Strawbridge v. Curtiss I. Facts/Procedural Posture: Citizens of Massachusetts sued citizens of Vermont and Massachusetts in a "circuit" court (then the federal trial court). That court dismissed for lack of jurisdiction; appeal to S. Ct.
II. Issue: Must all parties be of diverse citizenship from all adverse parties for diversity jurisdiction to exist in the federal courts? III. Narrow Holding: Dismissal affirmed. No jurisdiction. IV. Broad Holding: The diversity statute as passed by Congress required complete diversity among all adverse parties. V. Reasoning: The Act of Congress conferring jurisdiction said that a diversity suit could be brought "between a citizen of a state. . . and a citizen of another state." The Court interpreted this language to mean that all claimants must be qualified to sue all defendants. Strawbridge establishes the complete diversity rule. In this case the presence of people from Mass on both sides made in void. AN important point is the this case tried to interpret the words of congres; this would not be the result of interpreting the constitution. Mas v. Perry Facts: The plaintiffs are a French man and a Mississippi woman. They were married in Mississippi and then they moved to Louisiana to be grad students. While they were living in Louisiana, the plaintiffs discovered that Perry had been observing them through two-way mirrors in the apartment they were renting from him. The plaintiffs sued and won on the merits. During the trial, the defendant objected to the court’s subject matter jurisdiction, claiming there was no diversity between the parties. The plaintiffs won and the defendant appealed to the 5th Circuit solely on jurisdictional grounds. Issue: Does the federal court have diversity jurisdiction over this matter? Rule: Complete diversity of the parties is required in order for diversity jurisdiction to exist, meaning that no party on one side may be a citizen of the same state as any party on the other side. Analysis: The court looks at Mr. and Mrs. Mas in turn.
The court finds that Mr. Mas was still a citizen of France at the time of the filing of the lawsuit because he had not become a naturalized American citizen. The court finds that Mrs. Mas was domiciled in Mississippi at the time of the suit. Mrs. Mas lived in Mississippi when she married Mr. Mas, and her domicile did not change when they moved to Lousiana because there were not going to be there indefinitely, but only as students. The court refuses to apply the general rule that a wife is domiciled where her husband is domiciled to the case where an American woman marries a foreign man. The court cites a statute, 8 U.S.C. § 1489, which says that an American woman does not lose her citizenship if she marries a foreign man. Conclusion: The court affirmed the trial court’s ruling. Notes and Questions 1. a. If the amount in controversy is greater than $75,000, then yes, 28 U.S.C. § 1332(a)(2) allows diversity jurisdiction over a case where one party is a U.S. citizen and the other is a foreign citizen. b. The theory is that a state court would be more biased against a foreigner than a federal court would. c. If Mas was a permanent resident (had a green card), then he would be considered a citizen of Louisiana for diversity purposes and his suit would fail for lack of subject matter jurisdiction. 2. a. Okay. b. Mrs. Mas was a grad student the whole time she was in Louisiana. The old rule was that you can’t gain or lose a domicile merely by being a student. By the time of the present case and Gordon, this was changing. In Gordon, the court based its opinion on more than just the plaintiff’s attending school. The thing that really swayed that court was the fact that Gordon stated that she intended to remain in Idaho. So if Mrs. Mas doesn’t intend to remain in Louisiana, her domicile is sort of in limbo, but it remains officially in Mississippi. c. Why doesn’t this rule work the other way? That’s so sexist! 3. Okay! Both people sue at once. That’s true in the present case. a. I think what Yeazell is implying is that jurisdiction rests on different parts of § 1332 for the different defendants. I think he’s suggesting that this could be a problem. I guess maybe his idea is that we have two different controversies with two different grounds for diversity jurisdiction. I don’t know what the heck he’s saying. b. There may not be jurisdiction under § 1332(a)(2), but I think there definitely would be under § 1332(a)(3). There would be citizens of
different states, plus a foreign citizen. I don’t really see what Steve is getting at. 4. a. So the constitutional “circle” is bigger than the statutory “circle”, just like in subject matter jurisdiction. b. It would seem that this creates an exception to the rule of complete diversity, but I suppose the true effect would depend on how the statute is interpreted. 5. The statute doesn’t say anything about “citizens of different foreign states” like it does about “citizens of different [U.S.] States”. a. There seems to always have to be at least one American in the mix in order for diversity jurisdiction to lie. b. Randazzo v. Eagle-Picher Industries, Inc. Facts: P sued some corporations for his injuries caused by asbestos. In his complaint, P failed to list place of incorporation or principal place of business for some of the corporations. P's amended complaint also failed to provide this information. Issue: Did the federal court have subject matter jurisdiction based on diversity where the plaintiff fails to provide the place of incorporation or principal place of business of the corporate defendants? Holding: No Rationale: A corporation has dual citizenship. For diversity purposes, a corporation is a resident of the place of its incorporation and the place where it has it's principal business. Both of these places must be diverse from the plaintiff's residency in order to establish diversity jurisdiction. In this case, the plaintiff failed to provide sufficient information to establish subject matter jurisdiction. Example: Lets assume that Yahoo Inc. is incorprated in Delaware and it has its principal place on business in California. A plaintiff from Delaware or from California cannot sue Yahoo in a federal court based on diversity jurisdiction.
J.A. Olson CO. v. City of Winona Facts: P, a corporation, brought a diversity action in a federal court against a Mississippi D. P was incorporated in Illinois and had bank accounts and made all important decisions in Illinois. But its only manufacturing plant and almost all of its employees were based in Mississippi. Procedure: Trial court dismissed for lack of subject matter jrx.
Issue: Was P’s principal place of business Illinois or Mississippi? Holding: Mississippi Rationale: Courts generally use place of activity (here Mississippi) and nerve center (here Illinois) to determine in which place the corporation conducts principal business. Here the court used total activity test to see where the substantial part of P’s business was conducted and the court went with Mississippi. Illinois had P’s bank accounts and many major decisions were made in Illinois. But information supporting these decisions was provided from Mississippi. Also, majority of P’s employees and P’s only manufacturing plant was based in Mississippi. Therefore, Mississippi was P’s principal place of business and hence there was no complete diversity in this case. Note: Corporate defendants was dual citizenship: place of incorporation and the principal place of business. Both of these states of residency must be diverse from the opposing party’s residency in order to maintain a federal claim based on diversity of jurisdiction.
General Rules Test: (1)when considering a corporation whose operations are far flung, the sole nerve center is significant in determining principle place of business. (2) when a business has its operations in one state and executive offices in another, the place of activity is regarded as more significant. (3) However when the place of activity is passive and eth “brain” is in another state the situs of the coproration’s brain is given greater significance.
Belleville Catering Co. v. Champaign Market Place L.L.C.