IN THE UNITED STATES DISTRICT COURT FOR 

THE SOUTHERN DISTRICT OF NEW YORK 

 

 

PHYLLIS ANDREWS, et al., 

 Plaintiffs, 

v. Civil Action No. 07-3368 (SCR) 

ARTHUR B. MODELL, 

 Defendant. 

DEFENDANT’S OPPOSITION TO 

PLAINTIFFS’ MOTION TO REMAND 

EXHIBIT 6 

 

 

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Only the Westlaw citation is currently available.

United States District Court,

N.D. Ohio, Eastern Division.

Thomas E. MINOGUE, Herman H. Tarnow, and Jane 

F. Sims, Co-Trustees of the

Phyllis Andrews Family Trust Plaintiffs,

v.

Arthur B. MODELL Defendant.

No. 1:06CV286.

June 16, 2006.

Daniel D. Domozick, Mark R. Koberna, Sonkin & 

Koberna, Cleveland, OH, Christopher M. Green, 

Jacqueline B. Friedland, Melissa Kho, Boies, Schiller 

& Flexner, Armonk, NY, for Plaintiffs.

Brian J. Lamb, David J. Hooker, Nicole K. Wilson, 

Thompson Hine, Cleveland, OH, Douglas R.M. 

Nazarian, Michael J. O'Connor, Steven F. Barley, 

Hogan & Hartson, Baltimore, MD, for Defendant.

Memorandum of Opinion and Order

GAUGHAN, J. 

INTRODUCTION

*1 This matter is before the Court upon Defendant's 

Motion to Dismiss, or in the Alternative, to Transfer 

Venue (Doc. 4) and Plaintiffs' Motion for Remand 

(Doc. 15). This case relates to defendant Arthur 

Modell's failure to pay a finder's fee upon the alleged 

divestment of his stock interest in the company that 

owned the former Cleveland Browns football team. 

For the following reasons, Plaintiffs' Motion is 

GRANTED. 

FACTS

 In 1960, Vincent "Vinnie" Andrews informed Arthur 

Modell, then a New York television executive, of an 

opportunity to purchase a portion of the Cleveland 

Browns football team. Andrews arranged for Modell 

to meet with the sellers and originally planned to 

participate in the purchase. However, when Andrews 

was unable to come up with his portion of the money 

Modell was forced to find another partner. Prior to the 

time that the 1961 purchase was finalized, Andrews 

agreed to release Modell from any obligation to pay a 

finder's fee. Nonetheless, in 1963 Modell signed a 

Letter Agreement stating as follows: 

1. You [Modell] hereby retain me [Andrews] as 

your business manager for the period commencing 

January 1, 1963 and ending December 31, 1970. 

You will pay me a compensation of $3,000 for each 

of the calender years during that period.... In 

consideration of such retainer, I shall render to you 

at reasonable times and places such business advice, 

including the preparation of federal and other 

income and similar tax returns, as you may request. 

2. In addition to the foregoing, and as a finder's fee 

payable to me as a result of my efforts in the 

negotiations and transactions leading to your 

ownership of stock in Cleveland Browns, Inc., a 

Delaware corporation ("Browns"), and the 

acquisition by that corporation on March 22, 1961, 

of substantially all the assets of Cleveland Browns, 

Inc., an Ohio corporation, you agree that when, as 

and if you ever completely divest yourself of all 

your stock interest in the Browns or the Browns 

completely liquidate, you shall pay me an amount 

equivalent to 5% of your net gain from either or 

those transactions and any intervening sales by you 

of your Browns stock. 

* * * 

[3.] However, the payments specified in Section 2 

above shall be made in the event of my death to my 

estate. 

 Modell characterizes the Letter Agreement as 

"charity" provided on account of Andrews's failure to 

acquire the money to participate in the original 

purchase of the Browns. While he does not dispute 

that he signed and understood the agreement, Modell 

charges that he was persuaded to do so by his attorney, 

John Ashley Wells of the law firm Royall, Koegel & 

Rogers. Modell only later discovered that Robert E. 

Frisch, another lawyer from the same firm, 

represented Andrews and actually drafted the Letter 

Agreement. Correspondence and drafts of the Letter 

Agreement indicate that Wells was copied on 

correspondence from Frisch to Andrews. 

 Modell paid Andrews the yearly compensation set out 

in Section 1 of the Letter Agreement, even though he 

claims that Andrews never performed any services. 

Andrews died on January 2, 1969, naming his widow 

Phyllis as the executrix of his estate and his sole 

legatee. 

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*2 The value of Modell's interest in the Browns 

multiplied in the ensuing decades. The Letter 

Agreement, on the other hand, did not receive serious 

attention until nearly 30 years later when Modell 

moved the Browns to Baltimore and announced the 

potential sale of the team (by then called the Ravens) 

to Baltimore businessman Stephen Bisciotti. The 

terms of the agreement allowed Bisciotti's Baltimore 

Football Company ("BFC") to purchase 49% of the 

team immediately with an option to purchase the 

remaining 51% by December 1, 2005. At issue in this 

lawsuit is the finder's fee of Section 2 of the Letter 

Agreement, which Plaintiffs claim is now due and 

worth approximately $21 million. 

 The Andrews Family Trust was created on December 

27, 1999, or soon after the announcement of the sale to 

Bisciotti. The original trustees were Vincent Jr. and 

Robert Andrews, Mrs. Andrews's sons and also among 

the Trust's beneficiaries. [FN1] The Trust was funded 

with a $200,000 gift from Mrs. Andrews which the 

Andrews brothers then used for a purported purchase 

of the Letter Agreement from Mrs. Andrews. 

FN1. Modell notes that the Trust was most 

likely created to shield any recovery of the 

finder's fee from the Andrews brothers' 

creditors. Vincent Jr., Robert and a 

family-owned company are in bankruptcy 

proceedings. 

 Bisciotti announced his intention to exercise his 

purchase option on the Ravens in the Spring of 2003. 

Vincent Jr. and Robert then resigned as trustees and 

appointed Thomas E. Minogue and Thomas O. 

Callaghan. Minogue was a personal friend of Vincent 

Jr. while Callaghan was acquainted with Neil 

McGinness, a Cleveland attorney who was 

"quarterbacking the situation" at the time. The trustees 

contacted Modell and he indicated that he did not 

intend to pay the finders fee. Minogue and Callaghan 

then filed a complaint in the Cuyahoga County Court 

of Common Pleas on May 23, 2003. That action was 

removed to this Court and eventually transferred to the 

United States District Court for the District of 

Maryland. 

 While the original action was pending, Modell 

engaged in numerous maneuvers to retain a 1% 

ownership interest in the team. The Court summarized 

the details of those transactions in its March 14, 2006 

Opinion and Order denying Plaintiffs' Motion for a 

Preliminary Injunction. In short, Modell and Bisciotti 

agreed that Modell could retain a 1% share in the 

Ravens through a series of corporate entities. Modell 

eventually moved for summary judgment in the 

District of Maryland. This Court previously 

summarized the District of Maryland decision as 

follows: 

In the original complaint, the plaintiffs alleged 

breach of contract and sought an accounting. 

Defendant filed three motions for summary 

judgment. The first alleged that the Trust lacked 

standing to enforce the Letter Agreement because it 

had never been transferred from Mr. Andrews's 

estate. The second motion argued that the finder's 

fee portion of the Letter Agreement was 

unenforceable because the consideration (finding 

the opportunity to purchase the Browns) had already 

occurred when the Letter Agreement was signed. 

The third motion argued that the triggering 

event--"when, as and if you ever completely divest 

yourself of all your stock interest in the Browns or 

the Browns completely liquidate"--never occurred. 

*3 The district court first found that the Trust did 

not have standing. Mrs. Andrews's letter purporting 

to transfer the Letter Agreement was not sworn and 

was contradicted by her deposition testimony. 

Minogue v. Modell, 384 F.Supp.2d 821, 824-25 

(D.Md.2005) ("Minogue I" ). The Letter Agreement 

could not have passed to her by operation of law 

because the estate was insolvent and not finally 

closed. Id. at 825. Because they could not prove that 

Mrs. Andrews ever had any rights to the Letter 

Agreement, plaintiffs also could not prove that she 

transferred it to the Trust. Id. Thus, summary 

judgment in Defendant's favor was proper. 

