# Petition — Napper v. Anderson > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_0558%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1975 - **Citation:** 423 U.S. 837 ## Text Sutrerre Court, U.S. FILED | YUN 16 1975 In the ||. ieee Supreme Court of the United States October Term, 19% JIM L. NAPPER, ET UX., Petitioners Ve ANDERSON, HENLEY, SHIELDS, BRADFORD & PRITCHARD, ETC., ET AL., Respondents Petition For A Writ of Certiorari To The United States Court of Appeals For The Fifth Circuit H. AVERIL SWEITZER 226 Lakewood Tower Dallas, Texas 75214 Of Counsel: CHARLES BEN HOWELL Dallas, Texas 75214 . . it appears to ws that the doctrine [of res judicata] . . . must be treated as a compromise between two conflicting interests; the conveni- ence of avoiding a multiplicity of suits and the adequacy of the remedies afforded for conceded wrongs. —Learnep Hanp! Such a rule of public policy must be watched in its application lest a blind adherence to it tend to defeat the even firmer established policy of giving every litigant a full and fair day in court. —HeErsert Goopricx2 1. Lyons v. Westinghouse Electric Corp., 222 F.2d 184, 189 (2d Cir. 1955). 2. Unstext States v. Silliman, 167 F.2d 607, 614 (3d Cir. 1948). - INDEX OpiNiONns Below. ccccccccccccccccscccccccesscssseses JUTISGICTION coccccccccccsccccccevssessssssesecees Questions Presented eecceccccccvceccsssseseseseses First Question eeeeeeeeeeeeeeeeeeeeeeeeeeeeeee Second Question eeeeeeeaeeeeeeeeeeeeeeeeeeoee ee Statutes Involved eeeeeeoeeveeoeeeeeeeeeeeeeeeeeeeeee Summary of Argument @eeseoeaee eee eeeoceeeeoceee eee eeee Statement of the Case eeeeveeeeeeveeeeeeeeeeeeeeeoee Federal Jurisdiction in the Court of First Imstancecceccccccccccccccccccccccccccce Facts of the Case ccocccccccccccccccccccccccce Proceedings-State Courts-First Trial .eccccece Proceedings~Eastern District of Arkansas ..... Proceedings on Remand~Arkansas State Court.... Proceedings After Reversal-Texas State | APPT TT TTT TTT TTT TTT TTT TTTTTTTeTe Proceedings=Northern District of Texas..eccees Reasons for Allowing the Writ..cccccccccccceccsece First Questions The Right of Appeal May Not Be Unnecessarily Frustrated By the Issue Preclusion any) | PPrrrr rT ey TTTTTTeTrrrr+rrrrrrrrrrrrrrrTtt Evolution of the Preclusion Doctrine..cccceece The Diversity Claim is Meritorious. .cccccccces Johnson Co. v. Wharton Will Not Stand Up To ANALYSIS. cccccccccovccccccccccccccecccecce This Case Involves Collateral Application Of The Arkansas Judgment. ..ccccccccccccesesus The Case is Being Sacrified on the Altar of PN EBdn 666666000600600660 06000040060 00008 Petitioners are Being Deprived of a Valuable Right of Constitutional Proportions....ccoeee The Question Presented is Purely One of Federal Ee eee TT TTT TTT TTT TT TTT TT TTT Professor Moore has been Misconstrued...c.ccoce Many Authorities Hold Against Preclusion Where There Was No Right of Appeal....ccceces iii 43 46 ty INDEX Second Question: Petitioners Have Presented A Clear Case of Pendent Jurisdiction. .scccccecccess A Substantia! Federal Claim was Presented.....-. Inasmuch as the Federal Claim was Arguable, Pendent Jurisdiction of the State Claim Attached. ccccccccccccesccssessseseesssssesess® Petitioners Have Been Denied the Opportunity to Invoke the District Judges* Discretionary Jurisdiction Over Pendent ClaimsS.cccccceseees A Ruling of “No Power to Decide" Does Not Constitute an Exercise of the Discretion CO Decidecccccccccccsssesccssesessessessesese The “Dismiss Before Trial" Rule is Not a Mandate ccecoccccccccsesssesssssesssssssssssse CONCLUSION, cecccceceseesseseesessssssesesesessssess APPENDIX Federal Court Proceedings—-ArkansaSececsccceees (Defendants*) Petition for Removal..ecesees (Defendants*) MOTLONsc cccccccsccesescesscces Order (Remanding Case) ecccccccccccccccccccs 52 54 62 64 P.A.1 P.A.l P.A.1l P.A.2 Federal Court Proceedings—-TexaSeessccccececees PeA.2-8 Memorandum Opinion and Order.sesecesccesess P.A.2 Fifth Circuit PrOCEediNGSececsecsecseeeescvcees P.A.8-15 Opinion, 500 F.2d BBA. coccccccccccccccceses P.A.8 Opinion on Rehearing, 507 F.2d 723.cceceees P.A.-14 JUUGMENT sa ceeeeccesceceseeesesesesssseeseses P.A.-15 State Court ProceediNgGS~TeXaSecosececesesresecs P.A. 15-21 Opinion, Tex.Ct.Civ.App., 464 S.W.2d,496.. Supplemental Motion for Disqualification of Judge, 162nd Dist.Ct., Dallas Co., TOXAScccccceccceceseeeeseseceeseseeeeeece Motion to Certify Disqualification of Judge, 162nd Dist.Ct., Da@llas Co., TEXAS ccccccccccccccesccccceeeseceseseeeee P.A.16 P.A.19 P.A.19 v INDEX Motion to Call Another Judge to Conduct Hearing Upon Supplemental Motion For Disqualification of Judge, 162nd Dist.Ct., Dallas Co., TexScccccccccccccs P.A.19 Hearing on Motion for New Trial, 162nd Dist.Ct., Dallas Co., Di ndecesesetooce P.A.20 CITATIONS Cases: ited States reme Court Ashe v. Swenson, 397 U.S.436(1970)....ccccccece 28,29 Bell v. Hood, 327 U.S.678(1946)....ccccccccccce 7,52 C.A.B. v. Delta Airlines, 367 U.S.3l6....cccece "45 J. I. Case Co. v. Borak, 377 Ee 55 Commissioner v. Sunnen, 333 ee 21,22, 23,24,26, 29 , 34 Commonwealth Coatings Corp. v. Continental ee Cas.Co., 393 U.S.145(1968)...cccccreccecs 59 Cort v. Bethlehem Steel Corp., U.S.S.Ct.No.73-1908 (March 18,1975)....... 55 Cromwell v. Sac County, 94 U.S.351(1876)....... 18,19,33 Dallas County v. Reese, 43 U.S.L.W. 36fZ —— _ (nay i etberieeeceseseoesorce sc 52 gland v. Medical Exrs., 375 U.S.4 eoee The Fair v. Kohler Die Co., — %s CE EE 54,56 Gilbert v. David, 235 U.S.561(1915)....cccccccs "31 Griffin v. Ill., 351 U.S.12(1956)....cccccccccs 42 Hagans v. Lavine, 415 U.S.528(1974)...ccccccccs 7,53 Johnson Co. v. Wharton, 152 U.S.252(1894) 5.20,20.58, 28,2 Kalb v. Feurstein, 308 "ss Lindsey v. Normet, 405 U.S.56(1972)....cccccees 42 Mapp v. Ohio, 367 U.S.643(1961).....cccccccccce 31 Mechling Barge Lines v. U.S., Ee 47 Napper, et ux v. Anderson, et al., 419 Ee 2 13,40 N.L.R.B. v. Denver Trades Council, = 341 a 43 vi INDEX Parmelee Trans. Co. v. U.S., 351 F.2d 619 (Ct.C1.1965) Parsons v. C & O Ry.Co.,375 U.S.71(1963)..eeeee Rosado Ve Wyman, 397 U. Se 397 (1970) cccccccccccecs Snith Ve Sperling, 354 U. S. 91( 1957) eccccccccsecs United Mine Workers v. Gibbs, 383 U.S,.715(1966). U.S. ve Munsingwear, Inc., 340 U.S. 36(1950)....- Wyandotte Co. v. U.S. 389 U.S.191(1967).eeeeees Cases: Lower Federal Courts Allegheny Co. v. Maryland Cas.Co.,146 F.2d 633 (3-Pa.l944) ccccccccccccccccccccccccccseces Brunswick v. Regent, 463 F.2d 1205(5-Fla.1972).. A.H. Bnery Co. v. Marcan Corp., 268 F.Supp.289 (S.D. Ne ¥. 1967) cccccccccccccccccccccccscces Estevez v. Nabers, 219 F.2d 321(5-La.1955)...... Garland Co. v. Filmer, 1 F.Supp.8(1932)....eeee0- Geracy Inc. v. Hoover, 133 F.2d 25(C.A.D.C.1942) Hardin v. McAvoy, 216 F.2d 399(5-Ga.1954)....... Hellebrand v. Hoctor, 222 F.Supp.81(E.D.Mo.1961) Hellebrand v. Hoctor, 331 F.2d 453(8-Mo.1963)... Wn.Kalivas Const.Co. v. Vent Control, Inc., 325 F.Supp. 1008(W.D.M0.1970) ..cccccccccces Knuth v. Erie-Crawford Dairy Coop., 395 F.2d 420(3-Pa.1968) .cccccccccccccccces Knuth v. Erie-Crawford Dairy Coop., 326 F.Supp. 48(W.D.Pa.1971) .ccscccccescccce Lyons v. Westinghouse Electric Corp., 222 F.2d 184(2— N.Y. 1965) ccccccccccccccece Law v. Converse, 419 F.2d 38(3-Pa.1969)...seeeee McCurnin v. Kohlmeyer, 477 F.2d 113(5-La.1973).. McNellis v. First Fed.S & L Assn., 364 F.2d 251 (2-N. Y.1966) ccccccescccccccccs Meyers v. Ampex, 491 F.2d 1103(5-Tex.1974) 498 F.2d 1092. .ccccccccccsccccsccccccesers Napper v. Anderson et al, 500 F.2d 634, 39 36 , 37 507 F.2d Ure | 2,P.A.8-P.A.14 N.L.R.B. v. Denver Trades Council, 186 F.2d 326(10-Co1.1950) .ccccccccccsccces Rapp v. Van Dusen, 350 F.2d 806(3-Pa.1965)...... Reitmeister v. Reitmeister, 162 F.2d 691 CG. VSG oa nccececécncsencssesessessees 43 39 6,55 _ INDEX Rogers v. Valentine, 37 Poe Ree Te 8. GEG) . coccccccecccccoes Scoville v. Bd.Educ., 286 F.Supp. 988(N.D.I11.1968)......cccccccccs Smith v. Sperling, 117 F.Supp.781 (S.D.Cal.1953)affd.in part, 237 F.2d 317 (9-cal.1956), rvsd.oth.gnds., 354 A ES nee ee eee Spilker v. Hankin, 188 Pete MG BORED cnccccccsecscocseece Tutt v. Doby, 459 F.2d 1195(C.A.D.C.1972)..cceees 63 63 U.S. v. 111.2 Acres, 293 F.Supp.1042, (E.D.Wash.1968) , affd. 435 F.2d 561(9-Was ol FTO) coccccecccece U.S. v. Munsingwear, 178 F.2d 204 EE ee pe U.S. v. Silliman, 167 F.2d 607 G-N.J.1948)...... Webb v. Bladen, 480 F.2d 306(4-Va.1973)...ccccces Weissinger v. U.S., 423 F.2d 795 (In banc, SP Pate Sere ecceeeccecoseoesooseses Cases: Texas Courts Employers Mutual Cas.Co. v. Lee, 352 S.W.2d 155(Tex.Civ.App.1961)...ceccecces Fireman*s Fund Ins. Co. v. Bybee, 322 S.W.2d 657(Tex.Civ.App. 1959). .ccccccccce Napper, et ux v. Johnson, 464 S.W.2d 496(Tex.CiviApp.1971)..sccccceces Cases: Other Jurisdictions Bakula v. Schwab, 168 N.W.378(Wisc.1918)... cee. Hickman v. Hickman, 121 A.2d689 ESE SOLS ee ee Horowitz v. Horowitz, 199 Atl.816(Md.1938)...... Minor v. Lapp, 33 Cal.Reptr.864 NR AE Se New Milford Block Co. v. Ericson, 206 A.2d487 (Conn.Cir. App.Div.1964)..csceees Schuylkill Fuel Corp. v. Nieberg, 165 ON SR ERATE Seer 49 46,48 3,9,13 P.A.16 INDEX viii CONSTITUTIONAL PROVISIONS, STATUTES & RULES Communications Act Amendments, 1952,P.L.554, ch.879,Sec.18,66 Stats. Tllecccececececee 28 U.S.Ce, Sec. lLAGleccccccsccccceccccecececesece 28 U.S.C., $eC1332(a) .ccccccccccccccccccccccccs 23 U.S.Cey $eC.1447(d) cccccccccccccccccccccccces Rule 8(c) F.R.CivePeccccccccscsceceescesseseceses Rule 12(b) (6) F.eR.CivePecccccsccccccccccsesesess TEXTS AND OTHER Baker, Toward a Relaxed View of Pendent Jurisdiction, 33 U.Pitt.L.Rev., 759 (1972) . ccccccccccccccccccsccccccscecce The Constitution and Preclusion, 62 Mich. L.Rev.33(1963) .cccccccccccccccces Collateral Estoppel: Its Application and Misapplication, 29 Wash.&L.L.Rev.110(1972). Developments-Res Judicata, 65 Harv.L.Rev.818(1952) .ccccccccccccccces 46 Am.Jur.2d, Judgments, Sections 397-399...seee. Lavine & He, Man. Fed.Prac., 44-45 cesceeccccerces Hart & W., Fed.Cts.113(2d ed.1973)..ceccceecees 1-B Moore, Fed.Prac., Par. 0.416..cccccccccseces Petition for Certiorari, p.2, U.S. v. Munsingwear, No. 23,24, 0.T.1949, UsSeSupsCteweseeeees Petitioner's Brief, pp.8,22, U.S. v. Munsingwear, No. 23,24 OT 1949 U.S. Sup.Ct.cccccscceces en ADO - & & ino wy 63 18 51 25 18 31 63 46,47 24 24 Res. Jmts., (1942) Gee. GO(2) cccccccccccccececceces 18,22,23 25, 26,38, 48,49,50 Res. Jmts.2d, Sec.68.1(T.D.1973) ceccccccccccecces 2518,25 26, 27, 28,29 Scott, Collateral Estoppel by Judgment, | 56 Harv. LeRev.l (1942) ccccccccccccccccces 18 13 Wright & M,. Fed.Prac., Sec. 3564..ccccccccees 53,56 13 Wright & M. Fed.Prac., SeC. 3567.cccccccecces 57 IN THE SUPREME COURT OF THE UNITED STATES No. October Term, 1974 JIM L. NAPPER, ET UX., Petitioners V. ANDERSON, HENLEY, SHIELDS, BRADFORD & PRITCHARD, ETC., ET AL., Respondents Petition For A Writ of Certiorari To The United States Court of Appeals For the Fifth Circuit Petitioners, Jim L. Napper and wife, Jo Ann Napper, complain of respondents, Anderson, Henley, Shields, Bradford and Pritchard, a partnership of L. W. Anderson, William B. Henley, Jr., Charles 0. Shields, Addison Bradford, Jr., William A. Pritchard and C. A. Searcy Miller, each of them sued individ- ually and as member of defendant partnership and petition for the issuance and service of a writ of certiorari to the United States Court of Appeals for the Fifth Circuit to review the judgments and orders entered in that Court in its Cause No. 73- 3746 wherein petitioners were appellants and re- spondents were appellees. Notation: Unless otherwise indicated, all emphasis has been supplied by petitioners. OPINIONS BELOW This case was initiated in the United States District Court for the Northern District of Texas on August 23, 1971 (J.A.2) The only judgment or opinion of the District Court was its combined "Memorandum Opinion and Order" (P.A.2-8) dated October 3, 1973. It is unpublished. The judgment (P.A.15) and opinion(P.A.8-13)of the Fifth Circuit are dated September 16, 1974, the opinion being published at 500 F.2d 634. Its per curiam decision denying rehearing (P.A.14-]5)is dated Janu- ary 31, 1975 and published at 507 F.2d 723. The related Arkansas case of Napper, et ux. v. Anderson, et al. was initiated in the Circuit Court of Pulaski County, Arkansas on June 9, 1971 (P.A. 10), removed to the United States District Court for the Eastern District of Arkansas on July 12, 1971(P.A. 1), and remanded to the Pulas- ki Circuit Court by order dated May 9, 1973(P.A. 2 ). The Court on the same date announced “find- ings of fact and conclusions of law * * * from the bench"(P.A. 2 ). The Pulaski Circuit Court dismissed the case on November 15, 1973. An ap- peal to the Arkansas Supreme Court was dismissed on April 29, 1975. No other opinions were ren- dered by any of the courts in the Arkansas pro- ceedings, Federal or State, and none were published. A petition for certiorari to the Arkansas Supreme Court was denied here on November 18, 1974, No. No.74-381, 419 U.S. 1023(1974) l. In referring to the record of proceedings in the courts below, petitioners will employ the following abbreviations: (P.A. ), Petitioners* Appendix attached to the rear of this petition; (J.A. ), Joint Appendix filed with the Clerk of the Fifth Circuit; (R. ), Record of Proceedings prepared by U.S. District Clerk, Northern District, Texas. It should be noted that many of the papers from the latter court are copies of court papers originally filed elsewhere. 3 Only one opinion has been rendered by trial or appellate courts in the related Texas State Court case of Oy Re LOCH and it is pub- lished at 464 S.W.2d 496(Tex.Civ.App.1971)(P.A.16- 18). JURISDICTION The judgment of the Court of Appeals was en- tered on September 16, 1974. The Court of Appeals extended the time to petition for rehearirg untii October 23, 1974. A petition for rehearing was filed on that date, October 23, 1974 and was denied on January 3l, 1975. On April 24, 1975 and within 90 days thereafter, Mr. Justice Powell extended the time to petition for certiorari until June 2, 1975, Order No. A-876. On May 29 Mr. Justice Powell further extended the time to petition for certiorari until June 17, 1975, Order No. A-876. The jurisdiction of this Court is invoked under 28 U. S.C. §1254(1). QUESTIONS PRESENTED On April 24, 1950, the Supreme Court granted certiorari to consider substantially the same ques- tion now presented. Unfortunately, the Supreme Court disposed of tne prior case, U.S.v.Munsingwear, Toc, ,240 U.S.36(1950) on narrow procedural anounas not present herein and failed to expressly decide the fundamental issue again presented by petitioners' first question: FIRST QUESTION: Whether a judgment remanding a case back to the state court, which petitioners without fault on their part, could not have appealed as a matter of law, can, despite the frustration of appellate review, stand as a bar to relitigation of the identical is- sue by the same parties in another suit originally brought in another federal court; thereby defeating 4 the right of appeal that is otherwise available in the second case? SECOND QUESTION: Did not the Courts below fail to distingvish between the power to act (jurisdiction) and the propriety to act (discretion)? Were not petitioners thereby deprived of the opportunity to invoke the Trial Court's discretionary jurisdiction over pen- dent claims? STATUTES INVOLVED 28 U.S.C., §1291: "Final decisions of district courts. The courts of appeals shall have jurisdiction of ap- peals from all final decisions of the district _ courts of the United States, the United States Dis- trict Court for the District of the Canal Zone, the District Court of Guam, and the District Court of the Virgin Islands, except where a direct re- view may be had in the Supreme Court.” 