851 F.Supp. 1430 (D.S.D. 1994), Civ. 94-5009, Federal Beef Processors, Inc. v. CBS Inc.

Docket NºCiv. 94-5009
Citation851 F.Supp. 1430
Party NameFederal Beef Processors, Inc. v. CBS Inc.
Case DateMay 03, 1994
CourtUnited States District Courts, 8th Circuit, District of South Dakota

Page 1430

851 F.Supp. 1430 (D.S.D. 1994)

FEDERAL BEEF PROCESSORS, INC., Plaintiff,

v.

CBS INC.; CBS News Division, a division of CBS Inc.; 48 Hours; and Leendelle McClean, Defendants.

Civ. No. 94-5009.

United States District Court, D. South Dakota, Western Division.

May 3, 1994

Page 1431

Ronald W. Banks, Banks, Johnson & Colbath, Rapid City, SD, for plaintiff.

Steven J. Helmers and Craig A. Pfeifle, Lynn Jackson Shultz & Lebrun, Rapid City, SD, for defendants.

Page 1432

MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND AND GRANTING SUMMARY JUDGMENT

BATTEY, District Judge.

PROCEDURAL HISTORY

Before the Court are two motions which involve interrelated issues. Defendants CBS Inc. (CBS) and Leendelle McClean (McClean) have filed a joint motion for partial summary judgment alleging that McClean is entitled to summary judgment on the claims plaintiff Federal Beef Processors, Inc. (Federal) has asserted against McClean. Also pending is Federal's motion to remand this action to state court. Both motions require this Court to determine whether it has subject matter jurisdiction over this action.

FACTS

In December 1993, CBS, with the assistance of an employee of Federal, acquired a videotape of meat processing operations at Federal's beef slaughter plant in Rapid City, South Dakota. CBS intended to broadcast the videotape on its "48 Hours" program on February 9, 1994. On January 20, 1994, Federal initiated this action in South Dakota state court against CBS and McClean.

Federal's first amended complaint asserts the following claims: (1) breach of the duty of loyalty owed by an employee and aiding and abetting such a breach; (2) trespass; (3) violation of the Uniform Trade Secret Act as adopted by South Dakota; (4) invasion of privacy; (5) civil conspiracy to commit trespass, to invade privacy, and to breach a duty of loyalty; (6) willful deceit; and (7) commercial bribery. Federal seeks relief in the form of a temporary restraining order and a permanent injunction prohibiting CBS from broadcasting the videotape and requiring CBS to turn the tape and any copies over to Federal. Federal also seeks damages, costs, and attorneys' fees.

On February 7, 1994, the state trial court issued a preliminary injunction ordering CBS not to broadcast the videotape until the merits of Federal's claims were determined. CBS appealed to the South Dakota Supreme Court. The South Dakota Supreme Court agreed to hear the appeal and set the matter for hearing in March. The South Dakota Supreme Court, however, refused to grant an emergency stay of the trial court's order. CBS then petitioned United States Supreme Court Justice Harry A. Blackmun for an emergency stay. Finding that the state court's order was a prior restraint in violation of the first amendment to the United States Constitution, Justice Blackmun granted the emergency stay on February 9, 1994. CBS thereafter broadcast the video recording as planned.

On February 18, 1994, CBS and McClean removed the action to this Court. The defendants allege that this Court has subject matter jurisdiction over this action because the adverse parties are residents of different states and the amount in controversy exceeds $50,000. See 28 U.S.C. § 1332.

The two motions currently pending are CBS and McClean's motion for summary judgment and Federal's motion to remand. The resolution of these motions involves the following issues:

1. whether Federal's principal place of business is located in South Dakota and

2. whether Federal has any possibility of recovering against McClean.

DISCUSSION

A. Federal's Principal Place of Business

Defendants removed this action invoking the Court's "diversity jurisdiction." Diversity jurisdiction exists if the adverse parties are all residents of different states and the amount in controversy exceeds $50,000. See 28 U.S.C. § 1332. For diversity jurisdiction to exist, no defendant can be a resident of the state in which the plaintiff resides.

