Constitution, Article III, Section 2, Clause 1, and 28 United States Judicial Code 1332(a)(2). U.S. Const. art. III, 2, cl. 1. grants federal judicial power over all cases that are between a U.S. State or the citizen of a U.S. State and any "foreign States, Citizens or Subjects". 28 U.S.C. 1332(a)(2) provides for jurisdiction over a civil action that is between the citizen(s) of a U.S. State, and the "citizens or subjects of a foreign state".
The plaintiff attempted to sue Albert Khalily and D.A.Y. Kids Sportswear, Inc., in the Southern District of New York, on the basis of alleged breach of contract. Both defendants were incorporated in the State of New York. The plaintiff claimed the right to bring suit in a U.S. court under 28 U.S.C. 1332(a)(2), which grants jurisdiction to the court over civil disputes between U.S. citizens and "citizens or subjects of a foreign state".
During the breach of contract case, in June 1996, the court, of its accord, brought up the issue of whether it had proper jurisdiction over the matter. After the parties involved had briefed the issue, in August 1996, the court dismisssed it on the basis of lack of jurisdiction, having determined that, for the purposes of diversity jurisdiction, Hong Kong is not a "foreign state", and, therefore, the plaintiff cannot be considered a "citizen or subject" of one.
(a) Does "Hong Kong" merit the legal status of a "foreign state", thus allowing Matimak the status of a "citizen or subject of a foreign state" for the purposes of alienage jurisdiction;
(b) Does Matimak have the status of a "citizen or subject" of the United Kingdom because of the Hong Kong's status as a "British Dependent Territory", when Matimak brought suit;
(c)Does every non-U.S. citizen, in fact, have the right to claim alienage jurisdiction, when engaged in a civil dissent with a U.S. citizen
(a) No. Hong Kong is not recognized a "foreign state" by the Executive Branch of the U.S. Government, therefore, Matimak is not a "citizen or subject of a foreign state" for the purposes of alienage jurisdiction.
(b) No. Matmak is not a "citizen or subject" of the United Kingdom because the United Kingdom does not recognize corporations founded in Hong Kong as its "citizens or subjects".
(c) No. Only the "citizens or subjects" of foreign states which are recognized as being sovereign states by the U.S. Government may claim alienage jurisdiction.
(a) The definition of "foreign state" is not explicitly provided within the Constitution, nor in the relevent law. However, 13B C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure 3604 (1984) holds that the generally recognized definition of a "foreign state", for purposes of U.S. legal status is a state that is recognized formally by the Executive Branch of the Federal Government.
The Court used this definition to provide a ruling on the question of alienage jurisdiction in Iran Handicraft and Carpet Export Center v. Marjan International Corp., 655 F. Supp. 1275 (S.D.N.Y.), aff'd, 868 F.2d 1267 (2d Cir. 1988). At that time, the Court determined that because only the President has the power to receive Foreign Ministers, formal recognition of "foreign states" is solely the realm of the Executive Bra