destroying diversity jurisdiction." Panalpina, 764 F.2d at 355. The improper purpose must relate to defendants' attempts to improperly destroy diversity jurisdiction. As in Panalpina, there is no allegation that Harza International was incorporated in Liberia "solely for purposes of destroying diversity jurisdiction in a suit by an alien." Panalpina, 764 F.2d at 355.
II. Rule 11
Defendants request that this court impose Rule 11 sanctions on the grounds that plaintiff failed to make a reasonable inquiry into the basis for diversity jurisdiction, and that a "cursory review of a hornbook or digest" would have revealed the lack of diversity. International Shipping, 875 F.2d at 391. A district judge shall impose sanctions where appropriate. Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1082 (7th Cir. 1987), cert. dismissed, 485 U.S. 901 (1988). In deciding whether to impose Rule 11 sanctions, we must make an objective determination of whether plaintiff's conduct was reasonable in this case. Brown v. Federation of State Medical Boards, 830 F.2d 1429, 1435 (7th Cir. 1987).
If, as defendants claim, plaintiff's attorney failed to make a reasonable inquiry into the law, then sanctions are appropriate. Id. at 1435. In making this determination, we can consider "whether the document contained a plausible view of the law." Id. at 1435. In this case we must consider whether plaintiff's complaint contained allegations to support a plausible view of the law regarding § 1332.
Though we have found that plaintiff has failed to allege complete diversity, we do not believe Rule 11 sanctions are warranted. While it is true that the Second Circuit has affirmed the imposition of Rule 11 sanctions in a case substantially similar to this one, luckily for plaintiff we are not in the Second Circuit. See International Shipping, supra. One need only read the strong dissent in International Shipping,
and review the case law outside of the Second Circuit, to conclude that there is a plausible reading of § 1332 that would justify a finding of diversity here.
Therefore, we decline to award attorneys' fees under Rule 11.
III. Security Bond
Defendants also move this court to order plaintiff to post a security bond of $ 25,000 for costs and $ 25,000 for attorneys' fees. Because we decline to impose Rule 11 sanctions against plaintiff, we deny the motion for security bond relating to attorneys' fees. Having dismissed this case for lack of subject matter jurisdiction, we deny as moot the motion for security bond for costs.
We grant defendants' motion to dismiss for lack of subject matter jurisdiction. We deny defendants' motion for a security bond.
JAMES B. MORAN, Chief Judge, United States District Court
February 7, 1992.