## Facts

- Jimmy Lee Walker III (through guardian Cynthia M. Walker) and Cynthia M. Walker, South Dakota citizens, sued Norwest-related entities and individuals, plus a South Dakota attorney and law firm, over alleged misconduct in administering a trust.
- Plaintiffs’ counsel, James Harrison Massey, filed in federal court asserting diversity jurisdiction and alleged only that “the Plaintiff and some of the Defendants are citizens of different states.”
- The complaint identified Norwest Corporation as a Minnesota corporation but did not properly allege citizenship for all defendants; it described several as South Dakota “residents” and included South Dakota-based defendants.
- Defense counsel notified Massey that the complaint showed lack of diversity jurisdiction and requested dismissal, warning that sanctions would be sought if the case continued.
- Massey did not dismiss the action, did not amend to plead complete diversity, and did not drop non-diverse parties.
- Defendants moved to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1) and sought Rule 11 sanctions.

## Issues

1. Whether Rule 11 places on the district court (rather than plaintiffs’ counsel) the burden to determine and establish the parties’ citizenship for diversity jurisdiction.
2. Whether the district court abused its discretion by imposing Rule 11 sanctions for filing and maintaining a complaint that failed to plead complete diversity and suggested non-diversity.
3. Whether the district court abused its discretion in setting sanctions at $4,800 in attorneys’ fees and expenses.
4. Whether the district court erred by denying leave to amend the complaint after dismissal to attempt to cure the jurisdictional defect.

## Decision

- The dismissal for lack of subject-matter jurisdiction was affirmed because the complaint failed to establish complete diversity and indicated non-diverse parties.
- Rule 11 sanctions against Massey were affirmed; counsel had the duty to investigate and plead citizenship facts supporting diversity.
- The $4,800 fee-and-expense award was affirmed as within the district court’s discretion and tied to costs caused by the jurisdictional defect.
- The denial of leave to amend was affirmed where the lack of diversity was apparent, counsel was warned, and corrective action was not timely taken.

## Legal Principles

- Diversity jurisdiction under 28 U.S.C. § 1332 requires complete diversity between all plaintiffs and all defendants.
- The party invoking federal jurisdiction bears the burden to plead (and, if challenged, prove) jurisdictional facts, including each party’s citizenship.
- Rule 11 requires an attorney to conduct a reasonable inquiry before filing and to ensure factual and legal contentions have support; asserting diversity without properly alleging complete diversity may violate Rule 11.
- A district court may award attorneys’ fees and expenses as a Rule 11 sanction to deter litigation conduct that imposes avoidable costs, and appellate review is for abuse of discretion.
- Post-dismissal efforts to amend to create or salvage diversity may be denied where the jurisdictional defect was evident and counsel failed to act after notice.

## Conclusion

The court held that counsel—not the court—must investigate and plead complete diversity, and it affirmed dismissal and Rule 11 sanctions where counsel filed and persisted with a diversity complaint that failed to allege complete diversity despite clear notice of the jurisdictional defect.


Walker v. Norwest Corp., 108 F.3d 158 (8th Cir. 1997)