28 U.S.C., §1447(d): "An order remanding a case to the State court from which it was removed is not reviewable on ap- peal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1443 of this title shall be re- viewable by appeal or otherwise." SUMMARY OF ARGUMENT 5 1. By Statute, a remand order is expressly non- appealable. 28 U.S.C., §1447(d). Regardless of whether or not the remand order by the Eastern Dis- trict of Arkansas contained egregious error, peti- tioners had no choice but to return to the state courts of Arkansas where their case was finally dispatched without touching the merits in any way. The dismissal of a case is obviously a more severe remedy than a remand. This is particularly so in the present case where the Texas two year limitation period had already run at the time that the Northern District of Texas entered its dismissal. Because of the difference in the nature of the remedy, Congress has provided,and the federal courts have always allowed, appeals from dismissal orders, even tosis dismissing for want of diversity. 28 U.S.C., §1291. The Fifth Circuit erred in holding that "the in- ability to appeal from the order of remand does not permit the issue actually litigated and determined in the federal court in Arkansas to be relitigated in the second action" (P.A. 13). The authority re- lied upon, Johnson Co. v. Wharton, 152 U.S. 25211894), failed to distinguish between the two aspects of former adjudication: (1) Those applications wherein the second suit attempts to defeat the relief granted or denied in the first lawsuit ("claim preclusion" or "classic res judicata"), (2) Those applications wherein the findings of fact and law in the first case are invoked to decide the second case even though the second case does not threaten to impair the relief granted in the first ("issue preclusion" or "collateral estoppel"). The modern rule is to be found in Res,, Jmts, 2d, §68.1(T.D.1973): 6 § 68.1. Exceptions to the General Rule of Issue Preclusion. Although an issue is actually litigated and de- termined by a valid and final judgment, and the de- termination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances: (a)_The party _against_whom_preclusion_is t could not, as a matter of law, have obt» ined review of the sae by an ap- pellate court in the initial action; (p.1T70) Obviously, the Eastern District of Arkansas was not attempting to dispose of a case then pend- ing in the Northern District of Texas. His deci- sion could not have had direct effect upon the Texas case. It could only have had collateral ef- fect premised upon a claim that his ruling of "no diversity" is conclusive. Further, it was not necessary to dismiss the Texas action in order to effectuate the relief contemplated by the Arkansas remand order. The general rule of issue preclu- sion or collateral estoppel should not be applied here because it would frustrate the right to an appeal of the substantive issue on which the case turns, to-wit: whether or not this is an action "where the matter in controversy * * * is between * * * citizens of different States." 28 U.S.C., §1332(a). If the eighty year old Johnson case cannot be distinguished, it should be overruled. Petitioners based their claim of federal ques- tion jurisdiction upon criminal provisions of the Communications Act and the case of Reitmeister v. Reitmeister,162 F.2d 691(2-N.Y.,1947), a leading authority upon federal jurisdiction, widely cited, holding that a federal cause of action can be based upon a violation of the penal provisions of the Communications Act. A number of other cases sup- port the general proposition. Regardless of whether 7 or not their federal claim was upheld, it was meri- torious and eminently arguable. Pendent jurisdic- tion therefore existed. "* * * Whether the complaint states a cause of action * * * must be decided after and not before the court has assumed jurisdiction * * *," Bell v. Hood, 327 U.S.678(1946). The Fifth Circuit plainly erred in holding"there was never any basis of federal jurisdiction suffi- cient to support pendent jurisdiction***(P.A.15). The error is spelled out so-’plainly by the cases of Bell v. togslisee) United Mine Workers v. Gibbs, 383 U.S. 715(1966), and Hagans v. Lavine, 415 U.S. 528(1974), that the Supreme Court could easily re- verse per curiam without briefing or argument. Pendent jurisdiction is admittedly discretionary jurisdiction and the District Court could have de- clined to entertain the case. However, even though pendent jurisdiction was brought to the attention of the District Judge, she failed to consider the matter and held that the case must be dismissed "for want of jurisdiction" (P.A. 8 ). The District Court's failure to recognize that it possessed pendent jurisdiction deprived petition- ers of the opportunity to invoke the District Court's discretion to retain pendent jurisdiction. Webb v. Bladen, 480 F.2d 306(4-Va.,1973). Especially in view of the fact that respondents are claiming limit- ations, petitioners were deprived of a valuable right by the failure of the District Court to recognize that it held discretionary jurisdiction. STATEMENT OF THE CASE FEDERAL JURISDICTION IN THE COURT OF FIRST INSTANCE Petitioners, who were plaintiffs in the Trial Court, alleged that the case arose under the Cop- » P.L.554, Ch.879, munications Act Amendments of 1952 §18, 66 Stats.711, 722, and that the Court had 8 "federal question" jurisdiction under 28 U.S.C., §1337. Petitioners also alleged that they were citizens of Arkansas, that defendants were citizens of Texas and that diversity jurisdiction existed under 28 U.S.C., §1332 (R.36-37). FACTS OF THE CASE We include a full fact statement in the hope that the Court will desire background information. Frankly, however, few facts are needed to apprehend the nature of the questions presented, particularly the first question. With one exception, the facts stated by the Court of Appeals are correct, but we draw attention to the fact that titioners origi- nally moved to Arkansas in 1966 (P.A.17) and the District Judge in Arkansas found the petitioners to be "residents of Arkansas in all respects (J.A.10). e Court's statement on rehearing that “plain- ets came complain in good faith they considered themselves citizens of Arkansas, and were surprised by the contrary ruling, for on September 2, i9fi, ten days after the complaint was filed, defendants moved to dismiss for lack of diversity" 1s, we re- spectfully submit, very misleading. Defendants ; swore on July 12, 1971 that petitioners “are citizens of the State of Arkansas" (P.A. 1 ). The motion to dismiss referred to by the Fifth Circuit did not come until after the two year limitations period had run and was a drastic reversal of position calculated to trap petitioners in the wrong court. PROCEEDINGS-STATE COURTS-FIRST TRIAL On Janua 25, 1969, petitioners being in strained Pinmneial circumstances, were induced to enter into an oppressive transaction by which they were required to transfer apparent title to their property to one Earl B. Johnson for a fraction of its value. Since that date, they have litigated in an endless succession of courts without relief. The Court of Appeals for the Fifth Circuit was the latest to send petitioners away without reaching the merits of the controversy. 9 Petitioners’ litigation with respect to their property was initiated in the 160th District Court of Dallas County, Texas. A defendants' judgment was reversed on appeal, Napper v. Johnson, 464 S.W. 2d 496 (Tex. Civ. App. 1971) (Pk 16), writ of error re- fused by Texas Supreme Court, "no reversible error." That opinion will serve as a statement of the back- ground facts of this case. During the course of that trial, it was brought out for the first time that a member of the law firm, in which petitioners had been induced to repose their trust and confidence, had made an under-table deal by which they, the law- yers, could and did acquire a one-half interest in petitioners' property. PROCEEDINGS-EASTERN DISTRICT OF ARKANSAS On June 9, 1971, petitioners filed in the State Circuit Court at Little Rock, Arkansas, a complaint against the present respondents for legal malprac- tice and fraud (R.76-82), substantially the same as the complaint filed in this case (J.A.17-26). On July 12, 1971, Winslow Drummond, attorney for these respondents filed a petition for removal in the United States District Court for the Eastern District of Arkansas in which he swore upon oath that "at the commencement of this suit and at the present time Jim L. Napper and Jo Ann Napper were and are citizens of the State of Arkansas" (P.A.1). It has never been retracted or qualified in any man- ner and petitioners submit this declaration against interest as prima facie evidence of diversity of citizenship. Petitioners obtained service upon their Arkansas action under the Arkansas long-arm statute. Imme- diately after removal of the case, respondents filed their "Motion to Quash" contending that they were not amenable to service under the long-arm statute (P.A.10). Although respondents' motion was the sub- ject of protracted proceedings, it had never been acted upon at the time of the remand order of May 9, 1973, almost two years later (J.A.11). Petitioners made the following statement to the 10 1 ‘ . , t of j ict Court below in their "Brief In Suppor Jurisdiction® (J.A. 2). The respondents did not contest it in any way. We offer it for the Court's information as a summarization of those proceedings: his opinion a stipulation of facts could be worked out adequate for the purpose of passing upon the question of long-arm jurisdiction and urged that no hearing on the discovery motions after the motion to quash was filed, peng tee # notified plaintiffs that it planned to rule on the motion without a hearing and gave petitioners ten days to file brief, answer, affidavits and other opposing documents. Peti- tioners' counsel responded with the proposition (that the burden of proof on a motion to quash process is upon the moving party and urged nen ll the respondents as movants had produced no proo in support of their motion. e Court replied ti.at in its opinion, in a aman couvts ae burden of proving juris- diction is upon the plaintiff. tb tage nee ‘ responded by requesting time in which to effec discovery. Respondents opposed this request 9 the basis of the contention that the Court cou not grant discovery until jurisdiction had been established. Thereafter, the Court advised pe- titioners that they would be granted time to make discovery. Petitioners filed a request for production of documents and six separate sets of interrogatories. In answer to the re- quests, respondents refused to make discovery and answered that the Court had no jurisdiction to order discovery. Petitioners filed a motion to compel and asked the award of attorney's — on the basis that defendants had gery een (overruled upon the only contention that they were urging in opposition to discovery. In rg Malas the rigid and overly technical approach he e field employed before the turn of the century e doctrine must be applied with its limitations peertg bap Rae rate Commissioner v. Sunnen, supra imitations is that the righ should not be frustrated by invoking peo a sion with respect to a prior non-appealable judgment.4 4. When this case was orally argued in Honorable Chief Judge cunthened Kitnt. Seemann ane’ duets that at least insofar as criminal law is concerned. non- appealability seems to have no bearing, because the pros- ecution never has the right of appeal, but yet under Ashe v. Swenson, it may be bound by "collateral estoppel.” The situation is not at all comparable. It is the dou- ble jeopardy clause and not the law of former adjudication which frustrates the prosecution from taking an appeal. In the case at hand, the crux of the deprivation is the intro- duction of a nonappealable judgment into a case where the oe of appeal would otherwise be available, thus frus- io of the underlying issue upon which the The objective of a criminal case is punis placing the burden upon those who would secrangeed eons | to make out @ clear case for the exaction of the penalty In a criminal case, a lone human being is pitted against the power and prestige of the goverment in a contest for human liberty. Because the contest is basically unequal the Constitution has placed various handicaps upon the pros- ecution, one of which is the double jeopardy provision which provision denies the right of appellate review in all cases after jeopardy has attached. Because of the inherent dif- f a few comparisons can be drawn from criminal prac- 30 THE DIVERSITY CLAIM IS MERITORIOUS Neither the Fifth Circuit nor the Northern District of Texas would consider the merit of the Arkansas "no diversity" ruling. Both declared that they were prohibited from doing so by the law of. former adjudication. We will address the proposi- tion but briefly. Petitioners moved away from their home in Dallas, Texas during the early part of 1966 (P.A. 17) and at the time of filing of this lawsuit had continuously lived in Arkansas for over five years; there maintaining their only place of residence, voting, keeping their children in school, attending church, banking and licensing their automobiles (J.A.5-7[1], 12-14). The only exception is that during a six month period commencing about Thanks- giving of 1969, they stored their household goods in Arkansas and journeyed to Colorado and Texas ~ where Mr. Napper looked for work. During this six month period, there is no evidence that they set up a permanent household elsewhere and the temporary nature of their absence from Arkansas was attested by their leaving their possessions behind them (J. A.12-14). The Arkansas Court acknowledged that Mr. Napper "is a resident in all respects in Arkansas" (J.A.10). In remanding the case, the Eastern District of Arkansas primarily