Concept
Alienage and Foreign Parties
Diversity jurisdiction
Alienage and Foreign Parties
Section 1332(a)(1) covers disputes between citizens of different States, but Congress also opened the district courts to some disputes that involve foreign citizens, and it did so in three further subsections, (a)(2) through (a)(4). Each subsection describes a different party lineup, and a lineup that fits none of them falls outside the statute no matter how large the claim. The reason for the extra grants is that a foreign litigant may fear bias in any state forum, so the risk of prejudice does not depend on where the suit is filed.1 The sections below sort the lineups by subsection, starting with a state citizen on one side and a foreign citizen on the other.
Alienage Under Subsection (a)(2)
Section 1332(a)(2) gives the district courts jurisdiction over civil actions between citizens of a State and citizens or subjects of a foreign state.2 Lawyers call this branch alienage jurisdiction, because an alien (a citizen of another country) is on one side and a state citizen is on the other. The amount-in-controversy requirement still applies, so every example below assumes more than $75,000 is at stake. Suppose a citizen of Venezuela sues a New York citizen for $90,000. A foreign citizen is opposed to a state citizen, and the suit falls within (a)(2). Now suppose a Venezuelan sues a Frenchman. No state citizen appears on either side, so (a)(2) does not apply. The Constitution authorizes federal jurisdiction over a suit between a state citizen and an alien, and it does not authorize jurisdiction over a suit between two aliens.3
The statute carves out one group of aliens. The district courts lack original jurisdiction under (a)(2) over an action between citizens of a State and foreign citizens who are lawfully admitted for permanent residence in the United States and are domiciled in the same State.4 The reason follows from why alienage jurisdiction exists. A permanent resident who lives in New York is, in daily life, a neighbor of the New York citizen suing in New York, so the worry that a local court will favor its own against an outsider has little force. The current wording also has a history. A 1988 amendment treated a permanent resident as a citizen of the State of domicile, but its text also seemed to reach a suit between permanent residents of two different States, which raised doubts about whether Congress could confer jurisdiction over a suit between aliens. Congress then replaced that language with the present exception.5
The exception has two elements that must both be present, so changing either one restores jurisdiction. Imagine that a New York citizen sues a Canadian who holds lawful permanent resident status and is domiciled in New York. The exception applies, and (a)(2) provides no jurisdiction. Change only the domicile. If the Canadian permanent resident is domiciled in New Jersey, the two parties no longer share a State, and the suit falls within (a)(2). Change the status instead. A Canadian who lives in New York without permanent resident status is not within the exception, because the exception covers only lawful permanent residents.6 The facts of a separate invented example show how the carve-out can defeat a whole case. A Texan sues a French company and a French-born permanent resident who is domiciled in Texas. The exception removes the claim against the resident, and (a)(3), taken up next, cannot rescue it because no state citizens stand on opposite sides.7
A last variation in subsection (a)(4) is short. It gives jurisdiction when a foreign state, as defined in 28 U.S.C. § 1603(a), is the plaintiff and the defendants are citizens of a State or of different States.8
Aliens as Additional Parties
Subsection (a)(2) treats the alien as an opponent of a state citizen. Subsection (a)(3) addresses the other situation, where the alien is simply along for the ride. It covers actions between citizens of different States in which citizens or subjects of a foreign state are additional parties.10 Diversity among state citizens therefore remains the foundation, and the aliens do not count toward diversity or against it. Foreign parties may be added to either side, and they may even sit on both sides. A New Yorker and a Canadian who sue a Californian and a German satisfy (a)(3), because the state citizens are on opposite sides and the two aliens are additional parties.11 The aliens need not come from different countries. Citizens of one foreign country can appear on both sides without destroying the diversity the state citizens supply.12
The fourth lineup is the instructive one, because the case was within the statute until the last diverse defendant left. The Supreme Court has suggested in dictum that joining an alien plaintiff with an alien defendant leaves the complete diversity required by § 1332 absent.15 The reason is the same neutral-forum logic seen earlier, since with foreign citizens on both sides a state court could not favor one side as the local party.
Entities complicate the count, because a corporation can be a citizen of more than one place and each place counts. A corporation incorporated in London and headquartered in New York is a citizen of both the United Kingdom and New York. If a German sues it, aliens stand on both sides and no state citizen is on the German's side, so there is no diversity jurisdiction.16
Stateless and Nonresident Citizens
Two kinds of litigant fit neither the state-citizen category nor the alien category, and a case involving either one is outside § 1332. The first is the stateless person, someone who is a citizen or subject of no country at all. Alienage jurisdiction extends to citizens or subjects of a foreign state, and a stateless person is neither, so a suit between a U.S. citizen and a stateless person cannot go forward on diversity grounds.18
The second is the American who lives overseas. State citizenship for diversity purposes requires that a natural person be a U.S. citizen and also be domiciled in a particular State. A U.S. citizen domiciled abroad lacks the second element, so that person is not a citizen of any State, and the person is not an alien either, because an alien must be a citizen or subject of a foreign state. The result is the same stateless status as in the first case.19 Suppose a U.S. citizen who has made a permanent home in Paris sues a Texan. Neither side of the lineup fits any subsection, so the court lacks diversity jurisdiction. The same suit would be proper if the plaintiff were domiciled in Ohio, because the plaintiff would then be a state citizen opposed to a Texan.
