Argument of Justice Souter
Mr. Souter: The second case that I have to announce this morning is No. 01-651 JP Morgan Chase Bank against Traffic Stream (BVI) Infrastructure Limited.
This case comes to us on writ of certiorari to the United States Court of Appeals for the Second Circuit.
By statute, the Federal Courts have jurisdiction over cases between citizens of State and citizens who are subjects of a foreign State.
The respondent, Traffic Stream, is a corporation organized under the laws of the British Virgin Islands, which is an overseas territory under the political authority of the United Kingdom.
After Traffic Stream and a New York corporation the petitioner, JP Morgan Chase Bank, became embroiled in a contract dispute, Chase attempted to sue Traffic Stream in Federal Court.
The Second Circuit held it because Traffic Stream is a corporation of the British Virgin Islands, and the islands are not recognized as an independent country, jurisdiction would not lie.
In a unanimous opinion filed today with the Clerk of the Court, we reverse.
Both the jurisdictional statute and the constitutional provision allowing alienage jurisdiction were intended to insure foreign as a neutral forum for dispute resolutin.
In this way, the United States could provide incentives for foreign investment and avoid angering foreign governments.
Given the pervasive authority exercised by the United Kingdom over the British Virgin Islands, these purposes of alienage jurisdiction must serve by treating the British Virgin Islands’ corporations, as citizens who are subjects of the United Kingdom.
It does not matter that United Kingdom law may provide fewer rights to residents of the British Virgin Islands than it does to other United Kingdom subjects.
It is our own law that we consult in determining whether a corporation will have access to our courts, and it is beyond dispute to the nationals of a foreign state, whatever their status in their home country, might be treated as citizens or subjects of that state for purposes of federal jurisdiction.
