Lincoln Property Company v. Roche

546 U.S. 81 (2005)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Ps are citizens of Virginia. They leased an apartment in Fairfax County, Virginia. They discovered evidence of toxic mold in their apartment. Expert inspection confirmed the presence of mold, which the inspection report linked to hair loss, headaches, irritation of the respiratory tract, fatigue, and dermatitis. Ps moved out of their apartment for the remediation process, leaving their personal belongings in the care of D, the designated property manager of Westfield Village, and the mold treatment firm. Ps sued Ds in two actions in state court. Ps named three defendants: Lincoln; INVESCO Institutional, an investment management group; and State of Wisconsin Investment Board, the alleged owner of Westfield Village. Ds removed the cases to the District Court under diversity-of-citizenship jurisdiction. See 28 U.S.C. §§ 1332(a)(1), 1441(a). Ps stated that 'upon further discovery in this case,' they would 'determine if additional defendant or defendants will be named.' At no point did they seek to join any additional defendant. After discovery, the parties cross-moved for summary judgment. Ds' motion was granted. Before final judgment was entered, Ps moved to remand the case to the state court, alleging for the first time the absence of federal subject-matter jurisdiction. Ps alleged that Lincoln 'is not a Texas Corporation, but a Partnership with one of its partners residing in the Commonwealth of Virginia.' The Court denied the motion, concluding that Lincoln is a Texas corporation and that removal was proper because the requisite complete diversity existed between all plaintiffs and all defendants. Ps appealed. The Court of Appeals reversed and instructed the District Court to remand the case to the state court. It held that 'Lincoln operates under many different structures,' and it suspected that an unidentified 'Virginia subsidiary, be it a partnership, corporation or otherwise, rather than the Texas parent' was 'the real and substantial party in interest.' Because Lincoln was the party invoking federal-court jurisdiction, it had not demonstrated the nonexistence of 'the Virginia sub-'partnership,'' and had not met its burden of establishing diversity. Ds appealed.