Samincorp, Inc. v. Southwire Co., Inc., Civ. A. No. C79-828A.

• Decision Date: 20 June 1980
• Docket Number: Civ. A. No. C79-828A.
• Citation: 531 F. Supp. 1
• Parties: SAMINCORP, INC., Plaintiff, v. SOUTHWIRE COMPANY, INC., and Suramericana de Aleaciones Laminadas C. A., Defendants.
• Court: U.S. District Court — Northern District of Georgia

531 F. Supp. 1

SAMINCORP, INC., Plaintiff, v. SOUTHWIRE COMPANY, INC., and Suramericana de Aleaciones Laminadas C. A., Defendants.

Civ. A. No. C79-828A.

United States District Court, N. D. Georgia, Atlanta Division.

June 20, 1980.

F. Carlton King, Atlanta, Ga., for plaintiff.

James H. Bratton, Jr., John G. Despriet, Atlanta, Ga., for defendants.

ORDER

VINING, District Judge.

This is an action for breach of contract, specific performance, and tortious interference with contract. The plaintiff has moved for leave to amend its complaint; that motion is unopposed, and it is hereby GRANTED. Defendant Southwire Company, Inc., filed a motion to dismiss on August 17, 1979, based on failure to state a claim, failure to join an indispensible party, and forum non conveniens. Since that motion relied on matters outside the pleadings, the parties agree that it should be treated as a motion for summary judgment and have proceeded on that basis. On February 13, 1980, Southwire moved to dismiss for lack of jurisdiction over the subject matter. These motions are now ripe for consideration.

Southwire's motion to dismiss for lack of subject matter jurisdiction is predicated upon 28 U.S.C. § 1359, which provides, "a district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court." Southwire contends that Association de Tecnica Comercial, S.A. ("Atcom"), a Venezuelan corporation should have been a party to this action but assigned its interest in the litigation to Samincorp so as not to defeat diversity jurisdiction. Samincorp predicates its argument upon the assumption that the diversity requirement of 28 U.S.C. § 1332 precludes suits in which citizens of foreign states are opposing parties. However, a review of the authorities shows that this premise is incorrect. Since the premise is incorrect, the reasons for Atcom's assignment of its claims to Samincorp is of no legal significance for the purpose of considering Southwire's motion to dismiss for lack of subject matter jurisdiction.

The current diversity statute confers subject matter jurisdiction on the federal courts where the amount in controversy exceeds $10,000 and the controversy is between "citizens of different States and in which citizens or subjects of a foreign state are additional parties." 28 U.S.C. § 1332(a)(3). The statute does not provide that diversity is destroyed if citizens of foreign states are both plaintiffs and defendants, and one commentator has recognized that "the language of Section 1332(a)(3) is broad enough to allow aliens to be additional parties on both sides of the dispute. Under this interpretation, jurisdiction would exist if a New Yorker, and a Canadian, sued a Californian, and a German, assuming, of course, that there was a legitimate dispute between the two Americans." C. Wright, A. Miller, and E. Cooper, Federal Practice and Procedure § 3604 at p. 610 (1975).

The authorities cited by Southwire do not support their position. Although Professor Moore states, "When there are alien parties on both sides of the controversy jurisdiction will be found lacking even though they are citizens of different foreign countries ...," 1 Moore's Federal Practice, ¶ 0.751.-2 at p. 709.6, the authorities cited by Professor Moore provide no support for that blanket conclusion, since none involved the situation wherein Americans of diverse citizenship were parties and the aliens were simply additional parties. (The cases decided prior to 1948 which are cited by either Moore or Southwire are not applicable because section 1332(a)(3) has no prior counterpart.)

The primary case relied upon by Southwire, Kramer v. Caribbean Mills, Inc., 394 U.S. 823, 89 S.Ct. 1487, 23 L.Ed.2d 9 (1969), involved a controversy between two aliens, wherein one alien assigned his interest to an American citizen. That case, unlike the instant case, did not involve a controversy between citizens of different states with aliens also involved in the litigation. Southwire also seeks to find support in Lavan Petroleum Company v. Underwriters at Lloyds, 334 F.Supp. 1069 (S.D.N.Y.1971), which involved a suit by four American and two Iranian corporations against an English underwriting group, by quoting the following language, "Complete diversity is negated however by the presence as plaintiffs of the two alien corporations." 334 F.Supp. at 1071. However, the court was talking about subsection (a)(2), which speaks in terms of "citizens of a State and citizens or subjects of a foreign state." However, when addressing the jurisdictional requirement of subsection (a)(3), the court said, "If the citizen corporations were involved in litigation with citizens of different states, the presence of the two alien plaintiff corporations would be jurisdictionally immaterial." 334 F.Supp. at 1071.

Hercules, Inc. v. Dynamic Export Corp., 71 F.R.D. 101, 106 (S.D.N.Y.1976), merely states the proposition, in dicta, "The presence of aliens on both sides of a controversy will defeat diversity jurisdiction." But even that case cites a pre-...