of New York and found that, for diversity purposes under §
1332(a)(3), "an alien is an alien is an alien." Dresser, 106
F.3d at 500 (quoting Bank of New York, 861 F. Supp. at 229
(declining to follow DeWit)).
3. Clarification of Allendale and Spearing
The court is mindful of the fact that some courts and
commentators have construed dicta in Allendale to stand for the
proposition that, according to the Seventh Circuit, there is no
jurisdiction under § 1332(a)(3) if aliens on both sides of an
action hail from the same foreign country. See, e.g., John J.
Watkins, The "Other" Division: Federal Alienage Jurisdiction,
1997 ARK.L. NOTES 77, 90 (citing Allendale for the assertion
that "[s]ome courts have taken the position that there is no
jurisdiction under § 1332(a)(3) if one of the alien plaintiffs
has the same citizenship as one of the alien defendants");*fn8
WRIGHT & MILLER at §§ 3604, 3605, 3661 (summarizing Allendale
as holding that the "presence of foreign litigants on both sides
of a litigation does not destroy diversity jurisdiction unless
litigants are from same foreign state.").
In Allendale, the Seventh Circuit stated: "So why should the
presence of citizens of foreign states destroy diversity unless
(as in Spearing) they are citizens of the same foreign state?
The answer is found in the details of the statutory framework."
Allendale, 10 F.3d 425-28. The court finds that this dicta in
Allendale has been slightly misconstrued and is easily
distinguishable from the case at hand.
The primary issue on appeal in Allendale was whether the
district court had power to preliminarily enjoin a subsidiary
from litigating a parallel suit pending in a foreign court. Id.
at 430-32. Before considering this issue, however, the Seventh
Circuit addressed the jurisdiction of the case. Id. at 427-28.
According to the district court, the case involved (1) two
plaintiffs — a Rhode Island corporation with its principal place
of business in Rhode Island and a Great Britain corporation with
its principal place of business in London, and (2) four
defendants — a Delaware corporation with its principal place of
business in Illinois; a Maryland corporation with its principal
place of business in New York; and two French corporations with
their principal place of business in France. See Allendale Mut.
Ins. Co. v. Bull Data Sys., Inc., No. 91 C 6103, 1993 WL 171359,
at *1 (N.D.Ill. May 19, 1993). The Seventh Circuit confirmed that
"[a] case such as this, in which citizens of states are on both
sides of the litigation (Allendale and Alexander & Alexander on
one side and BDS on the other) and are completely diverse, fits
section 1332(a)(3) to a t." Allendale, 10 F.3d at 428 (internal
citations omitted). In so stating, the court referred only to the
complete diversity of the three domestic corporations, implying
that the diversity of the foreign corporations was irrelevant
in its § 1332(a)(3) analysis.
Unfortunately, Allendale has been misconstrued because, in
dicta preceding its clarification of § 1332(a)(3), it asks and
answers the rhetorical question, "[s]o why should the presence of
citizens of foreign states destroy diversity unless (as in
Spearing) they are citizens of the same foreign state?" Id.
at 425. In so stating, it seems that the Seventh Circuit sought
to explain that the presence of foreign citizens from the same
foreign state destroys diversity only in situations as posited in
Spearing. Thus, to fully understand this explanation, one must
Spearing v. National Iron Co., 770 F.2d 87 (7th Cir. 1985).
At issue in Spearing was whether Canada's worker's
compensation law precluded an American corporation from paying
damages attributable to its Canadian affiliate. 770 F.2d at 88.
Spearing involved a sole Canadian citizen suing a sole American
corporation, a case clearly falling within the realm of §
1332(a)(2). Id. The case did not involve a suit with United
States citizens on both sides of the action; therefore, the court
did not address a situation falling within the realm of §
1332(a)(3). In dicta, the court observed — in a parenthetical, no
less — that there would be no diversity jurisdiction in the
hypothetical situation where a sole Canadian plaintiff sued a
sole Canadian defendant. Id. at 90.*fn9 It is a true statement
that the presence of foreign parties on both sides of an action
destroys diversity if there is not a citizen of the United States
on each side of the action — this result is mandated by §
1332(a)(2). However, this statement has no bearing on the
construction of § 1332(a)(3), or on the present case where there
are diverse United States citizens on each side of the action.
Thus, the Allendale dicta merely explains that the presence of
foreign citizens from the same foreign state does not destroy
diversity unless a sole alien sues a sole alien, as posited in
Further, plaintiffs argue that in Mora v. McDonald's Corp,
No. 96 C 4401, 1997 WL 102546 (N.D.Ill. Mar. 6, 1997), a Northern
District of Illinois court held that complete diversity is
required for aliens under § 1332. Again, Mora is inapposite to
the case at hand because Mora did not involve an action between
citizens of different States with citizens of foreign states as
additional parties and, thus, the case did not fall within the
realm of § 1332(a)(3). Rather, Mora involved an action between
a citizen of a foreign state and a citizen of the United States,
and, accordingly, jurisdiction was addressed under § 1332(a)(2).
