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Back to the Beginning: Defendants and Plaintiffs Both Fail to Navigate the Vagaries of Diversity Jurisdictional Issues
Description In state court both defendants and plaintiffs improperly drafted pleadings which caused Court of Appeals to vacate lower court decision for lack of jurisdiction, not expiration of the statue of limitations.
Topic Court Procedure
Key Words Jurisdiction, Establishing Citizenship
C A S E   S U M M A R Y
Facts JEG improperly kept almost $90,000 that Guaranty sent it by accident. Guaranty sued JEG in federal court, based on diversity of citizenship. Guaranty's pleading stated that JEG "is a limited partnership whose principal place of business is in Massachusetts. The partners are all citizens of the State of Massachusetts." JEG's pleadings stated that Guaranty's statement "is complete and correct."
Lower Court Decision Case dismissed because statute of limitations had expired (the judge noted that JEG was in the wrong, but the clock had expired). Guaranty appealed.
Court of Appeals Decision Vacated with instructions to dismiss for want of jurisdiction. The pleadings were deficient. For purposes of establishing diversity jurisdiction, a limited partnership must establish the citizenship of each general and limited partner individually. Pleadings must specify citizenship of each party to the litigation; both parties failed to do this, so the federal courts cannot hear the case. "The lawyers knew what they had to do, and they did not do it.... Counsel have only themselves to blame if they must now litigate this case from scratch in state court."
Citation Guaranty National Title Co. v. J.E.G. Associates, 101 F.3d 57 (7th Cir., 1996)

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