10-2739 White Pearl Inversions, S.A., v. Cemusa, Inc.

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Civil Procedure
Diversity jurisdiction; corporations

When a foreign business entity is a party in a diversity action, the parties must explore whether it is comparable to a corporation or not.

“If it is hard to determine whether a business entity from a common-law nation is equivalent to a ‘corporation,’ it can be even harder when the foreign nation follows the civil-law tradition. Uruguay has at least three forms of limited-liability businesses: sociedad anónima (S.A.), sociedad anónima financiera de inversión (S.A.F.I.), and sociedad responsabilidad limitada (S.R.L.). White Pearl did not say which kind it is, and its lawyers did not analyze whether that kind of business organization should be treated as a corporation. We learned at oral argument that White Pearl’s lawyers did not know—indeed, that they did not even know their client’s legal name and had not tried to analyze the significance of its (unknown) organizational attributes. They simply assumed that Uruguay has such a beast as a ‘corporation’ and that White Pearl is one. The lawyers for Cemusa made the same assumption.”

Affirmed.

10-2739 White Pearl Inversions, S.A., v. Cemusa, Inc.

Appeal from the United States District Court for the Northern District of Illinois, Andersen, J., Easterbrook, J.

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