emphasized that the petitioners, Mr. and Mrs. Napper, still owned a house in Dallas, Texas, which they had rented out and that they had conceded that at some date in the future, when cir- cumstances would allow, they would like to return to Dallas (P.A.11,J.A.9-10). A "floating intention" to return whence one came is an insufficient basis to maintain citizenship at the previous residence. "From a practical standpoint, citizenship of the parties in many diversity cases is beyond dispute. If the full facts are that a man has lived and worked in Connecticut for three or four years before suit is filed and can testify that he has no present intention of moving any- where else to live, no one is going to make 31 much mileage out of a claim that he is not a citizen of Connecticut for diversity purposes." Lavine & H., Man.Fed.Prac., 44-45 - See also Gilbert v. David, 235 U.S.561(1915) and Hardin v. McAvoy, 216 F.2d 300(5-Ga.1954). One of the lesser recognized values of the right of appeal is that its mere existence imposes discipline upon trial courts. We believe that the right of appeal has a definite prophylactic effect. Mapp v. Ohio, 367 U.S. 643(1961). Where appeal is available the trial court is under compulsion to rule in accordance with the law. In a non-appealable proceeding, the temptation can arise to rule in accordance with one's own subjective notions. This is a case of legal malpractice, a case which a judge might be inclined to regard as both "sticky" and contentious. We make no accusations against the Honorable Judge of the United States District Court for the Eastern District of Arkansas. He made a visible effort to be both considerate and cordial toward petitioners and their counsel. All we know is that the minds of judges like the minds of other humans are subject to subtle influences. Certainly, a competent and experienced federal judge knows that remand orders are non-appealable. Whether the desire to get rid of a "sticky" case influenced the Court's ruling in any way, we do not know. We do know and do here point out that the temptation to issue a non-appealable remand order and clear his docket of a case which he might have regarded as personally distasteful was obviously present. JOHNSON CO. V. WHARTON WILL NOT STAND UP TO ANALYSIS The Johnson decision contains several obvious weaknesses: (1) Specious reasoning: Of one thing we are sure, Congress never foresaw the Johnson case and and had no intent at all as to the issue preclusion effect of a non-appealable judgment. Much stronger arguments as to the supposed intent of Congress can 32 be made in the opposite direction. Visualize the following argument of counsel: Argument Favoring Preclusion: Congress greg plain language that judg- ments of less than $5 are non-appealable. Con- gress placed no limitations upon such judgments. It necessarily follows that Congress intended none. This prior $400" judgment was just as valid, final and enforceable as a $6,000 judgment. One of the attributes of a valid, final and enforceable judg- ment is that the issues as necessarily found there- in are conclusive between the parties. It must, therefore, be necessarily concluded that Congress intended that the $400 judgment requires that judg- ment also go for the_plaintiff upon his later claim amounting to $6 ,306.> Argument Opposing Preclusion: Counsel has read the intent of Congress ex- actly backwards. He is piling an inference upon an inference. Of course, the $400 judgment is valid, final and enforceable. The plaintiff has collected his $400 and he may keep it. It is not involved in this case. We do not read the intent of Congress by inference. We read it from the plain language of the statute. Congress intended that judgments in excess of $500 are a alable. The statute on its face so provides. erefore, Congress must have intended for this latter claim for $6,306 to be subject to an appeal. The intent- ion of Congress to allow an appeal in this case may not be frustrated by invoking as conclusive a prior non-appealable judgment for only #400. To our way of thinking, the second argument has far greater appeal than the first because it gives De The opinion states that the second judgment was for $6306 but it fails to mention the amount of the prior judg- ment or the statutory minimum for appealability then in effect. The first two figures given above are hypothetical. 33 the appearance of a far sounder, more reasonable and just resolution of the competing considerations involved. However, let us be frank and practical for a moment. Let us call a spade a spade. The facts are that it is extremely doubtful if Congress had any intent whatever. The lawmakers simply did not envision or consider the problem presented in Johnson. The arguments in both directions concern- ing Congressional intent are specious because Con- gress had none. (2) No supporting authority: Unable to find any cases in int the decision went off on a few generalized statements then in vogue emphasizing so-called "res judicata" as a mechanical and mono- lithic rule admitting no exceptions and recognizing no countervailing considerations, the "brick wall" approach. (3) Cromwell case misread: The decision quotes extensively from Cromwell, but only from its dicta. The above quotation from Cromwell, which was the real holding of the case, was ignored. Obviously, Cromwell was not cited for its result, for that re- oar Wes ° re of Pgh eget ons od Any statement n Cromwell as to when preclu by definition, only dicta. ee ee ile (4) Issue Preclusion confused with claim pre- sion: Clearly, Johnson was identical to Cromwell jr Phy fgger that poms ware cases of issue preclu- nly. Owever, Johnson drew no distincti and called it all "res judicata." The failure to distinguish the dicta from the results of Cromwell reinforces the premise that Johnson failed to recog- nize the important distinctions between issue and claim preclusion. (5) Failure to discuss necessity: A non-appeal- able judgment must, of necessity, constitute a claim preclusion. Otherwise, it would not be a truly final judgment. If not, it would be available to the los- ing party to go elsewhere and seek to defeat the very relief (recovery, res) that was awarded. On the contrary, issue preclusion is a non-necessary aspect of a judgment in the sense that it goes beyond 34 the relief specifically awarded. Please forgive the repetition, but the point is essential. The dividing line, the watershed between issue preclu- sion and claim preclusion is the question of what relief (recovery, res) was specifically awarded in the prior judgment. While the application may be difficult in certain cases, the test is exceeding- ly simple. Beyond the specific relief (recovery, res) of a judgment, the law,in furtherance of the policy against repetitious litigations, may give the judgment collateral effect (hence, "collateral estoppel"). However, this latter aspect of a judg- ment is by definition, a case of issue preclusion asopposed to claim preclusion. Returning to the caption of this sub-section, while claim preclusion is a necessary (emphasis: necessary) element of a final judgment (otherwise, it cannot really be final), issue preclusion is never (emphasis: never) a necessary element of a final judgment. Cromwell v. Sac County, supra; Commissioner v. Sunnen, supra. The Johnson decision wholly failed to discuss necessity. instead, it jumped to the conclusion that issue preclusion was the necessary effect of a non-appealable judgment. Sunnen holds that issue preclusion is not always, in every instance, the necessary result of a final judgment. In that case, preclusion was refused because of subsequent events. While issue preclusion is, as a general rule, the desirable result, any contention that issue preclu- sion is, in all cases, the necessary result of a final judgment bodaciously overstates the matter. (6) Indirect relief that could not have been iven directly: in 1694 the statute, as we under- stand, srohibited the appeal of judgments under $500. Assume that the first judgment in Johnson had been for $6,706 and a proviso added to the judgment that no appeal would be permitted. Obvious- ly, the proviso would be held void and the appeal allowed as if the proviso were not there. The trial court had no power to impose such a condition. But, this is exactly the indirect effect of the Johnson case. A judgment of say, $400 was parlayed into a 35 non-appealable total award in the first and second judgments of $6,706 ($400, plus $6,306). If og law is port then a non-appealable judgment can- not indirectly award in excess of $500 because the ra page se is 7 nt direct awards in excess sum. e result reached j doesn't make good sense. _— a THIS CASE INVOLVES COLLATERAL APPLICATION OF THE ARKANSAS JUDGMENT We have previously pointed out the loose i- nology and the lack of uniformity which ee ane law of former adjudication. The Fifth Circuit has termed this to be a case of "estoppel by judgment * * * accurately termed 'direct estoppel.'" (P.A.13 fn.4). Analysis reveals this statement as no more ; than further terminological morass. The motion made by respondents in Arkansas was that "this action ought to be dismissed" (P.A.2). The order of the re eet "It is ordered that this case - s hereby, remanded to i 1 of Pulaski County, Meatball. a ae This was all of the relief which th Court undertook to render. He ruled oes cee eee case that was then pending before him. He made no ruling running to the merits of the underlying cause of action and respondents had asked for none. He made no ruling with respect to the pr i g Fe present ca was pending in lexas and respondents aske ase whch Furthermore, inasmuch as the only reli ef grant by the Arkansas Court was to remand that on Rg comet pending to the State Court of Arkansas, it is appa- rent that nothing which the Northern Distri rict Texas can do or which petitioners have ren the Texas Court to do can ssibly affect j : : or li impair the specific volte? orented by the eee 6. In fact, respondents have defended this action of legal malpractice for nigh onto four years without ever filing an answer and never giving a scrap of discovery. 36 Court. If the Arkansas judgment is to have any efrect whatever in Texas, the effect must be in- direct or collateral. Insofar as this case is con- cerned, it represents torture of the English lan- guage to say that this is a case of direct estoppel rather than collateral estoppel. Clearly, the present case is one of issue pre- clusion, not claim preclusion. This is primarily true because nothing which the Texas Court might do or which it has been asked to do can limit or affect or impair the relief granted in Arkansas. The cases cited by the Fifth Circuit itself illus- trate the terminological problem. In Mrezs Vv. Ampex , 491 F.2d 1103(5-Tx.1974), it is state a e Western District of Oklahom previously had dismissed an identical action for failure to state a claim upon which relief can be granted. In its second opinion, ers v. Ampex, 498 F.2d 1092(5-Tx.1974), the Court Stated Whe doctrine of direct estoppel bars the claim." Petitioners agrees Myers is clearly a case of claim preclusion, There, the prior judgment went to the entire underlying dispute between the parties. The Oklahoma Court held "Your pleadings entitle you to no relief." If the defendant had filed a motion for summary judgment, that court would have granted a take nothing judgment. If the prior court had heard the evidence, he would have directed a verdict. His ruling destroyed the entire dispute between the parties. His ruling thus precluded the same claim from ever being filed again in another court. Ergo, claim preclusion. In contrast to petitioners' case, if Myers had been allowed to sue in the Texas Court, the Texas judgment sought by Myers would necessarily have impaired the relief granted in the Oklahoma Court because the Oklahoma Court granted relief which ran to the very heart of the case. Thus, by necessity, we he ‘re claim preclusion, not issue preclusion. If "direct estoppel" is to be equated with claim pre- clusion or classic res judicata, then we agree that Myers is a case of direct estoppel. 37 Granted that the Arkansas Court based his remand order upon a finding of no diversity, this does not obscure the fact that all he undertook to do was to remand "this case" to the Pulaski County Circuit Court. There is a clear distinction between the judgment given and the findings which lead to a judgment. Where the subsequent case threatens the relief granted formerly, there is a case of claim reclusion. Otherwise, there can be no case except one of issue preclusion. If it is only the issues determined in the first case that are being given ~ effect in the second case, then, unless we are to slaughter the language, the first judgment is being given collateral effect rather than direct effect. The proposition is irrevocably true because the first judgment does not encompass the relief sought in the second case. Conversely, in Myers, the court by necessary implication ruled that ese pleadings will perpetually fail to state a cause" and gave re- lief not only to "this case" but gave permanent re- lief against the same pleadings wherever they may appear. Ergo, claim preclusion attached to those pleadings. The same appears to be true of Estevez v. Nabers,219F.2d 321(5-La.1955). The opinion there states that the first suit was "dismissed on the ground that there was no justiciable controversy" and further states that “the first action having held the complaint was defective in failing to al- a 8 er aa of a justiciable nature, we may nsider e correctne the facts there alleged." ee ve ens ae The Estevez opinion fails to disclose th i- culars of the complaints ruled upon, but we Eda that in the first case, the court did not dismiss upon any narrow procedural grounds or upon grounds of prematurity or defect in parties, but it went further and held that it had no power or jurisdic- tion to review exclusion orders issued by the Imni- gration Service either then or ever. If this was the gist of the original ruling, then the secoad case was a direct attack upon the relief granted in the first and we have another case of claim preclu- sion, not issue preclusion, The slipperiness of the concepts being discussed 38 is illustrated by the dissent of His Honor, Judge + Ming nets a opinion below), in Weissinger v. U.S., 423 F.2d 795(In banc, 5-Fla.1970), where Estevez was cited in the opposite direction--that is, a contention of "no preclusion" was there made on authority of Estevez, while Estevez is now cited as authority for application of preclusion. Rely- ing on Estevez, it was urged: "all that the district court could Proper’ mean by the words ‘with prejudice’ Lin the prior action] was the plaintiff could not again contest the issues of whether a demand was necessary, and, if so, whether one had been made. The words * * * do not show that the claim or cause of action is barred." Likewise, all that the Arkansas Court could . properly mean was that he was disposing of the case or proceedings in his Court. He did not rule upon a claim or cause of action pending in another court. His ruling, if it is to be applied in another court, can only have collateral effect. Clearly, this is a collateral estoppel which "must be used with its limitations carefully in mind so as to avoid in- justice," Commissioner v. Sunnen, supra at 599. rm “direct estoppel" is discussed in Res. Jats, 5, Commend d, and enous reference is made tO , comment b, for an illustration: ° e action was dismissed because of the nanSeteien of a third person as defendant, and the plaintiff thereafter brings an action on the same cause of action without joining the third person, the plaintiff is not entitled again to litigate the question whether the third person was a necessary party." do not argue with that definition of "direct ia maseet estoppel as there employed na. synonymous with claim preclusion, not issue preclu- sica. To allow the second suit would be to allow an attempt to defeat or impair the relief granted in the first. Clearly, this is impermissible, but these petitioners make no such attempt. 