Newman-Green, Inc. v. Alfonzo-Larrain

104 L. Ed. 2d 893 · Supreme Court of the United States · 1989

Facts

Newman-Green, an Illinois corporation, sued a Venezuelan corporation, Venezuelan citizens, and William Bettison, a U.S. citizen domiciled in Venezuela, for contract breach. Bettison's 'stateless' status (U.S. citizen but no state domicile) destroyed complete diversity jurisdiction. The Seventh Circuit panel dismissed Bettison to cure jurisdiction, but the en banc court reversed, leading to Supreme Court review.

Issue

Does a federal court of appeals have the authority, under 28 U.S.C. § 1653 or Federal Rule of Civil Procedure 21, to dismiss a dispensable nondiverse party to preserve statutory diversity jurisdiction?

Holding

Yes, a court of appeals has the authority to dismiss a dispensable nondiverse party whose presence spoils statutory diversity jurisdiction, thereby preserving the case. The Supreme Court reversed the en banc Seventh Circuit.

Rule

While 28 U.S.C. § 1653 only allows amendment of defective jurisdictional allegations, Federal Rule of Civil Procedure 21 permits courts, including appellate courts, to drop dispensable nondiverse parties at any stage to cure jurisdictional defects, especially when it avoids prejudice and wasteful litigation.

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Case brief last reviewed 2026-04-18. Prepared by CaseReader from the published opinion.