Fellowes, Inc. v. Changzhou Xinrui Fellowes Office Equipment Co.
759 F.3d 787
7th Cir.2014Background
- Fellowes (plaintiff) sued Changzhou Fellowes (defendant), a China-established business, for breach of contract in federal court under diversity jurisdiction (28 U.S.C. §1332(a)(2)).
- Hong Kong Fellowes is an investor-member of Changzhou Fellowes and has its principal place of business in Illinois.
- The complaint and parties describe Changzhou Fellowes as a “limited liability company” with non-alienable membership interests (members, not shareholders).
- The district court entered a preliminary injunction for Fellowes without resolving service and without deciding subject-matter jurisdiction.
- Changzhou Fellowes moved to dismiss for lack of subject-matter jurisdiction (and contested personal jurisdiction); the principal jurisdictional question was whether Changzhou has its own citizenship for §1332 purposes or the citizenships of its members.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a foreign entity that is a "juridical person" is a "corporation" for §1332 purposes | Every juridical person that can own property, contract, and litigate is a corporation for §1332, so Changzhou has its own citizenship | Only true corporations have separate citizenship; entities like LLCs/partnerships carry members' citizenships | Rejected plaintiff: the "juridical-entity" rule is too broad and inapplicable beyond Russell's narrow facts |
| Whether Changzhou Fellowes has independent citizenship (allowing §1332 diversity) | Changzhou is a separate citizen because it is a juridical entity | Changzhou is functionally an LLC-like entity and therefore takes the citizenship of each member (including Illinois) | Changzhou is not a corporation for §1332 and therefore has the citizenship of its members, including Illinois; complete diversity lacking |
| Whether Autocephalous Greek‑Orthodox (juridical-entity reasoning) controls here | Autocephalous supports treating foreign juridical entities as separate citizens | That case is limited and inconsistent with Supreme Court precedents like Carden/Bouligny | The court declines to extend Autocephalous beyond limited contexts (e.g., certain religious bodies) |
| Proper disposition given lack of diversity | Proceed and uphold preliminary injunction | Dismiss for lack of subject-matter jurisdiction | Vacated district court judgment and remanded with instructions to dismiss for want of subject-matter jurisdiction |
Key Cases Cited
- Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir. 1998) (LLC takes citizenship of each member)
- Carden v. Arkoma Associates, 494 U.S. 185 (U.S. 1990) (collective entities have citizenship of every member)
- Chapman v. Barney, 129 U.S. 677 (U.S. 1889) (joint-stock companies treated by citizenship of investors)
- Steelworkers v. R.H. Bouligny, Inc., 382 U.S. 145 (U.S. 1965) (unions/associations treated by members' citizenships; limits Russell)
- Puerto Rico v. Russell & Co., 288 U.S. 476 (U.S. 1933) (recognized narrow exception for certain civil-law juridical entities)
- Autocephalous Greek‑Orthodox Church v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278 (7th Cir. 1990) (applied juridical-entity reasoning in narrow context)
- Indiana Gas Co. v. Home Insurance Co., 141 F.3d 314 (7th Cir. 1998) (Lloyd’s syndicate not a corporation for §1332 purposes)