VANTAGE DRILLING COMPANY, Plаintiff-Appellant, v. HSIN-CHI SU, also known as Nobu Su, Defendant-Appellee.
No. 13-20379
United States Court of Appeals, Fifth Circuit
January 7, 2014
Before HIGGINBOTHAM, OWEN, and HIGGINSON, Circuit Judges.
Appeal from the United States District Court for the Southern District of Texas
PER CURIAM:
Plaintiff-Appellant Vantage Drilling Company (Vantage) is incorporated in thе Cayman Islands, with its principal place of
I
Vantage is an offshore drilling contractor that provides drilling units, related equipment, and work crews to major oil and natural gas companies around the world. Vantage is incorporated in the Caymаn Islands, with its principal place of business in Texas. Su served on Vantage‘s board of directors from June 2008 to April 2011. Su is a Taiwanese citizen. In August 2012, Vantage filed suit against Su in Texas state court for: breach of fiduciary duty; fraud, fraudulent inducement, and negligent misrepresentation; and unjust enrichment. Vantage sought damages, the imposition of a constructive trust on all profits or benefits obtained by Su, and a full accounting for all such profits and benefits.
Su timely removed the case to federal district court on the basis of diversity jurisdiction, alleging that diversity of citizenship existed by virtue of Vantage‘s Texas citizenship and Su‘s Taiwanese citizenship, and that the amount in сontroversy requirement of
The district court denied Vantage‘s motion to remand. It agreed that Vantage had dual citizenship, one of which was foreign, and that Su was a foreign citizen. However, it concluded that complete diversity was lаcking only between Su and “one aspect of the single plaintiff with dual citizenship,” and not Su and Vantage as parties. Noting that Vantage has no employees or operations in the Cayman Islands and that its headquarters and primary operations are in Texas where it “hires local workers, buys local supplies, rents local buildings, donates to local charities, and serves local customers,” the district court concluded that Vantage was “fully Texan” and that Su, as a “fully foreign party,” might face parochialism in a state court. Analogizing to human citizens for whom “[r]emoval is proper if the dual national‘s dominant nationality is American irrespective of its other affiliations,” the district court held that Vantage could not “rely[] on its foreign charter to avoid a national court despite the predominant reality of its existence.”
Vantage filed a petition for permission to appeal the district court‘s order denying remand, which was denied due to the district court‘s failure to properly certify the order for appeal under
“We review de novo a denial of remand to state court.”1 Remand is required “if at any time before final judgment it appears that the district court lacks subject matter jurisdiction over a case removed from state сourt.”2 Subject matter jurisdiction over a state claim in federal court under
whether removal jurisdiction is proper should be resolved against federal jurisdiction.”5
III
The facts of this case are substantially similar to those we addressed in Chick Kam Choo v. Exxon Corp.6 In Chick Kam Choo, a Liberian corporation with its principal place of business in New Jersey was sued in Texas state court by citizens of Singapore.7 The case was removed to federal court on the basis of diversity jurisdiction and the district court denied the plaintiffs’ motion for remand.8 We reversed, holding that “diversity jurisdiction under
Our holding rested on two main principles. First,
was a citizen of a foreign state under
Su asserts, however, that Chick Kam Choo based its decision on an additional rationale: given the underlying purpose of diversity jurisdiction to afford a neutral forum to out-of-state parties who might be subject to local bias, there was no need to permit diversity jurisdiction in Chick Kam Choo because the risk of such bias was remote.14 Su contends that this justification does not apply in the present case because the risk of prejudice to Su is more than remote. To this end, he argues that, unlike the foreign plaintiffs in Chick Kam Choo who were unlikely to benefit from local bias, Vantage is likely to reap the rewards of a local forum because it is a dual citizen plaintiff with its principal place of business and primary operations in Texas. Accordingly, unlike the defendant in Chick Kam Choo which did not need the protection of a federal forum because of the remote risk of local bias favoring the foreign plaintiffs, Su cоntends that he needs a federal forum to avoid the “significant danger that the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of a State and citizens or subjects of a foreign state . . . .“).
. . . as the alien defendant [he] will be unfairly prejudiced by the local bias of the state courts or state juries.”
However, the fact that Su may be subject to local bias while the defendant in Chick Kam Choo was not is relevant only if the minimal risk of prejudice against the defendant in Chick Kam Choo was a necessary basis for our decision.15 We conclude that it was not.
First, the comments in Chick Kam Choo regarding the remote risk of bias to the defendant came after we had already held that “[b]ecause [the defendant] is a citizen of Liberia, and because the plаintiffs are citizens of Singapore, diversity jurisdiction may not therefore be invoked under
The discussion in Chick Kam Choo
Our view finds additional support in the fact that other circuits facing similar alignments of parties and citizenships have also concluded that completе diversity is lacking and that diversity jurisdiction does not exist.20 Even though allowing this case to proceed in federal court might further the underlying purpose of the diversity statute, “[u]ntil Congress changes our jurisdiction and allows us to hear cases based on something less than complete diversity, we cannot act.”21
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For the foregoing reasons, we REVERSE and REMAND with instructions that the district court remand this case to the state court from which it was removed.