Carden v. Arkoma Associates

PETITIONER:Carden
RESPONDENT:Arkoma Associates
LOCATION:Residence of Cruzan

DOCKET NO.: 88-1476
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 494 US 185 (1990)
ARGUED: Nov 07, 1989
DECIDED: Feb 27, 1990

ADVOCATES:
Mitchell J. Hoffman – on behalf of the Respondent
Richard K. Ingolia – on behalf of the Petitioners

Facts of the case

Question

Media for Carden v. Arkoma Associates

Audio Transcription for Oral Argument – November 07, 1989 in Carden v. Arkoma Associates

Audio Transcription for Opinion Announcement – February 27, 1990 in Carden v. Arkoma Associates

William H. Rehnquist:

The opinion of the Court in No. 88-1476, Carden against Arkoma Associates will be announced by Justice Scalia.

Antonin Scalia:

This case is here on certiorari to the Fifth Circuit.

The question it presents is as follows: In determining whether there is diversity of citizenship between the parties as is required for federal diversity jurisdiction, complete diversity is required, that is, all the plaintiffs must be citizens of different states from all the defendants.

We have long held that the citizenship of a corporate plaintiff or defendant for these purposes is not the citizenship of all of its shareholders but rather the state of the corporation’s incorporation.

For ordinary partnerships, however, we have long held that the citizenship of all the partners must be taken into account.

In this case, the plaintiff, Arkoma Associates, is a limited partnership organized under the laws of Arizona suing two individual citizens of Louisiana.

One of Arkoma’s limited partners is also a citizen of Louisiana which would destroy the complete diversity.

The issue is whether at law, it does so.

The District Court held not, and denied a motion to dismiss on that ground.

The Fifth Circuit affirmed holding that only the citizenship of Arkoma’s general partners was relevant for determining whether there is complete diversity.

We reverse the judgment of the Court of Appeals and remand the case for further proceedings.

Arkoma cannot itself be considered a citizen of the state of its organization as that term is used in the diversity statute.

We have steadfastly refused in the past to accord to unincorporated associations the unique treatment that we give to corporations for that purpose rather, in a suit by or against an unincorporated association, we have looked to the citizenship of all the association’s members to determine whether there is complete diversity.

Arkoma argues that courts should make an exception to this rule in a case of limited partnerships and should look to the citizenship of only the general but not the limited partners.

Arkoma argues that this exception is required by the realities of modern business organizations like limited partnerships, in which only the general partners control the litigation in the day to day operations of the partnership.

The proposed exception is not supported by our cases and we decline to adopt it.

Arkoma’s arguments are more properly addressed to Congress and to this Court.

Magee Drilling Company and intervenor below asks that we affirm the judgment with respect to it because diversity of citizenship indisputably exist between it and Arkoma.

This question was not considered by the Court of Appeals and we leave it to be decided in the first instance on remand.

The judgment of the Court of Appeals is therefore reversed and the case is remanded for further proceedings.

Justice O’Connor has filed a dissenting opinion in which Justices Brennan, Marshall, and Blackmun have joined.