Engstrom v. Hornseth

• Decision Date: 12 March 1997
• Docket Number: Civil No. 93-2047 (DRD).
• Citation: 959 F.Supp. 545
• Parties: Bo ENGSTROM, et al., Plaintiffs, v. Kai HORNSETH, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

959 F.Supp. 545

Bo ENGSTROM, et al., Plaintiffs, v. Kai HORNSETH, et al., Defendants.

Civil No. 93-2047 (DRD).

United States District Court, D. Puerto Rico.

March 12, 1997.

Ernesto Reyes-Blassino, Hato Rey, PR, for plaintiffs.

James A. Toro, San Juan, PR, for Agrippina Versicheru.

OPINION AND ORDER

DOMINGUEZ, District Judge.

I. Introduction

The facts relevant to the Court's jurisdiction are few and undisputed. Bo Engstrom and his wife, Mayda Engstrom, filed the present diversity action in tort, alleging that the Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332(a). Mr. Engstrom is a Swedish citizen admitted to permanent residence in the United States, Mrs. Engstrom is a U.S. citizen, and they are both domiciled in the Commonwealth of Puerto Rico. The defendants are all citizens of and domiciled in European countries.¹

Pending before the Court is defendants' motion to dismiss for lack of subject matter jurisdiction (Docket No. 27), in which they argue that the Court lacks jurisdiction over this action because there are alien parties on both sides of the suit. The plaintiffs oppose this motion, relying on the Judicial Improvements and Access to Justice Act of 1988,² which among other things amended 28 U.S.C. § 1332(a) by adding a proviso stating that "[f]or the purposes of this section ... an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled." Plaintiffs argue that this amendment grants the Court jurisdiction over the instant case.

The motion to dismiss therefore presents a pure issue of statutory interpretation: whether the new "deeming" provision has the effect of extending the jurisdiction of the district courts of the United States to cover civil actions between an alien, on one side, and a permanent resident alien and a U.S. citizen, on the other.

II. Discussion

As a preliminary matter, the Court notes that the language of the deeming provision in Section 1332(a) lends itself to three possible interpretations, each of which has found at least one judicial sponsor. First, the provision may have merely withdrawn alienage jurisdiction from actions between a U.S. citizen and a permanent resident alien when they are both domiciled in the same State.³ Second, the deeming provision could be understood to have extended "citizenship," as that term is used and understood for purposes of both § 1332 and Article III, § 2 of the U.S. Constitution,⁴ to permanent resident aliens.⁵ Third, the provision could have eliminated the judicially-established requirement of complete diversity in alienage cases.⁶

The plaintiffs urge that the Court adopt either the second or the third interpretations. The defendants, however, argue that the first interpretation is the only correct one. The choice before the Court is potentially fatal to the plaintiffs' suit, for they have alleged no jurisdictional basis for this suit other than § 1332. In order to choose among these alternative interpretations, the Court first reviews the law regarding alienage jurisdiction as it existed prior to the addition of the deeming provision. This review will permit the Court to gauge the magnitude of the change from prior law represented by each interpretation of the deeming provision.

A. Alienage Jurisdiction Prior to the 1988 Amendment to Section 1332(a)

The district courts of the United States have "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $50,000⁷ ..., and is between ... citizens of a State and citizens or subjects of a foreign State." 28 U.S.C. § 1332(a)(2). It is therefore clear that, before the date of effectiveness of the deeming provision, the federal district courts had original jurisdiction over actions between a citizen of a State plaintiff and a permanent resident alien defendant, even when such defendant was domiciled in the same State as the plaintiff. See, e.g., Breedlove v. Nicolet, 32 U.S. (7 Pet.) 413, 431-32, 8 L.Ed. 731 (1833) (alienage jurisdiction existed over suit between citizens of the Republic of Switzerland who resided in New Orleans and citizens of the State of Louisiana); C.H. Nichols Lumber Co. v. Franson, 203 U.S. 278, 27 S.Ct. 102, 51 L.Ed. 181 (1906) (alienage jurisdiction existed over suit between subject of the Kingdom of Sweden who resided in Washington State and citizens of that state); Jagiella v. Jagiella, 647 F.2d 561, 563 (5th Cir.1981) (alienage jurisdiction existed over suit between citizen of France domiciled in the State of Georgia and citizen of that state). See also 1 James Wm. Moore, et al., Moore's Federal Practice ¶ 0.75[1.-2-2], at 800.39 (2d ed. 1995). Cf. Sadat v. Mertes, 615 F.2d 1176, 1183 (7th Cir.1980) (listing cases). As the Supreme Court explained, "[i]f [the plaintiffs were] originally aliens, they did not cease to be so, nor lose their right to sue in the federal court, by a residence in Louisiana. Neither the constitution nor acts of congress require that aliens should reside abroad, to entitle them to sue in the courts of the United States." Breedlove, 32 U.S. at 431-32.

