A drunken tumble on a cruise ship may lead to resolving how alienage/jurisdiction is determined in the Eleventh Circuit. In Caron v. NCL (Bahamas), Ltd., — F.3d —, 2018 WL 6539178 (11th Cir. Dec. 13, 2018), the Eleventh Circuit, for the first time, held an alien corporation has dual citizenship, but limited its holding. Specifically, Caron held there is no diversity jurisdiction in a suit between a foreign incorporated corporation with its principal place of business in Florida and a citizen of Canada. Unfortunately, despite guidance from sister courts, Caron left unresolved the question of whether a domestic incorporated corporation with a principal place of business abroad can invoke alienage-dual citizenship diversity in a suit against an alien following the 2012 amendments to 28 U.S.C. § 1332(c).
Background
On July 14, 2016, Canadian citizen Olivier Caron sued Norwegian Cruise Lines (“NCL”) after he sustained personal injuries by falling down an escape hatch on a ship while he was inebriated. Mr. Caron filed suit in the Southern District of Florida asserting diversity of citizenship jurisdiction and admiralty jurisdiction.[1]
Caron argued that the alienage-diversity provision, governing suits between aliens and citizens of a State, applies, and the district court properly entertained jurisdiction under this provision. Caron is a Canadian citizen and NCL is a Bermuda corporation with its principal place of business in Florida. Thus, Caron argued that NCL is a Florida citizen for alienage-diversity jurisdiction purposes.
NCL moved to dismiss Caron’s complaint and moved for summary judgment on Caron’s common law negligence theories. The district court granted both of NCL’s motions and Caron appealed to the Eleventh Circuit. In the appeal, the parties disagreed that the district court had subject matter jurisdiction, and this was the first issue addressed by the Caron court.
Eleventh Circuit’s Decision
Before this case, the Eleventh Circuit had never explicitly decided whether dual-citizen corporations, incorporated under the laws of a foreign state but with their principal place of business in a U.S. state, count as aliens to defeat complete diversity in suits against other aliens.
Alienage diversity, like general diversity under 28 U.S.C. § 1332(a)(1), must be complete; an alien on both sides of a dispute will defeat jurisdiction. See Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1340 (11th Cir. 2011); cf. Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435 (1806) (requiring complete diversity under the predecessor statute to § 1332(a)(1)).
Prior to Caron, the Eleventh Circuit took the position that alienage-diversity jurisdiction was proper in a suit between an alien and a corporation incorporated in the United States with a principal place of business abroad because the term “States” is capitalized and therefore only applied to the 50 U.S. states, and not to foreign states. See Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1557 (11th Cir. 1989) (interpreting a prior version of § 1332). Other circuits did not agree with this rationale. Compare Cabalceta, 883 F.2d at 1557 with Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 990 (9th Cir. 1994). As a result of this split amongst the Circuits, in 2012, Congress amended Section 1332(c). Whereas previous versions of Section 1332 solely referred to corporations incorporated in, or with their principal place of business in a “State,” the amendments added the term “foreign state” to Section 1332(c). The comments to the proposed statute demonstrate that the amendments were added by Congress to curtail diversity jurisdiction in light of the conflicting Cabalceta and Nike deci...
