Lincoln Memorial University Law Review Archive
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Abstract
Establishing subject-matter jurisdiction is an antecedent question in every case before every court. Classifying foreign, non-corporate business entities poses unique problems that have led to a decades-long circuit split. To classify these foreign entities, judges are left with two competing approaches: the “juridical entity approach” and the “features approach.”The juridical entity approach, championed by the Fifth and Ninth Circuit Courts of Appeal, holds that if a foreign business entity is classified as a juridical person under the laws of that foreign nation, then it will be determined as such in the American federal court system. As a juridical person, its single domicile under diversity jurisdiction will be applied under 28 U.S.C. § 1332(a). The features approach, developed by the Seventh Circuit, provides a holistic review, basing an entity’s classification on certain features it has. If an entity contains features that a typical American corporation has, its domicile under diversity jurisdiction will be applied under 28 U.S.C. § 1332(c).These two approaches differ greatly. Worse, the lower courts have received no guidance from the Supreme Court, as the Court is weary of entering this jurisdictional thicket. So, with this decades-long circuit split coming to the fore as recently as last year, it is time for action. Only one body can resolve this issue: Congress.Neither approach is perfect, but Congress would be well-advised to adopt the features approach. This approach provides courts with a clear and repeatable analytical template, as well as end this ongoing—and unnecessary—circuit split.
Recommended Citation
Nicholas G. Glover B.A.,
The Problem That “Will Recur”: Sunny Handicraft v. Envision This! And The Problem of Properly Classifying Foreign, Non-Corporate Business Entities,
11
Lincoln Mem’l U. L. Rev.
(2024).
Available at:
https://digitalcommons.lmunet.edu/lmulrev/vol11/iss3/1