However, it is also clear that, prior to the date of effectiveness of the "deeming" provision, this case could not have been brought in a federal district court. First, the Article III Judicial Power does not extend to cases brought under the courts' diversity jurisdiction in which the only parties are aliens. See Mossman v. Higginson, 4 U.S. (4 Dall.) 12, 14, 1 L.Ed. 720 (1800) ("[T]he legislative power of conferring jurisdiction on the federal Courts is, in this respect, confined to suits between citizens and foreigners."); Montalet v. Murray, 8 U.S. (4. Cranch) 46, 2 L.Ed. 545 (1807); Hodgson v. Bowerbank, 9 U.S. (5 Cranch) 303, 303, 3 L.Ed. 108 (1809);⁸ Jackson v. Twentyman, 27 U.S. (2 Pet.) 136, 136, 7 L.Ed. 374 (1829) ("[T]he judicial power was not extended to private suits, in which an alien is a party, unless a citizen be the adverse party."); Compagnie Nationale Air France v. Castano, 358 F.2d 203 (1st Cir. 1966) (no jurisdiction over suit by Cuban citizens against French corporation); Lloyds Bank PLC v. Norkin, 817 F.Supp. 414, 416 (S.D.N.Y.1993) ("It is clear that Article III of the Constitution does not give Congress the power to grant the federal courts jurisdiction over an action between two aliens."). See also 13B Charles Alan Wright, Arthur R. Miller, Edward H. Cooper, Federal Practice and Procedure § 3604, at 384-386 (1984) ("the Supreme Court determined that the [Judiciary Act of 1789] was unconstitutional insofar as it might permit suits in a federal court between two aliens") [hereinafter Wright and Miller, Federal Practice and Procedure]; 1 Moore's Federal Practice ¶ 0.75[1.-2-2], at 800.38 ("The organic grant of alienage jurisdiction requires that there be a state or a citizen of one of the United States on one side of the litigation. Thus, Congress is powerless to provide for federal court jurisdiction under the alienage grant⁹ over cases in which the only litigants are aliens, even if they are citizens of different countries") (emphasis added).

Second, for the exercise of alienage jurisdiction to be proper, there must be complete diversity between the parties. Interpreting the Judiciary Act of 1789, Chief Justice Marshall wrote:

The words of [the Judiciary Act of 1789] are, "where an alien is a party; or the suit is between a citizen of a state where the suit is brought, and a citizen of another state." The court understands these expressions to mean, that each distinct interest should be represented by persons, all of whom are entitled to sue, or may be sued, in the federal courts. That is, that where the interest is joint, each of the persons concerned in that interest must be competent to sue, or liable to be sued, in those courts.

Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). In other words, "diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff." Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 2402, 57 L.Ed.2d 274 (1978). It should be noted that "[t]he complete diversity rule does not prevent co-plaintiffs (or co-defendants) from being from the same state; rather, it requires that all of the plaintiffs be from different states than all of the defendants." Erwin Chemerinsky, Federal Jurisdiction § 5.3.3, at 280 (2d ed. 1994). In the alienage jurisdiction context, complete diversity requires that there not be aliens on both sides of a lawsuit, even if the aliens are citizens of different countries. Kramer v. Caribbean Mills, 394 U.S. 823, 89 S.Ct. 1487, 23 L.Ed.2d 9 (1969). See generally 1 Moore's Federal Practice ¶ 0.75[1.-2-3], at 800.39-800.43; 13B & 14 Wright and Miller & Cooper, Federal Practice and Procedure §§ 3605, 3661 (1984).

Third, because the requirement of complete diversity is of judicial rather than constitutional pedigree, being "entirely a product of statutory interpretation," Congress could abrogate the requirement at any time. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 373 n. 13, 98 S.Ct. 2396, 2402 n. 13, 57 L.Ed.2d 274 (1978).¹⁰ In dicta, the Supreme Court has indicated that the same result obtains in the alienage jurisdiction context. See Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829 n. 1, 109 S.Ct. 2218, 2221 n. 1, 104 L.Ed.2d 893 (1989) ("[t]his complete diversity requirement is based on the diversity statute, not Article III of the Constitution"); Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 492 n. 18, 103 S.Ct. 1962, 1970 n. 18, 76 L.Ed.2d 81 (1983) ("Since Article III requires only `minimal diversity,' ... diversity jurisdiction would be a sufficient basis for jurisdiction where at least one of the plaintiffs is a citizen of a State"). It therefore follows that Congress could, without exceeding the limits of the Judicial Power, abrogate the...