UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF PENNSYLVANIA
June 20, 1980
THEODORE LANG, JR., also known as TED LANG, JR.
WINDSOR MOUNT JOY MUTUAL INSURANCE COMPANY Box 28, Hamburg, Pennsylvania and G. R. KLINEFELTER 21 West Main Street, Ephrata, Pennsylvania, as Secretary of THE CLOISTER RELIEF ASSOCIATION, 21 West Main Street, Ephrata, Pennsylvania, and Representative of the class, members of THE CLOISTER RELIEF ASSOCIATION and CRISFIELD SHIPYARD, INC. 21 West Main Street Ephrata, Pennsylvania and MICHAEL KLINEFELTER 21 West Main Street Ephrata, Pennsylvania and J. RANDY KLINEFELTER, also known as G. R. KLINEFELTER 21 West Main Street Ephrata, Pennsylvania and RUSSEL THOMAS 21 West Main Street Ephrata, Pennsylvania
The opinion of the court was delivered by: TROUTMAN
MEMORANDUM AND ORDER
Determining that plaintiff has invoked federal jurisdiction properly constitutes the in limine question which federal courts must consider prior to proceeding to the merits of a claim. Pacific Intermountain Express Co. v. Hawaii Plastics Corp., 528 F.2d 911 (3d Cir. 1976). In the present controversy, resolution of this question requires reference to the capacity of defendant Cloister Relief Association (CRA), an unincorporated association, to be sued as a class under Fed.R.Civ.P. 23.2.
The Court dismissed the original action which plaintiff, then a domiciliary of the Commonwealth of Virginia, filed because several members of CRA were citizens thereof as well. See Lang v. Windsor Mount Joy Mutual Insurance Co., 487 F. Supp. 1303 (E.D.Pa. 1980) and United Steel Workers of America v. R. H. Bouligny, Inc., 382 U.S. 145, 86 S. Ct. 272, 15 L. Ed. 2d 217 (1965) (for purposes of diversity jurisdiction the citizenship of an unincorporated association is the citizenship of the individual members of the association).
Shortly before the dismissal, plaintiff filed another complaint, assigned originally to another judge in this district and later transferred, which not only alleged that plaintiff was a citizen of the District of Columbia but also purported to sue CRA as a class under Fed.R.Civ.P. 23.2. Defendants have now moved to dismiss this complaint as well.
At common law an unincorporated association could neither sue nor be sued. See United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 42 S. Ct. 570, 66 L. Ed. 975 (1922). Fed.R.Civ.P. 17(b) modifies this rule to allow an unincorporated association to sue or be sued when a question of federal law or rights is involved.
However, where the predicate of federal jurisdiction lies in diversity of citizenship, Rule 17(b) expressly refers the question of an unincorporated association's jural capacity to state law. See General Heat & Power Co. v. Diversified Mortgage Investors, 552 F.2d 556 (3d Cir. 1977). Pennsylvania law provides that an unincorporated association may sue and be sued as an entity, Pa.R.Civ.P. 2153(a),
but not as a class. See Plechner v. Widener College, Inc., 569 F.2d 1250 (3d Cir. 1977) and cf. Underwood v. Maloney, 256 F.2d 334 (3d Cir. 1958) ("(since) 1939 the law of Pennsylvania has forbidden a suit by or against an unincorporated association to be maintained as a class action, such suits must be deemed to be brought . . . against the unincorporated association itself"). Notwithstanding, plaintiff contends that Fed.R.Civ.P. 23.2 allows him to sue CRA as a class. The 1966 Committee Notes to this Rule indicate that "the real or main purpose of this characterization" was to give " "entity treatment' to the association when for formal reasons it cannot be sued as a jural person under Rule 17(b)." Because Pennsylvania law allows an unincorporated association to be sued as an entity, the purpose of Rule 23.2 has been served. Therefore, it is unavailable for plaintiff's use.
