51 F. Supp.2d 1232 (1999) | Cited 0 times | N.D. Alabama | April 28, 1999

Memorandum Opinion

On March 16, 1999, this court entered a show cause orderrequesting the parties to this litigation to demonstrate why theinstant action should not be remanded to the Circuit Court ofJefferson County, Alabama, from whence it came. On March 30,1999, a brief was filed by the defendants, Philip Morris, Inc.,R.J. Reynolds Tobacco Company, Brown and Williamson TobaccoCorporation and Lorrilard Tobacco Company, in response to theshow cause order of this court with regard to the issue ofjurisdiction. On April 9, 1999, defendant Liggett Group, Inc.,filed a motion to join in the brief of the other defendants insupport of jurisdiction over the instant action. In their brief,the defendants argued that jurisdiction was properly vested inthis court as the court had jurisdiction over the action underthe federal question statute, 28 U.S.C. § 1331,1 and basedupon diversity of citizenship as set forth at 28West Page1234 U.S.C. § 1332.2 For the consequent reasons, this court willremand the instant action to the Circuit Court of JeffersonCounty, Alabama.

Under 28 U.S.C. § 1447(c), the court has the authority toremand a case to state court "[i]f at any time before finaljudgment it appears that the district court lacks subject matterjurisdiction. . . ." See In re Bethesda Memorial Hosp., Inc.,123 F.3d 1407, 1410 (11th Cir. 1997). As the Eleventh CircuitCourt of Appeals further explained in University of SouthAlabama v. American Tobacco Co., 168 F.3d 405, (11th Cir. 1999):

This provision is mandatory and may not be disregarded based on speculation about the proceeding's futility in state court. See International Primate Protection League v. Administrators of Tulane Educ. Fund, 500 U.S. 72, 87-89, [111 S.Ct. 1700, 114 L.Ed.2d 134] (1991); Smith v. Wisconsin Dep't of Agric., Trade and Consumer Protection, 23 F.3d 1134, 1139 (7th Cir. 1994); see also Bruns v. National Credit Union Admin., 122 F.3d 1251, 1257 (9th Cir. 1997) (section 1447(c) is mandatory); Bromwell v. Michigan Mut. Ins. Co., 115 F.3d 208, 213 (3d Cir. 1997) (same); Maine Ass'n of Interdependent Neighborhoods v. Commissioner, Me. Dep't of Human Servs., 876 F.2d 1051, 1054 (1st Cir. 1989) (same). Moreover, a federal court must remand for lack of subject matter jurisdiction notwithstanding the presence of other motions pending before the court. See, e.g., Marathon Oil, 145 F.3d at 220 (holding that district court should have considered motion to remand for lack of subject matter jurisdiction before it addressed motion to dismiss for want of personal jurisdiction); Toumajian v. Frailey, 135 F.3d 648, 655 (9th Cir. 1998) (holding that district court should have remanded for lack of subject matter jurisdiction and should not have dismissed on grounds of ERISA preemption); Avitts v. Amoco Prod. Co., 53 F.3d 690, 693 (5th Cir. 1995) (per curiam) (holding that district court had no jurisdiction to order interim costs and attorneys' fees where action should have been immediately remanded for lack of subject matter jurisdiction); Smith, 23 F.3d at 1139 (holding that district court had no authority to dismiss removed claim without subject matter jurisdiction); In re Bear River Drainage Dist., 267 F.2d 849, 851 (10th Cir. 1959) (holding that motion to remand for lack of subject matter jurisdiction necessarily precedes motion to dismiss); Nichols v. Southeast Health Plan of Ala., Inc., 859 F. Supp. 553, 559 (S.D.Ala. 1993) (same).

Because removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, [61 S.Ct. 868, 85 L.Ed. 1214] (1941). Indeed, all doubts about jurisdiction should be resolved in favor of remand to state court. See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (citing Boyer v. Snap-on Tools Corp., 913 F.2d 108 (3d Cir. 1990); Coker v. Amoco Oil Co., 709 F.2d 1433 (11th Cir. 1983)). A presumption in favor of remand is necessary because if a federal court reaches the merits of a pending motion in a removed case where subject matter jurisdiction may be lacking it deprives a state court of its right under the Constitution to resolve controversies in its own courts. For example, in Marathon Oil, the district court dismissed an action on removal from state court for want of personal jurisdiction before reaching the issue of subject matter jurisdiction. 145 F.3d at 215. On rehearing en banc, the Fifth Circuit held that the district court erred in failing to first examine its subject matter jurisdiction and, because jurisdiction was in fact lacking, in failing to remand to state court. See id. at 220. The court reasoned that such an approach "accords the proper respect to the state courts, as the residual courts of general jurisdiction, to make the personal jurisdiction inquiry when [federal courts] lack either constitutional or statutory subject-matter jurisdiction over a removed case." Id.; see also Bromwell, 115 F.3d at 214 (noting that justiciability is a matter for the state court to decide where case should have been remanded to state court for lack of subject matter jurisdiction rather than dismissed); Smith, 23 F.3d at 1139 (declining to speculate on issue of state law where case should have been remanded to state court for lack of subject matter jurisdiction rather than dismissed).

The facts essential to resolving whether this action should beremanded to state court are relatively uncomplicated. On May27,1998, the plaintiff, William Wynn ("Wynn"), as a relator forthe State of Alabama,3 filed an application for writ of quowarranto in the Circuit Court of Jefferson County, Alabama,against the defendant tobacco companies, pursuant to the State ofAlabama's quo warranto provision, § 6-6-590, Alabama Code of1975.4 The relief originally sought by the plaintiff was therevocation of the defendants' corporate charters. The reason forgranting this relief originally asserted by the plaintiff wasthat the defendants had violated a litany of Alabama statutes andhad committed a host of Alabama common law torts in the course oftheir sale of tobacco products within the State of Alabama.

The defendants, desiring not to try the action in the statecourt, promptly filed a notice of removal with this courtpursuant to 28 U.S.C. § 1446(a),5 contending that this courthad diversity jurisdiction over the instant action permitting thecourt to hear the case.6 The plaintiff responded with amotion to remand filed on July 14, 1998, in which he contendedthat given the peculiar nature of the quo warranto action therecould exist no diversity jurisdiction over the instant action andthat the value of the matter in controversy did not exceed$75,000.00.7 This court denied the motion to remand onNovember23, 1998, citing as its reasons for denying remand, one, that afederal court can have diversity jurisdiction over a quowarranto action — i.e., that a quo warranto action had nospecial characteristics that prevented its removal to federalcourt,8 and two, that the action was similar to an action inwhich punitive damages are sought and the relief, which wouldcertainly benefit the State in an amount greater than $75,000.00,actually accrues to the State as aggregate relief, the fullamount being attributable to State of Alabama, the "named"plaintiff in the suit, as well as the relator to the action,Wynn.9

Prior to entry of this court's order denying remand of theinstant action, the defendants, on November 6, 1998, filed amotion for judgment on the pleadings. Among other contentions,the defendants argued that the plaintiff had not pursued his quowarranto claim under the appropriate statutory section andasserted that his failure to post a security bond to cover thedefendants' costs in litigating the action divested any court,state or federal, of jurisdiction over the claims. This courtentered a memorandum opinion and an order on February 1, 1999,denying the defendants' motion, but requesting that the plaintifffile an amended complaint clarifying his claim, ordering theplaintiff to plead his claim under the appropriate statutorysection and requiring that the plaintiff post appropriatesecurity within ten days of the entry of the order. Soon afterthe entry of that order and a later clarifying order, theplaintiff complied with these requests.

The plaintiff filed his amended complaint on February 16, 1999.In that complaint, the plaintiff restates his claim against thedefendants, seeking as relief the revocation of the defendants'certificates of authority to do business within the State under §6-6-591.10 As groundsfor the relief, the plaintiff asserts that the defendants haveviolated a host of federal and state statutes, and have engagedin a number of common law torts. Among the federal statutes withwhich the defendants have allegedly failed to comply are theRacketeer Influenced and Corrupt Organizations Act ("RICO") and"federal antitrust laws." On March 15, 1999, the defendantsresponded to the amended complaint by filing a motion to dismisspursuant to Federal Rule of Civil Procedure 12(b)(6).

On March 16, 1999, this court, having become aware of thedecision of the Eleventh Circuit Court of Appeals in Universityof South Alabama v. American Tobacco Co., 168 F.3d 405 (11thCir. 1999), entered a show cause order requesting that theparties brief the court on its subject matter jurisdiction overthe instant action.

Contentions & Analysis

The defendants now assert that there is both federal questionand diversity jurisdiction over the instant action. Thedefendants first argue that the amended complaint, which assertsas bases for quo warranto relief violations of RICO and federalantitrust statutes, evinces the presence of federal questionjurisdiction over the instant action. The defendants also claimthat there is diversity jurisdiction because the State of Alabamais not a real party in interest in the instant suit, but remainsa purely nominal party and as such this suit is one betweencitizens of different states, not between a state and citizens ofdifferent states.


Title 28, section 1331 of the United States Code states that"[t]he district courts shall have original jurisdiction of allcivil actions arising under the Constitution, laws, or treatiesof the United States." This basis for the subject-matterjurisdiction of the district court is commonly known as "federalquestion jurisdiction." In modern federal courts practice, thefederal question jurisdiction of the district courts is to beevaluated through examination of the well-pleaded complaint. SeeLouisville & Nashville Railroad v. Mottley, 211 U.S. 149, 152,29 S.Ct. 42, 53 L.Ed. 126 (1908).11 See also MetropolitanLife Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95L.Ed.2d 55 (1987) ("The`well-pleaded complaint rule' is the basic principle marking theboundaries of the federal question jurisdiction of the federaldistrict courts.") Unlike a determination of diversityjurisdiction — in which factual inquiries are often appropriatefor purposes of ascertaining the residency of a party or thelikelihood of success of an action against an ostensiblynon-diverse party — when jurisdiction is premised on theexistence of a federal question, the district court mustdetermine from the face of the complaint whether the plaintiff'saction arises "under the Constitution, laws, or treaties of theUnited States," 28 U.S.C. § 1331, or, when a defendant isattempting removal of the case, whether the action couldinitially have been brought in federal court. See City ofChicago v. Int'l College of Surgeons, 522 U.S. 156, ___, 118S.Ct. 523, 529, 139 L.Ed.2d 525 (1997).

Generally, under section 1331, a suit arises under federal law if there appears on the face of the complaint some substantial, disputed question of federal law. See Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 12, [103 S.Ct. 2841, 77 L.Ed.2d 420] (1983). Accordingly, to support removal, the defendant must locate the basis of federal jurisdiction in those allegations necessary to support the plaintiff's claim, ignoring his own pleadings and petition for removal. A defendant may not remove on the basis of an anticipated or even inevitable federal defense, but instead must show that a federal right is "an element, and an essential one, of the plaintiffs cause of action." Gully v. First Nat'l Bank, 299 U.S. 109, 111, [57 S.Ct. 96, 81 L.Ed. 70] (1936).

