Canton v. Angelina Casualty Company, 18221.
| Decision Date | 08 June 1960 |
| Docket Number | No. 18221.,18221. |
| Citation | 279 F.2d 553 |
| Parties | James J. CANTON, Robert Reeves and L. B. Johnson, Appellants, v. ANGELINA CASUALTY COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Floyd W. Addington, Joe H. Tonahill, Jasper, Tex., for appellants.
Howell Cobb, Beaumont, Tex., for appellee.
Before HUTCHESON, BROWN and WISDOM, Circuit Judges.
The plaintiffs, citizens of Texas, brought suit in the United States District Court for the Eastern District of Texas to recover benefits under the Texas Workmen's Compensation Law, Vernon's Ann.Civ.St. art. 8306 et seq. Each plaintiff claimed an amount in excess of $10,000 and alleged diversity of citizenship as the basis for jurisdiction. The defendant in each case is the Angelina Casualty Company, a Delaware corporation. The district judge found that the defendant had its principal place of business in Texas and dismissed the action for lack of jurisdiction. We affirm.
The 1958 Amendment, 72 Stat. 415, 28 U.S.C.A. § 1332, provides, in part:
"(c) For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business."
Appellants argue that under this language there is diversity of citizenship since appellants are citizens of Texas and appellee is a citizen of Delaware, the state of its incorporation. Such an interpretation is contrary to the plain meaning of the statute and would frustrate the purpose of the statute. The Act does not give an option to a plaintiff of treating a corporation as a citizen either of the state of incorporation or of the state where its principal place of business is located. The Act treats a corporation as a citizen of the state where it has its principal place of business as well as the state of incorporation. This is clearly indicated by the use of the conjunctive "and". The purpose of the law was to narrow jurisdiction, not to broaden it.1
The provision that "a corporation shall be deemed a citizen of any State by which it has been incorporated" is a statutory expression of the doctrine developed in decisions. St. Louis & Sante Fe Railway Co. v. James, 1896, 161 U.S. 545, 16 S.Ct. 621, 40 L.Ed. 802; Jacobson v. New York, N. H. & H. R. R. Co., 1954, 347 U.S. 909, 74 S.Ct. 474, 98 L.Ed. 1067. The purpose of the provision treating a corporation as a citizen of the state in which it has its principal place of business "is to eliminate the unfair practice of allowing an essentially local corporation to invoke diversity jurisdiction simply because it is chartered in a foreign state".2 Thus, the Senate Report on the bill enacted into law as an amendment to 28 U.S.C.A. § 1332 states:3
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