Buethe v. Britt Airlines, Inc.

• Decision Date: 09 April 1986
• Docket Number: No. 85-2177,85-2177
• Parties: 122 L.R.R.M. (BNA) 2061, 54 USLW 2583, 104 Lab.Cas. P 55,560, 1 Indiv.Empl.Rts.Cas. 965 Scott BUETHE, Plaintiff-Appellant, v. BRITT AIRLINES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1194

787 F.2d 1194

122 L.R.R.M. (BNA) 2061, 54 USLW 2583,

104 Lab.Cas. P 55,560,

1 Indiv.Empl.Rts.Cas. 965

Scott BUETHE, Plaintiff-Appellant, v. BRITT AIRLINES, INC., Defendant-Appellee.

No. 85-2177.

United States Court of Appeals, Seventh Circuit.

Argued March 4, 1986.

Decided April 9, 1986.

Stephen L. Trueblood, Trueblood, Harmon, Cater & Cook, Terre Haute, Ind., for plaintiff-appellant.

Scott Smith, Ford & Harrison, Atlanta, Ga., for defendant-appellee.

Before BAUER, POSNER, and EASTERBROOK, Circuit Judges.

POSNER, Circuit Judge.

This case, in which Scott Buethe complains about being fired as a part-time copilot by Britt Airlines, is before us for the second time. Buethe's original complaint, filed in an Indiana state court in 1980, alleged that by firing him Britt Airlines had violated both the Federal Aviation Act, 49 U.S.C. Secs. 1301 et seq., and state tort law. Britt Airlines removed the case to federal district court on the basis of Buethe's federal claim. The district judge granted Britt Airlines' motion for summary judgment on both claims, and dismissed the complaint. Buethe appealed, but contested only the dismissal of the state law claim. The appeal encountered a jurisdictional problem. While Buethe's state law claim was a proper pendant to his federal claim, the dismissal of the federal claim before trial ordinarily requires that any pendent state law claim be dismissed as well, unless, of course, there is an independent basis of federal jurisdiction over that claim--diversity. We remanded the case for a determination of whether Buethe and Britt Airlines had in fact been of diverse citizenship when the suit was filed and removed. 749 F.2d 1235, 1242 (7th Cir.1984). (Diversity must exist on both dates--filing and removal. Kanzelberger v. Kanzelberger, 782 F.2d 774, 777-78 (7th Cir.1986). But no material change occurred in the one-month interval between the filing and the removal of Buethe's case.)

On remand, Buethe filed an amended complaint (intended, of course, to relate back to the original complaint, see Fed.R.Civ.P. 15(c)), in which he alleged that when the suit was originally filed he had been a citizen of Indiana and Britt Airlines "an Illinois corporation." The allegation concerning Britt Airlines was insufficient to establish diversity. For diversity purposes a corporation is a citizen both of the state in which it is incorporated and of the state in which it has its principal place of business. 28 U.S.C. Sec. 1332(c). From the common but erroneous form of allegation used by Buethe it is impossible to tell whether his intention was to allege that the defendant merely was incorporated in the state named, or both was incorporated there and had its principal place of business there. Form 2(a) of the Forms Appendix to the Federal Rules of Civil Procedure shows the proper manner of alleging corporate citizenship (see also Note of Advisory Committee on the 1961 Amendment to Form 2; Casio, Inc. v. S.M. & R. Co., 755 F.2d 528, 529-30 (7th Cir.1985)), and we wish that the bar of this circuit would follow it. The failure to do so here was especially inexcusable, given that we had remanded the case expressly for a determination of whether there was diversity jurisdiction.

Britt Airlines, however, in its amended answer properly alleged that at the time of the suit it both was incorporated in Illinois and had its principal place of business there. But then it spoiled things--or tried to--by offering proof of these jurisdictional facts by attaching its articles of incorporation, showing its registered office to be in Illinois. All this proved, however, was that it was incorporated in Illinois, which everyone knew. The registered office is just an address required by the incorporating state. It could be a mail drop or a lawyer's office. It need not be, and is not deemed, the corporation's principal place of business; otherwise the state of incorporation and state of principal place of business would always be the same. The principal place of business--under the law of this circuit anyway--is where the corporation's nerve center is. E.g., Kanzelberger v. Kanzelberger, supra, 782 F.2d at 777.

We have concluded, however, though with some reluctance, that diversity jurisdiction was adequately if clumsily established. If the essential facts--namely the state or states of citizenship of each of the parties--are properly alleged, and no facts come to light during the proceedings which suggest that the allegations are incorrect, jurisdiction is established without need for any factual inquiry. Casio, Inc. v. S.M. & R. Co., supra, 755 F.2d at 530. Any other rule would bog down federal lawsuits hopelessly in the proof of jurisdictional facts. In this case, the amended answer adequately alleged the defendant's citizenship, which if correctly alleged was indeed diverse, and there is no persuasive reason to think that the allegations were false. It is true that the action of Britt Airlines' counsel in attaching the articles of incorporation showing the registered address of the corporation is consistent with an inference that he misunderstood section 1332(c), thought place of incorporation and principal place of business were synonyms, and may therefore have had no factual basis at all for the jurisdictional allegation. But equally he may have...