Carpenter v. Wichita Falls Independent School Dist.,44 F.3d 362, 366 (5th Cir. 1995). "The [well-pleaded complaint] rulemakes the plaintiff the master of the claim; he or she may avoidfederal jurisdiction by exclusive reliance on state law."Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct.2425, 96 L.Ed.2d 318 (1987).

In most cases, claims pled under state law are to be taken atface value for purposes of evaluating jurisdiction. However, intwo types of situations the court may disregard the state lawfacade of a complaint, thereby bringing to the surface thefederal claims lying beneath. See Her Majesty the Queen In Rightof the Province of Ontario v. City of Detroit, 874 F.2d 332, 339(6th Cir. 1989) (stating that "an exception to the well pleadedcomplaint rule exists when plaintiffs `artificially plead' theircomplaint in order to avoid federal jurisdiction of claims thatare federal in nature").12 The first instance in whichfederal question jurisdiction can be exposed in a claim couchedin state law is "where the vindication of a right under state lawnecessarily turn[s] on some construction of federal law."Franchise Tax Board v. Construction Laborers Vacation Trust,463 U.S. 1, 9, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). The secondcircumstance in which federal question jurisdiction can bebrought to the surface of a complaint drafted in the language ofstate law is that in which the federal claims completely preemptthe state law claims.

The defendants claim that although federal questionjurisdiction is not obvious from the face of the complaint, itexists beneath the state-law veneer of the plaintiff's claim,because resolution of the plaintiff's state law claim requires ananalysis of federal law — RICO and the federal antitruststatutes. Cases on the issue of whether a federal issue isembedded in astate law claim will give rise to federal question jurisdictionare seemingly difficult and conflicting. In American Well WorksCo. v. Layne & Bowler Co., 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed.987 (1916), the plaintiff brought suit in state court against thedefendant for libel because of statements made by the defendantthat the plaintiff was infringing upon a patent of the defendant.The defendant removed the case to the district court, which latergranted a motion to dismiss because the federal court hadexclusive jurisdiction over any patent claim, the resolution ofwhich the district court found would be an aspect of plaintiff'saction for libel. The Supreme Court, with Justice Holmes writingfor the majority, reversed, holding that the relation of thepatent infringement claim to the defamation action wasinsufficient to create federal question jurisdiction:

A suit for damages to business caused by a threat to sue under the patent law is not itself a suit under the patent law. And the same is true when the damage is caused by a statement of fact, — that the defendant has a patent which is infringed. What makes the defendants' act a wrong is its manifest tendency to injure the plaintiff's business; and the wrong is the same whatever the means by which it is accomplished. But whether it is a wrong or not depends upon the law of the state where the act is done, not upon the patent law, and therefore the suit arises under the law of the state. A suit arises under the law that creates the cause of action. The fact that the justification may involve the validity and infringement of a patent is no more material to the question under what law the suit is brought than it would be in an action of contract. If the state adopted for civil proceedings the saying of the old criminal law: the greater the truth, the greater the libel, the validity of the patent would not come in question at all. In Massachusetts the truth would not be a defense if the statement was made from disinterested malevolence. Rev.Laws, chap. 173, § 91. The state is master of the whole matter, and if it saw fit to do away with actions of this type altogether, no one, we imagine, would suppose that they still could be maintained under the patent laws of the United States.

Id. at 259-60, 36 S.Ct. 585 (emphasis added).

In Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 41S.Ct. 243, 65 L.Ed. 577 (1921), Smith, a shareholder in thedefendant corporation, sued for an injunction to keep thedefendant corporation from purchasing federal government bondsthat he claimed were issued in violation of the Constitution. Thecause of action was ostensibly grounded in state law. Although noobjection had been made to the court's jurisdiction at either thedistrict or circuit court level, the Court felt it necessary toaddress the question of under what law the plaintiff's claimarose.

The general rule is that, where it appears from the bill or statement of the plaintiff that the right to relief depends upon the construction or application of the Constitution or laws of the United States, and that such federal claim is not merely colorable, and rests upon a reasonable foundation, the District Court has jurisdiction under this provision.

At an early date, considering the grant of constitutional power to confer jurisdiction upon the federal courts, Chief Justice Marshall said:

"A case in law or equity consists of the right of the one party, as well as of the other, and may truly be said to arise under the Constitution or a law of the United States, whenever its correct decision depends upon the construction of either," Cohens v. Virginia, [19 U.S.] (6 Wheat) 264, 379 (5 L.Ed. 257) [1900]; and again, when "the title or right set up by the party, may be defeated by one construction of the Constitution or law of the United States, and sustained by the opposite construction." Osborn v. Bank of the United States, 9 [22 U.S.]Wheat. 738, 822 (6 L.Ed. 204)[1900].

In the instant case the averments of the bill show that the directors were proceeding to make the investments in view of the act authorizing the bonds about to be purchased, maintaining that the act authorizing them was constitutional and the bonds valid and desirable investments. The objecting shareholder avers in the bill that the securities were issued under an unconstitutional law, and hence of no validity. It is therefore apparent that the controversy concerns the constitutional validity of an act of Congress which is directly drawn in question. The decision depends upon the determination of this issue.

Id. at 199-201, 41 S.Ct. 243.

By contrast, in Moore v. Chesapeake & Ohio Ry. Co.,291 U.S. 205, 54 S.Ct. 402, 78 L.Ed. 755 (1934), a railroad worker suedunder Kentucky tort law for injuries that he "received while hewas engaged as a switchman in attempting to uncouple certainfreight cars and [that] were due to a defective uncouplinglever." Id. at 208, 54 S.Ct. 402. The plaintiff brought twoclaims, the first under the Federal Employers' Liability Act("FELA"), premised on federal question jurisdiction and thesecond under Kentucky law, premised on diversity of citizenshipjurisdiction. Under Kentucky law at the time, there existed aprovision that an employee could not be found liable forcontributory negligence if the plaintiff's injury was caused, inpart, by the railroad's failure to adhere to any safety law. Theplaintiff claimed that the railroad had failed to follow theFederal Safety Appliance Acts and, therefore, that he could notbe found liable for contributory negligence. The Court of Appealsconcluded that the claim stated under Kentucky law actually aroseunder the district court's federal question jurisdiction, ratherthan its diversity jurisdiction. The Supreme Court reversed,holding that the Kentucky law claim did not arise under federallaw.

The Federal Safety Appliance Acts prescribed duties, and injured employees are entitled to recover for injuries sustained through the breach of these duties. Johnson v. Southern Pacific Co., 196 U.S. 1, [25 S.Ct. 158, 49 L.Ed. 363 (1904)]; St. Louis, Iron Mountain & Southern R. Co. v. Taylor, 210 U.S. 281, [28 S.Ct. 616, 52 L.Ed. 1061 (1908)]; Texas & Pacific R. Co. v. Rigsby, supra. Questions arising in actions in state courts to recover for injuries sustained by employees in intrastate commerce and relating to the scope or construction of the Federal Safety Appliance Acts are, of course, federal questions which may appropriately be reviewed in this Court. St. Louis, Iron Mountain & Southern R. Co. v. Taylor, supra; Louisville & Nashville R. Co. v. Layton, supra. But it does not follow that a suit brought under the state statute which defines liability to employees who are injured while engaged in intrastate commerce, and brings within the purview of the statute a breach of the duty imposed by the federal statute, should be regarded as a suit arising under the laws of the United States and cognizable in the federal court in the absence of diversity of citizenship. The Federal Safety Appliance Acts, while prescribing absolute duties, and thus creating correlative rights in favor of injured employees, did not attempt to lay down rules governing actions for enforcing these rights. The original act of 1893 made no provision for suits, except for penalties. That act did impliedly recognize the employee's right of action by providing in section 8 that he should not be deemed to have assumed the risk of injury occasioned by the breach of duty. But the act made no provision as to the place of suit or the time within which it should be brought, or as to the right to recover, or as to those who should be the beneficiaries of recovery, in case of the death of the employee. While dealing with assumption of risk, the statute did not affect the defense of contributory negligence, and hence that defense was still available according to the applicable state law. Schlemmer v. Buffalo, Rochester & Pittsburg R. Co., 220 U.S. 590, [31 S.Ct. 561, 55 L.Ed. 596(1911)]; Minneapolis, St. Paul & Sault Ste. Marie R. Co. v. Popplar, 237 U.S. 369, 371, 372, [35 S.Ct. 609, 59 L.Ed. 1000 (1915)]. In these respects the amended act of 1903 made no change, notwithstanding the enlargement of the scope of the statutory requirements. The act of 1910, by a proviso in section 4 relating to penalties (36 Stat. 299 (45 USCA § 13)), provided that nothing in that section should `be construed to relieve such carrier from liability in any remedial action for the death or injury of any railroad employee' caused by the use of the prohibited equipment.

The Safety Appliance Acts having prescribed the duty in this fashion, the right to recover damages sustained by the injured employee through the breach of duty sprang from the principle of the common law (Texas & Pacific R.R. Co. v. [Texas & P. Ry. Co. v.]Rigsby, supra, at pages 39, 40 of 241 U.S., [482 of 36 S.Ct., 874 of 60 L.Ed., (1916)]) and was left to be enforced accordingly, or, in case of the death of the injured employee, according to the applicable statute (St. Louis, Iron Mountain & Southern R. Co. v. Taylor, supra, at page 285 of 210 U.S., [page 616 of 28 S.Ct.,]; Minneapolis, St. Paul & Sault Ste. Marie R. Co. v. Popplar, supra). When the Federal Employers' Liability Act was enacted, it drew to itself the right of action for injuries or death of the employees within its purview who were engaged in interstate commerce, including those cases in which injuries were due to a violation of the Safety Appliance Acts. Such an action must be brought as prescribed in the Federal Employers' Liability Act, and, if brought in the state court, it cannot be removed to the federal court, although violation of the Safety Appliance Acts is involved. See St. Joseph & G.I.R. Co. v. Moore, 243 U.S. 311, [37 S.Ct. 278, 61 L.Ed. 741 (1917)]. With respect to injuries sustained in intrastate commerce, nothing in the Safety Appliance Acts precluded the state from incorporating in its legislation applicable to local transportation the paramount duty which the Safety Appliance Acts imposed as to the equipment of cars used on interstate railroads. As this Court said in Minneapolis, St. Paul & Sault Ste. Marie R. Co. v. Popplar, supra, as to an action for injuries sustained in intrastate commerce: `The action fell within the familiar category of cases involving the duty of a master to his servant. This duty is defined by the common law, except as it may be modified by legislation. The Federal statute, in the present case, touched the duty of the master at a single point, and, save as provided in the statute, the right of the plaintiff to recover was left to be determined by the law of the state.'

