International Milling Co. v. Columbia Transportation Co. ( 1933 )

A foreign corporation is not immune from the orderly processes of state courts although its business is wholly interstate in character. The requirements of justice are paramount, unless submission thereto in the state where jurisdiction is sought imposes an unreasonable obstruction or undue burden upon interstate commerce. Davis v. Farmers Co-op. Equity Co. 262 U.S. 312,43 S. Ct. 556, 67 L. ed. 996.

The sole question here presented appears to be whether or not the suit begun by levy upon defendant's ship upon a cause of action arising in another state is an unreasonable burden upon interstate commerce and consequently a violation of the commerce clause of the federal constitution.

The case of Davis v. Farmers Co-op. Equity Co. 262 U.S. 312,43 S. Ct. 556, 67 L. ed. 996, was the first to establish the doctrine that an unreasonable burden in violation of the commerce clause might be placed on interstate commerce by subjecting a carrier to legal process in a state where it did not operate. While conceding that a foreign corporation engaged exclusively in interstate commerce was not immune from the orderly process of state courts, it held that the commerce clause of the federal constitution protected the foreign carrier from suit (a) in a state where the cause of action did not arise, and (b) in which the transaction giving rise to it was not entered upon, and (c) in which the carrier neither owned nor operated a railroad, and (d) in which the plaintiff did not reside. A. T. S. F. Ry. Co. v. Wells, 265 U.S. 101,44 S. Ct. 469, 68 L. ed. 928, followed the Davis case on similar facts.

Which of the various objections made to the Minnesota statute in the Davis case is of controlling importance, or must all concur in order to constitute the objectionable burden? The necessity for taking witnesses from the state where the cause arose to the state where jurisdiction is sought is not controlling, for in Hoffman v. Missouri ex rel. Foraker,274 U.S. 21, 47 S. Ct. 485, 71 L. ed. 905, witnesses were to be taken from Kansas to Missouri and, as against the Santa Fe in D. R. G. W. R. Co. v. Terte, 284 U.S. 284, 52 S. Ct. 152,76 L. ed. 295, they were required to be taken from Colorado to Missouri. The fact alone that the cause of action arose in a foreign jurisdiction was not controlling in either of those cases. They were both imported. Neither did the transaction out of which the cause arose in either case take place in the state where suit was brought. The residence of the plaintiff was not sufficient to lift the burden in Michigan Cent. R. Co. v. Mix,278 U.S. 492, 49 S. Ct. 207, 73 L. ed. 470, or in D. R. G. W. R. Co. v. Terte, 284 U.S. 284, 52 S. Ct. 152,76 L. ed. 295, nor was his nonresidence sufficient to impose it in the Hoffman case, 274 U.S. 21, 47 S. Ct. 485, 71 L. ed. 905. In the case at bar it is my understanding that the plaintiff, though a foreign corporation, has its principal place of business here. Such was the case in Missouri ex rel. St. L. B. M. Ry. Co. v. Taylor, 266 U.S. 200, 45 S. Ct. 47,69 L. ed. 247, 42 A.L.R. 1232, though probably not of controlling importance to the holding that the suit was not an unreasonable burden.

Of all the features suggested as objectionable in the Davis case, we have left as possibly of vital importance only the nonoperation or conduct of business in the state where jurisdiction is sought. I am the more impressed with the controlling importance of this element from a reading of D. R. G. W. R. Co. v. Terte, 284 U.S. 284, 52 S. Ct. 152,76 L.ed. 295.

In that case an employe at an interlocking track and signal plant, after acquiring a bona fide residence in Missouri, sued, in that state, the Rio Grande railroad and the Santa Fe, by both of which he had been employed, for injuries received in Colorado. The Santa Fe was a Kansas corporation licensed to operate its railroad in Missouri, whereas the Rio Grande operated no road in that state. Jurisdiction of the latter was sought by garnishment of traffic balances owed it by several railroad companies. It was held that a trial in Missouri would unreasonably burden interstate commerce as to the Rio Grande but not as to the Santa Fe. If the bringing of witnesses from Colorado were the controlling feature of the burden upon commerce, it was equally as burdensome for the Santa Fe as for the Rio Grande. Evidently we must look farther for the controlling distinction. The Santa Fe, although a foreign corporation, operated a railroad in Missouri. On the authority of Hoffman v. Missouri ex rel. Foraker, 274 U.S. 21,47 S. Ct. 485, 486, 71 L. ed. 905, the court said the burden on the Santa Fe was not unreasonable. Hoffman was a resident of Kansas suing a Missouri railroad for injuries received on its line in Kansas. One of the controlling considerations moving the Supreme Court to hold the burden not unreasonable was the operation of the defendant's road in Missouri. True, it was a Missouri corporation; but the state of incorporation is not controlling, because in the Terte case the Santa Fe was a nonresident, though licensed in Missouri. If the taking of witnesses from one state to another were the controlling consideration, the residence of the defendant would make no difference.

If any logical deduction can be drawn from the various cases, it seems to be that the operation of a railroad within the state where jurisdiction is sought is the important and controlling consideration. As far as commerce is concerned, I cannot see the distinction between operating a railroad into a state, as did the Santa Fe in the Terte case, and operating a line of steamships into one of its ports, as in the case at bar. Fortunately for the steamship line, it does not have to own right of way and trackage, but it does operate its ships into state waters and there docks, unloads, and loads them. This it does with its own crews and employes, just as much under its control as if it were operating a railroad to convey the same goods and passengers. It brings its property into the state just as effectively and for the same purpose as does a railroad. That defendant, by confining its operations to interstate business, avoids the necessity of taking a license to do business in this state is not important. As said in the Hoffman case [274 U.S. 23]:

"Even a foreign corporation is not immune from the ordinary processes of the courts of a state where its business is entirely interstate in character. International Harvester Co. v. Kentucky, 234 U.S. 579, 34 S. Ct. 944, 58 L. ed. 1479. It must submit, if there is jurisdiction, to the requirements of orderly, effective administration of justice, although thereby interstate commerce is incidentally burdened."

I therefore concur with Mr. Justice Olsen that jurisdiction was acquired in the case at bar to the extent of the property attached, and that interstate commerce is not thereby subjected to an unreasonable burden.