Van Horn v. Western Elec. Co.

• Decision Date: 05 January 1977
• Docket Number: Civ. No. 6-72293.
• Citation: 424 F. Supp. 920
• Parties: Donald VAN HORN, Plaintiff, v. WESTERN ELECTRIC COMPANY, a Foreign Corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

424 F. Supp. 920

Donald VAN HORN, Plaintiff, v. WESTERN ELECTRIC COMPANY, a Foreign Corporation, Defendant.

Civ. No. 6-72293.

United States District Court, E. D. Michigan, S. D.

January 5, 1977.

V. Paul Donnelly, Detroit, Mich., for plaintiff.

Chester E. Kasiborski, Jr., Detroit, Mich., for defendant.

OPINION

GUY, District Judge.

On October 8, 1976, the plaintiff commenced this action in the Circuit Court for the County of Wayne, Michigan. Defendant thereafter removed the case pursuant to 28 U.S.C. § 1441 alleging that this court had original jurisdiction under 28 U.S.C. § 1332(a), diversity of citizenship. The petition for removal was filed within the requisite thirty days after defendant received the complaint, 28 U.S.C. § 1446(b). However, the court, on its own motion, remands this case to the Circuit Court for the County of Wayne because the Petition for Removal fails to plead adequately that the parties are of diverse citizenship as required by 28 U.S.C. § 1332(a)(1) and (c).

Actions commenced in state court may only be removed where the action could have been originally brought in federal court:

"(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441.

There are two main sources for federal jurisdiction. The first is federal question jurisdiction in 28 U.S.C. § 1331(a) which permits actions to be brought in federal court where "the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and arises under the Constitution, laws, or treaties of the United States." In the instant case, plaintiff alleges that defendant discriminated against plaintiff on account of age, in violation of Michigan law, M.S.A. § 17.458(3a) M.C.L.A. § 423.303a. The cause of action plead in the complaint does not arise under the Constitution, laws, or treaties of the United States, but, rather, is an action arising under Michigan statutory law.

The second major source of federal jurisdiction is 28 U.S.C. § 1332(a)(1) which permits actions to be brought in federal court where "the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between — (1) citizens of different States . . ." For purposes of corporate parties, Congress established specific guidelines delineating where a corporation is deemed a citizen:

"(c) For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c).

Congress purposefully used the conjunctive "and" in defining the citizenship of a corporation thereby permitting a corporation to be a citizen of more than one state. As a matter of fact, a corporation incorporated in every state is likewise a citizen of each state for purposes of diversity of citizenship jurisdiction. Subsection (c) of Section 1332 was clearly designed to make corporations less amenable to suit in federal court on the basis of diversity of citizenship. Kelly v. United States Steel Corporation, 284 F.2d 850 (CA 3 1960); Walsh v. American Airlines, 264 F.Supp. 514 (E.D.Ky.1967).

In an original complaint as well as in a petition for removal where jurisdiction is predicated on diversity of citizenship, it is incumbent on the party asserting the jurisdiction to plead the principal place of business and place of incorporation of the corporation. See Barrow Development v. Fulton Insurance, 418 F.2d 316, 317 (CA 9 1969); Walsh v. American Airlines, 264 F.Supp. 514, 516 (E.D.Ky.1967); Carlton Properties v. Crescent City Leasing, 212 F.Supp. 370, 371 (E.D.Pa.1962); William Kalivas Construction v. Vent Control of Kansas City, 325 F.Supp. 1008, 1009 (W.D. Mo.1970); Browne v. Hartford Fire, 168 F.Supp. 796, 798 (N.D.Ill.1959); F. & L. Drug Corp. v. American Central, 200 F.Supp. 718, 720 (D.Conn.1961); Park v. Hopkins, 179 F.Supp. 671, 672 (S.D.Ind. 1960); Handy v. Uniroyal, 298 F.Supp. 301, 302 (D.Del.1969). Moreover, federal jurisdiction must be present both at the time of the complaint and time of removal, William Kalivas Construction, supra, and Carlton Properties, supra. In the instant case, the plaintiff's complaint alleges that the defendant is a corporation with an area office located in the City of Plymouth, County of Wayne, Michigan. Defendant's Petition for Removal alleges that plaintiff is a citizen of Michigan and that defendant is incorporated under the laws of the State of New York and, thus, that this court has original jurisdiction under 28 U.S.C. § 1332.¹

