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McCoy v. Siler


decided.: June 10, 1953.


Author: Goodrich

Before BIGGS, Chief Judge, and MARIS and GOODRICH, Circuit Judges.

GOODRICH, Circuit Judge.

This case concerns the Pennsylvania nonresident motorist statute and the United States statutes on venue. The plaintiff, an Iowa resident, sued the defendants, residents of North Carolina, for damages resulting from a motor vehicle accident which occurred in Pennsylvania. Service was made following the provisions of the Pennsylvania nonresident motorist statute.*fn1 The defendant raises the point that venue is lacking since the federal statute provides that: "A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside."*fn2

A state cannot by legislation modify or repeal a Congressional statute on the venue of federal courts.*fn3 On the other hand it is very clear that the venue provision may be waived. The question in this case is whether the defendants' privilege to be sued where either the plaintiff or they reside has been waived by anything they have done. Waiver, it is well established, can be by conduct as well as by expressed consent.*fn4

In Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 1939, 308 U.S. 165, 60 S. Ct. 153, 84 L. Ed. 167, it was held that a corporation waived the venue provisions by designating a state officer to receive service of process. From that it is argued that a motorist waives his venue privilege when he drives on the highways of a state whose law provides for service upon a designated public officer in a suit against a nonresident who has the misfortune to have an automobile accident within the state. Since these statutes are frequently phrased in terms of an appointment of the public officer to accept service of process, it is argued that a consent to service in that fashion, and to the jurisdiction of the state's courts, is implied.

As to the use of the fiction of consent to establish jurisdiction of a state for suit under these nonresident motorist statutes we can add little to the discussion by the First Circuit in Martin v. Fischbach Trucking Co., 1 Cir., 1950, 183 F.2d 53. The fiction of consent did well enough to provide the foundation for a step in expanding the jurisdiction which a state may exercise through its courts. But it is now perfectly clear that the jurisdiction rests on power and not consent at all; this is recognized by practically every thoughtful writer on the subject.*fn5

When it comes to the question of venue presented by this case quite a number of District Courts and one Court of Appeals have thought that the Neirbo case provided the analogy for the finding of waiver of venue here.*fn6 Others have thought the contrary.*fn7

We insist, however, that there is a real distinction between the cases where a party in fact gives consent to suit by appointing an officer of the state to receive process and a case where the party is drawn into court willy-nilly without any manifestation of consent on his part. It was many years ago held that if a corporation in fact designated such officer, that was consent, and the scope of the consent was a matter for the state's determination even though it could not force a corporation against its will into court except for the outcome of things done locally.*fn8 We think that when a motorist comes into a state and has an accident and is brought into court to defend himself from the consequence of that accident he does not consent to anything. He is in the state's court because the state has power to bring him there following his use of the state's highways. It seems to us unreal to say that he has "waived" the provision of a federal statute which gives him the privilege of being sued in certain places only. It seems to us a fictitions and illogical jump to reach such a conclusion.

We were pressed with the analogy of Knott Corp. v. Furman, 4 Cir., 1947, 163 F.2d 199, certiorari denied 1947, 332 U.S. 809, 68 S. Ct. 111, 92 L. Ed. 387. That case decided that the jurisdiction exercised by a state over a foreign corporation doing business within its boundaries is based on an implied consent indistinguishable from the express consent involved in the Neirbo case. Consequently the corporation waives its federal venue privilege by doing business in the state. In our opinion that case overlooked the clear distinction, drawn by the Supreme Court itself in the Neirbo opinion, between true and fictitious consent.*fn9 It is that very distinction which led this court to a contrary result on the precise issue involved in the Knott case. Robinson v. Coos Bay Pulp Corp., 3 Cir., 1945, 147 F.2d 512. Two other Courts of Appeals have agreed with us.*fn10 Insofar as the issue involved in those cases is analogous here, the weight of authority supports our conclusion.

The settlement of the question here involved in not one which, either way, will shake the foundations of American jurisprudence. Nor should it arouse violent emotions among those differing in opinion upon it. There is no hardship on the plaintiff if he cannot get into federal court in the Eastern District of Pennsylvania. The state court is open to him. There is no hardship on the defendant if we should decide that the venue provisions have been waived. He is subject to suit in state court anyway, and we take it that it is no harder to defend in one court than the other. Nor can we see any social issue involved. The only policy consideration which is apparent is that we should not be astute to widen federal diversity jurisdiction. However, we think the logic of the matter is in accordance with the First Circuit case and we shall follow it. The dissent of our brethern of the Sixth Circuit does not seem to us convincing.

