Tennessee Valley Authority v. Tennessee Electric Power Co.

90 F.2d 885, 1937 U.S. App. LEXIS 3981
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 14, 1937
Docket7606
StatusPublished
Cited by17 cases

This text of 90 F.2d 885 (Tennessee Valley Authority v. Tennessee Electric Power Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tennessee Valley Authority v. Tennessee Electric Power Co., 90 F.2d 885, 1937 U.S. App. LEXIS 3981 (6th Cir. 1937).

Opinions

SIMONS, Circuit Judge.

Nineteen corporations in the business of generating, transmitting, and distributing electric energy as public utilities in the area within and contiguous to the Tennessee river basin commenced a suit in the chancery court at Knoxville, Tenn., against the Tennessee Valley Authority, a corporation organized under special act of Congress, and the three directors of that corporation, to restrain acts being performed or threatened under powers claimed to be conferred by the TVA Act (as amended/ 16 U.S.C.A. § 831 et seq.). They allege such acts to be cither unauthorized or conferred by an unconstitutional grant of power. The suit was removed by the defendants to the United States District Court for the Eastern District of Tennessee. There a temporary injunction was granted, and the appeal is from the interlocutory decree. The Georgia Power Company, one of the plaintiffs, being restrained by an in junctional order subsequently issued out of the District Court for the Northern District of Georgia, and the Alabama Power Company, another, similarly restrained by the District Court for the Northern District of Alabama (Ashwander v. Tennessee Valley Authority, 19 F.Supp. 190), withdraw their support of the decree, but the remaining plaintiffs defend it.

The bill charges the defendants with having promulgated a program for the construction, development, and operation of a great federally owned and operated public utility system for the generation, transmission, and distribution of electricity, in all territory within physical transmission distance of the electric generating plants to be constructed under such program. It charges that with or without the authority of the act they contemplate construction of generating plants at 149 power sites on the Tennessee river and its tributaries, the construction of transmission and distribution lines to gridiron the entire area within 250 miles of such plants; that they plan to produce an amount of electric energy greatly exceeding the total consumption of the area, which includes all of the state of Tennessee and a large part of the six neighboring states. It charges that the execution of this program will irreparably injure if not wholly destroy the business and property of each of the plaintiffs, and that the defendants have already performed or are in process of performing a vast number of acts in the execution of their power program, which is being carried out as rapidly as possible. It charges the program itself, and all of the acts done pursuant to it to be unconstitutional and void, and that if the TVA Act purports to authorize such program, it is to that extent also unconstitutional and void. The defendants first challenged the jurisdiction of the court by motion to quash service of the subpoena, and later the sufficiency of the bill by a motion to dismiss. Upon the overruling of both motions they answered, denying the material allegations of the bill and challenging by supporting affidavits the right of the plaintiffs to either permanent or temporary relief. Their appeal not only assails the preliminary injunction, but brings up the jurisdictional and procedural questions decided against them below.

Jurisdiction must, of course, be first examined. The Tennessee Valley Authority is a public agency. By the terms of the statute creating it, its domicile is in Alabama. Therefore it is asserted that under the laws of Tennessee actions against it are local and not transitory, and may be brought only in a court of competent jurisdiction at the place of its domicile, and this notwithstanding the fact that the bill charges lack of legal or constitutional authority for acts being or threatened to be performed in Tennessee.

Section 4 of the Tennessee Valley Authority Act (as amended, 16 U.S.C.A. § 831c), specifically provides that the corporation may sue and be sued in its corporate name. This provision is without qualification. Section 8 (a), 16 U.S.C.A'. § 831g (a) is as follows:

“The Corporation shall maintain its principal office in the immediate vicinity of Muscle Shoals, Alabáma. The Corporation shall be held to be an inhabitant and resident of the northern judicial district of Alabama within the meaning of the laws of the United States relating to the venue of civil suits.”

The laws relating to venue of civil suits are well understood, particularly since the clarification of their interpretation in Lee v. Chesapeake & Ohio Ry. Co., [888]*888260 U.S. 653, 43 S.Ct. 230, 67 L.Ed. 443. The present suit was begun in a state court of Tennessee. Under the authority of section 28 of the Judicial Code (28 U.S.C.A. § 71), it was removed to' that United States District Court within the jurisdiction of which the state court action was pending. Whether a suit may be removed depends upon whether it could have been brought originally in the federal District Courts, which by section 24 of the Judicial Code (28 U.S.C.A. § 41), so far as applicable, have original jurisdiction of all suits of a civil nature, at common law or in equity, which arise under the Constitution or laws of the United States. This being such a case, it could have been brought originally in a federal court. The test of removability is not whether the suit could have been brought in the particular district to which it was removed, but whether it could have been brought at all in a federal District Court. The venue of such suit after removal is not the district in which it might have originally been brought,' but is the district in which the case is pending; for the right to remove is a personal privilege of the defendant, which he may assert or may waive. General Investment Co. v. Lake Shore & Michigan Southern Ry. Co., 260 U.S. 261, 275, 43 S.Ct. 106, 112, 67 L.Ed. 244. No- question of federal jurisdiction here arises by virtue of section 8 (a) of the TVA Act (16 U.S.C.A. § 831g (a), and the laws in respect to venue.

But while venue is waived by removal of a cause from a state into a federal court, want of jurisdiction in the state court is not cured thereby,- but may be asserted after removal is consummated. Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 258 U.S. 377, 42 S.Ct. 349, 66 L. Ed. 671; Cain v. Commercial Publishing Co., 232 U.S. 124, 131, 34 S.Ct. 284, 58 L. Ed. 534; General Investment Co. v. Lake Shore & M. S. Ry. Co., supra, 260 U.S. 261, 288, 43 S.Ct. 106, 117, 67 L.Ed. 244. It is first urged on behalf of the appellants that they may not be sued in Tennessee because no local statute specifically authorizes suit against a public agency. Section 8676, Shannon’s Code 1932, however, provides that any corporation claiming existence under the laws of the United States is subject to suit in Tennessee to the same extent as are local corporations. Denial of the applicability of this statute, based upon the rule that statutes which refer to corporations in general terms do not apply to public agencies, is not persuasive, for the Tensessee statute speaks not in general terms but with precision.

The principal challenge, however, to the jurisdiction of the Tennessee court is based upon the fact that the TVA Authority, being a public agency domiciled in Alabama, may not under the laws of Tennessee be sued in that state since actions against a

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Cite This Page — Counsel Stack

Bluebook (online)
90 F.2d 885, 1937 U.S. App. LEXIS 3981, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tennessee-valley-authority-v-tennessee-electric-power-co-ca6-1937.