The court also addressed the parties' remaining 

disputes. Regarding Defendant's claim of a lack of 

consideration, the court found a genuine issue of 

material fact as to whether the finder's fee was in 

exchange for the previous act of locating the team or 

Andrews's later work as Defendant's business agent. 

Id. at 825. The court also found a genuine issue of 

material fact as to whether Defendant's remaining 

1% interest satisfied the triggering event. Id. Finally, 

the court also discussed and rejected the plaintiffs' 

claim that the doctrine of prevention applied in this 

case. Id. at 826. 

 Minogue v. Modell, 1:06-cv-286, 2006 U.S. Dist. 

LEXIS 10714, *6-7 (N.D.Ohio March 14, 2006). 

 Accordingly, summary judgment in favor of Modell 

was granted on July 22, 2005. The trustees then began 

their own series of maneuvers to get the action back 

into court. On September 19, 2005, Mrs. Andrews 

executed a "Receipt, Release, Refunding Agreement, 

Indemnification Agreement of Waiver of Citation" 

bearing a caption of the Nassau County, New York, 

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Surrogate's Court. In that document, she 

acknowledged that she received the Estate's interest in 

the Letter Agreement "on or before January 27, 2000, 

or if not at that time, then, at the latest, on the date of 

her execution of this instrument...." She also purported 

to "re-confirm and re-acknowledge" the sale of this 

interest in the Letter Agreement to the Trust, "or, 

alternatively," stated as follows: 

[I]n the event that the aforementioned sale and 

assignment of her interest in the Letter Agreement 

pursuant to the Purchase Agreement and 

Assignment of Rights and Claims, respectively are 

deemed by an appropriate authority to have been 

ineffective, does hereby confirm and acknowledge 

the assignment to the Trust of all the rights and 

claims to which she is entitled in connection with 

the Letter Agreement pursuant to the Restated 

Assignment of Rights and Claims, a copy of which 

is appended hereto.... 

 Callaghan was diagnosed with cancer and decided to 

resign as trustee after the conclusion of Minogue I.

Two new trustees were appointed. Jane Sims is a trusts 

and estates attorney who resides in Maryland. Herman 

Tarnow is a family law practitioner from Florida. 

Maryland and Florida also happen to be where Modell 

keeps his summer and winter residences. Plaintiffs 

explain that Modell has engaged in extensive estate 

planning that may dissipate the assets available to pay 

the finder's fee should the trustees successfully 

prosecute this lawsuit or if the finder's fee comes due 

through Modell's estate. Thus they argue that trustees 

Sims and Tarnow were appointed for their knowledge 

of the law in the jurisdictions where any action related 

to Modell's estate would have to be adjudicated. 

Minogue also explains that he sought an odd number 

of trustees to avoid potential deadlocks in future 

trust-related decisions. 

*4 The new trustees filed a second Complaint in the 

Cuyahoga County Court of Common Pleas on 

December 30, 2005. The matter was removed to this 

Court on the basis of diversity of citizenship on 

February 6, 2006. Modell has filed a Motion to 

Dismiss, or in the Alternative, a Motion to Change 

Venue. Plaintiffs have filed a Motion to Remand the 

case to the Cuyahoga County Court of Common Pleas. 

MOTION TO REMAND

 Plaintiffs filed this action in the Cuyahoga County 

Court of Common Pleas. Modell removed the action 

to this Court pursuant to 28 U.S.C. § 1441(a), on the 

grounds that this is a "civil action brought in State 

court of which the district courts of the United States 

have original jurisdiction...." Modell argues that this 

lawsuit is subject to the Court's diversity jurisdiction. 

28 U.S.C. § 1332(a)(1). Plaintiffs disagree and have 

filed a motion to remand under 28 U.S.C. § 1447(c). 

 The Court has diversity jurisdiction where the amount 

in controversy is met and the action is between 

citizens of different states. The rule of complete 

diversity requires that each plaintiff be a citizen of a 

different state from each defendant. Glancy v. 

Taubman Ctrs., Inc., 373 F.3d 656, 664 (6th Cir.2004). 

Here, plaintiffs seek in excess of $21 million dollars 

so the amount in controversy is clearly met. The 

citizenship of the parties is also known. Modell and 

Sims are citizens of Maryland while Tarnow and 

Minogue are citizens of Florida and Connecticut, 

respectively. The parties' dispute boils down to 

whether the Court should disregard Sims's citizenship 

for purposes of determining diversity jurisdiction. If 

the Court does so, federal jurisdiction is appropriate. If 

not, the Court is without jurisdiction and the action 

must be remanded to the Cuyahoga County Court of 

Common Pleas. 

 Modell argues that Sims was appointed as trustee 

solely to frustrate diversity jurisdiction. Attempts to 

create or defeat diversity jurisdiction are nothing new. 

Litigants have a long history of gaming parties and 

claims to obtain or avoid federal diversity jurisdiction. 

One method to avoid federal jurisdiction is to bring 

claims against a non-diverse defendant. Courts have 

employed the doctrine of fraudulent joinder to thwart 

this tactic. E.g., Wecker v. National Enameling & 

Stamping Co., 204 U.S. 176, 27 S.Ct. 184, 51 L.Ed. 

430 (1907). The removing party bears the burden of 

proving that the plaintiff lacks a colorable claim 

against the non-diverse defendant. Coyne v. American 

Tobacco Co., 183 F.3d 488, 493 (6th Cir.1999). 

Because fraudulent joinder is determined solely on the 

basis of the claims, the plaintiff's motive is irrelevant 

to the fraudulent joinder inquiry. Jerome-Duncan, Inc. 

v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th 

Cir.1999); Harris v. Great Lakes Steel Corp., Div. of 

Nat'l Steel Corp., 752 F.Supp. 244, 246 n. 4 

(E.D.Mich.1990). All doubts are resolved in favor of 

remand. Coyne, 183 F.3d at 493. 

 This is not a fraudulent joinder case. Modell seeks the 

opposite of the fraudulent joinder inquiry. Rather than 

asking the Court to examine the substance of Sims's 

claims, Modell wants the Court to consider the motive 

for appointing Sims as trustee. Were the plaintiffs 

seeking to bring their claims in federal rather than 

state court, the Court would no doubt be authorized to 

make such an inquiry. Under 28 U.S.C. § 1359, "[a] 

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district court shall not have jurisdiction of a civil 

action in which any party, by assignment or otherwise, 

has been improperly or collusively made or joined to 

invoke the jurisdiction of such court." [FN2]

FN2. As will be discussed in some detail 

below, it was not always so clear that Section 

1359 applies to representatives and fiduciary 

appointments. However, most courts now 

consider the plaintiff's possible motive to 

create diversity, and the Supreme Court has 

indicated that it would do so also. Navarro 

Savings Ass'n v. Lee, 446 U.S. 458, 465-66, 

100 S.Ct. 1779, 64 L.Ed.2d 425 (1980). 

*5 By enacting Section 1359, "Congress sought to 

assure that ordinary contract and tort litigation is not 

diverted to the federal courts by litigants using devices 

to create the appearance, but not the substance, of 

federal diversity jurisdiction." Gross v. Hougland, 712 

F.2d 1034, 1037 (6th Cir.1983) (citing Kramer v. 

Caribbean Mills, 394 U.S. 823, 838-39, 89 S.Ct. 1487, 

23 L.Ed.2d 9 (1969)). One way litigants attempt to do 

so is through the appointment of representatives and 

fiduciaries who then bring the lawsuit in their own 

name. Gross, 712 F.2d at 1037. Even though the 

fiduciary party plaintiff is a real party in interest, [FN3]

courts will look beyond an otherwise legitimate 

appointment or assignment to determine whether the 

"primary aim of the transaction or appointment is to 

manufacture federal jurisdiction." Id. at 1037-1038.

