By: Jonathan M. Robbin and Anthony Richard Yanez
A drunken tumble on a cruise ship may lead to resolving how alienage/jurisdiction is determined in the Eleventh Circuit. In Caron v. NCL (Bahamas), Ltd., — F.3d —, 2018 WL 6539178 (11th Cir. Dec. 13, 2018), the Eleventh Circuit, for the first time, held an alien corporation has dual citizenship, but limited its holding. Specifically, Caron held there is no diversity jurisdiction in a suit between a foreign incorporated corporation with its principal place of business in Florida and a citizen of Canada. Unfortunately, despite guidance from sister courts, Caron left unresolved the question of whether a domestic incorporated corporation with a principal place of business abroad can invoke alienage-dual citizenship diversity in a suit against an alien following the 2012 amendments to 28 U.S.C. § 1332(c).
On July 14, 2016, Canadian citizen Olivier Caron sued Norwegian Cruise Lines (“NCL”) after he sustained personal injuries by falling down an escape hatch on a ship while he was inebriated. Mr. Caron filed suit in the Southern District of Florida asserting diversity of citizenship jurisdiction and admiralty jurisdiction.
Caron argued that the alienage-diversity provision, governing suits between aliens and citizens of a State, applies, and the district court properly entertained jurisdiction under this provision. Caron is a Canadian citizen and NCL is a Bermuda corporation with its principal place of business in Florida. Thus, Caron argued that NCL is a Florida citizen for alienage-diversity jurisdiction purposes.
NCL moved to dismiss Caron’s complaint and moved for summary judgment on Caron’s common law negligence theories. The district court granted both of NCL’s motions and Caron appealed to the Eleventh Circuit. In the appeal, the parties disagreed that the district court had subject matter jurisdiction, and this was the first issue addressed by the Caron court.
Eleventh Circuit’s Decision
Before this case, the Eleventh Circuit had never explicitly decided whether dual-citizen corporations, incorporated under the laws of a foreign state but with their principal place of business in a U.S. state, count as aliens to defeat complete diversity in suits against other aliens.
Alienage diversity, like general diversity under 28 U.S.C. § 1332(a)(1), must be complete; an alien on both sides of a dispute will defeat jurisdiction. See Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1340 (11th Cir. 2011); cf. Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435 (1806) (requiring complete diversity under the predecessor statute to § 1332(a)(1)).
Prior to Caron, the Eleventh Circuit took the position that alienage-diversity jurisdiction was proper in a suit between an alien and a corporation incorporated in the United States with a principal place of business abroad because the term “States” is capitalized and therefore only applied to the 50 U.S. states, and not to foreign states. See Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1557 (11th Cir. 1989) (interpreting a prior version of § 1332). Other circuits did not agree with this rationale. Compare Cabalceta, 883 F.2d at 1557 with Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 990 (9th Cir. 1994). As a result of this split amongst the Circuits, in 2012, Congress amended Section 1332(c). Whereas previous versions of Section 1332 solely referred to corporations incorporated in, or with their principal place of business in a “State,” the amendments added the term “foreign state” to Section 1332(c). The comments to the proposed statute demonstrate that the amendments were added by Congress to curtail diversity jurisdiction in light of the conflicting Cabalceta and Nike decisions.
The Caron court recognized that the 2012 amendments to Section 1332(c) explicitly impute to corporations dual citizenship, i.e., citizenship in every State or foreign state where the company is incorporated and in the State or foreign state where the company has its worldwide principal place of business. See Caron, 2018 WL 6539178, at *1, *3 n.3 (citing Section 1332(c)(1) (2012)).
Thus, a corporation incorporated in a foreign state is specifically deemed a citizen of both the foreign state and the domestic principal place of business when evaluating jurisdiction. As such, because in Caron plaintiff is a Canadian citizen and defendant is a Bermuda incorporated company with its principal place of business in Florida, both parties are considered aliens under Section 1332(a)(2) and diversity jurisdiction does not apply.
Since the inverse was not before it, the Caron court did not explicitly overrule Cabalceta and declined to address whether a domestic corporation with a worldwide principal place of business abroad, maintains dual citizenship. Caron, 2018 WL 6539178, at *3 n.3; accord Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 51 (2d Cir. 2012). But, the Caron court’s reading of the amendments to Section 1332 and other circuits’ decisions assist in providing a map to how the Eleventh Circuit will answer that scenario in the affirmative.
The Caron decision presented a case of first impression at the Eleventh Circuit addressing the reach of the 2012 amendments to 28 U.S.C. § 1332(c) and an alien corporation’s dual citizenship. Specifically, the Court settled the issue as to a foreign incorporated corporation with a domestic principal place of business and went one step closer to aligning itself with all other circuit courts in holding that a domestic incorporated corporation, with a principal place of business abroad, is an alien corporation for purposes of diversity jurisdiction. Such a holding would limit federal court access to corporations with their principal place of business abroad if they sue other aliens, who are either incorporated in a foreign state or also have their principal place of business abroad.
 The Caron court determined that the district court had properly exercised admiralty jurisdiction under Section 1333, which is why it was able to address the merits of the case.
 The Eleventh Circuit held that it had admiralty jurisdiction under Section 1333.
 Every court that has examined the 2012 Amendments has held that foreign corporations have dual citizenship. See, e.g., Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 51 (2d Cir. 2012) (“Every corporation is now treated for diversity purposes as a citizen of both its state of incorporation and its principal place of business, regardless of whether such place is foreign or domestic”); ABRO Indus. v. 1 New Trade, Inc., 2016 U.S. Dist. LEXIS 10219, at * (N.D. Ind. Aug 4, 2016) (holding as a result of the amendments to § 1332(c), defendant is a citizen of both Maryland where he is incorporated and Russia where its principal place of business is located).