Other courts which have considered this question have reached the same conclusion. In Lee v. Navarro Savings Association, 416 F. Supp. 1186, 1190 (N.D.Tex.1976), rev'd on other grounds, 597 F.2d 421 (5th Cir. 1979), the court held that
Rule 23.2 must be read in conjunction with Rule 17(b), which orders that the capacity of an unincorporated association to sue be determined by the law of the state in which the district court is held. If state law allows the association to sue as an entity, then a class action under Rule 23.2 is not available.
The court further determined that Texas law permitted the real estate investment trust in question to sue and be sued as an entity, see Tex.Rev.Civ.Stat.Ann. Art. 6138A, § 6(A)(2), and concluded that plaintiff could not bring the suit as a class action under Rule 23.2.
In Suchem, Inc. v. Central Aguirre Sugar Co., 52 F.R.D. 348, 355 (D.P.R. 1971), the court held that
when the law of the state in a particular case does not provide an unincorporated association with capacity as a jural person to sue or be sued, then and only then does the mechanism of Rule 23.2 come into operation and is available as a way of overcoming this lack of capacity by suing the individual representatives of the unincorporated association. This, as a result, gives the unincorporated association the so called entity treatment. Nevertheless . . . the purposes of diversity jurisdiction in cases where one of the parties is an unincorporated association, even if the association has the capacity to sue or to be sued according to state law, what controls is the residence of its members. (emphasis in the original)
The court concluded that Rule 23.2 was not available since Puerto Rican law accorded an unincorporated association the capacity to sue and be sued. P.R.Laws Ann. art. 27-30.
Similarly, having been afforded entity but not class treatment by Pennsylvania law for an unincorporated association, plaintiff cannot use Rule 23.2 to accomplish otherwise. To allow him to do so would impermissibly expand the jurisdiction of this Court. See Fed.R.Civ.P. 82 ("(these) rules shall not be construed to extend . . . the jurisdiction of the United States district courts"). Sitting in diversity, this Court acts as an auxiliary to the state judicial system. If the state courts would not recognize a class suit against an unincorporated association, neither can this Court. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938).
Principles of federalism admit of no alternative, and the precepts governing the appropriate scope of federal diversity jurisdiction agree. As the Court of Appeals summarized,
federal courts are without power to adjudicate the substantive claims in a lawsuit absent a firm bedrock of jurisdiction. . . . Not only may an improper exercise of judicial authority by the federal courts, in contravention of constitutional and statutory dictates, disrupt the carefully crafted and balanced system of federalism designed by the framers of the Constitution, but unnecessary proceedings would certainly require the expenditure of valuable judicial resources as well.
. . . (T)he concerns of judicial economy and of due respect for the principles of federalism are most apposite where . . . matters of diversity jurisdiction are implicated. To ignore the constitutional and statutory strictures regarding such jurisdiction would impose additional burdens on a federal judicial system which already strains to process cases that are necessarily lodged with it. Relaxation of diversity requirements, intentional or otherwise, inevitably will increase access to the federal courts by litigants now confined to state courts, thereby augmenting the volume of business of the federal tribunals. Such an occurrence also may postpone or even forestall the vindication of the rights of litigants criminal and civil who are properly in the federal courts.
(Federal) tribunals should be demanding in evaluating whether diversity subsists . . . (Access) to federal courts, on the grounds of the diverse citizenship of the parties, should be granted only where clearly appropriate and only to the extent, if at all, that is justified . . .. (Diversity) jurisdiction cannot be exercised, unless there has been a definitive determination that diversity of citizenship is present.
Carlsberg Resources Corp. v. Cambria Savings & Loan Association, 554 F.2d 1254, 1256-57 (3d Cir. 1977).
Because the present record does not disclose whether any member of CRA was a citizen of the District of Columbia on the date which plaintiff filed this action, defendants' present motion to dismiss must remain under advisement.
Within thirty days of the date of the accompanying order defendants shall submit to the Court some indication of the CRA membership's citizenship. After reviewing this information, the Court will enter an appropriate order disposing of defendants' motion in the manner indicated by the submitted information.