THE AMERICAN FOUNDATION, INC., PLAINTIFF-APPELLANT, v. MOUNTAIN LAKE CORPORATION, DEFENDANT-APPELLEE.

No. 71-2522. Summary Calendar.[*] United States Court of Appeals, Fifth Circuit.
January 24, 1972.

[*] Rule 18, 5th Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I.

Macfarlane, Ferguson, Allison Kelly, T. Paine Kelly, Jr., H. Vance Smith, Tampa, Fla., for plaintiff-appellant.

Stephen H. Grimes, Holland Knight, Bartow, Fla., for defendant-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

PER CURIAM:

[1] In this case we have carefully examined the order of the district court dismissing the plaintiff’s action without prejudice, the record, briefs, and contentions of the parties. We are unable to

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conclude that the factual and legal conclusions of the district court are erroneous. A copy of the opinion of the district court is attached hereto as Appendix A.

[2] Judgment affirmed.

APPENDIX A

A-20

(Filed June 4, 1971)

Document No. 17, R-52

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT
OF FLORIDA. TAMPA DIVISION.

(Number and Title Omitted)

ORDER

This is a diversity action. On September 28, 1970, defendant
filed a motion to dismiss for lack of jurisdiction over the
subject matter. It is contended by plaintiff that its principal
place of business is now, and always has been, in the State of
Pennsylvania and at its principal office in Philadelphia. It is
the contention of defendant that the principal place of business
of plaintiff is near Lake Wales, Florida.

In order to determine the threshold jurisdictional issue, a
hearing on the motion was held on May 12, 1971, at which
testimony was heard and evidence introduced. Both parties have
filed post-hearing memoranda of law.

The Diversity of Citizenship Statute, 28 U.S.C. § 1332, grants
federal district courts subject matter jurisdiction in actions
between citizens of different states. 28 U.S.C. § 1332(c), added
in 1958, provides that for purposes of the Statute, “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 * * *.” (Emphasis supplied.)

Concerning Section 1332(c), it has been said:

The determination of the principal place of
business has not been as simple a matter as this
might suggest. It is, in each case, a question of
fact, and the court must consider such factors as the
character of the corporation, its purposes, the kind
of business in which it is engaged, and the situs of
its operations. Two views seem to have found favor.
On one view, a corporation has its principal place of
business where its home office is located * * *. The
“home office” test in itself may be variously
applied, depending on whether the court looks to the
executive offices, at which general policy decisions
are made, or to the place where day-to-day control of
the business is exercised.

The other view is that the principal place of
business is the place where the corporation carries
on the bulk of its activity, even though the home
office, in either of the senses described above, may
be elsewhere. Wright, Federal Courts 90-91 (2d ed.
1970).

In this case it is conceded that plaintiff is incorporated in
Delaware and that Defendant is a Florida corporation with its
principal place of business in Florida. The question before the
Court is therefore whether plaintiff has Florida as its principal
place of business. If it does, diversity is lacking and the
action must be dismissed. Rule 12(h)(3), F.R.Civ.P.

In resolving this question the Court has examined applicable
caselaw. The principal case in this Circuit interpreting Section
1332(c) is Anniston Soil Pipe Co. v. Central Foundry Co.,
216 F. Supp. 473 (N.D.Ala. 1963), affirmed 329 F.2d 313 (5 Cir. 1964),
where Chief Judge Lynn refused to use “easy labels” such as
“center of gravity,” “nerve center,” or “place of operations.”
Based upon a thorough review of the total activity of a Maine
corporation it was determined on the basis of the specific facts
adduced that the corporation had its principal place of business
in Alabama, where production and plant facilities were located,
rather than New York, where the executive offices were.

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Scot Typewriter Co. v. Underwood Corp., 170 F. Supp. 862
(S.D.N.Y. 1959), is the principal case upholding the so-called
“nerve center” or “center of gravity” view. There it was held
that where a corporation is engaged in multistate activities with
offices, facilities, and plants in various states, the principal
place of business is the “center of gravity” of the corporation,
i.e., the “nerve center” of the business from which corporate
activities are directed, controlled, and coordinated.

In Kelly v. United States Steel Corp., 284 F.2d 850 (3 Cir.
1960), the so-called “nerve center” test was labelled but “a
pleasant and alluring figure of speech”. It was held that
Pennsylvania (where the main business activities were carried on)
and not New York (where the policy-making occurred) was the
principal place of business of U.S. Steel.

Diversity of citizenship is to be determined according to the
facts as they existed at the time of the institution of the
lawsuit. See, e.g., Television Reception Corp. v. Dunbar,
426 F.2d 174 (6 Cir. 1970). Based upon all the evidence relating to
the total activities of plaintiff, it is the Court’s conclusion
that at the time this action was begun and probably for some time
prior thereto plaintiff’s principal business was Polk County,
Florida, site of plaintiff’s Mountain Lake Sanctuary and Singing
Tower. This decision is based upon an examination of all the
facts adduced, and not upon a rigid application of any so-called
test.

The Court will not attempt to summarize the evidence presented.
The record speaks for itself. It will suffice to say that the
Court has considered, among other factors, the size of the work
force in Polk County, the Florida payroll, the nature and scope
of plaintiff’s activities, and plaintiff’s property holdings. And
it inescapably follows that in 1970 plaintiff’s principal
business activity was the maintaining and running of the Mountain
Lake Sanctuary and Singing Tower in Polk County, Florida. The
Court need not determine where plaintiff’s principal place of
business was in times past, nor when, if ever, it moved from some
other place to Florida.

Since both plaintiff and defendant are citizens of the State of
Florida for purposes of 28 U.S.C. § 1332, there is not diversity
of citizenship and this Court lacks jurisdiction over the subject
matter. Therefore, it is

Ordered:

This action is dismissed without prejudice.

Done and Ordered at Tampa, Florida, this 4 day of June, 1971.

BEN KRENTZMAN,
United States District Judge.

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