Appeal from the United States District Court for the Eastern District of Wisconsin. No. 76-C-436 -- Robert W. Warren, Judge .
Before Cummings, Pell and Cudahy, Circuit Judges.
The plaintiff-appellant, Moheb A. H. al Sadat, appeals from the judgment of the district court dismissing his complaint for want of subject matter jurisdiction. The plaintiff challenges the district court's judgment on three alternative grounds, any one of which, if sustained, would require a reversal of the judgment. The appellant first attacks the district court's finding that the plaintiff was not a domiciliary of the State of Pennsylvania and therefore not a citizen of a state within the meaning of 28 U.S.C. § 1332(a)(1). Second, the plaintiff questions the district court's holding that the plaintiff, a naturalized citizen of the United States, could not also claim to be a citizen of Egypt and hence a citizen or subject of a foreign state within the meaning of 28 U.S.C. § 1332(a)(2). Finally, the plaintiff urges that the defendants should be estopped from raising the issue of the district court's subject matter jurisdiction because the issue was raised after the statute of limitations had run on the plaintiff's cause of action.
I. The District Court's Judgment
This action arose in the federal district court upon the filing of the plaintiff's complaint on June 7, 1976. The complaint sought damages for injuries allegedly sustained by the plaintiff in an accident between automobiles operated by defendants Mertes and Galganites. Also joined as parties defendant were Hartford Accident & Indemnity Co. and Badger State Mutual Casualty Co., insurers of the automobiles involved in the collision. The plaintiff's complaint alleged negligence on the part of both Mertes and Galganites and sought damages totaling one million dollars. Defendants Hahn and General Casualty Co. of Wisconsin were joined as third party defendants upon the complaint of Galganites and Badger State.
The plaintiff's complaint posited the district court's jurisdiction upon "diversity of citizenship." The complaint alleged that the plaintiff was "an adult citizen of the United States presently residing at Villa el Sadat, 291 Street Cairo New Maadi, A.R. Egypt." The named defendants were alleged to be citizens of either Wisconsin or Connecticut. Despite the defect in the jurisdictional statement apparent on the face of the complaint, see Part III infra, no motion challenging the court's jurisdiction over the subject matter was filed until January 23, 1979. At that time the third party defendants moved that the action be dismissed. The motion maintained that because the plaintiff was not domiciled in the United States at the time his complaint was filed, he was not a "citizen of a state" within the meaning of 28 U.S.C. § 1332(a)(1). The other defendants later joined in this motion. The plaintiff responded by an affidavit stating that although he resided in Egypt on June 7, 1976, his domicile was Pittsburgh, Pennsylvania. Alternatively, the plaintiff averred that in 1976 he was a citizen of Egypt as well as of the United States. Therefore, the plaintiff suggested that jurisdiction existed under 28 U.S.C. § 1332(a)(2), and he requested leave to amend his complaint accordingly.
The district court granted the motion to dismiss. Sadat v. Mertes, 464 F. Supp. 1311 (E.D.Wis.1979). Upon consideration of the record including depositions which had been taken of the plaintiff, the district court found that the plaintiff was domiciled in Egypt when the action was commenced. Therefore, the court held, that although the plaintiff was a citizen of the United States, he was not a citizen of a state able to invoke the provisions of 28 U.S.C. § 1332(a)(1). In response to the plaintiff's second argument in support of the court's jurisdiction, the district court held that a naturalized citizen of the United States could not rely on his dual nationality to bring suit under 28 U.S.C. § 1332(a)(2).
II. The Plaintiff's Travels and Travails
An understanding of the jurisdictional dilemma facing the plaintiff requires a review of his wanderings over the last several decades. The plaintiff was born in Egypt, received his early schooling there, and apparently served in the Egyptian armed forces as a young man. He left his homeland during the 1950s and studied in Europe and worked in Kuwait before coming to the United States in 1963. While in the United States and prior to the events at issue here, he continued his education at several universities and at various times worked for several corporations. In 1973, he apparently was domiciled in Pittsburgh, Pennsylvania. He owned a home there; his wife worked for the University of Pittsburgh; and his children apparently attended the local schools there.
1973 was an eventful year for the plaintiff. With the permission of the government of Egypt he became a naturalized citizen of the United States. He also received an offer from Kohler International Ltd. to serve as the corporation's Area Manager for the Middle East. The job required the plaintiff, after a brief training period at the corporation's offices in Wisconsin, to relocate to Beirut, Lebanon. The plaintiff accepted the offer. His wife left her position with the university. He sold his house and began to move his family and personal property to Lebanon. On his way to O'Hare International Airport from Kohler's Wisconsin offices, the plaintiff was involved in the automobile accident giving rise to his complaint here. He nevertheless completed his move to Beirut and, once there, notified the U. S. Embassy that Beirut was his permanent overseas residence.
