Walker by Walker v. Norwest Corp.

108 F.3d 158 (8th Cir. 1997)

 

RULE:

It is the plaintiff's burden to plead the citizenship of the parties in attempting to invoke diversity jurisdiction. A plaintiff fails to carry that burden if they do not allege the domicile of the individual defendants or the place of incorporation and principal place of business of all the corporate defendants. For purposes of diversity jurisdiction, the terms "domicile" and "citizenship" are synonymous.

FACTS:

Plaintiffs, trust beneficiary, his guardian, and their attorney, filed a complaint against defendants, a corporation, trustees, and agents, alleging breach of fiduciary duty and other state law causes of action. The complaint stated that jurisdiction was based on diversity because the trust beneficiary and some defendants, who were a corporation, trustees, and agents, were citizens of different states. The trust beneficiary and the guardian were both citizens of South Dakota. The complaint averred that the corporation was a Minnesota corporation. The complaint stated that many defendants were "residents" of South Dakota. The district court granted a Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of jurisdiction and sanctioned the attorney under Fed. R. Civ. P. 11. The sanctions were challenged. The court affirmed the entry of sanctions in the amounts provided.

ISSUE:

Can an attorney be sanctioned under Rule 11 of the Federal Rules of Civil Procedure for pleading diversity jurisdiction but failing to identify the citizenship of the parties?

ANSWER:

Yes.

CONCLUSION:

The court held that it was the trust beneficiary and the guardian's burden to plead the citizenship of the parties in attempting to invoke diversity jurisdiction; they failed to carry that burden because they did not allege the domicile of the individual defendants or the place of incorporation and principal place of business of all the corporate defendants. Federal diversity jurisdiction required complete diversity, so that no defendant was a citizen of the same state as any plaintiff. The court held that the district court did not abuse its discretion in determining that sanctions were appropriate. Also, the district court did not abuse its discretion in entering sanctions for the full amount of expenses and fees claimed.

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