DiversityofCitizenship: TheBasics

2012DanGoodman Adiversityofcitizenshipcaseisoneoftwotypesofcasesafederalcourtcanhear. Theotherisafederalquestioncase.[Footnote1] Adiversityofcitizenshipcaseisacivilcase,withadollaramountwhichmustbe met,knownastheamountincontroversy.Itisacaseoriginallyfiledinstatecourt thatcouldhavebeenfiledinfederalcourt. Inadiversityofcitizenshipcasethepropercitizenshipmustexistbothwhenthe actioniscommencedatthestatelevelandwhenthepetitionforremovalisfiledat thefederallevel: InGibsonv.Bruce,108U.S.561,itwasdecidedthatundertheactofMarch3d, 1875,c.137,asuitcouldnotberemovedonthegroundofcitizenshipunlessthe requisitecitizenshipexistedbothwhenthesuitwasbegunandwhenthepetitionfor removalwasfiled.Houston&TexasCentralRailroadCompany&Othersv.Shirley: 111U.S.358,at360(1884).
http://books.google.com/books?id=HnIUAAAAYAAJ&pg=PA360#v=onepage&q&f=false

Theprovisionsofthatactarereproducedinthethirdsubdivisionofsection639 oftheRevisedStatutes,anditwasandisessential,inordertosuchremoval,where thereareseveralplaintiffsorseveraldefendants,thatallthenecessarypartieson onesidemustbecitizensoftheStatewherethesuitisbrought,andallontheother sidemustbecitizensofanotherStateorStates,andthepropercitizenshipmust existwhentheactioniscommencedaswellaswhenthepetitionforremovalisfiled. SewingMachineCases,18Wall.553;Vannevarv.Bryant,21Wall.41;BibleSocietyv. Grove,101U.S.610;CambriaIronCompanyv.Ashburn,118U.S.54;Hancockv. Holbrook,119U.S.586;Fletcherv.Hamlet,116U.S.408.Youngv.Parkers Administrator:132U.S.267,at270thru271(1889).
http://books.google.com/books?id=kMQGAAAAYAAJ&pg=PA271#v=onepage&q&f=false

2.Thecasewasnotremovablefromthestatecourt,unlessitappeared affirmativelyinthepetitionforremoval,orelsewhereintherecord,thatatthe commencementoftheaction,aswellaswhentheremovalwasasked,Stevensand MirickwerecitizensofsomeotherStatethantheoneofwhichtheplaintiffwas,at 1

thoserespectivedates,acitizen.Gibsonv.Bruce,108U.S.561,562;Houston&Texas CentralRailwayv.Shirley,111U.S.358,360;Mansfield,Coldwater&c.Railwayv. Swan,111U.S.379,381;Akersv.Akers,117U.S.197.Stevensv.Nichols:130U.S. 230,at231thru232(1889).

http://books.google.com/books?id=SsMGAAAAYAAJ&pg=PA231#v=onepage&q&f=false

Instrictterms,diversityofcitizenshipreferstothestatusofthepartiestoasuit whichisbeingremovedtofederalcourt(circuitcourt)onthisground.Onlyparties thathavearealinterestintheoutcomeofthesuitaretobeconsideredforthis purpose.Nominalpartiesareexcluded. BeingacitizenofaStateoftheUnionisthegeneralcriteria.However,the exceptionisforanalien;thatis,aforeigncitizenorsubject,livinginthiscountryor aboard. Acorporationisacitizenoftwostates,generally.Theoneinwhichitis incorporatedandtheotherinwhichitisheadquartered. Apartnership,oralimitedliabilitycompany,isacitizenofthestatesofwhichits constituentpartners(members)are. AnindividualwhoisacitizenoftheUnitedStatesmustaverthatheorsheisa citizenoftheUnitedStatesandacitizenofaStateoftheUnion,forpurposesof diversityofcitizenship.IfonedoesnotaverthatheorsheisacitizenoftheUnited States,thenthepresumptionwillbethatheorsheisnotacitizenoftheUnited States: Thepetitionavers,thattheplaintiff,RichardRaynalKeene,isacitizenofthe stateofMaryland;andthatJamesBrown,thedefendant,isacitizenorresidentof thestateofLouisiana,holdinghisfixedandpermanentdomicilintheparishofSt. Charles.Thepetition,then,doesnotaverpositively,thatthedefendantisacitizen ofthestateofLouisiana,butinthealternative,thatheisacitizenoraresident. Consistentlywiththisaverment,hemaybeeither. ...AcitizenoftheUnitedStatesmaybecomeacitizenofthatstateinwhich hehasafixedandpermanentdomicil;butthepetitionDOESNOTAVERthatthe plaintiffisacitizenoftheUnitedStates.... Thedecisionsofthiscourtrequire,thattheavermentofjurisdictionshallbe positive,andthatthedeclarationshallstateexpresslythefactonwhichjurisdiction depends.Itisnotsufficientthatjurisdictionmaybeinferredargumentativelyfrom itsaverments. 2

