The opinion of the court was delivered by: DITTER
Presently before me in this suit by a bonding company on an indemnity agreement are numerous motions filed by defendant, Rudolph J. DiMassa.
DiMassa's motions which essentially contest this court's subject matter jurisdiction
and plaintiff's capacity to maintain suit in Pennsylvania,
were filed in response to my granting summary judgment in favor of plaintiff and against DiMassa. On March 16, 1983, I received evidence on these issues and heard counsel's arguments. After careful review of the testimony and those arguments, I conclude plaintiff has proved it has capacity to maintain suit in Pennsylvania and that this court has subject matter jurisdiction.
Plaintiff filed this matter alleging diversity of citizenship as the basis of the court's subject matter jurisdiction. It is undisputed that plaintiff is a corporation incorporated under the laws of the state of Maryland and DiMassa is a citizen of the Commonwealth of Pennsylvania. Because a corporation is a citizen of the state of its incorporation and the state where it maintains its principal place of business, 28 U.S.C. § 1332(c) (1982), if plaintiff's principal place of business is Pennsylvania,
as DiMassa contends, this suit must be dismissed.
Plaintiff, as the party who invoked diversity jurisdiction, has the burden of proving all facts upon which jurisdiction could be sustained. If plaintiff does construct a prima facie showing of diversity, defendant must overcome or rebut this showing in order to dismiss the complaint. Support for defendant's position may be derived from affidavits, depositions and sworn documents filed by the parties from which the Court can examine and evaluate all relevant factors and surrounding circumstances but the exact method of determining the jurisdictional issue lies within the sound discretion of the district court.
Holman v. Carpenter Technology Corp., 484 F. Supp. 406, 409 (E.D. Pa. 1980) (citations omitted).
In addition to its allegations in the amended complaint in 1978, plaintiff filed an affidavit
in which facts are alleged supporting the conclusion stated therein that plaintiff's principal place of business is Baltimore, Maryland, the location of its corporate headquarters. In an effort to contest plaintiff's showing, DiMassa, in October, 1982, filed an affidavit
stating in conclusionary terms that plaintiff's principal place of business is Pennsylvania.
Despite the vagueness of DiMassa's affidavit, I will assume that at this juncture, plaintiff has the burden of proving the court's subject matter jurisdiction by a preponderance of the evidence.
In Kelly v. United States Steel Corp., 284 F.2d 850 (3d Cir. 1960), the United States Court of Appeals for the Third Circuit adopted a method of determining a corporation's principal place of business.
In Kelly, supra,
Judge Goodrich rejected the "nerve-center test" which located the principal place of business where policy decisions were made. Instead he adopted an "operational test" which looked to the state where the corporation had its "headquarters of day-to-day corporate activity and management." Kelly, supra, at 854. Facts significant to this analysis include locations of the personnel, equipment, and real estate of the corporations and locations of executive and high-level management's daily decisions. See, e.g., Quaker State Dyeing & Finishing Co. v. ITT Terryphone Corp., 461 F.2d 1140 (3d Cir. 1972); Holman v. Carpenter Technology Corp., 484 F. Supp. 406 (E.D. Pa. 1980); United Industrial Corp. v. Gira, 204 F. Supp. 410 (D.Del. 1961).
In the cited cases, the courts' task was to determine which of two states harbored the activity most significant for corporate operations.
Crum v. Veterans of Foreign Wars, 502 F. Supp. 1377, 1380 (D. Del. 1980).
At the March 16, 1983, hearing, DiMassa testified that USF&G occupied a large building in Plymouth Meeting. He had never been in it, did not know how many USF&G employees were there, nor the amount of space devoted to USF&G operations. He had never been to the Baltimore, Maryland offices of USF&G, had no knowledge concerning the size of the building, the number of persons who worked there, nor the executive level of those whose offices were there. In short, he had no basis to compare the Plymouth Meeting offices or personnel with those in Maryland.
Joel Klock, Claims Supervisor of the Philadelphia office and eleven year employee of plaintiff, testified extensively regarding the corporate structure and location of day to day management activity of plaintiff. Mr. Klock stated that while there are three branch offices of USF&G in Pennsylvania, the home office in Baltimore, Maryland, controls all corporate operations, occupies 22 stories of a 39 story building which bears its name, and houses the offices of the president and other corporate executives. Contrariwise, the Philadelphia branch office is housed in one third of a two story building and contains no executive offices. Additionally, the main information computer is located in Baltimore and all decisions regarding the issuance of bonds are made there. Furthermore, while USF&G employs 384 people in Pennsylvania, including 95 in the Philadelphia office, it employs 1800 people in its Baltimore office. Finally, Mr. Klock stated that Florida, Mississippi, Georgia, and Texas had branch offices larger than the Pennsylvania offices in terms of employees and revenue generated. Because a review of the above facts demonstrates Maryland harbors the activity most significant for corporate operations, I conclude plaintiff's principal place of business is located in Baltimore, Maryland. Therefore, this matter falls within the court's subject matter jurisdiction.
Having resolved DiMassa's contention regarding subject matter jurisdiction, I turn now to his assertion that USF&G lacks capacity to maintain suit in Pennsylvania because of its failure to obtain a certificate of authority to do business here as a foreign corporation pursuant to the Pennsylvania Business Corporations Law, Pa. Stat. Ann. tit. 15, §§ 2001 et seq. (Purdon 1967). In view of the fact that the statute relied on by DiMassa is inapplicable to USF&G,