Full Opinion (html_with_citations)

Case: 23-20292       Document: 128-1         Page: 1   Date Filed: 09/09/2024




        United States Court of Appeals
             for the Fifth Circuit                                 United States Court of Appeals
                              ____________                                  Fifth Circuit

                                                                          FILED
                               No. 23-20292                       September 9, 2024
                              ____________                           Lyle W. Cayce
                                                                          Clerk
J.A. Masters Investments; K.G. Investments,

                                                        Plaintiffs—Appellants,

                                    versus

Eduardo Beltramini,

                                         Defendant—Appellee.
               ______________________________

               Appeal from the United States District Court
                   for the Southern District of Texas
                        USDC No. 4:20-CV-4367
               ______________________________

Before Haynes, Willett, and Oldham, Circuit Judges.
Per Curiam:
       This appeal comes to us following a five-day jury trial. Plaintiffs J.A.
Masters Investments and K.G. Investments raise a multitude of issues, all of
which arise from state-law claims of fraud and breach of contract. The parties
fully litigated the case on the jurisdictional premise, accepted by the capable
district court, that the action was between “citizens of different States”
under
28 U.S.C. § 1332
(a)(1).
       After the parties submitted their briefing in this court, however, it
became apparent upon further review that the record failed to definitively
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                                  No. 23-20292


establish diversity jurisdiction. While the underlying pleadings mentioned
the residence of each party, they did not specifically identify the citizenship of
each party—a common yet unfortunate mistake when invoking a federal
court’s diversity jurisdiction. See, e.g., MidCap Media Fin., LLC v. Pathway
Data, Inc.,
929 F.3d 310, 313
 (5th Cir. 2019). As we have observed before,
“an allegation of residency alone does not satisfy the requirement of an
allegation of citizenship.” Strain v. Harrelson Rubber Co.,
742 F.2d 888, 889
(5th Cir. 1984).
       Acting upon our jurisdictional concern, we requested that the parties
submit a joint letter addressing whether diversity jurisdiction existed in this
case and, if not, what the property remedy should be. The parties submitted
a joint letter, expectedly insisting that jurisdiction existed and citing various
cases in support of their position. And, for good measure, the parties
concluded their letter by purporting to “stipulate to any and all facts which
would confirm that the parties have complete diversity of citizenship.” But
see Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee,
456 U.S. 694, 702
(1982) (“[N]o action of the parties can confer subject-matter jurisdiction
upon a federal court. Thus, the consent of the parties is irrelevant . . . .”).
       What the letter did not contain, however, were any citations to the
record establishing the citizenship of each party. At most, the letter simply
confirmed that the parties have repeatedly conflated residency with
citizenship and have litigated this case on the understandable yet mistaken
belief that allegations of the former were sufficient to establish subject-matter
jurisdiction. See Robertson v. Cease,
97 U.S. 646, 648
 (1878) (“Citizenship and
residence, as often declared by this court, are not synonymous terms.”).
       Perhaps the failure to observe this technical—but important—
distinction was inadvertent, and the parties can indeed show that they are
citizens of different states and are completely diverse. Perhaps not. Given the




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                                       No. 23-20292


state of the record, and the clarification we sought but did not obtain, we
think a remand is appropriate for the limited purpose of allowing the parties
to supplement the record as necessary. See
28 U.S.C. § 1653
; see also Molett
v. Penrod Drilling Co.,
872 F.2d 1221, 1228
 (5th Cir. 1989) (“Where, as here,
jurisdiction is not clear from the record, but there is some reason to believe
that jurisdiction exists, the Court may remand the case to the district court
for amendment of the allegations and for the record to be supplemented.”).
Then, and only then, can we and the district court take proper cognizance of
this dispute.
                                         *    *    *
        In what we presume to be an effort to make it abundantly clear that
jurisdiction exists, the parties noted in their joint letter to us that they would
seek confirmation from the district court that they were in fact diverse. To
that end, they briefly returned to the district court on their own accord and
filed a so-called “Motion to Clarify Citizenship,” reiterating much of what
they asserted in their joint letter before this court. The district court then
“granted” the motion, finding that the parties were diverse. We take no
position on that finding, but given our reservations thus far articulated about
the record, along with the one-court-at-a-time rule, see United States v. Willis,
76 F.4th 467
, 471–72 (5th Cir. 2023), we are unconvinced of its legal
significance.
        By the same token, we respectfully disagree with the dissenting
opinion that the district court has already “settled the citizenship issue” * and


