Lessons in Diversity Jurisdiction from the First Circuit
May 15, 2017Archives . Authors . Blog News . Feature . Policy/Contributor Blogs . Recent Stories . Uncategorized ArticleThe importance of subject-matter jurisdiction is axiomatic in federal courts. Parties must either get to federal court via a federal question or on the basis of diversity of citizenship. Given the centrality of subject-matter jurisdiction, Federal Rule of Civil Procedure 12(h)(3) mandates that cases that lack subject-matter jurisdiction must be dismissed. Even when issues of subject-matter jurisdiction are thought to be settled, new concerns can be raised at any time and force the court to reverse itself. Such was the case in an April 27, 2017 case from the First Circuit.
Rule 12(h)(3) enables litigants to raise challenges to the court’s subject-matter jurisdiction at any time. As the First Circuit recently found in Hearts with Haiti, Inc. v. Kendrick, “any time” can even mean after the trial and during the pendency of an appeal. The case’s subject-matter jurisdiction was predicated on the diversity of citizenship, as it raised state tort law issues, rather than a federal question.
In the underlying action, the founder of an orphanage in Haiti brought suit against Paul Kendrick for defamation claiming that Kendrick had falsely accused him of sexually abusing the boys in the orphanage. Kendrick further accused Hearts with Haiti—a non-profit charity raising funds for the orphanage—of enabling the abuse.
At trial, a jury awarded $14.5 million in damages to the orphanage’s founder, Michael Geilenfeld, and the fundraising charity. Kendrick appealed, and during the appeals process his lawyer discovered a colorable argument that the court lacked subject-matter jurisdiction over the dispute. Kendrick presented his plausible theory in his appeal, and the First Circuit remanded the case back to the district court to consider.
The district court dismissed the case, finding that it lacked subject-matter jurisdiction based on “an arcane exception” to the rules governing diversity jurisdiction. This time, it was the charity and Geilenfeld’s turn to appeal.
In a unanimous opinion authored by Retired Supreme Court Justice David Souter, the First Circuit affirmed the dismissal of the case. Under diversity jurisdiction, each plaintiff must be a citizen of a different state from that of the defendants. As Justice Souter explained, “citizen” of a state for subject-matter jurisdiction purposes means both a citizen of the United States as well as a domicile within a state.
Geilenfeld operated the orphanage in Haiti. In pre-trial proceedings, he had regarded himself as a “permanent resident” of Haiti, even though he was an American citizen. Even though he was born in Iowa, raised there, and occasionally visited the state, such facts were “inconsequential” to Justice Souter. Geilenfeld was not domiciled in a state: he was an American citizen without a state.
Without a state domicile, Geilenfeld could not be a “citizen” of diverse states under relevant diversity jurisdiction requirements, and accordingly the case must be dismissed under Rule 12(h)(3).
The plaintiff’s attempted to salvage the jury damage award by arguing that Geilenfeld could be severed from the case, leaving the US-based charity in the case as a diverse plaintiff. This was unsuccessful. Justice Souter found that doing so after trial would unfairly prejudice the defendant, especially as Geilenfeld played a major testimonial role at trial.
Hearts with Haiti illustrates the critical importance of subject-matter jurisdiction in federal court. Put simply, if courts lack subject-matter jurisdiction, they cannot exercise their authority over the parties before them. After years of litigation and a considerable jury verdict, the case boiled down to a simple question that students of Civil Procedure know all too well: are the plaintiffs and the defendants from different states in this diversity jurisdiction case? The answer here was no, as the expatriate orphanage-founder Geilenfeld was domiciled abroad, becoming a citizen without a state.
*Tommy Tobin is a graduate of Harvard Law School and the Harvard Kennedy School. Tommy has served as a Teaching Fellow in the Harvard Economics Department and Instructor of Law at UC Berkeley’s Goldman School of Public Policy. His writing has appeared in scholarly journals and major newspapers, such as the Baltimore Sun, Charlotte Observer, and San Francisco Chronicle.
Suggested citation: Tommy Tobin, Lessons in Diversity Jurisdiction from the First Circuit, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (May 15, 2017), https://live-journal-of-law-and-public-policy.pantheonsite.io/lessons-in-diversity-jurisdiction-from-the-first-circuit/.
You may also like
- April 2024
- March 2024
- February 2024
- November 2023
- October 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- November 2019
- October 2019
- September 2019
- April 2019
- February 2019
- December 2018
- November 2018
- October 2018
- September 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- May 2017
- April 2017
- March 2017
- February 2017
- December 2016
- November 2016
- October 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- August 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- June 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- April 2011
- March 2011
- November 2010
- October 2010
- September 2010