Olberding v. Illinois Central Railroad Company/Opinion of the Court

For present purposes the facts may be briefly stated. The railroad brought suit in the United States District Court for the Western District of Kentucky against Olberding, the owner of a truck, which, while on temporary business in Kentucky, collided with an overpass of the railroad, causing a subsequent derailment. Jurisdiction was based on diversity of citizenship, plaintiff being an Illinois corporation and Olberding a citizen of Indiana. Olberding was apprised of the action through service of process on the Secretary of State in Frankfort, Kentucky, according to the Kentucky Non-resident Motorist Statute. He entered a special appearance and moved that the case be dismissed on the ground of improper venue. The motion was overruled and the case went to trial, resulting in a verdict for the plaintiff. The Court of Appeals for the Sixth Circuit affirmed, 201 F.2d 582. Its ruling on venue, in the situation here presented, is in direct conflict with that of the First Circuit in Martin v. Fishbach Trucking Co., 183 F.2d 53, with which the Third Circuit has recently agreed, McCoy v. Siler, 205 F.2d 498. To resolve the conflict, we granted certiorari. 345 U.S. 950, 73 S.Ct. 867.

This is a horse soon curried. Congress, in conferring jurisdiction on the district courts in cases based solely on diversity of citizenship, has been explicit to confine such suits to 'the judicial district where all plaintiffs or all defendants reside.' 28 U.S.C. § 1391(a), 28 U.S.C.A. § 1391(a). This is not a qualification upon the power of the court to adjudicate, but a limitation designed for the convenience of litigants, and, as such, may be waived by them. The plaintiff, by bringing the suit in a district other than that authorized by the statute, relinquished his right to object to the venue. But unless the defendant has also consented to be used in that district, he has a right to invoke the protection which Congress has afforded him. The requirement of venue is specific and unambiguous; it is not one of those vague principles which, in the interest of some overriding policy, is to be given a 'liberal' construction.

It is not claimed that either the corporate plaintiff or the individual defendant here was a 'resident' of Kentucky. The sole reason why the plaintiff was allowed to bring this action in the federal court of Kentucky was that a consent to be sued in that state was attributed to the defendant. And this attribution was then made the basis of a waiver of his rights under the federal venue provision. Concededly the defendant did not in fact consent. He impliedly consented, so the argument runs, to be sued in the federal court of Kentucky simply by driving his automobile on the highways of Kentucky, which has the familiar statute holding non-resident motorists amenable to suit for accidents caused by their negligent operations within the State.

It is true that in order to ease the process by which new decisions are fitted into pre-existing modes of analysis there has been some fictive talk to the effect that the reason why a non-resident can be subjected to a state's jurisdiction is that the non-resident has 'impliedly' consented to be sued there. In point of fact, however, jurisdiction in these cases does not rest on consent at all. See Scott, Jurisdiction over Nonresident Motorists, 39 Harv.L.Rev. 563. The defendant may protest to high heaven his unwillingness to be sued and it avails him not. The liability rests on the inroad which the automobile has made on the decision of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, as it has on so many aspects of our social scene. The potentialities of damage by a motorist, in a population as mobile as ours, are such that those whom he injures must have opportunities of redress against him provided only that he is afforded an opportunity to defend himself. We have held that this is a fair rule of law as between a resident injured party (for whose protection these statutes are primarily intended) and a non-resident motorist, and that the requirements of due process are therefore met. Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091. But to conclude from this holding that the motorist, who never consented to anything and whose consent is altogether immaterial, has actually agreed to be sued and has thus waived his federal venue rights is surely to move in the world of Alice in Wonderland. The fact that a non-resident motorist who comes into Kentucky can, consistent with the Due Process Clause of the Fourteenth Amendment, be subjected to suit in the approppriate Kentucky state court has nothing whatever to do with his rights under 28 U.S.C. § 1391(a), 28 U.S.C.A. § 1391(a).

This conclusion is entirely loyal to the decision and reasoning of Neirbo Co. v. Bethlehem Corp., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167. There the defendant, a Delaware corporation, was sued by a non-resident of New York in the United States District Court for the Southern District of New York, and we found the venue requirements of what is now 28 U.S.C. § 1391(a), 28 U.S.C.A. § 1391(a) satisfied because Bethlehem had designated an agent in New York 'upon whom a summons may be served within the State of New York.' 308 U.S. at page 175, 60 S.Ct. at page 158, 84 L.Ed. 167. We held that this constituted an 'actual consent' to be sued in New York, not the iess so because it was 'part of the bargain by which Bethlehem enjoys the business freedom of the State of New York'. Ibid. We further held, following Ex parte Schollenberger, 96 U.S. 369, 377, 24 L.Ed. 853, that this consent extended to all courts sitting in New York, both federal and state. Of course this doctrine would equally apply to an individual defendant in situations where a state may validly require the designation of an agent for service of process as a condition of carrying on activities within its borders, and such designation has in fact been made. See Kane v. New Jersey, 242 U.S. 160, 37 S.Ct. 30, 61 L.Ed. 222. But here no such designation was required or made, and hence the Neirbo case has no applicability.

Reversed.