STATE FARM FIRE & CAS. CO. v. TASHIRE
Legal provision: 28 U.S.C. 1335
Argument of Nick Chaivoe
Chief Justice Earl Warren: State Farm Fire & Casualty Co. et al., Petitioners, versus Kathryn Tashire et al.
Mr. Nick Chaivoe: Mr. Skopil has completed his argument Your Honor.
My name is Nick Chaivoe for the respondent.
Chief Justice Earl Warren: Mr. Chaivoe?
Mr. Nick Chaivoe: Mr. Chief Justice, may it please the Court.
As Mr. Skopil indicated in his opening argument the two primary problems involved here and which I am going to discuss the question of jurisdiction which is two-pronged.
One is question of jurisdiction over the subject matter of this suit, and secondly the question of jurisdiction of the persons.
It is the respondent's position in this case that whether or not the persons injured in the Greyhound bus, the 35 persons who were injured in the Greyhound bus as a result of this accident had a right to proceed against the insurance carriers under the case of Brillhart versus Excess Insurance Companymust be decided according to the laws of the state and it should be pointed out that the State of Oregon as stated by the Ninth Circuit Court of Appeals has no direct action statute permitting a cause of action to be brought against the insurance carriers until after judgment, that is judgment against the person carrying the coverage.
Furthermore the statute State of Oregon is even more restrictive.
There are two statutes Oregon revised statute 23230 which states that only after judgment is secured against the assured may the individual then proceed against the insurance carrier.
The second statute 730 ORS 736.320 sets forth that bankruptcy does not relieve the insurance carrier of its responsibility.
That after judgment is unsatisfied for 30 days then the person securing the judgment may proceed against the insurance carrier.
These are the only two statutes in the State of Oregon committing recovery against an insurance company arising out of a casualty of this nature.
We submit then that based upon the laws in State of Oregon there is no subject matter jurisdiction here.
The injured persons in the Greyhound bus are not claimants under the interpleader statute 1335.
Justice Hugo L. Black: May I ask you [Inaudible] state, what will be the practical consequences to your plan if you lose your position here?
Mr. Nick Chaivoe: Please the Court, I have clients in Los Angeles, in California one is a paraplegic who was unable to move without attendants who would have to be required come from California to Oregon in order to have his matter tried before the court.
I have a client in Montana, who would have to come from Montana in order to have this case tried in Oregon.
Justice Hugo L. Black: But they are not obtained on account of convenience and necessity?
Mr. Nick Chaivoe: We have moved for a change of venue Your Honor, but that point has never been reached by the Oregon District Court because of the District Court’s position on the restraining order.
We filed a interlocutory appeal under 1292 (b) and the circuit court then took jurisdiction on this matter has -- has since come up as a result of the jurisdiction of the decision of the Circuit Court of Appeals.
The question of venue has never been argued in the Oregon Courts.
The Court in Oregon feeling that before they proceeded any further in this matter we should wait for the final determination of the whether or not interpleader would like.
Justice Hugo L. Black: Aside from that inconvenience that you have mentioned what are the other adverse factual consequences to your client that you foresee?
Mr. Nick Chaivoe: Your Honor we foresee one, the denial of right of trial by jury.
As far as we can determine --
Justice Hugo L. Black: Why would that follow?
Mr. Nick Chaivoe: This is a matter in equity Your Honor and we believe that once equity takes jurisdiction over the case that there is no right of trial by jury traditionally in equity.
The interpleader statute thus has not have provision for trial by jury and I believe there is one case and I am not certain the exact title, Signal Oil case which I believe supports my position that once in equity, no right of trial by jury exists.
Justice Hugo L. Black: You think that this would amount right to try the case although there was approved fund, which the court without a jury can distribute among those who are claimants to it.
Mr. Nick Chaivoe: This is our interpretation of what would occur Your Honor.
We have, we’d have a mass trial of 35 persons claims perhaps 40 persons if we include the bus driver and the driver or the owner of the pick up truck, its somewhere between 35 to 40 persons involved in one mass trial without a trial by jury without the individual damages of each person being presented as we feel to a jury and we feel should have a constitutional right to trial by jury under the United States Constitution and under Constitution of State of Oregon.
Justice Hugo L. Black: Aside from those are there any other adverse consequences which you foresee?
Mr. Nick Chaivoe: Yes Your Honor, I see not to my own clients.
I do see --
Justice Hugo L. Black: For claimants --
Mr. Nick Chaivoe: Relative to people in my -- in this particular case I do see however a tremendous danger to the right of trial by jury in all multiple injury cases in the future where the injuries might exceed the policy limits that the insurance carrier has.
