Diversity Jurisdiction and the German AG

Diversity Jurisdiction and the German AG

      In a recent decision from Alabama, a complaint was found to be deficient where it failed to explore the nature of the German AG. Stringer v. Volkswagen Group of America, Inc., No. 15-00509-N, 2015 WL 5898326 (S.D. Ala. October 8, 2015).

      Stringer filed a complaint against Volkswagen Group of America, Inc. and additional defendants including Volkswagen AG and Audi AG. As to these entities, he alleged that each is a “corporation created and existing pursuant to the laws of the nation of Germany.” In response to this assertion, the trial court wrote:

This is not even nominally adequate for an American corporation, as no allegation is made about each entity’s principal place of business. Moreover, Plaintiff has made no attempt to explain what the suffix “AG” means or to plead to the Court how it should be treated for purposes of diversity.

      After reviewing a variety of decisions as to the issues involved in the classification of foreign organizations as either corporations or unincorporated, the court directed that:

As such, if the Plaintiff wishes to adequately plead diversity, he must allege what kind of entity Defendants Volkswagen AG and Audi AG are - that is, whether each is a corporate or unincorporated entity.