Where the party alleging jurisdiction has failed to satisfy the minimum jurisdictional requirement for federal jurisdiction, the court, sua sponte, has the right and duty to raise the jurisdictional defect. Atlas, etc., Insurance Co. v. Southern, Inc., 306 U.S. 563, 568 n. 1, 59 S.Ct. 657, 83 L.Ed. 987 (1938), and Basso v. Utah Power and Light Company, 495 F.2d 906, 909 (CA 10 1974). Evans-Hailey Co. v. Crane Co., 207 F.Supp. 193, 198 (M.D.Tenn.1962); Bradford v. Mitchell Brothers, 217 F.Supp. 525, 526 (N.D.Cal.1963); Firemen's Insurance v. Robbins Coal, 288 F.2d 349, 350 (CA 5 1961); Whitelock v. Leatherman, 460 F.2d 507, 514 (CA 10 1972). Following this well developed principle, the court, on its own motion, concludes that defendant has failed to plead satisfactorily the jurisdictional allegation in its petition for removal, in that no allegation relative to the corporate defendant's principal place of business is included in the petition for removal, and, therefore, the court orders that the case be remanded to state court.

The party invoking the jurisdiction of the federal court has the burden of establishing the existence of jurisdiction. Moreover, there is a presumption against federal jurisdiction. See Basso v. Utah Power and Light Company, supra, at 909; Evans-Hailey Co. v. Crane Co., supra, at 198; F. & L. Drug Corp. v. American Central, supra, at 724; Walsh v. American Airlines, supra, at 515; and Whitelock v. Leatherman, supra, at 514, and a policy of strict construction of jurisdiction in favor of state court, Young Spring and Wire v. American Guarantee and Liability Insurance, 220 F.Supp. 222, 228 (W.D.Mo.1963); William Kalivas Construction v. Vent Control of Kansas City, supra, at 1010; and Alexander v. Missouri-Kansas-Texas Railroad, 221 F.Supp. 897, 898 (W.D.Mo.1963).

Similarly, courts have strictly interpreted the removal statute, 28 U.S.C. § 1441, against removal. Young Spring and Wire v. American Guarantee and Liability Insurance, supra, at 228; Browne v. Hartford Fire Insurance, supra, at 799; Evans-Hailey Co. v. Crane Co., supra, at 198; Walsh v. American Airlines, 264 F.Supp. 514, 516 (E.D.Ky.1967); Eubanks v. Krispy Kreme Donut, 208 F.Supp. 479, 481 (E.D.Tenn. 1961). Various reasons have been cited for the policy of strict interpretation against removal. In Young Spring and Wire Corp. v. American Guarantee and Liability Insurance, supra, the court enumerated four practical and theoretical reasons for the policy of strict construction against federal removal jurisdiction. First, if removal is permitted in doubtful cases, the party suffering an adverse judgment in the district court can appeal to the circuit court contending that removal should not have been permitted and thus secure a reversal of the lower court's judgment on the ground of lack of jurisdiction of the lower court to render a judgment. Young Spring and Wire, supra, at 228; William Kalivas Construction v. Vent Control of Kansas City, supra, at 1010; and Whitelock v. Leatherman, supra, at 514.

Second, the traditional justification for diversity jurisdiction of state court hostility toward non-resident defendants has been significantly reduced from the time when diversity jurisdiction was first created. Young Spring, supra, at 228; F. & L. Drug Corp. v. American Central Insurance Co., supra, at 723.

Third, that federal courts must cautiously guard their own jurisdiction so as not to infringe on the rightful independence and sovereignty of state governments. Young Spring, supra, at 228; Eubanks v. Krispy Kreme Donut, supra, at 481; Evans-Hailey Co. v. Crane Co., supra, at 198 (considerations of state sovereignty, comity, and traditional judicial respect for the jurisdiction of other courts).

Fourth, considerations of congestion in federal courts have prompted some courts to conclude that questionable cases of federal removal jurisdiction should be remanded to state courts. Young Spring, supra, at 228; Eubanks v. Krispy Kreme Donut, supra, at 481; and Browne v. Hartford Fire Insurance, supra, at 797-98.

Where a defendant has filed a properly pleaded "verified petition containing a short and plain statement of the facts which entitle him or them to removal," 28 U.S.C. § 1446(a), the court, of course, must accept the removal. As already noted, one of the requirements in a petition for removal is stating a basis for original federal jurisdiction and where this is based on diversity of citizenship, the petitioning party must state the principal place of business and place of corporation of any corporate parties. 28 U.S.C. § 1332(c). It has been held that where a petition for removal fails to allege the principal place of business of any corporate party the removal is improper and the court lacks jurisdiction to accept such removal. Browne v. Hartford Fire Insurance, supra, at 799; William Kalivas Construction v. Vent Control of Kansas City, supra, at 1010; Young v. Railway Express, 209 F.Supp. 953 (W.D.Ky.1962); Eubanks v. Krispy Kreme Donut, supra, at 481; Barrow Development v. Fulton Insurance, 418 F.2d 316, 317 (CA 9 1969)...