Justice Mr. Justice Bernnan: But how is that, I don’t quite follow you.
Your clients would have a course of action against whom?
Mr. Nick Chaivoe: We have cause of action against Clark, the driver of pick up truck.
Justice Mr. Justice Bernnan: Clark has been insured of --
Mr. Nick Chaivoe: The insured of insured of State Farm.
Justice Mr. Justice Bernnan: Yes.
Mr. Nick Chaivoe: Yes Your Honor and again we also feel we have a case course of action against Greyhound Lines, now this is other portion.
Justice Mr. Justice Bernnan: I don’t understand how you would be denied a right of trial by jury only because the insurance company insuring Clark puts its money in the court, why is that and why your right of trial by jury on the issues of negligence and damages as against Greyhound?
Mr. Nick Chaivoe: Because Greyhound has been joined interpleader action Your Honor and they have also obtained a temporary restraining order restraining us from proceeding with any cause of action in any court in the United States against Greyhound or their driver Nauta.
We are in position where we can't do a thing.
Justice Mr. Justice Bernnan: I am talking now to the trial by jury court.
Have you denied a right to trial by jury against --?
Mr. Nick Chaivoe: If the Court allows Greyhound’s petition to be involved to stay within the interpleader which is what they have petitioned for to go along with State Farm to have their cause determined at the same time, it seems to me that --
Justice Mr. Justice Bernnan: Greyhound has no claim on the – well they do have an independent claim on this fund but that’s their cause of action whereas your cause of action I frankly can't see how you be denied a right trial by jury not only against Greyhound but even against Clark?
Mr. Nick Chaivoe: Your Honor they have stated all proceeding with this across they even has against Greyhound.
In this case they have stayed all proceedings against Greyhound as well as against Clark.
We can't we – under the order of District Court of State of Oregon.
Justice Mr. Justice Bernnan: Then stay all proceedings elsewhere, but has the trial judge here has said you do not have a trial by jury on your claim against Greyhound or Clark for that matter?
Mr. Nick Chaivoe: He has not indicated which way he is going to do.
As a matter of fact the original trial judge is no longer sitting Your Honor.
He has resigned from the bench and we have not been before any other court, any other judge on this matter up to that time Judge Kenny (ph) has heard a few matters, but he has held everything in abeyance until this Court makes its final decision.
Unknown Speaker: The district is presided by [Inaudible]
Mr. Nick Chaivoe: Judge Hughes, Your Honor.
Chief Justice Earl Warren: Might there been a injury because of different wrongful death statutes?
Mr. Nick Chaivoe: Yes Your Honor that might be.
California and Washington both have unlimited recovery of wrongful deaths.
Oregon has a $25000 limitation.
Had the cases brought to Oregon the chances are that the court might apply the law of State of Oregon as a measure of damage rather than the law of State of California.
That certainly be the difference the amount of recovery to be had.
Justice Hugo L. Black: Well I am thinking to say that Oregon has a limited recovery?
Mr. Nick Chaivoe: $25000 yes Your Honor.
Justice Hugo L. Black: So that to that extent you would not suffer, would you?
Mr. Nick Chaivoe: As to Greyhound Lines we might, not as to State Farm which has limited policy.
Justice Hugo L. Black: Of course you might get a case trial on the state that has no limitations to the amount of recovery?
Mr. Nick Chaivoe: That is correct Your Honor.
We get to plead the file in California where many most of the cases that have been filed are filed there will be unlimited recovery in death case.
Chief Justice Earl Warren: But under the restraining order you cannot now file a suit in California, is that right?
Mr. Nick Chaivoe: Your Honor we had the restraining order lifted for the purpose of being allowed to file in order to toll the statute limitations of California which had only one year statue.
So the cases are filed, but we are limited from proceeding in the court.
We can't go no further with the cases.
I see my time is up Your Honor.
Mr. Griswold and I split our time and with the permission of the Court I will allow Mr. Griswold to proceed.
Argument of James Griswold
Mr. James Griswold: Mr. Chief Justice may please the Court.
As Mr. Chaivoe indicated to the Court the basic grounds of our being here two-pronged, the question of jurisdiction.
We feel that we are representing these clients and have the obligation of presenting this issue to the Court.
Unknown Speaker: [Inaudible]
Mr. James Griswold: We are yes Your Honor I am that’s correct Mr. Chaivoe’s interest and mine here are identical.
Unknown Speaker: [Inaudible]
Mr. James Griswold: That’s correct Your Honor.
