Carolyn Freidrich v. Thomas Davis

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________
No. 14-1031
_________
CAROLYN FREIDRICH
f/k/a Carolyn Zimmermann,
Appellant
v.
THOMAS DAVIS
________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-12-cv-05604)
District Judge: Honorable Anita B. Brody
_______
Submitted under Third Circuit
LAR 34.1(a) on
September 12, 2014
Before: RENDELL, GREENAWAY, JR., and SLOVITER,
Circuit Judges.
(Filed: September 22, 2014)
Michael J. Elliott, Esq.
Scanlon & Elliott
159 South Main Street
Suite 400
Akron, OH 44308
Andrew R. Spirt, Esq.
Golomb & Honik
1515 Market Street
Suite 1100
Philadelphia, PA 19107
Counsel for Appellant
Gerard F. Lipski, Esq.
Kennedy, Campbell, Lipski & Dochney
1818 Market Street
Suite 2510
Philadelphia, PA 19103
Counsel for Appellee
_____________
OPINION
_____________
SLOVITER, Circuit Judge.
Carolyn Freidrich (“Freidrich”) and Thomas Davis
(“Davis”), both American citizens, were passengers on a U.S.
Airways flight in 2010 from Philadelphia, Pennsylvania to
Munich, Germany. Freidrich alleges that, during the flight,
Davis left his seat and, while standing in the aisle waiting to
use the lavatory, he fell on her, breaking her arm. In 2012,
Freidrich filed suit against Davis for her injuries in the United
States District Court for the Eastern District of Pennsylvania
based on diversity jurisdiction. Davis subsequently moved to
dismiss the suit for lack of subject matter jurisdiction. The
District Court granted Davis’ motion to dismiss. Freidrich
filed a timely appeal. For the following reasons, we will
affirm.1
1
The District Court dismissed for lack of subject matter jurisdiction under 28 U.S.C. §
1332. This Court has jurisdiction over the District Court’s final order under 28 U.S.C. §
1291.
2
I.
Freidrich invoked diversity jurisdiction pursuant to 28
U.S.C. § 1332(a), claiming that she was a citizen of Ohio and
that Davis was a citizen of Pennsylvania. Davis filed a
motion to dismiss for lack of subject matter jurisdiction,
claiming that he was domiciled in Germany and no longer a
citizen of Pennsylvania. The District Court allowed for
limited discovery on the issue of domicile and held an
evidentiary hearing on November 20, 2013.
Following the hearing, the District Court, in a
Memorandum Opinion dated December 16, 2013, concluded
that Davis is domiciled in Germany, not Pennsylvania. The
District Court made the following findings of fact:
1. Both Freidrich and Davis are American
citizens.
2. Davis was born in June 1951 in
Harrisburg, Pennsylvania.
3. From 1985 to 1996, Davis lived in a home
he owned at 108 Blacksmith Road, Camp
Hill, Pennsylvania.
4. In 1996, Davis moved from Pennsylvania
to Germany. Since 1996, he has
continuously resided in Germany with the
exception of a six-month period in 1999
when he temporarily returned to
Pennsylvania for work.
5. In September 1999, Davis sold his home
at 108 Blacksmith Road. He currently
owns no property in Pennsylvania.
6. In July 2005, after deciding to remain in
Germany, Davis and his wife
purchased a home at Hintere
Gerbergass 7, Nordlingen, Germany.
They continue to reside there.
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7. Since 1999, Davis has owned his own
consulting company, Davis Consulting, a
German corporation with exclusively
German customers.
8. From 2000 to 2011, Davis filed German
tax returns using a German address.
9. Davis holds a German driver’s license
issued in February 1998.
10. Davis holds a German residency permit
issued in October 2003.
11. Since 2009, Davis has visited the United
States approximately twice a year for
seven to ten days at a time primarily for
the purpose of visiting family in the
Mechanicsburg, Pennsylvania area.
12. When he visits Pennsylvania, Davis stays
with either his mother-in-law in a one[-]
bedroom apartment at 5225 Wilson Lane,
Mechanicsburg, Pennsylvania, or with his
mother in a two-bedroom cottage in a
Mechanicsburg, Pennsylvania retirement
community.
13. Davis votes in U.S. national elections by
absentee ballot in Cumberland County,
Pennsylvania. In September 2012, Davis
filed a Federal Post Card Application
Voter Registration and Absentee Ballot
Request [(“Registration and Ballot
Request form”)]. Davis listed [his home in
Nordlingen, Germany] as his current
address. Davis listed his mother-in-law’s
Mechanicsburg, Pennsylvania address as
his U.S. address for voting purposes.
