The judicial power of the United States, as created by the
Constitution and provided for by Congress pursuant to
constitutional authority, is wholly independent of state action and
cannot be directly or indirectly destroyed, abridged, limited or
rendered inefficacious by exertion of state authority.
The right conferred by law of the United States to remove a
cause pending in a state to a federal court on compliance with the
federal law is paramount and free from restraint or penalization by
state action, and whether the right exists and has been properly
exercised are federal questions determinable by the federal courts
free from limitation or interference by state power.
A state statute which forbids a resort to the federal courts on
the ground of diversity of citizenship and punishes by
extraordinary penalties any assertion of a right to remove a case
under the federal law and attempts to divest the federal courts of
their power to determine whether the right exists is
unconstitutional as an attempted exertion of state power over the
judicial power of the United States.
A state cannot destroy the right to remove causes to the federal
courts by imposing arbitrary conditions as to state citizenship
which render it impossible for one entitled to the right to avail
of it.
A suit by a nonresident against officers of a state to enjoin
the enforcement of a state statute which violates constitutional
rights of complainant is not a suit against the state within the
prohibition of the Eleventh Amendment.
A state statute which deprives those entitled thereto of a
federal right is not made constitutional by the fact that it does
not discriminate, but operates on all alike.
The Oklahoma statute of May 26, 1908, forbidding foreign
corporations
Page 232 U. S. 319
from asserting any citizenship other than of that state and
providing for the revocation and forfeiture of the charter of any
corporation filing a petition for removal of a cause from the state
to the federal court, is unconstitutional as to corporations doing
an interstate business as an attempt to restrain and penalize the
assertion of a federal right.
Doyle v. Continental Ins.
Co., 94 U. S. 535, and
Security Co. v. Pruitt, 202 U. S. 246,
distinguished.
Where the plain text of a state statute leaves no doubt that it
is an attempt to prevent removal of causes to the federal court, it
will not be construed as a mere exercise of reasonable control over
corporations.
When the construction of a state statute given by the state
court and the state officers is plainly right, this Court will not
give the statute a different construction because, under the one so
given, the statute is flagrantly repugnant to the Constitution.
The St. Louis & San Francisco Railroad Company, a
corporation chartered under the laws of Missouri, and a citizen and
resident of that state, owned, controlled, or operated, for the
purpose of interstate and intrastate commerce, many hundreds of
miles of railway in Oklahoma, and extending into adjoining states
and beyond. These lines existed and were operated by the company,
some, it may be, before the Territory of Oklahoma was organized,
and most, if not all, before Oklahoma was endowed with statehood.
The lines composing the system originated in various charters, some
enacted by Congress, accompanied with grant of land, and others by
territorial grant. The unified system resulted from foreclosures,
consolidations, etc. In 1908, the company was sued by a citizen and
resident of Oklahoma, in a court of that state. On the ground of
diversity of citizenship, a petition and bond in due form and
seasonable time were filed by the company for removal to the
Circuit Court of the United States for the Western District of
Oklahoma. What action was taken by the state court does not appear,
but presumably the petition was denied, the following document
having been issued by the Secretary of State:
Page 232 U. S. 320
"
STATE OF OKLAHOMA"
"
Revocation of Charter of St. Louis & San
Francisco"
"
Railroad Company in Oklahoma"
"
GUTHRIE, OKLAHOMA, August 29th, 1908."
"
I
n the district court"
"
GERTRUDE GOODE, Administratrix of the Estate of"
"
Frank R. Goode, Deceased, Plaintiff,"
"
vs."
"
ST. LOUIS & SAN FRANCISCO RAILROAD COMPANY, a"
"
Corporation, Defendant"
"
Petition for Removal and to the Circuit Court"
"
of the United States"
"STATE OF OKLAHOMA"
"
Comanche County:"
"Having received due and legal notice from J. T. Johnson, judge
of the District Court of Comanche County, that the above-named
corporation defendant, St. Louis & San Francisco Railroad
Company, has filed a petition for removal to the United States
court, a certified copy of which is on record in the office of the
Secretary of State at the Capitol in the City of Guthrie, in the
State of Oklahoma."
