Yangming Marine Transport Corp. v. Electri-Flex Co.
| Decision Date | 30 December 1987 |
| Docket Number | No. 87 C 5348.,87 C 5348. |
| Citation | 682 F. Supp. 368 |
| Parties | YANGMING MARINE TRANSPORT CORP. d/b/a Yangming Line, Plaintiff, v. ELECTRI-FLEX COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Paul McCambridge, Tribler & Marwedel, Chicago, Ill., for plaintiff.
John F. Atkinson, James L. Siekmann, Hill, Van Santen, Steadman & Simpson, Chicago, Ill., for defendant.
This breach of contract case comes before the court on plaintiff's motion to remand to the Circuit Court of the Eighteenth Judicial Circuit of the State of Illinois, and on defendant's motion for transfer. For the reasons stated below, plaintiff's motion to remand is granted. We do not reach defendant's motion to transfer.
Plaintiff Yangming Marine Transport Corp. ("Yangming") is a Taiwan corporation with its principal place of business in Taipei. Complaint at Count I, ¶ 1. Defendant Electri-Flex is a corporation doing business in Illinois. Answer at Count I, ¶ 2.
Yangming filed a complaint in the Circuit Court of the Eighteenth Judicial Circuit of the State of Illinois on June 5, 1987, alleging that Electri-Flex engaged it to ship two 40-foot marine containers of flexible electric conduit to Bangkok, Thailand in consideration for freight charges totalling $5,800. Complaint at Count I, ¶¶ 3, 5; Count II, ¶¶ 3, 5. Electri-Flex denies that it ever made any agreement with Yangming; rather, it states that it retained an independent contractor, Behring International, Inc. ("Behring"), to ship its goods, and that Behring had sole control and responsibility for the mode of transport used. Answer at Count I, ¶ 3; Count II, ¶ 3.
Petition for Removal at ¶ 3. Defendant then moved for transfer to the United States District Court for the Northern District of Texas, Dallas Division, 28 U.S.C. §§ 1404(a), 1409(a).
Plaintiff responded by moving to remand the cause to the Circuit Court of the Eighteenth Judicial Circuit, DuPage County, Illinois. 28 U.S.C. § 1447(c).
Plaintiff alleges it had a contract with defendant. Defendant denies it, and states by way of defense that its shipping is conducted by an independent contractor, Behring, now in a Chapter 7 bankruptcy in Texas.
Defendant removed the cause to this court. Defendant contends that the subject matter of the cause is related to Behring's bankruptcy, because this independent contractor was the middleman in the transaction. Defendant also alleges that Standard Chartered Bank, PLC ("SCB"), a fourth party which is the secured creditor of Behring, now claims the monies which defendant thinks it may owe to Behring rather than to the plaintiff. Defendant seeks transfer to Texas so that it can be told to whom to pay the $5,800.
The parties before the court have diversity of citizenship, but the amount in controversy is less than $10,000. Defendant nonetheless argues that this court has jurisdiction. It offers three theories: (1) This case is related to one existing under Title 11, 28 U.S.C. § 1334. (2) This case is in the nature of an interpleader, 28 U.S.C. § 1335. (3) This case arises under admiralty or maritime jurisdiction, 28 U.S.C. § 1333. Whatever the status of the third or fourth parties, this court has jurisdiction only if the legal basis of that jurisdiction is discernable from the matters alleged in the complaint. This is the well-pleaded complaint rule. Franchise Tax Bd. of California v. Construction Laborers Vacation Trust for So. California, 463 U.S. 1, 9-12, 103 S.Ct. 2841, 2846-2848, 77 L.Ed.2d 420 (1983). The facts needed to establish jurisdiction need not necessarily all be evident from the complaint. We can, for example, examine the answer or other papers to determine the citizenship of a party named in the complaint in order to satisfy ourselves that there is true diversity of citizenship. But if the basis for removal is, as here, the existence of a federal question (or admiralty), then the federal question (or admiralty) must be visible on the face of complaint, and not appear first from the answer. "A right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First National Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936).
With this guiding principle in mind, we now take each of defendant's arguments for jurisdiction in turn.
Jurisdiction Related to Title 11 Action, 28 U.S.C. § 1334
There is no bankruptcy exception to the well-pleaded complaint rule. The relatedness, if any, of this case to a bankruptcy is visible only from the answer. The answer denies the existence of a contract between defendant and plaintiff, and suggests that plaintiff may have had a contract with a third party now in Chapter 7 before the Texas court. The complaint itself makes no mention of this third party, alleging only the existence of a contract with the defendant.
Defendant argues that this court has jurisdiction because this case is in the nature of an interpleader. Defendant argues that statutory interpleader, 28 U.S.C. § 1335, applies to this case. We do not now have statutory interpleader jurisdiction because defendant has not deposited the amount in controversy with the court. 28 U.S.C. § 1335(a)(2); Smith v. Widman Trucking & Excavating, Inc., 627 F.2d 792, 798 (7th Cir.1980). However, defendant states that it is ready, willing and able to deposit such a sum with the Clerk of this court "pursuant to Rule 68." Defendant's Memorandum in Opposition at 7. We therefore address the merits of defendant's argument for interpleader jurisdiction.
The amount in controversy is over the $500 statutory minimum. 28 U.S.C. § 1335(a). Defendant also states that the parties are diverse. It is not obvious, however, that the claimants are in fact sufficiently diverse for federal statutory interpleader jurisdiction. SCB, the bankrupt's secured creditor, is a United Kingdom corporation with its principal office in London, England. Defendant's Memorandum in Opposition at 7 n. 1. Yangming is a Taiwan corporation headquartered in Taipei. Whether a statutory interpleader action allows a federal court to take jurisdiction of an action in which all the claimants are foreign but the stakeholder is a citizen of a state is unclear. See 14 Wright & Miller at § 3636, pp. 85 n. 39, 86. Certainly there is not ordinary diversity among the claimants alone as diversity jurisdiction does not extend to cases between citizens of two foreign states. 28 U.S.C. § 1332; Montalet v. Murray, 8 U.S. (4 Cranch) 46, 2 L.Ed. 545 (1807).
Assuming that defendant could meet the diversity requirements for a statutory interpleader by naming Yangming and SCB,1 the issue before us is whether an affirmative defense in the nature of an interpleader can create federal jurisdiction where it is otherwise absent. Although the interpleader statute is deserving of a broad construction because of its remedial character, we do not think that this construction should be so broad as to defeat the wellpleaded complaint rule. Nothing in the complaint discloses that this action is in the nature of an interpleader, and we therefore find no jurisdiction on this theory.
The maritime nature of this case is visible from the face of the complaint, which alleges failure to pay on a contract for the carriage of goods by sea. Because there is no diversity jurisdiction, we must decide whether a case which plaintiff styled as a common law action is nonetheless removable as arising under our admiralty jurisdiction. We hold that it is not removable because defendant is a citizen of the state in which the action was brought. The route to this conclusion is somewhat complex.
The admiralty jurisdiction of the federal courts extends to suits on contracts for the carriage of goods by sea. See United States v. Isthmian S.S. Co., 359 U.S. 314, 79 S.Ct. 857, 3 L.Ed.2d 845 (1959); Allied Chem. Int'l Corp. v. Companhia de Navegacao Lloyd Brasileiro, 775 F.2d 476, 481 (2d Cir.1985) (breach of contract), cert. denied, 475 U.S. 1099, 106 S.Ct. 1502, 89 L.Ed.2d 903 (1986); 14 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3675 at p. 473 n. 10 (1985 & Supp. 1987) ("Wright & Miller").
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