Alienage Jurisdiction

Alienage Jurisdiction

Subsections (a)(2) through (a)(4) of 28 U.S.C. § 1332 extend diversity jurisdiction to civil actions that include a foreign party. Subsection (a)(2) reaches actions between “citizens of a State and citizens or subjects of a foreign state,” subject to a proviso that removes certain permanent residents from its coverage.¹ Subsection (a)(3) reaches actions between citizens of different States in which foreign nationals are additional parties.² Subsection (a)(4) differs in kind: it covers a foreign state itself, as 28 U.S.C. § 1603(a) defines that term, suing as plaintiff against citizens of a State or of different States.³ A foreign national reaches federal court under (a)(2) or (a)(3), and a foreign nation suing as plaintiff has its own route in (a)(4).⁴

These are alienage cases, and the method is the sorting exercise familiar from ordinary diversity, with one more category on the board. The court places every party in a category and then compares opposing parties. Complete diversity still means that no opposing parties share the same citizenship status.⁵ An individual is a state citizen only if a United States citizen domiciled in the State, and an alien if a citizen or subject of a foreign state.⁶ The word “States” includes the District of Columbia, Puerto Rico, and the Territories, so a person from any of those places stands on the state-citizen side of an alienage caption.⁷ Every alignment also needs more than $75,000 in controversy, exclusive of interest and costs.⁸

The routes differ in what they ask of the foreign party's position on the caption. Under (a)(2), the foreign national may be plaintiff or defendant, and that status is immaterial.⁹ Under (a)(4), the foreign state must be the plaintiff.¹⁰ The four subsections below take up the basic pairing rule of (a)(2), the permanent-resident exception, foreign parties added to a case between state citizens, and individuals who are neither state citizens nor aliens.

Alienage Under Subsection (a)(2)

Section 1332(a)(2) gives the district courts original jurisdiction over actions between “citizens of a State and citizens or subjects of a foreign state.”¹¹ It works as a pairing rule. The court sorts each party into a category, state citizen or foreign national, and asks whether a party from one category stands opposite a party from the other. If so, the foreign party's place on the caption makes no difference: the grant reaches a foreign plaintiff suing a state citizen and a state citizen suing a foreign defendant alike.¹² The $75,000 floor applies to the pairing as it applies to every alignment in § 1332(a).¹³

The state-citizen requirement comes from the Constitution. Article III authorizes jurisdiction over suits between a citizen of a State and an alien, not over suits between two aliens.¹⁴ The Judiciary Act of 1789 purported to reach every suit in which an alien was a party, and the Court held at a very early date that the Act was unconstitutional to the extent it allowed suits between two aliens.¹⁵ The Court confirmed that plain-meaning reading in Jackson v. Twentyman, and the policy behind it is practical: a contrary approach would open the federal courts to all the world's international civil disputes.¹⁶ Lower courts applying Twentyman hold that Article III requires at least one party who is a citizen of a State.¹⁷ Section 1332(a)(2) honors that limit by requiring that one of the opposing parties be a state citizen.¹⁸ The forum does not change the analysis, because an alien may face prejudice in any court.¹⁹

The second caption fails for want of a state citizen. That Venezuela and France are different countries gives the plaintiff nothing, because the statute pairs a state citizen with a foreign national, and this caption holds no state citizen to pair. Neither subsection (a)(1) nor subsection (a)(2) fits, and the state courts are the only available forum.²⁰

Residence in a State does not turn a foreign national into a state citizen. An English citizen is an alien whether she lives in California or in England, because she cannot become a state citizen without first becoming a United States citizen.²¹ A suit between her and a California citizen therefore falls within the pairing rule, unless she is lawfully admitted for permanent residence and domiciled in the same State as her opponent, the situation the next subsection addresses.²²

