Lincoln Property Co. v. Roche

Christophe and Juanita Roche (plaintiffs) leased an apartment in Virginia that was managed by Lincoln Property Co. (Lincoln) (defendant), a Texas corporation. The Roches discovered toxic mold in their apartment and filed a lawsuit in Virginia state court against Lincoln for violations of state law. Lincoln admitted that it managed the apartment during the contamination and removed the case to federal district court based on diversity jurisdiction. The district court granted summary judgment for Lincoln. The Roches moved to remand the case to state court, arguing that the federal court lacked subject-matter jurisdiction over the case. The Roches claimed that Lincoln was a parent company with a subsidiary or other affiliated company that was a citizen of Virginia, destroying diversity of citizenship. The Roches did not identify a Virginia subsidiary or join another defendant to the case. The district court denied the motion to remand, holding that removal was proper because Lincoln was a Texas corporation and there was complete diversity between the parties. The court of appeals reversed the district court, holding that Lincoln did not meet its burden to establish diversity of citizenship because it did not show that it did not own a Virginia subsidiary that was a real party in interest, meaning a party whose presence was necessary to properly resolve the case. The United States Supreme Court granted certiorari.