Donald Hoagland, as Receiver of Midwest Transit, Inc. v. Sandberg, Phoenix & Von Gontard, P.C.
385 F.3d 737
7th Cir.
2004
Check Treatment
Docket

*2 in Missouri, business three of the twenty- BAUER, POSNER, Before (the two members of the firm shareholders EASTERBROOK, Circuit Judges. corporation) are citizens of Illinois. If the citizenship of the mem- POSNER, Judge. Circuit bers is what for purposes counts of deter- Donald Hoagland, as receiver for Mid- mining diversity, as would be the if case Transit, west filed in an suit state Illinois the law firm were a partnership, limited against court the Sandberg firm, law which liability company, or any other noncorpo- in the course of representing had, Midwest rate enterprise, then the requirement of Hoagland charged, wronged its client. complete diversity has not been met and Jones, 449, 454-57, of Hotel for want Co. be dismissed the suit must L.Ed. 842 Belle jurisdiction. Catering Champaign ville Co. v. Market Wadel, In Coté *3 (7th Place, L.L.C., 691, 350 F.3d 692-93 however, held, Cir.1986), we as had Cir.2003); Music, Tango LLC v. Dead- Bolan, Saxe, Bacon & Circuit Second (7th Music, Inc., -Quick 244, 348 F.3d 245 Marbindale-Hubbell, Inc., 710 F.2d P.C. v. Bartolotta, Cir.2003); Cosgrove v. 150 F.3d (2d 87, Cir.1983), of purposes for that 89 (7th 729, Cir.1998); 731 Rolling Greens diversity a jurisdiction MHP, L.P. v. Holdings Comcast SCH any oth corporation treated like should be L.L.C., (11th 1020, Cir. 374 F.3d 1021-22 rendering the members’ corporation, er 2004) curiam); (per GMAC Commercial A number of subse citizenship irrelevant. Stores, Department Credit LLC v. Dillard ex quent cases are accord. Schneider (8th Inc., Cir.2004); Riley F.3d 827 v. 357 Fried, v. 320 F.3d rel. Estate Schneider of Pierce, Smith, Lynch, Merrill Fenner & (3d Cir.2003); 396, 399, Ships, 400 Ocean Inc., (11th 1334, 292 F.3d Cir. 111, Stiles, 114, 115 n. 1 Inc. v. 315 F.3d 2002); Village v. Handelsman As Bedford (2d Associates, v. Cir.2002); P.C. Edell & Partnership, Limited 213 F.3d sociates Angelos, Peter 264 F.3d Law G. Offices of (2d Cir.2000). Since (4th Wheeler, Cir.2001); Duffey corporations in certain respects differ Cir.1987). (11th F.2d corporations, perhaps in more re business contrary are no decisions. There involved in the spects than the entities Thorie, in Saecker v. We reaffirmed Coté cited, just led cases we were Saecker (7th Cir.2000), and 234 F.3d Thorie, supra, 234 F.3d at to time, involving in a case at about same of Coté could wonder whether rule be clear that nonprofit corporation, a made reconciled with these cases. a that of Coté stands for rule “for reconsideration, however, jurisdiction Upon is cor we diversity ought we to corporation,” have concluded that continue poration is a CCC Informa it Services, Salvage to rather than overrule and Inc. v. American follow Coté tion (7th Ass’n, conflict by so create an intercircuit doing Pool F.3d Cir. and, worse, into 2000) Wadel, inject the deterr supra, 796 confusion (quoting Coté v. jurisdiction. A 983); of federal salient see National Ass’n mination F.2d Ass’n, easy consideration in favor of Coté is Real Estate Realtors v. National (7th Cir.1990); any of a rule that cor applicability treats 894 F.2d Plus, Inc., diversity pur poration 292 F.3d as Subscription v.Wild (7th Cir.2002); legal to poses. approaches Functional Mutual Service Co., often, generally, Country questions perhaps are Casualty Co. v. Ins. Ins. Life (7th Cir.1988)—it rules; but to mechanical preferable it comes to preference we know is reversed1 when doesn’t what kind. Yet matter functionally jurisdiction. it is uncertain whether When that business entities are jurisdiction partic of a not a case is corporations, similar to but are formal within system, court not are cost ly partner such as limited ular litigation increased complexity are and ships limited-liability companies, necessity conducting inquiry diversity classified Associates, parties uncertainty but the dispel will purposes. Carden Arkoma having find start