The pairing rule demands more care when a party is a corporation, because one corporation can be a state citizen and an alien at once. A corporation is a citizen of every State and foreign state in which it is incorporated and of the State or foreign state where it has its principal place of business.²³ The court counts all of those citizenships; it cannot pick one and ignore the others.²⁴ A corporation incorporated in London and headquartered in New York is therefore a citizen of both the United Kingdom and New York. An alien who sues it faces an opponent who shares his status, and the caption no longer pairs a state citizen against a foreign national.²⁵ The result follows from the requirement behind all of § 1332(a), that no opposing parties share the same citizenship status.²⁶

The same logic runs in reverse. A Delaware corporation headquartered in Toronto is a citizen of Delaware and of Canada, so a Canadian plaintiff who sues it again meets an alien on the other side. In each arrangement the state courts remain available.²⁸

The third step is where corporate parties cause errors, since a student who records one citizenship for a corporation will miss the alien on its side of the caption.

Permanent Resident Exception

Section 1332(a)(2) grants jurisdiction over actions between state citizens and foreign nationals, then takes some of it back. The district courts “shall not have original jurisdiction under this subsection” 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.³⁰ A person admitted for permanent residence is a noncitizen who holds a green card, which authorizes the person to live and work in the United States on a permanent basis.³¹ The proviso is a carve-out from the pairing rule. It acts only on a caption that already pairs a state citizen against a foreign national, and it removes that case from federal court when the foreign national is a green card holder living in the same State as the state-citizen opponent.

Three conditions must all be present before the proviso takes a case out of federal court. The foreign party must be lawfully admitted for permanent residence. The foreign party must be domiciled in a State. And the opposing party must be a citizen of that very State.³² Domicile keeps the meaning taught earlier in this chapter, residence in a State with intent to remain indefinitely, so a green card holder who rents an apartment in Albany and plans to return to France next year is not domiciled in New York.³³ The test cuts the other way too: a foreign national who is domiciled in a State but was not admitted for permanent residence is treated as a foreign citizen, and the proviso leaves her alone.³⁴ Each condition screens out a different group of litigants, so an analysis that checks only one of them will misclassify the rest.

The proviso rests on the purpose of diversity jurisdiction, which is to protect an out-of-state litigant from in-state bias. A foreign national who permanently lives in the opponent's own State is, for most purposes, an in-stater and is less apt to face that bias. Congress also concluded that hearing these suits gave permanent residents easier access to federal court than United States citizens had, which it saw as unfair, and that the suits were inappropriately crowding the federal dockets.³⁵

Older materials describe a different mechanism, and the difference is a frequent source of error. In 1988 Congress amended the statute to provide that an alien admitted for permanent residence is deemed a citizen of the State where the alien is domiciled.³⁶ In 2012 Congress repealed that deeming proviso and enacted the present restriction in its place, qualifying the grant in (a)(2) without deeming language.³⁷ Under the current text, a green card holder is not a citizen of any State and does not become a United States citizen for diversity purposes. The person remains an alien who, in one narrow pairing, cannot invoke (a)(2).³⁸ A student who classifies a resident alien as a citizen of the domicile State is applying a rule that no longer exists.

The two defendants hold identical immigration status, and the only fact that moved the answer is where each is domiciled relative to the opposing citizen. Exclusion under (a)(2) also does not end the plaintiff's options, because one basis of federal jurisdiction is enough and another basis, such as a federal question, may still support the suit.³⁹

The proviso matters only when the opposing party is a United States citizen of the State in which the permanent resident is domiciled. Against any other opponent, the resident status is ignored and the person is treated like any other foreign citizen.⁴⁰ A permanent resident from France living in Connecticut who sues a German company shows the point. The resident is still an alien, so the caption pits an alien against an alien with no state citizen on either side, and the case fails the pairing rule before the proviso comes into play.⁴¹ Students often reach for the proviso in that setting and give the wrong reason for the right result. The proviso also limits jurisdiction only “under this subsection,” so it leaves untouched the grant over foreign parties added to a case between citizens of different States.⁴²

The fourth step does the real work, because a student who stops after confirming green card status and some State's domicile has not yet asked whether the opponent shares that State.