If the Court passes on this question of jurisdiction it may not reach these other things as to jury trial.
In our case for these clients of course an affirmance of the Ninth Circuit would solve these problems.
Actually the problems are much more far reaching than the question of service upon the Canadian and this I think is well borne out by the other two decisions that are matters, cases that are now pending, cases that have been presented to the District Court in Oregon, as presented to this Court by the brief amicus curiae and the case of Travelers Insurance versus Greyhound out of Louisiana.
We have given the citation in our brief of the Travelers case.
For the Court’s information that the matter has been taken to the Fifth Circuit, oral arguments were held on February 1st, this is the Travelers versus Greyhound case.
The primary problem that concerns us in the overall picture is this question of a jury trial.
What kind of a jury trial if any would be obtained by these people if interfered –
Justice Hugo L. Black: Suppose they have no jury trial problem, how would you feel that?
Mr. James Griswold: How would I feel about that?
Justice Hugo L. Black: This case.
Mr. James Griswold: If a jury trial was granted I then would ask the Court what kind of a jury trial?
Is this were 35 attorneys representing 35 plaintiffs would appear in one trial before the Court on liability, or one trial before the Court on the question of damages as to these people, one jury for all of these issues or would there be separate jury trials each -- for each party, each injured person on the question of liability and upon the question of damage.
Justice Hugo L. Black: Assuming you could get separate jury trial precisely as you could get in state courts in each of the cases how would you feel about this transfer if that were true?
Mr. James Griswold: The only damage that I could then see from a selfish point of view for the injured people would be that they could not then choose -- make the choice of forum that they would presently have if it were not for interpleader.
That the residents in the State of Washington, the Longview case is presently on file in the General Fire versus Greyhound, they could not proceed in Longview, Washington.
The residents of the State of California could not proceed in California.
This would be the damage or the injury.
In a personal injury case of course the choice of forum is most important to the injured party. And I say this because they have the right to choose their Attorney that will represent them rather than a trial committee.
They most often will hurry to their homes after an injury and seek the attention of their family doctor. The cost of taking depositions or having their doctors travel a distance to the place of trial could be substantial.
These are the ramifications of taking these people from so many states and so many of them and bringing them all together in one state Oregon, California, Washington whatever it might be or it could have been possibly except for the policy defense here, it could have been Montana.
So it isn’t just a grant or denial of a jury trial.
It's a grant or denial of all of these other aspects which accompany a jury trial and speaking for the plaintiffs in this cause and I feel that I am speaking for plaintiffs in the Louisiana bus accident and the plaintiffs in the Grants Pass Oregon accident.
Interpleader in this type situation, even with an individual jury trial for each party injured, if through interpleader would have necessity be in one Court in one jurisdiction and would cause additional expense and additional delay.
Justice Abe Fortas: I am not sure sir that I quite understand your theory then as to what the interpleader statute means.
Is it your theory that the interpleader statute means that in this case State Life couldn’t deposit the principal of its policy in a Court and that judgment could not be obtained against State Life in any other court, although the plaintiffs would be free to bring their actions in any other court and I have to say that.
Is that your theory of what it means?
Mr. James Griswold: No, I don’t believe that I would approve that statement Your Honor.
The interpleader proceeding means that everybody is brought to -- in my mind, everybody is brought to one Court, the appropriate restraining orders are entered preventing them from doing anything other than in that Court and if in this case by their complaint if it's found that there is insurance coverage that money would then be deposited in Court and State Farm will then walk away.
This of course is what they want.
Justice Abe Fortas: Money is deposited at the outset, isn’t it?
Mr. James Griswold: Yes that’s correct, (Inaudible) yes.
Justice Abe Fortas: Now well if that is so then what you’re telling us is that all of these consequences that you believe to be adverse, follow on necessity once it is determined that State Life may bring a proper interpleader action.
Mr. James Griswold: Yes and there this is additional consequence Your Honor.
Justice Abe Fortas: You mean there no -- is what I say here right?
Mr. James Griswold: Basically yes, Your Honor.
Justice Abe Fortas: Now if that is so then how do you dispose of the language in the interpleader statute saying that two or more adverse claimants -- saying that an interpleader action maybe brought where two or more adverse claimants et cetera are claiming or may claim to be entitled to such money and property?
Mr. James Griswold: Well the question Your Honor under the Bill Hart (ph) case is whether or not under the Oregon law these people are claimants.
Justice Abe Fortas: May be claimants.
Mr. James Griswold: Well its claimants who are claiming, or may claim.
The Ninth Circuit Court held that these people in this position in an action arising out of tort were not claimants within the meaning of the Interpleader Act because they could not be claimants against this petitioner in Oregon State Farm.
