636 F.3d 101 (4th Cir. 2011), 10-1486, Central West Virginia Energy Co., Inc. v. Mountain State Carbon, LLC
|Citation:||636 F.3d 101|
|Opinion Judge:||WYNN, Circuit Judge:|
|Party Name:||CENTRAL WEST VIRGINIA ENERGY COMPANY, INCORPORATED, a West Virginia corporation; A.T. Massey Coal Company, Incorporated, a Virginia corporation, Plaintiffs-Appellants, v. MOUNTAIN STATE CARBON, LLC, a Delaware Limited Liability Company; SNA Carbon, LLC; Severstal Wheeling, Incorporated, a Delaware corporation; Severstal North America, Incorporated,|
|Attorney:||Robert M. Stonestreet, Dinsmore & Shohl, LLP, Charleston, West Virginia, for Appellants. Gregory J. Krock, Buchanan, Ingersoll & Rooney, PC, Pittsburgh, Pennsylvania, for Appellees. W. Henry Jernigan, Jr., David E. Rich, Dinsmore & Shohl, LLP, Charleston, West Virginia, for Appellants. David B. F...|
|Judge Panel:||Before DUNCAN, DAVIS, and WYNN, Circuit Judges. Reversed by published opinion. Judge WYNN wrote the opinion, in which Judge DUNCAN and Judge DAVIS concurred.|
|Case Date:||April 13, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Fourth Circuit|
Argued: Jan. 26, 2011.
For federal diversity jurisdiction purposes, a corporation is a citizen of the states in which it has been incorporated and in which it has its principal place of business. In Hertz Corp. v. Friend, __ U.S. __, 130 S.Ct. 1181, 1186, 175 L.Ed.2d 1029 (2010), the Supreme Court clarified that the phrase " ‘ principal place of business' refers to the place where the corporation's high level officers direct, control, and coordinate the corporation's activities."
In this case, seven of Defendant Severstal Wheeling, Inc.'s eight officers, including its chief executive officer, chief operating officer, and chief financial officer, set corporate policies and oversee significant corporate decisions out of Dearborn, Michigan. Accordingly, under Hertz, Dearborn, Michigan is Severstal Wheeling's principal place of business. We therefore conclude that the district court erred in holding otherwise and reverse.
Plaintiff Central West Virginia Energy Co. (" Central Energy" ), a West Virginia coal sales company, brought this suit in federal district court in April 2009. Central Energy filed an amended complaint, along with Plaintiff A.T. Massey Coal Company (" Massey Coal" ), a Virginia corporation, in June 2009. Plaintiffs sued Mountain State Carbon, LLC (" Mountain State" ), its member companies, one of which is Severstal Wheeling, and its parent companies, all of which are in the steel business. Plaintiffs alleged that Mountain State wrongfully refused to accept coal deliveries in breach of a coal supply agreement with Central Energy. According to the complaint, Mountain State's refusal of the coal was the result of an illegal scheme on the part of Mountain State and its affiliated companies to shift the costs of the 2008-2009 economic downturn onto Central Energy and Massey Coal.
Mountain State and Severstal Wheeling filed a motion to dismiss the complaint due to a lack of diversity, the basis of federal jurisdiction in this case. Specifically, Mountain State and Severstal Wheeling argued that Severstal Wheeling's principal place of business is in Wheeling, West Virginia. And because both Central Energy and Severstal Wheeling are West Virginia citizens, they contended, diversity jurisdiction did not exist. Central Energy and Massey Coal opposed the motion.
While the motion was pending, the United States Supreme Court issued a decision clarifying how federal courts are to determine principal place of business— Hertz, 130 S.Ct. 1181. On March 31, 2010, citing Hertz, the district court granted Mountain State's and Severstal Wheeling's motion and dismissed the complaint for lack of subject matter jurisdiction. In its memorandum opinion and order dismissing the case, the district court focused on the fact that Severstal Wheeling's self-described day-to-day operations such as " ‘ purchasing, sales, transportation, engineering, human resources, and accounting/financial functions' are all handled in Wheeling" and noted Severstal Wheeling's " visibility in and involvement with the Wheeling community." Central Energy and Massey Coal appealed.
Central Energy and Massey Coal argue that the district court erred in its application of Hertz when it determined that Severstal Wheeling's principal place of business was Wheeling, West Virginia, despite the fact that Severstal Wheeling's officers control the company's policies and high-level decisions from Dearborn, Michigan. We agree.
This case was brought in federal court on the basis of diversity jurisdiction. Under 28 U.S.C. § 1332, a federal district court has original jurisdiction over all civil actions where the amount in controversy exceeds $75,000, exclusive of interest and costs, and is between citizens of different states. 28 U.S.C. § 1332(a)(1). With the exception...
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