The question of jurisdiction was submitted to the court without argument, by P.B. Key, for the appellants, and Harper, for the appellees.

On a subsequent day,

The court has considered this case, and is of opinion that the jurisdiction cannot be supported.

The words of the act of congress are, "where an alien is a party; or the suit is between a citizen of a state where the suit is brought, and a citizen of another state."

The court understands these expressions to meant that each distinct interest should be represented by persons, all of whom are entitled to sue, or may be sued, in the federal courts. That is, that where the interest is joint, each of the persons concerned in that interest must be competent to sue, or liable to be sued, in those courts.

But the court does not mean to give an opinion in the case where several parties represent several distinct interests, [268] and some of those parties are, and others are not, competent to sue, or liable to be sued, in the courts of the United States.

Decree affirmed.

[63] Binney, for the plaintiffs in error.

P.B. Key, contra.

Two points have been made in this cause.

1. That a corporation, composed of citizens of [85] one state, may sue a citizen of another state, in the federal courts.

2. That a right to sue in those courts is conferred on this bank by the law which incorporates it.

The last point will be first considered.

The judicial power of the United States, as defined in the constitution, is dependent, 1st. On the nature of the case; and, 2d. On the character of the parties.

By the judicial act, the jurisdiction of the circuit courts is extended to cases where the constitutional right to plead and be impleaded, in the courts of the union, depends on the character of the parties; but where that right depends on the nature of the case, the circuit courts derive no jurisdiction from that act, except in the single case of a controversy between citizens of the same state, claiming lands under grants from different states.

Unless, then, jurisdiction over this cause has been given to the circuit court by some other than the judicial act, the bank of the United States had not a right to sue in that court, upon the principle that the case arises under a law of the United States.

The plaintiffs contend that the incorporating act confers this jurisdiction.

That act creates the corporation, gives it a capacity to make contracts and to acquire property, and enables it "to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended, in courts of record, or any other place whatsoever."

This power, if not incident to a corporation, is conferred by every incorporating act, and is not understood to enlarge the jurisdiction of any particular court, but to give a capacity to the corporation to [86] appear, as a corporation, in any court which would, by law, have cognisance of the cause, if brought by individuals. If jurisdiction is given by this clause to the federal courts, it is equally given to all courts having original jurisdiction, and for all sums however small they may be.

But the 9th article of the 7th section of the act furnishes a conclusive argument against the construction for which the plaintiffs contend. That section subjects the president and directors, in their individual capacity, to the suit of any person aggrieved by their putting into circulation more notes than is permitted by law, and expressly authorizes the bringing of that action in the federal or state courts.

This evinces the opinion of congress, that the right to sue does not imply a right to sue in the courts of the union, unless it be expressed. This idea is strengthened also by the law respecting patent rights. That law expressly recognizes the right of the patentee to sue in the circuit courts of the United States.

The court, then, is of opinion, that no right is conferred on the bank, by the act of incorporation, to sue in the federal courts.

2. The other point is one of much more difficulty.

The jurisdiction of this court being limited, so far as respects the character of the parties in this particular case, "to controversies between citizens of different states," both parties must be citizens, to come within the description.

That invisible, intangible, and artificial being, that mere legal entity, a corporation aggregate, is certainly not a citizen; and, consequently, cannot sue or be sued in the courts of the United States, unless the rights of the members, in this respect, can be exercised in their corporate name. If the corporation [87] be considered as a mere faculty, and not as a company of individuals, who, in transacting their joint concerns, may use a legal name, they must be excluded from the courts of the union.

The duties of this court, to exercise jurisdiction where it is conferred, and not to usurp it where it is not conferred, are of equal obligation. The constitution, therefore, and the law, are to be expounded, without a leaning the one way or the other, according to those general principles which usually govern in the construction of fundamental or other laws.

A constitution, from its nature, deals in generals, not in detail. Its framers cannot perceive minute distinctions which arise in the progress of the nation, and therefore confine it to the establishment of broad and general principles.

The judicial department was introduced into the American constitution under impressions, and with views, which are too apparent not to be perceived by all. However true the fact may be, that the tribunals of the states will administer justice as impartially as those of the nation, to parties of every description, it is not less true that the constitution itself either entertains apprehensions on this subject, or views with such indulgence the possible fears and apprehensions of suitors, that it has established national tribunals for the decision of controversies between aliens and a citizen, or between citizens of different states. Aliens, or citizens of different states, are not less susceptible of these apprehensions, nor can they be supposed to be less the objects of constitutional provision, because they are allowed to sue by a corporate name. That name, indeed, cannot be an alien or a citizen; but the persons whom it represents may be the one or the other; and the controversy is, in fact and in law, between those persons suing in their corporate character, by their corporate name, for a corporate right, and the individual against whom the suit may be instituted. Substantially [88] and essentially, the parties in such a case, where the members of the corporation are aliens, or citizens of a different state from the opposite party, come within the spirit and terms of the jurisdiction conferred by the constitution on the national tribunals.

Such has been the universal understanding on the subject. Repeatedly has this court decided causes between a corporation and an individual without feeling a doubt respecting its jurisdiction. Those decisions are not cited as authority; for they were made without considering this particular point; but they have much weight, as they show that this point neither occurred to the bar or the bench; and that the common understanding of intelligent men is in favor of the right of incorporated aliens, or citizens of a different state from the defendant, to sue in the national courts. It is by a course of acute, metaphysical and abstruse reasoning, which has been most ably employed on this occasion, that this opinion is shaken.

As our ideas of a corporation, its privileges and its disabilities, are derived entirely from the English books, we resort to them for aid, in ascertaining its character. It is defined as a mere creature of the law, invisible, intangible, and incorporeal. Yet, when we examine the subject further, we find that corporations have been included within terms of description appropriated to real persons.

The statute of Henry VIII. concerning bridges and highways, enacts, that bridges and highways shall be made and repaired by the "inhabitants of the city, shire, or riding," and that the justices shall have power to tax every "inhabitant of such city," &c.; and that the collectors may "distrain every such inhabitant as shall be taxed and refuse payment thereof, in his lands, goods and chattels."

Under this statute those have been construed inhabitants who hold lands within the city where the [89] bridge to be repaired lies, although they reside elsewhere.

Lord Coke says, "every corporation and body politic residing in any county, riding, city, or town corporate, or having lands or tenements in any shire, quæ propriis manibus et sumptibus possident et habent, are said to be inhabitants there, within the purview of this statute."

The tax is not imposed on the person, whether he be a member of the corporation or not, who may happen to reside on the lands; but is imposed on the corporation itself, and, consequently, this ideal existence is considered as an inhabitant, when the general spirit and purpose of the law requires it.

In the case of The King v. Gardner, reported by Cowper, a corporation was decided, by the court of king's bench, to come within the description of "occupiers or inhabitants." In that case the poor rates, to which the lands of the corporation were declared to be liable, were not assessed to the actual occupant, for there was none, but to the corporation. And the principle established by the case appears to be, that the poor rates, on vacant ground belonging to a corporation, may be assessed to the corporation, as being inhabitants or occupiers of that ground. In this case Lord Mansfield notices and overrules an inconsiderate dictum of Justice Yates, that a corporation could not be an inhabitant or occupier.

These opinions are not precisely in point; but they serve to show that, for the general purposes and objects of a law, this invisible, incorporeal creature of the law may be considered as having corporeal qualities.

