United States Court of Appeals,
Fifth Circuit.
No. 94-10809.
Michael ELLIOTT and Vivian Elliott, Plaintiffs-Appellees,
v.
Robert TILTON, etc., Marte Tilton, etc., Word of Faith World
Outreach Center, Inc., and Word of Faith World Outreach Center
Church, etc., Defendants-Appellants.
Aug. 31, 1995.
Appeal from the United States District Court for the Northern
District of Texas.
Before HIGGINBOTHAM, and PARKER, Circuit Judges, and McBRYDE*,
District Judge.
ROBERT M. PARKER, Circuit Judge:
The plaintiffs brought this action in federal district court,
under its diversity jurisdiction, claiming damages for fraud,
breach of contract, intentional infliction of emotional distress,
and conspiracy. The plaintiffs were awarded 1.5 million in damages
after a jury trial, and the defendants appealed. For the first
time on appeal, one defendant, Marte Tilton, contended that the
district court lacked subject matter jurisdiction to entertain the
plaintiffs' claims. The other defendants adopted this argument.
Since we find that the plaintiffs did not meet their burden of
establishing complete diversity, the only basis for federal
jurisdiction, we vacate the judgment of the district court and
order the plaintiffs' claims dismissed.
*
District Judge of the Northern District of Texas, sitting
by designation.
1
I. FACTS
The defendants, Robert and Marte Tilton, are co-founders of
the Word of Faith World Outreach Center, which, among other things,
serves as the organization behind Robert Tilton's television
ministry. Prior to March 1992, Word of Faith operated as a Texas
non-profit corporation. In order to avoid disclosure of its
membership list to the Texas Attorney General, on March 30, 1992,
the non-profit corporation, Word of Faith World Outreach Center,
Inc., was dissolved. The Tiltons continued their ministry through
Word of Faith World Outreach Center Church, an unincorporated
religious association.
The plaintiffs, Mike and Vivian Elliott, live in Florida.
Vivian Elliott has suffered periodically from depression as a
result of alleged childhood abuse. In 1990, Mrs. Elliott attended
a cook-out at her parents' home, after which she went home and
wrote a "good-bye" note to her husband and children, and drove to
a wooded area where she contemplated taking her own life. While
sitting in her car talking to God about her family problems, Mrs.
Elliott felt that God responded and told her to go home to her
husband and children. The next morning as she was watching
television, Mrs. Elliott saw Robert Tilton on his Success N'Life
program. During this program, Mr. Tilton said that someone who was
watching was depressed and instructed this unidentified person to
call the Word of Faith prayer line. Mrs. Elliott felt as though
Robert Tilton was speaking directly to her, and that God had sent
him to reinforce God's message of the night before.
2
Mrs. Elliott did call Tilton's prayer line. In addition to
making a monetary vow, Mrs. Elliott was eventually persuaded to
make a video testimonial for use on Robert Tilton's television
program. Although Tilton's representatives later denied any such
representation, Mrs. Elliott testified that she was told that any
money generated by the use of her testimonial would be used to set
up a crisis center to help people who had suffered the same kind of
abuse she had. In addition, prior to filming, the Elliott's were
told that Word of Faith would stop showing the testimonial anytime
they asked. When Mrs. Elliott finally saw the edited testimonial
she became very upset because of certain dramatic recreations meant
to depict the type of abuse she suffered as a child. Despite her
calls and letters to Word of Faith asking that the testimonial not
be shown, Mrs. Elliott received no timely response, and Word of
Faith continued to use the testimonial.
The Elliotts filed this action in federal district court on
November 13, 1993, seeking damages for fraud, breach of contract,
intentional infliction of emotional distress, and conspiracy. The
case was tried before a jury, and on April 21, 1994, the jury
returned a verdict in favor of the plaintiffs on all claims in a
total amount of 1.5 million dollars. The district court
subsequently granted defendants' motion for judgment as a matter of
law with regard to plaintiffs' breach of contract claim, but
allowed the remainder of the verdict to stand. Final judgment was
entered on July 29, 1994. The defendants timely filed this appeal.
II. FEDERAL JURISDICTION
3
On appeal, defendant-appellant Marte Tilton contends that the
district court did not have subject matter jurisdiction because the
plaintiffs failed to establish complete diversity.1 Although this
argument was not presented in the district court, "[t]he right to
challenge [subject matter] jurisdiction cannot be waived."2
Federal courts are not courts of general jurisdiction; they
have only the power that is authorized by Article III of the
Constitution and the statutes enacted by Congress pursuant
thereto. For that reason, every federal appellate court has
a special obligation to "satisfy itself not only of its own
jurisdiction, but also that of the lower courts in a cause
under review,"....3
In addition, it is presumed that a cause lies outside the limited
jurisdiction authorized by Constitution and statute, "and the
burden of establishing the contrary rests upon the party asserting
jurisdiction[.]"4 When we find that the lower federal court lacked
jurisdiction, "we have jurisdiction on appeal, not of the merits
but merely for the purpose of correcting the error of the lower
court in entertaining the suit."5
1
The other appellants adopted this argument in their reply
brief to this Court.
