CORPORATIONS - STOCKHOLDER'S DERIVATIVE SUIT - DIVERSITY OF CITIZENSHIP

Authors

Edward S. Biggar, University of Michigan Law SchoolFollow

Abstract

Plaintiff, a New York corporation, brought a stockholder's derivative suit, in federal court, against the American Tobacco Company, a New Jersey corporation, and its directors, the majority of whom were citizens of New York. There being no federal question involved, defendant moved to dismiss the complaint because there was no proper diversity of citizenship. Plaintiff argued that by the New York decisions the ultimate interests of the defendant corporation and the plaintiff were identical, and that consequently the defendant corporation must be considered as the real plaintiff, thus supplying the necessary diversity of citizenship under the rule of Erie R.R. v. Tompkins. Held, that even assuming the applicability of the Tompkins case, the New York decisions had no bearing on the arrangement of parties for the purpose of determining federal jurisdiction. Motion to dismiss granted. J. R. A. Corp. v. Boylan, (D. C. N. Y. 1939) 30 F. Supp. 393.

Recommended Citation

Edward S. Biggar, CORPORATIONS - STOCKHOLDER'S DERIVATIVE SUIT - DIVERSITY OF CITIZENSHIP, 38 Mich. L. Rev. 724 (1940).
Available at: https://repository.law.umich.edu/mlr/vol38/iss5/14