L.Ed.2d will often themselves beginning, litigation their over from Fire Great Southern Proof perhaps gone after it has all way rations they hold that are corpo indeed through judgment. “Jurisdictional rations for diversity purposes. Besides ought rules simple precise be so those we’ve cited already, see Moor v. judges lawyers spared are having County Alameda, 411 U.S. 717- to litigate over not the merits of legal (1973) 36 L.Ed.2d 596 dispute but where and when those merits (municipal corporation); City Clinton shall litigated.” Lopez, In re 116 F.3d v. Moffitt, 812 F.2d Cir. (7th Cir.1997); see also Budi 1987) (same); City Rucci v. Pacific, nich v. Becton Dickinson & Cir.2003) (same); *4 196, 202-03, 1717, 100 L.Ed.2d Caudle v. Ass’n, American Arbitration Grubart, Jerome B. Inc. v. (7th Cir.2000) (non 230 F.3d Co., Great Dredge & Lakes Dock 513 U.S. profit corporation); Indiana Port 527, 549-56, 130 L.Ed.2d Comm’n v. Bethlehem Steel Corp., 702 (1995) (concurring opinion); Kennedy (7th Cir.1983) F.2d 109-10 (public (7th Wright, 851 F.2d Cir.1988); corporation); University Rhode Island of Xpress, Inter-Coastal Inc. v. United Co., A.W. Chesterton 2 F.3d States, (Fed.Cir.2002). 296 F.3d (1st Cir.1993) (same); “The more mechanical application of a Gaines v. Apache, Ski 8 F.3d jurisdictional rule, the better. The chief (10th Cir.1993) (tribal corporation); Stock and often jurisdictional virtue of a West, Inc. v. Tribes Confederated of clarity.” rule is In re Kilgus, 811 F.2d Reservation, Colville 873 F.2d (7th Cir.1987) (citations omit (9th Cir.1989) (same). Countless other ted). cases assume business and nonbusi There is an variety enormous types of corporations ness should be treated the of corporation. There are business cor- E.g., same. Tosco Corp. v. Communities porations, professional corporations, pub- Environment, a Better 236 F.3d 495 for lic benefit and corporations, charitable (9th Cir.2001) curiam) (per (nonprofit mutual benefit corporations, religious corporation); States, Bell v. United corporations, educational and scientific (3d Cir.1985) (same); corporations, municipal and other public Knab Co. v. St. Mary’s Hospital, corporations, cooperative (7th Cir.1961) (charita 286 F.2d corporations (see, sole e.g., Cal. Corp. corporation); ble Wellness Community- 10002), § Code and Native American House, National v. Wellness 70 F.3d corporations. tribal See & 1A William (7th Cir.1995) (same); Fresenius Fletcher, Meade Fletcher Cyclopedia of Medical Care Resources, Cardiovascular the Law Corporations, Private ch. 3 Inc. v. (rev. Puerto Rico & Caribbean Cardio ed.1999), and 1 James D. Cox & vascular Center Corp., 322 F.3d Hazen, Thomas Lee Cox & Hazen on (1st Cir.2003) (2d (public Corporations, ed.2003). corporation); ch. 1 Stro Would tek sensible, Corp. it be a v. Air feasible, Transport or even judi- Ass’n America, cial undertaking 300 F.3d to create and apply, Cir.2002) by case, case (incorporated association); for deciding standard trade which of these American should Institute be classified Engi Chemical purposes for neers v. diversity of the Reber-Friel 682 F.2d jurisdiction (2d Cir.1982) (educational and which not? No court and sci has thought so. All the nonprofit cases dis- entific corporation); Lyxell v. cuss the citizenship of Vautrin, corpo- nonbusiness 604 F.2d Cir. Against diversity purposes. citizenship curiam) corporation). (religious 1979) (per overruling Coté our background, this discarded? to be this law Is all create cause confusion needless would least, preserved be could at Simplicity, step would Such conflict. an intercircuit organized only a rule that by a ten because of gratuitous especially law is business-corporation a state’s under toward already noted Saecker dency diversity with business convergence involve a rule would But such jurisdiction. Thorie, supra, Saecker corporations. diversity stat- rewriting courts Christopher C. see also a “cor- flatly that states The statute ute. Is Hard Comment, “Breaking Up Wang, in which the state citizen poration” Unfin