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Caribbean Telecommunications Limited v. Guyana Telephone & Telegraph Company Ltd.

January 26, 2009

CARIBBEAN TELECOMMUNICATIONS LIMITED, PLAINTIFF,
v.
GUYANA TELEPHONE & TELEGRAPH COMPANY LTD. AND ATLANTIC TELE-NETWORK INC., DEFENDANTS.



The opinion of the court was delivered by: Ackerman, Senior District Judge

FOR PUBLICATION

OPINION AND ORDER

This matter comes before the Court on motions (Doc. Nos. 8, 9) filed by Defendants Guyana Telephone & Telegraph Company Ltd. (GT&T) and Atlantic Tele-Network Inc. ("Atlantic") to dismiss the Complaint filed by Plaintiff Caribbean Telecommunications Limited ("Caribbean"). Both motions seek dismissal for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), forum non conveniens under Rule 12(b)(3), and on the basis of international comity. During the course of considering the parties' arguments, the Court detected a potential flaw in subject-matter jurisdiction. Cognizant of federal courts' absolute duty to verify dubious assertions of subject-matter jurisdiction, this Court requested supplemental briefing from the parties on the matter. Cf. Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999) ("[S]ubject-matter delineations must be policed by the courts on their own initiative . . . .") (citation omitted).

Plaintiff bases the Court's subject-matter jurisdiction for this case on the federal diversity jurisdiction statute, 28 U.S.C. § 1332. The Court now considers sua sponte whether § 1332(a)(3) grants federal court jurisdiction where the sole Plaintiff is an alien corporation that has its principal place of business in the United States and one of the Defendants is also an alien corporation. After careful consideration of the statute's language, history, and purpose, the Court concludes that it lacks subject-matter jurisdiction to hear this case. Because severance of the non-diverse party cannot cure this jurisdictional defect, the Court must dismiss the present action.

I. BACKGROUND

This case involves breach of contract and tortious interference claims resulting from a telecommunications contract (the "interconnection agreement") between Caribbean and GT&T to provide cellular telephone service in the Co-operative Republic of Guyana. Caribbean and GT&T have disputed various obligations related to the interconnection agreement before the appropriate Guyanese administrative agencies and the Guyanese court system to no avail. However, because this Court now considers only the narrow question of subject-matter jurisdiction, it need not recount the facts of the parties' dispute; only the citizenship of the parties matters.

According to the Complaint, Plaintiff is a telecommunications company incorporated in Guyana with a principal place of business in Edison, New Jersey; Defendant Atlantic is a Delaware corporation with principal offices in Massachusetts; and Defendant GT&T is a Guyana-based and chartered telecommunications corporation, 80 percent of which is owned by Atlantic. Although GT&T and Atlantic ("Defendant Corporations") contest whether Plaintiff actually maintained a principal place of business in New Jersey, neither side disputes the geographic origins and principal places of business of Defendant Corporations. For present purposes, the Court will presume without deciding that Plaintiff maintained a principal place of business in New Jersey.

Plaintiff asserts that this Court has jurisdiction under § 1332(a)(3) because the claims involve domestic parties of diverse citizenship, and the alien Defendant (GT&T) qualifies as an "additional" party. Plaintiff's argument rests on the supposition that 28 U.S.C. § 1332(c)(1) endows it with the citizenship of its principal place of business-the State of New Jersey-for purposes of diversity jurisdiction. According to Plaintiff's argument, then, this case involves claims between a New Jersey citizen on one side, and a "dual-citizen" of Delaware and Massachusetts, as well as an alien corporation, on the other side. Conversely, Defendant Corporations maintain that the case involves alien corporations on both sides of the case, the lone domestic corporation (Atlantic) serving as the "additional party." Federal jurisdictional statutes, they argue, do not permit such an alignment of parties.

II. STYLE NOTE

To simplify the task of understanding the complex party alignments in this case and the occasionally counterintuitive language of the diversity statute, this Court will employ the following stylistic conventions. First, the Court will use the terms "citizenship," "citizen," and "alien" as employed by the statute. Thus, the Court will speak of a corporation's "citizenship" because § 1332 uses that language. However, the statute does not use the term "alien" to describe a corporation chartered outside the jurisdiction of the United States. In fact, as the Court will explain further, the statute does not expressly address foreign corporations at all. Nevertheless, the Court will refer to foreign corporations as "alien corporations" because, as noted above, § 1332 uses the same term-"citizenship"- when referring to the eligibility of individuals and corporations for a federal forum, and § 1332(a) uses the term "alien" to describe a foreign individual. The Court's choice of language in this regard does not reflect a substantive decision on the meaning of any portion of § 1332.

Next, the Court finds it helpful to adopt the shorthand employed by Judge Debevoise in K & H Business Consultants Ltd. v. Cheltonian, Ltd.,567 F. Supp. 420, 421--23 (D.N.J. 1983). Thus, where appropriate, the Court will use the letter "C" to denote the citizenship of domestic parties (including corporations), the letter "A" to refer to alien parties, and superscript numbers to signify diversity between citizen parties. Hence, the quintessential diversity jurisdiction case envisioned by § 1332(a)(1)-a suit between "citizens of different States"-has a party lineup of C1 v. C2 . Applying this style to the present case, the parties dispute whether the party lineup is C1 v. (C2 A), as Plaintiff contends, or A v. (A C), as Defendant Corporations maintain.As the Court will explain below, the Court's assessment of the party lineup determines the outcome of the jurisdictional question.

III. DIVERSITY JURISDICTION

Federal courts are courts of limited jurisdiction. See, e.g., Nw. Airlines, Inc. v. Transp. Workers Union of Am., AFL-CIO, 451 U.S. 77, 95 (1981). Congress has the constitutional authority, within the contours of Article III, to define the subject-matter jurisdiction for the lower federal courts. See, e.g., Palmore v. United States, 411 U.S. 389, 400--401 (1973); Cary v. Curtis, 44 U.S. (3 How.) 236, 245 (1845). "It follows, then, that the [lower federal courts] must look to the statute as the warrant for their authority . . . ." Cary, 44 U.S. (3 How.) at 245; see also Sheldon v. Sill, 49 U.S. (8 How.) 441, 449 (1850)("Courts created by statute can have no jurisdiction but such as the statute confers."). The subject-matter jurisdiction inquiry thus reduces to a question of power: "Has the Legislature empowered the court to hear cases of a ...


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