CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Citation259 F.2d 568
Docket NumberNo. 16935.,16935.
Decision Date22 September 1958

Albert Sidney Johnston, Jr., J. D. Stennis, Jr., Biloxi, Miss., for appellant.

R. W. Thompson, Jr., Webb M. Mize, Gulfport, Miss., Clifford Langsdale, Kansas City, Mo., for appellees.

Before RIVES, BROWN and WISDOM, Circuit Judges.

RIVES, Circuit Judge.

Federal jurisdiction in this case is based on diversity of citizenship. 28 U.S.C.A. § 1332. The district court was of the opinion that the requisite diversity existed.

The appellant Lowry has filed three actions based on his suspension and expulsion from International Brotherhood of Boilermakers, Iron Shipbuilders and Helpers of America, and its Local Lodge 693 of Pascagoula, Mississippi. The first was filed in the United States District Court for the Southern District of Mississippi on October 28, 1953, and was dismissed by that court on March 13, 1954, for lack of jurisdiction of the Local Lodge as an indispensable party.

That case need concern us no further, for, instead of appealing from the judgment of dismissal, Lowry almost immediately filed a second action in the Chancery Court of Jackson County, Mississippi, against the International Brotherhood and a number of non-resident individual officers. Service of process was effected through attachment and garnishment proceedings against the Local Lodge and two other garnishees. On petition of the International Brotherhood, the case was removed to the District Court for the Southern District of Mississippi on the ground of diversity of citizenship. There are three different sets of party defendants. First, the International Brotherhood was sued as a de jure person and, without further description as to whether or not it was incorporated, was alleged to be "a labor organization, a non-resident of the State of Mississippi, and is domiciled in Kansas City, Kansas"; second, several non-resident individuals who were officers of the union were sued as sufficiently representing all members; and third, Local Lodge 693, Ingalls Shipbuilding Corporation, and the Merchants and Marine Bank of Pascagoula were sued for the alleged purposes of garnishment and attachment, respectively. Lowry's motion to remand was overruled. The district court, however, dismissed the complaint on June 10, 1954, on the ground that it was barred by the statute of limitations. This Court reversed, not on jurisdictional grounds, but because it held that the Mississippi statute of limitations of six years, Code 1942, § 722 applied instead of the Kansas statute of two years, G.S.1949, 60-306. Lowry v. International Brotherhood, etc., 5 Cir., 1955, 220 F.2d 546.

On July 28, 1954, pending his appeal from the dismissal of his second action, Lowry filed a third action, also in the Chancery Court of Jackson County, Mississippi, against the same defendants. On petition of the International Brotherhood, that action was removed to the same federal court. Lowry's motion to remand for lack of diversity was overruled, the district court finding summarily that the requisite diversity existed. After reversal by this Court of the second action, the second and third actions were consolidated and, following a full trial, judgment was entered for the defendants. From that judgment this appeal is prosecuted.

On June 9, 1958, this Court, ex mero motu, requested briefs from both parties on whether or not diversity of citizenship existed so as to confer federal jurisdiction over the cause. The courts, on their own motion, are under a duty to raise the question of lack of federal jurisdiction at any time that such lack appears, either in the trial or appellate stage. McNutt v. General Motors Acceptance Corp., 1936, 298 U. S. 178, 56 S.Ct. 780, 80 L.Ed. 1135; Schroeder v. Freeland, 8 Cir., 1951, 188 F.2d 517; Murphy v. Hotel & Restaurant Employees & Bartenders International Union, D.C.Mich.1951, 102 F. Supp. 488; 54 Am.Jur., United States Courts § 138. Furthermore, for federal jurisdiction based on diversity of citizenship, all the parties on one side must, of course, be citizens of different states from all the parties on the other. E. g., Strawbridge v. Curtiss, 1806, 3 Cranch 267, 2 L.Ed. 435; Grant County Deposit Bank v. McCampbell, 6 Cir., 1952, 194 F.2d 469, 31 A.L.R.2d 909; Foster v. Carlin, 4 Cir., 1952, 200 F.2d 943.