Two related points help sort cases. A person who holds U.S. citizenship together with another nationality is treated as a U.S. citizen only, so the other nationality cannot be used to invoke alienage jurisdiction.20 Citizens of the District of Columbia and of the territories are, by statute, treated as state citizens for diversity purposes, which separates them from Americans domiciled abroad.21 Finally, a stateless party does not always doom a case. In Newman-Green, Inc. v. Alfonzo-Larrain, a U.S. citizen with no domicile in any State was a nondiverse party, and the Supreme Court allowed the court to preserve jurisdiction by dismissing that party, provided the party was not indispensable.22
Alienage Under Subsection (a)(2)
The first foreign-party grant in § 1332(a) covers the simplest lineup: a state citizen on one side and a foreign citizen on the other. The statute gives the district courts jurisdiction over civil actions between "citizens of a State and citizens or subjects of a foreign state."24 Lawyers call this branch alienage jurisdiction, because an alien, meaning a citizen of another country, is opposed to a citizen of one of the States. The amount-in-controversy requirement of more than $75,000 still applies, so each example below assumes that threshold is met. The word "State" here includes the territories, the District of Columbia, and Puerto Rico.25
The reason for the grant comes from the position of the foreign litigant. A Mexican citizen who sues an Illinois citizen over a $100,000 contract has no home state anywhere in the United States, and the same worry about favoritism toward a local party that supports ordinary diversity applies to that foreign litigant in any state courtroom. A federal forum answers the worry. That suit falls within (a)(2), because an alien is opposed to a state citizen. A suit between a Venezuelan and a Frenchman does not. Neither side contains a state citizen, so (a)(2) has nothing to attach to. The statute describes a mixed lineup, and two aliens facing each other is not one.
The same logic explains why a state citizen's presence on only one side of an alien-versus-alien dispute does not rescue it. Suppose a Texan and a Frenchman join as plaintiffs against a Spanish defendant. The Frenchman is an alien opposed to an alien, so the lineup reintroduces the alien-versus-alien dispute that the statute leaves out, and the Texan's participation does not turn it into the mixed lineup that (a)(2) describes. The foreign-forum concern that justifies the grant is also much weaker when foreign citizens stand on both sides.
The statute also draws a boundary around who counts as an alien. Mas v. Perry involved a Louisiana landlord who had hidden two-way mirrors in the bedroom and bathroom of a married couple who rented from him. Jean Paul Mas was a French citizen, and his wife, Judy Mas, was a U.S. citizen. The Fifth Circuit held that a woman does not change her domicile or her state citizenship for diversity purposes solely because she marries an alien.26 The alternative would have produced an absurd result. Had her husband's French status been attributed to her, she would have been a citizen of no State and, because she was not in fact an alien, unable to invoke alienage jurisdiction either.27 The lesson is that alienage status belongs to the person who actually holds foreign citizenship. A spouse, a business partner, or a co-plaintiff cannot borrow it.
Suppose a French permanent resident domiciled in Connecticut sues a Connecticut citizen. Both elements are met, the exception applies, and (a)(2) supplies no jurisdiction. Change the domicile only: if the French permanent resident is domiciled in New Jersey, the shared-forum rationale disappears, and the suit falls within (a)(2). Change the status instead: a French citizen who lives in Connecticut without lawful permanent residence is outside the exception, so (a)(2) applies. The comparison across these three variations shows that the exception is narrow, and it removes jurisdiction only when the alien and the state-citizen adversary are domiciled in the same State.
