667 F.Supp. 833 (S.D.Fla. 1987), 87-0457, Barrantes Cabalceta v. Standard Fruit Co.

Docket Nº:87-0457-Civ.
Citation:667 F.Supp. 833
Party Name:Perfecto BARRANTES CABALCETA, et al., Plaintiffs, v. STANDARD FRUIT COMPANY, et al., Defendants.
Case Date:July 21, 1987
Court:United States District Courts, 11th Circuit, Southern District of Florida
 
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Page 833

667 F.Supp. 833 (S.D.Fla. 1987)

Perfecto BARRANTES CABALCETA, et al., Plaintiffs,

v.

STANDARD FRUIT COMPANY, et al., Defendants.

No. 87-0457-Civ.

United States District Court, S.D. Florida.

July 21, 1987

Page 834

Charles S. Siegel, Baron & Budd, Dallas, Tex., Louis S. Robles, Miami, Fla., for plaintiffs.

James E. Wilber, Bond, Shoeneck & King, Boca Raton, Fla., for Standard Fruit Co., Standard Fruit & Steamship Co. Castle and Cook.

Kimbrell, Hamann, Jennings, Womack, Carlson & Kniskern, P.A., Miami, Fla., Edward T. O'Donnell, Mershon, Sawyer, Johnston, Dunwoody & Cole, Miami, Fla., Gennaro A. Filice, III, Hardin, Cook, Loper, Engel & Bergez, Oakland, Cal., Charles J. Kalil, of counsel, Midland, Mich., for Dow Chemical Co.

Sheryll Martens Dunaj, Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., Miami, Fla., R. Burton Ballanfant, Houston, Tex., for Shell Oil Co.

ORDER ON MOTION TO REMAND, MOTION TO DISMISS, AND RELATED MOTIONS

ATKINS, District Judge.

This cause is before the court on plaintiffs' Motion to Remand, and defendants' Motions to Dismiss for Forum Non Conveniens, Lack of Service of Process, Lack of Jurisdiction Over the Person, for Fraudulent Joinder, and More Definite Statement. The court has considered the pleadings submitted in this matter, the relevant law, and has heard oral argument. It is thereupon

ORDERED AND ADJUDGED as follows:

1. Plaintiffs' Motion to Remand is DENIED.

The court finds that removal was proper pursuant to 28 U.S.C., section 1441(b), on the ground that none of the parties is a citizen of Florida and that diversity of citizenship is present.

I. Principal Place of Business of Standard Fruit Company and Standard Fruit and Steamship Company

The court's main inquiry in this case concerns whether the principal place of business of any of the defendants is Florida. If so, removal would have been improper pursuant to the "no local citizen" limitation of the removal statute, 28 U.S.C., section 1441(b), which provides:

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

A corporation is deemed to be a citizen of both the state of incorporation and the state of its principal of business for diversity purposes. 28 U.S.C., section 1332(c). To determine the principal place of business of a corporate party, the court must apply the "total activity" test. Vareka Investments, N.V. v. American Investment Properties, Inc., 724 F.2d 907 (11th Cir. 1984). The test actually incorporates two tests: the nerve center test, which focuses on the locus of managerial and policymaking functions in the corporation, and the place of activities test, which focuses on the locus of production or sales activities. Id. at 910.

The two tests are applied in different factual situations. The nerve center test is applied to determine the principal place of a corporation whose activities are scattered among several different states. See Scot Typewriter Co. v. Underwood Corp., 170 F.Supp. 862 (S.D.N.Y.1959). The place of activities test is applied to determine the principal place of business of a corporation whose activities are basically bifurcated between two different states. Homestead Log Co. v. Square D Co., 555 F.Supp. 1056 (D.Idaho 1983). Thus, the principal place of business of a corporation with significant administrative authority and activity in one state and lesser executive offices but principal operations in another state has been held to be the latter state, Kelly v. U.S. Steel Corp., 284 F.2d 850 (3d Cir. 1960), and the principal place of business of

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a corporation with its corporate headquarters in one state and its single activity in another will generally be in the state of its operations, Lurie Co. v. Loew's San Francisco Hotel Corp., 315 F.Supp. 405 (N.D.Cal.1970). As applied, therefore, the two tests have been found to be not only reconcilable, see Toms v. Country Quality Meats, Inc., 610 F.2d 313, 315 n. 6 (5th Cir. 1980), but complementary, J.A. Olson Co. v. City of Winona, 818 F.2d 401, 410 (5th Cir. 1987).

The court finds the place of activities test to be the appropriate one for determining the principal place of business of Standard Fruit Company ("Standard Fruit"). Its operations occur in Ecuador, Honduras, and Costa Rica, and its executive and administrative functions occur in California and Florida. For purposes of determining diversity of citizenship, all aliens, whatever their nationality, are deemed to be citizens of the same jurisdiction. K & H Business Consultants, Ltd. v. Cheltonian, Ltd., 567 F.Supp. 420 (D.N.J.1983). In the court's view, this rule is equally applicable to determining a corporation's principal place of business. This determination underlies that of corporate citizenship for purposes of diversity jurisdiction, and, in cases not presenting a federal question, removal jurisdiction. Thus, the fact that all of Standard Fruit's operations occur in alien jurisdictions is the controlling characteristic, and, for purposes of the place of activities test, the court concludes that Standard Fruit's operations occur in one jurisdiction. Although certain of its executive and administrative functions occur in two states in the United States, this fact does not support a conclusion that Standard Fruit's activities, including operations and...

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