Standing. Fifth Circuit reaffirms the standing of citizens of foreign states to bring suits against citizens of the United States in federal court.
Servicios Azucareros de Venezuela, C.A. (“Servicios”) and Cameco Industries, Inc. (“Cameco”) were parties to an oral contract, substantiated over the years by various written agreements, under which Servicios was the exclusive distributor of John Deere products in Venezuela. For many years, Servicios earned commissions for sales in Venezuela of John Deere harvesters, tractors, and spare parts. Servicios alleges that, after Cameco changed its name to John Deere Thibodaux, Inc. (“John Deere”), John Deere wrongfully reduced the commission rate and attempted to terminate the contract. Servicios and its president filed suit against John Deere in Louisiana district court pleading alienage jurisdiction and seeking damages for breach of contract.
The district court dismissed the suit, holding that as a citizen of a foreign state, Servicios had no standing to file the suit in federal court. The district court also dismissed the case on the basis that Servicios failed to follow the court's instructions in filing a supplemental brief.
On appeal, the Fifth Circuit concluded that neither ground supported the dismissal of Servicios's suit. The court considered two standing inquiries: (1) whether Servicios satisfied the requirements for standing under Article III of the U.S. Constitution; and (2) whether Servicios had prudential standing to maintain suit in federal court.
The court recognized that Article III standing contains three requirements: (1) an injury in fact, (2) causation, and (3) redressability. Servicios satisfied these requirements because it alleged that it suffered an injury in fact -- $1.5 million in damages -- that was caused by John Deere's alleged breach of contract, and, should Servicios prove its case on the merits, its injury would be redressable by the district court.
Second, the court considered prudential standing, which is not strictly required by Article III of the Constitution but instead reflects judicially self-imposed limits on the exercise of federal jurisdiction. While the contours of prudential standing are not clearly defined, the principle prohibits a litigant from asserting another person’s legal rights, prohibits the adjudication of generalized grievances better addressed by the representative branches, and requires that a plaintiff’s complaint fall within the zone of interests protected by the law invoked. Here, Servicios’ complaint was not barred by the prudential standing doctrine as it did not seek to assert another person’s legal rights, it asserted personal and particularized injuries rather than general grievances, and the injuries were protected by the common law of contracts or, in Louisiana, the Louisiana Civil Code articles on conventional obligations or contracts.
In addition, the court decisively rejected John Deere’s argument that Servicios’s suit should be dismissed because of a purported rule of prudential standing that a nonresident alien does not have standing to sue a United States citizen or corporation in a federal court. The court stated that "John Deere's argument is based on a false doctrine initiated by a district court in the D.C. Circuit that has been discredited by the Court of Appeals of that circuit."
Finally, the court concluded that the district court abused in discretion in dismissing the case for failure to follow briefing instructions.
For all of these reasons, the Fifth Circuit vacated the district court’s order dismissing Servicios’s complaint and remanded the case.