39 THE CASE IS BEING SACRIFIED ON THE ALTAR OF RHETORIC While the terminology differed me nner nartig ef the distinction between the relief afforded (either granted or denied, denial amounting to a grant of relief to the opponent) and the findings of fact and conclusions of = Rr gs a basis for that re- lief was clearly spelled out in Cromwell v. Sac County, supra. Cromwell thereby sets out the dif- ference between claim preclusion and issue preclu- sion although those terms were not employed. Pri- marily, the distinction is whether or not the plain- tiff seeks to impair the relief afforded in the first case. While the test is stated in many places, it was forcefully spelled out in McNellis v. First Fed. S&L _Assn., 364 F.2d 251(2-N.Y.1966),cert.den. 305 eVDe , Ve "*The decisive test is this, whether the substance of the rights or interests established in the first action will be destroyed or impaired by the prosecution of the second.' "As indicated above, the state action here deter- mined that the two $62,000 payments could not be recovered by the trustees; success in the action now before us could not ‘destroy or impair' that determination." McNellis v. First Fed.S&L Assn., ++ Mile 251(2-N. e ,cer -Gen,. *Ve 7 "A judgment in one action is conélusive in a later one, * * * when the two causes of action have such a measure of identity that a different judgment in the second would destroy or impair rights or interests established by the first. Cromwell v. County of Sac, 94 U.S.351 * * *, "The distinction, though elaborated with special emphasis in many judgments of the Supreme Court * * * is not the doctrine of that court alone. * & & %& te * & 40 "The decisive test is this, whether the sub- stance of the rights or interests established in the first action will be destroyed or im- paired + prosecution of the second. * * *," Schuylki Fuel Corp. v. Nieber 165 N.E.456 (N.Y.1929)(Per Cardozo, C.J.). , Schuylkill quoted and cited as controlling: Moreno v. Marbil Productions, 296 F.2d 543 (2-N.Y. TS6I). The test was easy to apply in Cromwell. It is perhaps most difficult to apply in cases of dismis- sal such as Myers, Estevez and Napper. In order to decide whether claim preclusion or issue preclusion is to apply, it is necessary to analyze the nature and extent of the relief granted in the prior judg- ment. Sometimes, in order to determine what relief was granted, it is necessary to look at the plead- ing upon which the Court ruled and otherwise view the ruling in context. Please excuse the repeti- tion, but the point is crucial. The Arkansas Court granted no relief beyond the return of that parii- cular case (1.e., the proceedings numbered L.R. 71-C-124) to the Court below. Anything else that was said or done was a mere finding upon which the grant of relief was made. If the Arkansas judgment is to be given any further effect, the English lan- guage defines that effect as collateral. Like Cromwell, Johnson Co. v. Wharton was a case in which it was easy to distinguish issue preclusion from claim preclusion and the question was one of issue preclusion only. However, the Supreme Court in accordance with the practice of the day labeled it all as res judicata. The terminological failure to identify the two separate doctrines led to the Court's failure to consider whether they should be treated differently. Congress intended for judgments less than $500 to be non-appealable, the Court declared. From this sound premise, the Court jumped to the conclusion that Congress intended a $400 judgment to conclusive- ly require the entry of a judgment of $6,306. what a complete non sequitur! Consonant with too many 41 decisions of that era regarding former adjudication, the Supreme Court became so enmeshed with fine-spun theories and with obscure ees Ie ps Hs that it fail- ed to recognize the fundamental distinction involved. Certainly Congress intended or should have in- tended that there could be no subsequent lawsuit in which the plaintiff's right to recover $400 could be questioned, pepends eee of non-appealability. How- ever, the holding that the $400 judgment controlled the claim for $6,306 was, we suggest, brought about because the Court had lost sight of the distinction between issue preclusion and claim preclusion. If this Court will lay aside the "19th centruy leading book" case of Johnson Co. v. Wharton and ook at the case in bar “with realism and rational- ity," Ashe v. Swenson, supra, it will be plain that petitioners’ Case is likewise being immersed in the quick sands of terminology whereas if a commonsense approach is taken, petitioners must prevail. However the doctrines might be labeled, however fine the theories may be spun, it is obvious that this case only concerns the collateral effect of the Arkansas judgment and that petitioners are not here attempting to attack or restrict the relief specif- cally afforded in the non-appealable Arkansas order. It borders upon the ridiculous to essume that the Arkansas judge was attempting to control the outcome of a Texas case. Label this case as you will, as preclusion, as ws ge ry either direct or indirect (collateral) or call it a late-for-breakfast case, it makes no difference. No amount of relief in this case will ag tees ae upon the-relief awarded in Arkansas or deprive respondents of any "vested rights" (Commissioner v. Sunnen, supra) that may have accrued to them by reason of that order. If the Supreme Court will pierce the veil of terminology and look at the true nature of the case in bar, it will agree that there is no valid basis beneath the terminological differences for the frus- tration of the right of appeal, granted by Congress with respect to the present case. 42 PETITIONERS ARE BEING DEPRIVED OF A VALUABLE RIGHT OF CONSTITUTIONAL PROPORTIONS The right of appeal as an integral part of the federal system was inferentially recognized by the Constitutional provision creatine a Supreme Court "with — jurisdiction." Congress and the courts themselves have the right to regulate and limit jury trial from the federal system. But we do not think they can abolish appeals any more than jury trial. To do so would, in effect, abolish the Supreme Court itself. , On the other hand, respondents have no Consti- tutional right to assert preclusion by former ad- judication, “a doctrine judicial in origin." Com- missioner v. Sunnen, supra,597. If the right of appeal is rooted in the Constitution, it should not be defeated by an overzealous application of the lesser principle of collateral estoppel. Griffin v. Ill., 351 U.S.12(1956), held that due process does not obligate any state to provide the right of appeal. Even so, we urge, as above, that the federal system must provide for an appeal. It went on to hold appeal sufficiently fundamental that it may not be denied on the basis of unmean- ing ful distinctions. To clothe a non-appealable order of remand with the armor of preclusion irrev- ocably serves to frustrate appellate review of a dismissal, even though the law plainly allows an appeal where a case is dismissed for want of diver- sity. This, we submit, is the same type of unmean- ingful distinction condemned in Griffin v. Illinois. "When an appeal is afforded, however, it can- not be granted to some litigants and capricious- ly or arbitrarily denied to others without vio- lating the Equal Protection Clause. ***," Lindsey v. Normet, 405 U.S.56,76-77(1972). On authority of Lindsey, it is presented that the law of former odjaditetion may not be applied so as to arbitrarily or capriciously frustrate the right of appeal. Any other application traverses Constitutional safeguards. The case of Garland 43 Co. v. Filmer, 1 F.Supp.8,12(1932), supports the Same proposition: "Were there no claim that plaintiffs' rights under the Constitution of the United States had been invaded, the plea of res judicata would be @complete defense to these cases.* * * If, however, there is no right of appeal upon this federal question from the highest court of the state to the United States Supreme Court, the judgment * * * may not be pleaded as res judicata in the present cases. A determination of a federal constitutional question by a state tribunal is not conclusive if there is no right of appeal to the federal courts." It has numerously been held that the law of former adjudication must yield when it comes in con- flict with laws and principles of greater weight. Kalb v. Feurstein, 308 U.S.433(1940), England v. Medical Exrs., 375 U.S.411(1964). In NEB Vv. Denver lIrades Council, 186 F.2d 326(10-Col.1950), It was held that the doctrine of former adjudication could not prevail where it conflicted with the Con- gressional intention that disputes be decided in the first instance by the N.L.R.B. The proposition was inferentially upheld by this Court's affirmance. N.L.R.B. v. Denver Trades Council, 341 U.S.675(1951). ee also Spilker v. Hankin, -2d 35(C.A.D.C.1951). THE QUESTION PRESENTED IS PURELY ONE OF FEDERAL LAW While the law of former adjudication is a matter of general law, it is to be pointed out and empha- sized that the question presented inquires only if the federal court has jurisdiction of the case. Thusly stated, the question is peculiarly one of federal law for the Jederal courts alone have the power to determine their own jurisdiction. Smith v. Sperling, 354 U.S.91,95-96(1957). The question presented ¢ thus narrowed: Must a federal court in passing upon a question of diversity jurisdiction give conclusive effect to a4 a non-appealable remand order previously issued by another federal court? In answering this question, the Supreme Court is free to declare the rule which it thinks will best serve the federal policies involved without regard to the general law. We would hasten to point out that we have never challenged the rights of the courts below to weigh the decision of the Arkansas Court for its persuasive effect. All we urge here is that it should not be given conclusive effect because the right of appeal, a valuable right if not a Constitutional right, will be frustrated. When respondents first urged upon the Northern District of Texas that the order of the Eastern District of Arkansas had deprived it of jurisdic- tion, petitioners' counsel went to the books ex- pecting to find a "white horse" case for the sub- ject of diversity jurisdiction has been much liti- gated. Suprisingly, we found only two cases. Neither respondents nor the courts below have found a one. Both cases found are favorable to petitioners. In Hellebrand v. Hoctor, 222 F.Supp.81(E.D.Mo. 1961), the Court emphasized that diversity must be determined as of the date each successive complaint is filed. It, therefore, concluded that the dis- missal of the first suit for failure to present evi- dence upon the diversity claim was not "res adjudi- cata" in the second. In view of the policy that federal courts must continuously re-examine their jurisdiction, the affirmance of the case on other grounds implies approval, Hellebrand v. Hoctor, 331 F.2d 453(8-Mo.1963). The case of Wn.Kalivas Const.Co. v. Vent Control,Inc., 325 F.Supp. 1008 TW.D.Mo. 1970), involves a Similar claim and an identical ruling.” 7. Apparently the Fifth Circuit undertook to distinquish Hellebrand and Kalivas in the final paragraph of its opin- ion stating “plaintiffs had the burden of proving that they had changed their citizenship between July 12 and August 23, 1971." This, we submit, was error. It is true that laintiffs have the burden of proving jurisdiction but this r cont'd on following page) 45 See also, Smith v. Sperlin 117 F.Supp.781 809(S.D.Cal.1953), affd- in pact, 237 F. 24° 317(9- Cal.1956), rvsd.oth.gnds., 354 U.S.91(1957), where the Court held that its ruling upon diversit 1 be inapplicable to a trial on ‘he aerktas — "So also the findings of this court which serve as predicate for the cornciusion that the plain- tiff-stockholder's corporation is not in ‘anta- gonistic hands' cannot operate to bar contrary findings by a court havin plenary jurisdiction of the case, since the selloteces estoppel doc- trine is not applicable to such interlocutory or 'incidental' determinations of fact * * *," Similarly, Parsons v. C.&0. -Co., 375 U.S.71 (39692 not ware seats court re regarding forum nveniens do not preclude the fed passing upon the claim. a Soe nae In C.A.B. v. Delta Airlines, 367 U.S.316. it wa stated that whenever questions concerning finality : of decisions, either administrative or judicial, arise, that there are two opposi : both must be recognized: pposing policies which "* * * The desirability of finality on the one hand and the public interest in seachise what, ultimately, appears to be the right result on the other. Since these policies are in tension, it is necessary to reach a co j j nd 9°39]. 