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Starke v. New York

February 28, 1950


Author: Major

Before MAJOR, Chief Judge, and KERNER and LINDLEY, Circuit Judges.

MAJOR, Chief Judge.

This is an appeal from an order entered June 23, 1949, on defendant's motion, dismissing plaintiff's suit for lack of jurisdiction.

Much of plaintiff's argument before this court is predicated upon asserted facts purportedly taken from the briefs of the parties in the lower court but not alleged in the complaint and from an unpublished opinion of that court, none of which appears in the record before us. Manifestly, such extraneous matter cannot properly be considered in determining the validity of the order appealed from.

The complaint alleges that the plaintiff has since December 2, 1922 been employed by the defendant as a machinist and that "Under successive collective bargaining agreements entered into between the defendant and the successive duly authorized collective bargaining agents of the plaintiff" (naming such authorized agents, the last of which was System Federation No. 57, Railway Employees Department of the American Federation of Labor Mechanical Section thereof), and that "plaintiff by said employment by defendant acquired seniority rights accruing as December 2, 1922." It is alleged "That despite said collective bargaining contracts and in violation thereof, and in violation of the Railway Labor Act (Act of August 13, 1940; 45 U.S.C.A., Sect. 151 et seq.), which provides that it shall be the duty of carriers and their employees to make and maintain such collective bargaining agreements concerning rates of pay, rules and working conditions and to settle disputes arising thereunder, defendant improperly placed plaintiff in a seniority position below that of two other machinists whose accumulated seniority was less than that of plaintiff." It is alleged "That there are no further administrative remedies plaintiff must exhaust before bringing this action."

The complaint prays for "a judgment declaratory of plaintiff's seniority rights as an employee of defendant under the collective bargaining agreements entered into * * * pursuant to the provisions of the Railway Labor Act, said judgment of this Court to be declaratory of plaintiff's correct position on defendant's Machinists' Seniority Roster," and for restoration of such rights and to secure compensation for the damage resulting to plaintiff from defendant's long-standing impairment of plaintiff's seniority rights, which has wrongfully been paid to other employees with seniority rights junior to that of the plaintiff. And the complaint prays for a permanent injunction restraining the defendant from again changing or interfering with the said seniority rights.

Plaintiff contends that the court acquired jurisdiction because of diversity of citizenship of the parties, but even in the absence of such diversity the cause of action was one arising under the Railway Labor Act.

The sole allegation as to diversity is, "Plaintiff is a citizen of the State of Illinois.Defendant is a corporation, incorporated under the laws of the States of New York, Pennsylvania, Ohio, Indiana and Illinois." Then follows an allegation that the matter in controversy exceeds the sum of $3,000. Obviously the allegation as to diversity is insufficient on its face. Plaintiff, however, cites an authority, not shown in the record, which purports to disclose the official history of the defendant and construes the same to show that the defendant is a New York corporation and through a process of mergers was authorized to do business in Illinois. Upon this premise a number of cases are cited, the leading one of which is St. Louis and San Francisco Railway Co. v. James, 161 U.S. 545, 16 S. Ct. 621, 40 L. Ed. 802, in which it was held that there is an indisputable presumption that a corporation is composed of citizens of the State which created it, and that such presumption accompanies it when it does business in another State so that it may sue and be sued in the Federal courts in such other States as a citizen of the State of its original creation.

Without attempting to dissect defendant's complicated history, we are of the view that such history shows a voluntary consolidation by defendant and certain other railroads and that defendant has acquired a citizenship in each of the States of its incorporation. There are many cases in which, under such circumstances, the James case, supra, has been distinguished. Such distinction is aptly stated in Case v. Atlanta & C.A.L.R. Co., et al., D.C., 225 F. 862, 866:

"That line of decisions has no application to this cause.The line of decisions with which we are concerned grows out of the consolidation of railroad companies incorporated in different states. * * * All the decisions and text-writers agree that, where one corporation is formed by the consolidation of two or more corporations, the consolidated corporation is a citizen of each state in which any one of the constituent companies was a citizen. Upon this point there is marked unanimity."

See also Town of Bethel v. Atlantic Coast Line R. Co., 4 Cir., 81 F.2d 60, certiorari denied, Atlantic Coast Line R. Co. v. Town of Bethel, 298 U.S. 682, 56 S. Ct. 952, 80 L. Ed. 1402.

Plaintiff, contending that he has stated a cause of action arising under the laws of the United States, relies upon Sec. 152, First, of the Railway Labor Act, which provides:

"It shall be the duty of all carriers, their officers, agents and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof."

It is argued that the defendant has in two respects failed to perform duties imposed upon it by this section: (1) to maintain agreements concerning rules and working conditions, and (2) to settle disputes with employees, whether ...

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