Aliens as Additional Parties
Subsection (a)(2) treats the foreign citizen as the opponent of a state citizen. Subsection (a)(3) covers the other role an alien can play, that of a bystander to a dispute that is already diverse. It gives the district courts jurisdiction over actions between citizens of different States "in which citizens or subjects of a foreign state are additional parties."30 The foundation is therefore ordinary diversity among state citizens, and the foreign parties are set aside when the court counts. Suppose an Ohioan and a Canadian sue a New Jerseyan and a second Canadian. Once the Canadians are disregarded, an Ohioan faces a New Jerseyan, diversity is complete, and the presence of aliens on both sides changes nothing.31
The reason for the rule comes from what diversity jurisdiction is meant to guard against. Once state citizens stand on opposite sides, the federal forum already protects against local favoritism, and a foreign co-party adds no further risk of bias. A contrary rule would also force a plaintiff to split one dispute into separate suits just to keep a foreign co-plaintiff or co-defendant out. The same reasoning marks the limit. Foreign parties can ride along only on a case that has real state-citizen diversity to carry them, because without it nothing exists to which they can be added. The statute therefore does not allow aliens to be adversaries unless citizens of different States are present on both sides.32
The fourth lineup shows how much depends on the state-citizen foundation, because a case that was within the statute falls out of it when the last diverse adversary leaves.33 The same is true of a suit by an alien against an alien and a state citizen together.34 Nothing requires the aliens to come from different countries, and fellow citizens of one foreign country may appear on both sides without disturbing the diversity the state citizens supply.35
One area is unsettled. When a suit involves a permanent resident alien, courts disagree about whether diversity exists in a suit by a resident alien against a nonresident alien, or against a resident alien domiciled in a different State.36 Suppose a New Yorker sues a Californian together with a foreign citizen who is a permanent resident domiciled in New York. The permanent-resident carve-out in (a)(2) bears on that defendant, and the authorities do not give a settled answer on how it interacts with (a)(3). On an exam, flag the split and apply the clear parts of the rule, instead of presenting one answer as certain.
Stateless and Nonresident Citizens
Section 1332(a) sorts litigants into two categories: citizens of a State and citizens or subjects of a foreign state. Two kinds of litigant fit neither, and a suit to which either one is a party has no place in the statute's scheme. The first is the stateless person, who holds no nationality anywhere. The second is the American citizen who has made a home outside the United States. Both cases show that diversity depends on two separate facts, nationality and domicile, and that a party missing the required fact cannot be slotted onto either side of the lineup.
The stateless person is the easier case. Alienage jurisdiction reaches citizens or subjects of a foreign state, so a person who is a citizen or subject of no state at all is not an alien in the statutory sense.38 Nor is such a person a citizen of a State, since state citizenship requires U.S. citizenship in the first place. A suit between a U.S. citizen and a stateless person therefore lacks jurisdiction under § 1332, however large the amount in controversy.39 The constitutional text points the same direction, because it extends the judicial power to controversies between a state citizen and foreign citizens or subjects, and a person who belongs to no country is not a foreign subject.40
The American who lives abroad reaches the same result by a different route. A natural person is a citizen of a State for diversity purposes only if he is both a citizen of the United States and domiciled in that State.41 A U.S. citizen who is domiciled in a foreign country has the first element but not the second, so he belongs to no State. He is not an alien either, because his nationality is American and an alien must be a citizen or subject of another country. The result is that he is treated as stateless for purposes of § 1332, and he can neither sue nor be sued in diversity.42
Two parallel suits show which fact moves the answer. Imagine a retiree who was a citizen of Georgia, sold his house, and moved permanently to Costa Rica without acquiring Costa Rican citizenship. If he sues a Georgia corporation's owner in federal court, he cannot be counted as a Georgian, because he no longer has a domicile in any State, and he cannot be counted as an alien, because he never gave up his American citizenship. The suit fails under § 1332. Change only his domicile, so that he retires to Florida, and he becomes a Florida citizen opposed to a Georgian, which is ordinary diversity. Now change nationality instead: a Costa Rican citizen who lives in Georgia without permanent-resident status is an alien, and a suit against a Georgian falls within alienage jurisdiction. Alienage turns on the nationality a person holds, while state citizenship turns on U.S. citizenship combined with domicile, so living abroad can strip a U.S. citizen of state citizenship but cannot make that citizen an alien.
A person with dual nationality is a further variation. A litigant who is a U.S. citizen and also a citizen of another country is treated as an American only, so the second nationality cannot be used to claim alienage.43 That litigant then needs a state domicile to count in diversity, and without one is stateless for jurisdictional purposes.
A stateless party does not always end the case. In Newman-Green, Inc. v. Alfonzo-Larrain, one party was a U.S. citizen with no domicile in any State, and the Supreme Court treated him as stateless under § 1332(a)(3).44 Because his presence destroyed diversity only as to himself, the court could preserve jurisdiction over the remaining parties by dropping him from the suit, so long as he was not indispensable to the action.45 A plaintiff who wants to keep a federal forum therefore has a route when the stateless party is expendable, but a stateless party whose absence would prejudice the case leaves the court without jurisdiction.
The reason for the exclusion follows from how the statute is built. Congress authorized jurisdiction over specific lineups, a state citizen against a state citizen of another State, or a state citizen against a foreign citizen, because each pairing involves a litigant who might face bias in the other's home courts. A party who is neither a state citizen nor a foreign subject cannot be assigned to any of those pairings, and nothing in the statute treats such a person as a free-floating exception.