UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF PENNSYLVANIA
May 14, 1980
PACKAGE MACHINE COMPANY, REED-PRENTICE, JOINTLY & SEVERALLY
The opinion of the court was delivered by: TROUTMAN
MEMORANDUM AND ORDER
A plastic injection molding machine from which plaintiff tried to remove a foreign object amputated part of his right arm and caused shock, pain and disfigurement for which he now seeks damages. Plaintiff accuses defendants of negligently designing, manufacturing, distributing and selling the machine to his employer and breaching both express and implied warranties of safety, fitness and merchantability. Additionally, plaintiff charges that defendants conspired to allow the machine to be used by operators despite knowledge by defendants that the machine was unreasonably dangerous and to alter and destroy the machine following plaintiff's injuries to impede and preclude inspection by plaintiff's experts and attorney.
Defendants, now moving to strike the counts in the complaint alleging conspiracy, have represented that defendant Reed-Prentice has been a division of defendant Package Machinery Company (PMC) for approximately twenty-three years. Previously, defendants advise, Reed-Prentice functioned as a wholly-owned subsidiary of PMC. Plaintiff admits that both Reed-Prentice and PMC have an identical principal place of business.
Undoubtedly, a conspiracy requires at least two persons or corporate entities.
A corporation cannot conspire with itself
because a corporation can act only through its officers and employees. While conducting company business, they cannot conspire with the corporation of which they form an indispensable part.
A corporate conspiracy also requires more than the collective judgment of two individuals within the same entity, for their conduct, if challenged, becomes that of the single, corporate entity.
These principles have been accepted in this district,
other districts within this circuit,
and the circuit courts of appeals.
Because Reed-Prentice forms a division of PMC, plaintiff has alleged a legally incognizable one-corporation conspiracy.
Accordingly, the motion to strike those portions of the complaint alleging conspiracy will be granted.
One final observation merits attention. Plaintiff, a Pennsylvania domiciliary, predicated jurisdiction of this Court upon diversity of citizenship and alleged that Reed-Prentice and PMC have a principal place of business in East Longmeadow, Massachusetts. However, plaintiff failed to allege the state in which defendant has been incorporated and, therefore, has not eliminated the possibility that diversity jurisdiction may not lie.
Federal law deems a corporation to be a citizen of both the state where it maintains its principal place of business and is incorporated.
Plaintiff, as the party invoking federal jurisdiction, must affirmatively allege the essential elements of diversity jurisdiction,
(w)here these facts do not appear on the face of the complaint, it is defective from a jurisdictional standpoint . . . . Properly pleading jurisdiction affects the very power of a federal court to adjudicate the alleged claim.
Amendment will be allowed, however, in the interests of justice
since defendant will not be unfairly prejudiced thereby.
Accordingly, plaintiff will be allowed ten days from the date of the accompanying order to amend the complaint and to allege the state of incorporation of defendant.