Opinion
CIVIL ACTION NO. 07-10515-RGS.
August 7, 2007
MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION TO REMAND
Whittaker Corporation (Whittaker) brought this action against its insurer, American Nuclear Insurers (ANI), after ANI disclaimed a duty to defend and indemnify after Whittaker was designated as a potentially responsible party by the Department of Environmental Protection "for the release or threat of release of hazardous substances" at the Nuclear Metals Superfund Site located in Concord, Massachusetts. ANI, a jural entity, "is an unincorporated association of member insurance companies that subscribed to Nuclear Energy Liability Policy No. NF-44 issued by ANI to Whittaker." Complaint ¶ 2. The lawsuit was originally filed in the Massachusetts Superior Court. ANI removed the case to the federal district court claiming diversity of citizenship pursuant to 28 U.S.C. § 1332. Whittaker now seeks a remand of the case contending that complete diversity is lacking.
"Since diversity of citizenship is a jurisdictional requirement, the Court is always 'called upon to decide' it."C.T. Carden v. Arkoma Assocs., 494 U.S. 185, 194 (1990). Diversity of citizenship "must be complete." See In re Olympic Mills Corp., 477 F.3d 1, 6 (1st Cir. 2007). Whittaker argues that the court must evaluate ANI's citizenship for diversity purposes by applying one of two tests; either
(1) . . . the [c]ourt should consider the citizenship of all the members of ANI that underwrote the insurance policy at issue in this case because they are the real parties in interest, or (2) it should look to the citizenship of all of ANI's current members.
Whittaker Reply, at 2.
The United States Supreme Court is explicit that the citizenship of a legal entity other than a corporation is determined by the citizenship of every one of its members. See Carden, 494 U.S. at 195-196. However, citizenship is determined by a snapshot of the membership taken at the time the Complaint is filed. Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 574-576 (2004). ANI's counsel has represented to the court that all of "the subscribers of ANI as of the day that the action was filed by Whittaker . . . are diverse from Whittaker." Opposition Memorandum, at 2.
Whittaker also contends that ANI improperly removed this case because its membership includes two Massachusetts insurers, Commercial Union Insurance Company and Motors Insurance Company. However, ANI represents that Commercial Union is not a current subscriber to ANI and that Motors Insurance is incorporated in Michigan and maintains its principal place of business in Michigan.
The court does not agree with Whittaker's argument that ANI's relationships with other parties that may have an interest in the case defeats diversity. "[I]f [the] named party's interest is real, the fact that other interested parties are not joined 'will not affect the jurisdiction of the [federal courts].'" Lincoln Prop. Co. v. Roche, 546 U.S. 81, 126 S. Ct. 606, 615 (2005). See also Restatement (Second) of Judgments § 34(1), p. 345 (1980) ("A person who is named as a party to an action and subjected to the jurisdiction of the court is a party to the action. . . . The opportunity to litigate is accorded to persons who are parties. A person becomes a party to an action by being designated as such. . . .").
The choice of whom to sue was made by Whittaker, and not by ANI. Whittaker chose to name ANI as the sole defendant. "Ordinarily, a court will not interfere with the consequences of a plaintiff's selection in naming parties, unless the plaintiff has impermissibly manufactured diversity or used an unacceptable device to defeat diversity." 16 James Wm. Moore, et al., Moore's Federal Practice § 107.14(2)(c) (Matthew Bender 3d ed.). See also Toste Farm Corp. v. Hadbury, Inc., 70 F.3d 640, 646-647 (1st Cir. 1995) (applying 28 U.S.C. § 1359). The court is also satisfied that the claims, which include a breach of contract and violations of Mass. Gen. Laws c. 93A and Mass. Gen. Laws c. 176D, meet the $75,000 jurisdictional threshold required by 28 U.S.C. § 1332(a). See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 555 (2005).
The court has relied on the representations of ANI's counsel without attempting an independent investigation of their factual grounding. The court is confident that counsel understands the consequences of a knowing violation of Fed.R.Civ.P. 11. The court also notes that if the premise of the court's decision is undermined during the course of discovery, the issue of jurisdiction may be revisited at any stage of the proceedings.See Larson v. United States, 274 F.3d 643, 648 (1st Cir. 2001).
ORDER
For the foregoing reasons, Whittaker's Motion to Remand isDENIED.SO ORDERED.