It is true that as far as these cases go they serve to show that the corporation itself, in its incorporeal character, may be considered as an inhabitant or an occupier; and the argument from them would be more strong in favour of considering the corporation [90] itself as endowed for this special purpose with the character of a citizen, than to consider the character of the individuals who compose it as a subject which the court can inspect, when they use the name of the corporation, for the purpose of asserting their corporate rights. Still the cases show that this technical definition of a corporation does not uniformly circumscribe its capacities, but that courts for legitimate purposes will contemplate it more substantially.

There is a case, however, reported in 12 Mod. which is thought precisely in point. The corporation of London brought a suit against Wood, by their corporate name, in the mayor's court. The suit was brought by the mayor and commonalty, and was tried before the mayor and aldermen. The judgment rendered in this cause was brought before the court of king's bench and reversed, because the court was deprived of its jurisdiction by the character of the individuals who were members of the corporation.

In that case the objection, that a corporation was an invisible, intangible thing, a mere incorporeal legal entity, in which the characters of the individuals who composed it were completely merged, was urged and was considered. The judges unanimously declared that they could look beyond the corporate name, and notice the character of the individual. In the opinions, which were delivered seriatim, several cases are put which serve to illustrate the principle, and fortify the decision.

The case of The Mayor and Commonalty v. Wood, is the stronger, because it is on the point of jurisdiction. It appears to the court to be a full authority for the case now under consideration. It seems not possible to distinguish them from each other.

If, then, the congress of the United States had, in terms, enacted that incorporated aliens might suc [91] a citizen, or that the incorporated citizens of one state might sue a citizen of another state, in the federal courts, by its corporate name, this court would not have felt itself justified in declaring that such a law transcended the constitution.

The controversy is substantially between aliens, suing by a corporate name, and a citizen, or between citizens of one state, suing by a corporate name, and those of another state. When these are said to be substantially the parties to the controversy, the court does not mean to liken it to the case of a trustee. A trustee is a real person capable of being a citizen or an alien, who has the whole legal estate in himself. At law, he is the real proprietor, and he represents himself, and sues in his own right. But in this case the corporate name represents persons who are members of the corporation.

If the constitution would authorize congress to give the courts of the union jurisdiction in this case, in consequence of the character of the members of the corporation, then the judicial act ought to be construed to give it. For the term citizen ought to be understood as it is used in the constitution, and as it is used in other laws. That is, to describe the real persons who come into court, in this case, under their corporate name.

That corporations composed of citizens are considered by the legislature as citizens, under certain circumstances, is to be strongly inferred from the registering act. It never could be intended that an American registered vessel, abandoned to an insurance company composed of citizens, should lose her character as an American vessel; and yet this would be the consequence of declaring that the members of the corporation were, to every intent and purpose, out of view, and merged in the corporation.

The court feels itself authorized by the case in 12 Mod. on a question of jurisdiction, to look to [92] the character of the individuals who compose the corporation, and they think that the precedents of this court, though they were not decisions on argument, ought not to be absolutely disregarded.

If a corporation may sue in the courts of the union, the court is of opinion that the averment in this case is sufficient.

Being authorized to sue in their corporate name, they could make the averment, and it must apply to the plaintiffs as individuals, because it could not be true as applied to the corporation.

Judgment reversed; plea in abatement overruled, and cause remanded.

[83] [84] Alan M. Dubow, White Plains, N.Y. (Bruce Minkoff, Robinowitz Cohlan & Dubow, White Plains, N.Y., on the brief), for plaintiff-appellant.

Larry H. Krantz, New York City (Ronald W. Meister, Meister Leventhal & Slade, New York City, George Forman, Alexander & Karshmer, Berkeley, Cal., on brief), for defendant-appellee.

Before NEWMAN and KEARSE, Circuit Judges, and STANTON, District Judge.^[1]

Plaintiff A.F.A. Tours, Inc., doing business as Alumni Flights Abroad ("AFA"), appeals from a final judgment of the United States District Court for the Southern District of New York, Vincent L. Broderick, Judge, dismissing for lack of subject matter jurisdiction this diversity action against defendant Desmond Whitchurch for misappropriation of trade secrets. The district court summarily dismissed the complaint on the ground that it would not be possible for AFA to prove damages amounting to more than $50,000. For the reasons below, we vacate and remand for further proceedings.

According to the complaint, AFA operates a travel and tour business, specializing in deluxe tours for United States residents to overseas destinations including Australia, New Zealand, and New Guinea. It expended large sums of money and invested significant time and labor to develop, inter alia, a client and customer list, marketing information, and tour information. It regarded this information as confidential trade secrets.

From 1972 through 1989, Whitchurch was employed by AFA as its exclusive tour escort in the above areas. In that position, Whitchurch was privy to certain of the above confidential information. The complaint alleged that in or about October 1989, Whitchurch resigned from AFA, misappropriated the confidential information known to him, and organized his own tour business. Since that time, he has offered or intends to offer tours that compete with those offered by AFA; in connection with his own tours, he has solicited or intends to solicit participants from AFA's customer list.

AFA commenced the present diversity action in the district court for misappropriation of its trade secrets, seeking an injunction against any use by Whitchurch of confidential AFA information, and damages "in an amount which is not presently ascertainable, but which is believed to exceed the sum of $50,000.00." It also sought punitive damages of "no less than $250,000.00."

Whitchurch denied all of the material allegations of the complaint and quickly moved for summary judgment on the ground that the AFA information possessed by Whitchurch was not confidential. Whitchurch's supporting affidavits stated, inter alia, that, though Whitchurch had led an average of seven AFA tours per year for 17 years, he had had no written contract with AFA. He stated that AFA had never informed him that the customer names were confidential, or should not be [85] shared with others, or should be returned to AFA upon Whitchurch's resignation. Rather, he stated, AFA had freely disseminated lists of the names and addresses of its customers to "countless individuals and entities," including hotels, booking and travel agents, and the tour participants themselves.

Whitchurch stated that from February to May 1990, he had attempted to organize a tour on his own. In this effort he had, inter alia, written to former AFA tour participants he had escorted, informed them of his separation from AFA, and solicited their participation. Only two people reserved space on the planned tour, however, and it was canceled. He opposed the present lawsuit because he remained interested in conducting tours in the future.

AFA opposed Whitchurch's summary judgment motion, contending that there were genuine issues of fact as to, inter alia, the confidential nature of the AFA information and Whitchurch's knowledge of that confidentiality. It submitted affidavits describing its own operations and detailing steps it had taken to maintain the confidentiality of its customer list, including the following.

The names and addresses of AFA customers were not readily obtainable from any public source. AFA catered to alumni and alumnae of certain United States universities that did not generally sell their alumni lists to outside businesses for commercial purposes. AFA's customer list, maintained in a computer file to which access is denied without a password, was compiled largely from responses to AFA advertisements in alumni magazines and from referrals by AFA tour participants. AFA was currently spending more than $100,000 per year in advertising and promotion and in all had spent more than $1,000,000 in developing the customer list. The most valuable names on the list were those of persons who had traveled on past AFA tours.

AFA disputed Whitchurch's contention that its customer list had been freely disseminated, stating that the names on that list were not disclosed except on a need-to-know basis. Thus, Whitchurch himself had not been given the whole list but only the names and addresses of the persons he was to escort. Lists of persons participating in a particular tour obviously had to be disclosed to providers of services such as hotels, but the disclosures were limited and were made with a notation of confidentiality. AFA also asserted that Whitchurch was fully aware of the confidential nature of that information and that as part of his duties he had delivered preregistration information to hotels, including an AFA cover letter stating that the information provided "is STRICTLY CONFIDENTIAL and is supplied to you only for the purpose of pre-registering the members of the tour."