A distinction which I must make in this situation is the duties and the responsibilities of this petitioner, State Farm, as compared to the duties and the responsibilities the majority of the Interpleader proceedings.
I'm talking about the life insurance companies, I'm talking about the trust companies, the bond companies, the surety broker, bonds on broker surety bond.
In these situations the person that is obligated to make payment of money has only one obligation and that is to pay that money and two or three people claim that from him, he doesn't know which way to turn so the interpleader statute protects him, he plays into court in that ends it.
State Farm has two obligations under this contract.
When they sell this insurance policy, they have several hands out receiving the money.
This comes in to cover the cost of claims.
They have a handout to cover the agency premium.
Also included in this is the hand that covers the cost of defense, because they have in this contract the duty and the obligation to defend all the lawsuits brought against their assurers.
Now selfishly speaking we are not interested as to whether State Farm’s assurers are by protected by State Farm or not on the face of it, but basically we are when there is a limited policy as here --
Justice Abe Fortas: The problem there is, since it mirrors some section or sub section (a) of the Interpleader statute expressly lists policy of insurance?
Mr. James Griswold: That’s true, yes it does.
Justice Abe Fortas: And is there anything in the legislative history or elsewhere that qualifies that?
Mr. James Griswold: My answer is not to my knowledge Your Honor.
The only qualifications of that language are the decisions of the various District and Circuit Courts which are cited in the briefs.
Some of these Courts say it doesn't apply in this of type situation others have said that it does.
I started to indicate to the Court the interest we do have in State Farm defending its insured, it’s assured and that is that if there are funds, individual funds of the assured and actions are maintained against him, without the insurance defense the providing of a defense for the assured, his own individual funds would have to be used to retain counsel and court cost and this in a case of this nature would becomes substantial and any funds that the individual defendant might have which would normally under judgments shall I say be available to the injured parties would be spent in performing a duty, which we feel or performing the function of defending this case which we feel is the duty of State Farm.
Now there are we feel --
Justice Byron R. White: Has State Farm asked the court to review the [Inaudible]
Mr. James Griswold: State Farm in their complaint has said one we have the policy defense.
They have said we don’t feel we have the duty to defend for that reason.
They say also if we have the duty and if there is liability here are the $20,000 we would like to be relieved of the duty of defending, this is in the complaint and in the prayer.
Justice Byron R. White: I would think – you have to take the insured that [Inaudible]
Mr. James Griswold: To my knowledge Your Honor the insured has not made an appearance in this cause.
Now I would agree -- I would think he would be most unhappy.
He is -- he is left completely unprotected if this were to happen.
Justice Byron R. White: [Inaudible]
Mr. James Griswold: No, no.
This matter comes to this Court very early in the pleading stage.
The restraining order was entered.
Greyhound filed a motion to dissolve the restraining order and to dismiss the action and then withdrew that motion.
Now it says it would be convenient if they are permitted to come in.
We filed a motion to dissolve the restraining order and to dismiss.
This was denied by the trial court and the Ninth Circuit courts’ opinion.
Justice Byron R. White: As I understand your opponents, their position is that interpleadership lie not only where the claims may exceed the policy limits, but even though they didn’t, if there are multiple claimants and interpleadership lies solely to solve the problem of multiple litigation rather than multiple liability, that you--
Mr. James Griswold: Your Honor I don’t believe this is their position, I think their position is that they have right to Interpleader only if they can show.
Justice Byron R. White: [Voice Overlap]
Mr. James Griswold: The claims will exceed the amount of the policy which they have done here.
Justice Byron R. White: Do you know of any reason why if Interpleader was permitted in this case it shouldn’t be permitted also in the case where there is simple multiple claims?
Mr. James Griswold: Well, the basic purpose, the foundation for Interpleader is to remove the danger to the petitioner in an Interpleader proceeding from possibly being held for more than their contractual duty.
A life insurance company, a suit for $ 10,000 in New York and a policy in 10,000 in California.
Interpleader permits them to bring both people in one court and they only have to pay the one $ 10,000.
This is one of the primary functions of interpleader as I read the decisions and the works by Professor Chapman.
So if it would be impossible or if the petitioner and Interpleader could not show that the claims exceed the amount of the fund if I may use that expression, I don’t believe they would be entitled to Interpleader at all.
Justice Byron R. White: Now I'd this a -- if you limited Interpleader to this situation you describe it, is this the recurring situation, is this frequent?
Mr. James Griswold: I would basically say no it has not been frequent up to now.