Id. at 214-217, 54 S.Ct. 402. See also Hill v. Marston,13 F.3d 1548, 1550 (11th Cir. 1994) ("Moore makes clear thatviolation of a federal standard as an element of a state tortrecovery does not fundamentally change the state tort nature ofthe action."); Patti Alleva, Prerogative Lost: The Trouble WithStatutory Federal Question Doctrine After Merrell Dow, 52 OHIOST.L.J. 1477, 1515 (1991) (contending that in Moore, "the Courtacknowledged the Kentucky legislature's ability to embracefederal standards as its own without simultaneously forfeitingcontrol over hearing the claims that it created.").

The first attempt at reconciliation between the Court'sopinions in Smith and Moore occurred in Gully v. First Nat.Bank in Meridian, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936).Gully involved an attempt by the Mississippi state taxcollector to exact debts, including unpaid taxes, allegedlyassumed by the defendant bank in the purchase of an insolventnational bank. The case, originally filed in state court, wasremoved to federal district court on the basis that the case wasonearising under federal law because federal law defined the powerof the state to levy taxes against national banks. In holdingthat the case did not arise under federal law by virtue of themere fact that the state collector relied on the federal statutefor permission to sue the national bank, the Supreme Court firstnoted that "[t]o bring a case within the [federal question]statute, a right or immunity created by the Constitution or lawsof the United States must be an element, and an essential one,of the plaintiff's cause of action." Id. at 112, 57 S.Ct. 96(emphasis added). After determining that the action arose understate law, the Court concluded that the federal question arguablyraised by the defendant corporation, that a federal statute hadto permit any levy against the purchased national bank, was onlyobliquely related to the plaintiff's state law claim:

We recur to the test announced in Puerto Rico v. Russell & Co., supra: `The federal nature of the right to be established is decisive — not the source of the authority to establish it.' Here the right to be established is one created by the state. If that is so, it is unimportant that federal consent is the source of state authority. To reach the underlying law we do not travel back so far. By unimpeachable authority, a suit brought upon a state statute does not arise under an act of Congress or the Constitution of the United States because prohibited thereby. Louisville & Nashville R. Co. v. Mottley, supra. With no greater reason can it be said to arise thereunder because permitted thereby.

Petitioner will have to prove that the state law has been obeyed before the question will be reached whether anything in its provisions or in administrative conduct under it is inconsistent with the federal rule. If what was done by the taxing officers in levying the tax in suit did not amount in substance under the law of Mississippi to an assessment of the shareholders, but in substance as well as in form was an assessment of the bank alone, the conclusion will be inescapable that there was neither tax nor debt, apart from any barriers that Congress may have built. On the other hand, a finding upon evidence that the Mississippi law has been obeyed may compose the controversy altogether, leaving no room for a contention that the federal law has been infringed. The most one can say is that a question of federal law is lurking in the background, just as farther in the background there lurks a question of constitutional law, the question of state power in our federal form of government. A dispute so doubtful and conjectural, too far removed from plain necessity, is unavailing to extinguish the jurisdiction of the states.

This Court has had occasion to point out how futile is the attempt to define a `cause of action' without reference to the context. United States v. Memphis Cotton Oil Co., 288 U.S. 62, 67, 68, [53 S.Ct. 278, 77 L.Ed. 619 (1933)]. To define broadly and in the abstract `a case arising under the Constitution or laws of the United States' has hazards of a kindred order. What is needed is something of that common-sense accommodation of judgment to kaleidoscopic situations which characterizes the law in its treatment of problems of causation. One could carry the search for causes backward, almost without end.' Bird v. St. Paul, F & M Insurance Co., 224 N.Y. 47, 51, 120 N.E. 86, 13 A.L.R. 875 [(1918)]; Leyland Shipping Co. v. Norwich Fire Insurance Society, (1918) A.C. 350, 369; Aetna Insurance Co. v. Boon, 95 U.S. 117, 130, [24 L.Ed. 395 (1877)]; Milwaukee & St. Paul R. Co. v. Kellogg, 94 U.S. 469, 474, [24 L.Ed. 256 (1876)]. Instead, there has been a selective process which picks the substantial causes out of the web and lays the other ones aside. As in problems of causation, so here in the search for the underlying law. If we follow the ascent far enough, countless claims of right can be discovered to have their source or their operative limits in the provisions of a federal statute or in the Constitution itself with its circumambient restrictions upon legislative power. To set bounds to the pursuit, the courts have formulated the distinction between controversies that are basic and those that are collateral, between disputes that are necessary and those that are merely possible. We shall be lost in a maze if we put that compass by.

Id. at 116-18, 57 S.Ct. 96 (emphasis added). See alsoKeaukaha-Panaewa Community Ass'n v. Hawaiian Homes Commission,588 F.2d 1216, 1226 (9th Cir. 1978) as amended on denial ofrehearing and rehearing en banc, (1979) (holding that theCommission Act programs that had been in place under federal lawwhen Hawaii was a territory but made part of state law onceHawaii became a state "are, for all practical purposes, elementsof Hawaiian law"); Bender v. Prudential Ins. Co. of America,860 F. Supp. 803, 805-06 (M.D.Ala. 1994) (denying federal questionjurisdiction because the plaintiff would "first have to show thatthe defendants violated Alabama's fraud statutes and that she isentitled to recover punitive damages before the issue will everarise as to whether the state's restrictions on punitive damagesare inconsistent with the United States Constitution").

In Franchise Tax Board v. Construction Laborers VacationTrust, 463 U.S. at 6, 103 S.Ct. 2841, the Supreme Court stated,"Under our interpretations, Congress has given the lower federalcourts jurisdiction to hear, originally or by removal from astate court, only those cases in which a well-pleaded complaintestablishes . . . that the plaintiff's right to reliefnecessarily depends on resolution of a substantial question offederal law." Id. (emphasis added). See also Christianson v.Colt Industries Operating Corp., 486 U.S. 800, 808-09, 108 S.Ct.2166, 100 L.Ed.2d 811 (1988) (holding the invocation ofjurisdiction under § 1338 proper only in "those cases in which awell-pleaded complaint establishes either that federal patent lawcreates the cause of action or that the plaintiff's right torelief necessarily depends on resolution of a substantialquestion of federal patent law, in that patent law is a necessaryelement of one of the well-pleaded claims"). The puzzling matterleft over from Franchise Tax Board involved the issue of whatconstitutes a "substantial question of federal law."

Three years later, in Merrell Dow Pharmaceuticals, Inc., v.Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986),the Supreme Court went some way in explaining the meaning of thephrase "substantial question of federal law." First, the Courtheld that, usually, no substantial question exists where Congresshas not created a federal right of action to remedy the violationof federal law forming the basis of a plaintiff's claim. Id. at814, 106 S.Ct. 3229. See Jairath v. Dyer, 154 F.3d 1280, 1283(11th Cir. 1998). See also City of Huntsville v. City ofMadison, 24 F.3d 169, 173 (11th Cir. 1994) (refusing to readMerrell Dow as creating "a bright-line rule" that federaljurisdiction should not exist where no federal remedy had beencreated, but instead holding that "that it will be only theexceptional federal statute that does not provide for a privateremedy but still raises a federal question substantial enough toconfer federal question jurisdiction when it is an element of astate cause of action"); Barbara v. New York Stock Exchange,Inc., 99 F.3d 49, 54 (2d Cir. 1996) ("subsequent cases in thiscircuit have not read Merrell Dow categorically to precludefederal question jurisdiction in the absence of a private remedyfor violation of the relevant federal law"). But see Smith v.Industrial Valley Title Ins. Co., 957 F.2d 90, 93 (3d Cir. 1992)("Following Merrell Dow, we hold that a private federal remedyfor violating a federal statute is a prerequisite for findingfederal question jurisdiction in this circumstance"). Second, theCourt stated that the novelty of the federal law issue was notdeterminative of its substantial nature. Merrell DowPharmaceuticals, Inc., v. Thompson, 478 U.S. at 817. Instead,the Court indicated that whether a federal issue is substantialdepends on the nature of the federal interest at stake.

Several commentators have suggested that our § 1331 decisions can best be understood as an evaluation of the nature of the federal interest at stake. See, e.g., Shapiro, Jurisdiction and Discretion, 60 N.Y.U.L.REV. 543, 568 (1985); C. WRIGHT, FEDERAL COURTS 96 (4th ed. 1983); Cohen, The Broken Compass: The Requirement That a Case Arise "Directly" Under Federal Law, 115 U.PA.L.REV. 890, 916 (1967). Cf. Kravitz v. Homeowners Warranty Corp., 542 F. Supp. 317, 320 (E.D.Pa. 1982) (Pollak, J.) ("I cannot identify any compelling reasons of federal judicial policy for embracing a case of this kind as a federal question case. The essential Pennsylvania elements of plaintiffs' suit for rescission would be more appropriately dealt with by a Court of Common Pleas than by this court; and, with respect to the lesser-included issue of federal law, Pennsylvania's courts are fully competent to interpret the Magnuson-Moss Warranty Act and the relevant F.T.C. regulations, subject to review by the United States Supreme Court").

Focusing on the nature of the federal interest, moreover, suggests that the widely perceived "irreconcilable" conflict between the finding of federal jurisdiction in Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 41 S.Ct. 243, 65 L.Ed. 577[] (1921), and the finding of no jurisdiction in Moore v. Chesapeake & Ohio R. Co., 291 U.S. 205, [54 S.Ct. 402, 78 L.Ed. 755] (1934), see, e.g., M. REDISH, FEDERAL JURISDICTION: TENSIONS IN THE ALLOCATION OF JUDICIAL POWER 67 (1980), is far from clear. For the difference in results can be seen as manifestations of the differences in the nature of the federal issues at stake. In Smith, as the Court emphasized, the issue was the constitutionality of an important federal statute. See 255 U.S., at 201[41 S.Ct. 243] ("It is . . . apparent that the controversy concerns the constitutional validity of an act of Congress which is directly drawn in question. The decision depends upon the determination of this issue"). In Moore, in contrast, the Court emphasized that the violation of the federal standard as an element of state tort recovery did not fundamentally change the state tort nature of the action. See 291 U.S., at 216-217[54 S.Ct. 402] (" `The action fell within the familiar category of cases involving the duty of a master to his servant. This duty is defined by the common law, except as it may be modified by legislation. The federal statute, in the present case, touched the duty of the master at a single point and, save as provided in the statute, the right of the plaintiff to recover was left to be determined by the law of the State'") (quoting Minneapolis, St. P. & S.S.M.R. Co. v. Popplar, 237 U.S. 369, 372, [35 S.Ct. 609, 59 L.Ed. 1000] (1915)).

