Sheehan v. Gustafson
967 F.2d 1214 (1992)
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Rule of Law:
For purposes of federal diversity jurisdiction, a person's citizenship is determined by their domicile at the time a lawsuit is filed. Domicile requires both physical presence in a state and an intent to remain there indefinitely, a burden which the party asserting jurisdiction must prove by a preponderance of the evidence.
Facts:
- John D. Sheehan, a Nevada citizen, and Deil O. Gustafson had an alleged oral contract regarding the sale of the Tropicana Hotel in Las Vegas.
- Gustafson was a citizen of Minnesota until 1973, when he moved to Las Vegas, Nevada to manage the Tropicana Hotel, which he had purchased in 1972.
- From 1973 onward, Gustafson held a Nevada driver's license, was registered to vote in Nevada, and filed Minnesota state tax returns as a non-resident listing a Nevada permanent address.
- Gustafson was incarcerated in Minnesota from 1984 to 1987.
- At the time of the lawsuit in 1991, Gustafson maintained significant contacts in Minnesota, including bank accounts, a corporate-owned condominium, an office and secretary, and professional services (doctor, dentist, attorney).
- Gustafson's 1989 will declared he was domiciled in Clark County, Nevada.
- Around the time the lawsuit was filed, Gustafson was constructing a new home on his ranch in Ely, Nevada.
Procedural Posture:
- John D. Sheehan, Sr. sued Deil O. Gustafson in the U.S. District Court for the District of Minnesota, asserting federal jurisdiction based on diversity of citizenship.
- Gustafson filed a motion to dismiss the complaint for lack of subject matter jurisdiction, arguing that he, like Sheehan, was a citizen of Nevada.
- The District Court granted Gustafson's motion to dismiss, finding that both parties were citizens of Nevada, and therefore no diversity existed.
- Sheehan (appellant) appealed the dismissal to the U.S. Court of Appeals for the Eighth Circuit, where Gustafson was the appellee.
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Issue:
For purposes of federal diversity jurisdiction, is an individual domiciled in a state where they maintain significant business contacts and a part-time residence, or in the state where they have consistently maintained official ties such as voter registration, a driver's license, and have declared their intent to reside permanently?
Opinions:
Majority - Bowman, Circuit Judge
No. For diversity jurisdiction purposes, an individual is domiciled in the state where they demonstrate an intent to remain indefinitely, which is best evidenced by official ties and declarations rather than by the location of business contacts. The court determined that domicile is synonymous with citizenship and is assessed at the time the action is filed. The analysis requires a two-part test: (1) presence in the purported state of domicile, and (2) an intention to remain there indefinitely. The burden is on the plaintiff, Sheehan, to prove diversity by a preponderance of the evidence. While Gustafson had a physical presence in both Minnesota and Nevada, the court found the objective evidence of his intent to remain pointed decisively to Nevada. Factors such as his Nevada driver's license, voter registration, non-resident Minnesota tax filings, the declaration in his will, and the construction of a new home in Nevada were more indicative of an intent to remain than his business contacts and part-time presence in Minnesota.
Analysis:
This case provides a clear application of the two-part test for determining domicile in the context of diversity jurisdiction. It emphasizes that while a person may have multiple residences and substantial contacts in several states, they can only have one legal domicile. The court's analysis demonstrates that objective indicators of long-term intent, such as official registrations (voting, driver's license) and legal declarations (wills, tax filings), are typically given more weight than business contacts or temporary living arrangements. This precedent reinforces the high evidentiary burden on plaintiffs to establish federal jurisdiction and clarifies that a defendant's long-standing formal ties to one state are difficult to overcome, even in the face of significant, ongoing connections to another.
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