"Therefore, I, Leo Meyer, Assistant Secretary of State and now
Acting Secretary of State of the State of Oklahoma, by authority
invested in me under § 4 of house bill No. 131, approved by
the Governor of the State of Oklahoma, C. N. Haskell, May 26th,
1908, do hereby declare the license of the said St. Louis & San
Francisco Railroad Company to transact business in the State of
Oklahoma forfeited and revoked."
"In testimony whereof, I have set my hand and caused to be
affixed the great seal of the state."
"Done at the City of Guthrie this 29th day of August, A.D.,
1908."
"[Seal.] LEO MEYER"
"
Acting Secretary of State"
Page 232 U. S. 321
Thereupon the suit which is now before us was commenced by the
railroad company against the Secretary of State and his assistant,
seeking to enjoin them from giving effect to the certificate, or in
any way disturbing or interfering with the company in carrying on
business in the state. With much amplitude of statement, the source
and history of the title of the various railroads forming part of
the complainant's system in Oklahoma were enumerated. In addition
to asserting that rights secured to the corporation by the state
constitution had been denied by the action complained of,
violations of the Constitution of the United States were
specifically asserted on the following grounds: first, because the
state law under which the Secretary of State had purported to act,
and the action taken thereunder, constituted an unwarranted
interference on the part of the state and its officers with the
judicial power of the United States; second, because the attempt to
exclude the company from the state, and prevent it from doing
business therein, under the circumstances stated, was repugnant to
the commerce clause of the Constitution, the due process clause of
the Fourteenth Amendment, and the contract clause, the latter being
based on the assertion that the congressional and legislative acts
by which the roads forming part of the system of the company had
been incorporated constituted contracts giving a right to do
business in Oklahoma which that state had no power to impair. The
court allowed a restraining order. The bill was demurred to on the
ground of want of jurisdiction and want of equity. The demurrer was
overruled. The court, in an elaborate opinion, expounded its
reasons for so doing, holding that it had jurisdiction because of
diversity of citizenship, the complainant being a citizen of
Missouri, and the defendants, citizens and residents of Oklahoma.
In reaching this conclusion, the court analyzed the various
transactions, foreclosure, and consolidations, etc., by which the
railroad company had acquired the lines
Page 232 U. S. 322
composing its system, and held that there was nothing in any of
them which destroyed the Missouri citizenship of the complainant.
It moreover held, in any event, there was ample ground for
jurisdiction because of the constitutional rights asserted.
As to the alleged want of equity in the bill, the court, after
stating that the obvious purpose of the legislation under which the
Secretary of State had acted as deduced from its text, was to
prevent the removal of causes from the state to a court of the
United States, declared that the defendant in argument had so
conceded. It was decided that the state was without authority to
legislate to that effect, and therefore the law in question and the
action of the Secretary of State taken under it were void because
of repugnancy to the Constitution of the United States. The answer,
which was then filed, admitted the incorporation of the complainant
in Missouri, and the citizenship in Oklahoma of the defendants, as
well as the jurisdictional amount. The allegations of the complaint
as to interference with the authority of the courts of the United
States as to the commerce and contract clauses of the Constitution
and the due process and equal protection clauses of the Fourteenth
Amendment were sought to be traversed by copious averments
concerning the subject. Finally it was asserted, 1, that the
Missouri corporation was never authorized to acquire any railroad
in either the Indian or Oklahoma territory, and it therefore had no
standing to assert as a Missouri corporation, its ownership and
control of such roads as a basis for removal; 2, that in forming
the line or lines of railway which constituted its system, the
complainant had consolidated parallel and competing roads, in
violation of the antitrust laws of the territory and of the State
of Oklahoma, as well as the law of the United States, and therefore
the corporation was not in a position to assert its Missouri
citizenship, and 3, that the acquisition by the complainant of
various
Page 232 U. S. 323
roads forming parts of its system, which were covered by
charters granted by Congress or by Oklahoma territory, was in
conflict with such charters, and for this reason, moreover, the
corporation could not be heard to assert its Missouri citizenship.
