Frank W. Parks and John Patterson v. The New York Times Company

AINSWORTH, District Judge

(dissenting).

Fraudulent joinder is said to occur in removal cases based on diversity of citizenship when there is no reasonable basis for believing there is joint liability between the resident and nonresident defendants. The joinder of resident defendants is thus said to be for the sole purpose of fraudulently preventing the nonresident from exercising its legal right to remove the case from the state court to the United States district court. 1 A conclusion that the resident defendant was joined fraudulently is thereby justified. The burden of proof is on the defendant who seeks removal and it must be clear that under the law of the state in which the action is brought the facts asserted by plaintiff as the basis for liability against the resident defendant could not possibly create such liability, *482 and the asserted claim is therefore a sham and frivolous. Morris v. E. I. Du-pont de Nemours & Company, 8 Cir., 1934, 68 F.2d 788 . These are the legal principles of this court-made rule and with which there can be no dispute.

Where the joinder is without reasonable basis and it is clear that no liability exists on the part of the resident defendants, the joinder in a legal sense is held to be fraudulent. Johnson v. Kurn, 8 Cir., 1938, 95 F.2d 629 .

“On the question of removal we have not to consider more than whether there was a real intention to get a joint judgment and whether there was a colorable ground for it shown as the record stood when the removal was denied.” Chicago, Rock Island & Pacific Ry. Co. v. Schwy-hart, 1913, 227 U.S. 184 , 33 S.Ct. 250 , 57 L.Ed. 473 . And removability is determined as of the time of removal. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 , 58 S.Ct. 586 , 82 L.Ed. 845 (1938).

In this matter the district court “has painstakingly studied all the evidence submitted and available” and has reached the conclusion “that from the evidence presented upon the motion to remand in each of these cases there is no legal basis whatsoever for the claim asserted against the resident defendants”; and the trial judge found that the defendant, The New York Times Company, had sustained the burden of proof “by clear and convincing evidence that compels the conclusion that the join-der in each of these cases of the resident defendants was without any reasonable legal ground.” 195 F.Supp. 919, 922 . The record in this case consisted principally of the complete transcript of the trial in the companion Sullivan case, the King deposition, and the sworn complaint in Abernathy v. Patterson filed in the same United States district court as the instant proceedings.

The district judge carefully analyzed the evidence to determine if there was any reasonable basis under the law of Alabama upon which liability of the resident defendants could be established and he found as follows:

“There is no dispute as to what the evidence at the Sullivan trial showed as to the alleged sponsorship by the resident defendants of the alleged libelous article. In the cases now before this Court neither plaintiff contends that at a trial of this action he could or would offer any additional testimony, with the exception of the plaintiff Patterson, who, through his attorneys, contended that he expected the evidence to develop from the defendant King that King was the president of the Southern Christian Leadership Conference, of which the other individual defendants were members of the executive committee, and that said individual defendants through the Southern Christian Leadership Conference specifically or impliedly authorized or ratified the publication of the alleged libelous article. The evidence shows that the article in question was placed in The New York Times by an individual named John Murray, who was acting for a committee to defend Martin Luther King, Jr. Murray inserted the names of the four resident defendants as sponsors of the article. They were neither officers nor members of the committee, and had not authorized the committee, or Murray, or The New York Times, or anyone else to use their names in such a manner. Neither resident defendant knew.his name had been used until some time after the publication of the article in question. The theory that the article was authorized and that the individual resident defendants had authorized the use of their names through the Southern Christian Leadership Conference is without any evidentiary basis whatsoever. As a matter of fact, all the evidence is to the contrary and un-contradicted.” 195 F.Supp. 919, 923 .

*483 The majority opinion apparently agrees with the principal findings of fact of the court below when it states: “Other than the silence, the only evidence which in any way substantiates ratification is the sworn complaint filed by the resident defendants in Abernathy v. Patterson, supra, in which it is alleged that the advertisement was for their benefit and support, and the deposition of the Georgia defendant in the Patterson case in which the testimony was that an organization, of which he was president and in which the resident defendants were officers, received some of the funds raised through the medium of the ad.” It then states the question, was there substance to the claims against the resident defendants in the state court suits?