TheanswerofJamesBrownasserts,thatbothplaintiffanddefendantare citizensoftheStateofLouisiana. Withoutindicatinganyopiniononthequestion,whetheranyadmissioninthe pleacancureaninsufficientallegationofjurisdictioninthedeclaration,weareallof opinionthatthisanswerdoesnotcurethedefectofthepetition.Iftheavermentof theanswermaybelookedinto,thewholeavermentmustbetakentogether.Itis thatbothplaintiffanddefendantarecitizensofLouisiana.Brownv.Keene:33U.S. (Peters8)112,at115thru116(1834).

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Also,thecaseofSunPrinting&PublishingAssociationv.Edwards(194U.S.377, 1904). Syllabus: Thefacts,whichinvolvedthesufficiencyofavermentsandproofofdiverse citizenshiptomaintainthejurisdictionoftheUnitedStatesCircuitCourt,arestated intheopinionofthecourt. Opinion: WecometothecontentionthatthecitizenshipofEdwardswasnotaverredin thecomplaintorshownbytherecord,andhencejurisdictiondidnotappear. Inansweringthequestion,whethertheCircuitCourthadjurisdictionofthe controversy,wemustputourselvesintheplaceoftheCircuitCourtofAppeals,and decidethequestionwithreferencetothetranscriptofrecordinthatcourt. HadthetranscriptshownnothingmoreastothestatusofEdwardsthanthe avermentofthecomplaintthathewasaresidentoftheStateofDelaware,assuch anavermentwouldnotnecessarilyhaveimportedthatEdwardswasacitizenof Delaware,anegativeanswerwouldhavebeenimpelledbypriordecisions.Mexican CentralRy.Co.v.Duthie,189U.S.76;Hornev.GeorgeH.HammondCo.,155U.S.393; Dennyv.Pironi,141U.S.121;Robertsonv.Cease,97U.S.646.Thewholerecord, however,maybelookedto,forthepurposeofcuringadefectiveavermentof citizenship,wherejurisdictioninaFederalcourtisassertedtodependupon diversityofcitizenship,andiftherequisitecitizenship,isanywhereexpressly averredintherecord,orfactsarethereinstatedwhichinlegalintendment constitutesuchallegation,thatissufficient.Hornev.GeorgeH.HammondCo.,supra andcasescited. Asthisisanactionatlaw,weareboundtoassumethatthetestimonyofthe plaintiffcontainedinthecertificateoftheCircuitCourtofAppeals,andrecitedto 3