Although the subjective purpose of the party can be 

considered, courts may also look to: 

FN3. See, e.g., Fed.R.Civ.P. 17 (explaining 

that, among others, "[a]n executor, 

administrator, guardian, bailee, trustee of an 

express trust ... may sue in that person's own 

name without joining the party for whose 

benefit the action is brought"). 

among other things, whether the fiduciary has duties 

other than prosecuting the lawsuit; whether the 

fiduciary is the "natural" representative; whether the 

appointment was in fact motivated by a desire to 

create diversity jurisdiction,; and whether the suit is 

local in character. 

 Id. at 1039 (internal citations omitted). These 

principles have been applied to the appointment of 

trustees. E.g., Bartnick v. Reader Co., Inc., 487 F.2d 

1021, 1022 (8th Cir.1973); Ferrara v. Philadelphia 

Labs., Inc., 272 F.Supp. 1000, 1014-15 (D.Vt.1967).

[FN4]

FN4. Ferrara in particular bears some 

similarities to the case at bar. In Ferrara, the 

only asset of the trust was the underlying 

cause of action. The beneficiaries would 

have been the proper plaintiffs absent the 

trust. On the facts, the Ferrara trustee's 

powers may have been slightly more limited 

than those held by Minogue, Sims and 

Tarnow. Considering the particular 

circumstances, the district court in Ferrara

found dismissal under Section 1359 to be 

proper. Ferrara, 272 F.Supp. at 1014-15. On 

the other hand, Ferrara also recognized that 

"Federal district courts are courts of limited 

jurisdiction" and "jurisdiction extends no 

farther than it has been transferred by 

Congress." Id. at 1015. "Should there remain 

any doubt as to the proper disposition of this 

case, it must be resolved against 

jurisdiction." Id. at 1014. This highlights that 

there may be good reasons for distinguishing 

between efforts to create diversity 

jurisdiction and efforts to defeat diversity 

jurisdiction. 

 Modell essentially asks the Court to apply these same 

principles to the plaintiffs' alleged attempt to defeat

federal diversity jurisdiction through the appointment 

of Sims as trustee. [FN5] The answer to this question 

cannot come from the text of Section 1359. By its 

plain language Section 1359 only applies to attempts 

to "invoke the jurisdiction" of the federal courts. 

FN5. Plaintiffs dispute the proper test to 

apply when conducting the collusive plaintiff 

inquiry. As will be discussed below, a 

number of courts have formulated a test for 

assessing whether an assignment made to 

defeat diversity jurisdiction is collusive. 

There is little point in quibbling over the 

proper test. Inquiries into subjective motive 

are inherently difficult. Whether under Gross

or the assignment cases discussed below, all 

of the factors provide some value as 

objective indicators of the plaintiff's motive. 

 Plaintiffs believe that the issue is resolved by 

reference to Fed.R.Civ.P. 17(a) and Navarro Savings 

Assn. v. Lee, 446 U.S. 458, 100 S.Ct. 1779, 64 

L.Ed.2d 425 (1980). Rule 17 provides that "[e]very 

action shall be prosecuted in the name of the real party 

in interest. An executor, administrator, guardian, 

bailee, trustee of an express trust ... or a party 

authorized by statue may sue in that persons own 

name without joining the party for whose benefit the 

action is brought...." Navarro Savings answered the 

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question of "whether the trustees of a business trust 

may invoke the diversity jurisdiction of the federal 

courts on the basis of their own citizenship, rather than 

that of the trust's beneficial shareholders." Navarro 

Savings, 446 U.S. at 458. The Navarro Savings

Court answered that question in the positive, 

concluding that trustees who are not "naked trustees" 

serving as "mere conduits" to others are "real parties to 

the controversy ... [who] may sue in their own right, 

without regard to the citizenship of the trust 

beneficiaries." Id . at 465-66. 

 Plaintiffs argue that the Court's inquiry thus begins 

and ends with the question of whether Sims is a real 

party in interest under Rule 17(a) and Navarro 

Savings. This argument misses the mark. Navarro 

Savings itself explains the limited role of Rule 17(a). 

Rule 17 provides by rule who can sue in their own 

name but does not dictate whose citizenship counts for 

diversity jurisdiction. [FN6] Id. at 462 n. 9. For 

example, a union can sue in its own name but its 

citizenship is based on that of its members. Id.

FN6. This result is also compelled by Rule 82, 

which states that "[t]hese rules shall not be 

construed to extend or limit the jurisdiction 

of the United States district courts...." 

*6 Navarro Savings answered this second 

question--whose citizenship decides diversity 

jurisdiction--as applied to a particular 

trust/beneficiary relationship. The plaintiffs in 

Navarro Savings were eight trustees of a business 

trust who sued originally in federal court based on 

diversity jurisdiction. Id. at 459. The defendant, 

Navarro Savings, was a citizen of Texas and complete 

diversity existed as to the trustees. Id. at 460. 

However, a number of the trust's beneficiaries were 

citizens of Texas. Id. The Supreme Court concluded 

that diversity jurisdiction was properly based on the 

trustees' citizenship. Id. at 465. Among other things, 

the trust instrument "authorized the trustees to take 

legal title to trust assets, to invest those assets for the 

benefit of the shareholders, and to sue and be sued in 

their capacity as trustees." Id. at 464. The 

beneficiaries did not have the power to control the 

lawsuit and could only intervene in the trust's affairs 

"in the most extraordinary situations[,]" such as their 

right to elect or remove trustees. Id. at 465 n. 14. 

 Plaintiffs are correct in one respect. If the Court 

cannot consider the motive for Sims's appointment 

under a fraudulent or collusive joinder doctrine, 

Navarro Savings dictates that she is a real party in 

interest whose citizenship is properly considered for 

diversity of citizenship purposes. [FN7] Under the 

terms of the Trust, "any Trustee who acts under this 

Agreement may exercise all of the rights, powers and 

discretions and shall be entitled to all of the privileges 

and immunities granted to the named Trustee." In 

addition, the "Trustee shall have absolute discretion 

regarding the exercise of his powers, and such 

exercise shall be final and conclusive upon all 

persons." In Navarro Savings, total control of the 

business trust's activities was similarly vested in the 

trustees. 446 U.S. at 464-65. Finally, Sims is not a 

"naked trustee" serving as a "mere conduit" to the 

Andrews brothers. Her expertise in probate law is 

quite relevant to her duties as trustee. 

FN7. A number of courts cast the real party in 

interest analysis as a fraudulent joinder 

inquiry for plaintiffs. E.g., Foslip Pharms., 

Inc. v. Metabolife Int'l, Inc., 92 F.Supp.2d 

891, 903-04 (N.D.Iowa 2000). The analysis 

is similar. Rather than looking at the 

plaintiff's motive the court's focus is on the 

legal standing of the particular plaintiff to 

bring the action. In any event, under Navarro 

Savings it is clear that Sims is a real party in 

interest. 

 Modell makes three main arguments that Sims' duties 

as trustee do not rise to the level that allows 

consideration of her citizenship. The first two 

arguments are clearly rebutted by Navarro Savings.

First, Modell notes that Sims cannot actually exercise 

total control over the Trust, since the other two 

trustees could always outvote her. However, in 

Navarro Savings the Supreme Court was willing to 

consider the citizenship of each of eight trustees. Id. at 

459, 465. Second, Modell notes that two of the trust 

beneficiaries (the Andrews brothers) retain the right to 

replace the trustee under the following provision: 

My sons, VINCENT and ROBERT, shall have the 

right to remove any Trustee of any trust hereunder 

and to appoint one or more successor Trustees; 

provided, however, that both sons are living and 

competent and agree with such action and that any 

such successor Trustee would not be a related or 

subordinate party subservient to the wishes of any 

such son, (within the meaning of section 673(c) of 

the Code) if such son were the grantor of the trust. 

 *7 Again, this provision is reminiscent of trust 

provisions that the Navarro Savings Court found 

unconvincing as to beneficiary control: 

The shareholders may elect and remove trustees; 

they may terminate the trust or amend the 

Declaration; and they must approve any disposition 

of more than half of the trust estate. 

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 Id. at 465 n. 14. 

