Case Name: Krista WILSEY, Individually and as Special Administrator of the Estate of Lacey M. Hammel, Deceased Minor, Plaintiff-Appellant, Cross-Appellee, v. Charles F. EDDINGFIELD, M.D., Edward McKenney, D.O., and Vasant F. Pawar, M.D., Defendants-Appellees, Cross-Appellants
Court: United States Court of Appeals for the Seventh Circuit
Jurisdiction: United States
Decision Date: 1985-08-09
Citations: 780 F.2d 614
Docket Number: Nos. 84-2178, 84-2237 and 84-2258
Parties: Krista WILSEY, Individually and as Special Administrator of the Estate of Lacey M. Hammel, Deceased Minor, Plaintiff-Appellant, Cross-Appellee, v. Charles F. EDDINGFIELD, M.D., Edward McKenney, D.O., and Vasant F. Pawar, M.D., Defendants-Appellees, Cross-Appellants.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 780
Pages: 614–620

Head Matter:
Krista WILSEY, Individually and as Special Administrator of the Estate of Lacey M. Hammel, Deceased Minor, Plaintiff-Appellant, Cross-Appellee, v. Charles F. EDDINGFIELD, M.D., Edward McKenney, D.O., and Vasant F. Pawar, M.D., Defendants-Appellees, Cross-Appellants.
Nos. 84-2178, 84-2237 and 84-2258.
United States Court of Appeals, Seventh Circuit.
Aug. 9, 1985.
Rehearing and Rehearing In Banc Denied Dec. 16, 1985.
Alexandra de Saint Phalle, Londrigan, Potter & Randle, Springfield, Ill., for plaintiff-appellant, cross-appellee.
David B. Mueller, Cassidy & Mueller, Peoria, Ill., for defendants-appellees, cross-appellants.
Before WOOD and FLAUM, Circuit Judges, and BROWN, Senior District Judge.
. Although,, plaintiff-appellant, a resident of Iowa, sues in her individual capacity, she designates herself as "Special Administrator" and purports also to sue in that capacity. In her complaint she sought to have the district court exercise its diversity jurisdiction and appoint her special administrator under the Illinois statute. The district court determined that plaintiff-appellant as a non-resident could not qualify as special administrator under Illinois law and accordingly dismissed the complaint for lack of jurisdiction. The father of the deceased child, an Illinois resident, has a suit pending in state court alleging the same cause of action.
The following Order was not previously published pursuant to Circuit Rule 35, but at Judge Posner’s request the Order originally issued on August 9, 1985, as hereby amended, is for publication.
The Honorable Wesley E. Brown, Senior District Judge for the District of Kansas, is sitting by designation.

Opinion:
ORDER
On consideration of the motion for reconsideration filed in the above-entitled cause by plaintiff-appellant, cross-appellee Krista Wilsey, all of the judges on the original panel have voted to deny reconsideration. Accordingly,
It Is Ordered that the aforesaid motion for reconsideration be, and the same is hereby, Denied.
It Is Further Ordered that this case be Remanded to the district court with directions, to dismiss the complaint for lack of subject matter jurisdiction.
Having had the full benefit of counsel's views on the jurisdictional issue presented and the district court's determination that decedent's father, like the defendants, is an Illinois citizen, we now hold that jurisdiction is lacking.
In Betar v. DeHavilland Aircraft of Canada, Ltd., 603 F.2d 30, 32 (7th Cir.1979), we stated the general rule that "the citizenship of the real party in interest is determinative in deciding whether the district court has diversity jurisdiction." A party who has no significant interest in the outcome of the litigation cannot use his citizenship to transform a local controversy into one within the diversity jurisdiction of a federal court. Thus, although one serving in a representative capacity is a real party in interest in the sense that the action is properly maintained in his name, Fed.R.Civ.P. 17(a), a representative is not necessarily the real party in interest for the purpose of determining diversity jurisdiction. Id. "[I]f the law of the state gives the administrator, guardian, or other representative the status of only a nominal fiduciary then the beneficiary or the ward, not the administrator or guardian, is the real party in interest, and it is the citizenship of the beneficiary or ward, as the case may be, that is determinative." 3A Moore's Federal Practice ¶ 17.04 (2d ed. 1985). That the touchstone of the test is a review of the representative's legal powers, rights and duties was reaffirmed in Navarro Savings Assn. v. Lee, 446 U.S. 458, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980). See also Miller v. Perry, 456 F.2d 63, 65 (4th Cir.1972).