An exception of the complainant to the relevancy of the three
grounds just stated was maintained, and they were stricken from the
answer. By agreement between the parties, the present appellant,
the successor in office as Secretary of State, was substituted as
defendant. Thereupon, the case having been submitted to the court
on bill and answer, a decree was entered perpetually enjoining the
Secretary of State from giving effect to the order of revocation,
or interfering with or disturbing the complainant in the
transaction of its business in the state. It was expressly decreed
that the Act of the Legislature of Oklahoma upon which the action
of the Secretary of State was taken was void and unenforceable
because of its repugnancy to the Constitution of the United States.
This appeal was then taken.
Page 232 U. S. 327
MR. CHIEF JUSTICE WHITE, after making the foregoing statement,
delivered the opinion of the Court.
We have stated the case only to the extent necessary to make
clear the questions essential to be decided.
The assignments of error in general terms assail the overruling
of the demurrer, the striking of matter from the answer, and the
final decree. The propositions, however, which are urged at bar to
sustain these general assignments, are numerous and we think in
some aspects redundant. To consider them in the order in which they
are urged would, besides giving rise to repetition, tend to produce
confusion. We hence disregard the mere order in which they are
stated in the argument and come to consider the fundamental
propositions necessary to be taken
Page 232 U. S. 328
into view in order to determine whether the court below was
right in holding that the law under which the Secretary of State
acted, as well as the action of that officer, was void because
inconsistent with the judicial power of the United States,
reserving until that is done such separate consideration of the
propositions relied on as we may deem it necessary to make.
It may not be doubted that the judicial power of the United
States as created by the Constitution and provided for by Congress
pursuant to its constitutional authority is a power wholly
independent of state action, and which therefore the several states
may not by any exertion of authority in any form, directly or
indirectly, destroy, abridge, limit, or render inefficacious. The
doctrine is so elementary as to require no citation of authority to
sustain it. Indeed, it stands out so plainly as one of the
essential and fundamental conceptions upon which our constitutional
system rests, and the lines which define it are so broad and so
obvious, that, unlike some of the other powers delegated by the
Constitution, where the lines of distinction are less clearly
defined, the attempts to transgress or forget them have been so
infrequent as to call for few occasions for their statement and
application. However, though infrequent, occasions have not been
wanting, especially on the subject of the removal of causes with
which we are now dealing, where the general principle has been
expounded and applied so as to cause the subject, even from the
mere point of view of authority, to be beyond the domain of all
possible controversy.
See, for general question,
Ex Parte Young,
209 U. S. 123;
Reagan v. Farmers' Loan & Trust Co., 154 U.
S. 362,
154 U. S. 391;
Hess v. Reynolds, 113 U. S. 73,
113 U. S. 77;
Madisonville Traction Co. v. St. Bernard Mining Co.,
196 U. S. 239,
196 U. S. 252,
and on subject of removal,
Southern Pacific Company v.
Denton, 146 U. S. 202;
St. Louis & S.F. Ry. Co. v. James, 161 U.
S. 545;
Page 232 U. S. 329
Southern Railway Company v. Allison, 190 U.
S. 326;
Herndon v. C., R.I. & P.,
218 U. S. 135.
With this general principle in hand, let us come to fix one or
more of the essentials of the right to remove as a prelude to
testing the assailed statute and the action taken under it. In the
first place, the right, unrestrained and unpenalized by state
action, on compliance with the forms required by the law of the
United States, to ask the removal of a cause pending in a state to
a United States court is obviously of the very essence of the right
to remove conferred by the law of the United States. In the second
place, as the right given to remove by the United States law is
paramount, it results that it is also of the essence of the right
to remove that, when an issue of whether a prayer for removal was
rightfully asked arises, a federal question results which is
determinable by the courts of the United States free from
limitation or interference arising from an exertion of state power.