2
Taylor-Callahan-Coleman Counties District Adult Probation
Department v. Dole, 948 F.2d 953, 956 (5th Cir.1991).
3
Bender v. Williamsport Area School Dist., 475 U.S. 534,
541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501 (1986) (citations
omitted).
4
Kokkonen v. Guardian Life Ins. Co. of America, --- U.S. ---
-, ----, 114 S.Ct. 1673, 1675, 128 L.Ed.2d 391 (1994) (citations
omitted); see also Stafford v. Mobil Oil Corp., 945 F.2d 803,
804 (5th Cir.1991) ("The burden of proving that complete
diversity exists rests upon the party who seeks to invoke the
court's diversity jurisdiction.").
5
Bender, 475 U.S. at 541, 106 S.Ct. at 1331 (quoting United
States v. Corrick, 298 U.S. 435, 440, 56 S.Ct. 829, 831, 80 L.Ed.
4
The plaintiffs, the Elliotts, stated in their complaint that
federal jurisdiction was based on diversity of citizenship.6 The
plaintiffs alleged that they were residents and citizens of the
State of Florida, that the defendants Robert and Marte Tilton were
citizens of the State of Texas, and that Word of Faith World
Outreach Center Church was an unincorporated religious association,
and the successor to Word of Faith World Outreach Center, Inc.,
with its principal place of business located within the state of
Texas.7
The record clearly establishes diversity between the
plaintiffs and the defendants Robert and Marte Tilton. However,
"[i]n order for a federal court to assert diversity jurisdiction,
diversity must be complete; the citizenship of all of the
plaintiffs must be different from the citizenship of all of the
defendants."8 Thus, we must be concerned also with the citizenship
of defendant Word of Faith World Outreach Center Church.
Rule 8(a)(1) of the Federal Rules of Civil Procedure requires
1263 (1936)).
6
28 U.S.C. § 1332(a)(1) provides that the district courts
shall have original jurisdiction of civil actions between
citizens of different states.
7
The plaintiffs also named as a defendant Word of Faith
World Outreach Center, Inc., a Texas non-profit corporation, but
acknowledged that at the time of the filing of the complaint it
had been dissolved. Since diversity of citizenship is determined
at the time the action is filed, Freeport-McMoran, Inc. v. K N
Energy, Inc., 498 U.S. 426, 428, 111 S.Ct. 858, 860, 112 L.Ed.2d
951 (1991), Word of Faith's previous corporate status is
irrelevant to our determination.
8
Stafford, 945 F.2d at 804.
5
a pleading which sets forth a claim to contain "a short and plain
statement of the grounds upon which the court's jurisdiction
depends...."9 Even though this rule does not require citation of
a particular statute by name,10 it is generally agreed that "[w]hen
jurisdiction depends on citizenship, citizenship should be
"distinctly and affirmatively alleged.' "11 This burden rests with
the plaintiff as the party invoking the court's jurisdiction,12 and
"[f]ailure adequately to allege the basis for diversity
jurisdiction mandates dismissal."13 Plaintiffs contend that their
allegations of diversity are sufficient. We disagree.
We start with the well-settled principle that an
unincorporated association, religious or otherwise, must be
considered a citizen of every state in which its members reside.14
9
FED.R.CIV.P. 8(a)(1).
10
Illinois Central Gulf Railroad Co. v. Pargas, Inc., 706
F.2d 633, 636 (5th Cir.1983).
11
Stafford, 945 F.2d at 804 (quoting McGovern v. American
Airlines, Inc., 511 F.2d 653, 654 (5th Cir.1975) (quoting 2A
Moore's Federal Practice 8.10 at 1662)); Illinois Central
Railroad v. Pargas, Inc., 706 F.2d at 636 & n. 2; Toms v.
Country Quality Meats, Inc., 610 F.2d 313, 316 (5th Cir.1980).
12
Harvey Constr. Co. v. Robertson-Ceco Corp., 10 F.3d 300,
303 (5th Cir.1994) (citing Green v. Hale, 433 F.2d 324, 329 (5th
Cir.1970)). The plaintiffs argue "The Defendant herein has
failed to direct this Court to anything within the lower court
record on appeal which would show a lack of jurisdiction in this
matter...." The plaintiffs' attempt to shift the jurisdictional
burden in this case is unsupported and unpersuasive.
