United States District Court, Northern District of Illinois, Eastern Division
March 30, 1999
FREEBORN & PETERS, AN ILLINOIS GENERAL PARTNERSHIP, PLAINTIFF,
MARK JACOBSON AND RANDI JACOBSON, DEFENDANTS.
The opinion of the court was delivered by: Norgle, District Judge.
OPINION and ORDER
"The first thing a federal judge should do when a complaint is
filed is check to see that federal jurisdiction is properly
alleged." Wisconsin Knife Works v. National Metal Crafters,
781 F.2d 1280, 1282 (7th Cir. 1986).
Plaintiff, Freeborn & Peters ("Freeborn"), is an Illinois
general partnership of attorneys with its principal place of
business in Chicago, Illinois. On March 26, 1999, Freeborn filed
a complaint against Mark Jacobson ("Mark Jacobson") and Randi
Jacobson ("Randi Jacobson") (collectively referred to as the
"Jacobsons"). The Jacobsons are a married couple who retained
Freeborn in a separate action. The complaint alleges that under
an agreement entered July 18, 1996, Mark Jacobson owes Freeborn
$158,102.88 in unpaid attorney's fees and an unspecified bonus.
In the alternative, Freeborn alleges that the Jacobsons are
liable for the reasonable
value of the services rendered. Problematic, however, are
Freeborn's allegations regarding the court's jurisdiction.
In its jurisdictional statement, Freeborn alleges:
4. Plaintiff is an Illinois general partnership of
attorneys having its principal place of business in
Cook County, Illinois.
5. Defendant is a resident of the state of New York
and is engaged in various businesses, primarily in
New York, New York.
6. This Court has subject matter jurisdiction
pursuant to 28 U.S.C. § 1332(a) because there is
complete diversity of citizenship between the
parties and the amount in controversy exceeds
$75,000 exclusive of interest and costs.
(Compl. at ¶¶ 4-6.) Freeborn asserts that the court has
subject-matter jurisdiction based on diversity of citizenship.
See 28 U.S.C. § 1332. Because Freeborn is the party seeking to
invoke federal diversity jurisdiction, it bears the burden of
demonstrating that the requirements of complete diversity are
met. See Chase v. Shop 'N Save Warehouse Foods, Inc.,
110 F.3d 424, 427 (7th Cir. 1997). For the reasons stated below, the
court concludes that Freeborn has not met its burden and
dismisses the complaint because Freeborn fails to sufficiently
plead diversity jurisdiction. See Fed.R.Civ.P. 12(h)(3)
("Whenever it appears by the suggestion of the parties or
otherwise that the court lacks jurisdiction of the subject
matter, the court shall dismiss the action."); see also United
States v. County of Cook, 167 F.3d 381, 387 (7th Cir. 1999)
("No court may decide a case without subject-matter
jurisdiction, and neither the parties nor their lawyers may
stipulate to jurisdiction or waive arguments that the court
"Courts in the federal system are obliged to police the
statutory and constitutional limitations of their subject matter
jurisdiction." Krueger v. Cartwright, 996 F.2d 928, 930 (7th
Cir. 1993). Accordingly, jurisdictional issues should receive
priority consideration. See Jackson v. Resolution GGF Oy,
136 F.3d 1130, 1132 (7th Cir. 1998). In Market Street Associates
Ltd. Partnership v. Frey, 941 F.2d 588, 590 (7th Cir. 1991),
the Seventh Circuit emphasized to judges and lawyers alike the
duty to carefully scrutinize jurisdiction, stating:
We remind the bench and bar of this circuit that it
is their nondelegable duty to police the limits of
federal jurisdiction with meticulous care and to be
particularly alert for jurisdictional problems in
diversity cases in which one or more of the parties
is neither an individual or a corporation.
The rule of complete diversity of citizenship has been set in
stone since the Supreme Court's decision in Strawbridge v.
Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). Under the
rule, parties on the opposing sides of the legal ledger (i.e.,
plaintiff(s) and defendant(s)) must be of different citizenship.
See Stromberg Metal Works, Inc., Comfort Control, Inc. v. Press
Mechanical, Inc., 77 F.3d 928, 932 (7th Cir. 1996); see also
Barbers v. Bishop, 962 F. Supp. 124, 125 (N.D.Ill.) ("Diversity
between all plaintiffs on the one hand and all defendants on the
other must of course be total"), vacated on other grounds,
132 F.3d 1203 (7th Cir. 1997). When a partnership is a party, the
citizenship of a partnership is the citizenship of all of the
partners. See Carden v. Arkoma Associates, 494 U.S. 185
195-96, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990). If even one of
the partners is a citizen of the same state as the opposing
party, the suit cannot be maintained as a diversity action. See
Cosgrove v. Bartolotta, 150 F.3d 729
, 731 (7th Cir. 1998)
(citing Carden, 494 U.S. 185
, 110 S.Ct. 1015).
"The requirement that jurisdiction be established as a
threshold matter `spring[s] from the nature and limits of the
judicial power of the United States' and is `inflexible and
without exception.'" Steel Co. v. Citizens for a Better Env't,
523 U.S. 83, ___, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (1998)
(quoting Mansfield, C & L M R Co. v. Swan, 111 U.S. 379, 382,
4 S.Ct. 510, 28 L.Ed. 462 (1884)). Therefore, in every diversity
action, it is critical that the citizenship of the parties be
clearly established from the onset. Allegations of residency
are not sufficient, see Held v. Held, 137 F.3d 998, 1000 (7th
Cir. 1998), nor is a bare recitation that subject-matter
jurisdiction exists, see Lexington Ins. Co. v. Rugg & Knopp,
Inc., 165 F.3d 1087, 1090 (7th Cir. 1999). "When the parties
allege residence but not citizenship, the court must dismiss the
suit." Guaranty Nat'l Title Co. v. J.E.G. Associates,
101 F.3d 57, 59 (7th Cir. 1996).
Here Freeborn fails to state any party's citizenship. The
complaint merely mentions the residence of "Defendant" in the
singular (although there are two defendants). Without
allegations showing that the Jacobsons are of diverse
citizenship of every partner at Freeborn, the complaint falls
far short of providing what the federal courts have required for
nearly two centuries. Therefore, the complaint is dismissed for
lack of subject-matter jurisdiction.
IT IS SO ORDERED.
© 1992-2003 VersusLaw Inc.