In the third place, as the right freely exists to seek removal
unchecked or unburdened by state authority, and the duty to
determine the adequacy of a prayed removal is a federal, and not a
state, question, it follows that the states are, in the nature of
things, without authority to penalize or punish one who has sought
to avail himself of the federal right of removal on the ground that
the removal asked was unauthorized or illegal. Let us come, then,
to the text of the statute, with the object of determining its
constitutionality. Its first section provides
"that the domicil of every person, firm, or corporation
conducting a business in person, by agent, through an office, or
otherwise transacting business within the State of Oklahoma, and
which has complied with or may comply with the Constitution and
laws of the State of Oklahoma, shall be for all purposes deemed and
held to be the State of Oklahoma."
The second section provides for the immediate revocation of
"the license or charter to do business within the state of
Page 232 U. S. 330
Oklahoma of every person, firm, or corporation conducting a
business in person, by agent, through an office, or otherwise
transacting business within said State of Oklahoma, who shall claim
or declare in writing before any court of law or equity within said
State of Oklahoma, domicil within another state or foreign
country."
The third section makes it the duty of the judge of any court
before which any claim of foreign domicil is made within the
contemplation of the second section to at once make report of the
fact to the Secretary of State, and to transmit to that officer a
copy of the claim, and the fourth section imposes on the Secretary
of State the duty immediately, on the receipt of such report and
copy of the declaration, to "declare the license or charter of any
person, firm, or corporation so filing said claim or declaration
forfeited and revoked;" and the fifth causes it to be a misdemeanor
subjecting to a penalty of not less than one thousand nor more than
five thousand dollars each day or part of day for any person whose
license or charter is revoked to do business in Oklahoma in
conflict with the prohibitions of the statute.
While the provisions of the statute are dependent one upon the
other, and are unified in the sense that they all are components of
a common purpose -- that is, tend to the realization of one and the
same legislative intent -- its provisions nevertheless, for the
purpose of analysis, are plainly two-fold in character -- that is,
one, the compulsory citizenship and domicil within the state which
the first section imposes, and the other, the prohibition which the
statute pronounces against any assertion in a court of the
existence of any other citizenship and domicil than that which the
statute ordains, and the means and penalties provided for
sanctioning such prohibition. Although theoretically the first
would seem to be the more primary and fundamental of the two, since
the second, after all, consists but of methods provided for making
the first
Page 232 U. S. 331
operative, the second, from the point of view we are examining,
is the primal consideration, since it directly deals with the
assertion in a state court of a right to remove, and provides the
mechanism which was deemed to be effectual to render the assertion
of such right impossible. In other words, the difference between
its two provisions is that which exists between an attempt, on the
one hand, to render the enjoyment of a federal right impossible by
arbitrarily creating a fictitious legal status incompatible with
the existence of the right, and, on the other hand, the formulation
of such prohibitions and the establishment of such penalties
against the attempt to avail of the federal right as to cause it to
be impossible to assert it. Coming, then, to consider the statute
from the second or latter point of view, we think it is clear that
it plainly and obviously forbids a resort to the federal courts on
the ground of diversity of citizenship in the contingency
contemplated, punishes by extraordinary penalties any assertion of
a right to remove under the laws of the United States, and attempts
to divest the federal courts of their power to determine, if issue
arises on the subject, whether there is a right to remove. Indeed,
the statute goes much further, since, when an application to remove
is made, in order to prevent a judicial consideration of its merits
even by the state court, it in effect commands the judge of such
court, on the making of the application, to refuse the same, and to
certify the fact that it was made to a state executive officer to
the end that such officer should, without judicial action, strip
the petitioning corporation of its right to do business, besides
subjecting it to penalties of the most destructive character as a
means of compelling acquiescence. When the nature of the statute is
thus properly appreciated, nothing need be further side to manifest
its obvious repugnancy to the Constitution or to demonstrate the
correctness of the decree of the court below.
