Opinion ID: 2960214
Heading Depth: 2
Heading Rank: 1

Heading: jurisdiction

Text: Although the parties do not contest our jurisdiction, we are obliged to ascertain it independently. See, e.g., Joseph v. Leavitt, 465 F.3d 87, 89 (2d Cir. 2006) (“Although neither party has suggested that we lack appellate jurisdiction, we have an independent obligation to consider the presence or absence of subject matter jurisdiction sua sponte.”). We conclude that we have jurisdiction over both the original and consolidated action. First, with respect to the original action that we previously remanded for a jurisdictional finding, we see no factual error in the district court’s determination that the remaining parties—Monticello and Park Place—were completely diverse at the time that action was commenced. Second, with respect to the subsequently commenced action by the trustees, we are satisfied upon our review of the trust agreement and our questioning of the parties at oral argument that diversity jurisdiction exists over that action as well. For purposes of diversity jurisdiction, the citizenship of the fiduciary—not the beneficiary—generally controls. See O’Brien v. AVCO Corp., 425 F.2d 1030, 1032 (2d Cir. 1969) (citing Dodge v. Tulleys, 144 U.S. 451 (1892)). An exception exists where there is evidence of collusion for the purpose of obtaining federal jurisdiction. See 28 U.S.C. § 1359; see also Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 465–66 (1980) (holding that trustees who were “real parties in interest” could invoke 11 diversity jurisdiction on the basis of their own citizenships, in the absence of allegations of sham or collusion to manufacture diversity jurisdiction). Specifically, under the so-called “anti-collusion” statute, 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.” We explained in Airlines Reporting Corp. v. S & N Travel, Inc. that: We give careful scrutiny to assignments which might operate to manufacture diversity jurisdiction, the reasons for which we have made abundantly clear: such devices, unless controlled, can provide a simple means of expanding federal diversity jurisdiction far beyond [its] purpose. The cautious eye with which we view such assignments ensures that parties do not inappropriately channel ordinary tort and contract litigation, essentially disputes of a local nature, into the federal courts. Accordingly, we construe section 1359 broadly to bar any agreement whose “primary aim” is to concoct federal diversity jurisdiction. 58 F.3d 857, 862 (2d Cir. 1995) (citations and quotation marks omitted); see also Kramer v. Caribbean Mills, Inc., 394 U.S. 823, 825–26 (1969) (explaining that the purpose of the anticollusion statute was “to prevent the manufacture of Federal jurisdiction by the device of assignment”) (internal quotation marks omitted). In assessing whether an assignment is improper or collusive, several factors may be relevant, including but not limited to: “the assignee’s lack of a previous connection with the claim assigned; the remittance by the assignee to the assignor of any recovery; whether the assignor actually controls the conduct of the litigation; the timing of the assignment; the lack of any meaningful consideration for the assignment; and the underlying purpose of the assignment.” Airlines Reporting Corp., 58 F.3d at 863 (citations omitted). No single factor is dispositive. Id. 12 Here, we are satisfied that the Litigation Trust was not created for the improper purpose of manufacturing federal jurisdiction. To begin with, we are assured by appellants’ counsel that the Trust was created prior to counsel’s discovery of the jurisdictional defect. Moreover, a SEC filing supports the appellants’ assurances to us that the Litigation Trust was created for a legitimate business purpose; to wit, as a “condition to closing” a consolidation deal among Catskill, Mohawk and Monticello. Finally, the express terms of the Trust agreement place full responsibilities and powers over the litigation in the Trustees, and we have no reason to believe that these terms of the agreement are not being honored. We are thus satisfied that jurisdiction exists over the consolidated cases before us. See Navarro, 446 U.S. at 463–65.