Staley, Chief Judge, and McLaughlin, Kalodner, Smith and Seitz, Circuit Judges. Gerald McLaughlin, Circuit Judge (dissenting).
The defendants, Trustees of the Estate of Stephen Girard,*fn1 refused to admit the seven minor plaintiffs, Negro male orphans, to Girard College, a charitable educational establishment created under the Will of Stephen Girard, on the sole ground that Girard's Will expressly restricts admission to the College to "poor male white" orphans.
The guardians of the minor plaintiffs, the Commonwealth of Pennsylvania and its Attorney General, and the City of Philadelphia, filed a complaint in the District Court praying for an injunction restraining the defendants from denying the minor plaintiffs, and others similarly situated, admission to the College simply because they are Negroes.
The complaint consists of three counts. Count I charges in sum that Girard College "is so impressed with state involvement and state action" that its acts must be imputed to the state itself, and thus the denial of admission to the College on racial grounds violates the Fourteenth Amendment; Count II seeks application by the District Court of the cy pres doctrine to benefit all poor male orphans, irrespective of race or color, in accordance with Girard's alleged testamentary intent to benefit the City of Philadelphia and its citizens; Count III alleges that denial of admission to the seven minor plaintiffs solely because they are Negroes violates the Pennsylvania Public Accommodations Act, 18 P.S. § 4654.
The defendants moved to dismiss the complaint on these grounds: (1) the District Court lacked jurisdiction over the subject matter; (2) the issues were res adjudicata by reason of prior related proceedings in the state courts; (3) the complaint failed to state a claim upon which relief could be granted; and (4) the Commonwealth of Pennsylvania, its Attorney General, and the City of Philadelphia lacked the requisite standing or capacity to bring the action.
The District Court in its opinion, reported at 260 F. Supp. 323 (E.D.Pa.1966), held that it had jurisdiction with respect to all three counts of the complaint. It based its jurisdiction as to Count I under 28 U.S.C.A. § 1343(3) and 42 U.S.C.A. § 1983, because "the complaint sufficiently raises substantial questions of whether the defendants are, 'under color of' state authority, depriving the individual plaintiffs of their right to the equal protection of the laws".*fn2 It further ruled that it had pendent jurisdiction as to Counts II and III, because "the three counts of the complaint constitute a single 'case' for a single trial * * * the proof required on the several counts is overlapping, the constitutional issues are at least as significant as the state law questions, and the relief sought is unitary and identical".*fn3
The District Court made this further specific deposition with respect to the defendants' motion to dismiss:
It denied the motion insofar as it related to Counts I and II "without prejudice to the rights of the defendants to renew it at the appropriate time"; it denied the motion as to Count III "insofar as the seven individuals are partiesplaintiff", and granted it as to Count III "insofar as the Commonwealth of Pennsylvania, the Attorney General of Pennsylvania, and the City of Philadelphia are parties-plaintiffs",*fn4 on the ground that they "are precluded by res judicata from claiming that Girard College is violating the Pennsylvania Public Accommodations Act".*fn5
The District Court further ruled that "decision on the merits of counts one and two will be deferred" (260 F. Supp. at 357), stating that, "So far as count one is concerned, the issues of nonobvious state involvement are probably the kind that courts are rightly reluctant to decide on a motion to dismiss anyway * * * [and] They require concrete development to evaluate properly by the process of 'sifting facts and weighing circumstances'. Burton v. Wilmington Parking Auth., 365 U.S. 715, 722, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961)".*fn6
After this disposition "of the liminal questions of jurisdiction and standing", the District Court held that the question presented by Count III of the applicability of the Pennsylvania Public Accommodations Act ("Act") was one of first impression, since "The issue was not decided by the Pennsylvania courts in any of the former proceedings",*fn7 which had challenged the exclusion of Negro male orphans from Girard College for the assigned reason that the Will of Stephen Girard, the creator of the College, limited admission to the institution to "poor male white orphans". It further held, after extended discussion of the Act, which makes it a misdemeanor to practice racial discrimination in places of public accommodation and educational institutions generally, except where they are "in * * * their nature distinctly private",*fn8 that "This statute forbids discrimination in schools such as Girard", and, "Accordingly, if the individual plaintiffs can prove count three of their complaint, continued racial discrimination in the selection of students for admission to Girard College will be enjoined".*fn9
Having thus ruled, the District Court granted leave to the defendants to answer the complaint within 30 days of the filing of its opinion on September 2, 1966. The answer was filed on September 21, 1966. Prior thereto, the individual plaintiffs, on September 16, 1966, filed a motion for an early hearing at which evidence could be adduced as to any disputed factual issues with respect to Count III, and for a preliminary injunction "enjoining defendants from discriminating against plaintiffs and all others similarly situated in admission to Girard College on the basis of race".