Aliens as Additional Parties

Section 1332(a)(3) gives the district courts original jurisdiction over civil actions between “citizens of different States and in which citizens or subjects of a foreign state are additional parties.”⁴⁴ The provision builds on a case that already fits subsection (a)(1), with state citizens of different States on opposite sides, and then tolerates foreign parties joined on top of that base. Subsection (a)(2) handles the two-party suit between a state citizen and a foreign national, while (a)(3) handles the suit with more than two parties in which a foreign national appears, and a foreign national may be additional only when that foreign party is not the source of the diversity.⁴⁵ Like (a)(2), subsection (a)(3) ignores whether the foreign party sits on the plaintiff's side or the defendant's, and it remains subject to the $75,000 floor.⁴⁶

The Constitution supports the combination. Article III separately authorizes jurisdiction over suits between citizens of different States and over suits between state citizens and foreign citizens or subjects. A combination of the two is a fair inference, and Congress expressly authorized it in (a)(3).⁴⁷ The reason for a federal forum survives the addition: a pair of state citizens from different States already faces the risk of home-court bias, and a foreign party joined to that pair takes nothing away from it. Foreign parties cannot supply that pair themselves. Twentyman holds that constitutional diversity jurisdiction does not lie when every party to the suit is a foreign national, even if they come from different countries.⁴⁸

The simplest application has diverse state citizens opposing each other and a foreign national joining one side. The foreigner is the additional party, and jurisdiction lies.⁴⁹ Where state citizens genuinely oppose each other, foreign nationals joined on both sides may also be deemed additional, so an answer should say which arrangement it is analyzing.⁵⁰ A New Yorker and a Canadian who sue a Californian and a German satisfy the statute, because removing the two foreign parties leaves a New York plaintiff against a California defendant, state citizens of different States.⁵¹ The court in Samincorp, Inc. v. Southwire Co. reached the same conclusion, holding that diversity jurisdiction was not destroyed by the fact that subjects of a foreign state were additional parties on both sides of the action.⁵² The foreign parties also need not be diverse from each other.⁵³ The comparison among the state citizens does the work, and the foreign parties' countries are not tested against anyone's.

Two shapes fail, and both lack a pair of state citizens on opposite sides. The statute does not allow aliens to be adversaries unless state citizens of different States stand on opposite sides. A suit between an alien and another alien falls outside the grant, as the court held in Universal Licensing Corp. v. Paola del Lungo S.p.A., and so does a suit by an alien against an alien and a state citizen, as the court held in Ed & Fred, Inc. v. Puritan Marine Insurance Underwriters Corp.⁵⁴ The state citizen in the second suit does not rescue it, because that state citizen faces only aliens. An exam stem that shows foreign parties on both sides therefore does not decide the issue by itself. What decides it is whether state citizens of different States oppose each other once the foreign parties are set aside.

The provision also closes a loophole that would otherwise swallow the rule in Twentyman. Suppose a South African plaintiff sues a Chinese defendant, a suit that squarely presents the Twentyman problem. If an American citizen could join as a co-plaintiff and thereby open the federal courts, any two foreign litigants who preferred a federal forum could find a willing American to join them. Subsection (a)(3) blocks that move, because in such a case the American is the additional party, and jurisdiction does not lie.⁵⁵

One limit from the last subsection does not carry over. The permanent-resident proviso removes jurisdiction only “under this subsection,” meaning (a)(2), so it does not by its terms reach foreign parties added to a case between citizens of different States.⁵⁶ The dual-citizenship rule still applies, however. A corporation that holds both state and foreign citizenships must be sorted into both categories before the caption is tested, because each citizenship counts.⁵⁷

The second step keeps the foreign parties from distorting the analysis in either direction. A student who counts foreign parties on both sides as a defect will wrongly reject the New Yorker-and-Canadian suit against the Californian and the German, and a student who counts an American joined to a foreign dispute as a source of jurisdiction will wrongly accept the South African and Chinese suit.

