Facts
- R. H. Bouligny, Inc., a North Carolina corporation, sued the United Steelworkers of America, AFL-CIO in North Carolina state court for defamation arising from a unionization campaign.
- The complaint sought $200,000 in damages.
- The union, an unincorporated labor organization alleged to have its principal place of business in Pennsylvania, removed the case to federal court.
- The union asserted federal-question jurisdiction and diversity jurisdiction, arguing it should be treated as a single citizen of Pennsylvania despite having members in North Carolina.
- Bouligny moved to remand, arguing no federal question was presented and that an unincorporated association’s citizenship is determined by the citizenship of each member.
- The federal district court denied remand, reasoning that unincorporated associations should be treated like corporations for diversity purposes.
- On interlocutory appeal, the Fourth Circuit reversed and ordered remand for lack of diversity jurisdiction.
- The Supreme Court granted certiorari to decide whether an unincorporated labor union may be treated as a single citizen for diversity jurisdiction.
Issues
- Whether an unincorporated labor union may be treated as a single “citizen” (analogous to a corporation) for purposes of diversity jurisdiction, without regard to the citizenship of its members.
- Whether complete diversity is defeated when any member of an unincorporated labor union shares citizenship with the opposing party.
Decision
- The Supreme Court affirmed the Fourth Circuit’s judgment directing remand to state court.
- The Court held that an unincorporated labor union is not a “citizen” for purposes of 28 U.S.C. § 1332.
- The union’s citizenship for diversity purposes is the citizenship of each of its members.
- Because some union members were citizens of North Carolina like the plaintiff, complete diversity was absent and federal diversity jurisdiction did not exist.
- The Court declined to change the rule by judicial decision, stating that any expansion of diversity jurisdiction in this area is for Congress.
Legal Principles
- For diversity jurisdiction under 28 U.S.C. § 1332, an unincorporated association takes the citizenship of all its members, not a principal-place-of-business citizenship.
- Corporate citizenship rules (including statutory recognition of principal place of business) do not apply to unincorporated labor unions absent congressional action.
- Prior precedent treating unincorporated associations as non-citizens for diversity purposes remains controlling; altering this jurisdictional framework is a legislative question.
Conclusion
The Court held that an unincorporated labor union cannot be treated as a single citizen for diversity jurisdiction; instead, it shares the citizenship of each member, requiring remand when any member destroys complete diversity, and leaving any change to Congress.