The judgment of the District Court will be affirmed.

MARIS, Circuit Judge (concurring).

I join fully in everything which is said in the opinion of the court. I desire to add a few words, however, since I think that the action of the district court may be sustained on the additional ground that the court never acquired jurisdiction of the persons of the defendants. Merely carrying out in this case the ritual of serving process upon the state's own officer, the Secretary of the Commonwealth,*fn11 was not sufficient validly to summon the non-resident defendants into court. This was settled in Wuchter v. Pizzutti, 1928, 276 U.S. 13, 48 S. Ct. 259, 72 L. Ed. 446. In that case the Supreme Court held that in order to afford a nonresident motorist procedural due process of law it is necessary to provide for giving reasonable notice of suit to the nonresident himself. Pennsylvania Civil Procedure Rule 2079(a)*fn12 provides for such notice to be given by registered mail. It thus appears that it was by such extraterritorial service, if at all, that the district court acquired jurisdiction of the persons of the nonresident defendants.*fn13 But this service, being extraterritorial, could not be effective to do so in the present case. For extraterritorial service in the federal courts is regulated by Federal Civil Procedure rule 4(f), 28 U.S.C.*fn14 That rule restricts the service of process to the territorial limits of the state in which the district court is held unless a statute of the United States authorizes service beyond those limits. In this respect the rule is a limitation upon the provisions of Federal Civil Procedure rule 4(d)(7) which authorize service in the manner prescribed by state law. Since there is no federal statute authorizing extraterritorial service in a diversity case such as this one, rule 4(f) operated to prohibit service upon the defendants in North Carolina by registered mail in the manner provided by Pennsylvania Civil Procedure rule 2079(a). The district court, therefore, did not, in my opinion, acquire jurisdiction of the person of the defendants.

It may be thought that the conclusion which the court has reached in the present case is inconsistent with the doctrine of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188. It is true that there is here diversity of citizenship and jurisdictional amount and that the case might have been brought in the Pennsylvania state courts. It is also true that the sweep of Erie R. Co. v. Tompkins takes in not only the field of what has been conventionally regarded as substantive law, but also calls for the application in federal diversity cases of many state laws which for other purposes are regarded as procedural.*fn15 But the application of the Rules of Decision Act under the doctrine of Erie R. Co. v. Tompkins necessarily stops at the point where in the procedural field an Act of Congress or a rule of procedure promulgated by the Supreme Court pursuant to Congressional authority prescribes a uniform rule for the federal courts to follow. That is the situation here. True, the plaintiff could have brought suit in the state court and the defendant could have removed the suit to the federal district court. For Section 1441(a) of Title 28, U.S.C., would give the district court venue jurisdiction,*fn16 and Pennsylvania Civil Procedure Rule 2079(a) rather than Federal Civil Procedure Rule 4 would be applicable to the service of process.*fn17 But here Section 1391 of Title 28, U.S.C., and Federal Civil Procedure Rule 4(f) prescribe the procedure in these matters and there is, therefore, no area for the application of state law under the Rules of Decision Act.

BIGGS, Chief Judge (dissenting).

Every one of the forty-eight states and the District of Columbia has a nonresident motorist statute. The first of these was enacted in 1923 and the tide was almost full by 1934.*fn18 Under such circumstances it seems reasonable and realistic - rather than "unreasonable" or "unrealistic" - to hold that when a motorist drives his car into a state he does voluntarily perform an act which appoints an official of the state as his agent for service. As in Neirbo Co. v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 168, 60 S. Ct. 153, 155, 84 L. Ed. 167, he loses his venue privilege by "submission through conduct." In Neirbo the conduct was the voluntary express designation by the corporation of an agent for service. But Bethlehem did not expressly waive its venue privilege. Under the nonresident motorist statutes, a motorist does not formally or in writing designate the state official as his agent. He does not expressly say to the Secretary of State or the Registrar of Motor Vehicles, "I designate you my agent for service." If he did so I conceive that the majority would concede that the venue privilege was waived. But this is just what the nonresident motorist does do in substance and effect when to-day he drives from one State and into another. There is but minuscule practical difference between the voluntary express designation by a corporation of an agent for service as in Neirbo, and the voluntary, though not express, act of the nonresident motorist, a natural person, whereby the state official is made his agent for service. In neither case is the venue privilege expressly waived. In both cases the privilege should be deemed to be waived for in each case the venue privilege is lost by submission through conduct.

