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Simple English definitions for legal terms
assignee clause
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A quick definition of assignee clause:
An assignee clause is a rule that used to prevent someone from transferring a legal claim to another person who had different citizenship. This meant that if someone wanted to sue in federal court, they had to make sure that all parties involved had the right citizenship. However, in 1948, this rule was replaced by a new law that says federal courts cannot hear cases where someone has been added to the lawsuit just to meet the citizenship requirement.
A more thorough explanation:
An assignee clause is a provision that was part of the Judiciary Act of 1789. It prevented a person from assigning a legal claim to someone else who did not have the required diversity of citizenship. This means that if a person wanted to sue someone in federal court, they had to meet certain requirements, including having diverse citizenship with the defendant.
For example, if a person from New York wanted to sue someone from California in federal court, they would have to show that they had diverse citizenship. This means that they were not from the same state as the defendant. If they did not meet this requirement, they could not sue in federal court.
The assignee clause was replaced in 1948 by a new law, 28 USCA § 1359. This law denies federal jurisdiction when a party is improperly or collusively joined, by assignment or otherwise, merely to invoke jurisdiction. This means that a person cannot assign a claim to someone else just to meet the diversity of citizenship requirement and sue in federal court.
For example, if a person from New York wanted to sue someone from California in federal court, they could not assign their claim to someone from a different state just to meet the diversity of citizenship requirement. This would be considered improper or collusive and would not be allowed under the new law.