14. Davis checked a box on the Registration
and Ballot Request form that reads: “I am
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a U.S. citizen residing outside the U.S.,
and I intend to return.”
15. Davis holds a Pennsylvania driver’s
license issued in August 2011. The license
lists his mother-in-law’s Mechanicsburg,
Pennsylvania address.
16. From 2000 to 2012, Davis filed U.S. tax
returns using a German address.
17. Davis has a 401K retirement account with
American Express. Davis also has a bank
account in Pennsylvania with Santander
Bank that he keeps in order to access U.S.
currency.
18. Davis and his wife consulted local
German authorities about becoming
German citizens, but he has retained
his American citizenship.
19. At his deposition, Davis testified that he
intends to remain in Germany for the rest
of his life. He also testified that he and his
wife discussed the issue and jointly
decided to remain in Germany. Davis
testified that his friends and his life are in
Germany.
App. at 6–8 (footnotes omitted).
The District Court found that Davis, as an American
citizen domiciled in Germany, is “‘stateless’ for the purposes
of diversity jurisdiction, and he cannot sue or be sued under
the diversity jurisdiction statute.” App. at 10. Therefore, the
District Court ruled that it lacked subject matter jurisdiction
over the dispute and granted the motion to dismiss. Freidrich
appeals.
II.
Freidrich contends that the District Court had diversity
jurisdiction pursuant to 28 U.S.C. § 1332(a) because she is a
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citizen of Ohio and Davis is a citizen of Pennsylvania. We
exercise plenary review of a District Court’s grant of a
motion to dismiss for lack of subject matter jurisdiction, as
the question is one of law. McCann v. Newman Irrevocable
Trust, 458 F.3d 281, 286 (3d Cir. 2006). We review a District
Court’s factual findings for clear error. Id. “Under [the clear-
error] standard of review, our sole function is to review the
record to determine whether the findings of the District Court
were clearly erroneous, i.e., whether we are left with a
definite and firm conviction that a mistake has been
committed.” Id. (internal quotation marks and citation
omitted).
The statute governing diversity jurisdiction, 28 U.S.C.
§ 1332(a), provides:
The district courts shall have original jurisdiction
of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between—
(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a
foreign state, except that the district courts shall
not have original jurisdiction under this subsection
of an action between citizens of a State and
citizens or subjects of a foreign state who are
lawfully admitted for permanent residence in the
United States and are domiciled in the same State;
(3) citizens of different States and in which
citizens or subjects of a foreign state are additional
parties; and
(4) a foreign state, defined in section 1603(a) of
this title, as plaintiff and citizens of a State or of
different States.
For the purposes of diversity jurisdiction, we have
explained that “[c]itizenship is synonymous with domicile,
and ‘the domicile of an individual is his true, fixed and
permanent home and place of habitation. It is the place to
which, whenever he is absent, he has the intention of
returning.’” McCann, 458 F.3d at 286 (quoting Vlandis v.
Kline, 412 U.S. 441, 454 (1973)). “The party asserting
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diversity jurisdiction bears the burden of proof.” McCann,
458 F.3d at 286 (citing McNutt v. Gen. Motors Acceptance
Corp., 298 U.S. 178, 189 (1936)). “A party generally meets
this burden by proving diversity of citizenship by a
preponderance of the evidence.” Id.
The Supreme Court, interpreting § 1332(a), has
concluded that American citizens who are domiciled abroad
do not satisfy any of the enumerated categories required for a
federal court’s exercise of diversity jurisdiction. See
Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828-
29 (1989). The Court explained, “[i]n order to be a citizen of
a State within the meaning of the diversity statute, a natural
person must both be a citizen of the United States and be
domiciled within the State.” Id. at 828. An American citizen
living abroad is not domiciled in (nor a citizen of) any State
and is therefore “stateless.” Id. And Americans living abroad
are not citizens of foreign states because they are United
States citizens. Id. at 828-29.
Based upon Newman-Green and the language of §
1332(a), we have stated that
[a]n American citizen domiciled abroad, while
being a citizen of the United States is, of course,
not domiciled in a particular state, and therefore
such a person is “stateless” for purposes of
diversity jurisdiction. See [Newman-Green, 490
U.S. at 828]. Thus, American citizens living
abroad cannot be sued (or sue) in federal court
based on diversity jurisdiction as they are neither
“citizens of a State,” see 28 U.S.C. § 1332(a)(1),
nor “citizens or subjects of a foreign state,” see id.
at § 1332(a)(2).