Allocating Fees Do: state in also the incorporated it is Corpora of a Professional Business ished of business place principal which 1367, 1372-75 L.Rev. tion,” Chi. 64 U. 1332(c)(1). The 28 U.S.C. located. formerly advantages .that The tax refusing Car- In qualified. is not word form corporate the choice motivated company as liability a limited to treat den eliminated, been largely firms have by law *5 diversi- of the “corporation” a 73-74, 1.23, Hazen, § pp. &Cox dropped no Court statute, Supreme the ty determined, just as is now choice and that of which corporations hint firms, ad by the business case of in the cor- to business are limited speaks statute .exis liability, perpetual of limited vantages to minded the Court Had porations. .been advantages tence,, the other traditional and thought there it road—had go down Hillman, W. See Robert incorporation. Congress had to think some reason was of Professional Choices “Organizational category corporate to confine wanted Study,” 58 Empirical An Firms: Service might have corporations to business (2003); —it 1387, 1391-93 Lauryer Business noncor- whether consider expected been (If Any) “The Place Rutledge, E. Thomas func- that were entities business porate Entity Ra in Structure the Professional corporations to business tionally similar Lawyer tionalization,” 58 Business in way order be, the same treated Hamilton, should (2003); W. Robert 1417-19 special to give Congress’s desire carry out Partnerships in the United “Professional adopt- Far from to businesses. treatment L. Corp. States,” 26 J. might one that approach, Comment, a ing functional “The Thill, (2001); L. Debra rejects Coté, Carden over a shadow Regulation cast Doctrine Powers Inherent drawing in favor approach Minnesota such Will of Law: Practice and all corporations line Professional Cor Practicing between bright Attorneys said Companies Court Liability other associations. or Limited porations Statutory treatment Liabili special “having established Benefit Be Denied the rest to Con- L.Rev. Shields?,” Mitchell we will leave 20 Wm. ty Associates, su- see 1A Arkoma gress.” Carden 1015. We 70.10. Fletcher, supra, pra, shall do likewise. the Sand- Missouri, in which the state In prin- and has incorporated firm is berg the Second was decided Coté business, professional- place cipal ren- had been decision similar Circuit’s cor- regular makes statute years corporation In years earlier. three dered pro- applicable Missouri law of has, poration as we have since, judicial consensus Annotat- Vernon’s corporations. to fessional are that all seen, emerged 356.061; 356.031, §§ Statutes ed Missouri determining inway same treated also, e.g., Kehr, see Churchman v. 836 makes it easier to equity raise capital from S.W.2d 477-78 (Mo.App.1992). At the individuals do not place who want to their time, same Missouri authorizes the forma- personal (beyond assets those invested tion of Liability “Limited Companies.” corporation) at risk. Vernon’s Annotated Missouri Statutes In the case neither of a corpo- business 347.010, §§ 347.187; Jr., Nimrod Chapel, ration nor of professional “The Liability Limited Company: Small does limited liability shield personal Missouri,” Business Applications in 53 J. assets of investors who cause corpora-

Mo. Bar 348 Had the Sandberg tion to commit a tort or other unlawful act. firm followed that route —a route Missouri This important is an point the neglect of regards legally distinct —the rule of which has led to an sense, exaggerated Carden v. Arkoma Associates would have illustrated such cases as South High clicked in and removal of the litigation to Development, Weiner, Ltd. v. Lippe & the federal district court would have been Cromley Ohio St.3d 445 N.E.2d precluded. hand, On the other the firm (1983) (per curiam), could have elected to be pass- taxed on a Vinall, D.D.S., Kenneth A. P.C. v. through is, basis—that there would have Hoff- man, 133 Ariz. 651 P.2d been no state income tax at the entity Jones, see H. Bradley “The level—while Profes- as a sional