403. mpromise in each 7. (cont'd from preceding page) proposition goes no further than the proposition in- tiffs have the burden of proof in pont ag Pleinirhe never have the burden of disproving defensive issues. Both res judicata" and “estoppel” are expressly declared by Rule 8(c),F.R.Civ. P. to be defensive issues upon which respondents have the burden. Petitioners met their burden with factual affidavits establishing prima facie that on August 23, 1971 when this suit was filed, they were citizens of Arkansas. If respondents wished to defeat these affi- davits through a claim of preclusion, the burden of doing SO was upon them Rule 8(c) so provides, 46 Why, we ask, can the competing policies not be better adjusted by treating the former decision on the diversity question, which necessarily was aimed at a different date, as persuasive only, leaving the second court free to examine the facts as it finds them? Would such a competing policy not bet- ter serve the interest of the law and the litigants? PROFESSOR MOORE HAS BEEN MISCONSTRUED The Fifth Circuit apparently cites 1-B Moore, Fed.Prac.,90.416[5h, in support of its ruling, but we do not read it so. We believe that Moore has read Johnson as a case of claim preclusion only. Citing Johnson, he states that "a final judgment is res judicata," id.2301,(emphasis supplied), even where no appeal is allowed. If "res judicata" is taken to mean "claim preclusion," the statement is eminently correct, but not presently applicable. He continues: "When the inability to appeal is made to depend upon the absence of a jurisdictional minimum, the effect of the lower court's judgment as col- lateral estoppel presents a more clouded question. * * * But if such a lower court judgment is urged as collaterally conclusive Lan issue pre- clusion] of a dispositive issue in a later action on a cause of action inviving an amount suffi- cient to meet the jurisdictional standard for appeal, legislative intent would be frustrated should the judgmert be given collateral estoppel effect." id.230l. In support of his proposition, he cites Fireman's Fund Ins.Co. v. Bybee, 322 S.W.2d657(Tex.Civ.App. " ppellate court overturned $600 judgment for claimant because insurer had previously obtained $19.90 judgment against claimant; Texas law forbids appeals under $20.) as a horrible example of the overextension of the law of former adjudication. Taking a hypothetical non-appealable judgment for less than $100, Moore argues that the legisla- ture did not intend to allow to the court “power to adjudicate claims in excess of $100 except 47 subject to review *** [on appeal]" and concludes: "On analogy to the principle that a court should not be permitted to exercise jurisdiction in- directly through the collateral estoppel effects of its judgments, over cases that are beyond its jurisdiction to adjudicate directly, the judg- a = - — y os Claims should be denied ollateral estoppel effect in thi j i - $a.2301.02, pp Ss situation, Petitioners' argument is the same. A federal district court does not have jurisdiction to order that there shall be no right of appeal when a case is dismissed, and that which it does not. have power to do directly may not be accomplished indirectly. Professor Moore also interprets the Munsingwear case favorably to petitioners. Unless the right of appeal is a valuable right ps na nog pellate court have a "duty" to mes e opinion belo Says Moore, 1-B Moore, Fed. ° q0.416[6],p.2326: : y Peg sProce "***Unless the appellant was in some way res- ponsible for losing *** 'the right of appeal], giving collateral estoppel effect to the lower court judgment unnecessarily frustrates legisla- tive intent ***, While the litigant may have had his day in court ***, he has not had as much of a day in court as Congress or the State Legislature intended to give him. "[Author's footnote] *** Justice Douglas, in Munsingqwear *** assumed the proposition stated o-) HEF" In Mechling Barge Lines v. U.S., 368 U.S.324 (1961), this Court interpreted Munsingwear to the same effect: "*** This Court [there] enguacess the view that a party should not be concluded in subsequent li- tigation by a District Court's resolution of is- sues, when appellate review of the judgment 48 incorporating that resolution, otherwise available as of right, fails because of intervening mootness. * * * We think the principal enunciated in Munsingwear at least equally applicable to unteviouse administra- tive orders * * *,* The denial of the right of appeal is the denial of the right of appeal. It is of little consequence to the victim of a murder whether he was shot with a gun or stabbed with a knife; he is still dead. Likewise, it matters not whether appeal of a case is denied for mootness or because of express non-appeallabilitysthe result is the same. The right is valuable and important and may not be deprived unless a competing policy demands it. As we have shown, there is no such competing policy and no such demand. MANY AUTHORITIES HOLD AGAINST PRECLUSION WHERE THERE WAS NO RIGHT OF APPEAL In varying contexts, the courts have emphasi- zed the right of appeal and have refused to apply issue preclusion when the party could not appeal. In Bakula v. Schwab, 168 N.W.378(Wisc.1918) the Court stated: "An element essential to constitute res adjud- icata is a right of appeal from the judgment." In Hickman v. Hickman, 121 A.2d 689(Dela. Sup. 1956), the Court refused to allow preclusive effect to a justice of the peace finding that a Nevada divorce was valid "from which determination in this State there lies no appeal." In New Milford Block Co. v. Ericson, 206 A.2d 487 (Conn.Cir.App. Div. 1964) the Court refused to apply issue preclusion to a small claims judgment which the statute declared to be "final, conclusive and non-appealable." While the Texas Court expressly refused to follow Res. Jmts.,§69(2) in Fireman's Fund Ins. Co. v. Bybee, supra, a subsequent Texas case did follow 49 the Restatement and held that inasmuch as "no effec- tive appellate review was available in the prior suit," issue preclusion was inapplicable. Employers Mutual Cas. Co. v. Lee, 352 S.W.2d 158(Tex-Ctv App. ° titioners submit the later Texas case as the better authority. For a case in accord, with Employers. see Horowitz v. Horowitz 199 Atl.816(Md. Res. Jmts,§69(2) was also followed in Minor v. Lapp, 33 Cal.Reptr.864(Cal.App.1963) a moot appeal case, the Court stating that "to preclude any pos- sible claim of application of res judicata, we dis- miss wiciuut prejudice.” "Although a substantial portion of this cnin- ion relates to the issue of whether the clain- ed loss is deductible under the tax laws, we stress that this is dicta only and will have no collateral estoppel effect in any other forum. Thus, defendant's inability to appeal his judgment will not preclude its reasserting the deductibility defense in a refund suit for a later year.” Parmelee Trans. Co. v. U.S. 351 F.2d 619, 621 (Ct.CI.1965). In U.S. v. 111.2 Acres, 293 F.Supp.1042,1049 (E.D.Wash. a .2d 561(9-Wash.1970), the State of Washington had appeared as amicus curiae in previous litigation and judgment had gone against it. Relying on §69(2), it was held that the ruling had no preclusive effect because an amicus has no right of appeal. In Geracy Inc. v. Hoover, 133 F.2d 25(C.A.D.C. 1942) a tenant’s action for damages to his goods caused by the landlord's negligent repair to the roof, the tenant was held precluded by the prior judgment for possession obtained in an inferior court. Justice Rutledge (later of the Supreme Court) vehemently dissented: "I do not think Congress intended these conse- quences or that the Municipal Court should ad- judicate a claim in excess of its jurisdic- tional limit * * *. 50 "Congress intended the Municipal Court to keep within the bounds of power prescribed. * * * "Congress intended none of these results. * *& & * & & * & "If res judicata could be thought rightly to require such results, this judge-made rule should give way before being allowed to dictate consequences so unjust and so contrary to the intent and explicit prohibi- tion of Congress. * ee %* & & %* & "In my Opinion therefore, the bar of res judicata should not be applied further than to prevent relitigation of the right to pos- session and the claim for rent [being all that the inferior court had been authorized by Congress to decide]." The parallel to the present case is obvious. Congress did not empower the U.S. District Court sitting in the Eastern District of Arkansas: to expressly provide that a dismissal of order can- not be appealled. Particularly, the Arkansas court could not have ordered dismissal of a Texas case and prohibit the right of appeal. Congress did not tater that which cannot be done by direction should be accomplished by indirection. It appears that the dissent in Geracy has now become the law in the District of Columbia. See Tutt v. Doby, 459 F.2d 1195(C.A.D.C.1972) where the Court held*no preclusion" expressly relying on Res. Jmts., §69 (2). Professor Scott, one of the principal repor- ters for the original Restatement declared as fol- lows back in 19423 "A judgment rendered by the trial court may not be conclusive by way of collateral Sl estoppel because the unsuccessful party can- nut obtain the decision of the appellate court upon the matter decided adversely to him. The fact that a party who might have appealed fails to do so is immaterial; but the fact that he is unable to appeal is of importance." Scott, Collateral Estoppel, 56 Harv.L.Rev. 1,15(1942). It is now 1975 and the law of former adjudi- cation as expressed in the new Res. Jmts., §68.1 is the only rule that comports with the modern view. The law of prior adjudication is not a mechanical monolitt, "It is not meant to create vested rights." Issue preclusion must be applied with its limitations carefully in mind so as to avoid injustice." In Collateral Estoppel:It's Application and Misapplication, 29 Wash EL Ree LiOtIo72) it Is tite that the doctrine of prior adjudication is subject to many ambiguities, that no hard and fast rules can be drawn, that there are conflicting policies and standards, that the theories are com- plex, and that the law is fraught with danger if mechanically applied. These are the considerations which the Supreme Court failed to recognize in 1894 and the Fifth Circuit failed to recognized in 1974. Even the first Mr. Justice Harlan who wrote that decision conceded that the result was harsh. However, the Court declared that it had no power to alter this mechanical rule described as “res judicata” and declared that relief must come through legislative action. It is now 8l years later and no legislative action is in sight; the reason being that the law of prior adjudication is almost entirely a creature of the courts,"judicial in origin, “Commissioner vy, Sunnen, Supra at 597. If it is harsh, if it is difficult to understand, if it is inflexible, it is because the courts have made it so. This case presents an opportunity for the Supreme Court to assist the ALI in its work toward a modern, realistic, flexible, common-sense view 92 of the law of prior adjudication. To this end petitioners ask that certiorari be granted. SECOND QUESTION: PETITIONERS HAVE PRESENTED A CLEAR CASE OF PENDENT JURISDICTION Within the last few terms, the Supreme Court. has decided several knotty cases on the subject of pendent jurisdiction. To our way of thinking, the present case is entirely different. There is open and shut error on the face of the opinion be- low. The Court's statement that "there was never any basis of federal jurisdiction [stated in the complaint] sufficient to support pendent jurisdic- tion *** ," applies the wrong test. Unless the federal claim is completely insubstantial, it in- vokes federal jurisdiction. The error shown is of the type for which this court can and should issue a per curiam order, grant the writ, vacate and remand without briefing and formal argument as the court did in Dallas County v. Reese, 43 U.S.L.W.36/f (May I9, 1975). e error is of the type that such action would be appropriate. In Bell vs. Hood, 327 U.S.678(1946), the lower courts dismissed for want of jurisdiction but the Supreme Court reversed: "Before deciding that there is no jurisdic- tion, the District Court must look to the way the complaint is drawn to see if it is drawn so as to claim a right to recover under the Constitution and laws of the United States. For to that extent ‘the party who brings a suit is master to decide what law he will rely upon. * * * 'Where the complaint as here, is so drawn as to seek recove directly under the Constitution or laws of the United States the federal court, but for two possible excep- tions later noted, must entertain the suit. * * * Whether the complaint states a cause of action on which relief could be granted is a 33 question of law and, just as issue of fact, it must be decided after and not before the court has assumed jurisdiction over the con- troversy. If the court does later exercise its sasbedietion to determine that the alle- gations in the complaint do not state any grounds for relief, then dismissal of the case would be on the merits, not for want of jurisdiction. * * * The previously carved out exceptions are that a suit may sometimes be dismissed for want of jurisdiction where the alleged claim under the Constitution or federal statutes clearly a ars to be imma- terial and made solel +5 Fre u se of obtaining juriedh ction or where ak fain S P) nsubstantial an rivolous (empha- Sis Suppiteay." In their newest volume received from the printer on April 3, 1975, Wright and Miller discuss many decisions of this Court and conclude: "Thus a federal court must dismiss for want of jurisdiction if the federal claim that is the basis for jurisdiction is obviously with- out merit or is wholly frivolous. It similarly must dismiss for want of jurisdiction if the claim is clearly foreclosed by prior decisions of the Supreme Court. The test for dismissal et Seuss oat begun ba #y,foa tion o aus ty to the cla edera urisdiction exists. Wright & M. Fed.Prac. §3564 7 pp. 429-430 . In Hagans v. Lavine, 415 U.S.528(1974), it was held that a challenge to a Welfare regulation could not be regarded as insubstantial when the Supreme Court had never passed on a similar regul- ation and the regulation was not so patently immune from federal claims to require no meaningful con- sideration. Nor does it make any difference whether the plaintiff ultimately prevails upon his federal claim as long as he pleads an arguable claim. 54 "If the plaintiff really makes a substantial claim under an act of Congress, there is jurisdiction whether the claim ultimately be held good or bad." The Fair v. Kohler Die Company 228 U.S.22,25(1913). The merest poruees of the text and authori- ties cited clearly reflects that the Fifth Circuit has applied the wrong test in the present case. A SUBSTANTIAL FEDERAL CLAIM WAS PRESENTED. The District Court's opinion states "Defen- dants' previous Motion to Dismiss for lack of jur- isdiction together with their challenge to plain- tiffs' amended complaint are now before the Court under Fed.R.Civ.P. 12(b) (1) [motion to dismiss for want of jurisdiction of the subject matter]. As hereinafter set forth, this cause is dismissed without prejudice for want of jurisdiction" (P.A. The complaint alleges : "This is a civil action or proceeding arising under the Communications Act Amendments of 1952, P.L.554, ch.879,§18,66 Stats.711,722, prohibiting the interstate transmission of any communications in furtherance of any scheme to obtain money or property by means of false or fraudulent pretenses, representa- tions or promises, as hereinafter more fully appears. This Court has original jurisdiction of this case under 28 U.S.C. §1337." (J.A.17) Plaintiffs proceeded to allege specific mat- ters as being represented and held out to them and further specifically alleged that defendants as fiduciaries deliberately omitted certain material facts causing their communications to be deceptive (J.A. 18-22). "15, Each of the aforesaid communications, representations, statements and omissions was conducted by and between defendants situ- ated at Dallas, Texas and plaintiffs situated 55 at Cherokee Village, Arkansas and Hardy, Arkansas over the common carrier telephone facilities between the said points. 