Such cases — stating that complete diversity is required among
aliens under § 1332(a)(2) — are simply inapplicable here. See
Dresser, 106 F.3d at 497 (internal citations omitted).*fn10
In sum, because this court is persuaded by the rationale and
conclusion of the Third Circuit, and because a recent and
unanimous Seventh Circuit decision implicitly adopted and
extended the Third Circuit's holding, the court finds that, under
§ 1332(a)(3), the involvement of aliens from the same alien
nation as additional parties on both sides of an action does not
destroy diversity in a suit between diverse domestic citizens.
Thus, the court has subject matter jurisdiction pursuant to
28 U.S.C. § 1332(a)(3). Accordingly, the
court denies plaintiffs' petition for remand. The court shall now
consider the defendants' motion to transfer.*fn11
Defendants ask the court to transfer the case to the United
States District Court for the Southern District of Indiana in
accordance with the parties' forum-selection clause contained in
the Purchase Agreement. Federal law, specifically
28 U.S.C. § 1404(a), governs the decision whether to give effect to the
parties' contractual choice of venue and transfer the case. See
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29-32, 108 S.Ct.
2239, 101 L.Ed.2d 22 (1988) (addressing whether § 1404(a) is
applicable when a forum-selection clause is present).
The existence of a forum-selection clause is a significant
factor that figures centrally in the district court's calculus of
whether to transfer a case. Stewart Organization, Inc., 487
U.S. at 29, 108 S.Ct. 2239. Forum-selection clauses "`are prima
facie valid and should be enforced unless enforcement is shown by
the resisting party to be "unreasonable" under the
circumstances.'" Hugel v. Corporation of Lloyd's, 999 F.2d 206,
210 (7th Cir. 1993) (quoting M/S Bremen v. Zapata Off-Shore
Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972)
(footnote omitted)). A forum-selection clause will not be
enforced where "enforcement would be unreasonable and unjust, or
[where] the clause [is] invalid for such reasons as fraud or
over-reaching." M/S Bremen, 407 U.S. at 15, 92 S.Ct. 1907. Thus,
"absent a showing that trial `in the contractual forum will be so
gravely difficult and inconvenient that [the party challenging
the clause] will for all practical purposes be deprived of his
day in court,'" the parties will be held to their bargain as
contained in the forum-selection clause. Heller Financial, Inc.
v. Midwhey Powder Co., 883 F.2d 1286, 1291 (7th Cir. 1989)
(quoting M.S. Bremen, 407 U.S. at 18, 92 S.Ct. 1907 (alteration
in original)). Here, plaintiffs do not allege that enforcement of
the clause would be unreasonable or unjust, or that the clause is
invalid because of fraud or overreaching. In fact, plaintiffs
make no argument disputing the validity or the enforcement of the
forum-selection clause. Therefore, the court will give the
forum-selection clause full effect. Accordingly, the court grants
defendants' motion to transfer.
Further, pursuant to 28 U.S.C. § 1404(a), a district court may
transfer a civil action "[f]or the convenience of parties and
witnesses [and] in the interest of justice . . . to any other
district or division where it might have been brought."
28 U.S.C. § 1404(a). Transfer is appropriate under § 1404(a) where the
moving party establishes: (1) that venue is proper in the
transferor district; (2) that venue and jurisdiction are proper
in the transferee district; and (3) that the transfer will serve
the convenience of the parties and the witnesses and will promote
the interest of justice. See 28 U.S.C. § 1404(a); Coffey v.
Van Dorn Iron Works, 796 F.2d 217, 219 n. 3 (7th Cir. 1986). It
is in the sound discretion of the trial judge to determine the
weight accorded to each factor. See Coffey, 796 F.2d at 219.
Even if the parties did not have a forum selection clause and
if the court were to weight each factor in § 1404(a), it would
still reach the same conclusion. First, venue is proper in this
district because a substantial part of the events giving rise to
this claim occurred in this district and defendant Kimball is
subject to personal jurisdiction. See 28 U.S.C. § 1391. In
fact, no party disputes that this court has personal jurisdiction
over it. Second, venue is proper in the Southern District of
Indianapolis because (1) the parties contemplated this venue in
their forum-selection clause, (2) two of the
parties are Indiana corporations, and (3) Indiana law applies
according to the Purchase Agreement. (See Def.Mot. Ex. A at
42-43.) Third, the transfer will serve the convenience of the
parties and witnesses because there is no showing that any party
or witness will experience any inconvenience — much less be
deprived of a meaningful day in court — if the litigation
proceeds in Indianapolis. Finally, the transfer will promote the
interest of justice because a judge in Indiana is familiar with
the applicable Indiana law, and — more importantly — because the
forum-selection clause was freely entered into by all the
parties, and validly and reasonably represents the parties'
solemn agreement as to the most appropriate forum. Thus, all the
factors under § 1404(a) favor transfer.
In sum, the court grants defendants' motion to transfer venue.
This case is transferred to the United States District Court for
the Southern District of Indiana, Indianapolis Division.
Defendants' motion to dismiss is denied.
For the foregoing reasons, the court (1) denies plaintiffs'
motion to remand; (2) denies defendants' motion to dismiss for
lack of venue; and (3) grants defendants' motion to transfer
venue. The court orders this case to be transferred forthwith,
pursuant to 28 U.S.C. § 1404(a) and Local Rule 83.4, to the
United States District Court for the Southern District of
Indiana, Indianapolis Division.