Hearing was had on the motion for a preliminary injunction on October 3, 1966.*fn10 Evidence was then adduced bearing on Count III. Upon counsel's advice that no additional evidence on that Count would be offered on final hearing, the District Court ordered, without objection by counsel, that the preliminary hearing be treated as on final hearing.
In an Adjudication filed November 2, 1966, reported at 260 F. Supp. 358, the District Court ruled that Girard College "is covered" by the Pennsylvania Public Accommodations Act;*fn11 that "Said Act prohibits defendants from refusing plaintiffs admission to Girard College on the ground that they are not white, if they are otherwise qualified"; and that the minor plaintiffs "are entitled to a permanent and final injunction", which would give effect to its holding.*fn12
The District Court specifically stated in its "Discussion" of its disposition that " This adjudication, of course, reaches and disposes of finally only count three of the complaint. * * * We believed that a single trial would have disposed of the common issues of fact involved in all counts of the complaint. However, plaintiffs' insistence upon proceeding preliminarily (as it turned out, finally) on count three has made this an impossibility ". (Emphasis supplied.)*fn13
In the Decree accompanying the Adjudication, the District Court stated in part in Paragraph 1: "Defendants are permanently enjoined from denying to minor plaintiffs admission to Girard College on the sole ground that they are not white, provided that they are otherwise qualified for admission". Paragraph 4 of the Decree provided that "Plaintiffs may institute an action in the Orphans' Court of the County of Philadelphia, in order that the courts of the Commonwealth of Pennsylvania may have due opportunity to decide promptly and expeditiously all issues involved in count two of the plaintiffs' complaint [the cy pres count]". In Paragraph 5 of the Decree the District Court stated that it "will retain jurisdiction over all allegations of the complaint, pending a final determination of plaintiffs' right to the relief granted * * *."*fn14
The defendants appealed. In their brief they state the issues presented to be as follows:
1. Did the District Court err in holding that a substantial federal question was presented in Count I?
2. Did the District Court err in holding that it had pendent jurisdiction over Counts II and III and cy pres jurisdiction over Count II?
3. Did the District Court err in refusing to abstain from deciding Count III and in retaining jurisdiction over Count II after abstaining from deciding it?
4. Did the District Court err in holding that the orphanage is a place of public accommodation within the meaning of the state Public Accommodations Act?
This must immediately be said with respect to the stated issues.
As earlier established, the District Court specifically said that "this adjudication, of course, reaches and disposes of finally only count three of the complaint ". (Emphasis supplied.)
In paragraph 3 of its Decree it stated "The court determines expressly that there is no just reason for delay and expressly directs the entry of final judgment for plaintiffs and against defendants on count three of the complaint". 260 F. Supp. at 367. This disposition, made in accordance with the provisions of Rule 54(b), F.R.Civ.P., made the judgment as to Count III "a final decision" required by 28 U.S.C.A. § 1291.
Rule 54(b) permits entry of a final judgment as to one or more of multiple claims when "there is no just reason for delay and upon an express direction for the entry of judgment".
The complaint here asserts multiple claims, since the violations charged in its three counts are factually "separate and independent".*fn15 Count I charges that the defendants' denial of admission to Girard College is in substance in the exercise of State authority, viz., "under color of" State authority; Count III charges violation by individuals of the Pennsylvania Public Accommodations Act, independent of the "color of" State authority; Count II merely asserts a basis for the application of the cy pres doctrine.