must, Corporation,” it Fordham regular like L.Rev. business corpora- tion, pay corporate practical income tax differ- unless it ence elects Subchapter between S status. U.S.C. business *6 §§ 11(b)(2), 1362(a); corporations. Of Ruling lawyer Revenue course a 70- cannot 278; Hamilton, CB insulate himself from a malpractice by suit J. L. Corp. at 1052 n. 21. incorporating. But neither can individ- ual who position uses his in a business major The difference remaining between corporation to commit a Suppose tort. a professional corporation and a business corporate employee in furtherance of his (besides corporation the facts that “only employment bribes the purchasing officer professionals licensed are employed who of one of corporation’s his customers. The by professional the corporation may be (if bribe) customer harmed by the can sue or shareholders directors” and that corporation the he can also sue only “shares can be transferred to other —but employee who did the bribing. “It individuals practice licensed to in the same common profession,” misunderstanding Fletcher, 70.10) princi- 1A supra, § is ple of liability limited protects usually former the share- requires less finan- cial holders and capital, officers of a principal corporation capital of a for pro- liability fessional for corporation their being own wrongful its human capi- acts. It tal—the does not. reputation protects skills and It them contacts deriva- professional liability, is, tive employees. But from being called to course many there are account for the corpo- wrongs of corporation.” rations that have more Spartech financial capital v. Corp. Opper, 890 F.2d than many corporations; Cir.1989) business (emphasis there in original); see are law today firms that have annual Cape reve- Dietrich v. Brewery Co., & Ice nues of hundreds of millions of dollars— Mo. (1926); S.W. just two of passed them the billion-dollar Browning-Ferris Illinois, Industries of mark. In the case of Maat, as of Inc. v. Ter 195 F.3d business liability Cir.1999); limited Refrigeration Sales Co. v. Mitchell-Jackson, in which a simple situation 770 F.2d 102- (7th Cir.1985); Abstract Ser to will fail to Coastal reference state law resolve Co., vice, Ins. First American Title party’s citizenship Inc. v. of a is where the issue (9th Cir.1999); Haupt v. 173 F.3d for it then party foreign, is neces- (Iowa Miller, 514 N.W.2d sary to determine whether the characteris- Jantec, Inc., 1994); Or. Fields entity enough like foreign tics of the are Indus Vacco 857 P.2d those of a U.S. to make “cor- tries, Berg, Cal.App.4th Den Inc. Van poration” the translation into En- correct 613 n. 20 Cal.Rptr.2d Associates, v. Arkoma su- glish. Carden immunity for buy You from suits don’t pra, 494 U.S. at by being a busi your torts member & Puerto Rico Russell profes of a ness or a member L.Ed. 903 Lear S.Ct. corporation. sional Ltd., Corp. Holdings v. Johnson Electric between two So differences (7th Cir.2003). Car- actually corporation are rather types of exception “the den describes this as one than differences slight, maybe slighter consistency jurispru- the admirable of our and limited between business at dence on this matter.” companies. But these are details. liability involving 110 S.Ct. 1015. Cases U.S. enti- rule is that it avoids The charm Coté’s treating the ties are indeed consistent—in judges themselves entangle need state’s label determinative. inquiries into differences in functional rule corporations. sup- And it is a among jurisdiction there So for- ported, maybe compelled, Carden’s suit, Hoagland’s we can last proceed Granted, had effect approach. malistic appeal, which are to the merits of his states to of Cote’s flat rule been induce after slight. The district court determined mah proprietorships, jongg sole rename Hoagland’s failed as a bench trial that suit clubs, pit “corporations” bulls order Hoagland legal malpractice. suit less?) *7 (or it be to make them more would malprac disagree. legal A suit for doesn’t court, would be in suable in we law, governs