Lincoln Prop. Co. v. Roche
Issues
Whether a court can demand proof of the citizenship of an unnamed corporate entity affiliated with a named party when it deems that corporate entity to be the “real party in interest;” and whether, for diversity purposes, a court must consider a limited partnership as a citizen of any state with which the limited partnership has a “very close nexus,” as well as any state of which a partner is a citizen.
Although plaintiffs initially decide whether to sue in state or federal courts, per Article III, Section 2 of the Constitution, 28 U.S.C. § 1441(b) allows defendants to remove cases to federal court if opposing parties are citizens of different states. Christophe and Juanita Roche discovered toxic mold in the apartment they were leasing. The Roches filed a complaint in Virginia state court, naming property owners State of Wisconsin Investment Board (“SWIB”) and managers Lincoln Property Company (“Lincoln”) as defendants. SWIB and Lincoln later removed the case to federal district court based on diversity jurisdiction, claiming Wisconsin and Texas citizenship, respectively. After the district court granted Lincoln summary judgment, Roche challenged the court's jurisdiction on the grounds that Lincoln was a partnership with one of its partners residing in Virginia, claiming that Lincoln manipulated federal diversity jurisdiction by litigating the case in the name of another one of the companies in the Lincoln group. The district court ruled in favor of Lincoln, but the Fourth Circuit Court of Appeals reversed, finding that Lincoln had failed to prove its diversity from Roche. In deciding whether the Fourth Circuit erred in its holding, the Supreme Court will determine when Federal Courts can require proof of the diversity of parties not named in the complaint. The Court will also decide whether the Fourth Circuit announced a new and valid rule for determining the citizenship of a limited partnership for diversity jurisdiction purposes.
Questions as Framed for the Court by the Parties
1. Whether an entity not named or joined as a defendant in the lawsuit can nonetheless be deemed a "real party in interest" to destroy complete diversity of citizenship in a case removed from state court under 28 U.S.C. ? 1441(b).
2. Whether a limited partnership's citizenship for diversity subject-matter jurisdiction purposes is determined not by the citizenship of its partners, but by whether its business activities establish a "very close nexus" with the state.
In March 2001, Christophe and Juanita Roche (“Roche”) entered into a lease for Unit 104 in the Westfield Village Apartments. Pet'r Lincoln's Br. at 2.
Additional Resources
- Law about... Jurisdiction