*District Judge of the Northern District of Texas, sitting

by designation. 

1

United States Court of Appeals,

Fifth Circuit.

No. 94-10809.

Michael ELLIOTT and Vivian Elliott, Plaintiffs-Appellees,

v.

Robert TILTON, etc., Marte Tilton, etc., Word of Faith World

Outreach Center, Inc., and Word of Faith World Outreach Center

Church, etc., Defendants-Appellants.

Aug. 31, 1995.

Appeal from the United States District Court for the Northern

District of Texas.

Before HIGGINBOTHAM, and PARKER, Circuit Judges, and McBRYDE*,

District Judge.

ROBERT M. PARKER, Circuit Judge:

The plaintiffs brought this action in federal district court,

under its diversity jurisdiction, claiming damages for fraud,

breach of contract, intentional infliction of emotional distress,

and conspiracy. The plaintiffs were awarded 1.5 million in damages

after a jury trial, and the defendants appealed. For the first

time on appeal, one defendant, Marte Tilton, contended that the

district court lacked subject matter jurisdiction to entertain the

plaintiffs' claims. The other defendants adopted this argument.

Since we find that the plaintiffs did not meet their burden of

establishing complete diversity, the only basis for federal

jurisdiction, we vacate the judgment of the district court and

order the plaintiffs' claims dismissed.
2

I. FACTS

The defendants, Robert and Marte Tilton, are co-founders of

the Word of Faith World Outreach Center, which, among other things,

serves as the organization behind Robert Tilton's television

ministry. Prior to March 1992, Word of Faith operated as a Texas

non-profit corporation. In order to avoid disclosure of its

membership list to the Texas Attorney General, on March 30, 1992,

the non-profit corporation, Word of Faith World Outreach Center,

Inc., was dissolved. The Tiltons continued their ministry through

Word of Faith World Outreach Center Church, an unincorporated

religious association.

The plaintiffs, Mike and Vivian Elliott, live in Florida.

Vivian Elliott has suffered periodically from depression as a

result of alleged childhood abuse. In 1990, Mrs. Elliott attended

a cook-out at her parents' home, after which she went home and

wrote a "good-bye" note to her husband and children, and drove to

a wooded area where she contemplated taking her own life. While

sitting in her car talking to God about her family problems, Mrs.

Elliott felt that God responded and told her to go home to her

husband and children. The next morning as she was watching

television, Mrs. Elliott saw Robert Tilton on his Success N'Life

program. During this program, Mr. Tilton said that someone who was

watching was depressed and instructed this unidentified person to

call the Word of Faith prayer line. Mrs. Elliott felt as though

Robert Tilton was speaking directly to her, and that God had sent

him to reinforce God's message of the night before.
3

Mrs. Elliott did call Tilton's prayer line. In addition to

making a monetary vow, Mrs. Elliott was eventually persuaded to

make a video testimonial for use on Robert Tilton's television

program. Although Tilton's representatives later denied any such

representation, Mrs. Elliott testified that she was told that any

money generated by the use of her testimonial would be used to set

up a crisis center to help people who had suffered the same kind of

abuse she had. In addition, prior to filming, the Elliott's were

told that Word of Faith would stop showing the testimonial anytime

they asked. When Mrs. Elliott finally saw the edited testimonial

she became very upset because of certain dramatic recreations meant

to depict the type of abuse she suffered as a child. Despite her

calls and letters to Word of Faith asking that the testimonial not

be shown, Mrs. Elliott received no timely response, and Word of

Faith continued to use the testimonial.

The Elliotts filed this action in federal district court on

November 13, 1993, seeking damages for fraud, breach of contract,

intentional infliction of emotional distress, and conspiracy. The

case was tried before a jury, and on April 21, 1994, the jury

returned a verdict in favor of the plaintiffs on all claims in a

total amount of 1.5 million dollars. The district court

subsequently granted defendants' motion for judgment as a matter of

law with regard to plaintiffs' breach of contract claim, but

allowed the remainder of the verdict to stand. Final judgment was

entered on July 29, 1994. The defendants timely filed this appeal.

II. FEDERAL JURISDICTION
 

1The other appellants adopted this argument in their reply

brief to this Court. 

 

2Taylor-Callahan-Coleman Counties District Adult Probation

Department v. Dole, 948 F.2d 953, 956 (5th Cir.1991). 

 

3Bender v. Williamsport Area School Dist., 475 U.S. 534,

541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501 (1986) (citations

omitted). 

