National Mutual Insurance Co. v. Tidewater Transfer Co., Inc.

337 U.S. 582 (1949)

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Nature of the Case

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Facts

In defining the cases and controversies to which the judicial power of the United States could extend, the Constitution included those 'between Citizens of different States.' In the Judiciary Act of 1789, Congress created a system of federal courts of first instance and gave them jurisdiction of suits 'between a citizen of the State where the suit is brought, and a citizen of another State.' The Supreme Court, through Chief Justice Marshall held that a citizen of the District of Columbia was not a citizen of a State within the meaning and intendment of this Act. See Hepburn & Dundas v. Ellzey, 6 U.S. (2 Cranch) 445 (1805). This decision closed federal courts in the states to citizens of the District of Columbia in diversity cases, and for 136 years they remained closed. In 1940 Congress enacted the statute challenged here. It confers on such courts jurisdiction if the action 'Is between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory.' P commenced an action for a money judgment on a claim arising out of an insurance contract. No cause of action under the laws or Constitution of the United States was pleaded, jurisdiction being predicated only upon an allegation of diverse citizenship. P is a corporation created by District of Columbia law, while Tidewater (D) is a corporation chartered by Virginia, amenable to suit in Maryland by virtue of a license to do business there. The District Judge concluded that, while this diversity met jurisdictional requirements under the Act of Congress, it did not comply with diversity requirements of the Constitution as to federal jurisdiction, and so dismissed. The Court of Appeals affirmed. The Supreme Court granted certiorari. Tidewater’s (D) contention is that it cannot be made to answer P in the particular court that Congress has decided is the just and convenient forum.