Matao Yokeno v. Sawako Sekiguchi
2014 U.S. App. LEXIS 6965
9th Cir.2014Background
- Matao Yokeno, a lawful permanent resident living in Guam, sued Emil Lai and Sawako Sekiguchi (both foreign nationals residing in Japan) in Guam Superior Court for alleged breaches of fiduciary duty arising from business ventures.
- Lai and Sekiguchi removed the case to the District Court of Guam relying on diversity jurisdiction; the district court granted summary judgment for defendants.
- Yokeno challenged subject-matter jurisdiction for the first time on appeal, arguing diversity does not exist for disputes exclusively between aliens.
- The statutory issue centers on the 1988 “deeming clause” in 28 U.S.C. § 1332 (later repealed in 2011), which treated an alien admitted for permanent residence as a citizen of the state of domicile for purposes of diversity jurisdiction.
- The District Court of Guam is an Article IV court whose jurisdiction is coextensive with Article III district courts by the Organic Act of Guam; therefore constitutional limits on Article III diversity jurisdiction apply.
Issues
| Issue | Plaintiff's Argument (Yokeno) | Defendant's Argument (Sekiguchi & Lai) | Held |
|---|---|---|---|
| Whether federal courts (here, District of Guam) have subject-matter jurisdiction in a dispute exclusively between aliens when plaintiff is a permanent resident alien and statute "deems" him a state citizen | The deeming clause cannot create constitutional minimal diversity; a suit exclusively between aliens is outside Article III diversity jurisdiction, so federal court lacks jurisdiction | The deeming clause supplies statutory diversity (treating Yokeno as a citizen of Guam), so removal and federal jurisdiction were proper | The court held federal courts (including District of Guam) lack Article III diversity jurisdiction over alien-versus-alien disputes; the deeming clause cannot be used to expand constitutional jurisdiction, so the district court lacked jurisdiction |
| Whether the District Court of Guam may exercise diversity jurisdiction beyond Article III limits because it is an Article IV territorial court | Yokeno: No — Organic Act ties Guam court jurisdiction to Article III limits | Defs: District Court of Guam has diversity jurisdiction like Article III courts and thus may apply the statute | Held that the Organic Act makes Guam's diversity jurisdiction coextensive with Article III; it cannot exceed constitutional limits |
| Proper remedy for lack of subject-matter jurisdiction discovered on appeal | Yokeno: Vacatur of district judgment and remand to Guam Superior Court | Defs: alternatively urged dismissal of appeal on res judicata grounds (but did not dispute jurisdiction) | Court vacated the district court's summary judgment and remanded with instructions to remand to Superior Court of Guam; defendants’ res judicata motion denied |
| Whether courts should interpret the 1988 deeming clause to avoid constitutional doubt by reading it narrowly or disregarding its plain text | Yokeno: The clause cannot be read to supply minimal constitutional diversity for alien v. alien suits | Defs/others: some courts read clause per text to supply statutory citizenship or read it to avoid unconstitutional applications | Court applied plain-text rule: clause deems permanent resident as state citizen for statute but cannot be used to expand Article III jurisdiction beyond what Constitution permits |
Key Cases Cited
- Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (2007) (courts must normally resolve jurisdictional questions before merits but have limited discretion)
- Hodgson v. Bowerbank, 9 U.S. (5 Cranch) 303 (1809) (statute cannot confer jurisdiction beyond Constitution)
- Carden v. Arkoma Assocs., 494 U.S. 185 (1990) (§ 1332 requires complete diversity)
- Singh v. Daimler‑Benz AG, 9 F.3d 303 (3d Cir. 1993) (interpreted 1988 deeming clause as supplying statutory citizenship where complete diversity otherwise exists)
- Saadeh v. Farouki, 107 F.3d 52 (D.C. Cir. 1997) (expressed concern that applying deeming clause to create alien-vs-alien diversity may be unconstitutional)
- Intec USA, LLC v. Engle, 467 F.3d 1038 (7th Cir. 2006) (discussed ambiguity and dual‑citizenship implications of deeming clause)