AFA never sold or traded its list to others. Occasionally it received calls from persons considering a tour and requesting the names and addresses of former AFA tour participants; it refused to give out that information, informing the caller that the information was confidential. Even when a former AFA tour participant would call AFA to request the address or telephone number of a coparticipant, AFA's response was to relay the request to the coparticipant rather than giving the information to the caller. These practices were designed to prevent rival tours from gaining AFA confidential information by ruse.

At the oral argument of Whitchurch's motion, Whitchurch's attorney began by characterizing the motion as "turn[ing] on a very narrow issue" of whether the AFA information constituted trade secrets (Hearing Transcript, November 16, 1990 ("Tr."), at 1), and stating that the case was important to Whitchurch because "he may one day in the future wish to organize a tour, and write letters to individuals again" (id. at 2). The court, however, asked whether it even had to reach the question of trade secrets, raising sua sponte the question of whether the value of AFA's claims exceeded $50,000, a jurisdictional prerequisite for a diversity action. In response to the court's jurisdictional question, Whitchurch's attorney stated that Whitchurch, in soliciting for his planned tour, had written to 100-200 former AFA [86] tour participants but had received favorable responses from only two.

THE COURT: .... Why did you think your client was so unsuccessful in sparking interest in a tour under his direction?

MR. KRANTZ [counsel for Whitchurch]: I am sure one factor was that he was writing to people who had already been there, and so he was looking for only people who were interested in going twice. What other factors there were, I am really not certain....

Certainly any damages here are d[e] min[imi]s. I would absolutely agree with the Court.

THE COURT: Well, the Supreme Court has told us, as I read what it has said, that if there is a speculative question of fact but no reasonable possibility of damage, then summary judgement is appropriate....

(Id. at 5.)

AFA's attorney argued that Whitchurch's lack of success on his first effort was hardly dispositive of the issue of the amount of damages AFA might suffer, in light of Whitchurch's desire to conduct other tours in the future. In his letter to former AFA tour participants, for example, Whitchurch had offered the addressees their "first" opportunity to join his planned 28-day tour and said, "If you would like to be on my mailing list for future tours, please fill out and return the enclosed form. I will also be available to arrange special interest tours to the South Pacific." AFA's attorney, noting that over the years Whitchurch had escorted some 1,500 AFA clients on tours and had indicated that he would conduct a number of tours, argued that AFA's damages would be substantial. He stated that a single 10-customer tour to the area in question would easily generate more than $50,000:

THE COURT: How do you get up to fifty thousand dollars?

MR. DUBOW: ....

One tour of ten of your customers is a lot more than fifty thousand dollars. It's about seven to ten thousand dollars per customer on that one tour, and he's offering five or six different tours to areas of the world. And he even said in his letter that he is going to solicit customers for trips to that area of the world and expand on that. So there is no doubt, he doesn't deny that.

(Id. at 15.) Dubow also stated that "one tour alone will produce more than fifty thousand dollars to Mr. Whitchurch...." (Id. at 19.)

At the close of this hearing, the court granted summary judgment in favor of Whitchurch, stating as follows:

THE COURT: I grant defendant's motion for summary judgment. There may be a theoretical question of fact here, but it is not the same type of material question of fact that precludes summary judgment.

We have lists here that were available to the defendant for the seventeen years, with respect to some of the older witnesses [sic], I suspect that the people traveled on those lists[, m]any of whom have reached retirement age at that time are probably no longer available for touring purposes.

The defendant's track record in soliciting is a pretty bad one. Two people signed up with him. I see there is no way any fact finder in this case will possibly reach a point where it will award damages to the plaintiff. I see no possible reason that the fifty thousand — no possible basis upon which the fifty thousand dollar number, which I think does apply here, could ever be reached. We're not dealing here with the plaintiff's massive lists. We're dealing with a circumscribed portion of those lists where the customers have already been tapped and have taken their tours.

I have [a] very serious question as to whether the lists involved here are trade secrets. It maybe [sic], as the plaintiff argues, that this is a question of fact that I should not be deciding. But, I'm taking to heart what the Supreme Court has said and that is a summary judgment is an effective way to eliminate from the Court the matters cluttering up our calendars.

I see this case is one where there is no reasonable possibility that any jury will [87] render a verdict for the plaintiff, and on that basis, I grant summary judgement.

(Id. at 33-35.)

Judgment was entered dismissing the complaint, and this appeal followed.

On appeal, AFA contends that the dismissal for lack of jurisdiction was improper because the court (1) failed to give AFA an appropriate opportunity to show that it satisfied the jurisdictional amount, and (2) failed to apply the proper standard to AFA's requests for (a) damages and (b) injunctive relief. Whitchurch seeks to defend the judgment on the ground that the district court did not dismiss on the jurisdictional ground and that summary judgment on the merits was proper.

We reject Whitchurch's contention that the district court did not dismiss for lack of jurisdiction. Though the court styled its decision as one granting summary judgment and stated that it had a "very serious question" as to whether the AFA lists were trade secrets, it did not purport to resolve that question. Rather, it stated that it could see "no possible basis upon which the fifty thousand dollar number could ever be reached." The decision itself, therefore, especially in light of the colloquy that preceded it, indicates that the court dismissed because it had concluded that AFA could not satisfy the minimum jurisdictional amount.

For the reasons below, we conclude that the dismissal on the jurisdictional ground was improper. We also note that summary judgment dismissing AFA's trade secrets claims on the merits would have been improper.

The district courts have jurisdiction over civil diversity suits "where the matter in controversy exceeds the sum or value of $50,000, exclusive of interest and costs." 28 U.S.C. § 1332 (1988). The test for determining whether a plaintiff meets the jurisdictional amount, established by the Supreme Court in St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938), is as follows:

The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify a dismissal.

303 U.S. at 288-89, 58 S.Ct. at 590 (emphasis added).

The amount of damages recoverable in an action for misappropriation of trade secrets may be measured either by the plaintiff's losses, see, e.g., Timely Products Corp. v. Arron, 523 F.2d 288, 304 (2d Cir.1975); see generally 2 R. Milgrim, Milgrim on Trade Secrets ("Milgrim") § 7.08[3][a], at 7-314 to 7-318 (1990), or by the profits unjustly received by the defendant, see id.; Electro-Miniatures Corp. v. Wendon Co., 771 F.2d 23, 27 (2d Cir.1985). In addition, if punitive damages are permitted under the controlling law, the demand for such damages may be included in determining whether the jurisdictional amount is satisfied. See generally 14A C. Wright & A. Miller, Federal Practice and Procedure § 3702, at 44 (1985) ("Wright & Miller"). New York law apparently allows the recovery of punitive damages in a trade secrets case if the defendant's conduct has been sufficiently "gross and wanton." See, e.g., Huschle v. Battelle, 33 A.D.2d 1017, 308 N.Y.S.2d 235 (1st Dep't 1970), aff'd, 31 N.Y.2d 767, 338 N.Y.S.2d 622, 290 N.E.2d 823 (1972).

Further, in appropriate circumstances, the owner of trade secrets may obtain an injunction against their use or disclosure by another in breach of his confidential relationship with the owner. See Bridge C.A.T. Scan Associates v. Technicare Corp., 710 F.2d 940, 946 (2d Cir.1983). Where the plaintiff seeks injunctive relief, the value of his claim is generally assessed with reference to the right he seeks to protect and measured by the extent of the impairment to be prevented by the injunction. See generally 1 Moore's Federal [88] Practice ¶ 0.96[2] (2d ed. 1991); 14A Wright & Miller § 3708, at 143-44. In calculating that impairment, the court may look not only at past losses but also at potential harm. See generally id. at 146-49.

