Pepsico Do Brasil, Ltda v. Oxy-Dry Corp.

• Decision Date: 15 February 2008
• Docket Number: No. 05 C 5810.,05 C 5810.
• Citation: 534 F.Supp.2d 846
• Parties: PEPSICO DO BRASIL, LTDA, Plaintiff, v. OXY-DRY CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

534 F.Supp.2d 846

PEPSICO DO BRASIL, LTDA, Plaintiff, v. OXY-DRY CORPORATION, Defendant.

No. 05 C 5810.

United States District Court, N.D. Illinois, Eastern Division.

February 15, 2008.

William J. Sneckenberg and Matthew L. McBride, III, Sneckenberg, Thompson & Brody LLP, Chicago, IL, for Plaintiff.

James A. Foster, Matthew W. Miller and Therese Suzanne Seeley, Cassiday Schade LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

MILTON I. SHADUR, Senior District Judge.

This major commercial dispute, at least nominally between Pepsico do Brasil, Ltda ("Pepsico") and Oxy-Dry Corporation ("Oxy-Dry"), has been pending in this District Court under the claimed auspices of its diversity jurisdiction for nearly two and one-half years. But when an Oxy-Dry motion to compel the production of various witnesses in this geographic forum Father than in Brazil, where the witnesses reside, was brought before this, Court, what figuratively jumped off the pages of the motion were facts that raised a question as to the existence of subject matter jurisdiction.

Both because the absence of subject matter jurisdiction is an issue that may — indeed must — be raised at any time (even as late as post-judgment) and because it is this Court's obligation to police subject matter jurisdiction sua sponte (Wernsing v. Thompson, 423 F.3d 732, 743 (7th Cir.2005)), this Court promptly issued a February 4 memorandum order drawing the matter to the attention of both parties' counsel and requesting further input as to the insurers on whose behalf Pepsico is suing by reason of their having made payments on account of Pepsico's claimed loss (hence creating a subrogation status to the extent of those payments). Pepsico's counsel has just as promptly responded by filing Plaintiffs Jurisdictional Statement, providing the requested information and urging that no jurisdictional flaw exists.

In that respect this Court must plead guilty to having started Pepsico's counsel down the wrong path by the fact that it followed its reference to the subrogated insurers as being "real parties in interest" by insertion of a parenthetical citation to Fed.R.Civ.P. ("Rule") 17. That has led to a response by Pepsico that emphasizes that whether a plaintiff is the "real party in interest" for purposes of suit (which is the Rule 17(a) focus) is determined in diversity cases under state substantive law. Under such cases as Orejel York Int'l Corp., 287 Ill.App.3d 592, 222 Ill.Dec. 811, 678 N.E.2d 683 (1st Dist.1997) and Scheibel v. Groeteka, 183 Ill.App.3d 120, 131 Ill.Dec. 680, 538 N.E.2d 1236 (5th Dist.1989), Pepsico's partial financial interest (its Jurisdictional Statement identifies a $600,000 deductible that it had to bear) means that it can maintain this action in its name.

But that assertion impermissibly conflates the identity of the proper plaintiff (a procedural rather than a jurisdictional matter, for the Rules cannot of course override statutory law) with the question of what entity or, entities factor into the diversity equation. In the latter respect, see Navarro Say. Ass'n v. Lee, 446 U.S. 458, 462 n. 9, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980) and, more particularly, the extended and insightful discussion in Betar v. DeHavilland Aircraft of Canada, Ltd., 603 F.2d 30, 32-35 (7th Cir.1979).

It has long been established that the...