Anderson v. Southern Bell Telephone and Telegraph Co.

• Decision Date: 10 October 1962
• Docket Number: Civ. A. No. 912.
• Citation: 209 F. Supp. 921
• Parties: W. Wallace ANDERSON, Plaintiff, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Georgia

209 F. Supp. 921

W. Wallace ANDERSON, Plaintiff, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Defendant.

Civ. A. No. 912.

United States District Court M. D. Georgia, at Columbus.

October 10, 1962.

Richter & Birdsong, LaGrange, Ga., W. Ken Askew, Pine Mountain, Ga., for plaintiff.

Foley, Chappell, Young & Hollis, Bentley H. Chappell, Columbus, Ga., for defendant.

ELLIOTT, District Judge.

This action was brought in this court by a Georgia citizen with alleged jurisdiction being based on diversity of citizenship of the parties. The defendant challenges the existence of such diversity by a motion to dismiss plaintiff's complaint. Except for the ground claimed there does not appear to be any other basis for federal jurisdiction. The defendant alleges that its principal place of business is in Georgia. The plaintiff contends that it is elsewhere. The 1958 amendment to Title 28 U.S.C.A. § 1332 (c) provides: "a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." The defendant is a New York corporation, so the question whether this court has jurisdiction turns upon a determination of the actual principal place of business of the defendant.

Counsel for the plaintiff have insisted that the issue presented is one which should be submitted to a jury for determination. Counsel for the defendant contend that it is a question which should be determined by the court without reference to a jury.

If Georgia law does require the submission of this question to a jury as contended by plaintiff, this would not mean that such procedure must be followed here, for although a state-created right may be enforced in a federal court because of diversity of citizenship, the federal court will proceed by its own rules of procedure, and these are not necessarily identical with those of the state in which the federal court is sitting. Odekirk v. Sears, Roebuck & Co., 274 F.2d 441, 445, 7th Cir. (1960). It is true that in such diversity cases all substantive matters are controlled by state law, but purely procedural matters which do not affect the substantive rights of the parties are controlled by federal law. Rensing v. Turner Aviation Corporation, 166 F.Supp. 790, 793, D.C.N.D.Ill. (1958); Brookshire v. Penn. R. R. Co., D.C., 14 F.R.D. 154.

The generally accepted view in the federal courts is that the court may in its discretion decide the issue of diversity or it may submit the question to a jury for decision. Seideman v. Hamilton, 275 F.2d 224, 226, 3rd Cir. (1960); Guarantee Trust Company v. Collings, 76 F.2d 870, 3rd Cir. (1935); and the preferred practice in recent years has been for the court to decide jurisdictional questions without a jury. Guarantee Trust Company v. Collings, supra (1935); Taylor v. Hubbell, 188 F.2d 106, 9th Cir., (1951); Munro v. Doherr, 156 F.Supp. 723, D.C.D.Mass. (1957). The Circuit Court of Appeals of the Fifth Circuit has stated that the parties do not have a right to have the jurisdictional issue tried by a jury and has commented that the normal and usual procedure is for such matters to be determined by the judge. Hardin v. McAvoy, 216 F.2d 399, 403, 5th Cir. (1954).

In passing we might point out that this court has heretofore followed the practice of determining the location of a party's "principal place of business" without referring the question to a jury, and we think it is particularly appropriate that we do so when, as in this case, there is no real contest between the parties as to the basic facts upon which a determination must be made, but only as to how the statute should be interpreted in the light of these facts. Accordingly, this matter will not be referred to a jury and we will proceed to a determination of the issue based upon the evidence before the court, which consists of affidavits and answers to interrogatories, counsel for both parties having been heard in oral argument with respect thereto.

The present action was commenced in April, 1962 and jurisdictional facts existing at that time must furnish the basis of the court's conclusion as to the defendant's principal place of business. The parties have stipulated that while some of the evidence before the court relates to facts existing as of other dates, such matter shall be deemed to be accurately representative of the situation existing on the date on which this action was filed.

The court finds that the defendant is a New York corporation and that all of its common stock is owned by American Telephone & Telegraph Company, which is a New York corporation. The company is engaged in the business of furnishing communications services, mainly local and toll telephone service, in the states of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee. The company has 7,769,815 telephones in service and more of these are located in Georgia than in any other state with the exception of Florida.¹ The company maintains 41,825,599 miles of telephone and telegraph lines and more of these lines are located in Georgia than in any other state with the exception of Florida. The company has 64,007 employees and more of these are employed in Georgia than in any other state with the exception of Florida. The executive offices of the company are maintained in Atlanta, Georgia and all of the executive officers of the company (other than the exceptions hereafter mentioned) have their offices in that city. These include the President, two Vice Presidents in charge of operations, a Vice President in charge of comptroller activities, a Vice President in charge of revenue requirements, a Vice President in charge of marketing, a Vice President in charge of personnel, a Vice President in charge of public relations, a Vice President and General Counsel in charge of legal matters, the corporate Secretary and the corporate Treasurer. The Vice President and General Manager for the Georgia area also has his office in Atlanta. The company also has Vice Presidents-General Managers in charge of its operations in each of the nine states in which it operates, and those individuals have their offices in the respective states of their responsibility. So all of the persons holding executive positions with the company with the exception of the managers for the eight states other than Georgia have their offices and perform their duties in the City of Atlanta and are citizens of the State of Georgia. Further, the following departments of the company each have their headquarters in Atlanta, Georgia: accounting, personnel, public relations, marketing, revenue, legal, and the departments under the supervision of the corporate Secretary and the corporate Treasurer. The general tax accountant, the general accountant, the chief statistician, and all persons on their staffs, have their offices in Atlanta. The Personnel Supervisor and the Employees Benefit Committee, with all persons on their staffs, have their headquarters in Atlanta. The entire staff of the Employee Information Division, the Public Information Division, the Public Relations Division, the General Advertising Division, and those responsible for the publication of the company magazine. "Southern Telephone News", have their offices in Atlanta and the publication last mentioned is published there. All employees having to do with revenue requirements and marketing activities perform their functions in Atlanta. All of the general company attorneys, including the General Solicitor and his staff, have their offices in Atlanta. The staffs under the corporate Secretary and the corporate Treasurer, the Tax Commissioner and Tax Supervisor have their offices in Atlanta.

All of the executive officers of the company above mentioned who have their offices in Atlanta, with their various assistants and members of their staffs and other staff personnel total in the aggregate approximately 1,000 persons (1,047 by actual count on July 31, 1962), and their duties, responsibilities and functions are carried out in the general headquarters office of the company in Atlanta.

The manner in which the multi-state operations of the company are directed is as follows:

The Vice Presidents in charge of Operations and their staffs in the general office of the company in Atlanta, Georgia, exercise the authority over and are responsible for the Operations Department of the company in all of the nine states in which it operates. Included in such authority and responsibility are additions to and retirement of the company's plant, broadly termed the "construction program", which require estimates of cost of work to be done, and each such estimate involving more than $25,000.00 for either gross expenditures or plant retired by the company are required to be approved by the Engineering Staff Operations Manager and a Vice President in charge of Operations in the General Headquarters office of the company in Atlanta....