The plaintiff-appellant Lowry is a citizen of Mississippi. Assuming arguendo that the Local Lodge 693 is merely a garnishee-defendant and not an indispensable party defendant and that the individual defendants are citizens of other states and are sued as representatives of a class being composed of the union membership,1 nevertheless, federal jurisdiction does not affirmatively appear, but to the contrary it now affirmatively appears that the International Brotherhood is sued in the capacity of an entity and has a local lodge with many members in Mississippi. While it is true that a labor union being a voluntary association is in some ways similar in structure and operation to a corporation and may be treated as a separate legal entity for the purposes of suing and being sued,2 and even though the officers of an unincorporated labor union, like the officers of a corporation, have no right to refuse to produce records of the union on the constitutional grounds of the Fourth and Fifth Amendments,3 and, even though large unincorporated associations are treated similarly to corporations for the purpose of venue,4 the decisions fully support the textual statement that "unincorporated associations have never been accorded a status as jural persons for purposes of diversity jurisdiction, nor has there developed a presumption of a single citizenship of the members. This is so even when by the applicable law they have the capacity to sue and be sued in the association name. The citizenship of all the members must be looked to, and not merely that of the officers or managers." Hart and Wechsler, The Federal Courts And The Federal System, 1953, p. 917.5

Conceding that unincorporated associations and partnerships are not treated as jural persons for the purpose of diversity, the appellees-defendants contend that, nevertheless, this Court has jurisdiction because the suit was brought and prosecuted as a class action, and that the union in its entity capacity should be disregarded. This brings us to consider the class action in the light of diversity of citizenship for jurisdictional purposes.

The class action device is a traditional creature of equity and, as codified in former Equity Rule 38, was used when the number of people constituting a class were "so numerous as to make it impracticable to bring them all before the court."6 One kind of the traditional parties to a class action has been large unincorporated associations who, prior to the case of United Mine Workers of America v. Coronado Coal Co., 1922, 259 U.S. 344, 42 S.Ct. 570, 66 L.Ed. 975, could not be sued in federal court unless there was a joining of all members or unless the suit was a class suit.7 Before the adoption of the Federal Rules of Civil Procedure, the class action device was limited to equity practice, but now, of course, the class action under Rule 23 may be used also for historically law causes of action. A class suit against a large unincorporated labor association is, as Professor Moore states,8 the perfect example of the true class action under Rule 23(a) (1) in which a judgment is absolutely binding and res judicata as to all members.9

Following the decision of United Mine Workers of America v. Coronado Coal Co., supra, Rule 17(b), Federal Rules of Civil Procedure,10 allows a suit by or against an unincorporated association to be commenced in its name as an entity when the case concerns a substantive right under the Constitution or laws of the United States or when the state allows suit in the common name. Thus, for many purposes alternative measures are provided for suits involving partnerships or unincorporated associations in federal courts. In recent years, not only has the class action suit been a helpful way to obtain in personam jurisdiction over large associations in both state and federal courts, but also it has been used frequently to confer on federal courts jurisdiction on the basis of diversity of citizenship when such diversity would be defeated if the suit could be and were commenced in the entity name.11 The courts must look only to the citizenship of the named representatives for diversity purposes and a subsequent joinder of parties not having diversity will not defeat jurisdiction.12 It is well established that the courts will allow the dismissal of the action as to named parties in order to create diversity, as long, of course, as the dismissed parties are not indispensable13 — it is difficult to conceive of an indispensable representative of a large class.14 We can detect no policy against a liberal use of Rule 23(a) to create diversity even when Rule 17(b) would or could apply. As stated by Judge Parker, afterward Chief Judge, in Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 4 Cir., 1945, 148 F.2d 403, 405:

"And there is nothing in rule 17 (b) which limits the right to bring a class suit under rule 23(a) in proper cases. Rule 17(b) relates to capacity to sue or be sued; and it provides that, where a partnership or unincorporated association has no such capacity by the law of the state where the court is held, it may nevertheless sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States. There is nothing in this that limits the right to bring the unincorporated association into court by means of a class suit in accordance with the prior practice; and the right to bring such class suit

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