Kline v. Burke Construction Co.
260 U.S. 226 · Supreme Court of the United States · 1922
Facts
The Burke Construction Company, a Missouri corporation, entered into a contract with petitioners, citizens of Arkansas, to pave certain streets in Texarkana. The Construction Company subsequently brought an action at law against the petitioners in federal court for breach of this contract. Later, the petitioners instituted a suit in equity against the Construction Company and its sureties in an Arkansas state chancery court, alleging the company abandoned the contract and seeking an accounting and $88,000. Both actions concerned the same contract and sought only money judgments, making them actions in personam.
Procedural history
The Burke Construction Company initiated an action at law in the United States District Court for the Western District of Arkansas, which resulted in a mistrial. Subsequently, petitioners filed an equity suit in an Arkansas state chancery court, which was removed to the US District Court by the Construction Company but then remanded to the state court. After the federal mistrial, the Construction Company filed a dependent bill in the US District Court seeking to enjoin the state court suit. The District Court denied the injunction, but the Circuit Court of Appeals for the Eighth Circuit reversed this decision, instructing the District Court to issue the injunction, leading to this writ of certiorari.
Issue
Can a federal court enjoin the prosecution of a concurrent in personam suit in a state court, even if the federal court first acquired jurisdiction over the same subject matter and parties?
Holding
No, a federal court cannot enjoin a concurrent in personam suit in a state court. The Circuit Court of Appeals' decree, which had instructed the District Court to issue such an injunction, is reversed.
Rule
Section 265 of the Judicial Code generally prohibits federal courts from granting injunctions to stay proceedings in state courts, with an exception for bankruptcy cases. While federal courts may enjoin state court proceedings where the federal court first acquired jurisdiction over the subject-matter (res) and the state action would impair that jurisdiction, this rule applies only to actions in rem. For actions strictly in personam, seeking only a personal judgment, the pendency of a prior action in one court does not preclude a subsequent action for the same cause in another jurisdiction, as such actions do not involve control of a specific thing and thus do not impair the other court's jurisdiction. The right to invoke federal court jurisdiction based on diversity is statutory, not a direct constitutional right, and does not grant supremacy over concurrent state court jurisdiction in in personam cases.
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