 

4Kokkonen v. Guardian Life Ins. Co. of America, --- U.S. ---

-, ----, 114 S.Ct. 1673, 1675, 128 L.Ed.2d 391 (1994) (citations

omitted); see also Stafford v. Mobil Oil Corp., 945 F.2d 803,

804 (5th Cir.1991) ("The burden of proving that complete

diversity exists rests upon the party who seeks to invoke the

court's diversity jurisdiction."). 

 

5Bender, 475 U.S. at 541, 106 S.Ct. at 1331 (quoting United

States v. Corrick, 298 U.S. 435, 440, 56 S.Ct. 829, 831, 80 L.Ed.

4

On appeal, defendant-appellant Marte Tilton contends that the

district court did not have subject matter jurisdiction because the

plaintiffs failed to establish complete diversity.1 Although this

argument was not presented in the district court, "[t]he right to

challenge [subject matter] jurisdiction cannot be waived."2

Federal courts are not courts of general jurisdiction; they

have only the power that is authorized by Article III of the

Constitution and the statutes enacted by Congress pursuant

thereto. For that reason, every federal appellate court has

a special obligation to "satisfy itself not only of its own

jurisdiction, but also that of the lower courts in a cause

under review,"....3

In addition, it is presumed that a cause lies outside the limited

jurisdiction authorized by Constitution and statute, "and the

burden of establishing the contrary rests upon the party asserting

jurisdiction[.]"4 When we find that the lower federal court lacked

jurisdiction, "we have jurisdiction on appeal, not of the merits

but merely for the purpose of correcting the error of the lower

court in entertaining the suit."5
1263 (1936)). 

 

628 U.S.C. § 1332(a)(1) provides that the district courts

shall have original jurisdiction of civil actions between

citizens of different states. 

 

7The plaintiffs also named as a defendant Word of Faith

World Outreach Center, Inc., a Texas non-profit corporation, but

acknowledged that at the time of the filing of the complaint it

had been dissolved. Since diversity of citizenship is determined

at the time the action is filed, Freeport-McMoran, Inc. v. K N

Energy, Inc., 498 U.S. 426, 428, 111 S.Ct. 858, 860, 112 L.Ed.2d

951 (1991), Word of Faith's previous corporate status is

irrelevant to our determination. 

 

8Stafford, 945 F.2d at 804. 

5

The plaintiffs, the Elliotts, stated in their complaint that

federal jurisdiction was based on diversity of citizenship.6 The

plaintiffs alleged that they were residents and citizens of the

State of Florida, that the defendants Robert and Marte Tilton were

citizens of the State of Texas, and that Word of Faith World

Outreach Center Church was an unincorporated religious association,

and the successor to Word of Faith World Outreach Center, Inc.,

with its principal place of business located within the state of

Texas.7

The record clearly establishes diversity between the

plaintiffs and the defendants Robert and Marte Tilton. However,

"[i]n order for a federal court to assert diversity jurisdiction,

diversity must be complete; the citizenship of all of the

plaintiffs must be different from the citizenship of all of the

defendants."8 Thus, we must be concerned also with the citizenship

of defendant Word of Faith World Outreach Center Church.

Rule 8(a)(1) of the Federal Rules of Civil Procedure requires
 

9FED.R.CIV.P. 8(a)(1). 

 

10Illinois Central Gulf Railroad Co. v. Pargas, Inc., 706

F.2d 633, 636 (5th Cir.1983). 

 

11Stafford, 945 F.2d at 804 (quoting McGovern v. American

Airlines, Inc., 511 F.2d 653, 654 (5th Cir.1975) (quoting 2A

Moore's Federal Practice 8.10 at 1662)); Illinois Central

Railroad v. Pargas, Inc., 706 F.2d at 636 & n. 2; Toms v.

Country Quality Meats, Inc., 610 F.2d 313, 316 (5th Cir.1980). 

 

12Harvey Constr. Co. v. Robertson-Ceco Corp., 10 F.3d 300,

303 (5th Cir.1994) (citing Green v. Hale, 433 F.2d 324, 329 (5th

Cir.1970)). The plaintiffs argue "The Defendant herein has

failed to direct this Court to anything within the lower court

record on appeal which would show a lack of jurisdiction in this

matter...." The plaintiffs' attempt to shift the jurisdictional

burden in this case is unsupported and unpersuasive. 

 

13Stafford, 945 F.2d at 804-05 (citing Patterson v.

Patterson, 808 F.2d 357, 357 (5th Cir.1986); McGovern, 511 F.2d

at 654). 

 

14United Steelworkers of America v. R.H. Bouligny, Inc., 382

U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965); Hummel v.