the tice under Illinois which trouble; we are relieved to note that but simply in this case be substantive issues It is tendency no is discernible. be- such it parties have assumed that cause the label of using cause states are not does, v. Pana Communi Indiana Ins. Co. diversity “corporation” to statute game 8, 314 F.3d ty Unit School District No. deferring courts that the are comfortable (7th Ritt, 895, Cir.2002); v. Grundstad 900 places a business to the label state on (7th 867, Cir.1999); v. 166 870 Wood F.3d entity. Fire Hotel Great Southern Proof 425, Mid-Valley 942 F.2d Jones, point. Co. v. illustrates Cir.1991); BBSerCo, Inc. v. Metrix in- partnership The “limited association” (8th Cir.2003), 955, re n. 3 324 F.3d 960 many properties had of volved in that case (unless duty of lawyer’s quires breach it called but because wasn’t corporation, layperson, which is not is even to a obvious it was Pennsylvania in the statute contended) regarding the expert testimony pur- not to deemed loyalty lawyer of care or standard jurisdiction. diversity Cf. poses Barth v. Rea alleged to have violated. Plus, Inc., Subscription supra, 292 Wild v. 534, 399, 151 Ill.Dec. 564 gan, Ill.2d 139 528-29; Op- v. American Ripalda F.3d at (1990), 1196, and cases 1464, N.E.2d Corp., 977 erations Henslee, there; Monek & (D.C.Cir.1992). v. cited Besco 744 778,

Henslee, 816, (1980); 233 47 Ill.App.3d Nagy 297 Ill.Dec. 407 N.E.2d v. Beck (1998). 1126, 1130 701 ley, Ill.App.3d N.E.2d 218 Ill.Dec. (1991); 578 N.E.2d Barth v. Hoagland presented testimony. no such Reagan, supra, 151 Ill.Dec. grievance His is that he should have been 1200-02; v. Alvey, N.E.2d at Wissore complaint allowed to amend his either Ill.App.3d Ill.Dec. N.E.2d claim, that his which he make clear be- Grant, Tucek misunderstood, judge lieves the district Ill.App.3d Ill.Dec. N.E.2d but is rather breach malpractice 1 Ronald E. Mallen & Jeffrey alternatively contract or breach fiducia- Smith, 1.1, Legal M. Malpractice p. 5 ry duty, or allowed to dismiss his suit (5th ed.2000); (Third) Restatement over. prejudice without and start To bol- Governing Lawyers §§ Law 121 comment ster is not proceed- his contention that he f, 131 and comment whatever the ing malpractice theory points on a he out plaintiff to call it. Brush chooses v. Gilsd seeking that he is not common law dam- orf, Ill.App.3d 270 Ill.Dec. ages only the the attorneys’ but return of 783 N.E.2d 77 cannot be per He paid fees that Sandberg Midwest firm. mitted, by the claim— recharacterizing judge We think the Hoagland’s understood by calling whether conflict interest a perfectly case well that Hoagland’s fiduciary breach of or obligation con attempt change late, horses came too tending that his contract with law firm any theory but in his event current has no implied promise contained an not to com law, amending basis Illinois so the com- mit such get conflicts—to around the re plaint dismissing preju- the suit without quirement presenting expert testimony. any dice wouldn’t do him good. Widell v. That is the kind of formalist move that Wolf, Cir.1994); 43 F.3d reject. rightly courts Illinois courts hold Children, Department Hatch v. Youth fiduciary “when breach of duty (1st Families, & Their claim on operative is based the same facts Cir.2001). claim, as a legal malpractice and results in claim, in substance and with injury, the same the later claim should be out regard might how it be character duplicative.” dismissed as Fabricare ized, Sandberg is that the law firm repre Bell, Equipment Corp. Boyd Credit & sented adversaries—a Lloyd, Ill.App.3d 784, 263 Ill.Dec. (Midwest) president—in and its swindling (2002); Majumdar 767 N.E.2d a derivative action and its dual repre used *8 Lurie, Ill.App.3d 274 210 Ill.Dec. prevent sentation (1995); 653 N.E.2d see also recovering president assets of which the Duncan, “Legal Malpractice Meredith J. wrongfully deprived had corporation; By Any aWhy Other Name: Breach of firm wrongfully the law had accepted Fiduciary Duty Claim Does Not Smell as payment