United Steelworkers of America v. R. H. Bouligny, Inc.

Supreme Court of the United States
15 L. Ed. 2d 217, 1965 U.S. LEXIS 2253, 382 U.S. 145 (1965)

ELI5:

Rule of Law:

For the purposes of federal diversity jurisdiction, the citizenship of an unincorporated association, such as a labor union, is determined by the citizenship of each of its individual members, not its principal place of business. Any change to this rule must be enacted by Congress, not the courts.

Facts:

The United Steelworkers of America, an unincorporated labor union, was conducting a campaign to unionize the employees of a corporation in North Carolina.
During the campaign, the North Carolina corporation alleged that the union defamed it.
The United Steelworkers union's principal place of business was in Pennsylvania.
The union had members who were citizens of North Carolina.
The North Carolina corporation was also a citizen of North Carolina.

Procedural Posture:

A North Carolina corporation sued the United Steelworkers union in a North Carolina state court for defamation.
The union, as defendant, removed the action to the U.S. District Court, asserting diversity of citizenship jurisdiction.
The corporation, as plaintiff, filed a motion to remand the case back to the state court, arguing that complete diversity did not exist.
The U.S. District Court (trial court) denied the motion to remand, choosing to treat the union as a citizen of its principal place of business.
The corporation appealed the interlocutory order to the U.S. Court of Appeals for the Fourth Circuit.
The Court of Appeals, with the corporation as appellant and the union as appellee, reversed the District Court and directed that the case be remanded to state court.
The U.S. Supreme Court granted certiorari to review the decision of the Court of Appeals.

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Issue:

For the purposes of federal diversity jurisdiction, is an unincorporated labor union's citizenship determined by its principal place of business, like a corporation, rather than by the citizenship of each of its individual members?

Opinions:

Majority - Mr. Justice Fortas

No. For purposes of federal diversity jurisdiction, an unincorporated labor union's citizenship is that of each of its members. The Court held that despite strong policy arguments for treating large unincorporated associations like corporations, the long-standing rule established in Chapman v. Barney—that an association's citizenship is determined by the citizenship of all its members—remains controlling. The Court reasoned that extending the corporate citizenship fiction to unions is a matter for the legislature, not the judiciary. The Court distinguished its prior ruling in Puerto Rico v. Russell & Co., explaining that decision was based on the unique status of a civil law entity, not a change in the general federal rule. Furthermore, the Court noted the practical difficulties it would face in fashioning a new jurisdictional rule, such as determining a union's 'principal place of business' and dealing with local chapters, concluding these complex decisions are better suited for congressional consideration.

Analysis:

This decision reaffirms the principle of judicial restraint, with the Court explicitly deferring to Congress on a matter of expanding federal court jurisdiction. It solidifies the bright-line distinction between corporations and unincorporated associations for diversity purposes, thereby limiting access to federal courts for large, multi-state associations like labor unions, partnerships, and trade groups. By declining to overturn the old rule from Chapman v. Barney, the Court ensures that these entities will almost always face challenges in establishing the complete diversity required for federal jurisdiction, as they likely have members in nearly every state.

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