 Modell is thus left to contend that while Sims might 

otherwise have satisfactory powers as Trustee to make 

her a real party in interest for purposes of diversity 

jurisdiction, the intent in appointing her was other than 

to encourage the legitimate exercise of those powers. 

Navarro Savings did not absolutely foreclose 

consideration of a party's motive in naming a trustee. 

The Supreme Court noted that "[t]here is no allegation 

of sham or collusion" under Section 1359. Id. at 465. 

Because Section 1359 does not by its express 

language apply to attempts to defeat diversity, this 

simply brings the Court back where it started: is a 

district court allowed to consider whether the motive 

in naming a trustee was to defeat diversity 

jurisdiction? 

 The inquiry starts with the background to Section 

1359. Section 1359 is based on former Sections 41(1) 

and 80 of the United States Code. 28 U.S.C. § 41(1), 

80 (1940). Former Section 41(1) was part of the 

original Judiciary Act of 1789 and included an 

"assignee clause." [FN8] "The history of the clause ... 

shows clearly that its purpose and effect, at the time of 

its enactment, were to prevent the conferring of 

jurisdiction on the federal courts, on grounds of 

diversity of citizenship, by assignment, in cases where 

it would not otherwise exist...." Sowell v. Federal 

Reserve Bank, 268 U.S. 449, 453, 45 S.Ct. 528, 69 

L.Ed. 1041 (1925). Section 80 was originally enacted 

in 1875 [FN9] and was similarly concerned only with 

attempts to manufacture federal jurisdiction. See, e.g., 

Farmington v. Pillsbury, 114 U.S. 138, 146, 5 S.Ct. 

807, 29 L.Ed. 114 (finding that the transfer from 

Maine bondholders to a Massachusetts plaintiff in a 

suit against a Maine village was to "get a 

re-examination in that [federal] jurisdiction of the 

question decided adversely to the owners of the 

coupons by the highest judicial tribunal of the State"). 

FN8. "[No] district or circuit court [shall] 

have cognizance of any suit to recover upon 

any promissory note or other chose in action 

in favor of any assignee, or of any subsequent 

holder if such instrument be payable to 

bearer and be not made by any corporation, 

unless such suit might have been prosecuted 

in such court to recover upon said note or 

other chose in action if no assignment had 

been made...." 

Act of Sept. 24, 1789, § 11, 1 Stat. 73, 79. 

FN9. "That if, in any suit commenced in a 

circuit court or removed from a State court to 

a circuit court of the United States, it shall 

appear to the satisfaction of said circuit court, 

at any time after such suit has been brought 

or removed thereto, ... that the parties to said 

suit have been improperly or collusively 

made or joined, either as plaintiffs or 

defendants, for the purpose of creating a case 

cognizable or removable under this act, the 

said circuit court shall proceed no further 

therein, but shall dismiss the suit or remand it 

to the court from which it was removed...." 

Act of March 3, 1875, § 5, 18 Stat. 470, 472 

(emphasis added). 

 Although these statutes only touched on plaintiffs' 

attempts to manufacture diversity jurisdiction, the 

Supreme Court was not blind to attempts to defeat 

diversity jurisdiction. The doctrine of fraudulent 

joinder, which was discussed above, has long been 

employed by the Supreme Court. E.g., Chesapeake & 

Ohio Railway Co. v. Cockrell, 232 U.S. 146, 152, 34 

S.Ct. 278, 58 L.Ed. 544 (1914); Wecker, 204 U.S. 176, 

27 S.Ct. 184, 51 L.Ed. 430. Of course, unlike Section 

1359 and its statutory predecessors, the fraudulent 

joinder doctrine does not allow consideration of the 

plaintiff's motive to defeat jurisdiction. 

 Early Supreme Court cases thus refused to consider 

motive in cases where parties attempted to defeat 

federal jurisdiction. For example, in Provident 

Savings Life Assurance Co. v. Ford, the New York 

plaintiff brought an action against a New York 

defendant in New York state court. 114 U.S. 635, 636, 

5 S.Ct. 1104, 29 L.Ed. 261 (1885). The New York 

plaintiff was assigned the action from an Ohio 

individual who had obtained a judgment against the 

defendant in the Northern District of Ohio. Id. The 

defendant removed, claiming that the plaintiff was not 

the real party in interest. Id. at 640. The Supreme 

Court declined to inquire into the propriety of the 

assignment. Id . The New York court that had the case 

in the first instance could consider whether the 

assignment was fraudulent, "and this fact would be a 

defence to the action brought by the assignee." Id. at 

640-41. 

*8 Mecom v. Fitzsimmons Drilling Co. applied 

similar reasoning to the appointment of a 

representative. 284 U.S. 183, 52 S.Ct. 84, 76 L.Ed. 

233 (1931). In Mecom, an Oklahoma citizen died in an 

accident alleged to be caused by the negligence of the 

defendants. Id. at 184. His widow was appointed as 

administrator by the Oklahoma state probate court. Id.

Three times the widow attempted to sue the 

defendants in state court and three times the case was 

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properly removed. Id. Finally, the widow resigned and 

Mecom was appointed as administrator. Id. at 185. 

Because Mecom was a Louisiana resident, total 

diversity was destroyed. Id. The Supreme Court 

refused to look behind the appointment. However 

appointed, "[t]he applicable statutes make the 

administrator the trustee of an express trust and 

require the suit to be controlled by him." Id. at 186-87. 

To the defendants' allegations that Mecom, the widow 

and her attorney "were in a conspiracy to defeat 

federal jurisdiction[,]" the Supreme Court responded 

as follows: 

But it is clear that the motive or purpose that 

actuated any or all of these parties in procuring a 

lawful and valid appointment is immaterial upon the 

question of identity or diversity of citizenship. To 

go behind the decree of the probate court would be 

collaterally to attack it, not for lack of jurisdiction of 

the subject-matter or absence of jurisdictional facts, 

but to inquire into purposes and motives of the 

parties before that court when, confessedly, they 

practiced no fraud upon it. 

 Id. at 189. The Mecom Court was cognizant of and 

relied on the fraudulent joinder doctrine in refusing to 

consider the plaintiff's motive for changing the 

administrator: 

The case falls clearly within the authorities 

announcing the principle that in a removal 

proceeding the motive of a plaintiff in joining 

defendants is immaterial, provided there is in good 

faith a cause of action against those joined. While 

those cases involve a somewhat different 

situation,--that where a plaintiff joins defendants in 

order to avoid federal jurisdiction,--they are in 

principle applicable to the present case, where it is 

claimed a plaintiff was procured for the same 

purpose. 

 Id.

Section 1359 was enacted in 1948. Its purpose was 

essentially to fold the assignee clause of former 

Section 41(1) into the general "improperly or 

collusively made to invoke" federal jurisdiction 

language of former Section 80. See Historical and 

Statutory Notes, 28 U.S.C. § 1359. Similar to the 

statutes from which it was created, Section 1359

"expresses a policy against the creation of federal 

jurisdiction and not against its avoidance." 14 Wright, 

Miller & Cooper, Federal Practice and Procedure § 

3641 (3d ed.1998). 

 Although the adoption of Section 1359 was intended 

to diminish confusion, the result was the opposite. 

Without recognizing that cases such as Mecom and 

Provident involved attempts to defeat federal 

jurisdiction and were decided on motions to remand, a 

number of courts initially applied per se rules that 

courts could not consider the motive behind an 

assignment or an appointment of a representative or 

fiduciary even in cases of manufactured diversity 

under Section 1359. Linda S. Mullenix, Creative 

Manipulation of Federal Jurisdiction: Is There 

Diversity After Death?, 70 Cornell L.Rev. 1011, 

1019-20 (1985); see also, e.g., County of Todd, Minn.

v. Loegering, 297 F.2d 470, 473 (8th Cir.1961); Jaffe v. 

Philadelphia & Western R. Co., 180 F.2d 1010, 

1011-13 (3d Cir.1950). 