Here, it is undisputed that defendant McClean is a resident of South Dakota and defendant CBS is a resident of New York. Therefore, this Court lacks jurisdiction if Federal is a resident of either New York or South Dakota. Federal alleges it is a resident of South Dakota.

While individuals can be residents of but a single state at any one time, corporations like Federal are citizens of both the state of incorporation and the state where

Page 1433

the corporation's principal place of business is located. Blakemore v. Missouri Pac. R.R., 789 F.2d 616, 618 (8th Cir.1986); 28 U.S.C. § 1332(c)(1). Although Federal initially contended that it was incorporated under the laws of South Dakota, it has since conceded that Federal's place of incorporation is Minnesota. Therefore, if Federal is to be considered a resident of South Dakota, it must be because Federal's principal place of business is located in South Dakota.

The determination of a corporation's principal place of business is a mixed question of law and fact, but mainly one of fact. Blakemore, 789 F.2d at 618; North Star Hotels Corp. v. Mid-City Hotel Assocs., 696 F.Supp. 1265, 1269 (D.Minn.1988). The party invoking federal jurisdiction bears the burden of establishing the existence of diverse citizenship among adverse parties. Blakemore, 789 F.2d at 618; North Star Hotels Corp., 696 F.Supp. at 1269.

The federal courts have developed three different tests to determine a corporation's principal place of business. The "nerve center" test locates the principal place of business in the state from which...

