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Randazzo v. Eagle-Picher Industries, Inc.

United States District Court for the Eastern District of Pennsylvania
117 F.R.D. 557 (1987)
ELI5:

Rule of Law:

To establish diversity jurisdiction over a corporate defendant under 28 U.S.C. § 1332(c), a plaintiff's complaint must affirmatively and distinctly allege both the corporation's state of incorporation and its principal place of business.


Facts:

  • Plaintiff's complaint was part of a master asbestos litigation.
  • The complaint alleged that defendant C.E. Refractories was a corporation organized under the laws of Delaware.
  • It further alleged that C.E. Refractories had a 'registered office' in Philadelphia, Pennsylvania, but did not state its principal place of business.
  • The complaint alleged that defendant Bevco Industries was a corporation 'duly organized to do business within the Commonwealth of Pennsylvania' and was 'domiciled' there.
  • The complaint for Bevco Industries failed to specify its state of incorporation or its principal place of business.

Procedural Posture:

  • Plaintiff filed a complaint in the United States District Court against several defendants, including Bevco Industries and C.E. Refractories, as part of a master asbestos litigation.
  • The court, on its own motion, found the complaint jurisdictionally deficient for failing to properly allege the citizenship of Bevco Industries and C.E. Refractories.
  • The court dismissed the complaint but granted the plaintiff ten days to file an amended complaint to correct the jurisdictional defects.
  • Plaintiff filed an amended complaint that reiterated and incorporated the same allegations the court had previously found insufficient.

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Issue:

Does a complaint satisfy the requirements for federal diversity jurisdiction under 28 U.S.C. § 1332(c) if it fails to allege both a corporate defendant's state of incorporation and its principal place of business?


Opinions:

Majority - Joseph Lord, III, Senior District Judge

No. A complaint that fails to allege both a corporate defendant's state of incorporation and its principal place of business is jurisdictionally deficient. Federal courts are courts of limited jurisdiction, and the plaintiff bears the burden of affirmatively pleading the grounds for that jurisdiction. Under 28 U.S.C. § 1332(c), a corporation is a citizen of both its state of incorporation and the state of its principal place of business. Pleading ambiguous equivalents, such as a 'registered office' or 'domicile,' is insufficient to meet the statute's clear and mandatory requirements. Because the plaintiff's amended complaint willfully repeated these deficiencies after being given an opportunity to cure them, the complaint must be dismissed with prejudice.



Analysis:

This opinion serves as a stark reminder of the strictness of federal jurisdictional pleading requirements and the non-discretionary nature of subject-matter jurisdiction. The court emphasizes that these rules are not mere formalities but are fundamental limitations on federal power rooted in the Constitution. The dismissal with prejudice underscores the severe consequences for attorneys who fail to adhere to these basic rules, particularly after a court has explicitly identified the deficiency. The case warns practitioners that a heavy caseload is not an excuse for failing to meet the affirmative burden of establishing federal jurisdiction.

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