JPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure Ltd.

Last updated

JPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure Ltd.
Seal of the United States Supreme Court.svg
Argued April 17, 2002
Decided June 10, 2002
Full case nameJPMorgan Chase Bank, Petitioner v. Traffic Stream (BVI) Infrastructure Limited
Citations536 U.S. 88 ( more )
122 S. Ct. 2054; 153 L. Ed. 2d 95; 2002 U.S. LEXIS 4203; 70 U.S.L.W. 4520; 197 A.L.R. Fed. 619; 2002 Cal. Daily Op. Service 5034; 2002 Daily Journal DAR 6353; 15 Fla. L. Weekly Fed. S 359
Case history
PriorOn writ of certiorari to the United States Court of Appeals for the Second Circuit
Court membership
Chief Justice
William Rehnquist
Associate Justices
John P. Stevens  · Sandra Day O'Connor
Antonin Scalia  · Anthony Kennedy
David Souter  · Clarence Thomas
Ruth Bader Ginsburg  · Stephen Breyer
Case opinion
MajoritySouter, joined by unanimous

JPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure Ltd., 536 U.S. 88 (2002), was a case in which the Supreme Court of the United States held that a corporation organized under the laws of a British overseas territory is considered a "citizen or subject of a foreign state" for purposes of federal court jurisdiction.

Contents

Background

Chase Manhattan Bank (which later became JP Morgan Chase) sued Traffic Stream (BVI) Infrastructure Ltd., a company incorporated in the British Virgin Islands, in a dispute over a financing. Chase filed the suit in the United States District Court for the Southern District of New York. Federal jurisdiction was based on alienage under 28 U.S.C. § 1332(a)(3), in that the suit was between a United States company and a "citizen or subject of a foreign state." The District Court ruled for Chase, and Traffic Stream appealed.

Although no jurisdictional issue had been raised in the District Court, on appeal the Second Circuit inquired sua sponte whether federal subject-matter jurisdiction existed over the action. The Second Circuit concluded that jurisdiction was lacking. The court reasoned that since the British Virgin Islands are a dependent territory rather than a "foreign state," a British Virgin Islands corporation was not a "citizen or subject of a foreign state." The Second Circuit panel relied on the Circuit's prior Matimak decision, which had reached the same conclusion concerning a citizen of Hong Kong prior to the transfer of Hong Kong from British to Chinese sovereignty.

Traffic Stream petitioned the U.S. Supreme Court for certiorari , with the support of an amicus curiae brief from the government of the United Kingdom. The Court agreed to hear the case.

Opinion of the Court

Justice David H. Souter wrote the opinion for a unanimous Court, reversing the Second Circuit's decision and holding that a British Virgin Islands company like Traffic Stream was properly considered a "citizen or subject of a foreign state" for jurisdictional purposes.

The Court observed that Congress has authorized the federal courts to hear civil actions involving more than $75,000 between "citizens of a State and citizens or subjects of a foreign state." A corporation incorporated under the laws of a foreign state is deemed a citizen of that foreign state. The Second Circuit's view was that because the British Virgin Islands are a British dependent territory rather than a sovereign state under British and international law, a British Virgin Islands company was not a citizen or subject of a foreign state for purposes of alienage jurisdiction.

The Supreme Court disagreed, finding the distinction drawn by the Second Circuit to be "entirely beside the point of the statute providing alienage jurisdiction." After surveying the political status of British territories such as the British Virgin Islands, as well as the constitutional and statutory history of alienage jurisdiction, the Court held that a British Virgin Islands corporation could be considered a citizen or subject of a sovereign state, the United Kingdom. The fact that British Virgin Islands residents are not citizens or subjects of the United Kingdom under British nationality law, the Court held, did not negate that they are citizens or subjects of a foreign state for purposes of the alienage jurisdiction statute. The Court also observed that its decision was consistent with the views of the governments of the United Kingdom, the British Virgin Islands, and the United States.

See also

Related Research Articles

<span class="mw-page-title-main">British Virgin Islands</span> British Overseas Territory in the Caribbean

The British Virgin Islands (BVI), officially the Virgin Islands, is a British Overseas Territory in the Caribbean, to the east of Puerto Rico and the US Virgin Islands and north-west of Anguilla. The islands are geographically part of the Virgin Islands archipelago and are located in the Leeward Islands of the Lesser Antilles and part of the West Indies.

<span class="mw-page-title-main">Eleventh Amendment to the United States Constitution</span> 1795 amendment restricting ability to sue states in federal courts

The Eleventh Amendment is an amendment to the United States Constitution which was passed by Congress on March 4, 1794, and ratified by the states on February 7, 1795. The Eleventh Amendment restricts the ability of individuals to bring suit against states in federal court.

<span class="mw-page-title-main">Politics of the United States Virgin Islands</span> Politics of a U.S. territory

Politics of the United States Virgin Islands takes place in a framework of a presidential representative democratic dependency, whereby the Governor is the head of the territory's government, and of a multi-party system. United States Virgin Islands are an unincorporated and organized territory of the United States, administered by the Office of Insular Affairs of the United States Department of the Interior. Executive power is exercised by the local government of the Virgin Islands. The judiciary is independent of the executive and the legislature.

<span class="mw-page-title-main">Government of the British Virgin Islands</span>

His Majesty's Government of the Virgin Islands is the democratically elected government of the British Overseas Territory of the British Virgin Islands. It is regulated by the Constitution of the British Virgin Islands.

