Coury v. Prot
1996 U.S. App. LEXIS 14870, 85 F.3d 244 (1996)
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Rule of Law:
For purposes of federal diversity jurisdiction, a person's state citizenship is determined by their domicile. A U.S. citizen does not acquire a new domicile by merely being physically present in a new location; they must also possess the intent to remain there indefinitely, and the presumption of their existing domicile continues until a new one is affirmatively established.
Facts:
- Alain Prot, a dual citizen of the United States and France, established a domicile in Texas in 1987.
- Beginning in late 1990, Prot started a bottled water business in France, which required him to commute between Texas and France.
- In June 1991, Prot moved himself and his family to France to manage the business, anticipating it would take eighteen months to get running.
- Prot and David Coury engaged in a business transaction that resulted in a dispute.
- While living in France, Prot leased his Texas home on short-term leases and made conflicting statements over time about whether he intended to remain permanently in France or return to Texas.
- Prot's wife and children lived in Texas from the summer of 1992 until September 1993 before rejoining him in France.
- Prot maintained some ties to Texas, such as property ownership, but also established significant connections in France, including purchasing land and enrolling his children in school there.
Procedural Posture:
- David Coury, a citizen of California, sued Alain Prot in a Texas state court for breach of contract and fraud.
- Prot removed the action to the U.S. District Court, alleging he was a dual citizen domiciled in France, thus creating alienage jurisdiction.
- After a jury trial, the district court entered judgment for Coury on the breach of contract claim for $164,500 and later issued a turnover order for Prot's Texas property.
- Prot appealed to the U.S. Court of Appeals for the Fifth Circuit, arguing for the first time that the district court lacked subject matter jurisdiction.
- The initial appellate panel found the record insufficient to determine Prot's domicile and remanded the case to the district court for an evidentiary hearing on that issue.
- On remand, the district court held a hearing and found that Prot was domiciled in Texas at the commencement of the suit, meaning diversity jurisdiction existed, and returned the case to the Court of Appeals.
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Issue:
Does federal diversity of citizenship jurisdiction exist over a lawsuit involving a dual U.S.-French citizen who physically resides in France but has not formed the requisite intent to remain there indefinitely, thereby retaining his prior U.S. state domicile?
Opinions:
Majority - Dennis, Circuit Judge
Yes, federal diversity of citizenship jurisdiction exists because a person's domicile does not change unless they are both physically present in a new location and have a clear intention to remain there indefinitely. The district court determined that Prot, a citizen of Texas, was diverse from Coury, a citizen of California. For purposes of diversity jurisdiction under 28 U.S.C. § 1332, a natural person must be a U.S. citizen and domiciled in a particular state. A U.S. citizen domiciled abroad is considered 'stateless' and cannot sue or be sued in federal court on diversity grounds. Further, for a dual national, only their U.S. citizenship is considered. Domicile requires physical presence plus an intent to remain indefinitely. There is a presumption of continuing domicile, and the party asserting a change bears the burden of production. The district court's factual finding that Prot had not abandoned his Texas domicile was not clearly erroneous, as it was supported by evidence of his conflicting statements and his continued ownership of property in Texas, which indicated a lack of settled intent to make France his permanent home. Therefore, at the time the suit was filed and removed, Prot was a domiciliary of Texas, establishing diversity with Coury, a citizen of California.
Analysis:
This case illustrates the stringent and fact-intensive nature of determining domicile for federal diversity jurisdiction. It reinforces the principle that a U.S. citizen living abroad is effectively 'stateless' for jurisdictional purposes unless they can be proven to be domiciled in a specific U.S. state. The decision also highlights the inflexible rule that subject matter jurisdiction cannot be waived or created by estoppel, allowing a party who invoked federal jurisdiction (Prot) to later challenge it after receiving an unfavorable judgment. This underscores a significant inefficiency in the federal system, where a lack of jurisdiction can void entire proceedings at any stage, a risk the courts accept as a necessary cost of federalism.
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