FEDERAL PROCEDURE-JURISDICTION-DIVERSITY OF CITIZENSHIP REQUIRED IN STOCKHOLDER'S DERIVATIVE SUIT

Plaintiff, a citizen of New York, instituted a stockholder's suit on behalf of a New York corporation in the United States District Court for the Southern District of New York. Individual officers and directors of the corporation, all citizens of Connecticut, were charged with mismanagement and were joined with it as party defendants. Since plaintiff and defendant corporation were both citizens of New York, requisite diversity did not exist, and the district court dismissed the claim for lack of jurisdiction. Upon appeal, held, judgment affirmed.

The section of the Federal Judicial Code providing that "any civil action by a stockholder on behalf of his corporation may be prosecuted in any judicial district where the corporation might have sued the same defendants" relates solely to venue of such actions. Federal jurisdiction must be determined without regard to this statute. Lavin v. Lavin, (2d Cir. 1950) 182 F. (2d) 870.