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Linda M. Chabala and Richard R. Chabala v. Gerald Stout and Hurricane Express

September 5, 2012

LINDA M. CHABALA AND RICHARD R. CHABALA,
PLAINTIFFS,
v.
GERALD STOUT AND HURRICANE EXPRESS, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is the Notice of Removal by Defendants Gerald Stout and Hurricane Express, Inc. (Doc. 1.) Because the Notice of Removal fails to establish that this Court has subject matter jurisdiction over the action, it will be remanded to state court unless Defendants can show that diversity jurisdiction is proper.

I. Background

Plaintiffs originally filed this action in the Court of Common Pleas of Luzerne County, Pennsylvania on or about February 24, 2012. (Doc. 1, Ex. A.) In their Complaint, Plaintiffs bring a state-law action for negligence and loss of consortium against Defendants for injuries sustained by Plaintiff Linda M. Chabala on February 5, 2011. (Id. ¶¶ 10-29.)

On August 30, 2012, the Defendants removed the action from to this Court. (Doc. 1.) The Defendants allege that this Court's basis for jurisdiction is diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1). (Id. ¶ 7.) In the Notice of Removal, Defendants aver that Plaintiffs "are both residents of the Commonwealth of Pennsylvania." (Id. ¶ 3.) Defendant Hurricane Express, Inc. is averred to be "a business entity with a principal place of business located in Colcord, Oklahoma." (Id. ¶ 4.)

II. Discussion

Section 1332(a)(1) gives district courts original jurisdiction to hear cases where the matter in controversy exceeds the value of seventy-five thousand dollars ($75,000) and is between citizens of different states. In order for jurisdiction to exist, there must be complete diversity, meaning that each defendant must be a citizen of a different state from each plaintiff. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978).

"It is . . . well established that when jurisdiction depends upon diverse citizenship the absence of sufficient averments or of facts in the record showing such required diversity of citizenship is fatal and cannot be overlooked by the court, even if the parties fail to call attention to the defect, or consent that it may be waived." Thomas v. Bd. of Trs., 195 U.S. 207, 211 (1904). Federal courts have an obligation to address issues of subject matter jurisdiction sua sponte. Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999). Moreover, "[w]hen the foundation of federal authority is, in a particular instance, open to question, it is incumbent upon the courts to resolve such doubts, one way or the other, before proceeding to a disposition of the merits." Carlsberg Res. Corp. v. Cambria Sav. & Loan Ass'n, 554 F.2d 1254, 1256 (3d Cir. 1977); see also Fed R. Civ. P. 12(h)(3).

A. Corporate Defendant

In this case, Defendants' Notice of Removal fails to demonstrate the requirements of federal subject matter jurisdiction because it insufficiently alleges the citizenship of the corporate Defendant. A corporation may have more than one state of citizenship: "a corporation shall be deemed to be a citizen of every State . . . by which it has been incorporated and of the State . . . where it has its principal place of business." 28 U.S.C. § 1332(c)(1). A corporation may only have one principal place of business, and proper invocation of diversity jurisdiction requires that the plaintiff allege where a corporation has "its principal place of business." See S. Freedman & Co., Inc. v. Raab, 180 F. App'x 316, 320 (3d Cir. 2006) (affirming the district court's dismissal of a complaint alleging where the plaintiff corporation maintained "a principal place of business," rather than "its principal place of business"). A corporation's principal place of business is its "nerve center," that is, the place "where a corporation's officers direct, control, and coordinate the corporation's activities." Hertz Corp. v. Friend, 130 S. Ct. 1181, 1192 (2010).

Here, the Notice of Removal only includes facts about the corporate Defendant's principal place of business in the State of Oklahoma. (Doc. 1, ¶ 4.) To properly plead the citizenship of this corporation, Defendants must also allege where the corporate Defendant is incorporated, a fact that does not appear in the Notice of Removal. Therefore, this Court finds that the Notice of Removal has not properly demonstrated the corporate Defendant's citizenship for purposes of diversity jurisdiction.

B. Plaintiffs

For purposes of diversity jurisdiction, a natural person is deemed to be a citizen of the state where they are domiciled. Swiger v. Allegheny Energy, Inc., 540 F.3d 179, 182 (3d Cir. 2008) (citing Gilbert v. David, 235 U.S. 561, 569 (1915)). To be domiciled in a state, a person must reside there and intend to remain indefinitely. Krasnov v. Dinan, 465 F.2d 1298, 1300--01 (3d Cir. 1972). A person may have only one domicile, and thus may be a citizen of only one state for diversity jurisdiction purposes. See Williamson v. Osenton, 232 U.S. 619 (1914).

To the extent that the Notice of Removal alleges that Plaintiffs are both residents of the Commonwealth of Pennsylvania, this is not sufficient. Residence is not the same as domicile and does not establish citizenship for diversity purposes. See Krasnov, 465 F.2d at 1300 (3d Cir. 1972) ("Where one lives is prima facie evidence of domicile, but mere residency in a state is insufficient for purposes of diversity.") (internal citations omitted). The Court therefore finds ...


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