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STATE OF GEORGIA v. WENGER

July 22, 1950

STATE OF GEORGIA
v.
WENGER.



The opinion of the court was delivered by: Wham, Chief Judge.

  This is a tort action instituted by the State of Georgia to recover damages alleged to have resulted from a conspiracy to violate its revenue and regulatory laws with respect to intoxicating liquors and to violate the federal law and Constitution in regard thereto. In substance the complaint charges defendant, as a coconspirator, with selling and shipping to certain other coconspirators within the State of Georgia intoxicating liquor subject to Georgia tax and warehouse charges in the amount of $395,340.00, and evading said tax and warehouse charges. It is charged that as a result of the conspiracy, the State of Georgia has been damaged in the sum of $395,340.00. Jurisdiction of this court is alleged to exist by virtue of 28 U.S.C.A. § 1331, giving to this court jurisdiction where the matter in controversy exceeds the sum or value of $3,000.00 exclusive of interest and costs and arises under the Constitution, laws or treaties of the United States. The State of Georgia contends that her action arises under the second section of the Twenty-first Amendment*fn1 to the Constitution of the United States and under the Webb-Kenyon Act, 27 U.S.C.A. § 122*fn2.

Defendant has filed his motion to dismiss the complaint for want of jurisdiction, for failure to state a claim upon which relief can be granted, for failure of plaintiff to comply with the rules of this court and because the complaint does not show any authority for its institution. The last two grounds of the motion were disposed of on oral argument. The first two are now before this court for consideration.

The State of Georgia contends that the second section of the Twenty-first Amendment to the United States Constitution and the Webb-Kenyon Act create and guarantee in her a federal right which has been violated by the defendant and his fellow conspirators as described in the complaint, and that such violation of said right constitutes a tort on the part of defendant for which he should compensate plaintiff in damages. Plaintiff also contends that since the allegations of her complaint raise a federal question this court must assume jurisdiction and, having once assumed jurisdiction, even though the federal question be decided against plaintiff on the merits, must retain jurisdiction for the purpose of adjudicating the claim resting on state law.

There has been and there continues to be some confusion of views among the courts as to whether a United States District Court has any jurisdiction in a case allegedly arising under the Constitution and laws of the United States when consideration of the facts alleged and the Constitution and laws leads to the conclusion that the claim asserted by plaintiff does not as a matter of law arise under either the Constitution or the laws of the United States. According to the latest applicable decision of the Supreme Court, Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939, the rule seems to be that when a complaint is so drawn as to assert a claim allegedly arising under the Federal Constitution or laws which requires an interpretation thereof to determine whether the claim does so arise, jurisdiction of the case must be accepted by the court for the purpose of determining the question of law. The Fair v. Kohler Die Co., 228 U.S. 22, 25, 33 S.Ct. 410, 57 L.Ed. 716. If the initial question of law is determined adversely to plaintiff the case must be dismissed, not on jurisdictional grounds but on its merits; otherwise it must be held for trial. The exception to this rule is found in the case in which it clearly appears that the asserted claim of a federal right is immaterial and made solely for the purpose of obtaining jurisdiction, or appears to be wholly insubstantial and frivolous. Such case should be dismissed for want of jurisdiction despite the assertion in the complaint of a claim under the Constitution or laws of the United States though even in such case the accuracy of calling such dismissal jurisdictional has been questioned. Bell v. Hood, supra.

In the complaint before the court the question as to whether plaintiff is entitled to recover depends upon an interpretation of 28 U.S.C.A. § 1331 and upon a determination of the scope and meaning of the Twenty-first Amendment and of the Webb-Kenyon Act. Though both the amendment and the act have been interpreted in a number of cases in which their scope and intended purpose have been stated, the precise question here presented has not been considered or adjudicated. Does either the amendment or the act by the specific prohibitions therein contained against the transportation or importation of intoxicating liquors into a state contrary to its laws or to be delivered or used contrary to its laws create in the offended state a civil right to damages against persons who unlawfully and willfully violate the prohibitions of the amendment and the act? The question is one of substance and under the authority of Bell v. Hood, supra, I must accept jurisdiction in this case.

