CITES BY TOPIC:  diversity of citizenship

U.S. Constitution, Article III, Section 2

Section 2.

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;--to all Cases affecting Ambassadors, other public ministers and Consuls;--to all Cases of admiralty and maritime Jurisdiction;--to Controversies to which the United States shall be a Party;--to Controversies between two or more States;--between a State and Citizens of another State;--between Citizens of different States;--between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

[U.S. Constitution, Article III, Section 2]


28 U.S.C. §1332

TITLE 28 > PART IV > CHAPTER 85 > Sec. 1332.
Sec. 1332. - Diversity of citizenship; amount in controversy; costs

(a)  The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between -

(1) citizens of different States;

(2) citizens of a State and citizens or subjects of a foreign state;

(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and

(4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.

For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.

(b) Except when express provision therefore is otherwise made in a statute of the United States, where the plaintiff who files the case originally in the Federal courts is finally adjudged to be entitled to recover less than the sum or value of $75,000, computed without regard to any setoff or counterclaim to which the defendant may be adjudged to be entitled, and exclusive of interest and costs, the district court may deny costs to the plaintiff and, in addition, may impose costs on the plaintiff.

(c) For the purposes of this section and section 1441 of this title -

(1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has been incorporated and of the State where it has its principal place of business; and

(2) the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent.

(d) The word ''States'', as used in this section, includes the Territories, the District of Columbia, and the Commonwealth of Puerto Rico


Rutter's California Practice Guide: Civil Procedure Before Trial (2002), paragraph 3:623-3:625:

b.  [3:623] "Diversity" cases exceeding $75,000:  Claims between citizens of different states where the claim or value of the property in controversy exceeds $75,000 (exclusive of interest or costs) may be filed in federal court as well as state court. [28 USC §1332]

(1)  Diversity of citizenship:  "Citizenship" means domicile (see discussion of domicile, 3:153 ff.).  If there are several plaintiffs and defendants, none of the plaintiffs can reside in the same state as any of the defendants (complete diversity required).  Plaintiff can "create" diversity of citizenship with defendant by moving to another state before filing suit; but the change of domicile must be bona fide (intent to remain indefinitely).  If there is diversity when the action is filed, federal court jurisdiction is proper, even if a subsequent change of domicile destroys diversity.

For diversity purposes, a corporation is deemed a citizen of both the state in which it was incorporated and the state in which it has its principal place of business (28 USC §1332(c)(1)).  Thus, a corporation is deemed a California citizen if either incorporated here or its principal place of business is here.

Cross-refer:  See detailed discussion in Schwarzer, Tashima & Wagstaffe, Cal.Prac. Guide: Federal Civ.Pro. Before Trial (TRG), Ch. 2C.

(2) [3:625]  Other instances of diversity:  Federal court jurisdiction also exists in actions between citizens and aliens, and in suits by foreign nations against U.S. citizens.  [See 28 USC §1332(a)(2),(4)]

c. [3:626]  Effect of dual filings:  Where jurisdiction is concurrent, the same action can be filed in either or both federal and state courts.  If filed in both, each court acquires jurisdiction...but neither acquires exclusive jurisdiction.  Each may proceed at its own pace until one or the other reached final judgment and becomes res judicata on the claim.  Neither will interfere with or try to restrain each other's proceedings. [Donovan v. City of Dallas (1964) 377 US 408, 412, 84 S.Ct. 1579, 1582; Fowler v. Ross (1983) 142 CA.3d 472, 476-477, 191 CR 183, 186]

[Rutter's California Practice Guide: Civil Procedure Before Trial (2002), paragraph 3:623-3:625, speaking of STATUTORY and not COMMON LAW jurisdiction]


Hagans v. Lavine, 415 U.S. 528 (1974)

