3. In KRAMER v. CARIBBEAN MILLS, INC., 394 U.S. 823, 89 S.Ct. 1487, 23 L.Ed.2d 9

(1969), a Panamanian corporation assigned its interest under a contract with a Haitian corporation to Kramer, a Texas attorney, for $1. By a separate agreement, Kramer reassigned ninety-five percent of any net recovery on the assigned cause of action to the Panamanian company. Kramer then commenced suit against the Haitian company on the basis of diversity of citizenship. The District Court denied defendant’s motion to dismiss for want of jurisdiction. The Court of Appeals reversed, holding that the assignment was “improperly or collusively made” within the meaning of 28 U.S.C. § 1359. The Supreme Court affirmed, holding that:

If federal jurisdiction could be created by assignments of this kind, which are easy to arrange and involve few disadvantages for the assignor, then a vast quantity of ordinary contract and tort litigation could be channeled into the federal courts at the will of one of the parties. Such “manufacture of Federal jurisdiction” was the very thing which Congress intended to prevent when it enacted § 1359 and its predecessors.