of its fees from the corporation Sweet,” Wake 34 Forest L.Rev. 1137 (the client whose the firm interests had (1999). sacrificed); and that it should therefore be required (“disgorge”) to rebate the fees to The fact that sought restitution was in- Hoagland for the the corpora benefit of stead of conventional also damages does attorney’s throwing tion. An one client not alter the nature of the suit. Restitu- malpractice. remedy, wolves to save the other is tion sought is a at least when as Robson, Masters, Rogers v. Ryan, Bru here 1 reparations as for a tort. Dan B. Belom, Dobbs, 4.1(3), § mund & 81 40 Ill.2d Ill.Dec. Law p. Dobbs Remedies

745 a treated like latter is while the a citizen & Sales ed.1993); also Alaska (2d see 566 As- Arkoma Carden v. under partnership 746 Millet, 735 P.2d Service, Inc. v. sociates, 494 U.S. S.Ct. Heights Harker (Alaska 1987); City of lawyers in if And 313, L.Ed.2d 157 Ltd., Land, 830 S.W.2d Meadows Sun corpo- may organize in Missouri sought often It is (Tex.App.1992). on the other side rations, those 4.1(1), while Dobbs, § damages. lieu of call in Illinois must Mississippi River example see Stan pertinent for a p. liability partnerships,” Howard, “limited 152 themselves & Brassfield, Cowan ley one to fed- admitted have the states again 504 N.E.2d Ill.Dec. Ill.App.3d other. excluding the 328(c) court while § eral U.S.C. see (These about which more details and disgorgement and forfeiture (authorizing may be found labels use which states a conflict attorney has if debtor’s of fees Ribstein, Larry E. Bromberg & R. Alan Lynch, v. Merrill interest); Ingram Re- Partnerships, Liability Limited Smith, Pierce, & Fenner Act, and the Partnership curiam). Cir.2004) Asking vised (per Uniform (2003 Act Partnership Limited cause change the doesn’t for restitution Uniform ed.).) action. as if state control proceed AFFIRMED. colleagues My jurisdiction were federal scope of over the EASTERBROOK, Judge, Circuit Congress’s deci- inescapable result concurring. not other corporations, but treat sion to holding today’s consequence A curious Then the citizens. as organizations, a meaning of define is that states “corpo- is a something is whether question statute, -no jurisdictional statute —a federal regulate and, ration,” as devise states boundary a to draw less, designed one FDIC, 519 Atherton v. see My federal domains. state and between L.Ed.2d of 28 that for colleagues conclude Financial Ser- Kemper Kamen v. 1332(a) any “corporation” a U.S.C. 1711, 114 90, 111 S.Ct. vices, Inc., 500 U.S. that label. bestows state entity which on effect jurisdictional L.Ed.2d liability a limited a state renames Thus if Yet consequence. a natural label is liability corpora- aas “limited company a decision. made such has Congress its own “citizen” with tion,” becomes it (c)(1) togeth- 1332(a)(1) taken Sections attributes, the citizen- jurisdictional citizens, but are er mean matters. longer no ship of members state rather says that §in nothing Bartolotta, 150 F.3d Cosgrove Contrast “corporation.” identifies a law than federal Cir.1998). if a state re- too So statute, all. after federal 1332 is a Section a “limited partnership” “limited names of federal question meaning also Its “joint stock corporation,” partnership law apt, if, often as And law. corporation.” stock a “joint company” sources, the deci- state rules from absorbs *9 law. of federal is one this do sion to created and corporations are all Almost Inc., Foods, v. Kimbell States See United law, now hold so states by state defined 1448, L.Ed.2d 715, 99 S.Ct. 440 U.S. jurisdiction. Thus keys to federal Gastroenter- (1979). Clackamas See also “pro- as organize lawyers Texas when Wells, Associates, 538 U.S. P.C. ology politics local while corporations,” fessional (2003) 1673, 155 L.Ed.2d 440, 123 S.Ct. “pro- physicians groups that dictated not agency, rules common-law (using associations,” becomes the former fessional nomenclature, state to identify an “employ- heretofore 457, adverted to.” Id. at er” employment- federal S.Ct. 690. law).

