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The Supreme Court’s continuing interest in civil procedure already has produced two opinions involving removal this term: Martin v. Franklin Capital Corp., 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005), and Lincoln Property Co. v. Roche, 126 S. Ct. 606 (2005). Martin, discussed in my last column [ NLJ, 11-14-05], was newly appointed Chief Justice John G. Roberts Jr.’s first opinion. That case resolved a persistent split in the courts of appeals regarding the correct standard for awarding fees under the removal statute. Interaction of removal statute and federal rules This column explores the Lincoln Property case, which presents a more complex set of issues, and is significant because it deals with the interaction of the removal statutes and the Federal Rules of Civil Procedure, and resolves some questions about who has the burden of proof on various aspects of the forum-selection process. Lincoln Property presents a typical removal scenario: the Roches, unquestionably citizens of Virginia, complained of exposure to toxic mold in the apartment they leased in Virginia. Expert inspection of their apartment confirmed the existence of mold. The Roches filed two similar complaints in state court in Virginia, alleging a variety of ailments resulting from their exposure to the mold, as well as property damage claims. The state court complaints named three defendants: Lincoln Property Co., the developer and manager of the complex; Invesco Institutional (N.A.) Inc., a Delaware investment management corporation with its principal place of business in Georgia; and the state of Wisconsin, the owner of the apartment complex. With respect to Lincoln, the plaintiffs alleged that, acting through agents, it had caused the plaintiffs’ injuries. Describing itself as a corporate citizen of Texas, Lincoln removed the cases to federal court based on diversity jurisdiction. After Lincoln successfully moved for summary judgment, the plaintiffs moved to remand. Although the plaintiffs originally had alleged, then eventually conceded, that Lincoln was incorporated in Texas and had a Texas principal place of business, they argued in their motion to remand that Lincoln was not a corporation, but a partnership with one partner residing in Virginia. Because the citizenship of all partners counts for diversity purposes, complete diversity accordingly would be destroyed. Moreover, removal would be improper under � 1441(b) because one of the defendants was a citizen of the state in which the plaintiffs had brought suit. Of course, the plaintiffs hoped to be returned to state court: Virginia does not permit summary judgment based on affidavits or deposition testimony, nor has it adopted the relatively restrictive rule of Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (1993), to assess expert evidence. The district court found that Lincoln was a citizen of Texas and denied the motion to remand. The 4th U.S. Circuit Court of Appeals reversed and ordered that the Roches’ case be remanded to the Virginia court. Although recognizing that Lincoln is a Texas citizen and a proper party to the action, the 4th Circuit noted that Lincoln operates its business under many different entities. Although Lincoln was described as “the nominal party and ultimate parent company,” the 4th Circuit, looking at Lincoln’s rather confusing business structure, suspected that an unidentified Virginia entity, as opposed to the Texas parent corporation, was “the real and substantial party in interest.” According to the 4th Circuit, because Lincoln, the party invoking federal court jurisdiction, had not demonstrated the nonexistence of a Virginia subentity, it had not met its burden of establishing diversity, and therefore the cases must be remanded to the state court. Writing for a unanimous court, Justice Ruth Bader Ginsburg resolved a split among the courts of appeals on the question of whether an entity not named or joined as a defendant can nonetheless be deemed a real party in interest whose presence could destroy complete diversity. She found that although the 4th Circuit had correctly identified Lincoln as a proper party to the action, it had erred in insisting that some other entity affiliated with Lincoln should have been joined as a co-defendant, and that Lincoln had the obligation to identify that entity. Ginsburg’s opinion is a civil procedure professor’s dream case: It combines the usual statements about the requirements of diversity jurisdiction under � 1332, and removal of diversity cases under � 1441, and then begins a riff about the relationship between these jurisdictional statutes and the Federal Rules of Civil Procedure. She explores two rules raised by the 4th Circuit in its jurisdictional analysis: Rule 17(a), the real party in interest rule, and Rule 19, the necessary/ indispensable party rule. According to Ginsburg, these rules address the question of party joinder, but do not require plaintiffs or defendants