administration we 10 The effect of the Act was to amend 28 U. S. C. (1946 ed.) § 41 (1) so that it read in pertinent part: "The district courts shall have original jurisdiction as follows: . . . Of all suits of a civil nature, at common law or in equity. . . where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and . . . (b) Is between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory . . . ." 11 Act of June 25, 1948, 62 Stat. 869. 12 28 U. S. C. §.1332. Opinion of JACKSON, J. 337 U.S. should, so far as the language of the great Charter fairly will permit, give Congress freedom to adapt its machinery to the needs of changing times. In no case could the admonition of the great Chief Justice be more appropriately heeded—“. we must never forget, that it is a constitution we are expounding.' "13 15 Our first inquiry is whether, under the third, or Judiciary, Article of the Constitution," extending the judicial power of the United States to cases or controversies "between Citizens of different States," a citizen of the District of Columbia has the standing of a citizen of one of the states of the Union. This is the question which the opinion of Chief Justice Marshall answered in the negative, by way of dicta if not of actual decision. Hepburn & Dundas v. Ellzey, 2 Cranch 445. To be sure, nothing was before that Court except interpretation of a statute which conferred jurisdiction substantially in the words of the Constitution with nothing in the text or context to show that Congress intended to regard the District as a state. But Marshall resolved the statutory question by invoking the analogy of the constitutional provisions of the same tenor and reasoned that the District was not a state for purposes of the Constitution and, hence, was not for purposes of the Act. The opinion summarily disposed of arguments to the contrary, including the one repeated here that other provisions of the Constitution indicate that "the term state is sometimes used in its more enlarged sense." Here, as there, "on examining the passages quoted, they do not prove what was to be shown by them." 2 Cranch 445, 453. Among his contemporaries at least, Chief Justice Marshall was not generally censured for undue literalness in interpreting the lan 13 McCulloch v. Maryland, 4 Wheat. 316, 407. 14 U. S. Const. Art. III, § 2, cl. 1. 15 See note 8. |