Gatling, Patricia Lynn

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Maryland Journal of International LawVolume 6 | Issue 1 Article 13Dual Citizenship and Federal Diversity JurisdictionUnder 28 U.S.C. § 1332: Sadat v. Mertes, 615 Fd1176 (7th Cir. 1980)Patricia Lynn GatlingFollow this and additional works at: http://digitalcommons.law.umaryland.edu/mjilPart of the Civil Procedure CommonsThis Recent Decisions is brought to you for free and open access by DigitalCommons@UM Carey Law. It has been accepted for inclusion in MarylandJournal of International Law by an authorized administrator of DigitalCommons@UM Carey Law. For more information, please contactsmccarty@law.umaryland.edu.Recommended CitationPatricia L. Gatling, Dual Citizenship and Federal Diversity Jurisdiction Under 28 U.S.C. § 1332: Sadat v. Mertes, 615 Fd 1176 (7th Cir.1980), 6 Md. J. Int'l L. 126 (1980).Available at: http://digitalcommons.law.umaryland.edu/mjil/vol6/iss1/13DUAL CITIZENSHIP AND FEDERAL DIVERSITY JURISDICTIONUNDER 28 U.S.C. § 1332Sadat v. Mertes, 615 F.2d 1176 (7th Cir. 1980)In Sadat v. Mertes,' the United States Court of Appeals for the SeventhCircuit struck down a dual national's' claim that his dual citizenshipconferred jurisdiction upon a federal district court under 28 U.S.C.§ 1332(a)(2).3 In so doing, the Court of Appeals upheld the ruling of thedistrict court' and, ultimately, reaffirmed the strict complete diversityprinciple of the case of Strawbridge v. Curtis.' This non-expansive interpreta-tion of 28 U.S.C. § 1332 by the Seventh Circuit may indicate the need forcongressional action to protect individuals such as the Sadat appellant.The present action arose in the federal district court for the EasternDistrict of Wisconsin.' Sadat, the complainant, sought one million dollars indamages for injuries sustained in an automobile accident7 involving himselfand the appellees, Mertes and Galganites.' The nine appellees were alleged tobe either citizens of Wisconsin or Connecticut. The accident occurred inWisconsin while Sadat was on his way to O'Hare International Airport inChicago, Illinois.'Sadat asserted the jurisdiction of the federal district court upon the basisof "diversity of citizenship"' 0 pursuant to 28 U.S.C. § 1332(a)(1) or 28 U.S.C.1. 615 F.2d 1176 (7th Cir. 1980).2. A dual national is one who is a citizen of two or more states possessing theprivileges, rights and duties as defined by the Constitution of that nation-state. SeePerkins v. Elg, 307 U.S. 344 (1939).3. 615 F.2d at 1178.4. Sadat v. Mertes, 464 F. Supp. 1311 (E.D. Wisc. 1979).5. 7 U.S. (3 Cranch) 267, 2 L. Ed. 435 (1806).6. Sadat v. Mertes, 464 F. Supp. 1311 (E.D. Wisc. 1979).7. See 615 F.2d at 1178.8. Id.9. 615 F.2d at 1179.10. Diversity of citizenship is a phrase used with reference to the jurisdiction ofthe federal courts, which under U.S. Const. Art. III, § 2, extends to cases betweencitizens of different states, designating the condition existing when the party on oneside of a lawsuit is a citizen of one state, and the party on the other side is a citizen ofanother state, or between a citizen of a state and an alien. The requisite jurisdictionalamount must, in addition, be met. 28 U.S.C.A. § 1332(a)(1).(126)SADAT V. MERTES§ 1332(a)(2)." In the context of the instant case, section 1332 creates federaldiversity jurisdiction over actions between "citizens of different states," andbetween "citizens of a state and foreign states or citizens or subjectsthereof."" Sadat asserted the jurisdiction of the court by claiming that whenthe action was commenced, he was a naturalized" American and adomiciliary of the United States. The appellant argued that on June 7, 1976his domicile was in Pittsburgh, Pennsylvania, ' and thus he was a citizen of astate within the meaning of section 1332(a)(1).Alternatively, Sadat argued that he resided in Egypt at the commence-ment of the action on June 7, 1976." The appellant asserted the jurisdictionof the court by claiming he was a citizen of Egypt; as.such, he posited thatdistrict court jurisdiction existed pursuant to section 1332(a)(2).Thus, the