On the merits of the case the question of law is presented as to whether plaintiff has stated a claim upon which relief may be granted. This question has two phases. First, whether the claim has any immediate basis in the Constitution or laws of the United States, and, if not, whether the court, having accepted jurisdiction to determine that question must retain jurisdiction in order to dispose of plaintiff's claim allegedly arising under the laws of the State of Georgia.

The Webb-Kenyon Act was originally enacted on March 1, 1913, and was entitled "An Act divesting intoxicating liquors of their interstate character in certain cases". 27 U.S.C.A. § 122. Section 123 of said title which provided punishment for violation of the terms of the Webb-Kenyon Act was repealed in 1936, leaving no provision for any enforcement of said act either civil or criminal. Said act provides no civil remedy for damages caused by violations of its terms. The Webb-Kenyon Act was reenacted in 1935 without any enforcement provision.

A brief review of the history and background of the Webb-Kenyon Act will be helpful in arriving at its purpose and meaning. The case of Leisy v. Hardin, 135 U.S. 100, 10 S.Ct. 681, 34 L.Ed. 128, decided on April 28, 1890, had held that intoxicating liquor was an article of commerce within the meaning of the interstate commerce clause of the Constitution and that a statute of a state prohibiting the sale of any intoxicating liquors as applied to a sale by an importer from another state in the original package or keg with seals unbroken was unconstitutional and void as repugnant to the clause of the Constitution granting to Congress the power to regulate commerce with foreign nations and among the several states. Art. 1, § 8. Following that decision the Wilson Act, 26 Stat. 313, 27 U.S.C.A. § 121, was enacted by Congress on August 8, 1890 forbidding the sale of liquor in a state in the original package even although brought in through interstate commerce when the existing or future state laws forbade sales of intoxicants. The Wilson Act was upheld and applied by the Supreme Court in a number of cases but it was recognized that under the terms of that act the right to receive liquor was not affected and that such receipt and the consequent possession and the right to use the liquor so received remained protected by the commerce clause of the Constitution. Vance v. W.A. Vandercook Company, 170 U.S. 438, 18 S.Ct. 674, 42 L.Ed. 1100. To enable the states to close that loophole the Webb-Kenyon Act was enacted by Congress in 1913. In the case of Clark Distilling Company v. Western Maryland Ry. Co., 242 U.S. 311, at pages 323, 324, 37 S.Ct. 180, at page 184, 61 L.Ed. 326, the court, after adverting to its legislative and judicial history, said: "Reading the Webb-Kenyon Law in the light thus thrown upon it by the Wilson Act and the decisions of this court which sustained and applied it, there is no room for doubt that it was enacted simply to extend that which was done by the Wilson Act; that is to say, its purpose was to prevent the immunity characteristic of interstate commerce from being used to permit the receipt of liquor through such commerce in states contrary to their laws, and thus in effect afford a means by subterfuge and indirection to set such laws at naught. In this light it is clear that the Webb-Kenyon Act, if effect is to be given to its text, but operated so as to cause the prohibitions of the West Virginia law against shipment, receipt, and possession to be applicable and controlling irrespective of whether the state law did or did not prohibit the individual use of liquor. That such also was the embodied spirit of the Webb-Kenyon Act plainly appears, since, if that be not true, the coming into being of the act is wholly inexplicable."

Again the court said, speaking of said act, 242 U.S. on page 325, 37 S.Ct. on page 185:

"* * * that act did not simply forbid the introduction of liquor into a state for a prohibited use, but took the protection of interstate commerce away from all receipt and possession of liquor prohibited by state law.

"The movement of liquor in interstate commerce and the receipt and possession and right to sell prohibited by the state law having been in express terms divested by the Webb-Kenyon Act of their interstate commerce character, it follows that * * * there is no possible reason for holding that to enforce the prohibitions of the state law would conflict with the commerce clause of the Constitution; * * *."

In McCormick & Co. v. Brown, 286 U.S. 131 at page 141, 52 S.Ct. 522, 526, 76 L.Ed. 1017, the court said: "* * * there is no reason for denying to the Webb-Kenyon Act its intended application to prevent the immunity of transactions in interstate commerce from being used to impede the enforcement of the states' valid prohibitions."

No decision has been found that gives the Webb-Kenyon Act a broader scope or ascribes to it a meaning or purpose different from the meaning and purpose set forth in ...


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