I do not believe there was, for it is clear that the resident defendants had no knowledge of the insertion of the ad claimed to be libelous until several weeks after its publication. The resident defendants, though associated with Dr. King in the Southern Chritian Leadership Conference, were not members of nor familiar with the “Committee to Defend Martin Luther King and the Struggle for Freedom in the South,” which was responsible for insertion of the advertisement. The Conference and the Committee were entirely independent and separate groups and the resident defendants were not members of the Committee nor connected with it in any way. The King deposition disclosed that not even he authorized the use of his name in the advertisement in The New York Times (King deposition, page 80) nor does it appear that resident defendants in any way personally benefited from publication of the advertisement or the funds raised thereby, though some funds may eventually have been received by the Southern Christian Leadership Conference, of which they were officers. The circumstances here did not oblige them to issue a denial about the publication when demand for retraction was made by plaintiffs upon them. There is no evidence whatsoever on the part of the resident defendants of ratification by silence or otherwise of The New York Times’ advertisement. In Birmingham News, 209 Ala. 403 , 96 So. 336 , cited by the majority, the Alabama Supreme Court held that “under the circumstances disclosed by the evidence” it would have been the duty of the defendant to communicate with the plaintiff within a reasonable time its denial of liability of an item of charge against defendant for printing and if “under these circumstances” the defendant remained silent beyond a reasonable period after receipt of the bill the silence would evidence ratification. But the facts in the cited case are vastly different from those here.

The court below found the facts on the motion for removal, as it was obligated to do, under Rule 52(a) of the Federal Rules of Civil Procedure 28 U.S.C.A. and unless these findings are “clearly erroneous” they should not be set aside. Findings of fact are not clearly erroneous unless unsupported by substantial evidence or clearly against the weight of the evidence or induced by an erroneous view of the law. Fleming v. Palmer, 1 Cir., 1941, 123 F.2d 749 ; Barron and Holtzoff, Federal Practice and Procedure, § 1133; McLeod v. Cities Service Gas Company, 10 Cir., 1956, 233 F.2d 242 . I believe the district judge’s findings were supported by substantial evidence and are correct. The federal courts should be equally vigilant to protect the right to proceed in federal court as to permit the state courts in proper cases to retain their own jurisdiction; the duties of the court to exercise jurisdiction when conferred and not to usurp it when not conferred are of equal obligation. Wecker v. National Enameling & Stamping Co., 204 U.S. 176, 186 , 27 S.Ct. 184, 188 , 51 L.Ed. 430 (1907); Bank of the United States v. Deveaux, 9 U.S. (5 Cranch) 61, 85 , 3 L.Ed. 38 (1809).

I would therefore affirm the judgment of the district court in these cases.

Rehearing denied; AINSWORTH, District Judge, dissenting.

. The Constitution of the United States provides for diversity jurisdiction in the federal courts. Article III, Section 2, “The Judicial Power shall extend to all Cases * * * between Citizens of different States * * Of course, the federal diversity jurisdiction was not limited to controversies commenced in the federal courts or the purpose of diversity jurisdiction would be defeated. Accordingly, the first Judiciary Act of 1789 contained provisions for removal from state courts to the federal courts, and a removal jurisdiction has existed ever since. 1 Stat. 73 , § 12 (1789). In general see Warren, New Light on the History of the Federal Judiciary Act of 1789, 37 Harv.L.Rev. 49, 91 (1923). Railway Co. v. Whitton, 80 U.S. (13 Wall.) 270 , 20 L.Ed. 571 (1871); Gaines v. Fuentes, 92 U.S. (2 Otto) 10, 23 L.Ed. 524 (1875); and Tennessee v. Davis, 100 U.S. (10 Otto) 257, 265, 25 L.Ed. 648 (1879), wherein the Court said: “It [removal] was exercised almost contemporaneously with the adoption of the Constitution, and the power has been in constant use since.” However, the complete diversity requirement of Strawbridge v. Curtiss, 3 Cranch 267 , 7 U.S. 265 , 2 L.Ed. 435 (1806), greatly curtailed federal diversity jurisdiction and afforded an opportunity for plaintiffs to defeat federal jurisdiction. Strawbridge necessitated the development of the principle of fraudulent joinder.