havebeengivenonthetrial,waspreservedinabillofexceptions,whichformed partofthetranscriptofrecordfiledintheCircuitCourtofAppeals.Beingapartof therecord,andpropertoberesortedtoinsettlingaquestionofthecharacterof thatnowunderconsideration,Robertsonv.Cease,97U.S.648,wecometoascertain whatisestablishedbytheuncontradictedevidencereferredto. Inthefirstplace,itshowsthatEdwards,priortohisemploymentontheNew YorkSunandtheNewHavenPalladium,waslegallydomiciledintheStateof Delaware.Next,itdemonstratesthathehadnointentiontoabandonsuchdomicil, forhetestifiedunderoathasfollows:OneofthereasonsIlefttheNewHaven Palladiumwas,itwastoofarawayfromhome.IlivedinDelaware,andIhadtogo backandforth.MyfamilyareoverinDelaware.Now,itiselementarythat,toeffect achangeofoneslegaldomicil,twothingsareindispensable:First,residenceina newdomicil,and,second,theintentiontoremainthere.Thechangecannotbe made,exceptfactoetanimo.Botharealikenecessary.Eitherwithouttheotheris insufficient.Mereabsencefromafixedhome,howeverlongcontinued,cannotwork thechange.Mitchellv.UnitedStates,21Wall.350. AsDelawaremust,then,beheldtohavebeenthelegaldomicilofEdwardsatthe timehecommencedthisaction,haditappeared[Footnote2]thathewasa citizenoftheUnitedStates,itwouldhaveresulted,byoperationofthe FourteenthAmendment,thatEdwardswasalsoacitizenoftheStateof Delaware.Andersonv.Watt,138U.S.694.Bethisasitmay,however,Delaware beingthelegaldomicilofEdwards,itwasimpossibleforhimtohavebeenacitizen ofanotherState,District,orTerritory,andhemustthenhavebeeneitheracitizenof DelawareoracitizenorsubjectofaforeignState.Ineitherofthesecontingencies, theCircuitCourtwouldhavehadjurisdictionoverthecontroversy.But,inthelight ofthetestimony,wearesatisfiedthattheavermentinthecomplaint,thatEdwards wasaresidentoftheStateofDelaware,wasintendedtomean,and,reasonably construed,mustbeinterpretedasaverring,thattheplaintiffwasacitizenofthe StateofDelaware.Jonesv.Andrews,10Wall.327,331;ExpressCompanyv.Kountze, 8Wall.342.SunPrinting&PublishingAssociationv.Edwards:194U.S.377,at381 thru383(1904).
http://books.google.com/books?id=tekGAAAAYAAJ&pg=PA381#v=onepage&q&f=false

IfonedoesnotaverthatheorsheisacitizenofaState,thenitwillbepresumed, thatoneisnotacitizenofaState: Intheoralargumentbeforethiscourt,theinquiryarose,whethersincethe adoptionoftheFourteenthAmendmenttotheFederalConstitutionthemere allegationofresidenceinIllinoisdidnotmakesuchaprimafaciecaseof 4

citizenshipinthatStateas,intheabsenceofproof,shouldbedeemedsufficient tosustainthejurisdictionoftheCircuitCourt.Thatamendmentdeclaresthatall personsbornornaturalizedintheUnitedStates,andsubjecttothejurisdiction thereof,arecitizensoftheUnitedStates,andoftheStatewheretheyreside.Itwas suggestedthataresidentofoneoftheStatesisprimafacieeitheracitizenofthe UnitedStatesoranalien,ifacitizenoftheUnitedStates,andalsoaresidentof oneoftheStates,heis,bythetermsoftheFourteenthAmendment,alsoacitizenof theStatewhereinheresides,andifanalien,hewasentitledinthatcapacityto sueintheFederalcourt,withoutregardtoresidenceinanyparticularState.Itisnot tobedeniedthatthereissomeforceinthesesuggestions,buttheydonotconvince usthatitiseithernecessaryorwisetomodifytherulesheretoforeestablishedbya longlineofdecisionsuponthesubjectofthejurisdictionoftheFederalcourts. ThosewhothinkthattheFourteenthAmendmentrequiressomemodificationof thoserules,claim,notthattheplaintiff'sresidenceinaparticularStatenecessarily orconclusivelyproveshimtobeacitizenofthatState,withinthemeaningofthe Constitution,butonlythatageneralallegationofresidence,withoutindicatingthe characterofsuchresidence,whethertemporaryorpermanent,madeaprimafacie caseofrighttosueintheFederalcourts.AsthejurisdictionoftheCircuitCourtis limitedinthesensethatithasnoneexceptthatconferredbytheConstitution andlawsoftheUnitedStates,thepresumptionnow,aswellasbeforethe adoptionoftheFourteenthAmendment,is,thatacauseiswithoutits jurisdictionunlessthecontraryaffirmativelyappears.Incaseswhere jurisdictiondependsuponthecitizenshipoftheparties,suchcitizenship,orthe factswhichinlegalintendmentconstituteit,shouldbedistinctlyandpositively averredinthepleadings,ortheyshouldappearaffirmatively,andwithequal distinctness,inotherpartsoftherecord.Andsowherejurisdictiondependsupon thealienageofoneoftheparties.InBrownv.Keene(8Pet.115),Mr.ChiefJustice Marshallsaid:Thedecisionsofthiscourtrequirethattheavermentofjurisdiction shallbepositive,thatthedeclarationshallstateexpresslythefactonwhich jurisdictiondepends.Itisnotsufficientthatjurisdictionmaybeinferred argumentativelyfromitsaverments.Heretheonlyfactaverred,orappearingfrom therecord,isthatCeasewasaresidentofIllinois;andweare,ineffect,asked,in supportofthejurisdictionofthecourtbelow,toinferargumentatively,fromthe mereallegationofresidence,that,ifnotanalien,hehadafixedpermanent domicileinthatState,andwasanativeornaturalizedcitizenoftheUnitedStates, andsubjecttothejurisdictionthereof.Bysuchargumentativeinferences,itis contendedthatweshouldascertainthefact,vitaltothejurisdictionofthecourt,of hiscitizenshipinsomeStateotherthanthatinwhichthesuitwasbrought.We perceivenothingineitherthelanguageorpolicyoftheFourteenthAmendment whichrequiresorjustifiesusinholdingthatthebareavermentoftheresidence ofthepartiesissufficient,primafacie,toshowjurisdiction.Thejudgmentmust, therefore,bereversed,uponthegroundthatitdoesnotaffirmativelyappearfrom 5

