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Corporation Does Not Become State Citizen Merely By Complying with State Law
Description Appeals court upheld the verdict of federal trial court in a case involving property condemned for taking by Union Pacific Railroad under Arkansas law. Usage of the statute does not, by itself, make the railroad an Arkansas citizen, thereby forcing the dispute with an Arkansas citizen into state court.
Topic Court Procedure
Key Words Diversity of Citizenship; Foreign Corporation
C A S E   S U M M A R Y
Facts Union Pacific, using the power of eminent domain it was granted by the state of Arkansas, condemned private property to expand facilities. At the condemnation trial, experts disagreed on the value, which was set by the federal trial judge. The property owner appealed, contending that the federal court did not have jurisdiction because there was no diversity. Both parties, the property owner contended, are Arkansas residents so the case should have been removed to state court.
Decision Affirmed. Diversity jurisdiction is a matter of federal law. The issue here is whether a foreign railroad corporation that takes advantage of state law to obtain property by condemnation thereby becomes a citizen of the state for diversity jurisdiction purposes. Union Pacific is not an Arkansas citizen for diversity jurisdiction purposes. The railroad did not become an Arkansas citizen simply by complying with the provisions of Arkansas law.
Citation Union Pacific Railroad Co. v. 174 Acres of Land Located in Crittenden County, Ark., 193 F.3d 944 (8th Cir., 1999)

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