discrimination Although the say Court did not what attributes justify calling entity an a “cor- My colleagues have quite collected a few poration”, Great Southern Fire Ho- Proof § cases for proposition that 1332treats tel demonstrates that federal rather than as a any entity “corporation” bearing that state law supplies the rule decision. label as a matter of state law. With the observed, The Court 456-57, U.S. Wadel, exception of Coté 796 F.2d 981 S.Ct. judges state referred to (7th Cir.1986), Saxe, Bolan, Bacon & joint (also stock companies called “limited Martindale-Hubbell, Inc., P.C. v. associations”) partnership as “quasi-corpo- (2d Cir.1983), however, these decisions rations” Pennsylvania under law but did (or notice) fail to jurisdic discuss even explain not what distinguishes “quasi” tional question. They therefore have not corporation from a real joint If a one. produced holdings subject. on the See stock company “quasi,” deserves a why Pennhurst State School & Hospital v. doesn’t a professional corporation, which Halderman, 465 U.S. 119 & n. joint like a stock company in many differs S.Ct. 79 L.Ed.2d 67 United ways from a firm chartered under a state’s Lines, States v. L.A. Tucker Truck general corporate law? 37-38, U.S. 73 S.Ct. 97 L.Ed. 54 Just as Great Southern Fire Hotel Proof Fall, Webster v. 266 U.S. holds that nomenclature is not sufficient to 45 S.Ct. 69 L.Ed. 411 make an entity a “corporation” under Supreme Court, § so which v. County Alameda, has ad- Moor dressed question, this taxonomy treats (1973), matter of federal L.Ed.2d 596 law. Great holds that the Southern name is Jones, Fire unnecessary. Hotel Co. v. The Court concluded in Proof Moor that municipality S.Ct. 44 L.Ed. 842 a corporate an 1332(a)(1) § “citizen” example. It under joint held that a stock when it compa- ny freestanding entity must with the ability be deemed to incur partnership rather pay debts, than a own operate under without even (immediate) though the direction of the state that Pennsylvania Constitution of cre- ated it. provided even though This joint entity that “all stock was companies or “county” called a rather a “corpora- associations than having any powers tion.” privileges of corporations possessed individuals or partnerships” were “corpo- Both Great Southern Fire Hotel Proof

rations.” See 177 U.S. at and Moor entity’s insist legal at- 690. Pennsylvania made joint stock com- tributes rather than its name identify a panies, unlike normal partnerships, dis- “corporation.” But which attributes? En- tinct entities that like could tity insufficient, status is as is limited lia- sue and name; be sued in their own this bility; partnerships limited combine these joint made stock companies “corporations” yet were held Carden not to be “citi- as a Pennsylvania matter of not, law—but zens.” In Moor the Court emphasized the Supreme held, Court as a matter of judiciary California’s would issue law, under entity which status “is counties, mandamus to proper which is not a sufficient reason for regarding it as a when body is an tribunal, “inferior *10 corporation within jurisdictional board, rule corporation, person.” or why So one Indeed, feature no matter what rather “corporation” County was line, it is dividing potential names “board”? tribunal” “inferior than of the Supreme find a decision in to possible reasoning say. did not The Court life That makes the other on side. a Court County’s status as implies Moor court. appellate an intermediate in hard for and be sued to sue entity, able juridical letting nomencla- choose between must yet Great We name, enough; was own identify vainly to trying and control ture and Carden Hotel Fire Southern Proof distinguish cor- legal characteristics which the distinction is not entity status hold The former from other entities. porations organiza- and those corporations between latter wrong principle, approach is as “citizens” not treated that are tions in practice. 1332(a)(1). untenable under options, these to choose between stock, has Forced which marketable about What it is thinking that majority in join I distinguish law to in securities been used off than to names control set to let out- better from those regulation subject to firms Carden, the most Court’s hunt. snipe on a Bank v. Weav- See, Marine e.g., it? side word, essentially formal. A for- is 71 recent er, 455 U.S. at least virtue has Housing approach mal (1982); United L.Ed.2d jurisdic- in a Forman, a desirable feature certainty, Foundation, Inc. consistency. produces It also A tional rule. 44 L.Ed.2d were created Professional corporate function of economic principal accountants physicians, lawyers, ownership permit separation organization up tax-advan- to set firm-wide and others need control, entrepreneurs so a time when federal plans at taged pension those who capital, all supply not corpora- that opportunity invest- law restricted diversify their may supply capital cor- with the created entities managerial tions. States not furnish need ments and features the functional but change porate name frequently Shareholders skills. gim- If that partnership. jurisdictional pur- ignored and must be tax bene- door to federal opens A mick pro- entity only the continues. poses; § 1332? under fits, citizenship not why separate not does fessional were (The pensions rules principle, even from control ownership why explain may which changed for diversifica- opportunity it offers no today opt for limited professionals most scarcely different either; a P.C. tion non-corpo- or other liability partnerships Each partnership. from a economically does but this organization, rate forms cor- of a Missouri shareholder enti- of existing the treatment li- not affect employee a current poration must Supreme ties.) or the Congress Either in which services to provide censed if a brush broad finer lines can draw Court entity consist- or another specializes, firm (and too entrepreneurs) with leaves states Mo.Rev. persons. See solely of such ing much County did discretion. Yet Alameda § 356.111. Stat. negotiabili- stock; the nature issue can’t be thus entity’s securities

ty of an un- feature of

distinguishing County awas Alameda law.

der federal attributes legal body, with

governmental status) utterly unlike

(other entity than corporation.

those of business