Yokeno v. Sekiguchi

Organic Act of Guam granted the District Court of Guam the same privileges other courts possess regarding diversity jurisdiction that have been set forth in Article III., but because the Constitution does not confer Article III courts diversity jurisdiction involving aliens, the Organic Act must also be limited by the Constitution and diversity jurisdiction involving aliens is not permitted.

Matao Yokeno (“Yokeno”, an alien permanently residing in the United States in Guam sued Emil Lai (“Lai”) and Sawako Sekiguchi (“Sekiguichi”) for breach of fiduciary duty in the Superior Court of Guam. Lai, a British overseas national and Sekiguchi, a Japanese citizen, reside in Japan. Lai and Sawako removed the case to the District Court of Guam based on diversity of citizenship. Diversity of citizenship was not contested in the District Court and the Court granted summary judgment for Lai and Sekiguchi based on the merits. Yokeno filed a timely appeal and claimed that when the parties in dispute are aliens, there is no diversity of citizenship. Sekiguchi and Lai moved to dismiss the claim based on res judicata. The District Court in Guam exercised its authority to hear a case involving diversity of citizenship under the Organic Act of Guam. This act conveys the same privileges that Article III of the United States Constitution to states hearing cases involving diversity. The Organic Act’s jurisdiction involving diversity cases will not extend beyond the jurisdiction that is provided in 28 U.S.C. § 1332. However, in 1988, Congress amended the statute to include the “deeming clause” which provided that an alien that is a permanent resident in the United States will be deemed a citizen in the state that the alien is domiciled within. The plain language of the clause suggests that Yokeno is a citizen of Guam for the purposes of the case. However, commentators seem to suggest that the statute may exceed the powers of the Constitution. Three other circuits have interpreted the clause in conflicting ways but this is an issue of first impression in this circuit. The Court found that the deeming clause was an overstep to the powers set forth by the Constitution, therefore this Court, as well as the District Court of Guam does not have jurisdiction to hear this case.