Air Century SA v. Atlantique Air Assistance ( 2011 )

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
November 22, 2011
FOR THE TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
AIR CENTURY SA, a Dominican
Republic corporation,
Plaintiff-Appellant,
v. No. 10-6253
(D.C. No. 5:08-CV-01324-D)
ATLANTIQUE AIR ASSISTANCE, (W.D. Okla.)
a French corporation,
Defendant-Appellee,
and
INSURED AIRCRAFT TITLE
SERVICE, INC., an Oklahoma
corporation,
Defendant.
ORDER AND JUDGMENT *
Before LUCERO, ANDERSON, and GORSUCH, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Air Century, SA (Air Century) relied on diversity jurisdiction, 28 U.S.C.
§ 1332(a)(2), when it sued Atlantique Air Assistance (Atlantique) and Insured
Aircraft Title Services, Inc. (IATS) for breach of contract in the United States
District Court for the Western District of Oklahoma. Unfortunately, § 1332(a)(2)
did not provide jurisdiction; complete diversity is lacking because Air Century
and Atlantique are both foreign corporations with principal places of business
outside the United States, and therefore are both foreign citizens. Nevertheless,
in the district court the parties assumed (and stipulated to) the existence of
diversity jurisdiction. Instead of challenging diversity, Atlantique sought and was
awarded dismissal for lack of personal jurisdiction. Air Century stipulated to the
dismissal with prejudice of its claims against IATS and then appealed the
dismissal of its claims against Atlantique.
Belatedly noticing the diversity issue early in the appeal, Atlantique moved
to dismiss for lack of subject-matter jurisdiction. In response, Air Century
conceded that the district court had never had subject-matter jurisdiction. It
requested that this court (1) vacate the district court’s order dismissing Atlantique
for lack of personal jurisdiction and (2) dismiss this appeal. The dismissal
motion and all related filings were referred to this panel for decision. The parties
reiterated their jurisdictional positions in their merits briefs.
We have jurisdiction to consider this matter under 28 U.S.C. § 1291,
see Cunningham v. BHP Petroleum Gr. Brit. PLC, 427 F.3d 1238, 1243 n.4
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(10th Cir. 2005) (noting, in case where diversity was absent, that the district
court’s orders were final and appealable), as well as the established principle that
a court always has jurisdiction to consider its jurisdiction, see Combs v.
PriceWaterhouse Coopers LLP, 382 F.3d 1196, 1204 (10th Cir. 2004). Thus, we
need not dismiss the appeal, even though the lack of subject-matter jurisdiction
means that we cannot reach the merits of the parties’ dispute, see Gadlin v.
Sybron Int’l Corp., 222 F.3d 797, 800 (10th Cir. 2000).
Atlantique urges us to leave undisturbed the district court’s dismissal for
lack of personal jurisdiction because the Supreme Court has held that there is no
priority between subject-matter jurisdiction and personal jurisdiction. See
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584-88 (1999). In following
Ruhrgas AG, however, this court has chosen to address subject-matter jurisdiction
first where resolving that question is the easier route. See Gadlin, 222 F.3d
at 799. In this case, diversity is the easier issue.
Section 1332(a)(2) requires complete diversity. See Depex Reina 9 P’ship
v. Tex. Int’l Petroleum Corp., 897 F.2d 461, 465 (10th Cir. 1990). But “the
presence of foreign parties on both sides of the dispute destroys the complete
diversity required by § 1332(a)(2).” U.S. Motors v. Gen. Motors Eur., 551 F.3d
420, 424 (6th Cir. 2008); see also Grupo Dataflux v. Atlas Global Group, L.P.,
541 U.S. 567, 569 (2004) (stating, in case involving both state and foreign
citizens as plaintiffs and a foreign citizen as defendant, that because “aliens were
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on both sides of the case, . . . the requisite diversity was therefore absent”);
Ruhrgas AG, 526 U.S. at 584 (same); Cunningham, 427 F.3d at 1242, 1244(noting that the district court never had jurisdiction because a partnership was the
real party-plaintiff in interest; its citizenship rested on its partners, one of whom
was a foreign citizen; and a defendant was also a foreign citizen); Gschwind v.