Before making a determination that the plaintiff's claim does not meet the jurisdictional minimum, the court must afford the plaintiff an "appropriate and reasonable opportunity to show good faith in believing that a recovery in excess of [the jurisdictional amount] is reasonably possible." Arnold v. Troccoli, 344 F.2d 842, 846 (2d Cir.1965). Under these substantive and procedural principles, although the record indicates that AFA has not yet suffered actual damages even approaching $50,000, we have difficulty with the district court's decision.

First, though AFA did not make an evidentiary showing in support of its contention that the value of its claims exceeded $50,000, it was not afforded a proper opportunity to do so. The issue of the jurisdictional amount was first raised by the district court sua sponte at the argument on the summary judgment motion, and the court rendered its decision at the end of that argument. To the extent that the court thought AFA could not meet the jurisdictional minimum, it should not have dismissed without giving AFA an opportunity to present substantiation directed toward that issue.

Second, despite AFA's lack of an opportunity to present evidence addressed directly to the jurisdictional question, there was evidence in the record to suggest that the matter could not be conclusively resolved against it, for the oral arguments made by AFA's attorney to show that its claims were worth more than $50,000 had some support from documents already before the court. For example, he said Whitchurch had the names of some 1,500 AFA customers; this was consistent with (a) Whitchurch's own statement that in the 17 years he was employed by AFA he had led approximately seven tours each year (thus totaling some 119 tours) and (b) his attorney's statement that there were usually 10-15 people per tour. If there were no repeat customers among the persons Whitchurch escorted, he could have escorted some 1,785 AFA tour participants (119 × 15). As to AFA's attorney's estimate that a single tour of this type "[i]s about seven to ten thousand dollars per customer," the evidence in the record as to the destination and deluxe nature of the tours, including evidence that some participants traveled first class and reserved preferred hotel accommodations, supports an inference that a 28-day tour could well cost $10,000 per person.

What this means in terms of loss of earnings to a tour operator, however, is not revealed by the present record. AFA's suggestion that the tour operator himself would earn $10,000 per tourist (i.e., that such a tour would "produce more than fifty thousand dollars to Mr. Whitchurch" (Tr. 19 (emphasis added))) does not have the same record support and seems questionable. The district court was also undoubtedly correct in its assumption that many of the persons who traveled to the South Pacific with Whitchurch during the 17 years he was with AFA are not likely to travel to that area again. But it could not be said to a legal certainty that no one would return to that area. There was ample support in the record for the proposition that AFA has the prospects for repeat customers. For example, AFA had submitted from one of its brochures two pages excerpting comments from participants in a recent AFA tour (the commenters being identified only by their initials and city of residence); nearly one-third of those quoted indicated that they either had been on other AFA tours or would hope to go on future AFA tours. Indeed, an exhibit submitted by Whitchurch stated that one of the couples in a group he was to escort had been on 11 AFA tours. And two of the 100-200 former AFA South Pacific tour participants contacted by Whitchurch signed up for Whitchurch's proposed tour to the same area. If a tour operator could earn 17% of the price of a tour, and if Whitchurch were eventually successful in soliciting even 30 of the approximately 1,500 AFA participants [89] he has escorted (i.e., 2%, which may reflect the ratio of his success on his first attempt), the profit he could siphon from AFA would total $51,000. Thus, on the present record, the court could not conclude to a legal certainty that the value of AFA's claims did not exceed the jurisdictional minimum.

Further, AFA requested injunctive relief not just against Whitchurch's solicitation of its customers but also against any use of the information. Presumably such an injunction would include a prohibition against Whitchurch's sale or disclosure of the names and addresses of AFA's customers to other tour operators who might be better equipped than Whitchurch to exploit the information and attract more than 2% of the persons whose names Whitchurch could provide them. In addition, AFA's request for punitive damages in the amount of $250,000 might provide a basis for satisfaction of the jurisdictional amount. Whether or not AFA will be able to prove that Whitchurch's conduct was "gross and wanton" and warrants the recovery of such damages under New York law is an open question. But the present record does not foreclose that possibility.

In all the circumstances, we conclude that the record as it existed in the district court did not permit the court to find with legal certainty that the value of AFA's claims did not exceed $50,000.

Finally, even if Whitchurch were correct in his contention that the court dismissed AFA's trade secrets claims on the merits rather than for lack of jurisdiction, the dismissal could not stand. The question of whether or not a customer list is a trade secret is generally a question of fact. See, e.g., Chevron U.S.A., Inc. v. Roxen Service, Inc., 813 F.2d 26, 29-30 (2d Cir.1987); Defiance Button Machine Co. v. C & C Metal Products Corp., 759 F.2d 1053, 1063 (2d Cir.), cert. denied, 474 U.S. 844, 106 S.Ct. 131, 88 L.Ed.2d 108 (1985); see also 1 Milgrim § 2.03, at 2-47 to 2-49 (1990) ("existence of a trade secret is a question of fact for the determination of the trier of fact, secrecy being a basic element"). The answer depends in part on the subsidiary fact questions of whether or not the owner took "reasonable measures to protect [the] secrecy" of the list, see, e.g., id. § 2.04, at 2-55; Defiance Button Machine Co. v. C & C Metal Products Corp., 759 F.2d at 1063; and the ease or difficulty with which the information could properly be obtained from other sources, see, e.g., id.; Restatement of Torts § 757, comment b (1939). The mere fact that an employee has access to information the employer regards as confidential is not inconsistent with treatment of the information as a trade secret. The employer must, however, take appropriate precautions to alert the employee to the need to maintain the confidentiality. 1 Milgrim § 2.04, at 2-75 to 2-76.

In assessing the record to determine whether there is a genuine issue as to any material fact, the court is required to resolve all ambiguities and draw all factual inferences in favor of the party against whom summary judgment is sought. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986). As set forth in Part I above, in opposition to Whitchurch's motion for summary judgment, AFA submitted several affidavits describing both the efforts it had made to develop a customer list that was not available from any other source, and efforts it had made to prevent dissemination of the names on that list except to persons actually participating in the tours and persons who needed to know those names in order to service the AFA tours. Drawing all permissible fact inferences in favor of AFA, the court could not have concluded that as a matter of law the list was not confidential or was unworthy of protection. The record as it stands on this question is rife with genuine issues of fact.

We have considered all of Whitchurch's arguments in support of the district court's judgment and have found them to be without [90] merit. The judgment is vacated, and the matter is remanded for further proceedings not inconsistent with the foregoing.

[1] Honorable Louis L. Stanton, of the United States District Court for the Southern District of New York, sitting by designation.

[390] Patrick L. Duffy, Terre Haute, Ind., for plaintiffs-appellants.

Benjamin G. Cox, Terre Haute, Ind., for defendant-appellee.

Before SWYGERT and BAUER, Circuit Judges, and GRADY, District Judge.^[1]

The principal issue in this diversity case concerns the method of determining, for jurisdictional purposes, the amount in controversy in an action removed from a state court when plaintiff seeks injunctive relief. The district court first sustained its jurisdiction over this case by evaluating the matter in controversy from the defendant's viewpoint. It then ruled that, as to the merits, principles of res judicata barred the plaintiffs' claim. We affirm the district court's judgment.