therecordthatthedefendantinerrorwasentitledtosueintheCircuitCourt. Robertsonv.Cease:97U.S.646,at648thru650(1878).
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AnindividualwhoisacitizenofaStateandnotacitizenoftheUnitedStates, underArticleIV,Section2,Clause1oftheConstitution[Footnote3],onlyhasto averthatheorsheisacitizenofaStateoftheUnion: ThebillfiledintheCircuitCourtbytheplaintiff,McQuesten,allegedhertobe acitizenoftheUnitedStatesandoftheStateofMassachusetts,andresidingat TurnerFallsinsaidState,whilethedefendantsSteiglederandwifewerealleged tobecitizensoftheStateofWashington,andresidingatthecityofSeattleinsaid State.StatementoftheCase,Steiglederv.McQuesten:198U.S.141(1905).{After theFourteenthAmendment} TheavermentinthebillthatthepartieswerecitizensofdifferentStates wassufficienttomakeaprimafaciecaseofjurisdictionsofarasitdependedon citizenship.Opinion,Steiglederv.McQuesten:198U.S.141,at142(1905).
http://books.google.com/books?id=ceIGAAAAYAAJ&pg=PA141#v=onepage&q&f=false

TheappellantsbroughtsuitintheUnitedStatesDistrictCourtfortheSouthern DistrictofNewYorkforthepurposeofrecoveringfromtheTrusteeaninterestina trustestatewhichhadbeensold,transferredandassignedbyConradMorrisBraker, thebeneficiary.ThecomplainantswerecitizensandresidentsofPennsylvania. BothdefendantswerecitizensandresidentsofNewYork.Notwithstandingthe diversityofcitizenship,thecourtdismissedthebillonthegroundthat,asthe assignorBraker,acitizenofNewYork,couldnotintheUnitedStatesDistrictCourt, havesuedFletcher,TrusteeandcitizenofthesameState,neithercouldthe Complainants,hisassignees,suetherein,eventhoughtheywereresidentsofthe StateofPennsylvania. Theappealfromthatdecisioninvolvesaconstructionof24oftheJudicialCode, whichlimitsthejurisdictionoftheUnitedStatesDistrictCourtwhensuitisbrought therein...torecoveruponanypromissorynoteorotherchoseinactioninfavor ofanyassignee.....Brownv.Flectcher:235U.S.589,at594thru595(1914).
http://books.google.com/books?id=44GAAAAYAAJ&pg=PA594#v=onepage&q&f=false