The cases are sparse on this point.
Since this matter has come into our office there have now been three involving Greyhound only and yet I can’t help but comment that I see in the paper or on television of a lady that caused the death of several children in the state -- in New England, I don’t recall the state.
I think there was also a school bus accident with several injuries and I believe some deaths within the last few years -- within the last few weeks.
I think as we grow and as our highways fill with vehicles that carry more and more people this problem will become more and more common.
The situation we face here is an attempt to develop this particular law, this theory or rule of law and I think that it’s gone beyond bounds already and I’m thinking of the case as presented to this Court in the brief amicus curiae.
If the Court will recall the contents, this would indicate that Greyhound Incorporated owns Greyhound Lines and owns an insurance company.
The insurance company had a $ 500,000 policy on Greyhound Lines.
They have filed a similar matter with it being a single vehicle accident that happened in Oregon.
I can see as indicated in brief amicus curiae a possibility that the insurance programs as they might develop in the future would make efforts to take advantage of this situation.
We indicated in our brief that if interpleader is granted there would appear that the result reached in Travelers Indemnity versus Greyhound would be an appropriate relief.
This is a limited restraining order which is the thing that shall I say damages or hurts the injured people in an interpleader.
What it does is prevent these people from executing on judgments, executing against the insurance carrier, but they may proceed as they wish to obtain these judgments.
Justice Potter Stewart: Of course to the point of view of the insurer, the insurance carrier this -- your -- that solution wouldn't at all relieve him of the duty of defending every one of these cases in courts around various states, would it?
Mr. James Griswold: No it would not.
Justice Potter Stewart: Despite the small amount is all about liability --
Mr. James Griswold: That's correct, that's correct.
Of course when you asked would it relived his duty to defend I asked --
Justice Potter Stewart: Because I know in this case he claims he has not duty because --
Mr. James Griswold: No I don’t mean this Your Honor.
I ask whether or not under that policy he has any right to be relived of that duty.
This is the question that I ask and I submit no, that he is duty bound that he cannot take advantage of this situation, at least he assured on his own and avoid the defense of these cases.
Justice Potter Stewart: You think the liability with he undertook when he insured it undertook when it ensured was even though the limit for damages was $ 20,000 you think that sky was the limit so far as the duty of spending money to defend the insured and maybe 100 different lawsuits in 50 different states, that’s your point.
Mr. James Griswold: My answer has to be yes.
Justice Potter Stewart: I don’t mean I disagree with you I just --
Mr. James Griswold: My answer has to yes.
I don’t like the expression sky is the limit, but my answer is yes to that question.
This is their obligation.
This is should if it is not now, it should be build into their premium rating system because we can reach a point here Your Honor where whenever we have an out of state insurance carrier involved in accident with two or three people in an automobile, immediately we are an interpleader.
We get back to my question of a jury trial.
The convenience of the party, this happens in Oregon interpleader’s filed in Oregon.
We get back to our jury trial and whether or not under the interpleader system.
Of course the Signal Oil case is cited in petitioner’s brief indicates fairly that there is no jury trial authorized in this kind of a proceeding because it is an equity, but assume that, that rule is modified by this Court in this matter, still I question whether it would be in fact the jury trial is guaranteed by our Oregon Constitution.
I have just a very few moments left that might be the court if there are any other questions that I’ve not answered or not touched on.
Chief Justice Earl Warren: Mr. Chaivoe I would like to ask you one question about the scope of this restraining order under these circumstances.
Assume that as a result of this accident there were suits filed in each of the Western states that have different wrongful death statutes and so forth and would the insurance company if, If we affirm this judgment, would the insurance company have the right to choose its own forum for this purpose and then compel everyone to go to that one forum rather than the forum that had chosen for their lawsuit?
Mr. James Griswold: In interpleader yes and this is what’s happened in all three of these Greyhound cases rather, the answer is yes, they have done.
I see my time is up thank you very much.
Chief Justice Earl Warren: Very well.
Argument of John Gordon Gearin
Mr. John Gordon Gearin: Mr. Chief Justice may it please this Honorable Court.
I am appearing on behalf of Greyhound who was --
Chief Justice Earl Warren: Before you go into that argument Mr. Gearin would you, do you agree with Mr. Chaivoe as to the question I just asked him.
Mr. John Gordon Gearin: The question of the Chief Justice must be answered by us in this manner.
They can go anywhere they want to to sue as long as they get jurisdiction, they have that right, but they forget the provisions of 1404 of the judicial code which gives the District Court sound judicial discretion in determining which is the most convenient forum.
