Wheeler v. City and County of Denver/Opinion of the Court

The merits of the controversy are not involved. The sole question is whether there was collusion to give the court jurisdiction of the cause; and, of course, the existence of collusion implies the existence of fraud. Is fraud shown? Between the parties there is the requisite diversity of citizenship, requisite amount, and the complainants (appellants here) had such relation to the matters charged as to give them a standing to litigate their legality. They were solicited to bring the suit, however, and they were indemnified against liability for cost and counsel fees. Was this enough to make their proceeding collusive? To answer the question we must keep in mind the situation. The utilities commission was alleged to be an unconstitutional body and its expenditures illegal. Indeed, this had been decided; but injury from its action still impended, or was believed to impend. Litigation was threatened or believed to be threatened in the state courts; in other words, there was a purpose to change the forum of the litigation and possibly its results. The belief may have been unfounded; it cannot be said that it was not honestly entertained. Against these circumstances what is opposed? It is said that the water company was the party who desired the suit to be brought, and that the suit was brought for its benefit, and at its instance and request, and upon an express contract to pay the costs of litigation and counsel fees which might be incurred. A great deal of this is assumption; the water company admits ITS INTEREST, BUT THE APPELLANTS ALSO HAVe interest; but mere unity of interest or difference in its degrees is not enough; there must be an illegal purpose. If the interest was real and the peril which threatened was real or thought to be real, unity of interest or contribution of expenses cannot be regarded as necessarily proof of collusion. Chicago v. Mills, 204 U.S. 321, 51 L. ed. 504, 27 Sup. Ct. Rep. 286. And the cases are numerous in which it has been decided that the motives of litigants in seeking Federal jurisdiction are immaterial. Blair v. Chicago, 201 U.S. 400, 50 L. ed. 801, 26 Sup. Ct. Rep. 427, and cases cited.

Cashman v. Amador & S.C.anal Co. 118 U.S. 58, 30 L. ed. 72, 6 Sup. Ct. Rep. 926, is relied on. The case is distinguishable from the case at bar. Cashman was an alien and brought suit against the canal company, claiming that his land was injured by the debris thrown on it by the working of certain mines by hydraulic process. The suit was instituted at the instance of the county of Sacramento, the county not being able to bring suit in the Federal court. There was a cause of action in Cashman; there was a disability on the part of the county to sue in the Federal court in its own name. So far there is resemblance to the case at bar, but there are material differences between the agreement in that case and the agreement between the parties in this. The county was to pay the expenses, engage counsel, and indemnify Cashman against all charges and expenses, and he stipulated 'not to compromise, dismiss, or settle the said suit without the consent of the county of Sacramento, and to allow said county and the attorneys aforesaid in its behalf to manage and conduct the said suit to the same extent and in the same manner as if such suit had been commenced by and was prosecuted in the name of the said county of Sacramento.' It is manifest, as this court said, from the very beginning, the suit was in reality the suit of the county, with a party plaintiff 'collusively made' for the purpose of creating a case cognizable 'by the circuit court of the United States.' In other words, as was said, the 'dispute and controversy' which was 'involved' was nominally between Cashman, an alien, and the defendants, citizens of California, but was 'really and substantially' between one of the counties of California and citizens of that state, and thus not 'properly within the jurisdiction' of the circuit court.

The case at bar has no such features. It is not under the control of the water company. It was brought by appellants, they having a justiciable controversy, well or illfounded, and which it was desired to be determined in a Federal court, they being nonresidents of Colorado and citizens of other states.

It is true, by the decision of this court in Denver v. New York Trust Co. 229 U.S. 123, 57 L. ed. --, 33 Sup. Ct. Rep. 657, the merits of the controversy have been decided against them, but they must be judged as of the time their suit was begun; and, so judged, we think the suit was not collusively brought, and should not have been dismissed for want of jurisdiction. The decree dismissing it is therefore reversed.

Mr. Justice Day dissents.