88
OCTOBER TERM, 2001
Syllabus
certiorari to the united states court of appeals for the second circuit
No. 01-651. Argued April 17, 2002—Decided June 10, 2002
Respondent Traffic Stream (BVI) Infrastructure Ltd. is a corporation organized under the laws of the British Virgin Islands (BVI), an Overseas Territory of the United Kingdom. In 1998, petitioner, then known as Chase Manhattan Bank, agreed to finance some Traffic Stream ventures, with the contract to be governed by New York law and with Traffic Stream agreeing to submit to the jurisdiction of federal courts in Manhattan. Chase subsequently sued Traffic Stream for defaulting on its obligations. The District Court for the Southern District of New York found subject-matter jurisdiction under the alienage diversity statute, 28 U. S. C. § 1332(a)(2)—which gives district courts jurisdiction over civil actions where the controversy, inter alia, is "between citizens of a State and citizens or subjects of a foreign state"—and granted Chase summary judgment. In reversing, the Second Circuit found that, because Traffic Stream was a citizen of an Overseas Territory and not an independent foreign state, jurisdiction was lacking.
Held: A corporation organized under the laws of the BVI is a "citize[n] or subjec[t] of a foreign state" for the purposes of alienage diversity jurisdiction. Pp. 91-100.
(a) A corporation of a foreign state is deemed that state's subject for jurisdiction purposes. Steamship Co. v. Tugman, 106 U. S. 118, 121. Although Traffic Stream was organized under BVI law and the BVI is unrecognized by the United States Executive Branch as an independent foreign state, this Court has never held that the requisite status as citizen or subject must be held directly from a formally recognized state, as distinct from that state's legal dependency; and any such distinction would be entirely beside the point of the alienage jurisdiction statute. Pp. 91-92.
(b) The BVI Constitution was established by the Crown of the United Kingdom. The United Kingdom exercises pervasive authority over the BVI, e. g., the Queen may annul any BVI statute and make laws for the BVI. The Crown's representatives have imposed laws and international obligations on the BVI. In a practical sense, then, the statutes permitting incorporation in the BVI are enacted in the exercise of the United Kingdom's political authority, and it seems fair to regard a BVI
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