Hodges v. GEORGIA KAOLIN COMPANY, Civ. A. No. 1812.

• Decision Date: 02 July 1962
• Docket Number: Civ. A. No. 1812.
• Parties: M. R. HODGES, Plaintiff, v. GEORGIA KAOLIN COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Georgia

207 F. Supp. 374

M. R. HODGES, Plaintiff, v. GEORGIA KAOLIN COMPANY, Defendant.

Civ. A. No. 1812.

United States District Court M. D. Georgia, Macon Division.

July 2, 1962.

G. Lee Dickens, Jr., Milledgeville, Ga., for M. R. Hodges.

John B. Harris, Jr., of Harris, Russell & Watkins, Macon, Ga., for Georgia Kaolin Co.

ELLIOTT, District Judge.

This action was brought by the Plaintiff in the Superior Court of Twiggs County, Georgia, where the Defendant has a place of business. The cause was removed from the state court to the federal court by the Defendant on a claim of diversity of citizenship of the parties. The Plaintiff challenges the existence of such diversity by a motion to remand the cause to the state court. 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 New Jersey. The Plaintiff contends that it is in Georgia. The Defendant is a New Jersey corporation, so the question of whether or not this court has jurisdiction turns upon what finding this court makes as to the actual principal place of business of the Defendant. 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 present action was commenced in November, 1961 and jurisdictional facts existing at that time must furnish the basis for the Court's conclusion as to the Defendant's principal place of business.

A hearing was had on Plaintiff's motion to remand and evidence was introduced in the form of affidavits, answers to interrogatories, responses to requests for admission, documents, and oral testimony. On the basis of this evidence the Court finds that at the time this action was filed the Defendant was engaged in the business of mining, processing and selling kaolin, a clay that is used widely in the ceramic, paper and chemical industries. Its mines and its processing plant are located on lands owned or leased by the corporation in Twiggs County, Georgia. It has a financial interest in some other mining companies and it owns some lands and leases in other states, but the only mines and processing plants owned and operated by the company are in Georgia. The company is not authorized to do business in any state other than Georgia and New Jersey. It is a New Jersey corporation and all of its corporate stock is beneficially owned by E. J. Grassman, a citizen of New Jersey. Its product is sold in many states and in some foreign countries. In some instances the sale is made directly to the customer and in other instances through distributors or agents. In every instance the product is shipped directly from the processing plant in Georgia to the customer. All of the executive offices are located in Elizabeth, New Jersey. Sales are supervised there and the company financing is done there. All of the corporate directors live in New Jersey and all directors meetings are held in New Jersey. All of the corporate officers, with one exception, live in New Jersey. An Assistant Secretary lives in Georgia. The corporate records are kept in New Jersey and federal income tax returns are filed there.

None of the officers or directors of the Defendant who live in New Jersey are full-time employees of the company, and the executive, sales and financial office quarters in Elizabeth are shared by the Defendant with other corporations, some or all of which are controlled by the same interests which control Defendant.

The Defendant carries on its operations in Georgia through four departments or divisions. There is a Lands Division, which is concerned with the acquisition of lands by purchase or lease and with exploration and general land management; the Mining Division, which is concerned with the mining of clay; the Manufacturing Division, which handles all phases of processing the clay; and the Technical Division, which presumably has to do with research and engineering. Each of these departments is headed by a full-time manager, and each of these managers is a resident of Georgia. There is no general superintendent and the general overall direction of the operations centers in Mr. Grassman in New Jersey,...