United Steelworkers of America v. R. H. Bouligny, Inc.

PETITIONER: United Steelworkers of America
RESPONDENT: R. H. Bouligny, Inc.
LOCATION: Juvenile Court

DOCKET NO.: 19
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 382 US 145 (1965)
ARGUED: Oct 21, 1965
DECIDED: Nov 22, 1965

Facts of the case

Question

Media for United Steelworkers of America v. R. H. Bouligny, Inc.

Audio Transcription for Oral Argument - October 21, 1965 in United Steelworkers of America v. R. H. Bouligny, Inc.

Earl Warren:

No 19. United Steelworkers of America AFLCIO, petitioner versus R. H. Bouligny, Incorporated.

Mr. Gottesman?

Michael H. Gottesman:

Mr. Chief Justice, may it please the Court.

This case which is here on writ of certiorari to the Fourth Circuit, raises an unsettled question of federal jurisdiction.

How are the district courts to determine, whether diversity of citizenship exists, when one of the parties to the case is a labor union.

Now this case was instituted in the State Courts of North Carolina, the County Court of Mecklenburg County.

The respondent here, the company filed a complaint against the union, alleging that it had been libel by a pamphlet distributed by the union.

It sought as damages $100,000 actual damages and $100,000 punitive damages.

The only parties to the action were the company which was the plaintiff and the union which was the defendant.

The union removed the case to the Federal District Court, alleging the diversity of citizenship existed.

It asserted in its removal papers that the plaintiff company was a citizen of North Carolina, because incorporated there and having its principal place of business there, and that the defendant union was a citizen of Pennsylvania, because they were not incorporated that was the state of its principal place of business.

The company moved that the case be remanded to the state court.

It acknowledged that it was a citizen of North Carolina.

It did not dispute the union's contention that Pennsylvania was its principal place of business.

But it asserted that notwithstanding those facts diversity of citizenship did not exist because it said a union has no citizenship for diversity purposes, and that the courts must treat it when it's a party, as though it were a citizen of every state in which it has a member.

Since this union, the United Steelworkers has a member in each of the 50 states, including of course North Carolina, this meant on the company's theory that no diversity of citizenship existed.

The district judge refused to remand the case.

He held as the union had urged that it was a citizen of its principal place of business, Pennsylvania and that this was therefore a suit between a North Carolina plaintiff and a Pennsylvania defendant.

The company sought and obtained interlocutory review and the Court of Appeals reversed.

It held as the company urged, that a union has no citizenship of its own and that the district court must look to the citizenship of each of its members and that therefore a union such as this one with members in each of the 50 states, is to be treated as though it were a citizen of each of the 50 states and therefore incapable of removing cases to the federal courts on the ground of diversity of citizenship.

The question before this Court therefore, is whether labor union shall be treated as corporations have since 1844, as having a citizenship distinct from that of their members or in the corporate case their shareholders, or whether they are to have as the Court below held no citizenship and therefore be deemed citizens of every state in which they have a member.

Now of course the governing standard is Article III, Section 2, of the Constitution which creates the diversity ground and 28 U.S.C., Section 1332 (a), which confers that grant upon the lower District Courts and both speak in identical words.

The Constitution provides that the judicial power, the federal judicial power, shall extend to controversies between citizens of different states and the statute provides that the District Courts shall have original jurisdiction.

Of all civil actions where the matter in controversy exceeds the sum value of $10,000 as it does here, and is between, in the words of the Constitution, citizens of different states.

The question therefore is whether under these provisions the union like the corporation is a citizen, and in our view the beginning of that inquiry is to look to the purpose of the diversity jurisdiction, and to see whether it applies to unions as to corporations, so as to warrant their being treated as a single entity.

Now there have been historically great debates about what the purpose of the diversity jurisdiction is, and what it was when it was originally conferred.

But from the time of Alexander Hamilton's statements in Federalist Number 80, down through the legislative history of the Congressional amendments in 1958, one overriding purpose has been consistently expressed and we think must be accepted as the governing justification for the diversity jurisdiction.

And that purpose is that a neutral forum, a federal forum be provided, when an outsider is forced to litigate in the courts of its adversary or in the geographic region of his adversary.

The theory was as Alexander Hamilton put it in the Federalist, that in such cases the state tribunals cannot be supposed to be impartial.

And as concluded by the Judicial Conference in the 1950's and adopted in the Congressional reports in 1958, there is a great bulk of expert opinion from those who litigate in the courts, that local prejudice continues to exist and that the federal courts are in truth a strong protection against it.