16. In making the said communications, repre- sentations, and omissions, defendants utili- zed the facilities of interstate commerce. 17. Such communications, representations and Omissions were made, conducted and transacted in the course of interstate commerce."(J.A.22) The complaint further alleges the conduct of defendants as “false, fraudulent, and deliberate * * * done as part of a scheme to deprive plain- tiffs of their ownership of said property * * * " (J.A.23). In support of their federal claim, pet- itioners cited and discussed approximately fifteen authorities holding that a private right of action — be on a paw statutes, criminal nd regulator includin andotte - Vv. U.S. 389 U. 8.191 (1967) and 59 Se Cee he 377 U.S.426(1964). Petitioners placed primary reliance upon re vo ei tel ater 162 F.2d 691(2-N.Y.1947 ere Judge Learne and held that the sections of the Communications Act which de- clared to be criminal, the unauthorized intercep- tion and publication of interstate telephone mes- sages, created a federal cause of action for damages. As a general proposition, it cannot be denied that the federal courts have numerously inferred a federal cause of action from federal criminal statutes. A case of this classification was argued before this Court on March 18, 1975, Cort v. Bethlehem Steel Corp.,U.S. S.Ct.No.73-1908. In Cort as we understand it, the general principal is not in dispute, only the application of that principle. Similarly, the only dispute which could have been open in the Fifth Circuit was the appli- cation of the principle, not the existence of the principle: federal criminal statues can create a federal cause of action for damages. The particular wire fraud statute under which 56 petitioners were proceeding had never been con- strued before. Respondents did not contend to the opposite and neither of the courts held to the contrary. The fact that the Fifth Circuit rejected Reismeister and held the case to be controlled y a decision concerning mail fraud without dis- cussing the various other cases urged by petition- ers did not control the question as to whether a federal question had been pleaded. The Fair v. Kohler Die Company, supra. It has never been sug- gested that Sati ttonere’ federal claim was “so attenuated and unsubstantial as to be absolutely devoid of merit", Hagans v. Lavine, supra. Whether or not the federal claim could have been dismissed under Rule 12{>) (6), F.R.Civ.P., “Failure to State a Claim Upon 1c elief Can Be Granted," is im- material. Beyond doubt, the claim was of suffici- ent substance to invoke the jurisdiction of the federal court. INASMUCH AS THE FEDERAL CLAIM WAS ARGUABLE, PENDENT JURISDICTION OF THE STATE CLAIM ATTACHED. "If the plaintiff raises a substantial federal question, the * * * decision must go on the merits * * *, Jurisdiction is not lost because the court ultimately concludes that the claim is without merit. * * * The only practical importance of the distinction between the two kinds of dismissals is that if the federal claim is substantial enough to invoke federal jurisdiction, the court has power to exercise pendent jurisdiction over other claims that also may be asserted in the complaint, for which there is no independent jurisdictional basis." 13 Wright & M., Fed. Prac.,§3564,pp. 429-430. Pendent jurisdiction is almost as old as the federal union. The doctrine was revisited, broad- ened, and re-affirmed in United Mine Workers v. Gibbs,383 U.S.715(1966). If there is jurisdiction because of a federal question of substance, there is power to hear pendent claims that “derive from a common nucleus of operative fact." The federal court has pendent jurisdiction of any state law 57 claims that a plaintiff “would ordinarily be ex- pected to try all in one judicial proceeding." In Hagans v. Lavine, supra., a marginal federal con- sti tutional Claim was held sufficient to confer pendent jurisdiction over a federal statuatory claim, for which the amount in controversy re- quirement was not satisfied. Pendent jurisdiction was also upheld in Rosado v. Wyman,397 U.S.397 (1970). _ Many cases are cited and discussed in 13 Wright & M.,Fed. Prac. , §3567. It follows as the night the day that the district court erred in holding that it had no jurisdiction, pendent or otherwise over the peti- tioners' claims to recover for defendants' false representations made over the common carrier tele- phone system. It had pendent jurisdiction vesting it with the power to proceed to trial. PETITIONERS HAVE BEEN DENIED THE OPPORTUNITY TO INVOKE THE DISTRICT JUDGES' DISCRETIONARY JURISDICTION OVER PENDENT CLAIMS Of course, pendent jurisdiction is discre- tionary jurisdiction. Gibbs declared that "pen- dent jurisdiction is a doctrine of discretion, not of plaintiff's right," and that trial courts should look to “considerations of judicial eco- nomy, convenience and fairness to litigants," Id. 726. We present that petitioners were entitled to urge the District Judge to invoke her discre- tionary jurisdiction and that her erroneous ruling of "no jurisdiction" deprived them of this right. We concede that the usual rule is to dismiss pen- dent claims when the federal claim is dismissed, but dismissal is not automatic. Under the parti- cular facts of this case, the court should not have dismissed: (1) Respondents swore that diversity existed and removed this cause of action (a different case, same cause of action) out of the Arkansas State Court, kept it there almost two years with one 58 dilatory motion after the other and then impeached their own affidavits so as to cause the’case to be sent back to the state court where it was dismis- sed for lack of long-arm jurisdiction. (2) Their motives are plain. The Arkansas Federal Court had indicated it was going to sus- tain long-arm jurisdiction and defendants were attempting to engage in forum shopping. (3) By impeaching their own affidavit, res- pondents managed to manuever a ruling of "no diversity" in a non-appealable proceedings thus depriving these petitioners of the right to con- tend on appeal of error in that finding of "no diversity." (4) Respondents have made only a token effort to establish the correctness of the Arkansas ruling of "no diversity." They are satisfied to claim that petitioners have been manuevered out of the right to contest it. We urge that, at most, the soundness of the Arkansas Court's ruling is ques- tionable. Respondents contend that even though the order was non-appealable, the finding of "no- diversity" is conclusive. We submit the obvious proposition that the ultimate function of the courts is to dispense justice. 1f the District Court below finds the non-appealable Arkansas remand order to be unsound, or even questionable, should the Court not weight this factor heavily in favor of retaining its discretionary pendent jurisdiction? (5) Respondents' manuevering is not over by any means. They unabashedly advised both of the Courts below that they will urge the two year statute of limitations against Petitioners if the case is dismissed and refiled in the Texas state court. Should the District Court decline pendent jurisdiction when to do so will expose petitioners to a claim of limitations? (6) And the delay--petitioners were bilked out of their property way back in 1969. Almost six years have passed. They have been through 39 court after court Each a é — grees that they ha aweaY serious lawsuit" (J.A.11) and ‘hich’ Game hieiee . ey should go elsewhere for relief. How long, Oh mr 9 pot eee ereainiy, the Court should con- e time that the case has be and the prospects that the case might ~ge Ae mos delayed in decidin c be dent jutiedictiea,” whether to exercise its pen- (7) Please do not 1 i é ose sight of the i faanl dandeoks et Pig pom of malpractice and rm o awyers (and their i ance carrier, Continental Ca lt = about the political entent yoy | colitie te ‘ t €s and intrigues th exist in most every courthou Re petits ers obtain a really fair t ial § yy eee County Courthouse where the c yeas Gate Court has f hear motions to dis ity, ie & aot é quality, has set asid i ie 5 ai and has ordered a fourth a Pe ott 1d Ie Sh ge is too far removed to know ; Ny, Hut not so far away and so ignorant of human nature or to b ; neh existence of an area of j — = , ; possible concern, wstinn ink sete enough to eveluste =O : tioners are entitled t Court exercise its discretion upon the nt» Pig (8) At a minimum i » we have a situati bw passtsenete are locked in combat ah saoaiee seaeiiidnes on Courthouse daily and are personally come up for sp-elestion ence eee ee ese a pes to is Seaiéee ko naan —— Our years and look , Ene ; €ir campaigns. With pointing accusing fingers at a . that, with respect to a poe eget Ps indy Dallas County Courthouse dos et ete unty oes not exhibi characteristics of even-handed Sustice and Judicial re at the core of D of Law. In re Murchison, 349 U.S.133(1955) (9) Cases such as Cc i V. Continental Cas.Co., 303 Us tte Toeeyoss er V. Van Dusen, -2d 806(3-Pa.1965), held tha courts must not only be im j j t partial in fa im- rvs: in appearance and emphasize P ap ert nces which contain even the temptation to par- 60 tiality must be avoided. Thrust anyone’whom you desire into the shoes of these petitioners, he will approach the Dallas County Courthouse with misgivings ¢ . to whether he can obtain a fair trial. And, if the case goes against him, he is certain to go away convinced that he is the victim of bias and prejudice. Speaking from the stand- point of essential justice, this is a type of case that deserves to be heard in a federal forum. (10) Weighing the circumstances together, it is presented that this case favors, if it does not command, the exercise of pendent jurisdiction. A RULING OF "NO POWER TO DECIDE" DOES NOT CONSTITUTE AN EXERCISE OF THE DISCRETION TO DECIDE. The proposition is simple, as long as the District Judge was under the impression that she had no power to consider the case, she could not weigh the pros and cons for and against the exercise of discretion. In Parsons v. C&O Ry.Co., supra, it was held that the federal court's ruling of no jurisdiction to consider the forum non con- veniens issue upon its merits, was not equal to an exercise of discretion upon the question. In Knuth v. Erie-Crawford Dairy Coop., 395 F.2d 420,426[(3-Pa. 1968), the tattetioniry dismis- sal of pendent claims was reversed because "the court lacked an acceptable basis for exercising its discretion." On remand, the District Court ruled in favor of pendent jurisdiction: "After a case has been waiting for years to reach the courtroom and then testimony had been taken for several weeks, sound judicial adminis- tration dictates that the trial continue to a con- clusion. Furthermore, it would not simply be a matter of remanding to the state * * * because in those forums the statue of limitations could be raised as an aimost insurmountable defense to the plaintiffs' cause. Indeed, it would probably have 61 been an abuse of discretion not to conclude the case." Knuth v. Erie-Crawford Dairy Coop. ,326 F. Supp. 48,57(W.D. Pa.1971). "A failure to recognize the existance of authority to exercise discretion does not amount to its exercise. We therefore conclude that in order to afford the District Court the opportunity to exercise its discretion in the first instance, we must vacate the dismissal * * * and remand for proceedings consistent with this opinion." Webb v. Bladen, 480 F.2d 306(4-Va.1973). oS eas We do not contend that every case containing pendent claims must be remanded when the trial court mistakenly dismisses for want of jurisdiction when it properly should have dismissed for failure to state a federal cause of action. Pendent jur- isdiction is concerned with "judicial economy, convenience and fairness to litigants," United Mine Workers v. Gibbs, supra. If the Court of Appeals examines the record and finds no substan- tial basis upon which the District Court might reasonably exercise its discretion in favor of pendent jurisdiction, the Court of Appeals can declare the error harmless and affirm. But, cer- tainly, the present case is not one of harmless error. Petitioners have a sound basis for their claim of pendent jurisdiction. It is also possible that the Court of Appeals might properly decline to remand if the plaintiff had failed to point out the existence of pendent jurisdiction to the district court. However, your petitioners did point out the existence of pendent jurisdiction to the District Court (Brief Support- ing Jurisdiction, filed September 4, 1973, J.A.2) and respondents filed their opposition thereto (Supplemental Motion to Dismiss, filed September 25, 1973)(J.A.3R34-35). Thereafter, the District Court dismissed the entire action "for want of jur- isdiction." (J.A.27) impliedly ruling that pendent jurisdiction was not present. Petitioners are entitled to have the matter returned to the Dis- 62 trict Court where the District Court after being apprised that it indeed does have jurisdiction, may exercise her sound judicial discretion upon the matter. THE “DISMISS BEFORE TRIAL" RULE IS NOT A MANDATE ° The real question upon the claim of pendent jurisdiction, if there be one, asks not whether pendent jurisdiction exists but whether this be a case in which the power might rightfully be exercised. We refer to the declaration in Gibbs that "if the federal claims are dismissed before trial even though not insubstantial in a juris- dictional sense, the state claims should be dis- missed as well," Id.726. Petitioners suggest that this statement should be interpreted as a guideline, rather than a mandate. According to Rosado v. Wyman,397 U. S.397, 402,404 ,405(1970), ere is no absolute rule requiring a district court to dismiss every case where the federal issue fails before trial upon the merits: "In the case before us the constitutional claim was declared moot prior to decision by the three-judge court and the question arises whether that circumstance removed not only the obligation but destroyed the power of a federal court to adjudicate the pendent claim. We think not. * & * & * * & "Respondents analogize dismissal for mootness to dismissal for want of a substantial claim and rely on language in United Mine Workers v. Gibbs, to the effect at a federal cour should not pass on a state claim when the federal claim falters at the threshold and is 'dismissed before trial.’ 