Cessna Aircraft Co., 232 F.3d 1342, 1345 (10th Cir. 2000) (assuming without
deciding that § 1332(a)(2) was not satisfied where a foreign citizen sued a foreign
citizen and a state citizen). Because Air Century and Atlantique are undisputedly
both foreign citizens, complete diversity never existed.
Under these circumstances, the district court “had no power to rule on any
substantive motions or to enter judgment in the case,” and all of its orders must
be vacated. Cunningham, 427 F.3d at 1245. In light of the lack of subject-matter
jurisdiction, “we need not address the district court’s rulings on personal
jurisdiction.” Gadlin, 222 F.3d at 800.
The motion to dismiss the appeal is DENIED. The district court’s orders
are VACATED, and this matter is REMANDED with instructions for the district
court to DISMISS the case for lack of subject-matter jurisdiction.
Entered for the Court
Stephen H. Anderson
Circuit Judge
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10-6253, Air Century SA v. Atlantique Air Assistance
LUCERO, J., dissenting.
The district court dismissed this action for lack of jurisdiction, and all of us
agree that the district court lacked jurisdiction. Rather than affirming, however,
the majority vacates the district court’s dismissal and orders it to re-dismiss the
case on other grounds. Because this curious disposition contravenes an age-old
principle of appellate review, I respectfully dissent.
Our court articulated this rule a half-century ago:
[I]t is consistently held that an order or judgment which is correct in
ultimate effect will not be disturbed on appeal even though the lower
tribunal relied upon a wrong ground or gave an untenable reason for
its action. The issue on appeal is the correctness in ultimate effect of
an order or judgment, not the reason or reasons given therefor by the
trial court. And if an order or judgment is sustainable upon any legal
basis, it will be upheld on appeal despite the erroneous or untenable
reasons given by the trial court or lower tribunal for its entry.
First Nat’l Bank v. Luther, 217 F.2d 262, 266 (10th Cir. 1954) (citations omitted);
see also Helvering v. Gowran, 302 U.S. 238, 245 (1937) (“In the review of
judicial proceedings the rule is settled that if the decision below is correct, it must
be affirmed, although the lower court relied upon a wrong ground or gave a
wrong reason.”); Williams v. Norris, 25 U.S. (12 Wheat.) 117, 120 (1827)
(Marshall, C.J.) (“If the judgment [of the lower court] should be correct, although
the reasoning, by which the mind of the Judge was conducted to it, should be
deemed unsound, that judgment would certainly be affirmed in the superior
Court.”).
We have uniformly applied this principle when reviewing dismissals for
lack of jurisdiction. See, e.g., Robert Gay Energy Enters., Inc. v. State Corp.
Comm’n, 753 F.2d 857, 862 n.5 (10th Cir. 1985); see also Tast v. Dean, 182 F.
App’x. 748, 748-49 (10th Cir. 2006) (unpublished); Muchnick v. Colorado, 106 F.
App’x 659, 660 (10th Cir. 2004) (unpublished); United States ex rel. Schwartz v.
Coastal Healthcare Group, Inc., 232 F.3d 902 (10th Cir. 2000) (unpublished table
decision).
The majority offers no justification for its departure from this well-settled
rule. It cites Cunningham v. BHP Petroleum Great Britain PLC, 427 F.3d 1238,
1245 (10th Cir. 2005), for the proposition that a court without subject matter
jurisdiction has “no power to rule on any substantive motions,” but the district
court did not do that here—it merely dismissed for lack of jurisdiction. Nor does
Gadlin v. Sybron International Corp., 222 F.3d 797 (10th Cir. 2000), justify the
majority’s break from established principle. Our vacatur in that case was justified
by the district court’s ultra-jurisdictional consideration of the statute of
limitations. See id. at 798.
Seeing no reason to stray from the well-established rule, I would simply
affirm the district court’s dismissal on other grounds.
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