Federal Jurisdiction--Diversity of Citizenship

South Carolina law applies in all traditional personal injury cases. This type of state law is under the broad legal category of civil wrongs called tort law. Even though South Carolina law governs a tort case, sometimes a Defendant will be allowed to have the case removed from South Carolina State Court to federal court based on diversity of citizenship between the parties.

In serious cases, Defendants will usually attempt this procedural removal maneuver whenever possible, because generally speaking, federal judges are much more prone to grant a Defendant "summary judgment." Summary judgment deprives the injured party of her right to a jury trial and results in a defense judgment. When summary judgment is granted, the case is just decided in favor of a defendant based on paperwork filed with the Court and no live testimony--such as would happen at a trial--is taken before the Court.

Unlike State courts which have broad jurisdiction over cases brought before them, federal courts are considered to be courts of limited jurisdiction. Therefore, the types of cases that can be presented to a federal trial court are limited by statutes passed by Congress.

There are a number of jurisdictional statutes, but for most State tort cases brought in State Court, the diversity jurisdiction statute is the law that governs a federal court's right to hear the case.

This statute is found at 28 U.S.C. § 1332. The statute states, in part, as follows:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between — . . . citizens of different States;

The Supreme Court states that federal jurisdiction predicated upon 28 U.S.C. § 1332(a) requires complete diversity between all plaintiffs and all defendants. See Lincoln Property Co. v. Roche, 546 U.S. 81 (U.S. 2005) (citing Strawbridge v. Curtiss, 3 Cranch 267). When a corporation is a defendant, Section 1332(c)(1) states, “a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” 28 U.S.C. § 1332(c)(1).

A corporation, formed by paying fees and filing paperwork in a State Secretary State's office, is an organization whose primary purpose is to protect investors from personal liability, i.e., to help individuals evade personal responsibility for wrongs they commit. The law states that a corporation is considered a legal fiction or "an entity."

“For diversity purposes, a corporation maintains a dual citizenship. A corporation is a citizen of the state in which it was incorporated, and the state in which it has its principal place of business. 28 U.S.C. § 1332(c).” Clipper Air Cargo v. Aviation Products, 981 F. Supp. 956, 958 (D.S.C. 1997). Defense lawyers often make efforts to prove their corporate client's principal place of business is another state other than South Carolina.

Therefore, one tactic South Carolina Plaintiff attorneys follow to preclude federal jurisdiction before a case is removed, is to identify all South Carolina Defendants as parties to the lawsuit. By including a South Carolina Defendant in the legal action, a foreign corporate defendant will not be able to show the federal court that there exists "a complete diversity" of citizenship between the parties. As long as one of the legitimately named Defendants is a South Carolina citizen, the case, if removed, must be remanded to State Court because the Federal District Court would lack jurisdiction.