Stateless Persons

Subsections (a)(1) and (a)(2) each assume that every individual on the caption fits one of two categories. Subsection (a)(1) reaches actions between “citizens of different States,” and (a)(2) reaches actions between citizens of a State and foreign citizens, and the district courts have jurisdiction only over actions that fit a listed alignment.⁵⁹ Nearly every litigant sorts without trouble. A small group fits neither category, and an action involving one of them has no alignment to occupy.

The gap exists because the two categories rest on different tests. State citizenship turns on domicile: “In order to be a citizen of a State within the meaning of the diversity statute, a natural person must be both a citizen of the United States and be domiciled within the State.”⁶⁰ Alien status turns on nationality, and domicile plays no part in it.⁶¹ An English citizen who lives in California is still an alien, for example.⁶² Because the tests are independent, one person can fail both of them: moving abroad changes the answer to the domicile question and leaves the answer to the nationality question where it was.

A United States citizen who is domiciled abroad is the standard example. The person has no domicile in any State, so the state-citizen test fails, and the person holds United States nationality, so the alien test fails too. Courts treat such a person as “stateless” for diversity purposes.⁶³ In Newman-Green, Inc. v. Alfonzo-Larrain, the Supreme Court applied the domicile requirement to Bettison, a United States citizen who had no domicile in any State.⁶⁴ The Second Circuit stated the consequence in Cresswell v. Sullivan & Cromwell: “United States citizens who are domiciled abroad are neither citizens of any state of the United States nor citizens or subjects of a foreign state, and § 1332(a) does not provide that the courts have jurisdiction over a suit to which such persons are parties.”⁶⁵

Twentieth Century-Fox Film Corp. v. Taylor applied the same reasoning to a famous litigant. Elizabeth Taylor was sued on claims arising out of the filming of the movie Cleopatra. Although she was an American citizen when the suit was filed, she was domiciled abroad, so she was not subject to suit in federal court under the diversity statute: she was not a citizen of any State, and she was not an alien either, because she had not relinquished her American citizenship.⁶⁶ The English citizen in California and Taylor abroad mirror each other. The first lives in a State and is still an alien, and the second lived overseas and was still an American. In both situations the court asks about nationality first and domicile second.

When no alignment fits, the action cannot proceed under § 1332(a). Federal jurisdiction is unavailable when a party is a United States citizen with no state citizenship, and the state courts are then the only available forum.⁶⁷ Another basis, such as a federal question, can still supply jurisdiction on its own, since one basis is enough.⁶⁸ Article III points the same way, because the lower courts hold that constitutional diversity jurisdiction requires at least one party who is a citizen of a State, and a United States citizen who lacks state citizenship does not meet that requirement.⁶⁹ The defect goes to the court's power, so a party or the court can raise it at any time, even for the first time on appeal. A lawyer who assumes that a client living overseas is an alien risks litigating an entire case in a court that cannot decide it.⁷⁰

A second kind of stateless person has no nationality anywhere. An alien must be a citizen or subject of a foreign state, so a suit between a citizen of a State and a person who is a citizen neither of the United States nor of any other country falls outside the statute.⁷¹ The stateless person in Blair Holdings Corp. v. Rubinstein held a Nansen passport, a document the League of Nations issued to stateless refugees during the mid-twentieth century.⁷² The two kinds of stateless person reach the same result by different routes. The American abroad lacks a State, the person with no nationality lacks a foreign state, and each is missing the one attribute the statute requires.

A person who holds both United States citizenship and the citizenship of another country is treated as a United States citizen and nothing more, so the second nationality cannot support alienage jurisdiction. The Eleventh Circuit applied that rule in Molinos Valle Del Cibao, C. por A. v. Lama.⁷³ Once the dual national counts as a United States citizen, the ordinary domicile test finishes the job. Domicile in a State makes the person a state citizen like anyone else, and domicile abroad makes the person stateless.

The second step does most of the work, because the tempting error is to treat a defendant who lives overseas as an alien. Residence abroad ends state citizenship and leaves nationality untouched, so a person who keeps United States citizenship while living outside the country drops out of both categories at once.