Testa v. Katt

Brief Fact Summary

Testa (Plaintiff) sought treble damages in Rhode Island state court for Katt’s (Defendant) violation of the Federal Emergency Price Control Act for the automobile Defendant sold to him above the ceiling price.

Synopsis of Rule of Law

A state court cannot refuse to enforce a right arising from federal law for reasons of conflict with state policy or “want of wisdom†on Congress’s part.

Facts

Under the Emergency Price Control Act, anyone who sold goods above the price ceiling on those goods was liable to the buyer for treble the overcharge plus attorney’s fees.  The federal act created a right of action not only in federal court, but also in state court.  In 1944 Testa (Plaintiff) purchased an automobile from Katt (Defendant), a dealer, for $1,100, which was $210 above the ceiling price.  Plaintiff sued under the act in Providence, Rhode Island, in the State District Court.  He was awarded the full amount of damages possible under the act.  On appeal to the State Superior Court, damages were reduced to the amount of overcharge plus fees.  The State Supreme Court reversed on grounds that the federal statute was penal, and that it did not need to enforce penal laws of a government foreign in the international sense.  It held that because the United States was foreign in the “private international†sense, it did not need to enforce the federal act.  Testa (Plaintiff) appealed.

Issue

Can a state court refuse to enforce a right arising from federal law for reasons of conflict with state policy or “want of wisdom†on Congress’s part?

Held

(Black, J.)  No.  A state court cannot refuse to enforce a right arising from federal law for reasons of conflict with state policy or “want of wisdom†on Congress’s part.  The Supremacy Clause of the Constitution provides that the Constitution, federal laws, and treaties are the supreme law of the land, that the judges in every state are bound by that supreme law, regardless of any state law, Constitution, or policy to the contrary.  “The obligation of states to enforce . . . federal laws is not lessened by reason of the form in which they are cast or the remedy which they provide.â€Â  For a state to say that federal policy being in conflict with its own prohibits enforcement of the federal act is to ignore the policy Congress backed for all the people and all the states.  Rhode Island’s failure to enforce the federal act violated the Supremacy Clause and requires reversal.  Reversed and remanded.

Discussion

A state court is required to entertain a cause of action created under federal law that provides jurisdiction in state courts.  States may not discriminate against rights that arise under federal laws.  Despite the rule of this case, the question of where Congress obtained the power to require state courts to exercise jurisdiction is left unanswered.  Some suggest the Necessary and Proper Clause as the source for such power while others have supposed it to come from the power of Congress to establish inferior courts.