Ran, Inc v. Energy, Inc

• Decision Date: 19 February 1991
• Docket Number: No. 90-655,FREEPORT-M,90-655
• Citation: 111 S.Ct. 858,498 U.S. 426,112 L.Ed.2d 951
• Parties: cMoRAN, INC., et al. v. K N ENERGY, INC
• Court: U.S. Supreme Court

498 U.S. 426

111 S.Ct. 858

112 L.Ed.2d 951

FREEPORT-McMoRAN, INC., et al.

v K N ENERGY, INC.

No. 90-655.

Feb. 19, 1991.

PER CURIAM.

Petitioners seek review of a decision of the United States Court of Appeals for the Tenth Circuit, holding that a Fed- eral District Court lacked jurisdiction to entertain their diversity action because they added a nondiverse party after filing their complaint.We grant certiorari and reverse the decision of the Court of Appeals.

Petitioners, McMoRan Oil and Gas Company(McMoRan) and its parent company, Freeport-McMoRan Inc.(Freeport), sued respondentK N Energy, Inc.(K N) for breach of contract in the United States District Court for the District of Colorado.Petitioners claimed that respondent had failed to pay the price for natural gas agreed upon in their contract, and sought both declaratory relief to establish the contract price and damages for past underpayments.Petitioners based federal jurisdiction upon diversity of citizenship.At all times up to and including the filing of the complaint, Freeport and McMoRan were Delaware corporations with their principal places of business in Louisiana.K N was and is a Kansas corporation with its principal place of business in Colorado.

After suit was filed, petitioner McMoRan transferred its interest in the contract with respondent to a limited partnership, FMP Operating Company(FMPO), for business reasons unrelated to the instant litigation.FMPO's limited partners included citizens of Kansas and Colorado.Accordingly, before trial commenced, petitioners sought leave to amend their complaint to substitute FMPO as a plaintiff under Rule 25(c) of the Federal Rules of Civil Procedure.The District Court permitted petitioners to add FMPO as a party but did not remove McMoRan as a party.After a bench trial, the District Court held in favor of petitioners, and respondent appealed.The Court of Appeals reversed and directed that the suit be dismissed for want of jurisdiction.The court held that "although complete diversity was present when the complaint was filed," the addition of FMPO as a plaintiff destroyed jurisdiction.907 F.2d 1022, 1024(1990).The court based its holding upon our decision in Carden v. Arkoma Associates,494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157(1990).The court explained that "Carden establishes that [FMPO's] addition as the real party in interest destroys the district court's diversity jurisdiction."907 F.2d, at 1025.

Our decision last Term in Carden considered whether the citizenship of limited partners must be taken into account in determining whether diversity jurisdiction exists in an action brought by a limited partnership.The original plaintiff in Carden was the limited partnership; diversity jurisdiction, then, depended upon whether complete diversity of citizenship existed at the time the action was commenced.But nothing in Carden suggests any change in the well-established rule that diversity of citizenship is assessed at the time the action is filed.We have consistently held that if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events.Mollan v. Torrance,9 Wheat. 537, 6 L.Ed. 154(1824);Clarke v. Mathewson,12 Pet. 164, 171, 9 L.Ed. 1041(1838);Wichita Railroad & Light Co. v. Public Util. Comm'n of Kansas,260 U.S. 48, 54, 43 S.Ct. 51, 53, 67 L.Ed. 124(1922)("Jurisdiction once acquired . . . is not divested by a subsequent change in the citizenship of the parties.Much less is such...