Mr. Skopil has advised us that he had to bring this proceeding in the District Court of Oregon is the only state where they could jurisdiction over their assured.
The District Court may exercise its discretion and say no, this case should be transferred to the state where most of the claimants reside, where the accident happened for the convenience of parties and witnesses.
So there is no such thing today as forum shopping in the Federal Courts.
Justice Hugo L. Black: But may I ask you --
Mr. John Gordon Gearin: Yes sir.
Justice Hugo L. Black: Here people will say, have claims in five state we’ll assume.
You mean it under the Statute of Forum Non-Conveniens, a district court where they first tried send those individual cases out to those individual states.
Mr. John Gordon Gearin: To the District Court, yes sir, I do.
Justice Hugo L. Black: It could send them the District Court would have jurisdiction of this intervention and can send California managed case to California, Montana case to Montana and so forth?
Mr. John Gordon Gearin: No sir, the District Court in the exercise of its sound discretion and this is a point which we wanted to point out not only in this point but in other facets of this problem as well that this Court should welcome the jurisdiction.
It should interpret liberally this remedial statute bearing in mind always that it is the convenience of the parties and of the witnesses where the case should be tried.
Justice Hugo L. Black: In a multiple case like this you’ll have a new question arsing, could they transfer the whole case under the Doctrine of Forum non-conveniens, or could they send out, a subsidiary case of the individual who wants to sue the company?
Mr. John Gordon Gearin: Well, I’ll answer this.
The Court has discretion to transfer any case from its own district to another district which would be the most appropriate forum in a case --
Justice Hugo L. Black: That would be the whole case.
Mr. John Gordon Gearin: The whole case sir.
Justice Hugo L. Black: But it could not allow, make a transfer.
California man case and this case California Oregon man’s case to Oregon.
Mr. John Gordon Gearin: No sir, this should be, sir I thought that there should be one case --
Justice Mr. Justice Bernnan: This surely the State Farm’s case against (Inaudible) since Clark, as I understand it could be reached only in Oregon?
Mr. John Gordon Gearin: That is correct.
Justice Mr. Justice Bernnan: So it cannot be transferred.
I thought the provision of the rule was that the transfer may only, maybe made only to a district where the suit might be brought and surely State Farm’s claim against Clark could not have been brought in California or Montana or elsewhere?
Mr. John Gordon Gearin: It could have been brought had Mr. Clark been there.
All the actions could have been brought in the state.
Justice Mr. Justice Bernnan: But in this, but in this situation as I understood State Farm could bring the suit only in Oregon because that’s where Clark lives?
It could not have brought this action in California or Montana, correct?
Mr. John Gordon Gearin: If Clark had been subject to service.
Justice Mr. Justice Bernnan: Well I know but he is not, he lives in Oregon.
Mr. John Gordon Gearin: That is correct.
Justice Mr. Justice Bernnan: That means that if that’s so, then the action could not be transferred from Oregon that is the State Farm’s action against Clark could not be transferred from California or to Montana?
Mr. John Gordon Gearin: It, that may well be, but --
Justice Mr. Justice Bernnan: Isn't that what the rule says?
Mr. John Gordon Gearin: That is the rule, but is there anything inherently wrong in trying this case in Oregon.
The Oregon District Court sits in Medford, Oregon which is about 25 or 30 miles away from the situs of this particular accident.
Justice Abe Fortas: You represent Greyhound, don’t you sir?
Mr. John Gordon Gearin: I do.
Justice Abe Fortas: And if Mr. Clark cannot been insured here Greyhound could have been sued by these plaintiffs, by these plaintiffs in a number of jurisdictions.
Mr. John Gordon Gearin: It could be have been sued in any state in United States, any province of Canada where it does business and we would be faced with 35 different cases clogging the courts.
Justice Abe Fortas: Well you are not the, the Greyhound though is not insured by State Life?
Mr. John Gordon Gearin: We are not.
Justice Abe Fortas: So that what’s happening here is that as a result of the circumstance the State Life insured Mr. Clark.
Greyhound a stranger to that transaction is receiving benefit, you maybe entitled to it, I am not suggesting you are not, but however that maybe your receiving the benefit of this single trial in a forum selected by State Life?
Mr. John Gordon Gearin: That is correct and it is a benefit not only to Greyhound but to the public, to the parties, the claimants, the assured and the insurer as well.
One of the things --
Justice Abe Fortas: Well that just might be, now let me ask you one more question here if I may.
Why does State Life have to bring the action where it can obtain personal service on Clark.
I thought the interpleader statute – that an interpleader action could be filed wherever one of the, or more of the claimants resides?