The District Court's holding that it had jurisdiction as to Count I under the federal statutes earlier cited, and pendent jurisdiction as to Count II, and its retention of jurisdiction with respect to these counts, do not achieve the proportions of "a final decision" within Section 1291 so as to make them appealable.
Moreover, with respect to the denial of the motions to dismiss Counts I and II, it is settled that "denial of a motion to dismiss, even when the motion is based on jurisdictional grounds, is not immediately reviewable". Catlin v. United States, 324 U.S. 229, 236, 65 S. Ct. 631, 635, 89 L. Ed. 911 (1945).
The sum of the foregoing is that the sole appealable action of the District Court is its judgment, premised exclusively on Count III, and that our review here is limited to determining whether the District Court erred in entering that judgment.
The threshold question presented is whether the District Court erred in ruling that "the issue" of the "applicability" of the Pennsylvania Public Accommodations Act "was not decided by the Pennsylvania courts in any of the former proceedings",*fn16 which had challenged the exclusion of Negro male orphans from Girard College, and that consequently the issue was one of first impression which it was free to resolve ab initio.
It arises by reason of the fact that having so decided, the District Court proceeded (1) to construe the Pennsylvania Act as prohibiting the exclusion referred to; (2) to find that the defendants had violated that prohibition; and (3) to enjoin the defendants from denying the minor plaintiffs admission to Girard College.
We direct our attention to the stated threshold question because a determination that the District Court erred in its view that the Pennsylvania courts had "not decided" the applicability of the Public Accommodations Act "in the former proceedings" would make unnecessary discussion and resolution of the District Court's construction of the Act.
It must be noted that the District Court correctly stated in its opinion at 260 F.Supp 323, 339 that "Had the applicability of the act to Girard College been settled in the prior proceedings * * * we would be bound to adhere to the Pennsylvania courts' interpretation of the statute. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938) ".
In Beilan v. Board of Public Education, 357 U.S. 399, 404, 78 S. Ct. 1317, 1321, 2 L. Ed. 2d 1414 (1958), it was specifically held: "We are bound by the interpretation thus given to the Pennsylvania statutes by the Supreme Court of Pennsylvania". Again, in Barsky v. Board of Regents, 347 U.S. 442, 448, 74 S. Ct. 650, 98 L. Ed. 829 (1954), it was held that the interpretation of a New York statute by the Court of Appeals of New York "is conclusive here". This Court in McClaskey v. Harbison-Walker Refractories Co., 138 F.2d 493, 496 (1943), in a non-diversity case, held that the Pennsylvania Supreme Court's construction of a Pennsylvania statute is "binding upon us in determining rights accruing under Pennsylvania law".
It is settled too, that matters pertinent to an issue before a court and which were clearly presented to it, by brief or appendix thereto, are to be taken as covered by the court's decision though not mentioned in the opinion. Bingham v. United States, 296 U.S. 211, 218-219, 56 S. Ct. 180, 80 L. Ed. 160 (1935); Seward v. Heinze, 262 F.2d 42, 44 (9 Cir. 1958).
It has been specifically held that where a state statute is referred to and discussed in briefs, its consideration by the court must be assumed, although it "was not referred to in the court's opinion". Dostal v. Magee, 273 Wis. 228, 77 N.W.2d 604, 606-607 (1956).
In Irving Nat. Bank v. Law, 10 F.2d 721, 722 (2 Cir. 1926), where Judge Learned Hand spoke for the Court, it was held that construction of a statute assumed sub silentio in an opinion by a state court of last resort, is conclusive on a federal court.
In Steel & Tubes, Inc. v. Clayton Mark & Co., 21 F. Supp. 326 (D.C.Del.1937), it was held that where the sufficiency and propriety of a patent disclaimer under a statute had been before the court, and its opinion upheld the validity of the disclaimer without reference to the questions of sufficiency and propriety of the disclaimer, "The legal inference is that it passed upon them".
