Singh v. Daimler-Benz AG

• Decision Date: 15 November 1993
• Docket Number: DAIMLER-BENZ,No. 93-1007,93-1007
• Citation: 9 F.3d 303
• Parties: Manjit SINGH, as Administrator of the Estate of Ram P. Singh, Deceased, Appellant v.AG; Mercedes-Benz of North America, Inc.
• Court: U.S. Court of Appeals — Third Circuit

Page 303

9 F.3d 303

62 USLW 2343

Manjit SINGH, as Administrator of the Estate of Ram P Singh, Deceased, Appellant v. DAIMLER-BENZ AG; Mercedes-Benz of North America, Inc.

No. 93-1007.

United States Court of Appeals, Third Circuit.

Argued July 13, 1993.

Decided Nov. 15, 1993.

Terrance A. Kline (argued), George C. McFarland, Jr., Kassab, Archbold, Jackson & O'Brien, Media, PA, for appellant.

R. Mark Armbrust (argued), Daniel W. Cantu-Hertzler, Miller Dunham Doering & Munson, A Professional Corp., Philadelphia, PA, for appellee.

Before: SLOVITER, Chief Judge, NYGAARD and SEITZ, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Chief Judge.

In this appeal we must determine, apparently for the first time by an appellate court, whether the amendment to the diversity jurisdiction statute defining a permanent resident alien as a citizen for diversity purposes gives a federal court subject matter jurisdiction over a case brought by a permanent resident alien against two defendants, one of whom is a nonresident alien. The district court saw no impediment to diversity jurisdiction, declined the plaintiff's motion to remand to state court, and ultimately entered judgment on a jury verdict for the defendants. Plaintiff's appeal is limited to the issue of the district court's subject matter jurisdiction.

I. Facts and Procedural History

Plaintiff Manjit Singh filed a products liability action individually and as administrator of the estate of his father, who died after suffering massive injuries when the Mercedes sedan he was driving slid off a snowy highway in Pennsylvania on November 22, 1989. The complaint alleges that there were design and manufacturing defects in the automobile which caused decedent's death. Singh is a citizen of India, admitted to the United States for permanent residence and domiciled in Virginia, as was his father. It is the decedent's residence and citizenship which control citizenship for diversity purposes. See 28 U.S.C. Sec. 1332(c)(2) (1988). Singh's mother, with the same citizenship and residence, also was a plaintiff at the outset of this action, claiming for negligent infliction of emotional distress.

The defendants are the automobile's foreign manufacturer, Daimler-Benz, AG, a German corporation, and its American distributor, Mercedes-Benz of North America, Inc., a Delaware corporation with its principal place of business in New Jersey.

The action was originally filed in the Court of Common Pleas of Philadelphia County and was removed on the basis of diversity of citizenship. Plaintiffs moved to remand the case, arguing that there was not complete diversity of citizenship because the plaintiffs as well as the defendant Daimler-Benz are aliens. Defendants asserted federal jurisdiction based on the 1988 amendment to the diversity statute, which provides that a permanent resident alien of the United States is "deemed a citizen of the State in which such alien is domiciled." 28 U.S.C. Sec. 1332(a) (1988).

The district court denied plaintiffs' motion to remand, noting that the states of domicile of the permanent resident alien plaintiffs (Virginia) and Mercedes, the citizen defendant, (Delaware and New Jersey), are not the same. The court declined to deviate from the plain language of section 1332(a) as amended, finding that "the best evidence of Congress' intent ... is found in the text of the statute itself." Singh v. Daimler-Benz, AG, 800 F.Supp. 260, 261 (E.D.Pa.1992) (quotation omitted). The court rejected the holding of the district court in Arai v. Tachibana, 778 F.Supp. 1535 (D.Haw.1991), that there was no diversity jurisdiction where, as here, there were nonresident aliens and a resident alien as opposing parties. The district court then denied plaintiffs' motion to certify the question for an immediate appeal to this court.

After the individual claims by Manjit Singh and his mother were dismissed by stipulation, a jury trial was held on the representative claims asserted by Manjit Singh, and judgment was entered for the defendants. Singh appeals. Our review is plenary. See York Bank & Trust Co. v. Federal Sav. & Loan Ins. Corp., 851 F.2d 637, 638 (3d Cir.1988), cert. denied, 488 U.S. 1005, 109 S.Ct. 785, 102 L.Ed.2d 777 (1989).