The importance of the nature of the federal issue in federal-question jurisdiction is highlighted by the fact that, despite the usual reliability of the Holmes test as an inclusionary principle, this Court has sometimes found that formally federal causes of action were not properly brought under federal-question jurisdiction because of the overwhelming predominance of state-law issues. See Shulthis v. McDougal, 225 U.S. 561, 569-570[, 32 S.Ct. 704, 56 L.Ed. 1205] (1912) ("A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction or effect of such a law, upon the determination of which the result depends. This is especially so of a suit involving rights to land acquired under a law of the United States. If it were not, every suit to establish title to land in the central and western States would so arise, as all titles in those States are traceable back to those laws"); Shoshone Mining Co. v. Rutter, 177 U.S. 505, 507, 20 S.Ct. 726, 44 L.Ed. 864[] (1900) ("We pointed out in the former opinion that it was well settled that a suit to enforce a right which takes its origin in the laws of the United States is not necessarily one arising under the Constitution or laws of the United States, within the meaning of the jurisdiction clauses, for if it did every action to establish title to real estate (at least in the newer States) would be such a one, as all tides in those States come from the United States or by virtue of its laws").

Id. at. 814 n. 12, 106 S.Ct. 3229 (emphasis added). SeeCabazon Band of Mission Indians v. Wilson, 124 F.3d 1050, 1056(9th Cir. 1997) (noting the key issue in resolving whetherfederal question jurisdiction exists over a state claim with anapparent federal law aspect to be the importance of the federalinterest).

The defendants claim that this matter involves a substantialquestion of federal law, as the court, in ascertaining thepropriety of quo warranto relief, will need to consider whetherthe defendants violated certain provisions of RICO and, likely,engaged in Sherman Act-type and Robinson-Patman Act-typeanti-competitive practices. Because there exist such substantialquestions of federal law, the defendants claim, this court hasfederal question jurisdiction over the instant action. Thedefendants are likely correct in their conviction that theinstant case involves substantial questions of federal law.First, it can be inferred from Congress's having createdstatutory civil rights of action to remedy the alleged antitrustand RICO violations claimed that such claims have some federalimport. Merrell Dow Pharmaceuticals, Inc., v. Thompson, 478U.S. at 814, 106 S.Ct. 3229; Jairath v. Dyer, 154 F.3d at 1283.There is likely also an important federal interest at stake,i.e., a determination of the extent and power of the federalantitrust laws and anti-racketeering laws to disenfranchisedefendants of their ability to sell ostensibly legal productswhich have, arguably, deleterious health consequences.13Finally, as the defendant has noted, this court has exclusivejurisdiction over any civil federal antitrust action; as such,there is at least some expressed interest in having such claimslitigated in a federal forum. See Hunter Douglas, Inc. v.Harmonic Design, Inc., 153 F.3d 1318, 1329-30 (Fed.Cir. 1998)(concluding that federal question jurisdiction existed over statelaw injurious falsehood claim where such claim necessitated thedetermination of whether certain patents were valid, as thefederal court has exclusive jurisdiction over patent claims andas the matter at issue involved a federally created propertyright).14

Nonetheless, the federal rights involved in the instant case,while perhaps substantial, are not necessary components of theplaintiff's quo warranto claim, and, arguably, the plaintiffcan adequately make out his claim without demonstratingviolations of any federal statute. Indeed, state quo warrantoactions are generally meant to stop a person or corporation fromexercising authority that the person or corporation was notpermitted to exercise under state, not federal, law. See Wynn v.Philip Morris, Inc., ___ F. Supp.2d ___, at ___, CV 98-BU-1597-S(1999), Memorandum Opinion entered on November 23, 1998, at 3. Itis not the case that merely because federal antitrust law andRICO present alternative bases of granting the quo warrantorelief requested in this action, the plaintiff's right to reliefwill "necessarily depend on a resolution ofa substantial question of federal law." Franchise Tax Board v.Construction Laborers Vacation Trust, 463 U.S. at 6, 103 S.Ct.2841. Far from being an intricate part of the web of connectionsthat hold the plaintiff's claim together, the federal statutorygrounds for quo warranto relief are isolated threads, thepresence or absence of which makes no integral difference to theplaintiff's claim as a whole. See Gully v. First Nat. Bank inMeridian, 299 U.S. at 118, 57 S.Ct. 96.

Attempting to avoid the problems ensuing from their argumentthat federal question jurisdiction exists due to the presence ofa necessary and substantial federal element to the state law quowarranto action, the defendants assert that the plaintiffsrecitation of jurisdiction under the substantive remedialstatutes governing antitrust and RICO civil claims is sufficientto create federal question jurisdiction. This mere recitationdoes not form the grounds for federal question jurisdiction,however. This is so, first, because the plaintiff's onlysubstantive claim is that brought under state law for quowarranto relief; the plaintiff brings no freestanding federalclaims. Second, it is the case that, even if Wynn sought to bringan action pursuant to either of these statutes, without regard tothe State's quo warranto provisions, but solely as a plaintiffbringing suit on his own behalf to recover under the enforcementprovisions, the plaintiff would lack standing to proceed.15

Both the federal antitrust statutes and RICO have civil remedyprovisions. Section 15 of Title 15 of the United States Codestates that "any person who shall be injured in his business orproperty by reason of anything forbidden in the antitrust lawsmay sue therefor in any district court of the United States inthe district in which the defendant resides or is found or has anagent. . . ." Similarly, 18 U.S.C. § 1964, the civil remediesprovision of RICO, provides that "[a]ny person injured in hisbusiness or property by reason of a violation of section 1962 ofthis chapter may sue therefor in any appropriate United Statesdistrict court. . . ."

Suits brought pursuant to § 4 of the Clayton Act,15 U.S.C. § 15, must satisfy, in addition to constitutional standingrequirements, the statutory standing prerequisites of anantitrust action. Municipal Utilities Bd. of Albertville v.Alabama Power Co., 934 F.2d 1493, 1498 (11th Cir. 1991).Demonstration of antitrust standing involves a two-prongedanalysis. Id.

First, the plaintiff must establish that it has suffered "antitrust injury." [Municipal Utilities Bd. of Albertville v. Alabama Power Co., 934 F.2d at 1499.] As the Supreme Court has made clear, to have standing antitrust plaintiffs "must prove more than injury casually linked to an illegal presence in the market [i.e., but for causation]. Plaintiffs must prove antitrust injury, which is to say injury of the type that the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489[, 97 S.Ct. 690, 50 L.Ed.2d 701] (1977).

Florida Seed Co., Inc. v. Monsanto Co., 105 F.3d 1372, 1374(11th Cir. 1997), cert. denied, ___ U.S. ___, 118 S.Ct. 296,139 L.Ed.2d 228. "What constitutes an antitrust injury is ofcourse determined by the intent of the antitrust laws. . . ."Johnson v. University Health Services, Inc., 161 F.3d 1334,1338 (11th Cir. 1998).

Second, the plaintiff must establish that it is an efficient enforcer of the antitrust laws. Municipal Utils. Bd. of Albertville, 934 F.2d at 1499. This determination is predicated on the "target area test." Austin v. Blue Cross & Blue Shield of Ala., 903 F.2d 1385, 1388 (11th Cir. 1990). The target area test requires that an antitrust plaintiff both "prove that he is within that sector of the economy endangered by a breakdown of competitive conditions in a particular industry" and that he is "the target against which anticompetitive activity is directed." National Indep. Theatre Exhibitors, Inc. v. Buena Vista Distribution Co., 748 F.2d 602, 608 (11th Cir. 1984), cert. denied sub nom., Patterson v. Buena Vista Distribution Co., 474 U.S. 1013[, 106 S.Ct. 544, 88 L.Ed.2d 473] (1985). Basically, a plaintiff must show that it is a customer or competitor in the relevant antitrust market. Associated General Contractors, 459 U.S. at 539[103 S.Ct. 897].

Florida Seed Co., Inc. v. Monsanto Co., 105 F.3d at 1374.

Any purported claim against the defendants would seemingly bebased upon oligopolistic anti-competitive practices, such asprice fixing, prohibited under the Sherman Act, 15 U.S.C. § 1,and based upon oligopolistic, anti-competitive pricediscrimination under the Robinson-Patman Act.15 U.S.C. § 13.16 Regardless of the specific provisions under whichWynn's claim or claims are brought, the antitrust injuries whichmust have occurred to create antitrust standing are impedimentsto the plaintiff's ability to compete. Id.17

The court concludes that Wynn has suffered no antitrust injuryin this case because he is not a target against whomanti-competitive activity was, or is, directed. There is noallegation by the plaintiff that he attempted in any way tointroduce products into the market in competition with thedefendants and that the defendants, through the use of marketpower, deprived the plaintiff of the ability to compete, or that,because of price discrimination, cigarettes were more costly tohim than would otherwise be the case. As he is neither a sellerof products competing with the relevant products of thedefendants in same relevant geographic market18 nor apurchaser of those products who was required to pay more thananother, favored competing purchaser, the plaintiffcan show no antitrust injury to himself at all.19 Thus, theplaintiff has demonstrated no personal injury to his ability tocompete in the market, because the plaintiff never competed orparticipated in the market, nor does he plan to do so.

Congress modeled the civil remedy provision of RICO, § 18 U.S.C. § 1964(c), after section 4 of the Clayton Act, 15 U.S.C. § 15(a) (1988 & Supp. II 1990), Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 265, 112 S.Ct. 1311, 1317[, 117 L.Ed.2d 532] (1992); see also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 489 n. 8[, 105 S.Ct. 3275, 87 L.Ed.2d 346] (1985), the provision pursuant to which the plaintiffs in [Keogh v. Chicago & Northwestern Ry., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183 (1922)] and [Square D v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409, 106 S.Ct. 1922, 90 L.Ed.2d 413 (1986)] sought to obtain trebled damages. Indeed, both statutes confer standing to bring a private civil action in the exact same language: only upon a person `injured in his business or property. . . .'

Taffet v. Southern Co., 967 F.2d 1483, 1494 n. 12 (11th Cir.1992), cert. denied, 506 U.S. 1021, 113 S.Ct. 657, 121 L.Ed.2d583 (1992). Thus, as with cases brought by private citizens under15 U.S.C. § 15 for violations of the antitrust laws, suitsbrought pursuant to 18 U.S.C. § 1964 must satisfy specialstanding requirements. One prerequisite of such standing is that"the party's injuries be the direct result of the allegedracketeering activity." Bivens Gardens Office Bldg., Inc. v.Barnett Banks of Florida, Inc., 140 F.3d 898, (11th Cir. 1998)(emphasis added). Any injury must be proximately caused by theillegal activity. Id. In his amended complaint, the plaintiffposits the specific category of individuals injured by thedefendants' alleged RICO violations: "the industry's owncustomers, prospective customers and the children of Alabama."Plaintiff's Second Amended Complaint at 4. It is unclear how theplaintiff has plead any injury to himself, much less a directinjury as required under § 1964 for RICO standing.20

The facts which demonstrate an absence of RICO or antitruststanding in the instant action — the absence of which isreflective of a mere policy concern by this court, see GreaterRockford Energy and Technology Corp. v. Shell Oil Co.,998 F.2d 391, 395 (7th Cir. 1993) (stating "Antitrust standing, however,is primarily a matter of legal policy, namely: `[W]hether thepolicy of the law will extend the responsibility for the conductto the consequences which have in fact occurred.'") — are alsodemonstrative of an absence of Article III standing in theinstant action. See Associated General Contractors ofCalifornia, Inc., v. California State Council of Carpenters,459 U.S. 519, 535 n. 31, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).

