Nassau Sports v. Peters, Civ. A. No. 72 C 1086.

• Decision Date: 12 October 1972
• Docket Number: Civ. A. No. 72 C 1086.
• Citation: 352 F. Supp. 867
• Parties: NASSAU SPORTS, a limited partnership, Plaintiff, v. Garry PETERS et al., Defendant.
• Court: U.S. District Court — Eastern District of New York

352 F. Supp. 867

NASSAU SPORTS, a limited partnership, Plaintiff, v. Garry PETERS et al., Defendant.

Civ. A. No. 72 C 1086.

United States District Court, E. D. New York.

October 12, 1972.

Roth, Carlson, Kwit, Spengler & Goodell, New York City, and Fritz, Christ, O'Brien & Farrell, Mineola, N. Y., for plaintiff, by J. Edward Meyer, III, New York City, M. Halstead Christ, Mineola, N. Y., and Fred J. Halsey, Jr., New York City, of counsel.

Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendants Peters and Metropolitan Hockey Club, Inc., by Jay Topkis, Anthony M. Radice, New York City, of counsel.

Graubard, Moskovitz, McGoldrick, Dannett & Horowitz, New York City, for defendant Abrahams, by Emanuel Dannett, Robert I. Gosseen, New York City, of counsel.

MEMORANDUM DECISION AND ORDER

NEAHER, District Judge.

Plaintiff, owner of the newly-franchised New York Islanders Club in the National Hockey League ("NHL"), commenced this action in the New York Supreme Court, Nassau County, to enjoin defendant Garry Peters ("Peters"), a professional hockey player, from playing for defendant Metropolitan Hockey Club, Inc. ("Metropolitan"), in breach of plaintiff's alleged contract rights to Peters' exclusive services. The defendants joined in removing the action to this court on the ground of diversity of citizenship and jurisdictional amount, 28 U.S.C. § 1332(a). Plaintiff has moved to remand the action to the State court, asserting incomplete diversity in that Metropolitan, a New Jersey corporation, has its principal place of business in New York.¹

Concededly, Metropolitan was incorporated in the State of New Jersey and is a citizen of that state.² But since it is a corporation, diversity jurisdiction depends upon the location of Metropolitan's "principal place of business" within the meaning of 28 U.S.C. § 1332(c). That question is primarily one of fact to be determined upon review of the total activity of the corporation in terms of "such facts as the character of the corporation, its purposes, the kind of business in which engaged and the situs of its operations." Bruner v. Marjec, Inc., 250 F.Supp. 426, 427 (W.D.Pa.1966). See also Inland Rubber Corporation v. Triple A Tire Service, Inc., 220 F. Supp. 490 (S.D.N.Y.1963) and Epstein v. Guilford Industries, Inc., 218 F.Supp. 286 (S.D.N.Y.1963). Moreover, even though it is plaintiff who contests federal jurisdiction, the burden is on Metropolitan to satisfy the court that its principal place of business is in fact in a place other than New York. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936).

Metropolitan's affidavit opposing remand more than adequately meets its burden of establishing that its principal place of business is not in New York at the present time. Admittedly, Metropolitan was organized to own and operate a professional hockey team under franchise of the World Hockey Association ("WHA"). WHA itself is a newly formed league of professional hockey clubs expecting to make their debut this coming hockey season. Although Metropolitan has negotiated a lease to enable its team, the New York Raiders, to play half their regular season games in Madison Square Garden, up to this time the team it has been putting together has neither played any hockey games nor even practiced in New York. The remaining half of the New York Raiders' regular season games will, of course, be played in other WHA league cities throughout the United States and Canada. At the present time all personnel actually connected with the playing of hockey are located in New Jersey. The team's tryout rink is the New Jersey Ice Palace located in Ocean County, N.J. During the regular season the team will use the Branchbrook Arena in Newark, N.J. as its practice rink. Metropolitan has also arranged for the use of another practice rink in Essex County, N.J. Once the season starts the players, coaches and associated personnel will spend approximately 80% of their time in New Jersey.

In support of its motion to remand plaintiff stresses undeniable facts that Metropolitan's team is named "New York Raiders"; that 39 games comprising the entire home schedule of the Raiders are scheduled to be played at Madison Square Garden; that a ticket brochure shows that ticket sales for the Raiders' home games, as well as inquiries concerning sales, are to be directed to and will be handled by Metropolitan employees now located in an "office" in New York City, where ticket sales are in fact now taking place; and that Metropolitan's promotional activities, including newspaper, radio and television advertisement, media releases and press conferences emanate almost exclusively from the New York City "business office" of the Raiders. Finally, plaintiff avers, Metropolitan has an active substantial operating account at a Manufacturers Hanover Trust Company branch in New York City; the so-called "office" of Metropolitan in New Jersey is but the office of a law firm; and no telephone listing can be found for Metropolitan in the phone book.³

Challenging the weight of these facts, Metropolitan's affidavit points out that its corporate headquarters and executive offices are located at 2600 South Broad Street, Trenton, New Jersey. Its separate telephone number there is documented. The building—a brick structure of 5,000 square feet—is owned by Metropolitan's owners. Admittedly, the law firm of...