*9 The circuit courts eventually changed course. For 

example, the Court of Appeals for the Third Circuit 

overruled its Jaffe decision. McSparran v. Weist, 402 

F.2d 867, 876 (3d Cir.1968). The Third Circuit 

recognized that Section 1359 (or its statutory 

predecessors) did not apply to Mecom as follows: 

The fundamental distinction between Mecom and 

the present case is that there the collusion statute 

was not involved because the resignation of the 

administratrix and the appointment of her successor 

were acts done not to create federal jurisdiction but 

to prevent it from attaching. Section 1359, as its 

language clearly shows, expresses a policy against 

the creation of federal jurisdiction and not against 

its avoidance. It proscribes improper or collusive 

conduct "to invoke" diversity jurisdiction and hence 

was inapplicable in the Mecom case. 

 Id. at 875 (emphasis added); accord Pallozola v. 

Rucker, 797 F.2d 1116, 1120 (1st Cir.1986); Messer v. 

American Gems, Inc., 612 F.2d 1367, 1375 (4th 

Cir.1980); Betar v. De Havilland Aircraft of Canada, 

Ltd., 603 F.2d 30, 33 (7th Cir.1979); White v. Lee 

Marine Corp., 434 F.2d 1096, 1098 n. 5 (5th Cir.1970); 

Illinois ex rel. Scott v. Hunt Int'l Resources Corp., 481 

F.Supp. 71, 74 (N.D.Ill.1979). 

 Soon thereafter, the Supreme Court addressed Section 

1359 for the first time. In Kramer v. Caribbean Mills, 

Inc., Caribbean Mills was a Haitian corporation that 

entered into a contract with Panama and Venezuela 

Finance Company, a Panamanian corporation. 394

U.S. 823, 824, 89 S.Ct. 1487, 23 L.Ed.2d 9 (1969). 

The Panamanian corporation assigned its interest in 

the contract to Kramer, a Texas attorney, for 

consideration of $1. Id. Kramer then agreed to pay 

95% of any net recovery he obtained under the 

contract to the Panamanian corporation "solely as a 

bonus." Id. Caribbean Mills was sued in federal court 

and challenged the assignment under Section 1359. 

From the beginning of the opinion, the Supreme Court 

was clear that its task was a narrow one: "The issue 

before us is whether Kramer was 'improperly or 

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collusively made' a party 'to invoke the jurisdiction' of 

the District Court, within the meaning of 28 U.S.C. § 

1359." Id. at 825. 

 The Supreme Court ultimately held that "this 

assignment falls not only within the scope of § 1359

but within its very core." Id . at 830. In doing so, the 

Supreme Court rejected arguments that the underlying 

legality of the assignment exempted it from judicial 

review under Section 1359. Id. at 829. "[T]o accept 

this argument would render § 1359 largely incapable 

of accomplishing its purpose; this very case 

demonstrates the ease with which a party may 

'manufacture' federal jurisdiction by an assignment 

which meets the requirements of state law." Id. The 

Supreme Court put forth the following reasoning for 

its decision: 

If federal jurisdiction could be created by 

assignments of this kind, which are easy to arrange 

and involve few disadvantages for the assignor, then 

a vast quantity of ordinary contract and tort 

litigation could be channeled into the federal courts 

at the will of one of the parties. Such "manufacture 

of Federal jurisdiction" was the very thing which 

Congress intended to prevent when it enacted § 

1359 and its predecessors. 

 *10 Kramer, 394 U.S. at 828-829. 

 Nonetheless, the Court did not stray from the narrow 

question before it, and as such, did little to bring 

harmony to this area of law. In fact, the Supreme 

Court explicitly left two questions open. First, because 

the assignment in Kramer was partial, "we have no 

occasion to re-examine the cases in which this Court 

has held that where the transfer of a claim is absolute, 

with the transferor retaining no interest in the subject 

matter, then the transfer is not 'improperly or 

collusively made,' regardless of the transferor's 

motive." Id. at 828 n. 9. Second, the Supreme Court, 

citing Mecom, McSparran, and County of Todd,

declined to decide whether Section 1359 could be used 

to question representative or fiduciary appointments 

made with a motive to manufacture jurisdiction.

[FN10] Id. at 828 n. 10. 

FN10. Three distinctions between 

assignments and representatives were noted: 

Cases involving representatives vary in 

several respects from those in which 

jurisdiction is based on assignments: (1) in 

the former situation, some representative 

must be appointed before suit can be brought, 

while in the latter the assignor normally is 

himself capable of suing in state court; (2) 

under state law, different kinds of guardians 

and administrators may possess discrete sorts 

of powers; and (3) all such representatives 

owe their appointment to the decree of a state 

court, rather than solely to an action of the 

parties. It is not necessary to decide whether 

these distinctions amount to a difference for 

purposes of § 1359. 

394 U.S. at 828 n. 10. 

 The circuit courts have read Kramer as expanding the 

scope of review under Section 1359, and as discussed 

supra have generally felt free to explore whether a 

representative was appointed to create federal 

jurisdiction. Gross, 712 F.2d at 1037 (Sixth Circuit); 

Pallazola, 797 F.2d at 1126-27 (First Circuit); Bass v. 

Texas Power & Light Co., 432 F.2d 763, 766 (5th 

Cir.1970); O'Brien v. Avco Corp., 425 F.2d 1030, 

1034-35 (2d Cir.1969); Lester v. McFaddon, 415 F.2d 

1101, 1104 (4th Cir.1969); Cf. Hackney v. Newman 

Mem'l Hosp., 621 F.2d 1069, 1071 (10th Cir.1980)

(declining to apply Section 1359 where the 

plaintiff-administrator was also a beneficiary with a 

substantive stake in the litigation). 

 However, development of the law regarding 

representative appointments was abruptly cut short by 

the 1988 modifications to the diversity statute, 28 

U.S.C. § 1332. Commentators had long proposed 

statutory changes to thwart attempts to manufacture or 

defeat of diversity jurisdiction. One such proposal 

addressed representatives in wrongful death actions as 

well guardians of infants and incompetents: 

General Diversity of citizenship jurisdiction; 

amount in controversy; costs 

* * * 

(b) For the purposes of this section and section 1302 

[exceptions to diversity] of this title: 

* * * 

(4) An executor, or an administrator, or any person 

representing the estate of a decedent or appointed 

pursuant to statute with authority to bring an action 

because of the death of a decedent shall be deemed 

to be a citizen only of the same State as the decedent; 

and a guardian, committee, or other like 

representative of an infant or incompetent shall be 

deemed to be a citizen only of the same State as the 

person represented. 

 American Law Institute, Study of the Division of 

Jurisdiction Between State and Federal Courts (1969). 

By definitively basing diversity on the citizenship of 

the decedent, infant or incompetent, this proposal 

would moot all attempts to game federal jurisdiction 

in these cases. 

 Trustees were dealt with in a proposed modification 

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to Section 1359. One part of the proposal would 

explicitly state that the collusive or improper joinder 

doctrine of Kramer applies to transfers to trustees and 

other representatives. This is essentially the state of 

the law post-Kramer. However, unlike Section 1359, 

the proposal would apply this analysis equally to 

attempts to defeat federal jurisdiction: 

*11 Parties joined or made with a purpose of 

invoking or defeating federal jurisdiction 

* * * 

(b) Whenever an object of a sale, assignment, or 

other transfer of the whole or any part of an interest 

in a claim or any other property has been to enable 

or to prevent the invoking of federal jurisdiction

under this chapter or chapter 158 of this title, 

jurisdiction of a civil action shall be determined as if 

such sale, assignment, or other transfer had not 

occurred. The word 'transfer' as used in this section 

includes the appointment of a trustee, receiver, or 

other fiduciary, or any other person to hold or 

receive interests of any kind, whether made by 

private persons or by a court or any other official 

body. 

 Id. (emphasis added). 

 The citizenship proposal was essentially adopted by 

Congress in 1988. Other than the fact that it was never 

adopted, the fate of the proposal to expand Section 

1359 is unknown. Thus, while Section 1359 is 

unaltered from its original language, the diversity of 

citizenship statute now reads as follows: 

(c) For the purposes of this section and section 1441

of this title-- 

* * * 

(2) the legal representative of the estate of a 

decedent shall be deemed to be a citizen only of the 

same State as the decedent, and the legal 

representative of an infant or incompetent shall be 

deemed to be a citizen only of the same State as the 

infant or incompetent. 

