Public Sch. Retirement, et al. v. State Street Bank & Trust Co, No. 10-1244 (8th Cir. 2011)
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Plaintiffs sued defendant in state court alleging that defendant violated a number of its statutory and common-law duties while managing plaintiffs' assets. Defendant filed a notice of removal with the district court, arguing that the diversity-of-citizenship jurisdiction statute, 28 U.S.C. 1332(a)(1), gave the district court original jurisdiction over the action. At issue was whether the district court erroneously granted plaintiffs' motions to remand to state court. The court held that, after considering plaintiffs' relative lack of Independence from the State of Missouri as well as the potential impact that a money judgment in plaintiffs' favor could have on the state's treasury, the court found that plaintiffs were merely an arm of the state and not "citizens" for purposes of section 1332(a)(1). Therefore, defendant failed to prove by a preponderance of the evidence that the district court had original jurisdiction over the case and the district court's orders to remand the case to state court were affirmed.
Court Description: Civil case - civil procedure. A remand order based on a contractual forum-selection clause is not a remand based upon a procedural defect or lack of subject matter, and review of such an order is not prohibited by 28 U.S.C. Sec. 1447(d); on the whole, the Retirement Systems lack the type of independence from the State that a political subdivision typically possesses; further, a money judgment in favor of the Retirement Systems would benefit the State; taken together, these two factors show that the real party in interest in the suit is the State of Missouri, and the Retirement Systems are merely arms of the State; as a result, the Retirement Systems are not citizens for purposes of 28 U.S.C. Sec. 1332(1)(1), which means defendant has failed to prove by a preponderance of the evidence that the district court had original jurisdiction over the case; the remand order to the state court is affirmed. Judge Bye, dissenting.
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