Iraola & CIA, S.A. v. Kimberly-Clark Corp.
Facts
Iraola, an Argentine company, sued Kimberly-Clark, a citizen of Delaware and Texas, and two Georgia employees, alleging tortious interference after Kimberly-Clark terminated a distribution contract in Argentina. Iraola also named Geo Med as a defendant because invoices listed a Georgia address, but discovery later indicated Geo Med was tied to Robert Alpert, an Argentine citizen and former Iraola employee. Iraola argued that § 1332(a)(2) did not allow a foreign plaintiff to sue domestic defendants who were citizens of different states, and alternatively that Geo Med's Argentine citizenship destroyed jurisdiction. The district court entered default judgment for Kimberly-Clark on its counterclaim, then granted Iraola's motion for voluntary dismissal without addressing requested attorneys' fees.
Issue
Does 28 U.S.C. § 1332(a)(2) permit alienage jurisdiction when the foreign party is opposed by U.S. citizens from more than one state? If a foreign defendant is also present, may the court preserve jurisdiction by dismissing that defendant as dispensable, and must the district court explain its denial of attorneys' fees requested under Rule 41(a)(2)?
Rule
Section 1332(a)(2) is satisfied when citizens or subjects of a foreign state are on one side of the case and citizens of one or more U.S. states are on the other; it does not require that all domestic parties be citizens of a single state. Although diversity ordinarily fails when foreign entities appear on both sides without state citizens on both sides, a federal court may dismiss a dispensable nondiverse party to preserve jurisdiction if the party is not indispensable under Rule 19(b) and no prejudice will result. When ruling on attorneys' fees sought as a condition of a Rule 41(a)(2) voluntary dismissal, the district court must state findings and conclusions adequate for appellate review.
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Do the defendants have the strongest argument that the federal court lacks subject matter jurisdiction because the domestic defendants are citizens of more than one state?