383 U.S., at 726. The argument would appear to be that once a federal court loses power over the jurisdiction-conferring claim, it may not — consider a pendent claim. They contend that 63 mootness, like insubstantialit is a thres- held: Sunledhetions’ Getest.. %* & * & x * *® "We are not willing to defeat the common policy of pendent jurisdiction--the abaeeeree- tion of judicial energy and the avoidance of multiplicity of litigation--by a concep- tual approach that would require jurisdiction over the primary claim at all stages as a prerequisite to resolution claim. * * *," of the pendent Various federal courts have held tha can and should retain pendent seebedbecien pes though the federal claim was dismissed before trial. Scoville v. Bd.Educ., 286 F.Supp.988(N.D.111. 1968), rvsd.oth.gnds.425 F.2d sot eit isos} McCurnin v. Kohlmeyer,477 F.2d 113(5-La.1973); A. He oapes oF v. Marcan Corp., 268 F.Supp.289(S.D. -Y. 19€ . ; 2-N.Y.1968); Rogers v. Valentine, 37 F.R.D.231(S.D.N.Y.1964), eee v. Regent,463 F.2d 1205(5-Fla.1972). "Should the pendent claim al ismi if the federal claim fails a ae Hart & W., Federal Courts, 2d Ed.(1973),p.925. If limitations has run * * * in the interim," it is suggested that essential fairness requires the federal court to retain jurisdiction. A study by the ALI is cited to the effect that discretionarv dismissal be conditioned on a specific finding that" ‘determination * * * in a State court is in the settee © seein and not prejudicial to the ° itioners a i their claim to pendent oa peaches See also, Baker, Toward a Relaxed View of Pendent Jurisdiction, 33 U.Pitt.L.Rev., 750 (107 ripe: Macey Gibbs does not lay down any hn nea imitations on the handling of pendent issues and that the federal courts should not fence them- selves in with arbitrary rules. By retaining a pendent issue for trial, urges the author, the federal court is doing no more than it does in 64 any garden variety diversity case. Intrusion on the state courts' jurisdiction, says the author, is a false issue. Wherever the state forum is more appropriate, jurisdiction maybe declined. The only guideline required or necessary, it is concluded, is the guideline in Gibbs of “judicial economy, convenience and fairness. We have already stated why under the parti- cular facts of this case, the District Court should not have dismissed, We would point out that respondents originally brought this litiga- tion into the federal enclave by swearing that petitioners are citizens of Arkansas. Only when it suited their own objectives did they impeach their affidavit. The respondents conceded to both of the courts below that they will resist a refiling of this litigation in state court upon grounds of limitations. Is this alone not a suf- ficient basis for the exercise of pendent juris- diction? CONCLUSION The errors presented by this petition are a bit unusual. Under the first question, petition- ers urge that the Court of Appeals has erred by blindly following a decision of this Court which might have been controlling except that it has long since been outmoded. Under the second ques- tion, petitioners urge the converse. The Court of Appeals has wholly failed to follow the control- ling decisions of this Court, all of them of re- cent vintage, regarding pendent jurisdiction. 65 Either of the questions presents an ample basis for this petition. Your petitioners ask that a Writ of Certiorari be granted. Of counsel: Charles Ben Howell Dallas, Texas Junell , 1975 Respectfully submitted, H. AVERIL SWEITZER 226 Lakewood Tower Dallas, Texas 75214 APPENDIX ' FEDERAL COURT PROCEEDINGS--ARKANSAS NO. LR--71-C-124 JIM L. NAPPER & WIFE, PLAINTIFFS V. ANDERSON, HENLEY, SHIELDS, BRADFORD & PRITCHARD, ETC., DEFENDANTS, U.S. DISTRICT COURT, E.D.ARK.W.D. [ DEFENDANTS] PETITION FOR REMOVAL [Filed E.D.Ark.,July 13, 1971; R.28-29] l. This is a civil action between citizens of different states, the amount in controversy exceeds the sum of $10,000.00, exclusive of interest and costs, and this is a matter of which this court has jurisdiction. 2. At the time of the commencement of this suit and at the present time Jim L. Napper and Jo Ann Napper were and are citizens of the State of Arkansas. * * * * * * * * * 4. This action was filed in the Circuit Court of Pulaski County, Arkansas, on June 9, 1971. * * * * * * * * * WHEREFORE, defendants petition for removal of this cause to this court from the Circuit Court of Pulaski County, Arkansas. * * * * * * * * * Winslow Drummond, being duly sworn, states that he is one of the attorneys for the defendants and that the facts alleged in the foregoing peti- tion for removal are true to the best of his in- formation, knowledge and belief. [Here omitting jurat dated July 12, 1971] [ DEFENDANTS'] MOTION [Caption as iamedisvely foregoing; * * * * * * * * * 3. Paragraph 3 of the amended complaint states: "Notwithstanding the fact that plaintiffs, Jim L. Napper and wife, Jo Ann Napper, own homestead prop- erty in Texas, they have established and maintain sufficient residence in the State of Arkansas to P.A.2 entitle them to invoke the diversity jurisdiction of the United States District Court for the East- ern District of Arkansas." It would appear, there- fore, that the plaintiffs are citizens of the State of Texas and that there is, therefore, no diversity of citizenship between the plaintiffs and the defendants and that this action ought to be dismissed for want of jurisdiction. ORDER [ REMANDING CASE] [Caption as immediately foregoing; filed E.D.Ark.,May 10,1973;R.64 Presently pending in this case is a motion to remand filed by defendants for failure of diver- sity jurisdiction. On this day an evidentiary hearing was held and in conformity with the find- ings of fact and conclusions of law as stated by the Court from the bench at the conclusion of the presentation of evidence and argument, it is or- dered that this case be, and it is hereby, remanded to the Circuit Court of Pulaski County, Arkansas. Dated this 9th day of May, 1973. FEDERAL COURT PROCEEDINGS--TEXAS NO. CA 3-5046-B JIM L. NAPPER et ux v. ANDERSON, HENLEY, SHIELDS, BRADFORD & PRITCHARD, et al, U.S. DISTRICT COURT, N.D.TEXAS,DALLAS DIVISION MEMORANDUM OPINION AND ORDER [Filed Oct.3,1973;R.49-54] Defendants’ previous Motion to Dismiss for lack of jurisdiction together with their challenge to plaintiffs’ Amended Complaint are now before the court under Fed. R. Civ. P 12(b) (1). As hereinafter set forth, this cause is dismissed without prejudice for want of jurisdiction. P.A.3 Following litigation in the Texas state courts respecting the validity of a certain real estate instrument, Naper v. Johnson, 464 S.W.24 496 (Tex. Civ. App. 1971), writ ref. n.r.e., plaintiffs filed a complaint on June 9, 1971, in the Circuit Court, Pulaski County, Arkansas, against the: law firm and its members that represented plaintiffs in the real estate transaction at issue. On July 12, 1971, defendants in the Arkansas state court proceeding filed a Petition for Removal in the United States District Court for the Eastern District of Arkansas asserting diversity jurisdiction. Immediately after removal, defendants filed s Motion to | Quash Service of Process. While that Motion was pending, on Hovecmber 21, 1972, defendants filec a Motion to Dismiss for want of diversity jurisdiction asserting plaintiffs to be domiciled in Texas. While the plaintiffs' complaint was pending in the fedcra. district court in Arkansas after removal from the state court, plaintiffs filed on August 23, 1971, in this court anothér complaint against the same defendants as were named in the Arkansas proceeding. This second complaint was identical, except for minor grammatical changes, to the complaint pending in the federal district court in Arkansas. Paragraph four (4) of the complaint filed in this cause alleges in pertinent part: Plaintiffs are filing this suit as a precaution against having their cause dismissed after the tunning of the applicable limitation period. Plaintiffs request that the Court withhold pro- ceedings hereon pending a ruling by the federal courts of Arkansas upon the jurisdictional question. P.A.4 On September 25, 1973, plaintiffs filed their Amended Complaint in this cause. This Amended Complaint re-stated the same cause of action and same jurisdictional allegations that were presented in the Arkansas litigation; however, as an alternative cause of action, plaintiffs alleged “federal question" jurisdiction under 28 U.S.C. 1337 by virtue of defendants’ violation of the penal standards of the Wire Fraud Act, 18 U.S.C. 1343 (1970). Paced with a challengeto their allegation of diversity jurisdiction grounded in the remand order by the federal district court in Arkansas, plaintiffs'amendment to their Complaint is an attempt to estaplish “federal question" jurisdiction so as to creete pendent jurisdiction over what is otherwise a state law cause of action contingent upon diversity jurisdiction. Under the authority of Oppendeim v_ Sterling, 368 F.2d 516, 518-19 (10th Cir. 1966), cert. den. 386 U.S. 1011 (1967), reh. den. 388 U.S 925 (1967), 389 U.S. 1059 (1968), this court rejects plaintitf:' “federal question" / jurisdiction allegations relating to 28 U.S.C. 1337. Accord Van Daeje v. Vinci, 294 F. Supp. 71 (N.D. Ill. 1968). In rejecting this allegation of jurisdiction, this court notes thet 28 U.S.C. 1337 applies only to civil action arising from an Act of Congress regulating commerce. The cited statute, 18 U.S.C. 1343 (1970), is penal in nature and does not create any civil action as does, for example, the various securities acts. Moreover, a careful reading of 18 U.S.C. 1343 (1970) shows it not to regulate commerce, but rather to regulate personal behavior arising out of commerce. FPinally, as a matter of judicial philosophy, were 28 U.S.C. 1337 to apply P.A.5 in this situation, then jurisdiction could be created in any cause by merely alleging a violation of a federal penal statute, an argument rejected in Van Daele, supra. As to the remand order entered by the federal district court in Arkansas, this court has examined the briefs submitted by counsel in this cause and reviewed the exhibits attached thereto. It is clear that the federal district court in Arkansas conducted a full evidentiary hearing into the issue of diversity and applied the facts presented at that hearing in ruling that plaintiffs were domicilei in Texas although residents of Arkansas. It is wel’ established that in a in personam action pending in two courts yom the same parties on the same cause of action, both courts may proceed with the litigation until a judgment is obtained in one that is res judicata in the other. Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. 456, 466 (1938). However, plaintiffs in this cause sought, and received, a stay in the proceedings in this court pending a decision on the issue of diversity jurisdiction in the Arkansas litigation. There can be no challenge to the fact that the Arkansas federal court had jurisdiction to determine the issue of diversity jurisdiction. See Ripperger v. A. C. Allyn & Co., 113 F.2d 332 (2nd Cir.), cert. den. 311 U.S. 695 (1940). In that context, the remand order for lack of diversity jurisdiction is a final judgment that cannot be questioned despite the izck of an appeal from that order. This bar is equally applicable to remand orders and to judgments on the issue of diversity jurisdiction. With respect to P.A.6 remand orders, see Metropolitian Cas. Ins. Co. v. Stevens, 312 U.S. 563 (1940); ssouri Pacific . Vv. Pi , 160 U.S. 556 (1895); Yankaus v. Feltstein, 244 U.S. 127 (1917). With respect to judgments on diversity, see McCormick v. Sullivant, 10 Wheat. (23 U.S.) 192, 199 (1825); Evers v. Watson, 156 U.S. 527 (1895). between — on In this cause, which is / the same parties and/the same cause of action as before the federal district court in Arkansas, the Arkansas judgment on the domicile of plaintiffs is res judicata on that issue. As such, this court cannot make any inquiry into the standard Sf law applied or the findings of fact made by that court. See Burgess v. Nail, 103 F.ij 37, 43-44 (10th Cir. 1936); In re Constructors of Pla., Inc., 349 F.2d 595 (Sth Cir.), cert. den. 383 U.S. 912 (1965). This is true even if the legal standard has changed, see Barzin v. Selective Service Local Board No. 14, 446 F.2d 1382 (3rd Cir. 1971).. fo maintain a diversity action in federal court in a removal action, diversity must exist at both the time of the filing and at the date of removal. 