Grupo Dataflux v. Atlas Glob. Grp., L.P.

541 U.S. 567, 124 S. Ct. 1920 (2004)

 

RULE:

The jurisdiction of a court depends upon the state of things at the time of the action brought. This time-of-filing rule is hornbook law taught to first-year law students in any basic course on federal civil procedure. It measures all challenges to subject-matter jurisdiction premised upon diversity of citizenship against the state of facts that existed at the time of filing--whether the challenge be brought shortly after filing, after the trial, or even for the first time on appeal

FACTS:

Respondent limited partnership created under Texas law filed a state-law suit against petitioner, a Mexican corporation. Respondent, asserting Texas citizenship, alleged that the court had diversity-of-citizenship jurisdiction. At the time of the filing, respondent had two partners who were Mexican citizens, but these partners left the partnership before trial began. After trial, jury verdict resulted in the partnership's favor but before the entry of judgment, petitioner filed a motion to dismiss for lack of subject-matter jurisdiction, on the ground that the parties had not been diverse at the time that the complaint was filed. The action was subsequently dismissed upon a finding that the partnership included Mexican citizens. On appeal, the judgment was reversed. The Supreme Court reversed the judgment that reversed the dismissal of the action for lack of jurisdiction. 

ISSUE:

Could the partnership’s post-filing change in citizenship cure the lack of diversity jurisdiction which existed at the time of filing of the case?

ANSWER:

No.

CONCLUSION:

The United States Supreme Court held that the partnership's post-filing change in citizenship could not cure the lack of jurisdiction which existed at the time of filing. Considerations of finality, efficiency, and economy did not warrant an exception to the longstanding rule that jurisdiction based on diversity of citizenship was determined as of the time the action was commenced. While a lack of diversity could be cured in appropriate circumstances by dismissing a dispensable non-diverse party, since diversity among the remaining parties was maintained throughout the action, the partnership's change of citizenship could not cure the lack of diversity that existed between the partnership and the Mexican corporation at the commencement of the action.

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