Unreported / Non-Citable
Background
Grace Salako Smith filed a pro se lawsuit in Dallas County state court on behalf of the estate of Willie E. Smith (deceased), apparently seeking to prevent a foreclosure. Select Portfolio Services, a Utah corporation, removed the case to federal court based on diversity jurisdiction under 28 U.S.C. § 1332. In the notice of removal, SPS alleged that it is a Utah corporation and that the plaintiff is a Texas citizen who “resides in and is domiciled in the state of Texas.” The case was referred to Magistrate Judge David L. Horan for pretrial management.
Upon reviewing the notice of removal, the magistrate judge identified a critical deficiency in the jurisdictional allegations.
The Court’s Holding
The court held that the notice of removal does not distinctly and affirmatively show that the court possesses subject-matter jurisdiction. Under controlling Fifth Circuit precedent, when jurisdiction depends on citizenship, citizenship must be “distinctly and affirmatively alleged.” The court found the notice deficient because it fails to properly allege the estate’s citizenship.
Applying 28 U.S.C. § 1332(c)(2), the court explained that an estate’s citizenship is determined by the citizenship of the decedent (through the legal representative), not by where the estate representative resides or is domiciled. Since the notice alleged only that the plaintiff “resides in and is domiciled in the state of Texas,” it did not distinctly establish whether the decedent—and therefore the estate—was a Texas citizen or a citizen of another state. This failure to properly allege the estate’s citizenship left the jurisdictional basis unclear.
The court ordered SPS, as the party invoking federal jurisdiction, to amend the notice of removal by July 6, 2026, to address these jurisdictional deficiencies. The court warned that failure to cure the deficiency could result in remand for lack of subject-matter jurisdiction under 28 U.S.C. § 1447(c).
Key Takeaways
- Estate citizenship is determined by the decedent’s citizenship, not the residence of the legal representative or estate administrator.
- Notices of removal must distinctly and affirmatively allege the citizenship of all parties; vague or indirect allegations are insufficient to establish diversity jurisdiction.
- The party removing a case bears the burden of establishing federal subject-matter jurisdiction; failure to do so invites remand to state court.
Why It Matters
This order underscores the strict pleading requirements for establishing diversity jurisdiction, particularly in cases involving estates. Practitioners removing foreclosure cases and other actions on behalf of estates must clearly allege the decedent’s (not the representative’s) citizenship to satisfy federal jurisdictional requirements. Sloppy jurisdictional pleading—even if the parties’ ultimate citizenship may be diverse—can result in loss of federal forum and remand to state court.
The decision reflects courts’ ongoing vigilance in policing jurisdictional pleadings. As the magistrate judge noted, courts must examine the basis of jurisdiction sua sponte when necessary, and removal parties cannot rely on bare assertions about residence when the law requires more specific citizenship allegations tied to applicable statutory definitions.