Yokeno v. Sekiguchi

Citation754 F.3d 649
Decision Date15 April 2014
Docket NumberNo. 11–17196.,11–17196.
PartiesMATAO YOKENO, aka Eddie M. Yokeno, Plaintiff–Appellant, v. SAWAKO SEKIGUCHI, aka Sawako S. Lai; Emil Lai; John Does, 1–10, Defendants–Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

OPINION TEXT STARTS HERE

Limited on Constitutional Grounds

28 U.S.C.A. § 1332(a)

Andrew B. Compton, University of Arizona Pro Bono Appellate Project, Tucson, AZ, argued the cause for the Appellant. With him on the briefs were Willie Jordan–Curtis, Ph.D., J.D., Matthew J. Palmer, David C. Potts, and Michael R. Shumway, University of Arizona Pro Bono Appellate Project, Tucson, AZ.

Carlos L. Taitano, Taitano and Taitano LLP, Tamuning, GU, argued the cause for the Appellees and filed the briefs.

Appeal from the District Court of Guam, Frances Tydingco–Gatewood, Chief District Judge, Presiding. D.C. No. 1:09–cv–00020.

Before: DIARMUID F. O'SCANNLAIN, SUSAN P. GRABER, and CARLOS T. BEA, Circuit Judges.

OPINION

O'SCANNLAIN, Circuit Judge:

We must decide whether the federal court in Guam has jurisdiction in disputes exclusively between aliens.

I

Matao Yokeno sued Emil Lai and Sawako Sekiguchi in the Superior Court of Guam, asserting claims arising from alleged breaches of fiduciary duty in the course of the parties' several business ventures. Sekiguchi and Lai removed the case to the District Court of Guam based on diversity of citizenship.

Yokeno is an alien admitted to the United States for permanent residence, living in Guam.1 Lai, a British Overseas Citizen, and Sekiguchi, a Japanese citizen, both live in Japan. The district court did not examine its jurisdiction and neither party objected to its exercise based on diversity of citizenship. The district court granted summary judgment on the merits, in favor of Sekiguchi and Lai, and Yokeno timely appealed.

Yokeno now contests subject matter jurisdiction for the first time, contending that no diversity of citizenship exists in a dispute between aliens. He urges us to dismiss the appeal and to vacate the district court's judgment with instructions to remand to the Superior Court of Guam. Sekiguchi and Lai maintain that diversity jurisdiction exists but instead, curiously, move to dismiss this appeal based on res judicata.2

II

We deal first with Yokeno's jurisdictional challenge. We have an independentobligation to determine the district court's jurisdiction, see Chapman v. Pier 1 Imports (U.S.), Inc., 631 F.3d 939, 954 (9th Cir.2011) (en banc), and we consider Yokeno's objection to subject matter jurisdiction even though he raises it for the first time on appeal, see Detabali v. St. Luke's Hosp., 482 F.3d 1199, 1202 (9th Cir.2007).

A

Article III of the United States Constitution extends the judicial power to controversies “between Citizens of different States ... and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.” U.S. Const. art. III, § 2, cl. 1. This clause, the constitutional source of diversity jurisdiction, supplies jurisdiction even where only minimal diversity of citizenship is present. See State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530–31, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). In the case of litigation involving an alien, a state or a citizen of a state must be a party. Jackson v. Twentyman, 27 U.S. (2 Pet.) 136, 136, 7 L.Ed. 374 (1829); Hodgson v. Bowerbank, 9 U.S. (5 Cranch) 303, 304, 3 L.Ed. 108 (1809); Kavourgias v. Nicholaou Co., 148 F.2d 96, 97 (9th Cir.1945).

Unlike the Constitution, the diversity statute, 28 U.S.C. § 1332, 3 requires complete diversity of citizenship. See Carden v. Arkoma Assocs., 494 U.S. 185, 187, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806)). We have repeatedly confirmed the application of this rule in alienage cases, refusing to hear disputes between aliens for lack of statutory jurisdiction even when a citizen party—and thus constitutionally required minimal diversity—is present. See Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 991 (9th Cir.1994); Craig v. Atl. Richfield Co., 19 F.3d 472, 476 (9th Cir.1994); Faysound Ltd. v. United Coconut Chems., Inc., 878 F.2d 290, 294 (9th Cir.1989).