Extraterritorial jurisdiction (ETJ) is the legal ability of a government to exercise authority beyond its normal boundaries.

<span class="mw-page-title-main">Alien Tort Statute</span> US legislation

The Alien Tort Statute, also called the Alien Tort Claims Act (ATCA), is a section in the United States Code that gives federal courts jurisdiction over lawsuits filed by foreign nationals for torts committed in violation of international law. It was first introduced by the Judiciary Act of 1789 and is one of the oldest federal laws still in effect in the U.S.

<span class="mw-page-title-main">Diversity jurisdiction</span> U.S. court jurisdiction over persons of different states or nationalities

In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction that gives United States federal courts the power to hear lawsuits that do not involve a federal question. For a federal court to have diversity jurisdiction over a lawsuit, two conditions must be met. First, there must be "diversity of citizenship" between the parties, meaning the plaintiffs must be citizens of different U.S. states than the defendants. Second, the lawsuit's "amount in controversy" must be more than $75,000. If a lawsuit does not meet these two conditions, federal courts will normally lack the jurisdiction to hear it unless it involves a federal question, and the lawsuit would need to be heard in state court instead.

In law, an alien is any person who is not a citizen or a national of a specific country, although definitions and terminology differ to some degree depending upon the continent or region. More generally, however, the term "alien" is perceived as synonymous with foreign national.

<span class="mw-page-title-main">House of Assembly of the British Virgin Islands</span>

The House of Assembly of the British Virgin Islands, until 2007 known as the Legislative Council, has 15 members: 13 directly elected for four-year terms, and two ex officio members.

<span class="mw-page-title-main">Law of the British Virgin Islands</span>

The law of the British Virgin Islands is a combination of common law and statute, and is based heavily upon English law.

<span class="mw-page-title-main">Human rights in the British Virgin Islands</span>

In practice, basic human rights in the British Virgin Islands (BVI) appear to be respected. Reports of repression of freedom of speech, interference with democracy or the rule of law, and arbitrary arrest and torture are generally non-existent. The BVI have been described as "generally free of human rights abuses".

<span class="mw-page-title-main">LGBT rights in the British Virgin Islands</span>

Lesbian, gay, bisexual, and transgender (LGBT) persons in the British Virgin Islands face legal challenges not experienced by non-LGBT residents. Same-sex sexual activity has been legal in the British Virgin Islands since 2001.

Taxation in the British Virgin Islands is relatively simple by comparative standards; photocopies of all of the tax laws of the British Virgin Islands (BVI) would together amount to about 200 pages of paper.

<span class="mw-page-title-main">Outline of the British Virgin Islands</span> Overview of and topical guide to the British Virgin Islands

The following outline is provided as an overview of and topical guide to the British Virgin Islands:

<span class="mw-page-title-main">Politics of the British Virgin Islands</span> Politics of a British overseas territory

Politics of the British Virgin Islands takes place in a framework of a parliamentary representative democratic dependency, whereby the Premier is the head of government, and of a multi-party system. The British Virgin Islands are an internally self-governing overseas territory of the United Kingdom. The United Nations Committee on Decolonization includes the islands on the United Nations list of non-self-governing territories. The Constitution of the Islands was introduced in 1971 and amended in 1979, 1982, 1991, 1994, 2000 and 2007. Executive power is exercised by the government. Legislative power is vested in both the government and the House of Assembly. The Judiciary is independent of the executive and the legislature. Military defence is the responsibility of the United Kingdom.

<i>HIH Casualty and General Insurance Ltd v Chase Manhattan Bank</i>

HIH Casualty and General Insurance Ltd v Chase Manhattan Bank[2003] UKHL 6 is an English contract law case concerning misrepresentation.

<span class="mw-page-title-main">British Virgin Islands company law</span>

The British Virgin Islands company law is the law that governs businesses registered in the British Virgin Islands. It is primarily codified through the BVI Business Companies Act, 2004, and to a lesser extent by the Insolvency Act, 2003 and by the Securities and Investment Business Act, 2010. The British Virgin Islands has approximately 30 registered companies per head of population, which is likely the highest ratio of any country in the world. Annual company registration fees provide a significant part of Government revenue in the British Virgin Islands, which accounts for the comparative lack of other taxation. This might explain why company law forms a much more prominent part of the law of the British Virgin Islands when compared to countries of similar size.

<i>Nilon Limited v Royal Westminster Investments S.A.</i>

Nilon Limited v Royal Westminster Investments S.A.[2015] UKPC 2, P.C. is a leading case of the Judicial Committee of the Privy Council on the right of a party to seek rectification of a company's share register, and the use of "anchor defendants". The case also included various obiter comments about the doctrine of forum non conveniens.

<i>Stichting Shell Pensioenfonds v Krys</i>

Stichting Shell Pensioenfonds v Krys[2014] UKPC 41 was a decision of the Privy Council on appeal from the British Virgin Islands relating to an anti-suit injunction in connection with an insolvent liquidation being conducted by the British Virgin Islands courts.

<span class="mw-page-title-main">Effects of Hurricane Irma in the British Virgin Islands</span>

The effects of Hurricane Irma in the British Virgin Islands were significant in terms of both human and socio-economic impact on the Territory. Hurricane Irma struck the British Virgin Islands as a Category 5 hurricane during the daylight hours of Wednesday, 6 September 2017. It caused widespread destruction, and killed a total of four people. The eye of the hurricane traveled over the three major islands in the group: Virgin Gorda, Tortola and Jost Van Dyke.

References