463 F.3d 702 (7th Cir. 2006), 05-3077, BondPro Corp. v. Siemens Power Generation, Inc.

Docket Nº:05-3077.
Citation:463 F.3d 702, 80 U.S.P.Q.2d 1207
Party Name:BONDPRO CORPORATION, Plaintiff-Appellant, v. SIEMENS POWER GENERATION, INC., Defendant-Appellee.
Case Date:September 12, 2006
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 702

463 F.3d 702 (7th Cir. 2006)

80 U.S.P.Q.2d 1207

BONDPRO CORPORATION, Plaintiff-Appellant,



No. 05-3077.

United States Court of Appeals, Seventh Circuit.

Sept. 12, 2006

Argued May 11, 2006.

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[Copyrighted Material Omitted]

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Peter M. Reinhardt (argued), Menomonie, WI, for Plaintiff-Appellant.

David T. Schultz (argued), Halleland, Lewis, Nilan & Johnson, Minneapolis, MN, for Defendant-Appellee.

Before POSNER, EASTERBROOK, and WOOD, Circuit Judges.

POSNER, Circuit Judge.

The plaintiff in this diversity suit for theft of a trade secret won a verdict on liability from the jury; but before the jury proceeded to the second stage of a bifurcated trial--that of determining what damages, if any, the plaintiff had suffered--the district judge granted judgment for the defendant as a matter of law. Wisconsin law--but as adopted in Wisconsin, the Uniform Trade Secrets Act is to "be applied and construed to make uniform the law relating to misappropriation of trade secrets among states enacting substantially identical laws." Wis. Stat. § 134.90(7). And so "decisions by other jurisdictions [than Wisconsin] on questions involving the UTSA are to be given careful consideration." Minuteman, Inc. v. Alexander, 147 Wis.2d 842, 434 N.W.2d 773, 779-80 (1989).

We begin with some jurisdictional issues. Our Circuit Rule 28(a)(1) requires that the jurisdictional statement in a diversity suit name the states of which the parties are citizens. In violation of this rule, the jurisdictional statement in the plaintiff's brief fails to indicate the citizenship of the parties (both of which are corporations); it says only that they are "citizens of different states." The defendant's brief, compounding the violation, states that the plaintiff's jurisdictional statement is complete and correct. So we ordered the parties to supplement their jurisdictional statements, and the responses indicate that the parties are indeed citizens of different states and thus that the district court had diversity jurisdiction, for the case was removed to the district court by the out-of-state party and the amount-in-controversy requirement is satisfied. But the defendant's response added: "it appears that BondPro is not a corporation in 'good standing' with the State of Wisconsin, as its status of April 1, 2004, is listed as delinquent." Inquiry of the plaintiff's counsel at oral argument revealed that he didn't know his client's current status under Wisconsin law or whether that law authorizes a delinquent Wisconsin corporation to bring a suit in a

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Wisconsin state court. Apparently it does. The only consequence of delinquency is that the Wisconsin Department of Financial Institutions can bring an administrative proceeding to dissolve the corporation, Wis. Stat. § 180.1420, and this was not done. And shortly after the oral argument BondPro was restored to good standing.

Anyway, until a corporation's charter is revoked, it remains a corporate citizen of the state of incorporation, and no more is necessary to allow it to maintain a suit in a federal court, Smith v. Arundel Cooperative, Inc., 660 F.Supp. 912, 913 (D.D.C.1987); 15 Moore's Federal Practice § 102.56[9], p. 102-132.5 (3d ed.2005)--at least as a matter of federal jurisdiction; for it is always open to a defendant to show that the plaintiff in a diversity suit lacks capacity, under the law of the plaintiff's state, to bring a suit. Fed.R.Civ.P. 9(a). Any such defense was waived here, however, because while noting BondPro's delinquency the defendant makes no argument for dismissal based on it. Since a corporation's authority to sue in its state courts is not a jurisdictional prerequisite to removal on grounds of diversity, Maryland People's Counsel v. FERC, 760 F.2d 318, 319 (D.C.Cir.1985) Summers v. Interstate Tractor & Equipment Co., 466 F.2d 42, 49-50 (9th Cir.1972) Zelinger v. Uvalde Rock Asphalt Co., 316 F.2d 47, 53 (10th Cir.1963); see also Fed.R.Civ.P. 9(a); Wagner Furniture Interiors, Inc. v. Kemner's Georgetown Manner, Inc., 929 F.2d 343, 345-46 (7th Cir.1991); MTO Maritime Transport Overseas, Inc. v. McLendon Forwarding Co., 837 F.2d 215, 218 (5th Cir.1988), the waiver eliminates the issue from our consideration.

We add that even if the plaintiff had dissolved since the removal of the case to the district court, this would not affect jurisdiction, United States Liability Ins. Co. v. Fassbinder United Builders, Inc., No. 99 C 50330 (N.D.Ill. Feb. 12, 2003), 2003 U.S. Dist. LEXIS 1991, at *2; see Wild v. Subscription Plus, Inc., 292 F.3d 526, 528 (7th Cir.2002), unless its dissolution signified that there was no longer an adversary proceeding. But there might be; the dissolved corporation might have a successor that could be substituted for it and the suit continue. With immaterial exceptions, jurisdiction depends on the facts that exist when the suit is filed, e.g., Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 570, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004)--which means, by the way, that if BondPro had been dissolved before suing and the dissolution had eliminated any interest it had in the suit, resurrection of the corporation after the suit was filed would not have conferred jurisdiction. Wild v. Subscription Plus, Inc., supra, 292 F.3d at 528.

A further sign of the lawyers' carelessness is that their briefs are miscaptioned. The name of the defendant is given as "Siemens Westinghouse Power Corporation," which was changed before the appeal was filed. One might have expected the defendant's lawyer, at least, to know the name of his client. The lawyers' insouciance about jurisdiction, however, goes beyond carelessness, and we hereby direct counsel for both parties to show cause within ten days from the date of this decision why they should not be sanctioned for violating our circuit rule.

There is still another jurisdictional issue. It is whether BondPro has anything...

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