6

a pleading which sets forth a claim to contain "a short and plain

statement of the grounds upon which the court's jurisdiction

depends...."9 Even though this rule does not require citation of

a particular statute by name,10 it is generally agreed that "[w]hen

jurisdiction depends on citizenship, citizenship should be

"distinctly and affirmatively alleged.' "

11 This burden rests with

the plaintiff as the party invoking the court's jurisdiction,12 and

"[f]ailure adequately to allege the basis for diversity

jurisdiction mandates dismissal."13 Plaintiffs contend that their

allegations of diversity are sufficient. We disagree.

We start with the well-settled principle that an

unincorporated association, religious or otherwise, must be

considered a citizen of every state in which its members reside.14
Townsend, 883 F.2d 367, 369 (5th Cir.1989); see also C.T. Carden

v. Arkoma Associates, 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d

157 (1990) (holding that citizenship of a limited partnership for

diversity purposes depends on the citizenship of "all the

members," including limited partners). 

 

15Muscle Shoals Assoc., Ltd. v. MHF Ins. Agency, Inc., 792

F.Supp. 1224, 1227 (N.D.Ala.1992) (holding that allegation that

defendant was a "Florida Corporation" was not sufficient

allegation of state of incorporation); see also Nadler v.

American Motors Sales Corp., 764 F.2d 409, 413 (5th Cir.1985)

(holding that allegation that parties were "residents" of

particular states does not satisfy the requirement of Rule

8(a)(1) where diverse "citizenship" was required for

jurisdiction); Strain v. Harrelson Rubber Co., 742 F.2d 888, 889

(5th Cir.1984) (same); Kerney v. Fort Griffin Fandangle Ass'n,

Inc., 624 F.2d 717 (5th Cir.1980) (same). 

7

As a widespread and diffuse television ministry, or "church", Word

of Faith World Outreach Center must be considered an unincorporated

association for purposes of diversity, as plaintiffs alleged.

Although apparently realizing that Word of Faith fell into this

category, the Plaintiffs only alleged that its principal place of

business was in the State of Texas. This allegation would have

been relevant to the determination of the citizenship of a

corporate entity, but is completely irrelevant with regard to the

citizenship of an unincorporated association, such as Word of

Faith.

The plaintiffs also presented a stipulation, by way of a joint

pre-trial order, that Word of Faith was "an unincorporated

religious association located in Farmers Branch, Texas." This

stipulation must also be deemed insufficient because it does not

address the citizenship of the defendant association and "can be

construed as being purely "location descriptive' in the geographic

sense."15 The basis of our jurisdiction "cannot "be established
 

16Illinois Central Gulf Railroad Co. v. Pargas, Inc., 706

F.2d 633, 636 (5th Cir.1983) (citing 5 C. Wright & A. Miller

Federal Practice and Procedure § 1206, at 78-79 (1969 &

Supp.1983)). 

 

17We note that plaintiffs have not moved to amend their

"[d]efective allegations of jurisdiction" as they could have even

on appeal pursuant to 28 U.S.C. § 1653. 

8

argumentatively or by mere inference.' "

16 Such a stipulation could

refer merely to the location of the church's headquarters or

facilities and thus cannot serve to establish citizenship for

purposes of jurisdiction.

To distinctly and affirmatively allege Word of Faith's

citizenship, plaintiffs should have included in their complaint

allegations regarding the specific states in which Word of Faith's

members resided. Such specific allegations are necessary to allow

a court to determine whether complete diversity of citizenship

exists. The plaintiffs' complaint contained no such allegations,17

and plaintiffs point to no evidence in the record that would allow

them to establish the necessary jurisdictional facts.

The defendants adopt an expansive view of the "membership" of

Word of Faith. In essence, the defendants seem to take the

position that the church's membership consists of everyone the

church wishes to so designate, including contributors to their

television ministry and people who merely listen to their

broadcasts. While the defendants' position in this regard raises

some interesting questions, it is not necessary for us to resolve

or even reach them. On the record before us, we must hold that

plaintiffs failed to meet their burden of alleging and establishing
9

complete diversity.

III. CONCLUSION

We are troubled by the obvious waste of resources that results

from dismissing the case at this juncture for want of jurisdiction.

However, because plaintiffs failed to plead or prove the complete

diversity on which they claimed to base jurisdiction, we have no

alternative. This type of jurisdictional defect ordinarily should

be discovered at an early management or status conference prior to

a substantial investment in case preparation. Unfortunately, it

was not caught when it should have been in this case. The time

required to establish the legal and factual basis for federal

jurisdiction is a worthwhile investment. More importantly, failing

to do so, as in this case, is costly. For the foregoing reasons,

the judgment of the district court must be VACATED for lack of

jurisdiction, and the plaintiffs' claims are DISMISSED without

prejudice.