The conclusion just stated leaves us only the duty of
Page 232 U. S. 332
separately and briefly referring to some of the propositions
pressed in argument: (a) the contention that, because the object of
the suit was to enjoin state officers from violating the
constitutional rights of the complainant, it was therefore a suit
against the state, and not maintainable, is so plainly in conflict
with the settled doctrine to the contrary that we do not further
notice it. (b) The contention so much insisted upon, that the act
should not be declared unconstitutional because it does not
discriminate, we assume refers to the provision of the statute
creating an arbitrary standard of state citizenship and domicil;
but, as we see no possibility of separating that provision from the
unconstitutional attempt to prevent access to the courts of the
United States, there is no occasion to further deal with the
subject of discrimination. If, however, we were to separately
consider it, at once it is to be observed that the contention
proceeds upon a self-evident misconception, which is this: that if
only wrong be indiscriminately done, it becomes rightful. (c) The
proposition that the constitutionality of the statute and the
action taken under it is supported by the decisions in
Doyle v.
Continental Ins. Company, 94 U. S. 535, and
Security Company v. Prewitt, 202
U. S. 248, is, we think plainly unfounded. Those cases
involved state legislation as to a subject over which there was
complete state authority -- that is, the exclusion from the state
of a corporation which was so organized that it had no authority to
do anything but a purely intrastate business, and the decisions
rested upon the want of power to deprive a state of its right to
deal with a subject which was in its complete control, even though
an unlawful motive might have impelled the state to exert its
lawful power. But that the application of those cases to a
situation where complete power in a state over the subject dealt
with does not exist has since been so repeatedly passed upon as to
cause the question not to be open.
Western
Union Telegraph Company v. Kansas,
Page 232 U. S. 333
216 U. S. 1;
Pullman Co. v. Kansas, 216 U. S. 56;
International Textbook Co. v. Pigg, 217 U. S.
91;
Buck Stove & Range Co. v. Vickers,
226 U. S. 205, and
Herndon v. C., R.I. & P. Ry., 218 U.
S. 135. The grounds of the decision in the last case
show the extremely narrow scope of the rulings in the
Doyle and
Prewitt cases, and render their
inapplicability to this case certain. Indeed, the ruling in the
Herndon case and in those subsequent to the
Doyle
and
Prewitt cases, most of which were reviewed in the
Herndon case, demonstrates that no authority is afforded
by those two cases for the conception that it is within the power
of a state in any form, directly or indirectly, to destroy or
deprive of a right conferred by the Constitution and laws of the
United States. (d) The matters which the court below ordered
stricken from the answer were irrelevant to the issue for decision,
even if it be conceded hypothetically that they had merit, because,
under that assumption, they would have only been properly
cognizable if presented in an appropriate manner and at the proper
time to the federal tribunal which had a right to pass upon them
when considering the propriety of the removal which was prayed.
(e) We consider that the plain text of the statute, the meaning
affixed to it by the state court when the application to remove was
made, the subsequent action taken by the state officers, the
character of the pleadings, the concession as stated by the court
below, which was made in the argument, all leave no room for the
contention that, at all events, the statute should be construed not
as an attempt on the part of the state to prevent the removal of
causes, but simply as an effort on the part of the state to exert
reasonable control over corporations within its borders. The
argument that the statute, if understood as we understand it, is so
flagrantly repugnant to the Constitution as to suggest the
impossibility of believing that it was enacted with that end in
view, but repudiates, as we have seen, the action of the state
court and of the
Page 232 U. S. 334
state officers under it, and the whole course of the trial, and
comes at last to the contention that the more plainly an enactment
violates the Constitution, the more urgent the duty of deciding
that it does not do so.
Affirmed.