Mr. Sadat and his family stayed in Beirut for about two years. On April 15, 1975, apparently as a result of mutual dissatisfaction complicated by the political unrest in Lebanon, the plaintiff and his employer terminated their association with each other. On June 25th, Kohler and the plaintiff executed a mutual release. In consideration of the plaintiff's release of all employment related claims against it, Kohler agreed, inter alia, to release its claims against the plaintiff and to
pay the actual cost of transporting Mr. Sadat and his wife and children, including reasonable expenses incidental to such transporting, as well as Mr. Sadat's household furnishings and personal property, from Lebanon to the United States or other location specified by Mr. Sadat; provided, however, that in any event such sum paid shall not exceed the cost of transportation to Pittsburgh, Pennsylvania; and provided further, that Mr. Sadat notifies Company prior to transportation and accomplishes said transportation as promptly as is reasonable, but in no event later than December 31, 1975.
Around this time, according to the plaintiff's deposition, he and his family made a hurried departure from Lebanon. Intense fighting had broken out in the streets and the plaintiff therefore moved to the nearest safe place he could bring his family: Alexandria, Egypt.
After the plaintiff's move to Egypt, he stayed in Cairo for several years. According to the plaintiff, Kohler refused to honor its commitment to pay for transportation for him and his family to the location of his choice.*fn1 He claimed he was financially unable to transport himself or his family back to the United States.*fn2 He also was unable to obtain employment in Egypt, and, in the interim, he and his family resided in a house in Cairo that his mother purchased for him and he registered with the U.S. Embassy as a permanent resident. Documents submitted by the plaintiff indicate that he was issued Egyptian driver's licenses, paid the real estate taxes on the home, and maintained a checking account in Cairo during this time. In 1978, the plaintiff returned to the States and is now residing in Milwaukee.
III. Was the Plaintiff a Citizen of any of the United States?
The plaintiff's travels over time have been many, but this court's inquiry must center on his status at the time of the commencement of this action. As the district court noted, that is the time at which the jurisdiction of the court is determined. Smith v. Sperling, 354 U.S. 91, 93 n.1, 77 S. Ct. 1112, 1113 n.1, 1 L. Ed. 2d 1205 (1957).*fn3 The plaintiff's status of June 7, 1976, therefore determines the capacity in which he brings this suit.
28 U.S.C. § 1332(a)(1) creates the federal courts' jurisdiction over actions between "citizens of different States." For a natural person to fall within the provision he must be both (1) a citizen of the United States and (2) a citizen of a particular state. See Scott v. Sandford, 60 U.S. (19 How.) 393, 405-06, 15 L. Ed. 691 (1857); Delaware, L. & W. R. Co. v. Petrowsky, 250 F. 554, 557 (2d Cir.), cert. denied, 247 U.S. 508, 38 S. Ct. 427, 62 L. Ed. 1241 (1918). It is not disputed here that the plaintiff having been naturalized in 1973 is a citizen of the United States. What is contested is whether in 1976 when his complaint was filed he was a citizen of one of the United States. The issue is crucial to the plaintiff's claim of jurisdiction under 28 U.S.C. § 1332(a)(1) because settled precedent establishes that a citizen of the United States who is not also a citizen of one of the United States may not maintain suit under that section. Meyers v. Smith, 460 F. Supp. 621 (D.D.C.1978); Kaufman & Broad, Inc. v. Gootrad, 397 F. Supp. 1054 (S.D.N.Y.1975); Garner v. Pearson, 374 F. Supp. 580, 588-90 (M.D.Fla.1973); Hernandez v. Lucas, 254 F. Supp. 901 (S.D.Tex.1966); Clapp v. Stearns & Co., 229 F. Supp. 305 (S.D.N.Y.1964); McClanahan v. Galloway, 127 F. Supp. 929 (N.D.Cal.1955); Alla v. Kornfeld, 84 F. Supp. 823 (N.D.Ill.1949); Hammerstein v. Lyne, 200 F. 165 (W.D.Mo.1912). Although this doctrine excluding Americans domiciled abroad from the federal courts has been questioned,*fn4 the plaintiff does not directly attack it here and we see no reason for upsetting settled law now.
State citizenship for the purpose of the state diversity provision is equated with domicile. The standards for determining domicile in this context are found by resort to federal common law. Stifel v. Hopkins, 477 F.2d 1116, 1120 (6th Cir. 1973); Ziady v. Curley, 396 F.2d 873, 874 (4th Cir. 1968). To establish a domicile of choice a person generally must be physically present at the location and intend to make that place his home for the time at least. See Restatement (Second) of Conflict of Laws §§ 15, 16, 18 (1971). Applying these standards, the district court found that the plaintiff was domiciled in Egypt in 1976. The plaintiff, however, contends that he should be considered a domiciliary of the State of Pennsylvania. He apparently bases his claim upon his previous domicile there in 1973 and his alleged intention to return there upon leaving Lebanon in 1975. ...