Jackson v. Tennessee Valley Authority

• Decision Date: 19 June 1978
• Docket Number: No. 74-343-NA-CV.,74-343-NA-CV.
• Citation: 462 F. Supp. 45
• Parties: Howard JACKSON v. TENNESSEE VALLEY AUTHORITY and Ickes-Braun Glasshouses, Inc.
• Court: U.S. District Court — Middle District of Tennessee

462 F. Supp. 45

Howard JACKSON v. TENNESSEE VALLEY AUTHORITY and Ickes-Braun Glasshouses, Inc.

No. 74-343-NA-CV.

United States District Court, M. D. Tennessee, Nashville Division.

June 19, 1978.

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COPYRIGHT MATERIAL OMITTED

Harlan Dodson, Jr., Hooker, Keeble, Dodson & Harris, Nashville, Tenn., George R. Fleming, Marks & Fleming, Clarksville, Tenn., for plaintiff.

John K. Maddin, Jr., Gracey, Maddin, Cowan & Bird, Nashville, Tenn., Herbert S. Sanger, Jr., Gen. Counsel, Charles A. Wagner, III, Associate Gen. Counsel, Larry S. Bush; William R. Casto, Tennessee Valley Authority, Knoxville, Tenn., for defendants.

MEMORANDUM

MORTON, Chief Judge.

On August 2, 1974, plaintiff filed suit against defendants to recover damages for injuries he sustained while working at the Cumberland Steam Plant in Cumberland, Tennessee. In his complaint, plaintiff made the following allegations as to the jurisdiction of this court:

1. Your Plaintiff is a resident of the Middle District of Tennessee. Defendant TENNESSEE VALLEY AUTHORITY is a corporation incorporated by act of Congress, maintaining facilities in the Middle District of Tennessee, including Stewart County, Tennessee. ICKES-BRAUN GLASSHOUSES, INC., is an Illinois corporation which did business in the State of Tennessee, as hereinafter related, and is subject to service of process in the State of Tennessee based upon its activities there.

2. This Court has jurisdiction for this case of the TENNESSEE VALLEY AUTHORITY pursuant to the provisions of 28 USCA Sections 1331 and 1349. This Court has jurisdiction in this case over ICKES-BRAUN GLASSHOUSES, INC., on the grounds that Plaintiff and Defendant are citizens of different states and the amount in controversy exceeds $10,000.00, as set forth in 28 USCA Section 1332.

In their answers, neither defendant challenged the jurisdiction of this court, although defendant Tennessee Valley Authority ("TVA") did assert that 28 U.S.C. § 1349 was not applicable to it as a jurisdictional basis for suit. Similarly, in the pre-trial order submitted by the parties and approved by the court on July 23, 1975, the jurisdiction of this court as to both defendants was not disputed.

In a memorandum opinion entered on March 17, 1976, the court found that neither defendant was liable to plaintiff for the injuries he had suffered. Jackson v. Tennessee Valley Authority, 413 F.Supp. 1050 (M.D.Tenn.1976). In making such a finding, the court found that the jurisdiction of the court had been properly invoked "pursuant to the provisions of 28 U.S.C. §§ 1331 and 1332." Plaintiff subsequently appealed this court's decision to the Sixth Circuit Court of Appeals.

In an order entered on February 17, 1978, the Court of Appeals vacated the judgment of this court and remanded the case to this court for further consideration. Jackson v. Tennessee Valley Authority, No. 76-1841 (6th Cir. February 17, 1978). In vacating this court's judgment, the Court of Appeals did not reach the merits of this action and the court's ruling thereon. Rather, the Court of Appeals found that this court had not sufficiently considered the question of subject matter jurisdiction over both defendants. Accordingly, the Court of Appeals remanded the case to this court with directions to "conduct a hearing on the legal issues involved and give the parties an opportunity to present whatever evidence they consider appropriate to support their respective positions."

The hearing ordered by the Court of Appeals was held by this court on April 11, 1978. At said hearing, each of the parties was given the opportunity to present whatever evidence they desired on the issue of jurisdiction, and to argue the jurisdictional questions involved in this case. Based on the evidence adduced therein and the entire record as previously developed by this court, the court makes the following findings.

As to the defendant Ickes-Braun Glasshouses, Inc. ("Ickes-Braun"), the question is relatively simple. The basis for jurisdiction asserted by plaintiff as to defendant Ickes-Braun was 28 U.S.C. § 1332(a), diversity of citizenship. 28 U.S.C. § 1332(a) provides in pertinent part as follows:

The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between—

(1) citizens of different States.

28 U.S.C. § 1332(c) provides in pertinent part as follows:

For the purposes of this section and section 1441 of this title, 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: ...