To the foregoing must be added the settled principle that where the applicable rule of decision is the state law, it is the duty of the federal court to ascertain and apply that law, even though it has not been expounded by the highest court of the state. Fidelity Union Trust Co. v. Field, 311 U.S. 169, 61 S. Ct. 176, 85 L. Ed. 109 (1940). It was there said at pages 177-178, 61 S. Ct. at page 178:
"The highest state court is the final authority on state law, (citing cases) but it is still the duty of the federal courts, where the state law supplies the rule of decision, to ascertain and apply that law even though it has not been expounded by the highest court of the State. (citing cases). An intermediate state court in declaring and applying the state law is acting as an organ of the State and its determination, in the absence of more convincing evidence of what the state law is, should be followed by a federal court in deciding a state question. * * *
"Here, the question was as to the construction and effect of a state statute. The federal court was not at liberty to undertake the determination of that question on its own reasoning independent of the construction and effect which the State itself accorded to its statute. That construction and effect are shown by the judicial action through which the State interprets and applies its legislation. That judicial action in this instance has been taken by the Chancery Court of New Jersey and we have no other evidence of the state law in this relation. * * * We have held that the decision of the Supreme Court upon the construction of a state statute should be followed in the absence of an expression of a countervailing view by the State's highest court, (citing cases) and we think that the decisions of the Court of Chancery are entitled to like respect as announcing the law of the State."
In Brown v. Moore, 247 F.2d 711, (1957), we applied the doctrine stated, saying at page 721:
"It is the duty of the federal courts where, as here, the State law supplies a rule of decision to ascertain and apply that law 'even though it has not been expounded by the highest court of the State, (citing Fidelity Union Trust Co. v. Field, supra)'."
Applicable to our consideration here is the further rule that a federal court may take judicial notice of matters of record in state courts within its jurisdiction. Berkowitz v. Philadelphia Chewing Gum Corporation, 303 F.2d 585, 587 (3 Cir. 1962). Some of the briefs filed by the appellants in the former proceedings before the Pennsylvania Supreme Court have been made part of the record in the instant case in "Court's Exhibit 'A'". We have taken judicial notice of other briefs filed by the parties in the Supreme Court cases, as well as the pleadings and briefs in the various Orphans' Court proceedings which led to the appeals to the Pennsylvania Supreme Court.
The principles above stated will guide us in our consideration and disposition of the question as to whether the Pennsylvania Supreme Court and/or the Orphans' Court of Philadelphia "decided" the issue of applicability or non-applicability of the Pennsylvania Public Accommodations Act to the denial of admission to Girard College of Negro male orphans in the former proceedings in the state courts, where the denial was challenged.
We come now to the earlier proceedings.
Their consideration must be prefaced by this statement of the background of those proceedings.
Stephen Girard died in 1831. In his Will,*fn17 he left a portion of his estate in trust for the erection, maintenance, and operation of a "College". The Will provided that the College was to admit "as many poor white male orphans, between the ages of 6 and 10 years, as the said income shall be adequate to maintain".*fn18 The City of Philadelphia was named as Trustee.
The City accepted the Trust, and the institution was opened in 1848. Later, by virtue of an Act of the Pennsylvania General Assembly (Act of June 30, 1869, P.L. 1276 § 1, 53 P.S. § 16365),*fn19 the trust's administration and the operation of the College were transferred from the City of Philadelphia to the "Board of Directors of City Trusts of the City of Philadelphia".
From the institution's opening to the present day, Stephen Girard's testamentary direction restricting admission to the College to "white male orphans" has been strictly adhered to. This restriction was first challenged in September 1954 when two Negro boys, William Ashe Foust and Robert Felder,*fn20 whose applications for admission to Girard College had been rejected because they were not white, joined in a Petition for Citation in the Orphans' Court of Philadelphia County, for orders directing "the City of Philadelphia, acting by the Board of Directors of City Trusts, to show cause why petitioner should not be admitted to Girard College without discrimination as to race or color". Foust and Felder subsequently filed separate petitions for Citation.
The petitions alleged in paragraph 8 that:
"The rejection by the Board of Directors of City Trusts of your petitioner for admission to Girard College solely because of his race or color violates the 14th Amendment of the United States Constitution and the Constitution of the Commonwealth of Pennsylvania and the statutes of our Commonwealth, and is contrary to the public policy of the City, State and Nation". (Emphasis supplied.)
The Commonwealth of Pennsylvania and the City of Philadelphia which intervened in the litigation in the Orphans' ...