February 26, 1991
CARMANIA CORP., N.V., PLAINTIFF,
HAMBRECHT TERRELL INTERNATIONAL, HAMBRECHT TERRELL, P.C., ARCHITECTS, EDWARD HAMBRECHT, INDIVIDUALLY, JAMES TERRELL, INDIVIDUALLY, DANIEL BARTELUCE, INDIVIDUALLY, H.M. HUGHES CO., INC., CUSTOM ART METALS, INC., DONALDSON ACOUSTICS CO., INC., HUDSON-SHATZ PAINTING CO., INC., MICHAEL S. COLLYER CORP., AIR IDEAL, INCORPORATED, HUGH O'KANE ELECTRIC COMPANY, INC., PORT MORRIS TILE & TERRAZZO CORP., MARTIN J. LOFTUS CARPETS, INC., DEFENDANTS. THE HAMBRECHT TERRELL INTERNATIONAL CORP., AND HAMBRECHT TERRELL, P.C., THIRD-PARTY PLAINTIFFS, V. SYSKA & HENNESSY, INC., THIRD-PARTY DEFENDANT. H.M. HUGHES CO., INC., PLAINTIFF, V. CARMANIA CORP., N.V., CUSTOM ART METALS, INC., DONALDSON ACOUSTICS CO., INC., HUDSON-SHATZ PAINTING CO., INC., MICHAEL S. COLLYER CORP., AIR IDEAL, INCORPORATED, HUGH O'KANE ELECTRIC COMPANY, INC., PORT MORRIS TILE & TERRAZZO CORP., AMSTERDAM-ROTTERDAM BANK, N.V. AND V.N. SHAFFERMAN, DEFENDANTS.
The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
Defendants Hambrecht Terrell International Corp., Hambrecht
Terrell, P.C., Edward Hambrecht, James Terrell and Daniel
Barteluce (collectively "HTI") and H.M. Hughes Co., Inc.
("Hughes") move pursuant to Rule 12(b)(1) of the Federal Rules
of Civil Procedure to dismiss 88 Civ. 5507 for lack of subject
matter jurisdiction and pursuant to 28 U.S.C. § 1447 to remand
88 Civ. 5691, on the ground that plaintiff Carmania Corp., N.V.
("Carmania") is a citizen of New York and therefore diversity
of citizenship is lacking.
For the reasons stated below, the motions to dismiss 88 Civ.
5507 and to remand 88 Civ. 5691 are granted. The third-party
complaint in 88 Civ. 5507 is also dismissed because the Court
does not have jurisdiction over the main action.
The facts of this case have been set forth more fully in a
prior opinion of this Court. Carmania Corp., N. V. v. Hambrecht
Terrell International, et al., 705 F. Supp. 936 (S.D.N Y
1989),*fn1 reargument denied, 705 F. Supp. 936 (S.D.N.Y. 1989).
The facts relevant to these motions follow. Plaintiff Carmania
Corp., N.V. ("Carmania") is incorporated in the Netherlands
Antilles. Carmania brought suit in federal court and removed
the related state action
to federal court, claiming that because it is a foreign
corporation and its principal place of business was allegedly
in the Netherland Antilles, diversity jurisdiction existed. As
a result of recent discovery efforts by defendants, the parties
have stipulated, for purposes of this action, that Carmania's
principal place of business is in the City and State of New
York and that the pending motions by plaintiff for a protective
order and by HTI to compel disclosure and for a stay should be
deemed a motion to dismiss 88 Civ. 5507 and to remand 88 Civ.
5691.*fn2 The HTI defendants are citizens of the state of New
York for purposes of diversity jurisdiction. At issue is
whether under 28 U.S.C. § 1332(c), Carmania is deemed to be a
citizen of the state of New York, thereby defeating diversity
jurisdiction. 28 U.S.C. § 1332(c) provides:
(c) For the purposes of this section and section
1441 of this title —
(1) a corporation shall be deemed to be a
citizen of any State by which it has been
incorporated and of the State where it has its
principal place of business . . .
Carmania argues that § 1332(c) does not apply to foreign
corporations but only to domestic corporations, relying on
Clarkson Co., Ltd. v. Shaheen, 544 F.2d 624 (2nd Cir. 1976),
and Corporacion Venezolana de Fomento v. Vintero Sales Corp.,
629 F.2d 786 (2nd Cir. 1980), cert. denied, 449 U.S. 1080, 101
S.Ct. 863, 66 L.Ed.2d 804 (1981). HTI points to recent District
Court decisions in this circuit and two Court of Appeals
decisions in other circuits to support its contention that §
1332(c) does apply to foreign corporations. See, e.g., Vareka
Investments, N.V. v. American Investment Properties, Inc.,
724 F.2d 907 (11th Cir. 1984), cert. denied, 469 U.S. 826, 105
S.Ct. 107, 83 L.Ed.2d 51 (1984); Jerguson v. Blue Dot
Investment, Inc., 659 F.2d 31 (5th Cir. 1981), cert. denied,
456 U.S. 946, 102 S.Ct. 2013, 72 L.Ed.2d 469 (1982).
Carmania admits that the statements on which it relies in
Clarkson and Corporacion Venezolana, supra, are dicta. It
contends, however, that in construction of a statute, such
dicta are issued to guide the conduct of inferior courts and
must be given considerable weight. While such dicta may be
entitled to weight, they are not binding on the Court.
Furthermore, in Corporacion Venezolana, the Court of Appeals
expressly did not rule on whether § 1332(c) applies to foreign
corporations. The careful analysis of the legislative history
of § 1332(c) in Jerguson, supra, 659 F.2d at 33-35, and the
evident trend among the district courts of this circuit, weigh
in favor of applying § 1332(c) to foreign corporations. See
Petroleum & Energy Intelligence Weekly, Inc. v. Liscom, 88 Civ.
3840 (JMW), 1989 U.S.Dist. LEXIS 11402 (S.D.N.Y. 1989), and
cases cited therein. Plaintiff also relies on Eisenberg v.
Commercial Union Assurance Co., 189 F. Supp. 500 (S.D.N Y
1960), but in that case, the foreign corporation had a
worldwide principal place of business in London and also a
principal United States place of business which was located in
New York. Here, the record shows only a single principal place
of business, which is in New York City, and the stipulation
entered into by the parties does not qualify that description
in any way. The facts of this case indicate that to apply §
1332(c) to Carmania would serve Congress' purpose in enacting
the statute. See Jerguson, supra. Accordingly, the Court
considers Carmania a citizen of New York and finds no diversity
of citizenship. Carmania Corp. v. Hambrecht Terrell
International, et al., 88 Civ. 5507 (RPP), is dismissed, as is
the third-party complaint in that action, and H.M. Hughes Co.
Inc. v. Carmania Corp., et al., 88 Civ. 5691 (RPP), is remanded
to the Supreme Court of the State of New York pursuant to
28 U.S.C. § 1447.
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