MIDCAP MEDIA FINANCE, L.L.C., Plaintiff-Appellee Cross-Appellant,
PATHWAY DATA, INCORPORATED, doing business as Consumer Direct, Defendant-Appellant Cross-Appellee.
Appeals from the United States District Court for the Western
District of Texas
CLEMENT, DUNCAN, and OLDHAM, Circuit Judges.
S. OLDHAM, CIRCUIT JUDGE.
appeal involves a contract dispute that pits MidCap Media
Finance, L.L.C., against Pathway Data, Inc., and
Pathway's CEO, David Coulter. But we cannot reach the
merits because the parties have failed to establish diversity
of citizenship. We remand to allow the district court to
consider additional evidence regarding jurisdiction.
agreed to loan Pathway up to $1.5 million for online
advertising under the Media Financing, Security and
Assignment Agreement (the "Agreement"). Coulter
executed a Guaranty of Repayment (the "Guaranty")
that personally obligated him to pay MidCap damages in
certain circumstances. When Pathway stopped making the
required periodic payments and refused to repay the
outstanding amount-despite receiving a notice to cure and a
default notice-MidCap sued Pathway and Coulter. Pathway
asserted counterclaims and defenses.
bench trial, the trial court concluded Pathway breached the
Agreement and awarded damages to MidCap. The trial court,
however, found Coulter was not personally liable for those
damages under the Guaranty. Pathway appealed the trial
court's determination that MidCap did not materially
breach the Agreement. MidCap cross-appealed, contending the
trial court erred in concluding Coulter was not personally
their opening appellate briefs, the parties agreed the
district court had diversity jurisdiction under 28 U.S.C.
§ 1332. And they said we have jurisdiction under 28
U.S.C. § 1291. Notwithstanding the parties'
agreement, we have an independent obligation to assess our
own jurisdiction before exercising the judicial power of the
United States. See, e.g., Ruhrgas AG v. Marathon
Oil Co., 526 U.S. 574, 583 (1999).
did so at the outset of this case, we could not find proper
allegations or evidence of the parties' citizenship. So
we asked for and received supplemental briefs on the issue.
We are now convinced the evidence does not exist in this
federal courts have limited jurisdiction, parties must make
"clear, distinct, and precise affirmative jurisdictional
allegations" in their pleadings. Getty Oil Corp. v.
Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 1988).
To properly allege diversity jurisdiction under § 1332,
the parties need to allege "complete diversity."
McLaughlin v. Miss. Power Co., 376 F.3d 344, 353
(5th Cir. 2004) (per curiam). That means "all persons on
one side of the controversy [must] be citizens of different
states than all persons on the other side."
Ibid. (quotation omitted).
difference between citizenship and
residency is a frequent source of confusion. For
individuals, "citizenship has the same meaning as
domicile," and "the place of residence is prima
facie the domicile." Stine v. Moore, 213 F.2d
446, 448 (5th Cir. 1954). Nevertheless, "[c]itizenship
and residence, as often declared by this court, are not
synonymous terms." Robertson v. Cease, 97 U.S.
646, 648 (1878). Citizenship requires not only
"[r]esidence in fact" but also "the purpose to
make the place of residence one's home." Texas
v. Florida, 306 U.S. 398, 424 (1939). Therefore, 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) (per curiam).
distinction is not empty formalism. Take for example the
Supreme Court's decision in Robertson v. Cease.
Robertson was a citizen of Texas. But the complaint relied ...