issues facing the court were: (1) whether a person possessingdual nationality, one of which is United States citizenship, is "a citizen orsubject of a foreign state under 28 U.S.C. § 1332(a)(2);"1 and, (2) whether thissuit is within the jurisdiction of the federal courts."The federal district court held that: (1) at the commencement of theaction the plaintiff was domiciled in Cairo, Egypt; although he was anaturalized citizen of the United States, he was not "a citizen of a state" asrequired under subsection 1332(a)(1), thus, he was not able to invoke theprovision of that subsection; and, (2) a naturalized U.S. citizen may not asserthis foreign citizenship based upon birth to meet the requirements of 28U.S.C. § 1332(a)(2), governing diversity jurisdiction between "citizens of astate" and aliens."8Thus, the federal district court dismissed the suit filed by Sadat for lackof subject matter jurisdiction."11. 28 U.S.C. § 1332(a)(2) Diversity of Citizenship; amount in controversy; costs:(a) The district courts shall have original jurisdiction of all civil actionswhere the matter in controversy exceeds the sum or value of $10,000,exclusive of interest and costs, and is between-(1) citizens of different states;(2) citizens of a State, and foreign states or citizens or subjects thereof;and(3) citizens of different states and in which foreign states or citizens orsubjects thereof are additional parties ....12. Id.13. A naturalized citizen is one who, being an alien by birth, has receivedcitizenship under naturalization laws. BLAck's LAW DICTIONARY (5th ed. 1979).14. 615 F.2d at 1179, 1180.15. Id. at 1178.16. Id. at 1180, 1182.17. Id. at 1188.18. Id. at 1189. See also 28 U.S.C. § 1332(a)(2).19. 464 F. Supp. at 1312.128 THE INTERNATIONAL TRADE LAW JOURNALIn examining the issues presented to the district court, the Court ofAppeals first addressed the issue of whether or not the appellant was acitizen of any of the United States.' The court held that the plaintiff was nota citizen 6f any state of the United States at the time of the commencement ofthe action because he resided in Egypt; therefore, diversity jurisdiction didnot exist under section 1332(a)(2).2' The determining factor was theappellant's status at the time of the commencement of the action, "becausethat is the time at which the jurisdiction of the court is determined."Even though the appellant argued that he intended to return toPennsylvania, and that he never intended to make Cairo his home, the courtstated that, "his statement of intent is entitled to little weight when inconflict Witlh the facts." Sadat failed to establish Pernnsylvinia was higdomicile.n The appellant left Pennsylvania in 1973 for Lebanon and he neverestablished, "the physical presence necessary to reestablish his domicile inPennsylvania."' The court ruled that, "a domicile once established continuesuntil it is superseded by a new domicile."The second issue addressed by the Court of Appeals was whether theplaintiff was a citizen or subject of a foreign state." Section 1332(a)(2) veststhe federal district court with jurisdiction over suits between citizens of astate and citizens of foreign states; such jurisdiction is referred to as alienagejurisdiction.' The court emphasized the dominant policy consideration for thestatute's jurisdictional provisions by relying on Blair v. Rubenstein,' whichheld that section 1332(a)(2) "was intended to provide the federal courts witha form of protective jurisdiction over matters implicating internationalrelations where the national interest was paramount.' The criterion appliedby the court to determine whether the appellant was a foreign citizen withinthe meaning of section 1332(a)(2) was: "whether the country in whichcitizenship is claimed would so recognize him."' This criterion was alsoenunciated by the court in Blair," which held that "it is the undoubted right20. 615 F.2d at 1181.21. Id. at 1182.22. Id. at 1180.23. Id. at 1181.24. Id.25. Id.26. Id. at 1182.27. Alienage jurisdiction - 28 U.S.C. § 1332(a)(2).28. 133 F. Supp. 496 (S.D.N.Y. 1955).29. 