1A J. MOORE, FEDERAL PRACTICE Para. 0.161(1) at page 528 with supporting cases cited in note 34. Thus, the Arkansas judgment that plaintiffs are residents of Texas is res judicata as to the date of filing of that complaint (June 9, 1971) and the date of removal (July 12, 1971). The issue is joined, therefore, whether plaintiffs changed domicile between July 12, 1971, and the date this cause was filed, August 23, 1971. P.A.7 of changed circumstances When a party attempts to assert the doctrine with respect to an issue relating to jurisdiction, the standard is very strict. For example, having once been dismissed for lack of * a justiciable controversy, an alien's suit to bar deportation after a final deportation order was issued is still barred by the doctrine of res judicata. Estevez v. Nabers, 218 F.2d 321 (5th Cir. 1955). Accord, Ripperger v. A.C. Allyn & Co., 113 F 2d 332 (2nd Cir.), cert. den. 311 U.S. 695 (1940); Hellebrand v. Hoctor, 222 F. Supp. 81 (E.D. Mo. 1963), affirmed 331 F.2d 453 (8th Cir. 1964). Despite being permitted by this court to amend their Complaint, plaintiffs in this cause do not allecse any change in circumstances. that assert any change in domicile since July 12, 1971. The Supplemental Affidavit executed by plaintiffs on August 23, 1973, purporting to state their subjective intentions in July, 1971, is substantially identical to the previous Affidavit filed in this cause and does not allege and factual changes subsequent to July 12, 1971, that suggest a change in domicile from Texas to Arkansas. Indeed, plaintiffs’ counsel argues *. . . the Arkansas Pederal Court erred by holding that people who have admittedly resided in Arkansas. . . are mere sojourners in a strange land.” Plaintiffs’ ‘September 6, 1973, Brief at Page 7. But as noted, this court cannot initiate inquiries into the legal or factual standard applied in Arkansas. The burden is solely upon plaintiffs to plead sufficient facts to vest this court with jurisdiction and they have failed to do so. P.A.8 IT IS THEREFORE ORDERED, ADJUDGED and DECREED that the P.A.9 NAPPER v. ANDERSON, HENLEY, SHIELDS, ETC. 2 Judgment e649 Exvoppel by judgment precluded plaintiffs from success- fully asserting diversity jurisdiction in federal district court where another federal district court had dismissed prior action involving same parties based upon determination that, as of date of removal of the prior action to the federal court, both plaintiffs and defendants were citizens of Texas and plaintiffs failed to plead or prove that they had changed their citizen- ship between date of removal of the prior action and date on which subsequent action was filed, even though plaintiffs were not able to appeal from order remanding the prior action above styled and numbered cause be and the same hereby is DISMISSED FOR WANT OF JURISDICTION without prejudice. IT IS FURTHER ORDERED, ADJUDGED and DECREED that each party shall bear their own costs in this cause., FIFTH CIRCUIT PROCEEDINGS NO. 73-3746 JIM L. NAPPER AND WIFE JO ANN NAPPER PLAINTIFFS-APPELLANTS v. ANDERSON, HENLEY, SHIELDS, BRADFORD & PRITCHARD, ETC., DEFENDANTS-APPELLEES U.S. COURT OF APPEALS, FIFTH CIRCUIT OPINION Sept. 16, 1974 [500 F.2d 634] Plaintiffs brought diversity action against Texas law partnership and individual partners for alleged malpractice and alternatively sought to recover for alleged violation of Wire Fraud Act. The United States District Court for the Northern District of Texas, Sarah Tilghman Hughes, J., dis- missed for want of jurisdiction and the plaintiffs appealed. The Court of Appeals, Rives, Circuit Judge, held that Wire Fraud Act did not operate to create federal cause of action for damages, and that estoppel by judgment precluded plaintiffs from successfully asserting diversity jurisdiction where prior action filed against defendants by plaintiffs in another district court had been dismissed based upon determination that, as of date of removal of the prior action to federal district court, both plaintiffs and defendants were citizens of Texas and change of plaintiffs’ citizenship between date of removal of the prior action and filing of complaint in present case had not been pleaded or proved. Affirmed. 1. Telecommunications 498 Wire Fraud Act did not operate to create federal cause of action for damages against defendants who were alleged to have violated the Act. 18 U.S.C.A. §§ 1341-1343. to state court. 3. Judgment ¢-720 Estoppel by judgment will not permit matters actually litigated and determined between same parties in one proceed- ing to be relitigated. 4. Judgment 634 Estoppel by judgment is accurately termed “direct estop- pel” where issue has actually been litigated and determined in an action between same parties based upon same cause of action. See publication Words and Phrase for other judi- cial constructions and definitions. Appeal from the United States District Court for the North- ern District of Texas. Before BROWN, Chief Judge, and RIVES and DYER, Circuit Judges. RIVES, Circuit Judge: This appeal is from a judgment of the district court dismiss- ing the case for want of jurisdiction and without prejudice. We affirm. The complaint seeks the recovery of damages from a Dallas, Texas, law partnership and the individual partners for alleged P.A.10 NAPPER v. ANDERSON, HENLEY, SHIELDS, ETC. malpractice involving the validity and effect of a conveyance of the Napper’s home in Dallas." The first action asserting this claim was filed by plaintiffs on June 9, 1971, in the Circuit Court of Pulaski County, Arkansas. The complaint alleged that the cause of action arose in Arkansas, and sought to have the Arkansas state court acquire “long-arm” jurisdic- tion over the Texas defendants (See Arkansas Statutes 27-— 2502). On July 12, 1971, defendants filed a petition for removal to the Federal District Court for the Eastern District of Arkan- sas asserting diversity jurisdiction that the plaintiffs were citizens of Arkansas and the defendants were citizens of Texas. Defendants then filed in the federal district court to which the case had been removed a motion to quash the “long-arm” service of process. The next month, on August 23, 1971, the plaintiffs filed im the United States District Court for the Northern District of Texas a complaint in the present case, identical, except for minor grammatical changes, to the complaint pending in the federal district court in Arkansas. This complaint stated: “Plaintiffs are filing this suit as a precaution against having their cause dismissed after the running of the applicable limitations period. Plaintiffs request that the Court with- hold proceedings hereon permding a ruling by the federal courts of Arkansas upon the jurisdictional question.” Plaintiffs based federal jurisdiction on diversity of citizenship, asserting that the defendants were all citizens of Texas and going into some detail as to their own citizenship: “Notwithstanding the fact that plaintiffs, Jim L. Napper and wife, Jo Ann Napper, own homestead property in Texas, they have established sufficient residence in the State of Arkansas to entitle them to invoke the diversity 1. The conveyance is that described in Napper v. Johnson, Tex.Civ. App.1971, 464 S.W.2d 496. P.A.11 NAPPER v. ANDERSON, HENLEY, SHIELDS, ETC. jurisdiction of the United States District Court for the Northern District of Texas.” The defendants on September 2, 1971, moved to dismiss plain- tiffs’ complaint for lack of jurisdiction, alleging: “It affirmatively appears on the face of Plaintiffs’ com- plaint that they are citizens and residents of Texas, as are ‘the Defendants, so that no diversity of citizenship exists. In the alternative, if it does not affirmatively appear on the face of Piaintiffs’ complaint that they are citizens of the State of Texas, then Defendants affirmatively assert that they are citizens of such state, so that there is no diversity of citizenship, and the Court has no jurisdiction over the cause of action asserted by Plaintiffs.” More than a year later, on November 21, 1972, the defend- ants filed in the federal district court in Arkansas a motion to dismiss for want of diversity jurisdiction, asserting plaintiffs to be citizens of the same state as were defendants, that is Texas. On May 9, 1973, a hearing was conducted on that motion to dismiss. The district judge found that the plaintiffs at the time of filing their complaint and since had the inten- tion of going back to Texas. In part, the Judge said: “The Court believes that his [Mr. Napper’s] intention when he came here was not to make Arkansas his home on an indefinite basis, that that is what is absent and, there- fore, he remained domiciled in Texas and remained a Texas citizen, although residing in Arkansas.” The case was accordingly remanded to the Circuit Court of Pulaski County, Arkansas. That state court never reached the merits, but ultimately sustained the defendants’ motion to quash the “long-arm” service of process. {1} On September 25, 1973, the plaintiffs filed in the present case an amended complaint reasserting the same claim based on diversity jurisdiction with the same allegations of citizenship. As an alternative claim, the plaintiffs sought to recover damages alleged to have resulted from violation by P.A.12 NAPPER v. ANDERSON, HENLEY, SHIELDS, ETC. the defendants of the wire fraud act, 18 U.S.C. § 1343." The plaintiffs claim that violation of that criminal statute operates to create a federal cause of action for damages against the defendants, and assert jurisdiction under 28 U.S.C. § 1337. In Oppenheim v. Sterling, 1966, 368 F.2d 516, 518-519, the Tenth Circuit held that 18 U.S.C. §§ 1341, 1342, relating to mail fraud, are purely penal and rejected “the view that a violation of these penal statutes as such affords the court federal question jurisdiction in a civil case.” The wire fraud act, 18 U.S.C. § 1348, is closely analogous to the mail fraud statute, 18 U.S.C. § 1341, and likewise evidences no intent of Congress to grant additionai federal question jurisdiction in civil cases. Reitmeister v. Reitmeister, 2 Cir. 1947, 162 F.2d 691, does not persuade us differently. [2-4] Estoppel by judgment precludes the plaintiffs from successfully asserting diversity jurisdiction. The distinction between res judicata and estoppel by judgment is discussed in Commissioner v. Sunnen, 1948, 333 U.S. 591, 597, 598, 68 S.Ct. 715, 92 L.Ed. 898. Estoppel by judgment will not permit matters actually litigated and determined between the same parties in one proceeding to be relitigated (333 U.S. at 598, 68 S.Ct. 715). We agree with the full and amply supported “§ 1343. Fraud wire, radio, or television " 8 ene tauiea Goaned ar tenuis to anttnn Gay egheann Or ‘artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the of executing such scheme or artifice, shall be fined not more than $1,000 or imprisoned not more than five years, or “§ 1337. Commerce and anti-trust regulations . S The Gatriat courte aha have evlgfaal justediction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies.” ” 4. The estoppel by judgment is accurately termed “direct estoppel where the issue is actually litigated and determined in an action between the same parties based upon the same cause of action. See P.A.13 NAPPER v. ANDERSUN, HENLEY, SHIELDS, ETC. discussion in 1B Moore’s Federal Practice 4 0.405{5], that “the underlying policy of res judicata is not restricted to a valid judgment that deals solely with the merits; it extends to and includes matters in abatement, such as jurisdiction of the subject matter, federal jurisdiction, jurisdiction over the res, jurisdiction over the defendant, venue, and related matters.” (Footnotes omitted.) As between the two federal district courts, the inability to appeal from the order of remand does not permit the issue actually litigated and determined in the federal court in Arkansas to be relitigated in the second action. Johnson Company v. Wharton, 1894, 152 U.S. 252, 14 S.Ct. 608, 38 L.Ed. 429; see also the full discussion of and possible limita- tions to this rule in 1B Moore’s Federal Practice { 0.416{5]. The federal district court in Arkansas held that as of July 12, 1971, the date of removal, it lacked jurisdiction because plaintiffs were on that date citizens of Texas. To sustain federal jurisdiction in the Texas district court, plaintiffs had the burden of proving that they had changed their citizenship between July 12 and August 23, 1971, when their complaint in the present case was filed. Though afforded ample opportuni- ty to do so, the plaintiffs have never pleaded or proved any change of citizenship during that crucial period. The district court properly dismissed the case for want of jurisdiction, and its judgment is Affirmed. A.L.I. Restatement, Judgments § 45 comment d; Estevez v. Nabers, 5 Cir. 1955, 219 F.2d 321, 324; Myers v. Ampex, Inc., 5 Cir. 1974, 498 F.2d 1092 [1974]; 46 Am.Jur.2d § 397, p. 566 n. 7. That distinction between “direct estoppel” and “collateral estoppel” helps to make clear our conclusion that neither the standards of law applied by the federal district court.in Arkansas nor its findings of fact may be relitigated. Adm. Office, U.S. Courts—West Publishing Company, Saint Paul, Minn. P.A.14 Jim L. NAPPER and wife, Jo Ann Napper, Plaintiffs-Appellants, Vv. ANDERSON, HENLEY, SHIELDS, BRADFORD & PRITCHARD, etc., Defendants-Appellees. No. 73-3746. United States Court of Appeals, Fifth Circuit. P.A.15 NAPPER v. ANDERSON, HENLEY, SHIELDS, ETC. filed, defendants moved to dismiss for lack of diversity. The amended complaint filed two years later, on September 25, 1978, sought recovery also on a claimed federal cause of action which we held to be nonexistent. There was never any basis of federal jurisdiction sufficient to support pendent jurisdic- tion of the state law claim.' The panel, therefore, declines to grant appellants’ petition for rehearing. The Petition for Rehearing is denied and no member of this panel nor Judge in regular active service on the Court having requested that the Court be polled on rehearing en banc (Rule [507 F.2d 723] Rule 12), the Petition for Rehearing En Banc is denied. 1. See Hurn v. Oursler, 1938, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. Appeal from the United States District Court for the North- 1148; Mine Workers v. Gibbs, 1966, 383 U.S. 715, 725, 86 S.Ct. ern District of Texas; Sarah Tilghman Hughes, Judge. 1130, 16 L.Ed.2d 218; Rosado v. Wyman, 1970, 397 U.S. 397, 404, 90 S.Ct. 1207, 25 L.Ed.2d 442; Moor v. County of Alameda, 1973, 411 ON PETITION FOR REHEARING AND PETITION FOR U.S. 693, 710, et seq., 93 S.Ct. 1785, 36 L.Ed.2d 596. Cf. Lazier v. Weitzenfeld, 1975, 505 F.2d 896 [1975]; Perry v. Jones, 1975, —— REHEARING EN BANC F.2d — [1975). (Opinion September 16, 1974, 5 Cir. 1974, 500 F.2d 634). ee ee ee Before BROWN, Chief Judge, and RIVES and DYER, JUDGMENT Circuit Judges. [Caption as immediately foregoing filed Sept.16,1974] PER CURIAM: ideration of appellants’ petition for rehearing, the This cause came on to be heard on the transcript oo van - mes of the record from the United States District Court panel adheres to its decision reported in 500 F.2d 634, that the ; ; district court properly dismissed the case for want of jurisdic- a District of Texas, and was argued tion. Bei! v. Hood, 1946, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. ON CONSIDERATION WHEREOF, It is now here order- 939, does nct require a different result. ed and adjudged by this Court that the judgment of Admittedly, the defendants have all along been citizens of the said District Court in this cause be, and the Texas. It now appears that on August 23, 1971, the date of oe affirmed; , > age mee s further ordered that plaintiffs-appellants filing the complaint in the Texas federal district court, the pay to defendants-appellees, the costs on appeal to plaintiffs were also citizens of Texas. The plaintiffs cannot be taxed by the Clerk of this Court. complain that in good faith they considered themselves citi- zens of Arkansas, and were surprised by the contrary ruling, for on September 2, 1971, ten days after the complaint was STATE COURT PROCEEDINGS - TEXAS P.A.16 NAPPEBR v. JOHNSCN Cite as 464 8. W.2d 498 Jim L. NAPPER and Wife Je Ann Napper, Appellants, Earl B. JOHNSON, Appelice. Ne. 4974. Court of Civil Appeals of Texas, Waco. Feb. 4, 1971. Rehearings Den'ed March 4, 1971 Action to cancel instrument in form of deed. The 160th District Court, Dallas County, Hoyet A. Armstrong, J., rendered judgment for defendant, and plaintiffs ap- pealed. The Court of Civil A [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_0558%3A1. Public record. Not legal advice.