Ayala v. Bway Corporation
MEMORANDUM Opinion and Order written by the Honorable Gary Feinerman on 8/31/2017.Mailed notice.(jlj, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
17 C 4665
Judge Gary Feinerman
MEMORANDUM OPINION AND ORDER
George Ayala brought this suit in the Circuit Court of Cook County, Illinois, against his
former employer, BWAY Corporation, alleging state law claims and seeking $1,050,000 in
damages. Doc. 1-1. BWAY removed the suit to federal court under 28 U.S.C. § 1441(a),
invoking the diversity statute, 28 U.S.C. § 1332(a), which provides that federal courts have
jurisdiction over civil disputes between “citizens of different States” when the amount in
controversy exceeds $75,000. Doc. 1. To establish diversity, BWAY alleged that it is a
Delaware corporation with its principal place of business in Georgia, making it a citizen of
Delaware and Georgia, see 28 U.S.C. § 1332(c)(1), and that Ayala is a citizen of Illinois. Ayala
moves to remand the suit to state court on the ground that BWAY’s principal place of business is
Illinois, not Georgia, rendering the parties non-diverse. Doc. 15.
As the party removing this suit to federal court, BWAY bears the burden of establishing
federal jurisdiction. See Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010). “When challenged on
allegations of jurisdictional facts, the parties must support their allegations by competent proof.”
Id. at 96-97. As just noted, Ayala challenges BWAY’s assertion that its principal place of
business is in Georgia, not Illinois. A corporation’s principal place of business is its “nerve
center”—“the place where a corporation’s officers direct, control, and coordinate the
corporation’s activities”—which “should normally be the place where the corporation maintains
its headquarters.” Id. at 92-93. To keep this case in federal court, then, BWAY must establish
that its nerve center is in Georgia.
BWAY’s evidence consists, in its entirety, of the following. BWAY has two corporate
officers. Kenneth Roessler, the President and Chief Executive Officer, works at BWAY’s
“Executive Office” in Oak Brook, Illinois. Doc. 15-1; Doc. 20-4 at ¶¶ 2-3. Jeffrey Sprick, the
Vice President and Chief Financial Officer, works at BWAY’s “Corporate Office” in Atlanta,
Georgia. Doc. 15-1; Doc. 20-4 at ¶¶ 2-3. Both Sprick and Roessler participate in “high-level
decision-making for the Company with respect to Company strategy and direction.” Doc. 20-4
at ¶ 2. The Atlanta office handles “many key aspects of the Company’s high-level operations,
including, but not limited to, the Company’s tax planning, corporate accounting, and all bankingrelated functions,” and it “processes all company transactions (including transactions for all fixed
assets), all cash disbursements, all receivables, all checks, and all payroll for 4,000+ employees
across all BWAY locations.” Id. at ¶ 5. In addition, the Atlanta office “serves as the Company’s
hub for IT hardware and infrastructure, which supports all BWAY locations,” “maintains
BWAY’s official corporate books and records,” “has more persons working at that location
(approximately 70 persons) than the Oakbrook [sic] Office,” and is likely to host the company’s
next board meeting. Id. at ¶¶ 6-9. BWAY’s filings with the Securities and Exchange
Commission list the Atlanta office as the company’s principal business address. Doc. 20-6.
This evidence does not come close to showing that BWAY’s Georgia office, rather than
the Illinois office, is the locus of the “direct[ion], control, and coordinat[ion of] the corporation’s
activities.” Hertz, 559 U.S. at 92-93. The tax, accounting, payroll, and IT functions carried out
in Atlanta are routine matters of corporate housekeeping, not the sort of executive direction,
control, and coordination functions that characterize a principal place of business. See Hoschar
v. Appalachian Power Co., 739 F.3d 163, 172 (7th Cir. 2014) (“When a corporation’s day-to-day
operations are managed in one state and its officers make significant corporate decisions and set
corporate policy in another, the corporation’s nerve center and principal place of business is the
latter.”). The fact that BWAY’s SEC filings list the Atlanta office as its principal business
address bears little weight. See Hertz, 559 U.S. at 97 (“[W]e reject … that the mere filing of a
form [with the SEC] listing a corporations ‘principal executive offices’ would, without more, be
sufficient proof to establish a corporation’s ‘nerve center.’”). It makes no difference that more
people work in the Atlanta office than in the Oak Brook office; it matters what those people do,
not how many of them are doing it. See id. at 90-91 (rejecting the “business activities” approach,
which considered the total number of employees in a State in determining a corporation’s
principal place of business). And the fact that BWAY’s next board meeting will take place in
Atlanta is irrelevant. See id. at 93 (holding that a corporation’s principal place of business is
“not simply an office where the corporation holds its board meetings”).
True, the record reflects that both Sprick and Roessler participate in “high-level decisionmaking for the Company with respect to Company strategy and direction.” Doc 20-4 at ¶ 2. But
even if this and BWAY’s other evidence established that the Atlanta office participated in the
company’s “direction, control, and coordination,” BWAY still must show that the Atlanta office
performs those functions to a greater extent than does the Oak Brook office; after all,
determining which of two offices is a corporation’s principal place of business inherently
requires a comparison. See Hertz, 559 U.S. at 93 (“The word ‘principal’ requires us to pick out
the main, prominent or leading place.”) (internal quotations marks omitted); Hoschar v.
Appalachian Power Co., 739 F.3d 163, 173 (4th Cir. 2014) (comparing direction, control, and
coordination activities at the two locations where the corporation’s officers worked to determine
which was the principal place of business). Yet BWAY provides no evidence about what
happens at the Illinois office, let alone evidence that the direction, control, and coordination
functions performed at the Illinois office—where Roessler, the President and CEO, works—are
less significant than those performed at the Georgia office. The court therefore finds that BWAY
has failed to meet its burden of establishing that the Corporate Office in Georgia, as opposed to
the Executive Office in Illinois, is the company’s principal place of business.
Because BWAY is a citizen of Delaware and Illinois, the parties are not diverse, and
because the parties are not diverse, BWAY’s invocation of the diversity jurisdiction fails.
Ayala’s motion to remand accordingly is granted, and this suit is remanded to the Circuit Court
of Cook County, Illinois.
August 31, 2017
United States District Judge
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