615 F.2d at 1182.30. Hague Convention on Certain Questions Relating to the Conflict of National-ity Laws, 12 April 1930, 179 L.N.T.S. 89, 5 Hudson Int'l. Legislation 359.31. 133 F. Supp. 499 (S.D.N.Y. 1955).SADAT V. MERTESof each country to determine who are its nationals and it seems to be generalinternational usage that such a determination will usually be accepted byother nations. 2The Court of Appeals maintained that, notwithstanding Sadat's U.S.naturalization, Egypt still regarded the appellant as an Egyptian citizenY Toprove his Egyptian citizenship, Sadat produced a letter from the EgyptianConsulate General,' granting him permission to be naturalized with UnitedStates citizenship while maintaining his Egyptian citizenship. He was alsoissued an Egyptian driver's license and international driver's license by theEgyptian government.' Based upon the evidence presented, the courtconcluded that despite Sadat's naturalization in the United States, he was anEgyptian citizen and was so recognized by Egypt under 'their laws.-'Therefore, he possessed dual citizenship and was a dual national."In the case at bar, the Court of Appeals held that the appellant could notrely on his status as a dual national to be considered a subject of a foreignstate within the meaning of section 1332(a)(2).1 The court examined twodistrict court decisions to reach its conclusion. 9 In Aquirre v. Nagel," theplaintiff, an American citizen of Mexican parentage who was regarded byMexico as a Mexican citizen,"' brought a personal injury suit in federaldistrict court pursuant to section 1332(a)(1).' In Aquirre, both the plaintiffsand defendants were alleged to be citizens of Michigan.'3 The district courtruled that the plaintiff's jurisdictional claim could not be based on section1332(a)(1) because the action was not between citizens of different states.However, the district court did have jurisdiction under section 1332(a)(2).The parents of the plaintiff were citizens of Mexico and Mexico regarded heras a citizen by virtue of her parentage." In Sadat, the Court of Appealsrejected the holding in Aquirre because of its expansive nature and because32. Id. at 499.33. 615 F.2d at 1183.34. This is to certify that the Egyptian government does not have any objectionsfor its citizens to officially apply for American citizenship provided that they have nostanding criminal records, no financial liabilities to the government, have served in themilitary service and seek the permission of the Egyptian Government beforehand.35. 615 F.2d at 1184.36. Id. at 1183.37. Id.38. See 615 F.2d at 1187.39. Id. at 1185.40. 270 F. Supp. 535 (E.D. Mich. 1967).41. Id.42. Id.43. Id.44. Id.THE INTERNATIONAL TRADE LAW JOURNALof the Aquirre court's failure to examine the literal language of the statutewithout regard for the underlying policies of alienage jurisdiction.,5The Court of Appeals also examined and ultimately relied upon theauthority established in Raphael v. Hertzberg. 6 The Raphael court disallowedaccess to the federal courts under alienage jurisdiction." In Raphael, theplaintiff, a naturalized U.S. citizen, averred that he was also a citizen of theUnited Kingdom." The action was brought against defendant residents ofCalifornia for breach of contract, a variety of torts, including negligence andbreach of fiduciary duty.'9In Sadat, the court's justification for its holding commenced with thestatutory requirement of completed diversity. The Court of Appeals statedthat to allow naturalized citizens access to the federal district courts, "wouldgive naturalized citizens nearly unlimited access to the federal districtcourts, access which has been denied to native-born citizens."50 The courtfurther stated that "such favored treatment is unsupported by the policiesunderlying 28 U.S.C. § 1332."' l The court then refrained from extending thescope of section 1332.Essentially, the Seventh Circuit's stance is a return to the completediversity rule of Strawbridge v. Curtis.2 The rule was established when theSupreme Court of the United States, in 1806, held that where the interest isjoint, each of the persons