As the Supreme Court recently stated in Department of Commercev. U.S. House of Representatives, 525 U.S. 316, ___, 119 S.Ct.765, 772, 142 L.Ed.2d 797 (1999):

We have repeatedly noted that in order to establish Article III standing, "[a] plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen v. Wright, 468 U.S. 737, 751[, 104 S.Ct. 3315, 82 L.Ed.2d 556] (1984).

As has been noted, Wynn has no injury particular to himself whichcan be redressed under either RICO or the antitrust laws. Thiscourt therefore lacks Article III standing over any supposed RICOor antitrust claims brought by Wynn. Thedefendants' arguments that federal question jurisdiction existsin the instant suit therefore fail.21


There are two prerequisites for diversity jurisdiction under28 U.S.C. § 1332(a)(1): First, there must exist complete diversityof state or foreign citizenship between each plaintiff and alldefendants. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267,267, 2 L.Ed. 435 (1806) and Owen Equip. & Erection Co. v.Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978).Second, the value of the matter in controversy must exceed thepresent statutory amount of "$75,000.00, exclusive of interestand costs." 28 U.S.C. § 1332(a). On March 16, 1999, the courtrequested briefing on the issue of whether, as the State isrequired to be made the named party to a quo warrantoproceeding under § 6-6-591 of the Alabama Code of 1975, diversityof citizenship is lacking in the instant action.

Jurisdiction under 28 U.S.C. § 1332 requires that all partiesto an action be "citizens" of a state or a foreign state. SalemTrust Co. v. Manufacturers' Finance Co., 264 U.S. 182, 189-90,44 S.Ct. 266, 68 L.Ed. 628 (1924). "[I]t is well established thata state is not a citizen of a state for the purpose of diversityjurisdiction under § 28 U.S.C. § 1332." University of SouthAlabama v. American Tobacco Co., 168 F.3d at 411. See PostalTelegraph Cable Co. v. State of Alabama, 155 U.S. 482, 487, 15S.Ct. 192, 39 L.Ed. 231 (1894) ("A state is not a citizen. Andunder the judiciary acts of the United States it is well settledthat a suit between a state and a citizen or a corporation ofanother state is not between citizens of different states, andthat the circuit court of the United States has no jurisdictionof it, unless it arises under the constitution, laws, or treatiesof the United States.") (citing Ames v. Kansas, 111 U.S. 449, 4S.Ct. 437, 28 L.Ed. 482 (1884); Stone v. South Carolina,117 U.S. 430, 6 S.Ct. 799, 29 L.Ed. 962 (1886); Germania Ins. Co. v.Wisconsin, 119 U.S. 473, 7 S.Ct. 260, 30 L.Ed. 461 (1886)). TheState of Alabama is listed on the face of the complaint as thebeneficiary of the action brought by the relator Wynn. From theface of the pleadings, therefore, the court would appear to lackdiversity jurisdiction over the instant action.

The mere presence of the State of Alabama on the pleadings as aplaintiff, however, is alone not sufficient to divest this courtof diversity of jurisdiction, if the State is listed merely as anominal plaintiff. Navarro Sav. Ass'n v. Lee, 446 U.S. 458,460, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980) (stating that "afederal court must disregard nominal or formal parties and restjurisdiction only upon the citizenship of real parties to thecontroversy"). See Bacon v. Rives, 106 U.S. 99, 104, 1 S.Ct. 3,27 L.Ed. 69 (1882) (holding that defendants in role of meregarnishees were immaterial parties for purposes of determiningdiversity of citizenship). For example, in Wormley v. Wormley,21 (8 Wheat.) U.S. 421, 5 L.Ed. 651 (1823), the plaintiffs, allapparently residents of Kentucky, sued the defendants, who wereall residents of other states, except for a husband of one of theplaintiffs who was also a resident of Kentucky, but who wasjoined simply as "a nominal defendant, joined for the sake ofconformity in the bill, against whom no decree is sought." Id.at 451. The Supreme Court determined that it was not divested ofdiversity jurisdiction,stating, "This Court will not suffer its jurisdiction to beousted by the mere joinder or non-joinder of formal parties; butwill rather proceed without them, and decide upon the merits ofthe case between the parties, who have the real interests beforeit, whenever it can be done without prejudice to the rights ofothers." Id. If, then, the State of Alabama is a nominal partyto this action, there exists diversity of citizenship; if,however, the State is a real party in interest, the quowarranto action clearly falls outside of this court's purview.See 13B CHARLES A. WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER,FED. PRAC. & PROC.2D, § 3606, at 409 ("In determining whethercomplete diversity exists, nominal or formal parties who have nointerest in the action will be ignored.").

In Broyles v. Bayless, 878 F.2d 1400, 1402 (11th Cir. 1989),the Eleventh Circuit Court of Appeals elaborated on whetherfederal or state law governs the resolution of who is a realparty in interest and who is merely a nominal, or formal, partyto a suit:

Federal courts look to the substantive law of the state, however, to determine whether an individual, although a party to the lawsuit, is a real and substantial party to the litigation. Jones v. Griffith, 688 F. Supp. 446, 450 (N.D.Ind. 1988), vacated on other grounds, 870 F.2d 1363 (7th Cir. 1989). This hurdle prevents a party with an insufficient interest in the litigation from using his or her citizenship to transfer a local controversy into one within federal diversity jurisdiction and vice-versa. See Wilsey v. Eddingfield, 780 F.2d 614 (7th Cir. 1985), cert. denied, 475 U.S. 1130[, 106 S.Ct. 1660, 90 L.Ed.2d 202] (1986). Thus, Federal courts do not consider the controlling state's procedural law as to who must be a party to any given action, but rather look to determine upon whom the state confers substantive rights. 6A ALAN A. WRIGHT, ARTHUR R. MILLER AND MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE, CIVIL § 1544 (1971). Cf. Lumbermen's Mutual Casualty Company v. Elbert, 348 U.S. 48, 51, [75 S.Ct. 151, 99 L.Ed. 59] (1954) (insurance company real party in interest where state law gave plaintiff direct cause of action against the company).

(Emphasis added.) See also 6A WRIGHT & MILLER, FED. PRAC. &PROC.2D, § 1544, at 340-42 (stating that "the court must look tothe substantive law creating the right being sued upon to see ifthe action has been instituted by the party possessing thesubstantive right to relief. In light of the Supreme Court'sdecision in Erie Railroad Company v. Tompkins, [304 U.S. 64, 58S.Ct. 817, 82 L.Ed. 1188 (1938)], state law will control in anaction based on diversity of citizenship for purposes ofascertaining who possesses the original cause of action. . . .The forum state's procedural statute or rule defining the realparty in interest concept is not applicable, however, because itonly governs who may sue in the state courts." (footnotesomitted)). But see, FED.PROC., Access to District Courts, §1.60, at 99 (asserting that the determination of whether a partyis a real party in interest for purposes of diversity ofcitizenship is made with reference to federal law, but notingdisagreement).22

The reason generally given for dispensing with state procedurallaw in determining the real party in interest is that thedoctrine pronounced in Erie Railroad Company v. Tompkins,304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), that the appropriatesubstantive law to be applied in a diversity actions is thatdetermined by the choice of law provisions of the state in whichthe district court sits — i.e., some state's substantive lawapplies in all diversity actions, is also straightforwardlyapplicable to the determination of who under state law is a realparty in interest. As presented though, that rationale is not allthat it is cracked up to be, as it bootstraps the substantive lawof the state onto the jurisdictional issue.23 The presence orabsenceof subject-matter jurisdiction is a federal issue, to be resolvedprior to the assessment of the substantive rule of decision to beapplied to a case. Nonetheless, Erie doctrine does have an impacton the issue of how and why state substantive law is to beapplied in determining who is a real party in interest in anaction. Who constitutes a real party in interest in an action forpurposes of diversity of citizenship must be determined withreference as to what the matter in controversy is. If a party hasno real interest in the matter in controversy, then the legallycognizable value or sum of that matter is nothing to that party,and he or she can have no real stake in the outcome of theaction. Where jurisdiction over an action is founded upondiversity, whether a cognizable interest in the matter incontroversy exists, and hence, whether a named party is a realparty in interest, will be a matter of state substantive, ratherthan procedural law.

The court must therefore determine whether the State of Alabamahas a legally cognizable interest in the present action. Thedefendants, pointing to State Board of Optometry v. Lee OpticalCo., 287 Ala. 528, 253 So.2d 35, 36-37 (1971), an AlabamaSupreme Court decision, contend that Alabama is merely a nominalparty to the action, with no cognizable interest in the matter incontroversy in the instant suit. In Lee Optical, the plaintiffState Board of Optometry brought a quo warranto action againstthe defendant, Lee Optical, to prevent it from engaging in the"unlawful practice of optometry." Id. 253 So.2d at 36. Thedefendant demurred to the petition on the grounds that the StateBoard of Optometry was incapable of bringing the action; thestate trial court sustained the demurrer. An amended petition wasthen filed in the name of the State of Alabama on relation of theState Board of Optometry. A demurrer was again filed, this timeon the grounds that a new party had been added to the suit;again, the demurrer was sustained by the trial court. The StateBoard of Optometry then filed another amended petition, removingthe State as a party and proceeding in its own name. Once more,the defendant balked, stating that the State Board of Optometryhad shuffled the parties. The trial court granted the demurrerand dismissed the suit. On appeal to the Alabama Supreme Court,it was held that the removal of the State of Alabama from theplaintiff's petition was the removal of a mere nominal party.Id. at 36-37. "In quo warranto actions the rule isestablished that where suit is brought by the State on relationof another party, it is the relator and not the State who is thereal party in interest." Id. at 37.

In coming to this conclusion, the Alabama Supreme Court reliedupon its earlier decision in Baxter v. State ex rel. Metcalf,243 Ala. 120, 9 So.2d 119 (Ala. 1942). In Baxter, Metcalfbrought an action as relator for the State of Alabama, requestingthe ouster of Baxter, an assistant superintendent for the EtowahCountyBoard of Education who was to fill in for the electedsuperintendent, a member of the State National Guard called awayinto the United States Army. The trial court granted the writ ofquo warranto and ousted Baxter. An appeal to the AlabamaSupreme Court followed. Id. On appeal, the Alabama SupremeCourt was first confronted by an argument propounded by theState's Attorney General that his officer had a "right ofcontrol" over the action and that, as the action was not in thepublic welfare, the writ of quo warranto could not issue. Thecourt disagreed, stating that an individual could bring a quowarranto action without the approval of the Attorney General. Inarriving at this conclusion and using it as a springboard forreversing the trial court's order, the Alabama Supreme Courtfurther stated:

It is only by virtue of our statutory system that an individual, in a case of this character, has any standing in court. The use of the name of the State is more or less a formality. The State is without interest and only a formal party to the cause (State v. Butler, [225 Ala. 191, 142 So. 531 (1932)], supra; 51 C.J.334), though we have sanctioned the view a proceeding instituted in the name of the State on relation of an individual suffices for the purpose of an amendment making the relator as an individual party thereto. West End v. State, 138 Ala. 295, 36 So. 423 [(1903)].

