79 Notre Dame L. Rev. 1925 (2003-2004)
The Tidewater Problem: Article III and Constitutional Change

handle is hein.journals/tndl79 and id is 1937 raw text is: THE TIDEWATER PROBLEM: ARTICLE III AND CONSTITUTIONAL CHANGE James E. Pfander* INTRODUCTION The Supreme Court's 1949 decision in National Mutual Insurance Co. v. Tidewater Transfer Co.' poses an enduring puzzle for students of the law of federal jurisdiction. The case began when the National Mu- tual Insurance Company-a District of Columbia corporation- brought suit in federal district court in Maryland. The plaintiff corpo- ration invoked the federal court's diversity jurisdiction, relying upon a then recently enacted statute that defined citizens of the District (and other territories) as citizens of a State for diversity purposes.2 This definition ran headlong into the restrictive terms of Article III itself, which provides for the assertion of jurisdiction over disputes between citizens of different States.3 It also bumped into an early Marshall * Prentice H. Marshall Professor of Law, University of Illinois College of Law. My thanks to Thomas Lee, Ron Rotunda, and Jay Tidmarsh for helpful comments, and to the editors of the Notre Dame Law Review for the invitation to participate in the Federal Courts, Practice and Procedure Issue. Special thanks to David Shapiro, for his many contributions to the field, for his comments on this Article, and for his kind words along the way. 1 337 U.S. 582 (1949). 2 As amended, the 1940 diversity statute extended the jurisdiction of the district courts to civil actions between citizens of different states or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory. See Act of Apr. 20, 1940, ch. 117, 54 Stat. 143 (codified as amended at 28 U.S.C. § 1332 (2000)). For the legislative history of the statute, see infra notes 178-82 and accompanying text. 3 The diversity grant of jurisdiction, as it has come to be known, extends the judicial power of the United States to controversies between Citizens of different States. U.S. CoNsT. art. III, § 2. Of an immense literature, see, Thomas D. Rowe, Jr., Abolishing Diversity Jurisdiction: Positive Side Effects and Potential for Further Reforms, 92 HARv. L. REv. 963 (1979); and David L. Shapiro, Federal Diversity Jurisdiction: A Survey and a Proposal, 91 HARv. L. REv. 317 (1977). Corporations have been deemed citizens of their state of incorporation, and more recently of the state in which they have their principal place of business. For more on corporate citizenship, see infra Part IV. 1925

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