 28 U.S.C. § 1332(c)(2). 

 Although there is little legislative history on this 

provision, what history there is indicates that the goal 

was to decrease the number of diversity cases. [FN11]

Cf. Wright, Miller and Cooper, Federal Practice & 

Procedure § 3641(3d ed.1998) (explaining that the 

1998 amendment "clarif[ied] an aspect of diversity of 

citizenship jurisdiction that plaintiffs frequently 

manipulated in attempts to defeat diversity jurisdiction 

(or, more commonly, to fabricate that kind of 

jurisdiction)"). Whatever its purpose, by defining the 

citizenship of representative plaintiffs as that of the 

decedent, infant or incompetent, Congress made it 

impossible to either manufacture or defeat diversity 

jurisdiction in most but not all cases involving 

representative plaintiffs. Thus, while there are a 

number of classes of representative plaintiffs (such as 

trustees) to which Section 1332(c)(2) does not apply, 

little law has been developed in this area in the last two 

decades. 

FN11. "The provisions of this title make 

modest amendments to reduce the basis for 

Federal court jurisdiction based solely on 

diversity of citizenship. 

* * * 

While the Judicial Conference of the United 

States has long supported total abolition of 

diversity jurisdiction, such measures are very 

controversial. There are many litigants who 

zealously protect the right to choose between 

the State and Federal courts. This title makes 

three changes in the diversity area: It 

increases the amount in controversy from 

$10,000 to $50,000; it treats permanent 

resident aliens in the United States as citizens 

of the State of domicile; and it provides that 

citizenship in representative party cases 

(estates, infants, and incompetents) is 

determined by reference to the citizenship of 

the 'represented' party." 

134 Cong. Rec. S16284-01; 1988 WL 

177968 (1988). 

 The law has continued to develop in cases involving 

assignments. Modell thus points the Court to a number 

of lower court decisions that have essentially applied 

the Kramer analysis of collusive assignments to 

plaintiffs' attempts to defeat diversity jurisdiction.

[FN12] The leading case is the Fifth Circuit's decision 

in Grassi v. Ciba-Geigy, 894 F.2d 181 (5th Cir.1990). 

The Grassi plaintiffs obtained a default judgment 

against Ciba-Geigy PLC in Texas state court. Id. at 

182. Unable to enforce the judgment, the plaintiffs 

sued Ciba-Geigy PLC's parent company, Ciba-Geigy, 

Ltd. Id. Before doing so, the plaintiffs assigned 2% of 

their interest in their claim to a Costa Rican 

corporation. Id. This had the result of destroying 

diversity jurisdiction since foreign parties were on 

both sides of the dispute. Id.

FN12. It is worth noting at the outset that 

"[t]he Supreme Court has not yet spoken as 

to whether the lower federal courts have 

correctly read the Kramer case as authorizing 

application of its principles to attempts by 

plaintiffs to defeat federal diversity 

jurisdiction." Louisiana v. Sprint 

Communications Co., L.P., 892 F.Supp. 145, 

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149 n. 4 (M.D.La.1995) (emphasis in 

original). 

*12 The plaintiffs relied on Provident for the 

proposition that courts cannot question assignments 

made to defeat diversity jurisdiction. Id. at 182-83. 

The Fifth Circuit read Provident as standing for two 

propositions: "First, that federal courts lack the power 

to look beyond the pleadings in determining the 

existence of diversity jurisdiction absent specific 

statutory authorization; and second, that state law and 

the state court systems will adequately defend a 

defendant's right to removal jurisdiction against 

devices designed to defeat it. These propositions have 

not fared well since 1887." Id. at 183. 

 As for the second proposition, the Fifth Circuit relied 

on Kramer and the cases interpreting Kramer as a 

direct departure from any reliance on the state courts. 

Id. at 183-84; see also Picquet v. Amoco Prod. Co.,

513 F.Supp. 938, 942 (M.D.La.1981) (Kramer

"inject[s] a new note of realism into the determination 

of diversity jurisdiction"). Regarding the first 

proposition, the Court cited Wecker, supra, as 

"recogniz[ing] that federal courts do possess some 

inherent authority to look beyond the pleadings in 

order to protect a litigant's right to diversity 

jurisdiction." [FN13] 894 F.2d at 183. Wecker is a 

traditional application of the fraudulent joinder rule 

that "diversity jurisdiction [is] not defeated by joinder 

of a nondiverse defendant who could not conceivably 

be liable." Id.

FN13. As will be discussed in more detail 

below, this argument does not fare so well in 

distinguishing Mecom. In Mecom, the 

Supreme Court relied upon the fraudulent 

joinder doctrine in refusing to consider the 

motive for the representative appointment. 

284 U.S. at 189. 

 The Fifth Circuit concluded as follows: "Although the 

basic propositions for which Provident and its 

progeny stand have been abandoned, the Supreme 

Court has not had formal occasion to reexamine that 

ruling since 1887." Id. at 184. Although not overruled,

[FN14] Provident was limited to its facts of a 

complete assignment. [FN15] Id. at 184-85.

According to the Fifth Circuit, courts are free to 

examine the motive behind partial assignments to 

defeat diversity jurisdiction. [FN16] Id. To do 

otherwise would be unjust: 

FN14. See Go Computer Inc. v. Microsoft 

Corp., No. C 05-03356, 2005 U.S. Dist. 

LEXIS 31404 (N.D.Cal. Nov. 21, 2005) 

(refusing to remand a case where the 

assignment was complete, because "it is this 

Court's view that it is bound by Provident

and its progeny and cannot examine the 

motives behind the assignment"). 

FN15. Courts have also found that partial 

assignments are prone to manipulation. With 

partial assignments the potential to collude to 

game federal jurisdiction is much greater, 

since the assignor still has an interest in the 

litigation. E.g., Grassi, 894 F.2d at 185. 

FN16. "[D]espite the absence of a statute 

specifically granting district courts the 

authority to inquire into assignments made 

for the purpose of defeating federal 

jurisdiction, the existence of diversity 

jurisdiction and the removal statute, 28 

U.S.C. § 1441, grant the Court the power to 

protect its own jurisdiction." 

Picquet, 513 F.Supp. at 943. 

Congress has created diversity jurisdiction and the 

right of removal under 28 U.S.C. § 1441 for the 

purpose of protecting non-resident litigants from 

local prejudice. Although there are many, including 

(or especially) members of the federal judiciary, 

who question the continuing need for its existence, 

removal based on diversity of citizenship is a right 

conferred by Congress, the need for which "may 

well be greatest when the plaintiff tries hardest to 

defeat it." American Law Institute, Study of the 

Division of Jurisdiction Between State and Federal 

Courts, Official Draft, at 169 (1969). This right 

would be an illusory one indeed if a plaintiff could 

defeat it by the simple expedient of assigning a 

fractional interest in the outcome of the suit to an 

agent performing what is essentially litigation 

support on a contingent fee basis. 

 Id. at 185; see also Gentle v. Lamb-Weston, Inc., 302 

F.Supp. 161, 165 n. 10 (D.Maine 1969) ("So long as 

federal diversity jurisdiction exists[,] the need for its 

assertion may well be greatest when plaintiff tries 

hardest to defeat it."). 

*13 Thus, a number of courts now consider whether a 

plaintiff's motive for assigning a claim is to defeat 

diversity jurisdiction. In almost all of these cases, a 

partial assignment was obviously calculated to defeat 

diversity. [FN17] See Grassi, 894 F.2d at 182

(assigning a 2% interest to a Costa Rican corporation); 

JMTR Enters., L.L.C. v. Duchin, 42 F.Supp.2d 87, 91 

(D.Mass.1999) (assigning a portion of the claim to a 

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related company of non-diverse citizenship); Smilgin v. 