Because this is an appeal from the District Court of Guam, we also consider the unique nature of its jurisdiction. That district court is not an Article III court; it was created by the Organic Act of Guam, see48 U.S.C. §§ 1421–1421k–1, pursuant to Article IV of the Constitution. See Chase Manhattan Bank (Nat'l Ass'n) v. S. Acres Dev. Co., 434 U.S. 236, 236–37, 98 S.Ct. 544, 54 L.Ed.2d 501 (1978) (per curiam). The Organic Act of Guam confers upon the District Court of Guam the same diversity jurisdiction afforded to Article III courts: 4 “The District Court of Guam shall have the jurisdiction of a district court of the United States, including, but not limited to, the diversity jurisdiction provided for in [ 28 U.S.C. § 1332], and that of a bankruptcy court of the United States.” 48 U.S.C. § 1424(b).

B

In 1988,5 Congress amended § 1332 to include the following clause, known as the “deeming clause”:

For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.6

Pub.L. No. 100–702, § 203(a), 102 Stat. 4642, 4646 (1988). In 2011, but after this case was removed to the District Court of Guam, Congress again amended § 1332 to delete the deeming clause.7

On its face, the deeming clause would seem to confer jurisdiction in cases, like this one, between a resident alien plaintiff and non-resident alien defendants, where neither constitutional nor statutory jurisdiction would otherwise exist. This case requires us to determine the effect of the deeming clause on the citizenship of a resident alien suing solely alien defendants—a question of first impression.

III

Sekiguchi and Lai contend that the district court properly exercised jurisdiction in this case because it is an Article IV court, not an Article III court. The Organic Act itself makes clear, however, that the diversity jurisdiction of the District Court of Guam is coextensive with the diversity jurisdiction of an Article III district court. See48 U.S.C. § 1424(b). 8 The Organic Act does not purport to supply the District Court of Guam with jurisdiction exceeding that of an Article III district court. Instead, it identifies the diversity statute as the source of one aspect of such jurisdiction. The question before us is whether the 2011 version of 28 U.S.C. § 1332 comports with constitutional limits on the jurisdiction of an Article III court—the same jurisdiction the Organic Act confers upon the District Court of Guam.

IV
A

Statutory interpretation begins with the text of the statute. Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999). “Where the statute's language is plain, the sole function of the courts is to enforce it according to its terms, for courts must presume that a legislature says in a statute what it means and means in a statute what it says there.’ Int'l Ass'n of Machinists & Aerospace Workers, Local Lodge 964 v. BF Goodrich Aerospace Aerostructurers Grp., 387 F.3d 1046, 1051 (9th Cir.2004) (quoting Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253–54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)) (citation and internal quotation marks omitted). We do not look at statutory language in isolation, but consider “the specific context in which that language is used, and the broader context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). Only if this approach leaves or reveals ambiguity may we turn to extrinsic evidence such as legislative history. See Dep't of Hous. & Urban Dev. v. Rucker, 535 U.S. 125, 132, 122 S.Ct. 1230, 152 L.Ed.2d 258 (2002); W. Va. Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 98–99, 111 S.Ct. 1138, 113 L.Ed.2d 68 (1991); R.R. Comm'n of Wis. v. Chi., Burlington, & Quincy R.R. Co., 257 U.S. 563, 589, 42 S.Ct. 232, 66 L.Ed. 371 (1922) (“Committee reports and explanatory statements of members in charge made in presenting a bill for passage ... are only admissible to solve doubt and not to create it.” (citations omitted)); United States v. Sioux, 362 F.3d 1241, 1246 (9th Cir.2004).

Whenever possible, federal statutes are construed ‘to avoid serious doubt of their constitutionality.’ Stern v. Marshall, –––U.S. ––––, 131 S.Ct. 2594, 2605, 180 L.Ed.2d 475 (2011) (quoting Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 841, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986)). The avoidance canon, however, ‘does not give [us] the prerogative to ignore the legislative will in order to avoid constitutional adjudication.’ Id. (alteration in original) (quoting Schor, 478 U.S. at 841, 106 S.Ct. 3245).

B

The plain language of the deeming clause instructs us to treat Yokeno, a permanent resident alien, as a citizen of Guam for purposes of determining statutory diversity jurisdiction. To “deem” is [t]o treat (something) as if (1) it were really something else or (2) it has qualities that it does not have.” Black's Law Dictionary (9th ed.2009); see also 2 Oxford English Dictionary (Compact ed.1971) (defining “to deem” as “to judge, conclude, think, consider, hold”). According to the text, we should regard Yokeno not as an alien but as a citizen of Guam, and statutory diversity jurisdiction should lie in his dispute with alien defendants. In other words, the deeming clause purports to confer statutory jurisdiction in this suit between aliens where neither constitutional nor statutory jurisdiction would otherwise exist.

Cases and commentators, however, have suggested that, notwithstanding the plain language, the statute might be unconstitutional in the circumstances presented here because it would exceed the constitutional requirement of minimal...

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