United States District Court, Northern District of Illinois, W.D
April 3, 1959
GEORGE C. HARKER, PLAINTIFF,
MORTON KOPP AND CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, A FOREIGN CORPORATION, DEFENDANTS.
The opinion of the court was delivered by: Perry, District Judge.
The complaint before the court consists of two counts, and
jurisdiction, in each instance, is sought on the ground of
diversity of citizenship.
In Count I, plaintiff, George C. Harker, a citizen of
Wisconsin, complains of defendant Morton Kopp, a citizen of
Illinois, and alleges "That on or about the 16th day of November,
1957, the plaintiff, George C. Harker, was riding as a
fare-paying passenger in a certain railroad train being then and
there operated by the Chicago, Milwaukee, St. Paul and Pacific
Railroad Company, a foreign corporation, said train being
operated between the cities of Madison, Wisconsin, and Rockford,
Illinois." Said Count further alleges, "That the defendant,
Morton Kopp, was then and there riding as a passenger in the
aforesaid railroad train and did violently, wilfully, wantonly,
and maliciously assault the plaintiff without any excuse,
justification, or provocation on the part of the said plaintiff."
In Count II (with which count we are concerned at this time),
plaintiff complains of defendant, Chicago, Milwaukee,
St. Paul and Pacific Railroad Company (hereinafter called
"defendant railroad"), "a Foreign Corporation, having its
principal place of business in the City of Chicago, County of
Cook and State of Illinois." (Emphasis supplied.)
With respect to Count II, a question arises as to whether there
exists diversity of citizenship requisite to give this court
jurisdiction. Defendant railroad alleges that it has two
citizenships, the second one being of Wisconsin, the State of its
incorporation, and moves to dismiss the complaint herein on the
theory that, since plaintiff is also a citizen of Wisconsin,
diversity is lacking.
Both plaintiff and the defendant railroad point to the 1958
amendment of the Judicial Code in support of their respective
At the outset, it should be noted that to determine "diversity
jurisdiction" in the instant case, we cannot apply the principles
which obtain in cases where a corporation has more than one
citizenship by virtue of its incorporation in more than one
State. The defendant railroad in the instant case does have two
citizenships but it is not a multistate corporation. As it
alleges, it is incorporated under the laws of but one State,
Wisconsin; its second citizenship is acquired, pursuant to the
1958 amendment, because it has its principal place of business in
Turning, now, to the statute in question: Section 1332 of Title
28 U.S.C.A., reads, in part —
"(a) The district courts shall have original
jurisdiction of all civil actions where the matter in
controversy * * * is between:
"(1) Citizens of different States".
The 1958 amendment added the following paragraph:
"(c) For the purposes of this section and section
1441 of this title, a corporation shall be deemed a
citizen of any State by which it has been
incorporated and of the State where it has its
principal place of business."
Going back to the legislative history of the 1958 amendment, we
find that its primary purpose was to reduce the heavy workload of
the federal courts caused, in part, by diversity of citizenship
cases in which jurisdiction was based on the fictional premise
that a corporation, although wholly local in character and
operation, is a citizen of another State because of its
incorporation in that State.
By providing that, for the purpose of diversity jurisdiction,
a corporation shall be deemed a citizen of the State where it has
its principal place of business, the amendment in question has
taken cognizance of the fictional nature of such premise and has
sought to correct a situation which it engenders. Obviously,
since the amendment was framed to reduce rather than to increase
the workload of the courts, we may safely assume that it was not
intended to create another ground on which to base diversity
The amendment in question goes farther, however, and recognizes
that the fictional premise has become an integral part of our
judicial structure. It perpetuates the fiction, so to speak, for
we find included in the amendment the additional provision
that "* * * a corporation shall be deemed a citizen of any State
by which it has been incorporated * * *." And so the amendment
has made it possible for a corporation to have two citizenships
without being a multistate corporation in the sense in which that
term has heretofore been used.
Clearly the statute as amended does not give to a litigant a
right to choose or elect whether he will allege citizenship of a
corporation to be of the State of incorporation or to be of the
State wherein is located the corporation's principal place of
business — such election depending on which allegation will best
serve his purpose in arguing for or against the existence of
and consequent jurisdiction or lack thereof. In the instant case,
plaintiff cannot allege the Illinois citizenship of the defendant
railroad and ignore its Wisconsin citizenship which coincides
with his own.
Diversity of citizenship must be complete and where, as in this
case, one of the parties is a corporation having two citizenships
by virtue of the 1958 amendment, neither of the citizenships of
such a corporation, party on one side, may coincide with that of
the party or parties on the other side.
The court must hold that as to Count II of the complaint
herein, there is no diversity of citizenship as between the
plaintiff and the defendant railroad, and that the court is
therefore without jurisdiction as to that count.
Order in accordance herewith.
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