New York Life Ins. Co., 854 F.Supp. 464, 465 

(S.D.Tex.1994) (assigning only 1% of the claim to the 

non-diverse plaintiff); Picquet, 513 F.Supp. at 940

(assigning 1/108th interest in the land at issue); Gentle,

302 F.Supp. at 162 (assigning 1% of the claim to a law 

school classmate of the plaintiff's attorney). One court 

has distilled from precedent the following factors that 

should be considered: 

FN17. A number of courts that consider 

attempts to defeat diversity jurisdiction rely 

upon Miller v. Perry, 456 F.2d 63 (4th 

Cir.1972). This reliance is misguided. In 

Miller, the North Carolina wrongful death 

statute required the appointment of a North 

Carolina resident as representative in a suit 

against a North Carolinian. Id. at 64. The 

plaintiff's motive was not to defeat diversity 

jurisdiction, but to comply with North 

Carolina law. The Fourth Circuit "inject[ed] 

a new note of realism into the determination 

of diversity jurisdiction" not to determine 

whether an otherwise proper representative 

was collusively joined to defeat diversity, but 

to assess whether the representative's 

citizenship (required only by state law) 

should be considered at all. Id; see also 

Messer, 612 F.2d at 1374 ("Plaintiff here 

being plainly non-collusive, having no stake 

in the matter, being appointed only to fulfill 

the North Carolina statutory requirement[,]" 

does not have any "substantive interest in this 

case."). This Court previously answered this 

question in the positive as to Sims under 

Navarro Savings. 

The pattern includes, among other factors: (1) a 

partial, rather than total, assignment; (2) lack of 

consideration paid by the assignee to the assignor; 

(3) the plaintiff's motive was to stay in state court; (4) 

the assignee had no interest in the litigation before 

the assignment; and (5) the assignment was made 

shortly before the suit was filed. 

 JMTR, 42 F.Supp. at 92 (citing Grassi, 894 F.2d at 

186).

 Modell asks the Court to apply these same principles 

to the appointment of Sims. First, Sims is only one of 

three trustees, and thus she cannot control the actions 

of the trust on her own. Second, Modell posits that 

plaintiffs' reason for seeking remand is to take 

advantage of local animosity related to his decision to 

move the Browns to Baltimore. Third, Sims was a 

stranger to the trust prior to appointment. Fourth, Sims 

was appointed mere days before this action was filed 

in the Cuyahoga County Court of Common Pleas. 

 Modell has not cited, and the Court's research has not 

uncovered, any Sixth Circuit case where a court 

considered whether an assignment was motivated to 

defeat diversity jurisdiction. For the reasons discussed 

in detail below, there are reasonable arguments that 

the Sixth Circuit would not follow Grassi and its 

progeny. In any event, this Court does not have before 

it an assignment and this action is not governed by 

Provident. Rather, Sims is a plaintiff as a result of a 

representative appointment. The issue is whether the 

circumstances justify a departure from the rule of 

Mecom.

 Modell has not pointed to any case from any 

jurisdiction where a court has been willing to limit 

Mecom in the same manner that courts have limited 

Provident. [FN18] Every case that the Court has found 

reached the opposite conclusion. 

FN18. Some courts have implied that Miller 

v. Perry is such a case. E.g., Picquet, 513 

F.Supp. at 943. However, as explained supra

at note 17, the Miller court did not examine 

the motive of the appointment. Instead, that 

court simply decided that the particular 

representative at issue was not a real party in 

interest for diversity purposes. 

 In Herrick v. Pioneer Gas Prods. Co., the plaintiff 

Herrick (a Texas citizen) was appointed 

co-administrator of the estate of the victim of an 

explosion. 429 F.Supp. 80, 81 (W.D.Ok.1976). The 

plaintiffs then sued the defendants (also Texas citizens) 

in Oklahoma state court. Id. The defendants removed 

and argued that Herrick was appointed solely to defeat 

diversity of citizenship. Id. The district court surveyed 

Mecom, Kramer, McSparran, Section 1359 and other 

relevant law before concluding as follows: "For the 

reasons that Mecom stands criticized but not overruled, 

and that 28 U.S.C. § 1359 relates only to the improper 

creation, not the destruction, of federal diversity 

jurisdiction, this Court feels bound to remand this 

case." Id. at 84. The defendants argued that the case 

differed from Mecom in that Herrick was not the sole 

administrator. To this the district court responded that 

"[t]his distinction fails to reach the heart of the 

problem as it is clear that Idabelle could appear before 

the probate court and resign as administratrix as did 

the widow in Mecom." Id.

*14 In In re Richardson-Merrell, Inc. "Bendectin" 

Prods. Liability Litig., the district court for the 

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Southern District of Ohio considered arguments that it 

should "engage in a closer scrutiny of the propriety of 

[an] appointment." MDL No. 486, 1986 U .S. Dist. 

LEXIS 30825, *12 (S.D.Ohio 1986). The court first 

noted that the cases cited in support of such scrutiny 

were creation of diversity cases under Section 1359. Id.

Absent statutory authorization, the court would not 

consider whether the appointment was calculated to 

defeat diversity: "Congress has passed no statute 

covering it, and it does not threaten this court's 

jealously guarded jurisdiction." Id. at *12-13. 

 The Court agrees that the result here is compelled by 

Mecom. As Section 1359 jurisprudence developed, the 

courts changed course and chose not to apply Mecom

to cases involving representatives precisely because 

Mecom involved an attempt to defeat rather than 

create diversity jurisdiction. McSparran, 402 F.2d at 

875; Pallozola, 797 F.2d at 1120; Messer, 612 F.2d at 

1375; Betar, 603 F.2d at 33; White, 434 F.2d at 1098 n. 

5; Scott, 481 F.Supp. at 74. Although some later courts 

discounted this distinction in the case of assignments, 

it is not a distinction without difference. Both 

Congress and the courts have traditionally sought to 

limit diversity jurisdiction, which is the result that is 

reached through application of Section 1359 to 

attempts to manufacture diversity jurisdiction. The 

converse is not true with respect to attempts to defeat 

federal jurisdiction, particularly on removal. 

 Congress has had numerous opportunities to abolish 

the distinction between attempts to defeat and 

attempts to manufacture diversity jurisdiction. Section 

1359 was passed nearly twenty years after Mecom was 

decided and only addressed attempts to invoke federal 

jurisdiction. The 1988 amendments to Section 

1332(c)(2) similarly did not address attempts to defeat 

jurisdiction. At best, Congress has been silent as to 

attempts to defeat federal jurisdiction. 

 While some courts have interpreted this silence as a 

license to expand federal jurisdiction, the Sixth Circuit 

does not afford district courts such a luxury. "[A] 

federal court must proceed with caution in deciding 

that it has subject matter jurisdiction." Musson 

Theatrical v. Federal Express Corp., 89 F.3d 1244, 

1252 (6th Cir.1996). "The Constitution allows federal 

courts only a limited and special jurisdiction, and 

powers not given to the federal courts by Congress are 

reserved to the primary repositories of American 

judicial power: state courts." Id. Here, Congress has 

not granted the power Modell asks this Court to 

exercise. To any pleas that statutes should be 

interpreted liberally to allow such an inquiry, the 

response is as follows: 

Any notion that the jurisdictional net should be 

broadly cast by the courts is at odds with the 

constitutional establishment of a federal 

government of limited powers. The Supreme Court 

has appealed to this constitutional vision in 

directing that the removal statutes are to be 

narrowly construed.... 

 *15 Palkow v. CSX Transp., Inc., 431 F.3d 543, 

554-555 (6th Cir.2005); see also Salei v. Boardwalk 

Regency Corp., 913 F.Supp. 993, 1007 

(E.D.Mich.1996). 

 Even if the Court were to embark on such an analysis, 

Section 1359 and Section 1332(c)(2) are in fact 

consistent with Mecom. Congress's intent in passing 

both statutes was to limit rather than expand diversity 

jurisdiction. Under Section 1332(c)(2), motive is 

irrelevant for representatives of decedents, infants and 

incompetents. The only difference is that with these 

representatives it is the decedent, infant or 

incompetent's citizenship that counts. 