Thus for the purposes of diversity jurisdiction, a corporation has dual citizenship in both the state of incorporation and the state in which its principal place of business is located. Steinbock-Sinclair v. Amoco International Oil Co., 401 F.Supp. 19 (N.D.Ill. 1975); 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 3624 (1975).

In his complaint as originally filed, plaintiff alleged, and defendant Ickes-Braun admitted, that Ickes-Braun had been incorporated in the State of Illinois. Plaintiff did not allege or prove, however, the location of defendant Ickes-Braun's principal place of business. At the April 11 hearing the following evidence was introduced: Ickes-Braun was incorporated in the State of Illinois. In 1972, Ickes-Braun was acquired by the Roper Corporation through a merger. Roper Corporation had been incorporated in the State of Delaware. The articles of merger between Roper Corporation and Ickes-Braun were filed with the Secretary of State of Delaware in 1972. Since the time of the merger, Ickes-Braun has been at all times an operating division of Roper Corporation. From August 1974 to the present time, the corporate headquarters of Roper Corporation, the office from which the activities of said corporation are supervised and directed, have been located in Kankakee, Illinois. Although Roper Corporation and Ickes-Braun carry on business in a number of states, a substantial part of their business was and is carried on in the State of Illinois.

Where a corporation carries on its business in a number of states and no one state is clearly the state in which its business is principally conducted, the state in which the substantial part of its business is transacted and from which centralized general supervision of its business is exercised is the state in which it has its principal place of business. United Nuclear Corp. v. Moki Oil & Rare Metals Co., 364 F.2d 568 (10th Cir.), cert. denied, 385 U.S. 960, 87 S.Ct. 393, 17 L.Ed.2d 306 (1966); Exxon Corp. v. Duval County Ranch Co., 406 F.Supp. 1367 (S.D.Tex.1975); Briggs v. American Flyers Airline Corp., 262 F.Supp. 16 (N.D.Okl.1966); 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 3625. The evidence in this case reveals that general supervision over the activities of defendant Ickes-Braun is exercised in the State of Illinois and that Ickes-Braun conducts the substantial part of its business in Illinois. Thus the court holds that it has subject matter jurisdiction over defendant Ickes-Braun pursuant to 28 U.S.C. § 1332(a), the plaintiff being a citizen of the State of Tennessee, the defendant being a citizen of the States of Illinois and Delaware, and the amount in controversy clearly exceeding $10,000. Steinbock-Sinclair v. Amoco International Oil Co., supra; Gavin v. Read Corp., 356 F.Supp. 483 (E.D.Pa.1973).¹

As to defendant TVA, the question of jurisdiction is not as simple. Plaintiff alleged that the court had jurisdiction over defendant TVA pursuant to 28 U.S.C. § 1331. Section 1331(a) provides that the district court shall have original jurisdiction of all civil suits which arise "under the Constitution, laws, or treaties of the United States ...." Section 1331(a) also provides that there need be no "amount in controversy" in any action brought against the United States or "any agency thereof."²

TVA was created by the TVA Act as "a wholly owned corporate agency and instrumentality of the United States." United States ex rel. TVA v. An Easement & Right-of-Way Over Two Tracts of Land (Rogers), 246 F.Supp. 263, 269 (W.D.Ky. 1965), aff'd, 375 F.2d 120 (6th Cir. 1967). Section 19 of the TVA Act, 16 U.S.C. § 831r, specifically denominated TVA as "an instrumentality and agency of the Government of the United States for the purpose of executing its constitutional powers." As described by the court of appeals for this circuit:

The Tennessee Valley Authority exercises an executive or administrative function in its activities, which, prior to its establishment, rested with the divisions of the executive branch of the Government. ... Its great functions are governmental in nature, and might have been performed directly by officers of the Government. It is plainly a governmental agency or instrumentality of the United States.

Tennessee Valley Authority v. Kinzer, 142 F.2d 833, 837 (6th Cir. 1944) (citations omitted). TVA's status as an instrumentality and agency of the United States and, more importantly, the Government's ownership of it were discussed in the legislative history to the 1959 amendments to the TVA Act, where committees of both Houses of Congress noted that the United States is TVA's "owner and sole stockholder." S.Rep.No. 470, 86th Cong., 1st Sess. 11 (1959); H.R. Rep.No.271, 86th Cong., 1st Sess. 8 (1959), U.S.Code Cong. & Admin.News 1959, p. 2000.

TVA's status as a wholly owned federal corporation created under an act of Congress places the present action against TVA squarely within the grant of subject matter jurisdiction under 28 U.S.C. § 1331. In the Pacific Railroad Removal Cases, Union Pacific Ry. v. Myers, 115 U.S. 1, 5 S.Ct. 1113, 29 L.Ed. 319 (1885), the Supreme Court held that any claim against a private corporation incorporated under an Act of Congress falls within...