DiversityofcitizenshipisderivedfromtheConstitutionoftheUnitedStatesof 6

America;atArticleIII,Section2,Clause2whichprovidesthat[T]hejudicialPower [oftheUnitedStates]shallextendtoControversiesbetweenCitizensofdifferent States,or[between]Citizens[ofaState]thereof,andforeigncitizensorsubjects. Congress,underauthorityofthisprovision,hasprescribedbystatutethe conditionsbywhichafederalcourt(circuitcourt)canexercisediversityof citizenship. DiversityofcitizenshipwasexploredbytheSupremeCourtoftheUnitedStatesin thecaseofStrawbridgev.Curtiss(7U.S.(Cranch3)267,1806).InthiscaseChief JusticeJohnMarshalestablisheddiversityofcitizenshipasbeingthelegal requirementthattheplaintifftothecause(case)shouldbeacitizenofaState differentthanthatofthedefendant. Inthiscase,plaintiffswerecitizensofMassachusetts.Onedefendantwasacitizen ofVermont.TheotherdefendantswerecitizensofMassachusetts.Sinceanumber ofthedefendantswerecitizensofthesameStateastheplaintiffs,thenitwas decidedthatthecircuitcourtdidnothavejurisdiction;thatis,diversityof citizenshipwaslacking. Anextensionofthismaximisthatallplaintiffstoacause(case)mustbecitizensof aStatedifferentfromthatofthedefendants.Anexample,twoplaintiffs;oneisa citizenofMichigan,theotheracitizenofDelaware.Twodefendants;oneisacitizen ofConnecticut,theotheracitizenofNebraska.Ifonedefendantwaseitheracitizen ofMichiganorDelaware,thendiversityofcitizenshipwouldnotexist.Inaddition,a partnershiporalimitedliabilitycompanywithonepartnerormemberbeinga citizenofthesameStateasopposingpartywilldeprivethefederalcourt(circuit court)ofjurisdictionforpurposesofdiversityofcitizenship. Also,analien;thatis,aforeigncitizenorsubjectcannotsueanotheralien;thatis, aforeigncitizenorsubject.OneofthepartiesmustbeacitizenofaState.In addition,toacasetowhichtherearemorethenoneplaintiff,ordefendant,orboth, apartywhichisanaliencannotappearonbothsidesofthesuit,butonlyonone. Thus,twocitizensofFlorida,cansuetwocitizensofGeorgiaandanalien,for purposesofdiversityofcitizenship;whiletwocitizensofFloridaandanalien, cannotsuetwocitizensofGeorgiaandanalien,forpurposesofdiversityof citizenship.[Footnote4] ________________________ 7

Footnotes: 1.Afederalquestioncaseisacivilcasewhichinvolvesaclaimunderthe ConstitutionoftheUnitedStatesofAmerica,orthelawsoftheUnitedStates,or treatiestowhichtheUnitedStatesisaparty,oracombinationthereof.Depending ontheyearofthesuit,theremayalsobeadollaramountwhichmustbemet;thatis, anamountincontroversy. 2.Thatis,fromtheavermentofcitizenshiporotherpartsoftherecord. 3.SeemyworkTwoDistinctStateCitizensForPurposesOfDiversityOf CitizenshipwhereIshowthattherearetwostatecitizensundertheConstitutionof theUnitedStatesofAmerica.ThefirstisatSection1,Clause1oftheFourteenth Amendment.ThesecondisatArticleIV,Section2,Clause1oftheConstitution.Also shownisthatacitizenofaState,underSection1,Clause1oftheFourteenth AmendmentisacitizenoftheUnitedStates,whereasacitizenofaState,under ArticleIV,Section2,Clause1isacitizenoftheseveralStates.And,thatprivileges andimmunitiesofacitizenoftheUnitedStatesarenotthesameasprivilegesand immunitiesofacitizenoftheseveralStates.SlaughterhouseCases(83U.S.36,at74, 1873). 4.Formoredetailedinformationondiversityofcitizenship,refertothefollowing worksandmemorandumdecision: InTheUnitedStatesDistrictCourtForTheEasternDistrictofPennsylvania McCrackenv.FordMotorCompanyet.al. CivilAction,No.07CV2018 MemorandumDecision,Page3 ...[T]hejurisdictionofthecircuitcourtfails,unlessthenecessarycitizenship affirmativelyappearsinthepleadingsorelsewhereintherecord....Theburden isontheplaintifftoaffirmativelyallegetheessentialelementsofdiversity jurisdiction.SeeMcNuttv.GeneralMotorsAcceptanceCorp.,298U.S.178,18889. 8