 Nor has the Supreme Court demonstrated any 

willingness to ignore the distinction between attempts 

to create jurisdiction and attempts to defeat 

jurisdiction. Much like Congress, the Supreme Court 

has been careful in its language. Although some courts 

have gleaned from Kramer broad authorization to 

inquire into all forms of transfers or assignments, 

Justice Harlan's opinion was pointedly narrow: "The 

issue before us is whether Kramer was 'improperly or 

collusively made' a party 'to invoke the jurisdiction' of 

the District Court, within the meaning of 28 U.S.C. § 

1359." Kramer, 394 U.S. at 825. Contrary to some 

courts' assumptions, the Supreme Court described 

Congress's purpose in passing Section 1359 as 

keeping tort and contract cases out of federal court. Id.

at 428-29. 

 In recent dicta the Supreme Court was precise in 

distinguishing between attempts to create diversity 

jurisdiction to which Section 1359 and Kramer apply 

and attempts to defeat diversity jurisdiction which are 

confined to the traditional fraudulent joinder doctrine: 

No party here has been "improperly or collusively" 

named solely to create federal jurisdiction, see 28 

U.S.C. § 1359 ("A district court shall not have 

jurisdiction of a civil action in which any party, by 

assignment or otherwise, has been improperly or 

collusively made or joined to invoke the jurisdiction 

of such court."); Kramer v. Caribbean Mills, Inc.,

394 U.S. 823, 830, 89 S.Ct. 1487, 23 L.Ed.2d 9 

(1969) (assignment for collection only, motivated 

by desire to make diversity jurisdiction available, 

falls within the "very core" of § 1359); Little v. 

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Giles, 118 U.S. 596, 600-607, 7 S.Ct. 32, 30 L.Ed. 

269 (1886) (where land was purportedly sold to 

out-of-state farmer but no money or deed changed 

hands, quiet title action could not be maintained 

based on farmer's diverse citizenship), nor to defeat 

it, see Chesapeake & O.R. Co. v. Cockrell, 232 U.S. 

146, 152, 34 S.Ct. 278, 58 L.Ed. 544 (1914) (diverse 

defendants, upon showing that joinder of 

nondiverse party was "without right and made in 

bad faith," may successfully remove the action to 

federal court). 

 Lincoln Prop. Co. v. Roche, 546 U.S. 81, ----, 126 

S.Ct. 606, 614, 163 L.Ed.2d 415 (2005). 

 Although some commentators suggest that the lower 

courts should lead Congress in the development of this 

area of the law, [FN19] this case is practically 

indistinguishable from Mecom. Even if the Court were 

to accept the Grassi /assignment line cases, the 

reasoning employed by those cases does not readily 

transfer to representative appointments. Grassi relied 

on Wecker v. National Enameling & Stamping, a 

traditional fraudulent joinder case, as a source of 

power to examine the assignment and to distinguish 

Provident. Grassi, 894 F.2d at 183. The Grassi court 

reasoned that Wecker, by showing a willingness to 

protect a litigant's right to diversity jurisdiction, 

essentially overruled any notion that federal courts 

lack power to consider a plaintiff's motive to defeat 

diversity jurisdiction. Id. This reasoning does not 

serve to distinguish Mecom. In Mecom, the Supreme 

Court based its refusal to consider motive on the 

fraudulent joinder doctrine and Wecker. Mecom, 284 

U.S. at 189-90. Under these circumstances, the Court 

simply cannot recognize Wecker as approving of 

efforts to inquire into the motive of a representative 

appointment for purposes of defeating diversity 

jurisdiction. 

FN19. "As far as the possibility of the 

enactment of a statutory prohibition on the 

use of devices to defeat federal diversity 

jurisdiction that would parallel the 

prohibition against the creation of diversity 

jurisdiction found in Section 1359, it appears 

that this may be an area of the law in which 

Congress takes its guidance from judicial 

developments." Wright, Miller and Cooper, 

Federal Practice and Procedure § 3641 (3d 

ed.1998); see also Gentle, 302 F.Supp. at 165

(citing Moore for the proposition "that the 

federal courts should not await legislative 

action to cure an erroneous doctrine which 

had been evolved by the federal courts"). 

*16 One arguably significant distinction between this 

case and Mecom is that Sims is one of three trustees. 

Grassi and its progeny distinguished Provident on the 

basis that it involved a complete assignment of claims. 

A complete assignment removes any interest that the 

assignor may have had prior to assignment. With a 

partial assignment, the assignor retains an interest in 

the action. In most of the partial assignment cases, that 

retained interest was 95% or greater. However, a 

similar distinction does not apply to representative 

appointments. No matter how many representatives 

are appointed, the beneficiary's interest is always the 

same. Even if Provident is properly distinguished on 

this basis, Mecom is not. [FN20]

FN20. This does not mean that a 

representative's citizenship will always be 

considered for diversity purposes. If a 

particular representative has almost no 

responsibility, the representative may not 

qualify as a real party in interest. Cf., 

Navarro, 446 U.S. at 465-66; Miller, 456 

F.2d at 64. 

 At the end of the day, the Court is left with the 

seeming injustice of subjecting Modell to an Ohio 

State Court in light of the potential bias he may face 

and the progress already made in Minogue I. First of 

all, the case has been refiled as a result of Modell's 

decision to seek the previous dismissal well into 

litigation on a basis other than the merits. Second, 

such judgments are not for this Court to make when 

the Supreme Court has spoken decisively on the issue 

as it did in Mecom. Third, this is essentially a contract 

suit that the parties have argued under New York and 

Ohio law. The Ohio Courts are more than competent 

to adjudicate these substantive matters as well as the 

pending motion to dismiss. Fourth, if the Court of 

Common Pleas foresees difficulty in seating an 

unbiased jury, it may transfer the case elsewhere 

within the state or even out of state. See Ohio Civ. R. 

3(C)(4) (permitting transfer of a case to an adjoining 

county "when it appears that a fair and impartial trial 

cannot be had in the county in which the suit is 

pending"); State ex rel. Smith v. Cuyahoga County 

Court of Common Pleas, 106 Ohio St.3d 151, 153, 832 

N.E.2d 1206 (2005) (explaining that "forum non 

conveniens applies to cases in which the more 

convenient forum is in another state or another 

country"). 

 In sum, pursuant to Navarro Savings plaintiff Sims is 

a real party in interest whose citizenship is properly 

considered for diversity purposes. Pursuant to Mecom 

v. Fitzsimmons Drilling Co. the Court is forbidden 

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from speculating further into the motive for Sims's 

appointment as trustee. [FN21] Because Sims and 

Modell are both citizens of Maryland, there is no 

diversity of citizenship and thus no subject matter 

jurisdiction for the Court to hear plaintiffs' state law 

claims. The action must be remanded to the Cuyahoga 

County Court of Common Pleas. 

FN21. It is not entirely clear that such an 

analysis would result in this Court retaining 

jurisdiction. The fact of Callaghan's illness is 

undisputed. Although Modell disputes the 

relevance of Sims's expertise in Maryland 

probate law, if he is successful in defending 

this action that is where this dispute will 

ultimately be settled. The main strikes 

against Sims are the timing of her 

appointment and the fact that plaintiffs in fact 

chose not to refile in the Maryland district 

court. However, the rule suggested by 

Modell would essentially require the Court to 

assume the worst of plaintiffs' motives, 

effectively precluding the appointment of 

reasonable nondiverse trustees and depriving 

plaintiffs of their choice of forum. See, e.g., 

Hackney v. Newman Mem'l Hosp., 621 F.2d 

1069, 1071 (10th Cir.1980) ("Had plaintiff 

been appointed as the original administratrix, 

defendants admit they would have had 

problems in challenging the appointment."). 

 Finally, Modell argues that jurisdiction cannot be 

ousted by changes in parties during litigation. The 

simple response is that Minogue I is over. Modell 

sought dismissal for lack of standing and the district 

court agreed. That case is now closed. To Modell's 

complaint that plaintiffs have not returned documents 

from Modell I, the proper response is to enforce the 

parties' protective order. 

*17 Because the action is being remanded, Modell's 

motion to dismiss and motion to transfer are moot. 

CONCLUSION

 For the foregoing reasons, Plaintiffs' Motion to 

Remand is GRANTED. 

 IT IS SO ORDERED. 

 Not Reported in F.Supp.2d, 2006 WL 1704932 

(N.D.Ohio) 

END OF DOCUMENT 

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