Herman L. Reid, James Q. Bryan and Gratha Bryan, Appellants, v. Ford, Bacon and Davis Construction Corporation, Appellee, 405 F.2d 861 (8th Cir. 1969)

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U.S. Court of Appeals for the Eighth Circuit - 405 F.2d 861 (8th Cir. 1969) January 14, 1969

Bernard Whetstone, Little Rock, Ark., for appellants.

John M. Shackleford, Jr., of Shackleford & Shackleford, El Dorado, Ark., for appellee.

Before MATTHES, GIBSON and LAY, Circuit Judges.


Plaintiffs bring this action against Ford, Bacon and Davis Construction Corporation to recover a total of $85,000 arising out of injuries received by James Q. Bryan. Bryan was injured in a bus operated by Herman L. Reid in the scope of his employment for the defendant. Both Bryan and Reid were working for defendant at the time of the accident. Bryan and his wife obtained a default judgment against Reid and now all three seek damages on the admittedly novel theory that the employer was negligent in failing to provide Reid with liability insurance which runs to the benefit of a co-employee. Bryan could not sue Ford, Bacon and Davis directly for his injury by reason of the exclusive remedy provided by the Workmen's Compensation Laws. Ark.Stat.Ann. § 81-1304 (1947).

The merits of the case turn on Arkansas law. The case was originally brought in state court and the defendant removed it to federal district court. Thereafter the district court sustained a motion to dismiss the case on its merits and the plaintiffs appealed. We do not pass upon the propriety of the district court's ruling, since we find that the federal courts lack jurisdiction on the face of the pleadings. Even though the question is not raised by the parties, at the threshold of any case is the question of our limited power to entertain a suit. Rock Island Millwork Co. v. Hedges-Gough Lumber Co., 337 F.2d 24 (8 Cir. 1964).

In order to remove an action under Title 28 U.S.C. § 1441(a), it must be demonstrated that the action could otherwise have originally been commenced in the federal district court. Title 28 U.S.C. § 1332, requires that all of the plaintiffs have diversity of citizenship with the defendant corporation.

The original complaint alleges that plaintiff Reid is a citizen of the State of Louisiana and that the defendant corporation "is a corporation organized and existing by virtue of the laws of the State of Louisiana with its principal office being located at 3901 Jackson, Monroe, Louisiana." In defendant's petition for removal, it is alleged that "petitioner, Ford, Bacon and Davis Construction Corporation, is a corporation organized and existing by virtue of the laws of the State of New York."

The problem exists that defendant has not demonstrated complete diversity of citizenship. Although defendant corporation has alleged it is "organized and existing" by virtue of the laws of New York, plaintiffs' allegation that defendant's "principal office [is] located at 3901 Jackson, Monroe, Louisiana" still remains uncontroverted. Under § 1332 the defendant corporation at the time of removal is "deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." (Emphasis ours.) This being so, it is uncontroverted that plaintiff Reid and the defendant were citizens of the same state. As has been authoritatively written: "A corporate defendant, removing on the basis of diversity, should have to aver in its petition the state wherein it is incorporated and where it has its principal place of business." 1A Moore, Federal Practice, ¶ 0.168 [3.-4] at 1204 (2d ed. 1965). See also Chapman v. Ozark Forest Prods. Inc., 246 F. Supp. 816 (W.D. Mo. 1965); F & L Drug Corp. v. American Central Ins. Co., 200 F. Supp. 718 (D. Conn. 1961). Here the defendant not only failed to make such proper allegation, but we are confronted with plaintiffs' pleadings which state to the contrary.

The judgment is reversed for lack of jurisdiction, with directions to vacate the dismissal and to remand the case to the state district court.