Mr. John Gordon Gearin: That is under 1335, but this particular action also involves a suit for declaratory judgment by the insurer to determine the initial question of whether or not there was coverage and that particular phase of this proceeding must be brought in the district of Oregon.
The interpleader statute under 1335 gives any district in which one or more of the adverse claimants resides then you -- of the actions which could be in California.
Justice Abe Fortas: Well until that question is decided I suppose there is an additional problem here as to whether there are any adverse claimants?
Mr. John Gordon Gearin: There are adverse claimants Your Honor.
The cases so hold, Adams Underwriters versus Lloyd's and the Revere case.
Because to say that an widow with two children who has lost the breadwinner of the family is not an adverse claimant to an insurance policy that insurers the man who drove over the wrong side of the highway is certainly felicitous in the extreme.
Justice Abe Fortas: I am not saying that that’s what the insurance company says and you just repeat it.
Mr. John Gordon Gearin: No that -- the Court of Appeals in this case held that they were not adverse, but it offends our sense of reality to say that an insurance company does not met with adverse claims when its insured is obviously a tortfeasor, obviously owes this money and there is just a limited fund.
They are adverse one for the other and in this case there are only nine of these 35 claimants who seek to avoid the consequences of the District Court's discretion in this matter.
The rest of the many claimants, some 20 odd in number, have go along with what the District Court has done, because they feel it’s proper.
These small group of claimants seek to take some advantage, undue advantage of the other claimants.
Justice Abe Fortas: Well let me ask you just one more question and I’ll leave you alone.
Do you agree that this case would go to trial without a jury?
Mr. John Gordon Gearin: Absolutely not Greyhound in this case with its answer and cross complaint for declaratory relief interposed a demand for trial by a jury.
Adams and Revere cases holds that you are entitled to a jury.
Justice Abe Fortas: Would the individuals, well would there be individual trials here?
Mr. John Gordon Gearin: That is within the discretion, the sound discretion of the District Court.
Under Rule 42 the court can consolidate cases where they have the same issue of fact and law.
And to think that a District court would for 35 consecutive weeks try one case after the other, the same case, the same witness is ridiculous because the Court would be subject to censor.
The rule was designed, Rule 42 was designed to prevent delays, to have a consolidation of cases where you have the same identical question of fact and law and the same thing involves whether you have a passenger on the left side of the bus or a passenger on the right side of the bus, you still have the identical questions which should be consolidated for trial under the rule.
Chief Justice Earl Warren: Mr. Gearin.
Mr. John Gordon Gearin: Yes sir.
Chief Justice Earl Warren: May I peruse the question of Mr. Justice Black asked you a few moments ago.
Suppose out of these 35 claimants, there was one paraplegic up in Maine, another one down in Florida, another one in California and this order that was made below is in effect.
Could the District Court in Oregon say although we have jurisdiction here under this interpleader, we would transfer the Maine case to Maine, the Florida case to Florida and the California case to California because it would be inconvenient for these paraplegics, to have to come to Oregon to try this lawsuit.
Mr. John Gordon Gearin: I think that the Court might well have the discretion to do so if --
Chief Justice Earl Warren: Does it have the power?
Mr. John Gordon Gearin: I am not prepared to answer that.
I would make this alternative suggestion as a solution because I do not know whether the Court will have the power.
Chief Justice Earl Warren: Have you looked into it?
Mr. John Gordon Gearin: I have not sir.
Chief Justice Earl Warren: Well, don’t you think that’s a very important thing in this case?
Mr. John Gordon Gearin: The most important thing, if it pleases the Chief Justice is the question of liability.
We think that and so far as we’re concerned --
Chief Justice Earl Warren: The question of liability is most important to the Greyhound?
Mr. John Gordon Gearin: And to the claimants as well.
Chief Justice Earl Warren: The question of whether the lawsuit is to be tried might be of great importance to a paraplegic plaintiff as I understand there is in this case?
Mr. John Gordon Gearin: There’s one paraplegic plaintiff Mr. Wood who resides in California.
Now, the case may well be tried to – be sent to California by the District Court if he has the opportunity to exercise that discretion.
Chief Justice Earl Warren: Do you mean the whole 35?
Mr. John Gordon Gearin: Yes that’s where the accident happened.
Chief Justice Earl Warren: I know, but what I’m asking is, can they maintain the jurisdiction over in the Oregon Court and then say Case A shall go to state of Maine, Case B shall go to Florida, Case C shall go to California because of the injustice it would do if those plaintiffs have to come to Oregon.