to name and join any additional parties to this action. First, Rule 17(a) is wholly inapplicable to the case because it directs that “every action shall be prosecuted in the name of the real party in interest.” (Emphasis added.) Thus, the rule pertains to joinder of plaintiffs, not defendants. Second, Rule 19 provides for the joinder of parties who should or must take part in the litigation to achieve a just adjudication. Because Lincoln had admitted that it managed the property during the relevant times, Ginsburg found that no additional person or entity needed to be joined for just adjudication. She quoted 16 Moore’s Federal Practice � 107.14[2][c] (3d ed. 2005) for the proposition that: “In general, the plaintiff is the master of the complaint and has the option of naming only those parties the plaintiff chooses to sue, subject only to the rules of joinder [of] necessary parties.” Thus, it was incorrect for the 4th Circuit to inquire whether some other person or entity might have been joined as an additional or substitute defendant. She next rejected the 4th Circuit’s attempts to rely on earlier Supreme Court precedent that appeared to apply Rule 17 in diversity cases to complaining and defending parties. She noted that the court’s decisions applying “real party to the controversy” language when explaining whose citizenship counts for diversity purposes were irrelevant to the Roches’ case. This was not a case where a party had been “improperly or collusively” named solely to create federal jurisdiction, under 28 U.S.C. 1359. Nor did the Roches’ case implicate the court’s 11th Amendment cases in which actions against a state agency have been regarded as suits against the state itself. She concludes by discussing the relationship between the Federal Rules of Civil Procedure and Congress’ jurisdictional intent by noting that sometimes a named party’s citizenship does not determine its diverse status. For example, under Rule 17(a), executors, administrators and guardians “may sue in [their] own names without joining the party for whose benefit the action is brought.” With respect to diversity jurisdiction, however, Congress has directed under � 1332(c)(2) that “the legal representative of [a decedent's] estate . . . shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent.” On the other hand, Congress has not spoken to whether a corporation, for diversity-of-citizenship purposes, should be deemed to have acquired the citizenship of all or any of its affiliates. To the contrary, in cases like the plaintiffs’, Congress has provided the applicable rule: “[A] corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” According to Ginsburg: “The jurisdictional rule governing here is unambiguous and it is not amenable to judicial enlargement. Under � 1332(c)(1), Lincoln is a citizen of Texas alone, and under � 1441(a) and (b), this case was properly removed.” Two issues that perplexcourts and practitioners The court’s opinion raised two other issues that often perplex federal courts and practitioners: First, defendants had raised in their petition for certiorari the question of whether a limited partnership can be deemed a citizen of a state on the sole ground that the partnership’s business activities bear a “very close nexus” with the state? Although the court found that no partnership needed to be joined, and thus treated that question as not ripe for adjudication, it appeared to signal how it would have ruled on the issue by noting that the court’s prior decisions have not regarded the locations at which a partnership conducts its business as relevant to subject-matter jurisdiction. Rather, it noted that for diversity purposes, a partnership’s citizenship is deemed to be the citizenship of each state in which a partner, limited as well as general, is domiciled. It also raised, but did not resolve, the question of whether the presence of a diverse but in-state defendant in a removed action is a “procedural” defect, not a “jurisdictional” bar. This is an important question that the court will need to resolve some day because it determines whether the plaintiff must raise the issue within 30 days after the defendant has removed, or whether the defect can be raised, as a jurisdictional matter, at any time. The unanimous court’s opinion certainly makes sense. Imagine the confusion if in any case the courts needed to look back to determine whether there was a party out there that could have been joined. Although the 4th Circuit is correct that the burden for demonstrating the existence of federal jurisdiction is on the removing defendant, the party invoking jurisdiction, its only further inquiry should have been to determine whether Rule 19 required the joinder of any additional parties. Rule 19 rarely supports the addition of absent parties. Georgene M. Vairo is a professor of law and William M. Rains Fellow at Loyola Law School, Los Angeles. She can be reached at [email protected].

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