        *
          We also disagree, of course, with the notion that granting a motion to supplement
the record somehow implies that “we have already found the district court to have settled
the citizenship issue.” Post, at 5 (Haynes, J., dissenting). We do not couch significant
jurisdictional rulings in such oblique ways, and even we if did, our order granting the motion
would amount to nothing more than a “drive-by jurisdictional ruling” with no binding
effect. Steel Co. v. Citizens for a Better Envt.,
523 U.S. 83, 91
 (1998).




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that, alternatively, our jurisdictional concern could be obviated by allowing
the parties to simply amend their pleadings before this court. Post, at 5
(Haynes, J., dissenting). When, as here, a case has been tried to final
judgment, “mere allegations” of jurisdiction do not suffice. Lujan v. Defs. of
Wildlife,
504 U.S. 555, 561
 (1992). Instead, plaintiffs must demonstrate
jurisdiction “by affidavit or other evidence specific facts” establishing
jurisdiction, and “those facts (if controverted) must be supported adequately
by the evidence adduced at trial.”
Ibid.
 (internal quotation marks and citation
omitted). Thus, we cannot belatedly declare that jurisdiction exists on this
incomplete record. Given the procedural posture of this case, we must
instead hold the parties to their required evidentiary burden.
                                     * * *
       The parties and the distinguished district court have undoubtedly
poured much time and many resources into this case, and we can appreciate
how our strict observance of a technical point of jurisdiction will likely not
come as welcome news at this late stage in the litigation. But without full
assurance that this case falls within the strictures of our limited jurisdiction,
any resolution we would purport to provide would be a nonbinding advisory
opinion at best and an ultra vires act at worst. We decline to risk transgressing
our Article III power absent a sound basis in the record supporting the
exercise of federal jurisdiction.
       In the event the parties can, on remand, remedy the jurisdictional
defect we have identified here, we stand ready to resolve their dispute on the
merits. Accordingly, and with surpassing respect for the learned district
court, we REMAND this case for further proceedings consistent with this
opinion. This panel will retain jurisdiction pending any further appeal.




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                                  No. 23-20292


Haynes, Circuit Judge, dissenting:
       We raised this issue of diversity in this case by sending a letter
requiring some information. I disagree with the discussion of the letter and
the district court in the majority opinion because the effect of our letter was
that the parties took the issue to the district court, filing a joint motion
requesting a finding of diversity. The district court judge concluded that the
evidence was sufficient to declare the citizenship of the parties (the amount
in controversy is not part of the majority opinion’s concern). The district
court judge entered an order finding the citizenship of the Plaintiffs and
counter-defendants to be California and the defendants and counter-
plaintiffs to be Texas. Thereafter, the parties requested that we file the
district court’s order, and our court granted that request as follows: “IT IS
ORDERED that the unopposed motion to supplement the record on appeal
to include the July 10, 2024 district court order settling the citizenship of the
parties is GRANTED.”
       Thus, we have already found the district court to have settled the
citizenship issue, and I see no reason to remand. In my opinion, the
jurisdiction is sufficiently demonstrated. The majority opinion sets out the
notion that evidence was needed at trial, but its quote shows that it involves
“if controverted.” Lujan v. Defs. of Wildlife,
504 U.S. 555, 561
 (1992) (a case
addressing standing). Here, the parties agree on the citizenship of the
parties, so evidence at trial was not needed. Given that the district court has
already addressed the diversity, but the majority is concerned, the majority
could request that the parties amend in the appellate court pursuant to
28 U.S.C. § 1653
 (“Defective allegations of jurisdiction may be amended, upon
terms, in the trial or appellate courts.” (emphasis added)). However, I am not
seeking that. I think we should conclude diversity has been established. I
respectfully disagree with ordering a remand requiring the district court to
say it again.




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                              No. 23-20292


     Accordingly, I respectfully dissent from the majority opinion.




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