Swiger v. Allegheny Energy, Inc., 540 F.3d 179, 184 (3d Cir.
2008). This reasoning is consistent with the approach of
other circuits. See, e.g., D.B. Zwirn Special Opportunities
Fund, L.P. v. Mehrotra, 661 F.3d 124, 126 (1st Cir. 2011); ISI
Int’l, Inc. v. Borden Ladner Gervais LLP, 316 F.3d 731, 733
(7th Cir. 2003); Cresswell v. Sullivan & Cromwell, 922 F.2d
60, 68-69 (2d Cir. 1990).
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It follows that if Davis, an American citizen, is
domiciled in Germany, he is “stateless” for the purposes of
diversity jurisdiction, as the District Court held, and cannot
sue or be sued in diversity. This conclusion, while troubling,
is compelled by the language of the statute and by precedent
from both the Supreme Court and our circuit. We find this
troubling because it closes the doors of federal court to a
citizen of a State who wishes to sue another citizen based on
diversity, as in this case. It may be that this “stateless person”
doctrine is an unintended consequence flowing from
Congress’ now possibly outdated assumption that U.S.
citizens generally reside in the United States. See Swiger,
540 F.3d at 188 (McKee, J., concurring).
We turn next to the District Court’s factual finding that
Davis was an American citizen domiciled in Germany. Such
factual findings are reviewed under the deferential clear-error
standard. See McCann, 458 F.3d at 286.
Freidrich argues on appeal that, prior to living in
Germany, Davis was domiciled in Pennsylvania, and this
Pennsylvania domicile, “once acquired is presumed to
continue until it is shown to have been changed.” Appellant’s
Br. at 18 (quoting Washington v. Hovensa LLC, 652 F.3d 340,
345 (3d Cir. 2011)). While the presumption of continued
domicile does not shift the burden of proof to Davis, Freidrich
argues that it “shifts the burden of production” to Davis “to
provide ‘sufficient evidence to rebut the presumption.’”
Appellant’s Br. at 18 (quoting Washington, 652 F.3d at 345).
Freidrich contends that domicile is a question of both physical
residence and intent, and Davis, in his 2012 Registration and
Ballot Request form, checked a box that declared his intent to
return to the United States, instead of selecting a box stating
“I am a U.S. citizen residing outside the U.S. and I do not
intend to return.” Appellant’s Br. at 13, 20-21; App. at 89.
Thus, according to Freidrich, because Davis manifested his
intent to return to the United States, he did not produce
sufficient evidence to rebut the presumption that his domicile
continued to be Pennsylvania.
We do not find clear error in the District Court’s
conclusions that Davis produced sufficient evidence to rebut
the presumption of continued domicile and that Davis is
8
domiciled in Germany. The District Court’s finding of a
German domicile is based upon both Davis’ actions and his
declarations of intent. Davis testified that he lives in
Germany and that he intends to remain there. Although he
exercises his political rights in the United States, Davis does
not exercise them at the state or local level. From 2000 to
2011, Davis filed tax returns in both the United States and
Germany listing his address in Germany. In addition, Davis’
home, business, and family are all located in Germany.
Although Davis continues to have some ties to
Pennsylvania, including some bank accounts and a
Pennsylvania driver’s license, it was not clear error for the
District Court to conclude that Davis rebutted the
presumption of continuing domicile based upon other
evidence favoring a finding of a German domicile. With the
presumption destroyed, the burden is on Freidrich to prove
diversity of citizenship by a preponderance of the evidence.
Freidrich has failed to meet her burden. Freidrich
relies entirely on the Registration and Ballot Request form
from 2012 in which Davis stated that he intends to return to
the United States. This alone does not satisfy the
preponderance-of-the-evidence standard. Davis testified that
he made this selection on the form simply because he could
not rule out the possibility that he may one day return to the
United States. History, and the uncertainty of the world
situation, show the wisdom of that caution. The vast majority
of the other objective evidence in the record—evidence based
upon more than mere statements of his intent—points to
Germany as Davis’ “true, fixed and permanent home and
place of habitation. It is the place to which, whenever he is
absent, he has the intention of returning.” McCann, 458 F.3d
at 286 (quoting Vlandis, 412 U.S. at 454). We cannot
conclude that the District Court’s finding that Davis was
domiciled in Germany was clear error.
III.
For the reasons set forth above, we affirm the District
Court’s grant of Davis’ motion to dismiss for lack of subject
matter jurisdiction.
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