concerned in that interest must be competent to sueor liable to be sued in federal courts.0 In Strawbridge, the complainantsappealed from the dismissal of a bill in chancery by a Massachusetts circuitcourt for want of jurisdiction. ' Some of the complainants were averred to becitizens of Massachusetts. The defendants were similarly alleged to becitizens of that same state. Only one citizen, Curtis, was a citizen of anotherstate, Vermont. In an opinion delivered by Chief Justice Marshall, the Courtlooked to the language of the District Court's Jurisdiction Act, to find thatdiversity exists only "where an alien is a party, or the suit is between acitizen of [the] state where the suit is brought and a citizen of anotherstate."45. 615 F.2d at 1186.46. 470 F. Supp. 984. (C.D. Cal. 1979).47. Id.48. Id.49. Id.50. 615 F.2d at 1186.51. Id.52. 7 U.S. (3 Cranch) 267, 2 L. Ed. 435 (1806).53. Id.54. Id.55. Id.130SADAT V. MERTESThe holding of the Court of Appeals appears to have been based on theintentions of the legislators who framed section 1332.1 The situationpresented in Sadat was one of first impression at the circuit level.The Court of Appeals applied the holding of Raphael to the facts ofSadat. 7 However, the Raphael case did not present the same or a similarfactual situation. Moreover, the court returned to the complete diversity ruleof Strawbridge v. Curtis to prevent the appellant from gaining access to thefederal district court. The Strawbridge rule as applied by the Seventh Circuitmight give a native born- plaintiff, who is a citizen of a state, the ability tomanipulate his suit by preventing a defendant, who is a naturalized U.S.citizen of a state, possessing dual citizenship, from any access to the federaldistrict courts - providing that the plaintiff can find another citizen of hisown state who would be a proper co-defendant. 9 Such an anomalous situationdefeats the requirement of complete diversity under 28 U.S.C. § 1332 and thejurisdictional claim of the defendant. The plaintiff would then be able toproceed to state court, regardless of any possible bias to the defendant or anypossible foreign relations repercussions. This type of "favored treatment" hasnot been supported by the policies of the legislation. ® The situation presentedin Sadat fell squarely within either 28 U.S.C. § 1332(a)(1) or § 1332(a)(2). Thecourt in Aquirrel held that it was not "good law to deny the existence ofjurisdiction under subsection (2) on the grounds of non-existence of jurisdic-tion under subsection (1)." One of the two diversity provisions should beapplicable to Sadat.The Court of Appeals decision has left the future of 28 U.S.C. § 1332strictly within the province of Congress. For the time being, the Sadatholding leaves intact the general principle of complete diversity of Straw-bridge and the strict interpretation of 28 U.S.C. § 1332. The court declined toextend the scope of section 1332, concluding: "The statutory terms 'citizens ofdifferent states' and 'citizens or subjects of a foreign state' are presumablyamenable to some congressional expansion consistent with constitutionallimitations." Sadat v. Mertes indicates that the courts are waiting for56. 615 F.2d at 1182.57. Id. at 1188.58. Native born is a natural born subject or citizen; a citizen who owes his domi-cile or citizenship to the fact of his birth within the country referred to.59. See Note, Abolishing Diversity, 92 HARV. L. REV. 963, 966-68 (1979).60. 615 F.2d at 1186.61. 270 F. Supp. 535 (E.D. Mich. 1967).62. Id. at 536.63. 615 F.2d at 1189.132 THE INTERNATIONAL TRADE LAW JOURNALCongress to act. As long as Congress remains silent, the courts will refuse tograpple with the intracacies of federal diversity jurisdiction based upon dualcitizenship within the meaning of 28 U.S.C. § 1332(a)(2) and will insteadcontinue to apply the inflexible and strict Strawbridge rule of completediversity.Patricia Lynn Gatling

Dual Citizenship and Federal Diversity Jurisdiction Under 28 U.S.C. § 1332: Sadat v. Mertes, 615 Fd 1176 (7th Cir. 1980)

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