Because of the questions presented for review, the procedural history of the case is important. On April 22, 1977 Amoco Pipeline Company filed a complaint in the Vigo Superior Court, Vigo County, Indiana, seeking to condemn an easement for a pipeline across real estate owned by Ray and Genevieve McCarty. Condemnation was sought under authority of Indiana Code Section 32-11-3-1, which allows certain corporations empowered by their articles of incorporation to transport petroleum products to the public to exercise the power of eminent domain. The McCartys filed no objections to Amoco's complaint, and on May 26, 1977 the state court entered an order condemning the easement sought by Amoco and appointing three appraisers to assess the property. No interlocutory appeal was taken from this order although such an appeal is authorized. Indiana Code Section 32-11-1-5.

The appraisers awarded compensation of $1,625.00, which sum was deposited with the state court by Amoco on June 23, 1977. The McCartys filed exceptions to this appraisal, which procedure entitled them to a jury trial on the value question under Indiana law. See Schnull v. Indianapolis RR, 190 Ind. 572, 131 N.E. 51 (1921). Amoco [391] also, filed a petition to have the condemned easement vested in it, and, with no objections being filed, the state court ordered the easement so vested on July 13, 1977.

On November 21, 1977 the McCartys moved the state court to set aside its May 26 order of condemnation. The court received written arguments from both sides before ruling on the motion. The McCartys stated that the essence of their argument was that Amoco was not in fact using the pipeline for a public use and that the only right Amoco had to appropriate their property was predicated on public use. In support thereof, the McCartys called to the court's attention the facts that the pipeline's termini were at subsidiary plants owned by the same corporate entity which owned Amoco, that no entry or exit pipes existed apart from the termini, and that the pipeline transported a substance known as xylene "which may or may not be petroleum as contemplated by the legislature." After taking the motion under advisement, the state court overruled it on March 9, 1978. No appeal was taken from this March 9 ruling.

On April 7, 1978 the McCartys filed a new suit in Vigo Superior Court which was based on the same theory and facts of allegedly private use as had been presented to the state court in support of the November 21, 1977 motion. The McCartys asked the court to enjoin Amoco from using their land for its pipeline and to order Amoco to remove the pipeline. On April 25, 1978 Amoco removed the action to the United States District Court for the Southern District of Indiana and filed an answer setting up the defense of res judicata. The McCartys filed a motion to remand on May 15, stating that the matter in controversy did not exceed $10,000 as required by 28 U.S.C. § 1332 because they had not asked for any damages. The district court denied the motion on June 8 stating:

Part of the relief sought by plaintiffs in this action is the removal by defendant of defendant's pipeline from certain real estate allegedly owned by plaintiffs. By its brief and supporting affidavit on the instant motion, defendant has demonstrated that the cost of such removal, as well as the value to defendant of not removing such pipeline, is well in excess of the required jurisdictional amount. Plaintiffs have not contested defendant's assertions by any reply brief.

The principal purpose of the requirement of a minimum jurisdictional amount in controversy is to assure that an action is substantial. The Court is satisfied that the amount in controversy in this action is in excess of Ten Thousand Dollars, exclusive of interest and costs. Plaintiffs' challenge to this Court's jurisdiction over the subject-matter of this action is not well-taken.

The district court subsequently entertained Amoco's motion for summary judgment, and on July 13, 1978 the court granted it, concluding that the McCartys' present action was a collateral attack on the judgment of the Vigo Superior Court and was barred by the doctrine of res judicata.

The first issue on appeal is whether the federal court had jurisdiction to hear the case upon removal. The McCartys contend that because the value to them of the matter in controversy does not exceed $10,000 the jurisdictional minimum amount required by 28 U.S.C. § 1332 is not present. They point to the appraisal award of $1,625.00 as establishing the value of the object in litigation to them,^[2] and rely on this court's opinion in City of Milwaukee v. Saxbe, 546 F.2d 693 (7th Cir. 1976), for the proposition that the value from the plaintiff's viewpoint is the relevant and controlling one.

Valuation of the matter in controversy in suits for declaratory or injunctive relief is a [392] complex task. The court must not only undertake to evaluate intangible rights as opposed to objects commonly found in the marketplace, but it must decide what rights are involved in the controversy and from whose viewpoint their value is to be measured. A review of the cases and commentary on the subject reveals that there is considerable disagreement as to how a court should accomplish this task.

The seminal case in this area was decided by the Supreme Court in 1862. A steamboat owner sued for abatement of a nuisance, a bridge over the Mississippi River. The Court disposed of the jurisdictional amount question by stating:

But the want of a sufficient amount of damage having been sustained to give the Federal Courts jurisdiction, will not defeat the remedy, as the removal of the obstruction is the matter of controversy, and the value of the object must govern.

Mississippi & Missouri RR v. Ward, 67 U.S. (2 Black) 485, 492, 17 L.Ed. 311 (1862). The difficulty with this passage lies in the cryptic use of the phrase "value of the object." In the context in which it was used, the term could mean the value of the plaintiff's steamboat business, the cost to the defendant of removing the bridge, the value of the bridge itself, or the value of the plaintiff's right to be free of the obstruction.

Some courts have resolved the difficulty by adopting the rule that only the value to the plaintiff may be used to determine the jurisdictional amount.^[3] Support for this interpretation is principally garnered from the Supreme Court's opinion in Glenwood Light & Water Co. v. Mutual Light, Heat & Power Co., 239 U.S. 121, 36 S.Ct. 30, 60 L.Ed. 174 (1915). In that case the plaintiff sought to enjoin the defendant from erecting poles and wires that would interfere with those of the plaintiff. The trial court dismissed the case for lack of the jurisdictional amount in controversy because the cost to the defendant of removing its poles and wires would be less than the required amount. The Supreme Court reversed, saying:

The district court erred in testing the jurisdiction by the amount that it would cost defendant to remove its poles and wires where they conflict or interfere with those of complainant, and replacing them in such a position as to avoid the interference. Complainant sets up a right to maintain and operate its plant and conduct its business free from wrongful interference by defendant. This right is alleged to be of a value in excess of the jurisdictional amount, and at the hearing no question seems to have been made but that it has such value. The relief sought is the protection of that right, now and in the future, and the value of that protection is determinative of the jurisdiction.

Id. at 126, 36 S.Ct. at 32.

Although supportive of the "plaintiff viewpoint" rule, the holding in Glenwood is only that jurisdiction is present if the value to the plaintiff exceeds the required amount regardless of the value to the defendant. The Glenwood case does not exclude the possibility that jurisdiction would be present in a case where the value required was present from the defendant's viewpoint but not from the plaintiff's. See 14 Wright, Miller & Cooper, Federal Practice and Procedure § 3703, pp. 406-07 (1976).

Another approach taken by some courts is to view the amount in controversy from the point of view of the party seeking to invoke federal jurisdiction.^[4] Under this rule, the court would look to the plaintiff's viewpoint in a case brought originally in federal court and to the defendant's viewpoint in a case removed to federal court from a state court.

[393] Although this rule has certain attractive features such as tying the controlling viewpoint to the burden of proof as to jurisdiction, two problems with it arise. The first is the possibility of anomalous results. Under the rule, if a case originally brought in federal court were dismissed for failure to meet the jurisdictional amount from the plaintiff's viewpoint, it could yet end up in federal court if the plaintiff reinstituted the case in state court and the defendant—from whose point of view the required amount was present—then removed it. See 14 Wright, Miller & Cooper, supra at 410. This possibility introduces the second, more fundamental problem. 28 U.S.C. § 1441 only provides for the removal of actions "of which the district courts of the United States have original jurisdiction . . . ." Thus, it is generally true that if a case could not originally be brought in federal court it may not be removed there. But as outlined above, the "burden of proving jurisdiction viewpoint" rule could lead to a situation where the federal court would assume removal jurisdiction where it could not assert original jurisdiction. Being thus contrary to the statutory directive, the second rule is not a viable interpretation. See 1 Moore's Federal Practice, ¶ 0.91[1], pp. 845-46 n. 10 (1978).