In Betar, we analyzed the duties of a personal representative under the Illinois Wrongful Death Act, Ill.Rev.Stat. ch. 70, § 1 et seq., and determined that those duties were an inadequate basis for finding the personal representative to be the real party in interest for diversity purposes.
The Illinois Wrongful Death Act gives neither the personal representative nor the decedent's estate the right to share in the proceeds of the recovery. The representative's sole duty under the Act is to distribute the proceeds to the statutory beneficiaries in the event of recovery.
Betar, 603 F.2d at 35. We therefore concluded that the personal representative lacked a "stake in the outcome" and that the statutory beneficiaries were the real parties in interest; "[t]hey are the only parties that have an actual stake in the outcome of the litigation." Id. We are fully aware that the Tenth Circuit has disagreed with the Betar analysis, finding that a personal representative, whose duties are to bring the wrongful death action, conduct the litigation, and distribute the proceeds, is not merely a nominal party. Hackney v. Newman Memorial Hospital, Inc., 621 F.2d 1069, 1071 (10th Cir.1980). We are, however, bound by this circuit's precedent unless that precedent is later determined to be erroneous. This is not such a ease.
Wilsey nevertheless contends that Betar does not govern the outcome of the present suit. She reads Betar to hold that the beneficiaries are the real parties in interest only when the personal administrator lacks a personal stake in the outcome of the lawsuit. She would have us concentrate on her status as a beneficiary in conjunction with her nominal status as personal representative. She informs us that if we do not do so, we will be creating conflict with seven other circuit courts of appeals. Initially, we note that Betar's reference to a stake in the outcome, read in context, was inextricably intertwined with its previous discussion of the duties of a personal representative under the Illinois Wrongful Death Act. The court held that the beneficiaries were the real parties in interest because the representative is only a nominal party. Betar neither holds, nor suggests, that the citizenship of a personal representative, who under state law has only nominal duties but who by virtue of her status as a beneficiary has a stake in the outcome, is controlling for diversity purposes. This is the issue presented here.
Hackney is cited by Wilsey in support of her argument. In Hackney, the decedent, the defendants, and all beneficiaries but one were Oklahoma citizens. The daughter-beneficiary who was an Oklahoma citizen originally was appointed administrator of decedent's estate. When the estate had been fully administered and only the cause of action for wrongful death remained, the administrator resigned and the daughter-beneficiary who was a Colorado citizen was named as her successor. The latter then filed suit in federal court claiming diversity of citizenship between herself and the defendants. The Tenth Circuit found that diversity jurisdiction had been properly invoked because the administrator had a "substantial relationship" to the litigation. Two considerations led the court to this conclusion. As previously noted, the court apparently disagreed with Betar, O'Brien v. AVCO Corp., 425 F.2d 1030 (2d Cir.1969), and Lester v. McFaddon, 415 F.2d 1101 (4th Cir.1969), that a personal representative appointed for the sole purpose of pursuing a wrongful death action is merely a nominal party. Under Oklahoma law, the administrator, to whom the cause of action belongs, has full authority to conduct the litigation; the beneficiaries have no right to settle, control or otherwise dispose of the action. The Hackney court further found that the administrator, by virtue of her status as a beneficiary under the Oklahoma wrongful death act, had a substantive stake in the litigation. The court's bottom line was that the appointment of a nonresident fiduciary who has a substantial beneficial interest in the litigation is immune from challenge on jurisdictional grounds. Hackney does not answer the question presented here. In that case, a personal representative's duties under the Oklahoma wrongful death statute were found to be more than nominal. In contrast, in this ease Wilsey, as personal representative, would be merely a nominal party under Betar. She has a stake in the outcome (i.e., is a real party in interest) solely by virtue of her status as a beneficiary. But this stake is no different from that held by the two remaining beneficiaries, one of whom is an Illinois resident. We think that the exception Wilsey asks us to create cannot withstand scrutiny. Where the persona] representative's role under state law is that of a nominal party, the citizenship of the beneficiaries controls. Merely because one of these beneficiaries seeks appointment as the personal representative does not dispense with consideration of the citizenship of the other beneficiaries. Complete diversity between the beneficiaries and the defendants is required.