But proceeding to a final judgment of ouster upon the petition in the name of the State alone is tantamount to granting relief to a mere nominal party and one who in fact seeks no redress and is without interest in the result. Indeed, as above indicated, the State through the Attorney General has demonstrated any such relief is not desired. Originally the writ of quo warranto issued out of chancery (22 R.C.L.683) and we have often entered reversals on appeal in equity cases for a want of a necessary party to the suit though the question was not raised in the court below.

As said in Pate v. Hall, 220 Ala. 411, 125 So. 650, 652, [(1930)] "in many cases a reversal will be had out of regard for the orderly administration of justice."

Under the provisions of Section 1142, Code, supra, when the action is brought on the information of any person "his name must be joined as plaintiff with the state." Our statutory system has supplemented the common-law remedy and is now the only system of laws touching quo warranto proceedings obtaining in this State and we have held that such a proceeding that fails to meet the statutory requirements as to parties and procedure cannot be maintained. Louisville & N.R.R. Co. v. State ex rel. Gray, 154 Ala. 156, 45 So. 296 [(1907)].

Though the question was not presented in the court below, yet to proceed to final judgment without such joinder is to grant relief not only in the absence of necessary party, but in favor of a mere nominal party and in utter disregard of the statute. It bears some analogy to those cases where judgment is entered upon a complaint stating no cause of action, as discussed in Kirkland v. Pilcher, 174 Ala. 170, 57 So. 46 [(1911)]. We, therefore, conclude the judgment is due to be reversed for the reason stated.

Id. at 120-21, 9 So.2d 119. To some degree the decision of theAlabama Supreme Court is incomprehensible. As an apparentconsequence of its holding in Baxter,24 a relator in a quowarranto action was obligated not merely to bring his action asa relator for the State, but was required to join himself as aparty to the action.25More significant, though, is the conclusion of the Court that theState is a mere nominal party that cannot proceed alone in a quowarranto action and that failure of a plaintiff to join himselfor herself to a quo warranto action will bar a judgment againstthe defendant due to the absence of a plaintiff who is a realparty in interest. It would appear, then, that for purposes ofproceeding under the quo warranto provisions of the AlabamaCode, the inclusion of the State as a party to the action is amere formalism.

This would tend to indicate that, under the state law, theState of Alabama is not the real party in interest in the presentaction. However, without more, the language of these two casesmerely indicates that the State is a real party in interest forpurposes of state procedural law. Whether the State of Alabamawould constitute, as a matter of state substantive law, a realparty in interest in a given action is not at issue in thosecases. Rather, the conclusions of Lee Optical and Metcalf arethat, for the purposes of who is required to be joined to a quowarranto action in state court, the State is a nominal party andthat the relator the real party in interest. However, thisstatement of state law does not resolve the genuine issue withrespect to whether or not the State in the instant action is areal party in interest, i.e., "[t] hat person who can dischargethe claim upon which suit is brought and control the actionbrought to enforce it, and not necessarily the person ultimatelyentitled to the benefit of the recovery or the personbeneficially interested therein." 59 AM.JUR.2D § 36 (1987).

The issue is a complicated one. As a matter of Alabamasubstantive law, the grant of a quo warranto writ is properonly when a public, rather than private, interest is to beserved. Further, any benefit accruing from successful prosecutionof the quo warranto action will accrue principally to theState. There will, of course, be the obvious benefits anddetriments to particular individuals who do seek or would seektobacco products which need not be gone into here. Wynn obtainsno personal gratification from this action. At the same time, theState has no authority to intervene or control Wynn's actionagainst the defendants. In an abundance of caution the courtconcludes that the State is merely a formal party to the suit,having no interest in the matter in controversy, the right of thedefendants to act under a certificate of authority in the State.

Nonetheless, even if, or, more properly, because the State isnot a real party in interest in the instant action, the courtlacks over the matter, because the value of the matter incontroversy to the real party in interest, Wynn, does not exceed$75,000.00. This court earlier concluded that the benefit to theState arising from this suit if the plaintiff prevailed was morelikely than not a sum exceeding $75,000.00, as a consequence oflessened costs for the treatment of illness, improvements in thequality of life, and similar consequences. The court furtherfound that this relief was aggregate relief on behalf of thecitizens of Alabama, in which Wynn partook.

Upon reconsideration, and in light of this court's conclusionthat the State of Alabama is not a real party in interest in thepresent action, the court concludes that any aggregate right ofrelief that the State enjoys is not one in which Wynn partakes.As the State is not a real party in interest, any benefitaccruing to it in the present action is not to be calculated aspart of the amount in controversy for Wynn. In Glover v. MidlandMortgage Co. of Oklahoma, Inc., 228 B.R. 293, 296 (N.D.Ala.1998), this court stated that "where the matter in controversyinvolves a collective right, not particular to each individualplaintiff, the Court has held that aggregation is permissible."However, there is no indication in this case that there is anycommon and undivided right between the State of Alabama and Wynn.In fact, that the State exists as merely a nominal party to thisaction indicates that any right belongs solely to Wynn. ThatWynn is the real party in interest in the present action whilethe State is not demonstrates the existence of an interest ofWynn that is not a common and undivided right of relief betweenthe two parties. The separate right of relief on which Wynnpursues his action, exclusive of the State of Alabama, cannot bethe basis of any interest in an aggregate right on which theState of Alabama might recover.26 The value of the matter incontroversy in this quo warranto action is, therefore,calculated from the perspective of Wynn and Wynn alone. Anybenefit accruing to Wynn alone is certainly less than $75,000.00,as it is comprised of little more than good feeling resultingfrom revocation of the defendants' certificates of authority.Therefore, there is no diversity of citizenship jurisdiction overthe instant action.27

In sum, there can be no diversity jurisdiction in the instantaction. If the State of Alabama is a real party in interest,there can be no diversity of citizenship, as Alabama is not acitizen of a state, but a State itself. If, however, as the courthas determined, the State is not a real party in interest, thenany benefit it might receive from this action is not attributableto Wynn for purposes of determining the value of the matter incontroversy. Consequently, the value of the matter in controversyin the action is manifestly and substantially less than $75,000,as Wynn gets nothing from bringing this action except the rich,full pleasure of smoking a cigarette company.


For the foregoing reasons, this case will be REMANDED to theCircuit Court of Jefferson County, Alabama. Costs will be taxedagainst the defendants.


This cause comes on to be heard on a motion for reconsiderationfiled on April 29, 1999. In light of that motion the court wishesto clarify its position on the federal question jurisdictionissue. The court found a lack of federal question jurisdiction onthe alleged RICO and antitrust claims of the plaintiff becausethe plaintiff did not bring claims under either of thosestatutes, but instead invoked this court's jurisdiction over itsstate law quo warranto action on the basis of the remedialprovisions of those statutes. As such, the case was properlyanalyzed as a state law claim in which a substantial andnecessary question of federal law must be posed. The court'sdiscussion of antitrust standing and its discussion of RICOstanding are not necessary to the holding of this court, butinstead reflect this court's prudential concerns over exercisingjurisdiction in this action. See Greater Rockford Energy andTechnology Corp. v. Shell Oil Co., 998 F.2d 391, 395 (7th Cir.1993) (stating "Antitrust standing, however, is primarily amatter of legal policy, namely: `[W]hether the policy of the lawwill extend the responsibility for the conduct to theconsequences which have in fact occurred.'"). However, theplaintiff's lack of an injuryparticular to himself in an antitrust or RICO action may deprivethe court of Article III standing, and federal questionjurisdiction, in any case. See Associated General Contractors ofCalifornia, Inc. v. California State Council of Carpenters,459 U.S. 519, 535 n. 31, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).

As the Supreme Court recently stated in Department of Commercev. U.S. House of Representatives, 525 U.S. 316, ___, 119 S.Ct.765, 772, 142 L.Ed.2d 797 (1999):

We have repeatedly noted that in order to establish Article III standing, "[a] plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen v. Wright, 468 U.S. 737, 751[, 104 S.Ct. 3315, 82 L.Ed.2d 556] (1984).

Although this court should have noted such in its opinion, thefacts that supported a lack of antitrust or RICO standing, i.e.,no injury to plaintiff "traceable to defendant's allegedlyunlawful conduct," also support a lack of Article III standing inthis case.

Therefore, this court hereby SUBSTITUTES the memorandum opinionentered contemporaneously herewith for its memorandum opinionfiled on April 28, 1999, and DENIES the defendant's motion forreconsideration filed on April 29, 1999.

1. Section 1331 of Title 28 of the United States Code states,"The district courts shall have original jurisdiction of allcivil actions arising under the Constitution, laws, or treatiesof the United States."

2. The general requirements of diversity jurisdiction, asrelates to the present action, are described in subsection (a) ofsection 1332:

The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000.00, exclusive of interest and costs, and is between —

(1) citizens of different States. . . .

28 U.S.C. § 1332(a)(1).

3. BLACK's LAW DICTONARY (6th ed. 1990) defines a suit broughtex relatione as a "legal proceeding[] which [is] instituted bythe attorney general (or other proper person) in the name andbehalf of the state, but on the information and that theinstigation of an individual who has a private interest in thematter. . . ." The "relator" is the individual who brings theaction on behalf of the state. Thus, the instant case ismis-styled, as the action is brought by the State of Alabama, exrelatione, that is, upon the information or relation of, Wynn.Cf. State ex rel. Baker v. Evans, 683 So.2d 421 (Ala. 1996);Carr v. State ex rel. Goggans, 720 So.2d 197 (Ala. 1996); andDunlap v. State ex rel. Durrett, 622 So.2d 1305 (Ala. 1993).

4. Section 6-6-590(a) of the Alabama Code of 1975 providesthat "[a]n action may be commenced . . ., in the name of thestate, against the offending corporation, on the information ofany person for the purpose of vacating the charter or annullingthe existence of any corporation . . .," where the corporationperforms one of a number of offending acts.

5. Under this section,

[a] defendant or defendants desiring to remove any civil action . . . from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.

28 U.S.C. § 1446(a).

6. The date of the notice of removal was June 22, 1998.

7. A plaintiff can move to remand a removed case to statecourt "on the basis of any defect other than subject matterjurisdiction . . . within 30 days after the filing of the noticeof removal. . . ." 28 U.S.C. § 1447(c). Under this scheme,non-jurisdictional defects in removal are waived if not madewithin thirty (30) days after the notice of removal is filed. Inre Bethesda Memorial Hosp., Inc., 123 F.3d 1407, 1409-10 (11thCir. 1997). However, a motion to remand grounded on a lack ofsubject-matter jurisdiction can be made at any time. In reUniroyal Goodrich Tire Co., 104 F.3d 322, 324 (11th Cir. 1997).There is a third category of grounds for remand, those cases inwhich remand is premised on neither a "defect" in the removalprocess nor a jurisdictional flaw, as in the case of federalabstention doctrine, denial of supplemental jurisdiction or theexistence of a forum selection clause. The Eleventh Circuit Courtof Appeals has recently concluded that a remand premised on oneof these non-jurisdictional, non-defect grounds does not fallwithin the thirty day limitations period and can be the subjectof appellate review. Snapper v. Redan, 171 F.3d 1249, 1260(11th Cir. 1999).

