Comment by Clare K. Pierce
This Comment focuses on the issue of venue in the federal court system for unincorporated associations and partnerships. Despite the occasional statements of courts and commentators to the contrary, it is an unsettled area of the law. Congress has never enacted decisive legislation regarding venue with respect to these types of business entities, and the rules have been left largely to judicial development.
The last time the United States Supreme Court visited this issue, it fashioned a venue rule for unincorporated associations by analogy to venue for corporations: “wherever [the entity] is ‘doing business.”’ However, since this determination, the venue statute for corporations has itself changed. Now, a defendant corporation's residence for venue purposes is any judicial district in which it is subject to personal jurisdiction. This change is substantial, not merely cosmetic.
Thus, if the analogy to corporations is to be utilized, it is important to determine whether the old (doing business) or the new (personal jurisdiction) analogy is to be employed to determine venue for unincorporated associations. Courts and commentators are divided. In addition, it is arguable that the analogy to corporations itself is less valid than it once was, given the detailed revisions of the venue statutes. These continue to provide special rules for incorporated entities only along with other developments in the law, through which differential treatment of corporations and unincorporated associations has been sharpened.
The second Part of this Comment contains a historical analysis of the venue provisions for individuals and corporations. This Part briefly defines venue and discusses the evolution of the venue provisions generally and for corporations specifically, from the first Judiciary Act to the present.
The third Part traces the evolution of the law regarding venue for unincorporated associations. This Part will discuss the rationale used to equate unincorporated associations to corporations for venue purposes in federal courts.
Then, in Part IV, important developments in the law, which may impact how venue for unincorporated associations should now be assessed, will be reviewed. One development was Congress's alteration of the statutory venue provisions for corporations in 1988. A second development is the Supreme Court's decision in Carden v. Arkoma Associates. Carden reaffirmed the separate treatment of unincorporated associations and corporations with regard to their citizenship for purposes of diversity.
In the fifth Part, these developments will be analyzed to determine whether the old venue rule applied to unincorporated associations (i.e. wherever it does business) is still the right rule to apply. In addition, possible alternative approaches, in light of the changes, will be discussed. Some of these alternative approaches may better reflect the statutory and judicial evolution that has recently taken place and provide a more sensible alternative to the status quo.
About the Author
Clare K. Pierce. B.A. 1996, University of Buffalo, S.U.N.Y.; J.D. candidate 1999, Tulane Law School.
Citation
73 Tul. L. Rev. 699 (1998)