involve a constitutional issue. Moore, Federal Practice para. 0.60[8.-3].
The plaintiff's reliance on Lancaster v. Kathleen Oil Company, 241 U.S. 551, 36 S. Ct. 711, 60 L. Ed. 1161 (1916) is misplaced. In this case, the plaintiff claimed that the defendant's oil and gas mining lease was void and that it was entitled to possession because of a prior lease. The court distinguished it from Taylor, supra, on the ground that it was not only an action in ejectment but also an action for a perpetual injunction to restrain defendant from asserting any rights under its lease. Such relief involved the interpretation of certain acts of Congress and the authority of the Secretary of the Interior to grant approval of the defendant's lease.
Finally, the plaintiffs ask us to pierce the corporate veil by disregarding the separate existence of Colonial of Pennsylvania. They argue that it is merely a "dummy subsidiary" or "alter ego" of the present defendant. Without Colonial of Pennsylvania as a recognized party, this court would have power to adjudicate the controversy because complete diversity would still exist. See Indianapolis v. Chase National Bank, 314 U.S. 63, 62 S. Ct. 15, 86 L. Ed. 47 (1941); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L. Ed. 435 (1806).
While the plaintiffs have cited no cases to us and our research has disclosed none where the courts have overlooked the separate identity of a wholly owned subsidiary in order to avoid being ousted of its diversity jurisdiction where that party is indispensable or needed for a full and just adjudication of the controversy, the Supreme Court has on several occasions considered the issue of the creation of a corporation specifically for the purpose of creating diversity. In Miller & Lux, Inc. v. East Side Canal & Irrigation Co., 211 U.S. 293, 29 S. Ct. 111, 53 L. Ed. 189 (1908), the stockholders of a California corporation created a Nevada corporation and transferred its property to the latter without dissolving the former. The California concern owned the Nevada corporation completely and had full control over its operations. The subsidiary then sued another California corporation in the federal court in that state on the basis of diversity of citizenship. The Court found that the creation of the Nevada corporation was a mere sham for the sole purpose of creating federal jurisdiction and that its corporate creator could have compelled it to dismiss the suit and reconvey the property. While the mere acquisition of citizenship in a state to create diversity was not sufficient to defeat jurisdiction, it held that jurisdiction did not exist here because "the Nevada corporation was organized and collusively made plaintiff in the suit in the Federal court simply for the purpose of creating a case cognizable by that court." Miller & Lux, Inc. v. East Side Canal & Irrigation Co., supra at 306, 29 S. Ct. at 115. See also Southern Realty Investment Co. v. Walker, 211 U.S. 603, 29 S. Ct. 211, 53 L. Ed. 346 (1909); Lehigh Mining & Manufacturing Co. v. Kelly, 160 U.S. 327, 16 S. Ct. 307, 40 L. Ed. 444 (1895).
The Supreme Court has also held that the mere dissolution of a corporation and its incorporation in another state to create diversity of citizenship will not oust the federal courts of jurisdiction. Black and White Taxicab and Transfer Co. v. Brown and Yellow Taxicab and Transfer Co., 276 U.S. 518, 48 S. Ct. 404, 72 L. Ed. 681 (1928). There the Court stated, "The motives which induced the creation of respondent to become successor to its Kentucky grantor and take a transfer of its property have no influence on the validity of the transactions which are the subject of the suit. The succession and transfer were actual, not feigned or merely colorable. In these circumstances, courts will not inquire into motives when deciding concerning their jurisdiction." Black and White Taxicab and Transfer Co. v. Brown and Yellow Taxicab and Transfer Co., supra at 524, 48 S. Ct. at 405.
In these cases, the Supreme Court has not seen the issue as one of piercing the corporate veil but rather as one of a collusively made party under the federal statute which specifically proscribes this court's jurisdiction under such circumstances. See 28 U.S.C. § 1359.
In the instant action, we do not have the situation where a party is attempting to come into federal court through manipulation of corporate identity. The plaintiffs want us to disregard a corporation so that we may be able to adjudicate the controversy. There is no statute analogous to 28 U.S.C. § 1359 which requires us to retain jurisdiction where a party creates a corporation "collusively or improperly" so as to avoid the federal courts. In fact, on several occasions, the Supreme Court has held that the calculated action of a party to avoid the federal court will not give us jurisdiction where it would otherwise exist. Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S. Ct. 84, 76 L. Ed. 233 (1930); Provident Savings Life Assurance Society v. Ford, 114 U.S. 635, 5 S. Ct. 1104, 29 L. Ed. 261 (1885).
The Congress has also expressly narrowed our diversity power by providing that a corporation shall be deemed a citizen not only of its state of incorporation but also of the state where its principal place of business is located. 28 U.S.C. § 1332(c); Lawson v. United House of Prayer, 252 F. Supp. 52 (E.D.Pa.1966). If a corporation happens to be incorporated in more than one state, it is a citizen of each, thus further restricting the number of federal courts in which suit can be instituted on the basis of diversity. Lawson v. United House of Prayer, supra; Stroup v. Pittsburgh & Lake Erie R. Co., 186 F. Supp. 154 (N.D.Ohio 1960); Moore, Federal Practice para. 0.78; 1 Barron & Holtzoff, Federal Practice & Procedure § 26 fns. 93.1-93.4.
Even assuming without deciding that we could disregard the corporate existence of a subsidiary completely controlled by a parent corporation so that we might obtain jurisdiction of the controversy, we shall not do so under the circumstances of this case in light of Congressional policy and the decisions of the Supreme Court. Moreover, there is no suggestion that the parent is using the subsidiary to shield or perpetrate fraud or wrongdoing.
See Steven v. Roscoe Turner Aeronautical Corp., 324 F.2d 157, 7 A.L.R.3d 1332 (7th Cir. 1963)); Whayne v. Transportation Management Service, Inc., 252 F. Supp. 573 (E.D.Pa.1966); American Anthracite & Bituminous Coal Corp., 131 F. Supp. 244 (E.D.Pa.1955); 1 Fletcher, Cyclopedia Corporation §§ 41-41.3.
The cases cited by the plaintiff are inapposite. Cahokia Sportservice, Inc., v. Cahokia Downs, Inc. 165 F. Supp. 686 (E.D.Ill.1958), was an action by an Illinois corporation for a declaratory judgment to construe a lease. The defendant, a Delaware Corporation, contended that diversity was lacking because its wholly owned subsidiary, an Illinois corporation, was the real party in interest. The court found that the assignment of the lease to the subsidiary was not complete and that the defendant was still the real party in interest. It did not disregard the separate corporate existence of the subsidiary.
Chicago, M. & St. P. Ry. v. Minneapolis Civic and Commerce Ass'n, 247 U.S. 490, 38 S. Ct. 553, 62 L. Ed. 1229 (1918), cited by the plaintiffs, dealt with the decision of the Minnesota Railroad and Warehouse Commission involving rate discrimination by two railroads through their wholly owned subsidiary which had title to certain property. The court did not disregard the subsidiary as a party or separate entity. It simply affirmed the Minnesota court's decision that the subsidiary should not be recognized as an independent common carrier for rate making purposes. It had nothing to do with the question of whether the subsidiary should be ignored for jurisdictional purposes.
Colonial of Pennsylvania is an indispensable party, and this litigation cannot be fully and justly adjudicated under Rule 19 without its joinder. Since jurisdiction cannot be predicated on a federal question, the joinder of Colonial of Pennsylvania will destroy diversity of citizenship. We must therefore dismiss the complaint under Rule 12(b)(7).