8. In so holding, this court cited to and explained Ames v.State of Kansas, 111 U.S. 449, 4 S.Ct. 437, 28 L.Ed. 482 (1884),in which the Supreme Court permitted removal of a quo warrantoaction premised on federal question jurisdiction. Although thiscourt did not discuss the issue, presumably the plaintiff soughtto claim that a state quo warranto action was akin to a divorceor alimony proceeding, which, even when the parties to such aproceeding are diverse, cannot be the proper subject of diversityof citizenship jurisdiction. See Ankenbrandt v. Richards,504 U.S. 689, 700-01, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992),reaffirming the jurisdictional limitation set forth in Barber v.Barber, 62 U.S. (21 How.) 582, 16 L.Ed. 226 (1858). However, asthe Supreme Court noted in Ankenbrandt, the rationale formaintaining the domestic relations exception to statutorydiversity jurisdiction is not that the Supreme Court in Barbergot its construction of the then-existing jurisdictional statuteright in exempting domestic relations cases, but that subsequentCongresses did nothing to change or address that decision inlater alterations of the diversity statute. See Ankenbrandt,504 U.S. at 700, 112 S.Ct. 2206. In the instant case, there is noprior exception to the statutory diversity jurisdiction that hasbeen made by the Supreme Court and which has become ingrained inthe structure of the statutory jurisdiction of the federaldistrict courts. As such, this court found nothing exceptionalabout a quo warranto action exempting that class of cases fromthis court's diversity jurisdiction.

9. See this court's memorandum opinion entered on November 23,1998, at 7-8, discussing Tapscott v. MS Dealer Service Corp.,77 F.3d 1353, 1359 (11th Cir. 1996).

10. For simplicity's sake, this court has engaged in a bit ofrevisionist history in the body of the opinion. In response tothe defendants' motion to dismiss, the plaintiff moved to amendhis earlier filed pleading on January 8, 1999, to restate hisquo warranto claim under § 6-6-591. The court granted theplaintiff's motion on January 12, 1999. After entry of thiscourt's February 2, 1999, order, the plaintiff filed anotheramended complaint, in which he again mispled the statutory sourceof his claim. Nonetheless, it is clear from the amended complaintthat the plaintiff seeks his relief under § 6-6-591 of theAlabama Code of 1975. The court refers to this second amendedcomplaint throughout the instant opinion as "the amendedcomplaint."

11. This, arguably, was not always the case. General federalquestion jurisdiction, with the exception of a brief periodbetween the close of Adams' Federalist Administration and theopening of Jeffersonian era, was not vested in the districtcourts until the Reconstruction period, in 1875. This earlypredecessor to the present federal question and federal questionremoval statutes was construed to give federal district courtsnearly the fullest extent of the Article III jurisdiction overfederal questions. See Michael G. Collins, The UnfortunateHistory of Federal Question Removal, 71 IOWA L.REV. 717, 720-30(1986). This included the ability of a federal district court toevaluate a federal law defense to a state law action indetermining the presence of a federal question in an actioninitiated in or removed to federal court. Id., see especiallyn. 68, listing decisions in which removal was permitted on thebasis of a federal defense. The tide began to turn against thefree-wheeling days of removal with the Supreme Court's decisionin Metcalf v. City of Watertown, 128 U.S. 586, 588-89, 9 S.Ct.173, 32 L.Ed. 543 (1888), stating that although it had been"often decided by this court that a suit may be said to ariseunder the constitution or laws of the United States, within themeaning of that act, even where the federal question upon whichit depends is raised, for the first time in the suit, by theanswer or plea of the defendant," the grounds of removal waseither to be disclosed in the plaintiff's complaint or in thepetition for removal. In State of Tennessee v. Union & Planters'Bank, 152 U.S. 454, 461, 14 S.Ct. 654, 38 L.Ed. 511 (1894), theSupreme Court took the conclusion of the Metcalf court a stepfurther and explained that, with respect to thepost-reconstruction era Judiciary Acts of 1887 and 1888, federalquestion jurisdiction will rest with a federal court only on thebasis of a federal claim stated on the face of the plaintiffspleading. So it remains.

12. Occasionally, a defendant will attempt removal to federalcourt on the basis that the plaintiff "artificially pled" hisstate law claims and that, in fact, the factual bases for theplaintiff's claim more readily suggest a federal, rather thanstate, action, or that the facts alleged support a federal causeof action, but no state cause of action. Either of these eventsmay occur without implicating the jurisdiction of a federaldistrict court, however. A plaintiff is permitted to deceptivelyplead or mis-plead his or her own claims to remain in statecourt, as long as no federal question is necessarily implied fromthe claims in either of the two ways stated in the body of thisopinion.

13. For example, as a competitive injury, the plaintiff seemsto assert something novel: that because of anti-competitivepractices, a healthy alternative to the tobacco products sold bythe defendants has not emerged.

14. However, as has been noted by the Eleventh Circuit Courtof Appeals in Jairath v. Dyer, 154 F.3d at 1283, the questionof whether there exists a substantial issue of federal lawsomewhat evaporates when it is the case that under thesubstantive provisions of the law itself, the plaintiff wouldlack standing to pursue the action. See infra.

15. The quo warranto statute gives Wynn the authority tobring his suit as a relator for the State for purposes of thequo warranto action only. It does not give him the ability toprosecute, on behalf of the state, any other substantive claimeither under state or federal law. Therefore, Wynn, insofar as itis argued that he seeks to do so, can only bring his federalclaim or claims on his own behalf, and not as a relator of theState of Alabama.

16. In actuality, the plaintiffs complaint seems to focus on aconspiracy to control the cigarette market and "suppresscompetition" in that market. As recited, the alleged violationsin question are of the Sherman Antitrust Act and theRobinson-Patman Act, rather than arguable attempts to enter intotying arrangements with purchasers of cigarettes under § 14 ofTitle 15, although this too may be an aspect of the plaintiff'saction.

17. In Alan's of Atlanta, Inc. v. Minolta Corp.,903 F.2d 1414, 1418 n. 6 (11th Cir. 1990), the Eleventh Circuit Court ofAppeals discussed the wide variety of meanings "competitiveinjury" has taken:

A controversy has raged (and continues to rage) over the meaning of the word "competition" as used in the so-called "competitive injury" phrase of section 2(a) [of the Clayton Act]. See, e.g., Boise Cascade Corp. v. FTC, 837 F.2d 1127, 1143 (Starr, J.); id., at 1148-52 (Williams, J., concurring); id., at 1152-63 (Mikva, J., dissenting). The word "competition" as generally used in the antitrust laws seems capable of meaning different things to different people and, according to one commentator, can be interpreted in at least five ways. See R. BORK, THE ANTITRUST PARADOX 58-61 (1978). To some, "competition" can only mean "any state of affairs in which consumer welfare cannot be increased by moving to an alternative state of affairs through judicial decree," id., at 61, and competitive injury under the antitrust laws cannot occur unless an action taken has the net effect of restricting output and raising prices, i.e., lowering consumer welfare. Id., at 122. See also Ball Memorial Hosp., Inc. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1334 (7th Cir. 1986). Under this interpretation a proven injury to competitors is irrelevant under the antitrust laws (including the [Robinson-Patman Act]); the focus of inquiry is on the detrimental effects of prices on consumers, not the detrimental effect of prices on competitors, for rarely the twain shall meet.

Judicial precedent, however, suggests that in the [Robinson-Patman Act] the meaning of competition is not so narrow, nor the gap between an injury to competition and an injury to competitors so wide. Indeed, many cases dealing with secondary-line price discrimination (as does this one) hold or suggest that an injury to competition is proved by showing an injury to competitors. See, e.g., Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 434-38[, 103 S.Ct. 1282, 75 L.Ed.2d 174] (1983) (section 2(a) competitive injury shown where price charged to `competing purchasers' was different; effect on consumers not considered); [F T C v.] Morton Salt, 334 U.S. 37, 45-47, 49-50[, 68 S.Ct. 822, 92 L.Ed. 1196 (1948)] (section 2(a) `was intended to justify a finding of injury to competition by a showing of "injury to the competitor victimized by the discrimination"' proof that `the competitive opportunity of . . . merchants [was] injured' shown by fact that disfavored purchasers `had to pay [the seller] substantially more for their goods than their competitors had to pay'); Corn Prod. Ref. Co. [v. F T C], 324 U.S. 726, 738-39[, 65 S.Ct. 961, 89 L.Ed. 1320 (1945)] (price differentials that divert business from one competitor to another create an effect that `may be to substantially lessen competition.'); Hasbrouck v. Texaco, Inc., 842 F.2d 1034, 1040 (9th Cir. 1987), cert. granted, 490 U.S. 1105[, 109 S.Ct. 3154, 104 L.Ed.2d 1018] (1989) (injury of harm to competitors probative of injury to competition); Rose Confections, Inc. v. Ambrosia Chocolate Co., 816 F.2d 381, 385 (8th Cir. 1987) (harm to competition established by showing harm to competitors); Chrysler Credit Corp. v. J. Truett Payne Co., 670 F.2d 575, 580 (5th Cir.), cert. denied, 459 U.S. 908[, 103 S.Ct. 212, 74 L.Ed.2d 169] (1982) (to establish competitive injury under section 2(a) a plaintiff `must demonstrate that the likely effect of the alleged price discrimination was to allow a favored competitor to draw significant sales or profits away from him, the disfavored competitor'); Foremost Dairies, Inc. v. FTC, 348 F.2d 674, 678 (5th Cir.), cert. denied, 382 U.S. 959[, 86 S.Ct. 435, 15 L.Ed.2d 362] (1965) (recognizing that section 2(a) protects injury to competition as well as injury to competitors). But see Boise Cascade, supra, at 1143 (harm to competition all that matters); Richard Short Oil Co. v. Texaco, Inc., 799 F.2d 415, 420 (8th Cir. 1986) (RPA refers to competition in general, not competitors). This interpretation has carried over to primary-line price discrimination as well. See Utah Pie Co. v. Continental Baking Co., 386 U.S. 685[, 87 S.Ct. 1326, 18 L.Ed.2d 406] (1967) (local market price war driving down prices injured competitor, thus it injured competition); A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc., 881 F.2d 1396 (7th Cir. 1989) (recognizing difference between law and economics); McGahee v. Northern Propane Gas Co., 858 F.2d 1487 (11th Cir. 1988), cert. denied, 490 U.S. 1084[, 109 S.Ct. 2110, 104 L.Ed.2d 670] (1989) (predatory intent to destroy competitor). But cf. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574[, 106 S.Ct. 1348, 89 L.Ed.2d 538] (1986) (allegations conflicting with economic theory are to be viewed skeptically). The gist of these cases, representing about a half-century of [Robinson-Patman Act] interpretation, is that the legal focus of the competitive injury inquiry is on the competitor, not the consumer. For section 2(a) purposes, whether or not output is restricted or prices are raised simply is not dispositive.