McCrackenallegesthat{the}FordisincorporatedinDelawareand headquarteredinMichigan.Thus,FordisconsideredacitizenofbothDelawareand Michigan.TheplaintiffallegesthatheisacitizenoftheUnitedStates,butdoesnot makeanyallegationastohisstatecitizenship.Heallegesthathehasresided principallyinPennsylvania,NewYorkandDelawareoverthepasttenyears.These allegationsdonotestablishMcCrackensstatecitizenship. Sincetheplaintiffhasfailedtoallegethecitizenshipofoneofthepartiestothis action,hehasnotaffirmativelyallegedtheessentialelementsofdiversity jurisdiction.Accordingly,thecourtisdeprivedofjurisdictionandthisactionis dismissedpursuanttoRule12(b)(1)forlackofsubjectmatterjurisdiction
http://www.paed.uscourts.gov/documents/opinions/09d0519p.pdf

APrimeronRemoval:DontLeaveStateCourtWithoutIt:
http://www.balch.com/files/Publication/992723a2ea1b4cb89cb8 01287d8ca796/Presentation/PublicationAttachment/416c40d86d9d4ce0a4d8 0a4830a78300/Removal%20Article.pdf

RemovalAndRemand:AGuideToNavigatingBetweenTheStateAndFederal Courts:
http://www.federalappeals.com/docs/REMARTFI.pdf

FederalJurisdictionBasedOnRemoval:A50StateSurvey: AReportofthePharmaceuticalSubcommitteeoftheProductsLiabilityCommittee
http://www.dgslaw.com/attorneys/ReferenceDesk/Pilkington_FedJurisdiction.pdf

TheHiddenBiasInDiversityJurisdiction: WashingtonUniversityLawReview,Volume81,Number1,Page119(2004)
http://lawreview.wustl.edu/inprint/811/p119%20Bassett.pdf

TowardaPrincipledStatutoryApproachtoSupplementalJurisdictioninDiversity ofCitizenshipCases: IndianaLawJournal,Volume74,Issue1,Page5(1998)

http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=2213&context=ilj&sei redir=1&referer=http%3A%2F%2F

III.PlaintiffsParadiseLost:DiversityofCitizenshipandAmountinControversy undertheClassActionFairnessActof2005: LoyolaofLosAngelesLawReview,Volume39,Issue3,Page1025(2006)

http://digitalcommons.lmu.edu/cgi/viewcontent.cgi?article=2535&context=llr

FederalCourtsJurisdictionClarificationActHearingBeforeTheSubcommitteeOn Courts,TheInternet,AndIntellectualPropertyOfTheCommitteeOnTheJudiciary, HouseOfRepresentatives,OneHundredNinthCongress,FirstSession,November 15,2005.

http://commdocs.house.gov/committees/judiciary/hju24607.000/hju24607_0f.htm

SeekingCAFAClarity:ASummaryofRecentCaseLawAddressingChallengesto JurisdictionUndertheClassActionFairnessAct:
http://www.dinsmore.com/seeking_cafa_clarity/

OverhaulingtheFederalJurisdictionStatutes: TheFederalCourtsJurisdictionandVenueClarificationActof2011
http://www.pepperlaw.com/pdfs/ComLitAlert_010512.pdf

ReportoftheProceedingsoftheJudicialConferenceoftheUnitedStates: SeethereportoftheCommitteeonFederalStateJurisdiction,Jurisdictional Improvements

http://www.uscourts.gov/FederalCourts/JudicialConference/Proceedings.aspx

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