The Court of Appeals ruled that petitioners had not tendered a substantial constitutional claim and ordered dismissal of the entire action for want of subject matter jurisdiction. The principle applied by the Court of Appeals - that a "substantial" question was necessary to support jurisdiction - was unexceptionable under prior cases. Over the years this Court has repeatedly held that the federal courts are without power to entertain claims otherwise within their jurisdiction if they are "so attenuated and unsubstantial as to be absolutely devoid of merit," Newburyport Water Co. v. Newburyport, [415 U.S. 528, 537]   193 U.S. 561, 579 (1904); "wholly insubstantial," Bailey v. Patterson, 369 U.S. 31, 33 (1962); "obviously frivolous," Hannis Distilling Co. v. Baltimore, 216 U.S. 285, 288 (1910); "plainly unsubstantial," Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 105 (1933); or "no longer open to discussion," McGilvra v. Ross, 215 U.S. 70, 80 (1909).  One of the principal decisions on the subject, Ex parte Poresky, 290 U.S. 30, 31 -32 (1933), held, first, that "[i]n the absence of diversity of citizenship, it is essential to jurisdiction that a substantial federal question should be presented"; second, that a three-judge court was not necessary to pass upon this initial question of jurisdiction; and third, that "[t]he question may be plainly unsubstantial, either because it is `obviously without merit' or because `its unsoundness so clearly results from the previous decisions of this court as to foreclose the subject and leave no room for the inference that the question sought to be raised can be the subject of controversy.' Levering & Garrigues Co. v. Morrin, supra; Hannis Distilling Co. v. Baltimore, 216 U.S. 285, 288 ; McGilvra v. Ross, 215 U.S. 70, 80 ."

[Hagans v. Lavine, 415 U.S. 528 (1974)]


Young v. IRS, 596 F.Supp. 141 (N.D.Inc. 09/25/1984)

The court notes that two general jurisdiction statutes may have some potential applicability to this case. However, the court is convinced that neither one of these statutes will supply this court with jurisdiction over plaintiff's claim. The first statute, 28 U.S.C. § 1340, grants the district court original jurisdiction of any civil action arising under any act of Congress providing for internal revenue. The very language of the statute indicates that this section does not create jurisdiction in and of itself. Section 1340 makes clear that the jurisdiction extends to civil actions arising under the Internal Revenue laws; as such, the suit must be based on some cause of action which the Internal Revenue Code recognizes and allows the plaintiff to bring. Absent some recognition of this kind of suit under the Internal Revenue Code, § 1340 will not create an independent basis for jurisdiction. As one court has noted, "given the limitations which Article III of the Constitution places on the jurisdiction of the federal courts, it is doubtful that the various jurisdictional statutes [like § 1340] could do more than waive the congressionally imposed jurisdictional amount requirement." Crown Cork & Seal Co. v. Pennsylvania Human Relations Commn., 463 F. Supp. 120, 127 n. 8 (E.D.Pa. 1979).

It appears that this case does not arise under the Internal Revenue Code. Plaintiff does not seek either to enforce any provision of the Code or to pursue a statutory remedy under the Code. Rather, he seeks damages for the alleged violation of his rights. In fact, the whole thrust of plaintiff's case is that he is outside the scope of the Code so that the actions of the defendants are violations of his rights. However, if the plaintiff's claim comes from outside the Code, then it logically cannot "arise under" the Code, and therefore § 1340 cannot provide plaintiff with jurisdiction.

A second possible source of general jurisdiction is 28 U.S.C. § 1331, the federal question jurisdiction statute. Plaintiff claims that he is outside the scope of the federal income tax laws. Such a claim brings into question the interpretation of several provisions of the Internal Revenue Code. This may be sufficient to create some kind of federal question jurisdiction based on the interpretation of the Code. However, this federal question would not provide a sufficient jurisdictional basis for plaintiff's damage claim. In order to recover damages, the plaintiff must show that he can recover damages for violations stemming from defendants' alleged unconstitutional activity. Plaintiff can obtain damages against the defendants under only one of two theories: a claim under the Federal Tort Claims Act, 28 U.S.C. § 2671-2680; or an implied cause of action under the principles of Bivens v. Six Unknown Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). As will be discussed more fully in the next section of this order, a claim under the Federal Tort Claims Act will fail on principles of sovereign immunity. Furthermore, in Seibert v. Baptist, 594 F.2d 423, 429-32 (5th Cir. 1979), cert. denied, 446 U.S. 918, 100 S.Ct. 1851, 64 L.Ed.2d 271 (1980), the court refused to recognize a Bivens-type cause of action against the IRS and IRS officials and agents. The actions of the present defendants in assessing the taxes and penalties against the plaintiff and in generally operating under the IRS regulatory framework were not of the outrageous nature of those found in Bivens. This court agrees with the Seibert court and refuses to recognize a Bivens-type cause of action against the IRS or IRS officials and agents for the collection and assessment of taxes. Thus, while a federal question may exist, it provides no basis for plaintiff to recover damages. As such, § 1331 cannot provide this court with jurisdiction over plaintiff's damage claim.

[Young v. IRS, 596 F.Supp. 141 (N.D.Inc. 09/25/1984)]