Before CUMMINGS, Chief Judge, BAUER, WOOD, CUDAHY, ESCHBACH, POSNER, COFFEY, FLAUM, EASTER-BROOK and RIPPLE, Circuit Judges, and BROWN, Senior District Judge .
ORDER
On consideration of the petition for rehearing and suggestion in banc filed in the above-entitled cause by plaintiff-appellant, Krista Wilsey, individually and as Special Administrator of the Estate of Lacey M. Hammel, Deceased Minor, a vote of the active members of the court was requested, and a majority of the active members of the court have voted to deny rehearing in banc. The order entered in this case on August 9, 1985, is amended sua sponte by the original panel by the addition of a new footnote number 1, and the renumbering of the original footnotes. All of the judges on the original panel have voted to deny the petition for rehearing. Accordingly,
It Is Ordered that the aforesaid petition for rehearing and petition for rehearing in banc be, and the same are hereby Denied.
. In an order dated April 17, 1985, we remanded this case sua sponte to the district court for a determination whether there was complete diversity between the parties, but retained jurisdiction of the appeal. Plaintiff-appellant Wilsey filed a motion for reconsideration and in the alternative a petition for rehearing with suggestion for rehearing en banc, challenging the April 17, 1985 decision and order. Because no final order had yet been issued in this case, only the motion for reconsideration is properly before us.
. There is disagreement in Illinois cases on the extent of a personal representative's role in a wrongful death action. Compare Franciscy v. Jordan, 43 Ill.App.2d 344, 193 N.E.2d 219 (2d Dist.1963) (surviving spouse, as administrator of decedent's estate, legally possessed sole right of action or control over litigation) with Strong v. Hodges, 344 Ill.App. 306, 100 N.E.2d 667 (2d Dist.1951) (administrator, who is only the legal agent of the beneficiary, does not have sole and exclusive right to control suit or to compromise, settle or release cause of action).
. In the cases referred to by Wilsey, with the exception of two addressed later, the appointment of nonresident representatives with only nominal duties had the effect of creating facial diversity of citizenship that would not otherwise have existed, all defendants and all beneficiaries being citizens of the same state. Because each of these representatives lacked a stake in the outcome (i.e., his status under state law was as a nominal party only), the appointments were viewed as violations of 28 U.S.C. § 1359. In dicta, these courts stated that if the representatives had had stakes in the outcomes, their citizenship may have controlled for diversity purposes.
. Our holding does not conflict with cases in which a nonresident beneficiary was named as personal representative and allowed to bring the wrongful death action in federal court. See O'Brien v. Stover, 443 F.2d 1013 (8th Cir.1971); lamen v. Goos, 302 F.2d 421 (8th Cir.1962). In O'Brien, the nonresident fiduciary was the decedent's "sole heir." Diversity of citizenship was bona fide. In lamen, the citizenship of all beneficiaries was the same as that of the nonresident surviving spouse who was appointed as personal representative.
The Honorable Jesse E. Eschbach since participating in consideration of this case has taken senior status.
The Honorable Wesley E. Brown, Senior District Judge for the District of Kansas, is sitting by designation. Judge Brown did not participate in the vote on the petition for rehearing in banc.
. Judges Eschbach, Posner, and Easterbrook voted to grant rehearing in banc, and Judges Eschbach and Easterbrook join in Judge Pos-ner's dissent to the Order of this court denying rehearing in banc which follows this Order.