Mr. John Gordon Gearin: I think not with respect to a segregated trial of liability.
Perhaps with regard to their trial of damages, the Court may well have jurisdiction to say we’ll try a liability here and if there is liability Mr. Wood you may try this case elsewhere because your doctors are in Maine, your doctors are here, you reside here.
Now, that may very well be the situation.
Chief Justice Earl Warren: Half a jury trial?
Mr. John Gordon Gearin: That’s correct because the Court has given broad discretion, it's given these wonderful tools to the Federal rules to bifurcate the trial, to consolidate, to have his pretrial practices and kept them all together.
One further thing that bothers me was a comment by the Court with regard to the varying death limits.
In a suit for declaratory judgment the District Court in which the case is tried in an interpleader action applies the conflicts of law, rule of the State where it says that is the case of Griffin versus Mccoach, a 1946 case in 313 U.S.
The reason text writers however say that it should -- that problem of conflicts of law should be decided by the District Court within the limits of his discretion and that’s one thing that we ask again that this Court extend the jurisdiction to this type of case, how, when, where and the manner in which the discretion is exercised, the jurisdiction is held, is to be determined by the District Court according to the individual case the facts than before it.
This Court should not place a tight and begrudging hand on this statute which says 1335 when there are two more adverse claimants to the same fund.
We are here incidentally, we’re not the petitioner.
Chief Justice Earl Warren: May I ask you this question Mr. Gearin?
If you did not have -- if your Greyhound didn’t have this insurance, would it be entitled to be here today?
Mr. John Gordon Gearin: Greyhound would not be entitled to be here today unless it were named a defendant in a interpleader action.
Greyhound in this accident had no insurance.
They were self insurers under the Interstate Commerce Act.
Chief Justice Earl Warren: I see.
Mr. John Gordon Gearin: We would not have a right if it pleases the Chief Justice to come into Court and say, we -- everyone is suing us all over, we want them all in one basket, we would like to have that right because the expense of defending 35 cases up and down the Pacific Coast and throughout the United States is a tremendous task on the witnesses and parties.
Chief Justice Earl Warren: So the difference -- the only difference between not having the insurance and having it would be that the Oregon Court in this situation has given jurisdiction where otherwise it would not have?
Mr. John Gordon Gearin: That is correct, it would not have --
Chief Justice Earl Warren: Let me ask you this, if that is true and if it does save you an enormous amount of money to have this right, the interpleaders as you exercise it here, would there be anything to prevent Greyhound from just having a nominal amount of insurance and then carrying it’s own to all intents and purposes and have it for the sole purpose of getting them to proceeding of this kind where otherwise would not have it?
Mr. John Gordon Gearin: That’s the suggestion made by the amicus curiae I think it’s entirely fallacious if it pleases --
Chief Justice Earl Warren: No the question isn't fallacious, the answer might --
Mr. John Gordon Gearin: I didn’t mean --
Chief Justice Earl Warren: The answer might be, but how about, what is the answer to it?
Mr. John Gordon Gearin: The answer is one of the economic impossibility.
No businessman would deliberately have low limits in order to take advantage of this and we don’t look forward to this catastrophes.
The insurance is to protect, the insurance is to protect the individual for which a substantial premium is paid and Your Honor misunderstood me, the statements in the brief amicus curiae are absurd.
To think -- to suggest to this Court that a responsible business will deliberately go out and have a small policy of insurance which would expose the company to tremendous liability just to take advantage of something like this.
The insurance is to protect the company against liability imposed by law and if you don’t have insurance I think that the -- it would be poor business practice, it would be unsound economically for a company to have this in mind when they go out to do it, it imputes the bona fides of everyday business and I assure the Court that insofar as Greyhound is concerned, we don’t have it and the stockholders certainly could bitterly complaint against any management that were foolhardy.
Chief Justice Earl Warren: Does every big carrier have the insurance?
Mr. John Gordon Gearin: Most carriers do, there are some who are self insurers, as Greyhound was in the accident we’re talking about here.
Chief Justice Earl Warren: Yes --
Mr. John Gordon Gearin: And we would have no right to interplead.
Chief Justice Earl Warren: They were considered foolish and worthy in assuming this liability.
Mr. John Gordon Gearin: No, but they didn’t setup --
Chief Justice Earl Warren: Would there be anymore if they had a small amount of insurance to go --
Mr. John Gordon Gearin: That would be merely a dummy for impure motives which we didn’t not have and we do not have.
Insurance is to protect the public, and the public should be protected in this case.
Chief Justice Earl Warren: Very well.
Mr. John Gordon Gearin: Thank you sir.