Newman-Green, Inc. v. Alfonzo-Larrain

PETITIONER: Newman-Green, Inc.
RESPONDENT: Alfonzo-Larrain
LOCATION: Kino Community Hospital

DOCKET NO.: 88-774
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 490 US 826 (1989)
ARGUED: Apr 24, 1989
DECIDED: Jun 12, 1989

ADVOCATES:
Frank K. Heap - on behalf of the Respondents
Phil Caldwell Neal - on behalf of the Petitioner

Facts of the case

Question

Media for Newman-Green, Inc. v. Alfonzo-Larrain

Audio Transcription for Oral Argument - April 24, 1989 in Newman-Green, Inc. v. Alfonzo-Larrain

William H. Rehnquist:

We'll hear argument next in Number 88-774, Newman-Green, Inc., versus Alejandro Alfonzo-Larrain.

Mr. Neal.

Phil Caldwell Neal:

Mr. Chief Justice, and may it please the Court:

The narrow issue presented by this case is whether a court of appeals may permit amendment of the complaint to drop a nondiverse defendant and thereby perfect diversity jurisdiction so that the court may go on to decide the merits of the appeal.

The court below held that it had no such power.

The courts of appeals for the Second, Third, Fifth, Ninth and District of Columbia Circuits have held to the contrary and, in fact, no court since 1942, which was the Seventh Circuit again, has held that it did not have such power.

It is a narrow issue, but perhaps the broader significance of it is that it raises a question whether the powers of the courts of appeals, so far as possible, should be conducted in a way... should be construed in a way that permits the just, speedy and inexpensive termination of controversies as the Federal Rules of Civil Procedure admonish.

The case arises from a suit brought by the Plaintiff, Petitioner here, the Newman-Green Company, to enforce certain individual guarantee agreements of individuals in Venezuela which guaranteed royalty payments due from a Venezuelan corporation under a license agreement with the Plaintiff corporation.

The Plaintiff... the complaint alleged that the five individual Defendants, that four of them were residents and citizens of Venezuela, and that the fifth-named Defendant, one Bettison, was a citizen of the United States, resident in Caracas, Venezuela, and the complaint alleged jurisdiction based on Section 1332 of Title 28.

The... no objection to the jurisdiction of the court, of the district court, was made by the Defendants at any time, although they did, oddly enough, move to quash service of process.

That was overruled.

The case was litigated in the district court for about four-and-a-half years, and you can get some idea of the extensiveness of the... of the litigation and how controverted it was by scanning the docket entries which are reproduced in the... in the joint appendix.

At length after four-and-a-half years, during which time the district court had rendered several opinions, the district court rendered summary judgment which disposed of all of the claims against the five individual Defendants.

The Venezuelan Corporation itself had intervened in the meantime and had certain counterclaims pending.

The district court gave judgment in part for the Plaintiff, and that judgment was eventually satisfied.

No appeal was taken from it, but in important aspects gave judgment, summary judgment for the Defendants and entered a Rule 54(b) certification, upon which appeal was taken to the Seventh Circuit.

When counsel for the Appellant rose to make his argument, a judge of the Seventh Circuit said,

"Do we have jurisdiction of the case? "

And it was then and only at that time that anyone realized that in fact, under Section 1332, there was no diversity jurisdiction.

Harry A. Blackmun:

Which judge was that, Mr. Neal?

Phil Caldwell Neal:

That was Judge Easterbrook, Justice Radmun... Blackmun.

Harry A. Blackmun:

I'm not surprised.

[Laughter]

Who wrote the dissent?

Phil Caldwell Neal:

Judge Easterbrook wrote the dissent, yes.

Judge Easterbrook raised the issue and then suggested to counsel that the problem could be solved if the Plaintiffs cared to file a motion to dismiss Bettison, the nondiverse Defendant.

The argument continued.

The case was taken under submission.

The Plaintiff did indeed file such a motion.

The Defendants, the Appellees, filed a motion to dismiss the case rather than to dismiss the Defendant, and when the opinion came out, Judge Easterbrook dealt first with the jurisdictional point and then said we grant the motion to dismiss the nondiverse Defendant and proceeded to decide the merits.