13
Stafford, 945 F.2d at 804-05 (citing Patterson v.
Patterson, 808 F.2d 357, 357 (5th Cir.1986); McGovern, 511 F.2d
at 654).
14
United Steelworkers of America v. R.H. Bouligny, Inc., 382
U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965); Hummel v.
6
As a widespread and diffuse television ministry, or "church", Word
of Faith World Outreach Center must be considered an unincorporated
association for purposes of diversity, as plaintiffs alleged.
Although apparently realizing that Word of Faith fell into this
category, the Plaintiffs only alleged that its principal place of
business was in the State of Texas. This allegation would have
been relevant to the determination of the citizenship of a
corporate entity, but is completely irrelevant with regard to the
citizenship of an unincorporated association, such as Word of
Faith.
The plaintiffs also presented a stipulation, by way of a joint
pre-trial order, that Word of Faith was "an unincorporated
religious association located in Farmers Branch, Texas." This
stipulation must also be deemed insufficient because it does not
address the citizenship of the defendant association and "can be
construed as being purely "location descriptive' in the geographic
sense."15 The basis of our jurisdiction "cannot "be established
Townsend, 883 F.2d 367, 369 (5th Cir.1989); see also C.T. Carden
v. Arkoma Associates, 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d
157 (1990) (holding that citizenship of a limited partnership for
diversity purposes depends on the citizenship of "all the
members," including limited partners).
15
Muscle Shoals Assoc., Ltd. v. MHF Ins. Agency, Inc., 792
F.Supp. 1224, 1227 (N.D.Ala.1992) (holding that allegation that
defendant was a "Florida Corporation" was not sufficient
allegation of state of incorporation); see also Nadler v.
American Motors Sales Corp., 764 F.2d 409, 413 (5th Cir.1985)
(holding that allegation that parties were "residents" of
particular states does not satisfy the requirement of Rule
8(a)(1) where diverse "citizenship" was required for
jurisdiction); Strain v. Harrelson Rubber Co., 742 F.2d 888, 889
(5th Cir.1984) (same); Kerney v. Fort Griffin Fandangle Ass'n,
Inc., 624 F.2d 717 (5th Cir.1980) (same).
7
argumentatively or by mere inference.' "16 Such a stipulation could
refer merely to the location of the church's headquarters or
facilities and thus cannot serve to establish citizenship for
purposes of jurisdiction.
To distinctly and affirmatively allege Word of Faith's
citizenship, plaintiffs should have included in their complaint
allegations regarding the specific states in which Word of Faith's
members resided. Such specific allegations are necessary to allow
a court to determine whether complete diversity of citizenship
exists. The plaintiffs' complaint contained no such allegations,17
and plaintiffs point to no evidence in the record that would allow
them to establish the necessary jurisdictional facts.
The defendants adopt an expansive view of the "membership" of
Word of Faith. In essence, the defendants seem to take the
position that the church's membership consists of everyone the
church wishes to so designate, including contributors to their
television ministry and people who merely listen to their
broadcasts. While the defendants' position in this regard raises
some interesting questions, it is not necessary for us to resolve
or even reach them. On the record before us, we must hold that
plaintiffs failed to meet their burden of alleging and establishing
16
Illinois Central Gulf Railroad Co. v. Pargas, Inc., 706
F.2d 633, 636 (5th Cir.1983) (citing 5 C. Wright & A. Miller
Federal Practice and Procedure § 1206, at 78-79 (1969 &
Supp.1983)).
17
We note that plaintiffs have not moved to amend their
"[d]efective allegations of jurisdiction" as they could have even
on appeal pursuant to 28 U.S.C. § 1653.
8
complete diversity.
III. CONCLUSION
We are troubled by the obvious waste of resources that results
from dismissing the case at this juncture for want of jurisdiction.
However, because plaintiffs failed to plead or prove the complete
diversity on which they claimed to base jurisdiction, we have no
alternative. This type of jurisdictional defect ordinarily should
be discovered at an early management or status conference prior to
a substantial investment in case preparation. Unfortunately, it
was not caught when it should have been in this case. The time
required to establish the legal and factual basis for federal
jurisdiction is a worthwhile investment. More importantly, failing
to do so, as in this case, is costly. For the foregoing reasons,
the judgment of the district court must be VACATED for lack of
jurisdiction, and the plaintiffs' claims are DISMISSED without
prejudice.
9