The nonresident motorist entering the Commonwealth of Pennsylvania should be deemed to be aware that he necessarily appoints a state official as his agent for service. And since service on this official under the state statute is also sufficient to confer jurisdiction upon the federal court under FRCP 4(d)(7), the motorist should also be deemed to anticipate being held to answer suit in such a court. Concededly, a state legislature cannot legislate effectively as to venue in a federal court. But while the Commonwealth of Pennsylvania, in enacting Section 1201, 75 P.S.Pa., providing that the motorist constitutes a state official his agent for service in the courts of the Commonwealth and "* * * in the United States District Courts of Pennsylvania * * *", could not affect the federal venue statute, it did provide a basis for the conclusion that a motorist who subjects himself by his conduct to the jurisdictional provisions of the statute should also be deemed to waive his federal venue privileges.*fn19

In Neirbo the Supreme Court pointed out that corporations do business outside their originating bounds and this fact made "intolerable their immunity from suit in the states of their activities." As economic advances were made the law took the changed circumstances into consideration and, finally, in Ex parte Schollenberger, 1877, 96 U.S. 369, 24 L. Ed. 853, "Mr. Chief Justice Waite * * * displaced metaphor with common sense." As was also said in Neirbo the decision in the Schollenberger case "was not a matter of technical legal construction, but a way of looking at corporations", and "Men's minds have become habituated to corporate activities which crossed state lines." So here, save only that the Pennsylvania nonresident motorist statute and others substantially similar to it present a way, now hardly new, of looking at motorists who drive into a state for business or pleasure. The days when an interstate motor trip was a high adventure and not a common course of conduct are gone with the solid rubber tire. The Commonwealth of Pennsylvania, authorizing a foreign corporation to do business within its borders, requires as a condition that the corporation appoint an agent for service in the Commonwealth. The Commonwealth of Pennsylvania, permitting - really, authorizing - a nonresident motorist to drive in the State, whether for business or for pleasure, imposes a substantially similar condition, viz., that he make a state official his agent for service. The question is really one of public policy as was pointed out in Neirbo. As Mr. Justice Frankfurter cogently stated, 308 U.S. at page 168, 60 S. Ct. at page 155, "Whether such surrender of a personal immunity be conceived negatively as a waiver or positively as a consent to be sued, is merely an expression of literary preference." It is true that one of the purposes behind section 51, as it is behind newer section 1391(a) was to save defendants from inconvenience. Id. at page 168, 60 S. Ct. 153.*fn20 But the convenience of defendants, whether corporations or natural persons, is a practical thing. One can well conveive of the respective States if the majority view prevails, creating ports of entry for the incoming nonresident motorist wherein he shall "sign in" and expressly designate a state official as his agent for service in case he has an accident within the State; otherwise, entry prohibited. The respective States could even compel the execution of an express waiver of the federal venue privilege by the incoming motorist and such a course, I believe, would meet no constitutional barrier.

The fiction employed in Neirbo is a useful legal artifact. I can perceive no reason why a similar artifact should not be employed in the instant case. All the circumstances seem to call for its use. In the present state of the law, including the forty-nine nonresident motorist statutes, it seems artificial not to employ the fiction and to hold that the nonresident motorist consents to be sued in the state when he enters it. As I have reiterated, it seems unreasonable at least under the circumstances at bar, to treat the motorist's implicit consent to be sued in the state on a different basis from an express consent by him. If mine be a reasonable interpretation of the law and the operative facts it would seem to follow that the nonresident motorist should be deemed to have waived his venue privilege in a United States district court.

I do not agree with the reasoning or the conclusion in Martin v. Fischbach Trucking Co., 1 Cir., 1950, 183 F.2d 53. I agree with the conclusion reached in Olberding v. Illinois Central R. Co., 6 Cir., 1953, 201 F.2d 582.

For the reasons stated I must respectfully dissent from the view expressed by the majority.

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