There is yet a third rule which a number of courts have adopted^[5] and which may be termed the "either viewpoint" rule. Under this rule, as the court stated it in Ronzio v. Denver & R.G.W.R. Co., 116 F.2d 604, 606 (10th Cir. 1940) (footnotes omitted):

In determining the matter in controversy, we may look to the object sought to be accomplished by the plaintiffs' complaint; the test for determining the amount in controversy is the pecuniary result to either party which the judgment would directly produce.

Although there are no Supreme Court cases directly on point, some support for this third rule can be found in the Court's opinions. In Smith v. Adams, 130 U.S. 167, 175, 98 S.Ct. 566, 569, 32 L.Ed. 895 (1889), the Court stated:

[O]ur appellate jurisdiction in this case depends upon whether the amount in dispute, exclusive of costs, exceeds the sum designated. By matter in dispute is meant the subject of litigation, the matter upon which the action is brought and issue is joined, and in relation to which, if the issue be one of fact, testimony is taken. It is conceded that the pecuniary value of the matter in dispute may be determined, not only by the money judgment prayed, where such is the case, but in some cases by the increased or diminished value of the property directly affected by the relief prayed, or by the pecuniary result to one of the parties immediately from the judgment.^[6]

An additional reference to the issue, although admitted cryptic, deserves mentioning. In Illinois v. City of Milwaukee, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712 (1972), the Court dismissed the question of jurisdictional amount with this sentence and accompanying citations:

The considerable interests involved in the purity of interstate waters would seem to put beyond question the jurisdictional amount provided in § 1331(a). See Glenwood Light & Water Co. v. Mutual [394] Light, Heat & Power Co., 239 U.S. 121, [36 S.Ct. 30, 60 L.Ed. 174]; Mississippi & Missouri R. Co. v. Ward, 2 Black 485, 492, [67 U.S. 485, 17 L.Ed. 311]; Ronzio v. Denver & R.G.W.R. Co., 116 F.2d 604, 606; C. Wright, The Law of Federal Courts 117-119 (2d ed. 1970); Note, 73 Harv.L.Rev. 1369.

Id. at 98, 92 S.Ct. at 1390. With considerable qualification, some authorities have read the Court's citations, particularly to the Ronzio case and the Wright treatise, as a suggestion that a federal court may view the jurisdictional amount from the perspective of either party. See 14 Wright, Miller & Cooper, Federal Practice and Procedure § 3703, pp. 410-11 (1976); C. Wright, Federal Courts 135 n. 12 (3d ed. 1976).

Policy considerations also support the either viewpoint rule. It may be true that the plaintiff viewpoint rule results in some degree of certainty and simplicity of application,

[b]ut certainty and simplicity, while sometimes important goals should not be allowed to blind federal courts to the realities of the magnitude of the controversy. While the plaintiff viewpoint rule has much to recommend it, it should not be applied if to do so destroys jurisdiction when a substantial claim clearly in excess of $10,000 is involved. Since the jurisdictional amount prerequisite was enacted primarily to measure substantiality of the suit, the question of whether the controversy is substantial should not be answered unqualifiedly by looking only to the value of that which the plaintiff stands to gain or lose. For example, if plaintiff seeks an injunction to have defendant remove an office building encroaching on one foot of plaintiff's land, the value of the matter in controversy to plaintiff may be trivial while the expense in removal to the defendant if the injunction is granted would be clearly in excess of $10,000. In such a case the courts should recognize that a substantial controversy is involved and look to the effect of the suit on either party to the litigation.

1 Moore's Federal Practice, ¶ 0.91[1], p. 846 (1978).

As for the prior decisions of this court, there is no holding squarely on point.^[7] In Breault v. Feighenholtz, 380 F.2d 90 (7th Cir.), cert. denied, 389 U.S. 1014, 88 S.Ct. 591, 19 L.Ed.2d 660 (1967), a diversity case seeking to set aside a will, defendants challenged the existence of a jurisdictional amount in controversy. Defendants, the executor and trustees of the estate in question, supported their motion to dismiss by an affidavit stating that the estate was in fact insolvent, and that therefore it would be impossible to distribute to plaintiffs amounts meeting the jurisdictional prerequisite. Although plaintiffs attempted to counter this by an amended complaint alleging on information and belief that the estate was sufficiently solvent, this court ruled that bare allegations based merely on information and belief were insufficient proof of the existence of a jurisdictional amount. Thus, the holding of the case was that the plaintiff had failed to show "substantial proof . . . justifying the conclusion that the action involves `value' in the necessary amount"; the holding was [395] [396] not predicated on the court's statement that the value involved is to be measured by pecuniary consequences to the plaintiffs. See id. at 92. The court was not required to decide between viewpoints.

Motorists Mutual Ins. Co. v. Simpson, 404 F.2d 511 (7th Cir. 1968), cert. denied, 394 U.S. 988, 89 S.Ct. 1470, 22 L.Ed.2d 763 (1969), involved two contentions raised by the plaintiff to prevent a dismissal of its complaint for lack of a jurisdictional amount that are relevant to the question at hand. In neither instance, however, were we confronted with the exact question before us today. Simpson involved a declaratory judgment action brought by an insurer. The first relevant theory supporting jurisdiction was that two separate insurance policies contained in the same instrument could be aggregated to obtain the jurisdictional amount. We rejected this theory by holding that where the insurer's liability was several and not joint, the coverage amounts may not be aggregated to reach the jurisdictional amount.

The second theory was that because defendant's compulsory counterclaim involved an amount in excess of the jurisdictional minimum, federal jurisdiction should be sustained. We recognized that some courts had found jurisdiction in such cases, but we ruled that in the case before us, since the defendant had opposed federal jurisdiction from the beginning and had only filed the compulsory counterclaim after the jurisdictional objection had been overruled, "grounds of equity and fairness" dictated that the counterclaimed amount ought not be used. Id. at 514-15. Thus, we did not rule that the original "matter in controversy," the insurer's claim, could not be valued from the perspective of the defendant; that question was not before us.

In City of Milwaukee v. Saxbe, 546 F.2d 693 (7th Cir. 1976), this court engaged in its only extended discussion of the instant matter. Federal court jurisdiction was asserted on three bases: 28 U.S.C. §§ 1361, 1331, and 1343(4). We first discussed the assertion of section 1361 jurisdiction, finding that since no clear duty was involved, mandamus jurisdiction would not lie. We then proceeded to discuss the existence of section 1331 jurisdiction, with particular regard to the presence of the requisite amount in controversy. We noted that the constitutional claim involved—the right to be free from selective and discriminatory prosecution—was "difficult to price for jurisdictional purposes." Id. at 701. We then observed that an alternative approach was available, that being the either viewpoint test articulated in Ronzio, supra. We stated that "on balance" it was preferable to adhere to the plaintiff viewpoint rule, at least in civil rights suits against federal officers. Id. at 702. This comment, however, became dicta when we affirmed the district court's assertion of jurisdiction on the basis of section 1343(4).

