Professional Documents
Culture Documents
United States Court of Appeals, Third Circuit
United States Court of Appeals, Third Circuit
2d 71
RUBIN, Jack B.
v.
BUCKMAN, Esq., Melvin J., Individually, and Melvin J.
Buckman, Esq., t/a Mesirov, Gelman, Jaffe, Cramer
& Jamieson, a Partnership.
Appeal of Melvin J. BUCKMAN, Esq., individually, and
Melvin
J. Buckman, Esq., t/a Mesirov, Gelman, Jaffe,
Cramer & Jamieson.
No. 83-1285.
The district court proceeded directly to the merits and granted defendants'
motion for summary judgment. Plaintiff then filed a motion to reconsider,
alleging for the first time that diversity did not exist. In a memorandum
accompanying the motion, plaintiff claimed that he was not a citizen of Hong
Kong, but was either a U.S. citizen with no U.S. domicile, or was a New Jersey
domiciliary. Under either alternative, subject matter jurisdiction would be
lacking, since a U.S. citizen with no U.S. domicile cannot sue in diversity, and
if plaintiff was a New Jersey resident his citizenship would not have been
diverse from all defendants.
In an opinion granting plaintiff's motion, the district court found that plaintiff or
his attorneys had either intentionally deceived the court, "so as to be in a
position to nullify any adverse judgment," or had been reckless, and in either
event had committed "a flagrant violation" of Fed.R.Civ.P. 11. The district
judge vacated the order granting summary judgment and dismissed the lawsuit.
Defendants' motion to reinstate the summary judgment, or in the alternative for
further discovery into whether diversity existed when the complaint was filed,
was denied. This appeal followed.
Defendants first contend that the district court erred by not holding that
plaintiff was bound by his original allegation of Hong Kong citizenship.
Defendants do not dispute that ordinarily a court must dismiss an action
whenever it appears that subject matter jurisdiction is lacking. Fed.R.Civ.P.
12(h)(3). However, they argue that plaintiff should be estopped from denying
his original allegation because it was not made in good faith, citing Di Frischia
v. New York Central Railroad Co., 279 F.2d 141 (3d Cir.1960). In that case,
the parties stipulated that diversity existed, but after the statute of limitations
had run, the defendant railroad challenged diversity and the district court
dismissed the action on that ground before trial. A panel of this court reversed,
holding that the railroad could not amend its answer to put diversity in issue,
and that "a defendant may not play fast and loose with the judicial machinery
and deceive the courts." 279 F.2d at 144.
The district judge held that Di Frischia was distinguishable because in that case
the parties' stipulation made diversity the law of the case, while here the
jurisdiction issue "had never been squarely decided by the court." We need not
decide whether Di Frischia is distinguishable, because subsequent decisions of
the Supreme Court have made it clear that subject matter jurisdiction can never
be created by estoppel, even as a sanction for conduct such as that here or in Di
Frischia. See, e.g., Insurance Corp. of Ireland v. Compagnie des Bauxites de
Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 2104, 72 L.Ed.2d 492 (1982);
Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 377 n. 21, 98 S.Ct.
2396, 2404 n. 21, 57 L.Ed.2d 274 (1978).1 Thus, "[a]lthough we tend to agree
that the Di Frischia rule is preferable to the present practice, we do not regard
ourselves as free to adopt it." Eisler v. Stritzler, 535 F.2d 148, 152 (1st
Cir.1976). Di Frischia can no longer be regarded as the law of this circuit.2
7
Defendants urge in the alternative that the district court erred by not allowing
them to take further discovery on plaintiff's citizenship and domicile to
determine whether diversity actually existed when the complaint was filed.
Once the action has been decided on the merits, it seems unfair to defendants to
let plaintiffs escape from an adverse judgment on the basis of the new
allegations in plaintiff's motion for reconsideration. We see no reason to take
plaintiff's new jurisdictional averments at face value, given the Rule 11
violation contained in his complaint, and the district court's conclusion, which
we fully share, that "[o]ne would have to be naive indeed" to believe that
plaintiff's counsel learned of the existence of a jurisdictional defect only after
the entry of an adverse judgment on the merits.
The order of the district court dated December 10, 1982 will be vacated to the
extent that it vacates the order granting summary judgment for defendants, and
the case will be remanded to the district court for further proceedings consistent
with this opinion. The costs awarded by the district court are not challenged on
appeal.
11
12
13
It is the tradition of this court that reported panel decisions are binding on
subsequent panels. Thus, no subsequent panel overrules a published opinion of
a previous panel. Court in banc consideration is required to overrule a published
opinion of this court.
14
15
This rule has been in force since the infancy of the federal court system, see
Capron v. Van Noorden, 6 U.S. (2 Cranch) 126, 2 L.Ed. 229 (1804); see also
American Fire & Casualty Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702
(1951), and as the Court's opinion acknowledges, has now been emphasized by
recent expressions of the Supreme Court in Insurance Corp. of Ireland v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 2104,
72 L.Ed.2d 492 (1982), and Owen Equipment & Erection Co. v. Kroger, 437
U.S. 365, 377 n. 21, 98 S.Ct. 2396, 2404 n. 21, 57 L.Ed.2d 274 (1978).
16
Decisions of the U.S. Supreme Court prior to Di Frischia also cast serious
doubt, to say the least, on the soundness of the outcome in that case. See
American Fire & Casualty Co. v. Finn, 341 U.S. 6, 17-18, 71 S.Ct. 534, 541542, 95 L.Ed. 702 (1951); Mansfield, Coldwater & Lake Michigan Ry. v.
Swan, 111 U.S. 379, 4 S.Ct. 510, 28 L.Ed. 462 (1884)
No issue of the res judicata effect of the judgment of a court lacking subject
matter jurisdiction is presented by this case. Cf. Insurance Corp. of Ireland v.
Compagnie des Bauxites de Guinee, 456 U.S. at 702 n. 9, 102 S.Ct. at 2104 n. 9
(1982); Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 60
S.Ct. 317, 84 L.Ed. 329 (1940)