UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
December 1, 1967
Sam VOGEL and Snyder & Hilda Vogel, Plaintiffs,
TENNECO OIL COMPANY (a corporation), Defendant
The opinion of the court was delivered by: SIRICA
SIRICA, District Judge.
The parties are before the court on a motion to dismiss a complaint for breach of contract on the ground that the court lacks jurisdiction of the subject matter. Defendant has also moved for a change of venue in the event the court finds that jurisdiction is present. Plaintiffs are citizens and residents of Texas. Defendant is a Delaware corporation with its principal place of business in Texas,
and is licensed to do business in the District of Columbia.
Plaintiffs invoke the jurisdiction of this court on the ground of diversity of citizenship. Diversity jurisdiction is conferred on United States District Courts by 28 U.S.C. § 1332 (1964), which states:
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000 * * * and is between * * * citizens of different States.
* * *
(c) For the purposes of this section * * * a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.
Defendant contends that, since both parties are citizens of Texas, diversity of citizenship is not present. Plaintiffs argue, however, that diversity is not the sole ground of jurisdiction; that 28 U.S.C. § 1391(c) (1964), establishes an alternative ground. This section, part of the federal venue statute, states that a corporation may be sued in any judicial district in which it is incorporated or licensed to do business, or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes. Plaintiffs contend that since defendant is licensed to do business in the District of Columbia, it may be sued here.
Plaintiffs' reliance on section 1391(c), however, is both misplaced and unnecessary. Section 1391(c) relates only to the proper placing of venue once jurisdiction has been found;
it cannot be used in itself as a basis for jurisdiction.
Generally federal jurisdiction is invoked on one of two grounds.
There is either a federal question involved,
or there is diversity of citizenship.
Unless one or the other is present the court cannot go forward with the case. It is only after the court has determined that it has jurisdiction that the question of the proper venue arises.
Whenever it is determined that the court lacks jurisdiction it cannot proceed
even though the requirements of section 1391(c) have otherwise been met.
In the instant case, then, if diversity existed the action could be brought in this district pursuant to section 1391(c), for the defendant is licensed to do business here. However, since both parties are citizens of Texas, diversity as a basis for federal jurisdiction, is lacking.
This is not the end of the matter, however, for the United States District Court for the District of Columbia is one of those unique federal courts
that have a general jurisdiction in law and equity corresponding to that of the state courts with respect to matters which in a state would be reviewed by a state court.
This court is open to the citizens of any state who properly invoke its jurisdiction.
Diversity of citizenship is not a necessary prerequisite for local jurisdiction.
All aspects of local jurisdiction are governed by local statute,
in this case D.C.Code Ann. § 11-521 (1967):
(a) Except in actions or proceedings over which exclusive jurisdiction is conferred by law upon other courts in the District, the United States District Court for the District of Columbia, in addition to its jurisdiction as a United States district court and to any other jurisdiction conferred by law, has * * * original jurisdiction of all:
(1) Civil actions between parties, where either or both of them are resident or found within the District * * *.
(b) Except as otherwise specially provided, an action may not be brought in the District Court by original process against a person who is not resident or found within the District.
When the local jurisdiction of the court is invoked, a party may not allege compliance or noncompliance with the requirements of the local statute by showing that jurisdiction or venue is present or absent under a federal statute,
nor may federal jurisdiction be obtained by qualifying under the local statute.
Thus plaintiff may not bring suit in the District of Columbia merely because 28 U.S.C. § 1391(c) states that a corporation may be sued wherever it is licensed to do business. Section 1391(c) has no application where jurisdiction is alleged under D.C.Code Ann. § 11-521. Plaintiff must show that defendant is a resident or found in the District.
"Resident" has been interpreted to mean state of domicile.
There is no indication on the face of the complaint that defendant is domiciled in the District of Columbia. There is, however, a statement that defendant is transacting business in the District. It has been held that when a corporation is conducting business in a district of a character warranting inference of subjection to the local jurisdiction, it is found there.
In addition, defendant admits that it is licensed to do business in the District of Columbia. As a condition for receiving a certificate to do business in the District of Columbia defendant had to appoint a local agent to accept service of process,
and this has been held to be sufficient to subject a foreign corporation to the jurisdiction of the local courts.
To complete the circle, when a corporation is subject to the jurisdiction of the local courts, it is said to be found in the district.
Thus plaintiff has stated sufficient jurisdictional facts in its complaint to establish jurisdiction in this court under D.C.Code Ann. § 11-521 (1967).
For these reasons defendant's motion to dismiss is denied.