Whatever the merits may be of following the plaintiff viewpoint rule in civil rights actions against government officials, we decline to follow the Saxbe dicta in this removed diversity case. As has already been pointed out "[s]ince the jurisdictional amount prerequisite was enacted primarily to measure substantiality of the suit, the question of whether the controversity is substantial should not be answered unqualifiedly by looking only to the value of that which the plaintiff stands to gain or lose." 1 Moore's Federal Practice ¶ 0.91[1], p. 846 (1978). In the instant case, the defendant Amoco has shown by an unchallenged affidavit that the pecuniary result to it which the judgment prayed for would directly generate would exceed the jurisdictional amount. We believe that the interests of equity and fairness, as well as the purposes behind the removal statute, would here be well served by allowing the plaintiff's claim to be evaluated for jurisdictional purposes by applying the either viewpoint rule. Accordingly, we hold that removal was proper and that the district court had jurisdiction to hear this case.

Having disposed of the jurisdictional issue, we reach the merits of the case. In their motion and accompanying briefs urging the Vigo Superior Court to set aside its

May 26 order of condemnation, the McCartys brought before that court the same theory and facts of allegedly private use as they now urge in the instant action. The state court decided the motion against them, and they took no appeal therefrom. Under the doctrine of res judicata, the judgment of the Vigo Superior Court is binding on the parties in this case. Jordan v. Sisson, 82 Ind.App. 128, 141 N.E. 881 (1924), cited with approval in Town of Flora v. Indiana Service Corp., 222 Ind. 253, 256-57, 53 N.E.2d 161 (1944). Accordingly, the judgment of the district court granting defendant Amoco's motion for summary judgment is affirmed.

[1] The Honorable John F. Grady, United States District Judge for the Northern District of Illinois, Eastern Division, sitting by designation.

[2] We are informed that the amount of this appraisal award is under appeal by the McCartys, which fact calls into question the weight to be afforded the $1,625.00 award for purposes of determining jurisdiction. Because of our disposition of this issue, however, we need do no more than note the fact of the McCartys' appeal at this point.

[3] See, e. g., Kheel v. Port of New York Authority, 457 F.2d 46 (2d Cir.), cert. denied, 409 U.S. 983, 93 S.Ct. 324, 34 L.Ed.2d 248 (1972); Massachusetts State Pharmaceutical Ass'n v. Federal Prescription Service, 431 F.2d 130 (8th Cir. 1970); Alfonso v. Hillsborough County Aviation Authority, 308 F.2d 724 (5th Cir. 1962).

[4] See, e. g., Family Motor Inn, Inc. v. L-K Enterprises Div., Consolidated Foods Corp., 369 F.Supp. 766 (D.Ky. 1973). See also Hatridge v. Aetna Casualty & Surety Co., 415 F.2d 809, 815 (8th Cir. 1969) (dictum) (Blackmun, J.).

[5] See, e. g., Committee for G.I. Rights v. Callaway, 171 U.S.App.D.C. 73, 518 F.2d 466 (1975); Government Employees Ins. Co. v. Lally, 327 F.2d 568 (4th Cir. 1964); Ronzio v. Denver & R.G.W.R. Co., 116 F.2d 604 (10th Cir. 1940). See also Commonwealth of Massachusetts v. United States Veterans Administration, 541 F.2d 119, 122 n. 3 (1st Cir. 1976); Williams v. Kleppe, 539 F.2d 803, 804-05 n. 1 (1st Cir. 1976).

[6] The District of Columbia Circuit has noted that the Supreme Court's willingness to entertain the taxpayers' appeal in Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), also may be indicative of the Court's view that the defendant's viewpoint may be used to establish the jurisdictional amount in certain cases. Tatum v. Laird, 144 U.S.App. D.C. 72, 76 n. 6, 444 F.2d 947, 951 n. 6 (1971), rev'd on other grounds, 408 U.S. 1, 92 S.Ct. 2318, 33 L.Ed.2d 154 (1972). The Court in Flast, without mentioning any monetary value of the taxpayer's claim, noted that "the challenged program involves a substantial expenditure of federal tax funds." 392 U.S. at 103, 88 S.Ct. at 1954.

[7] A variety of district court cases within this circuit, however, have discussed the issue. Most of these favor the plaintiff viewpoint rule. See Lakeside Mercy Hospital, Inc. v. Indiana State Bd. of Health, 421 F.Supp. 193 (N.D.Ind.), aff'd mem., 547 F.2d 1170 (7th Cir. 1976); Miller-Bradford & Risberg, Inc. v. FMC Corp., 414 F.Supp. 1147 (E.D.Wis.1976); State ex rel. Bruce v. Larkin, 346 F.Supp. 1065 (E.D.Wis.1972); State Committee to Stop Sanguine v. Laird, 317 F.Supp. 664 (W.D.Wis.1970); Butterman v. Walston & Co., 308 F.Supp. 534 (E.D.Wis.1970). Indeed, one court went so far as to claim that "[a]lthough the value to the defendant of avoiding interference with his activities may exceed the jurisdictional amount, the test, at least in the Seventh Circuit, is measured from the plaintiff's viewpoint." State ex rel. Bruce v. Larkin, supraat 1067.

Some district court decisions, however, have favored the either viewpoint rule. See Armstrong v. Townsend, 8 F.Supp. 953 (S.D.Ind. 1934). See also National Lock Co. v. Chicago Regional Labor Bd., 8 F.Supp. 820 (N.D.Ill. 1934). And there is even some dicta to support the "burden of proving jurisdiction" viewpoint rule. See Barton Chemical Corp. v. Avis Rent-A-Car System, Inc., 402 F.Supp. 1105 (N.D.Ill. 1975) (dictum).

Before the Court is the plaintiff's motion to remand. For the reasons that follow, the plaintiff's motion is GRANTED.

Angela Ochoa was injured while riding in a Ford Explorer that was rear-ended by Paul Gulley, who was driving a Budget rental car. The accident happened on February 2, 2006 in New Orleans. Ms. Ochoa, a Louisiana citizen, sued Paul Gulley, Budget Rent A Car System, Inc., and PV Holding Corporation (the title holder of Budget rental cars) in state court on October 5, 2006. Budget and PV Holding were served on October 31, 2006. They removed the suit to this Court on November 30, 2006, invoking the Court's diversity jurisdiction. Paul Gulley was served on December 21, 2006.

The plaintiff now moves to remand, contending that the Court lacks subject matter jurisdiction. Budget is a citizen of Delaware. Before his apartment was destroyed by Hurricane Katrina on August 29, 2005, Paul Gulley had lived in Orleans Parish, Louisiana. He evacuated to Arlington, Texas, where he has been living since the storm. The issue before the Court is the evacuee Paul Gulley's domicile at the time the state court petition was filed.

Although the plaintiffs challenge removal in this case, the removing defendants carry the burden of showing the propriety of this Court's removal jurisdiction. See Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir.), cert. denied, 510 U.S. 868, 114 S. Ct. 192, 126 L.Ed.2d 150 (1993); Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988). In addition, any ambiguities are construed against removal, Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir. 1979), as the removal statute should be strictly construed in favor of remand. York v. Horizon Fed. Sav. and Loan Ass'n, 712 F. Supp. 85, 87 (E.D. La. 1989); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941).

Budget and PV Holding removed this case on the basis of diversity jurisdiction. The plaintiff initially contends that Paul Gulley's failure to consent to the removal renders removal procedurally defective. Alternatively, the plaintiff contends that the Court lacks subject matter jurisdiction because Paul Gulley was a Louisiana domiciliary at the time the complaint and removal petition were filed.

The Court agrees that it lacks subject matter jurisdiction, but first addresses the plaintiff's procedural defect ground for remand.

