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Nat'l Mut. Ins. Co. v. Tidewater Transfer Co. - 337 U.S. 582, 69 S. Ct. 1173 (1949)

Rule:

28 U.S.C.S. § 41(1) provides that the district courts shall have original jurisdiction of all suits of a civil nature, at common law or in equity where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and is between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory.

Facts:

Petitioner commenced this action in the United States District Court for Maryland on a claim arising out of an insurance contract. No cause of action under federal laws or the U.S. Constitution was pleaded. Jurisdiction was predicated only upon an allegation of diverse citizenship under 28 U.S.C.S. § 41(1). This statute provided that district courts shall have original jurisdiction of all suits of a civil nature between citizens of different states or citizens of the District of Columbia where the controversy exceeded the sum of $3,000 exclusive of interest and costs. The district court concluded that while the diversity of the parties met jurisdictional requirements under the statute, it did not comply with diversity requirements of the U.S. Constitution as to federal jurisdiction. The Court of Appeals for the Fourth Circuit affirmed. The United States Supreme Court granted certiorari review.

Issue:

Was 28 U.S.C.S. § 41(1) (1946) constitutional as a permissible exercise of congressional power under U.S. Const. art. I?

Answer:

Yes

Conclusion:

The United States Supreme Court then held that 28 U.S.C.S. § 41(1) was constitutional as a permissible exercise of congressional power under U.S. Const. art. I, and it reversed the judgment of the appellate court. Congress was empowered to put federally administered justice within the reach of the citizens of the District of Columbia against citizens of another state.

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