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15 practice notes
  • Should the Eighth Circuit recognize procedural misjoinder?
    • United States
    • South Dakota Law Review Vol. 53 Nbr. 1, March 2008
    • 22 Marzo 2008
    ...Id. (27.) Palmquist v. Conseco Med. Ins. Co., 128 F. Supp. 2d 618, 621 (D.S.D. 2000) (citing Fed. Beef Processors, Inc. v. CBS Inc., 851 F. Supp. 1430, 1435 (D.S.D. 1994)). (28.) Filla, 336 F.3d at 809 n.9 (quoting 16 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE [paragraph] 107.14[2] [c......
  • From proxy to principle: fraudulent joinder reconsidered.
    • United States
    • Albany Law Review Vol. 69 Nbr. 4, September 2006
    • 22 Septiembre 2006
    ...to fraudulent joinder questions indicate must be taken as true. Id. (318) Id. at 1039-40. (319) Id. at 1041. (320) See id. (321) 851 F. Supp. 1430 (D.S.D. (322) Id. at 1432, 1435. (323) Id. at 1435. (324) Id. (325) Id. at 1436 (citing In re Bus. Men's Assurance Co. of Am., 992 F.2d 181, 183......
  • Making a Federal Case of It: Removing Civil Cases to Federal Court Based on Fraudulent Joinder
    • United States
    • Iowa Law Review Nbr. 91-1, November 2005
    • 1 Noviembre 2005
    ...Inc., 109 F. Supp. 2d 365, 373 (E.D. Pa. 2000) (declining to broadly pierce the pleadings); Fed. Beef Processors, Inc. v. CBS Inc., 851 F. Supp. 1430, 1435-36 (D.S.D. 1994) (discussing different approaches and concluding that piercing is permissible). [24] See Smallwood, 385 F.3d at 576; Bo......
  • 902 F.Supp. 185 (E.D.Mo. 1995), 495CV1156, Reeb v. Wal-Mart Stores, Inc.
    • United States
    • Federal Cases United States District Courts 8th Circuit Eastern District of Missouri
    • 18 Octubre 1995
    ...joined, her residency is disregarded for purposes of determining diversity jurisdiction. Federal Beef Processors, Inc. v. CBS, Inc., 851 F.Supp. 1430, 1434 Title 28 U.S.C. § 1441(b) allows a defendant who meets certain requirements to remove a civil action from state court to federal court ......
  • Request a trial to view additional results
12 cases
  • 902 F.Supp. 185 (E.D.Mo. 1995), 495CV1156, Reeb v. Wal-Mart Stores, Inc.
    • United States
    • Federal Cases United States District Courts 8th Circuit Eastern District of Missouri
    • 18 Octubre 1995
    ...joined, her residency is disregarded for purposes of determining diversity jurisdiction. Federal Beef Processors, Inc. v. CBS, Inc., 851 F.Supp. 1430, 1434 Title 28 U.S.C. § 1441(b) allows a defendant who meets certain requirements to remove a civil action from state court to federal court ......
  • Petersen v. Rusch, Inc., 011206 MOEDC, 4:05CV01328 ERW
    • United States
    • Federal Cases United States District Courts 8th Circuit Eastern District of Missouri
    • 12 Enero 2006
    ...can consider an affidavit when deciding whether a defendant has been fraudulently joined. See Federal Beef Processors, Inc. v. CBS Inc., 851 F.Supp. 1430, 1435 (D.S.D. 1994) (rejecting argument that Anderson represents an affirmative prohibition on a district court considering evidence outs......
  • 98 F.Supp.2d 1081 (E.D.Mo. 2000), 4 99CV1769, Flynn v. Teak Associated Investments #'2, Inc.
    • United States
    • Federal Cases United States District Courts 8th Circuit Eastern District of Missouri
    • 22 Mayo 2000
    ...of business when the corporation engages in business in more than one state. See, e.g., Federal Beef Processors, Inc. v. CBS, Inc., 851 F.Supp. 1430, 1432-33 (D.S.D.1994); Associated Petroleum Producers, Inc. v. Treco 3 Rivers Energy Corp., 692 F.Supp. 1070, 1073-74 (E.D.Mo.1988). These ref......
  • Block v. Toyota Motor Corp., 122310 MNDC, 10-2802 ADM/AJB
    • United States
    • Federal Cases United States District Courts 8th Circuit District of Minnesota
    • 23 Diciembre 2010
    ...defendant has been joined to defeat diversity, but applies to § 1441(b) as well. See, e.g., Fed. Beef Processors, Inc. v. CBS Inc., 851 F.Supp. 1430, 1434-36 (applying fraudulent joinder doctrine in § 1441(b) case). Fraudulent joinder of a party will not prevent removal. Anderson v. Home In......
  • Request a trial to view additional results
3 books & journal articles
  • Should the Eighth Circuit recognize procedural misjoinder?
    • United States
    • South Dakota Law Review Vol. 53 Nbr. 1, March 2008
    • 22 Marzo 2008
    ...Id. (27.) Palmquist v. Conseco Med. Ins. Co., 128 F. Supp. 2d 618, 621 (D.S.D. 2000) (citing Fed. Beef Processors, Inc. v. CBS Inc., 851 F. Supp. 1430, 1435 (D.S.D. 1994)). (28.) Filla, 336 F.3d at 809 n.9 (quoting 16 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE [paragraph] 107.14[2] [c......
  • From proxy to principle: fraudulent joinder reconsidered.
    • United States
    • Albany Law Review Vol. 69 Nbr. 4, September 2006
    • 22 Septiembre 2006
    ...to fraudulent joinder questions indicate must be taken as true. Id. (318) Id. at 1039-40. (319) Id. at 1041. (320) See id. (321) 851 F. Supp. 1430 (D.S.D. (322) Id. at 1432, 1435. (323) Id. at 1435. (324) Id. (325) Id. at 1436 (citing In re Bus. Men's Assurance Co. of Am., 992 F.2d 181, 183......
  • Making a Federal Case of It: Removing Civil Cases to Federal Court Based on Fraudulent Joinder
    • United States
    • Iowa Law Review Nbr. 91-1, November 2005
    • 1 Noviembre 2005
    ...Inc., 109 F. Supp. 2d 365, 373 (E.D. Pa. 2000) (declining to broadly pierce the pleadings); Fed. Beef Processors, Inc. v. CBS Inc., 851 F. Supp. 1430, 1435-36 (D.S.D. 1994) (discussing different approaches and concluding that piercing is permissible). [24] See Smallwood, 385 F.3d at 576; Bo......