Deveaux v. Bank of the United States

Supreme Court of the United States · Federal Courts

Federal Courtsdiversity jurisdictioncorporate citizenshipfederal jurisdictionBank of the United Statessue and be suedcircuit courtscitizens of different states

Facts

The Bank of the United States, a corporation created by federal law, brought suit in federal circuit court against a citizen of another state. The defendant challenged jurisdiction on two grounds: that the Bank's charter did not itself confer a right to sue in federal court, and that a corporation could not sue in federal court based on diversity because a corporation is not a citizen. The Bank had sued in its corporate name and averred the citizenship of those represented by that name.

Issue

Did the Bank's act of incorporation itself authorize suit in the federal courts, and if not, may a corporation composed of citizens of one state sue a citizen of another state in federal court by looking to the citizenship of the corporation's members rather than the corporation as an artificial entity?

Rule

A corporate charter granting power to "sue and be sued" does not, without express language, confer jurisdiction on the federal courts. But although a corporation aggregate is not itself a citizen, federal courts may look beyond the corporate name to the citizenship of the individuals composing it; if those members are citizens of a different state from the opposing party, the corporation may sue in its corporate name in the courts of the United States, and an averment to that effect is sufficient.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

Blue Mesa Trading Company is a corporation formed by a federal statute. Its charter authorizes it to "sue and be sued, plead and be impleaded, in all courts of record and any other place whatsoever." Blue Mesa files a contract suit in federal circuit court in St. Louis against Nora Velez, a Missouri citizen, relying only on that charter language.

What is the best argument regarding federal jurisdiction?

Explanation. The majority held that a generic power to "sue and be sued" does not enlarge the jurisdiction of federal courts. It merely allows the corporation to appear in courts that already have cognizance of the cause. So unless some separate jurisdictional basis exists, the federal court lacks jurisdiction. (Derived from Deveaux v. Bank of the United States (n.d.).)