II. Discussion

The Constitution provides that federal courts can have jurisdiction over suits "between a State, or the Citizens thereof, and foreign States, Citizens or Subjects." U.S. Const. art. III, Sec. 2. The first Judiciary Act of 1789 implemented this authority by providing that federal courts have jurisdiction over suits "where ... an alien is a party, or the suit is between a citizen of the State where the suit is brought, and a citizen of another State." Act of Sept. 24, 1789, ch. 20, Sec. 11, 1 Stat. 73, 78. In an early interpretation of the diversity statute, the Court enunciated the requirement of complete diversity, i.e. that each plaintiff must be able to sue each defendant. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). It has since clarified that the complete diversity requirement is statutory, because Article III only requires minimal diversity. See State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 531, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). Thus Congress is empowered to authorize federal jurisdiction on the basis of diversity as long as at least one plaintiff and one defendant are diverse. See id. With respect to aliens, the Supreme Court early construed Article III as authorizing diversity suits only between a citizen of a state and an alien, see Mossman v. Higginson, 4 U.S. (4 Dall.) 12, 14, 1 L.Ed. 720 (1800) (citing Judiciary Act of 1789, ch. 20, sec. 11, 1 Stat. 73, 78); Montalet v. Murray, 8 U.S. (4 Cranch) 46, 47, 2 L.Ed. 545 (1807); Hodgson v. Bowerbank, 9 U.S. (5 Cranch) 303, 304, 3 L.Ed. 108 (1809), and the statute now does not expressly provide that one alien may sue another in federal court. See 28 U.S.C. Sec. 1332(a)(2) (granting jurisdiction in cases between "citizens of a State and citizens or subjects of a foreign state.")

More than a decade ago when confronted with a case where an alien was one of several plaintiffs suing an alien defendant, we held that the complete diversity required under Strawbridge was lacking. See Field v. Volkswagenwerk AG, 626 F.2d 293, 296 (3d Cir.1980). Other circuits have also construed the diversity statute to apply the complete diversity requirement to aliens. See, e.g., Faysound Ltd. v. United Coconut Chemicals, Inc., 878 F.2d 290, 294-95 (9th Cir.1989); Eze v. Yellow Cab Co. of Alexandria, Va., Inc., 782 F.2d 1064, 1065 (D.C.Cir.1986); Chick Kam Choo v. Exxon Corp., 764 F.2d 1148, 1151-52 (5th Cir.1985).

In light of these precedents, plaintiff argues that because the decedent Ram Singh was an alien (a permanent resident alien) and defendant Daimler-Benz is an alien (a nonresident alien), complete diversity is lacking and there is no subject matter jurisdiction. However, the cases upon which Singh relies construed the diversity statute before Congress expanded the definition of "citizen" for purposes of diversity to provide that "an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled." 28 U.S.C. Sec. 1332(a) (1988). The district court relied on the plain language of the new provision to find that the Singhs (including, significantly, the decedent) are deemed citizens of Virginia. The court concluded that as one defendant is an alien and the other is an American corporation with citizenship in Delaware and New Jersey, "there is complete diversity between the parties." App. at 90. The court reiterated this view on reconsideration. See Singh v. Daimler-Benz, AG, 800 F.Supp. 260 (E.D.Pa.1992).

Plaintiff contends that the district court's reading of the statute is erroneous. He claims that it will lead to a dramatic increase in the number of diversity suits maintained in federal court, and that Congress could not have intended, nor did it have the power, to overrule the longstanding prohibition of suits between aliens. Under plaintiff's view, the new provision was intended only to bar suits where a permanent resident alien sues a citizen of the same state, and did not establish a new definition of citizenship for permanent resident aliens in all cases.

A. Statutory Language

In resolving a question of statutory interpretation we turn first to the language of the provision. See Commissioner v. Engle, 464 U.S. 206, 214, 104 S.Ct. 597, 602, 78 L.Ed.2d 420 (1984). We find no support there for plaintiff's position. The amended diversity jurisdiction statute reads:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $50,000 ... and is between--

(1) citizens of different States;

(2) citizens of a State and citizens or subjects of a foreign state;

(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and

(4) a foreign state ... as plaintiff and citizens of a State or of different States.

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.

28 U.S.C. Sec. 1332(a) (1988) (emphasis added).

There is no ambiguity in the emphasized language. With this new provision, which became effective on May 18, 1989, see David D. Siegel, Commentary on 1988 Revision, 28 U.S.C.A. Sec. 1332, at 5 (West.Supp.1993), Congress directed that permanent resident aliens, who heretofore were considered "citizens or subjects of a foreign state" for purposes of diversity jurisdiction, are now considered "citizen[s] of the State in which [they are] domiciled." The provision represents a straightforward congressional direction.

Plaintiff concedes, at least implicitly, that this is the plain reading of the statute. He argues,...