We need not address this issue in any greater detail at this time. We address it at all only because the controversy over competitive injury may have implications for our later analysis of "antitrust injury" under Clayton Act section 4, 15 U.S.C. § 16. For the time being we are satisfied merely to make it clear that when confronted with contemporary economic argument on the one hand and judicial precedent on the other, we feel, unlike those of a more activist bent, see, e.g., R. BORK, supra, at 36, that economic argument is not ultimately controlling; judicial precedent is. Subsequent to the Eleventh Circuit Court of Appeals decision in Alan's of Atlanta, the Supreme Court decided Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 224, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993), in which the Court, swayed by the "preconceived idea of crystalline purity" (WITTGENSTEIN, PHILOSOPGICAL INVESTIGATIONS at § 108) embodied in prevailing economic haute couture, concluded that an injury to competition is ultimately nothing more than an idealized lower cost to consumers, regardless of whether such short-term lower costs result in actual, as opposed to theoretical, long-term lower costs or fewer beneficial products. Although stated in the context of a Robinson-Patman Act claim, the concept advanced was apparently made applicable to all antitrust claims. Under such a theory, the use of market power to prevent substitutes for tobacco products from reaching the market cannot be the basis of antitrust injury. However, the court does not rest its conclusion that no antitrust injury exists on this ground. Rather, the court concludes that the absence of an antitrust injury is due to the fact that Wynn cannot allege, as an individual, an antitrust injury particular to himself.

18. I.e., the plaintiff has not alleged that he himselfsuffered a "primary-line" injury. Under Wynn's theory, anindividual, to be a target of anti-competitive practices wouldhave to be attempting to compete or competing in the market byselling healthy cigarettes.

19. I.e., the plaintiff has not alleged that he suffered a"secondary-line" injury.

20. The defendants seem to suggest that the plaintiff alsoasserts independent mail fraud claims under 18 U.S.C. § 1341 andwire fraud claims under 18 U.S.C. § 1343. However, theplaintiff's amended complaint falls to bear out this assertion.Rather than assert independent mail or wire fraud claims, theplaintiff incorporates these violations into his broad assertionof RICO violations which help make up his quo warranto claim.

21. The defendants contend that because there exists federalquestion jurisdiction over plaintiff's antitrust and RICO claims,the court has supplemental jurisdiction over the remaining statelaw claims of the plaintiff. Section 1367 of Title 28 states thata federal district court "shall have supplemental jurisdictionover all other claims that are so related to claims in the actionwithin [the court's] original jurisdiction that they form part ofthe same case or controversy under Article III of the UnitedStates Constitution." However, as this court lacks originaljurisdiction over the instant suit based upon federal questionjurisdiction, it has no authority to assert jurisdiction over anyrelated state law claims, to the extent that such exist at all.

22. In Lumbermen's Mutual Casualty Company v. Elbert,348 U.S. 48, 50-51, 75 S.Ct. 151, 99 L.Ed. 59 (1954) (cited by theEleventh Circuit Court of Appeals in Broyles v. Bayless, 878F.2d at 1402), the Supreme Court stated:

Section 1332(a) of the Judicial Code, 28 U.S.C. s 1332(a), 28 U.S.C.A. s 1332(a), reads as follows:

`The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $3,000 exclusive interest and costs, and is between:

`(1) Citizens of different States ***.'

It is petitioner's contention that the `matter in controversy' here is the underlying tort liability of the alleged wrongdoer. If this were true, of course, no diversity of citizenship would exist between respondent and Mrs. Bowen, as the real party-defendant in interest. But the Louisiana courts have differentiated between actions brought by an injured party against the insurer alone and those brought against either the tortfeasor alone or together with the insurer. In the former action, the insurer is foreclosed from asserting defenses such as coverture, normally available to the tortfeasor. Edwards v. Royal Indemnity Co., 182 La. 171, 161 So. 191 [(1935)]. Similarly, the insurer is severely restricted in advancing technical defenses based upon the terms of the policy, such as a failure of notice, when the injured party brings a direct action. Jackson v. State Farm Mutual Automobile Ins. Co., 211 La. 19, 29 So.2d 177 [(1946)]. While either type of action encompasses proof of the tortfeasor's negligence, in the separate suit against the insurer a plaintiff must also establish liability under the policy. The Louisiana courts have characterized the statute as creating a separate and distinct cause of action against the insurer which an injured party may elect in lieu of his action against the tortfeasor. West v. Monroe Bakery, 217 La. 189, 46 So.2d 122 [(1950)]; Jackson v. State Farm Mutual Automobile Ins. Co., supra.


There is even greater justification for disregarding the tortfeasor's citizenship here than for disregarding the citizenship of a beneficiary since the insurer — unlike a fiduciary — has a direct financial interest in the outcome of this litigation.

23. If a state could, through mere procedural decisionsrestrict the rights of access of parties to federal court, thatstate could, through its own action constrict the diversityjurisdiction of the federal court, which it is not permitted todo. A good example of this in a different context is Begay v.Kerr-McGee Corporation, 682 F.2d 1311 (9th Cir. 1982). In thatcase, the plaintiff Navajo miners working on uranium mines on aNavajo reservation brought an action against the defendantclaiming that they were exposed to radiation in the course oftheir employment and as a consequence of the exposure sufferedsevere injuries. The district court dismissed the action on thegrounds that because the state vested exclusive jurisdiction inthe state workers' compensation commission, no subject matterjurisdiction remained with the court. The Ninth Circuit Court ofAppeals disagreed with the district court on this issue, statingthat while the requirement that the plaintiffs proceed under thestate workers compensation laws may have deprived the plaintiffsof a substantive claim, it did not deprive the district court ofsubject matter jurisdiction. Id. at 1317.

The district judge apparently concluded that because Arizona law would deprive an Arizona court of jurisdiction in a like case filed in state court, the federal court lacked diversity jurisdiction. Here, he erred. The question is whether the Indian complaint stated a claim for relief under Arizona law pursuant to Erie, rather than whether the district court lacked subject matter jurisdiction. See Black v. Payne, 591 F.2d 83, 86 n. 1 (9th Cir. 1979) (federal question). Although the states have the power to prevent the federal court from granting relief in a diversity case by denying the substantive right of action asserted, they "have no power to enlarge or contract the federal jurisdiction." Markham v. City of Newport News, 292 F.2d 711, 713 (4th Cir. 1961). See Railway Co. v. Whitton's Adm'r, 80 U.S. (13 Wall.) 270, 286[, 20 L.Ed. 571] (1871); Greyhound Lines, Inc. v. Lexington State Bank & Trust Co., 604 F.2d 1151, 1154-55 (8th Cir. 1979); Poitra v. Demarrias, 502 F.2d 23, 25-27 (8th Cir. 1974), cert. denied, 421 U.S. 934[, 95 S.Ct. 1664, 44 L.Ed.2d 93] (1975). "State rules will not be applied `to thwart the purposes of statutes of the United States.'" Pankow Constr. Co. v. Advance Mortgage Corp., 618 F.2d 611, 613 (9th Cir. 1980), quoting Sola Elec. Co. v. Jefferson Co., 317 U.S. 173, 176[, 63 S.Ct. 172, 87 L.Ed. 165] (1942). Thus, state law may not control or limit the diversity jurisdiction of the federal courts. The district court's diversity jurisdiction is a creature of federal law under Article III and 28 U.S.C. § 1332(a). Pursuant to the supremacy clause, section 1332(a) preempts any contrary state law. Nothing in Erie compels a different conclusion. "The Erie doctrine does not extend to matters of jurisdiction or, generally, to matters of procedure. . . . Erie requires that the federal court grant or withhold relief as the state courts would. It does not require relegation of the diversity jurisdiction to the mercies of the legislatures of fifty separate states." Markham v. City of Newport News, supra, 292 F.2d at 718.

Indeed, the Erie doctrine rests upon the premise that the jurisdiction of the federal diversity court is satisfied, and addresses only the question whether federal or state law provides the substantive rules of decision in the case. See Erie, supra, 304 U.S. at 74-77, 58 S.Ct. 817 Regardless of whether Erie primarily involves interpretation of the Constitution or the Rules of Decision Act, 28 U.S.C. § 1652, see P. BATOR, P. MISHKIN, D. SHAPIRO & H. WECHSLER, HART & WECHSLER'S THE FEDERAL COURTS AND THE FEDERAL SYSTEM 706-08 (2d ed. 1973), it does not purport to permit state control of areas in which Congress has acted pursuant to its constitutional authority. See Erie, supra, 304 U.S. at 78[58 S.Ct. 817] ("Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State."). Nothing in Erie, its progeny, or the principles of federalism supporting the doctrine suggests that a state statute may operate to divest a federal court of the jurisdiction conferred by 28 U.S.C. § 1332(a). Only Congress, by repealing section 1332, has the constitutional authority to abolish or limit the district court's jurisdiction to hear all cases and controversies between citizens of different states which involve the requisite amount in controversy.

Id. at 1315-16.

24. And Alabama statutory law, as evidenced by Alabama Code §6-6-595, which states, "Whenever an action is commenced under theprovisions of this article on the information of any person, hisname must be joined as a plaintiff with the state."

25. The plaintiff has apparently made himself individually aparty to the action, although, again, clarification of the styleof this case by the plaintiff might clear up this littleconfusion. (This court, were it to retain jurisdiction over theinstant action, would have crafted the prior statement in moreimperative terms.)

26. In the same way in which later plaintiffs seeking punitivedamages under Alabama law cannot be said to have an aggregatematter in controversy permitting removal to federal court on thebasis of an earlier punitive damages award for the same orsimilar actions, even though if those later plaintiffs had beenparties to the original action their claims could have beenremoved to federal court because the punitive relief wasagreegable, because the State is not a party here, any aggregateaward it might receive in a future action cannot be attributedback to Wynn's quo warranto suit.

27. Arguably, the case is like one in which a plaintiff seeksprospective injunctive relief that would prevent a defendant inengaging in future conduct similar to that suffered by theplaintiff. However, Wynn can only pursue this action in his ownname; the State is not a potential party to this action. At best,the State could only sue to prevent a defendant from sellingproducts in the state without a certificate of authoritysubsequent to the revocation of that certificate. See Glover v.Midland Mortgage Co. of Oklahoma, Inc., 228 B.R. at 312 (statingthat "if an injunction was issued, future suits arising under theinjunction would provide a common and undivided right of relief,but at present, each prospective plaintiffs right for relief ishis or her own").

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