A defect in the procedure for removal, if timely asserted, may be grounds for remand. 28 U.S.C. § 1447(c) (providing 30-day window for challenges to procedural defects in removal); Caterpillar, Inc. v. Lewis, 519 U.S. 61, (1996). The "rule of unanimity" requires that, absent exceptional circumstances, all served defendants must join or otherwise file a written notice of consent to removal before the expiration of the 30-day removal period in 28 U.S.C. § 1446. Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d 1254, 1261-62 (5th Cir. 1988) (holding that all served defendants are required to join in petition for removal no later than 30 days from the date on which the first defendant was served); Gillis v. Louisiana, 294 F.3d 755, 759 (5th Cir. 2002).^[1] In other words, "[d]efendants (at least those not citizens of the forum state) who are unserved when the removal petition is filed need not join in it." Getty Oil Corp. v. Ins. Co. of North America, 841 F.2d at 1262 n.9 (5th Cir. 1988) (citing Pullman Co. v. Jenkins, 305 U.S. 534 (1939)). It is undisputed that Paul Gulley had not been served at the time the served defendants filed their notice of removal. His consent was not required.^[2]

To exercise diversity jurisdiction, complete diversity must exist between the plaintiffs and all of the properly joined defendants, and the amount in controversy must exceed $75,000. See 28 U.S.C. § 1332.

By providing that the judicial power of the United States shall extend to controversies "between Citizens of Different States," Article III, §2 of the United States Constitution vests diversity jurisdiction in federal courts. For a court to have subject matter jurisdiction over a case based upon 28 U.S.C. § 1332, complete diversity must exist between the plaintiff and the defendant (no plaintiff may be a citizen of the same state as any defendant). Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806); Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555 (5th Cir. 1985); Mas v. Perry, 489 F.2d 1396, 1398-00 (5th Cir. 1974), cert. denied, 419 U.S. 842 (1974). The determination of state citizenship for diversity purposes is a matter of federal common law and is not determined by state law. Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974); Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996). Diversity of citizenship must be present at the time the complaint is filed; therefore, the Court examines a litigant's domicile at the time when the complaint was filed. Mas, 489 F.2d at 1399.

The citizenship of an individual is synonymous with his domicile. Freeman, 754 F.2d at 555. The United States Supreme Court defined domicile as "residence at a particular place accompanied with positive or presumptive proof of an intention to remain there for an unlimited time." Mitchell v. United States, 88 U.S. (21 Wall.) 350, 352, 22 L.Ed. 584 (1874). The Fifth Circuit has refined the definition: "A person's domicile is the place of his `true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom.'" Mas, 489 F.2d at 1399 (quoting Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954)). There is no minimum period of residence required, but the intent to remain at the particular place for an unlimited or indefinite period of time is required. Freeman, 754 F.2d at 555.

The law of domicile is a mixed question of law and fact. Welch v. American Surety Co.. 186 F.2d 16 (5th Cir. 1951); Knapp v. State Farm Ins., 584 F. Supp. 905, 906 (E.D. La. 1984); Whitney Nat'l Bank v. Chatelain, 1991 WL 213917 (E.D. La. 1991). The party invoking federal jurisdiction has the burden of pleading the diverse citizenship, and if diversity jurisdiction is properly challenged, that party also bears the burden of proof. Mas, 489 F.2d at 1399 (citations omitted).

In ascertaining domicile, the Court is not limited to the pleadings; rather, it may review record evidence, affidavits, and testimony concerning facts underlying the citizenship of the parties. Coury v. Prot, 85 F.3d 244, 249 (5th Cir. 1996). While relevant to the determination of domicile, a statement of intent is "entitled to little weight if it conflicts with objective facts." Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 556 (5th Cir. 1985).

In determining one's domicile, the Court should address a variety of factors, none of which is itself determinative. Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996). In fact, "[t]he court should look to all evidence shedding light on the litigant's intention to establish domicile." Id. The actual fact of residence and the real intention of remaining there, as disclosed by a person's entire course of conduct, are the controlling factors. See Freeman, 754 F.2d at 555-56.^[3]

Federal subject matter jurisdiction here turns on where was Gulley's domicile on October 5, 2006 when this lawsuit was filed. The defendants have the burden of showing that removal was proper; thus, they must show that Gulley was a Texas domiciliary at the time the plaintiff filed her complaint. The Court finds that the defendants have not carried their burden.

The parties agreed to limited discovery relating to the issue of Gulley's domicile and he was deposed in December 2006. Gulley testified that he was born in New Orleans and lived there until Hurricane Katrina. Though he was living in Texas, he was "visiting family" in New Orleans when the car accident giving rise to this lawsuit happened in February 2006.

The plaintiff characterizes Gulley as being domiciled in Louisiana in February 2006 when the accident happened and months later when she filed this lawsuit. She points to Gulley's Louisiana driver's license, which he presented at the time of the accident, and the fact that he did not have permanent employment in Texas until shortly before his deposition.

The defendants characterize Gulley as being domiciled in Texas, pointing to his deposition testimony that he has resided in Texas since he evacuated there shortly after the storm, does not presently intend to live in Louisiana, and recently got a job in Texas.

The Court notes that the record provides few objective facts concerning Gulley's domicile in October 2006; indeed, the record consists only of Gulley's deposition testimony, which is attached (albeit unauthenticated) to the defendants' opposition to the plaintiff's motion to remand. Accordingly, the defendants have not addressed many of the objective facts that typically aid the Court in ascertaining domicile, e.g., the places where the litigant exercises civil and political rights, pays taxes, owns real and personal property, has his drivers and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his family. See Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996) (citations omitted).

The record shows that Gulley works and resides in Texas. The defendants do not dispute that Gulley has a Louisiana driver's license. He has lived in New Orleans all of his life until he was forced to leave because Hurricane Katrina destroyed his home; he has family in New Orleans. He was in New Orleans at the time of the accident, though the record does not show the duration of his stay or how often he travels between Texas and Louisiana, nor when he developed his present intention to stay in Texas "indefinitely."

Gulley's recent employment in Texas and his subjective statement that he does not presently intend to live in New Orleans fall short of establishing that his domicile several months ago — at the time the complaint was filed — was Texas and not Louisiana. There is little objective evidence to corroborate his subjective present statement of intent. The defendants bear the burden of showing diverse citizenship because they are attempting to invoke this Court's subject matter jurisdiction. They have failed to carry that burden to show that Gulley was a citizen of Texas at the time the complaint was filed; thus, the Court lacks removal jurisdiction based on diversity of citizenship.

Accordingly, the plaintiff's motion to remand is GRANTED. The case is hereby remanded to the Civil District Court for the Parish of Orleans.

[1] "It is well settled in the Fifth Circuit that all defendants who have been served before removal must consent to removal within 30 days after service on the first defendant." Forman v. Equifax Credit Info. Services, Inc., 1997 WL 162008, at *1 (E.D. La. April 4, 1997) (Clement, J.) (citing Doe v. Kerwood, 969 F.2d 165, 167 (5 Cir. 1992) and Getty Oil Corp. v. Ins. Co.th of North America, 841 F.2d 1254, 1263 (5th Cir. 1988)).

[2] To the extent the plaintiff is contending that removal is defective because Gulley is in fact a Louisiana citizen and not a citizen of Texas, these contentions are addressed in the Court's analysis of whether the parties are completely diverse.

[3] Some factors the Court may examine include the places where the litigant exercises civil and political rights, pays taxes, owns real and personal property, has his drivers and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his family. Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996) (citations omitted).