Marshall v. Vicksburg Healthcare, LLC et al

Filing 14

ORDER Signed by Honorable David C. Bramlette, III on 10/17/2011 (PL)

IN THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
ALPHONSO MARSHALL, INDIVIDUALLY AND
ON BEHALF OF ALL OF THE HEIRS AT LAW
AND WRONGFUL DEATH BENEFICIARIES
OF THE ESTATE OF VANESSA MARSHALL,
V.

PLAINTIFFS

CASE NO.:5:11-cv-00121-DCB-RHW

VICKSBURG HEALTHCARE, LLC d/b/a RIVER
REGION MEDICAL CENTER d/b/a RIVER REGION
HEALTH SYSTEMS; AND JOHN DOES 1-10

DEFENDANTS

ORDER
This cause is before the Court on Plaintiffs’ Motion to Remand
[docket

entry

no.

7].

Having

considered

the

said

Motion,

Defendant’s response thereto, applicable statutory and case law,
and being otherwise fully advised in the premises, the Court finds
and orders as follows:
I. Procedural History
Plaintiff Alphonso Marshall, a Mississippi citizen, filed the
present case, individually and on behalf of all the decedent’s
beneficiaries, in the Circuit Court of Warren County, Mississippi.
Defendant Vicksburg Healthcare, LLC, (“VHC”) removed the case to
this Court on the basis of diversity jurisdiction. See 28 U.S.C. §
1332.

In

its

Notice

of

Removal,

VHC

invoked

this

Court’s

jurisdiction by averring that the amount in controversy exceeds
$75,000, exclusive of interest and costs, and that it is diverse
from Marshall as a Delaware corporation with its principal place of
business in Delaware. See Notice of Removal, Attachment #1.

Marshall now moves for remand, stating that VHC’s principal
place of business is in fact in Vicksburg, and therefore it should
be

considered

a

resident

of

Mississippi

for

jurisdictional

purposes.1 See 28 U.S.C. § 1332(c)(1). VHC does not expressly deny
this allegation in its response. Instead, VHC relies entirely on
Marshall’s

Amended

Complaint,

in

which

he

states

that

VHC’s

principal office is in Delaware. Vicksburg purportedly construes
Marshall’s statement to be a judicial admission justifying its
removal of the cause to this Court.
II. Discussion
A federal court possesses subject matter jurisdiction over
civil cases “arising under the Constitution, laws, or treaties of
the United States,” or cases in which the amount in controversy
exceeds $75,000, exclusive of interest and costs, and in which
diversity of citizenship exists between the parties. 28 U.S.C. §§
1331, 1332. If a federal court, as a court of limited jurisdiction,
lacks this statutory or constitutional power to adjudicate a claim,
it must not hear the case. See Home Builders Ass'n, Inc. v. City of
Madison, 143 F.3d 1006, 1010 (5th Cir. 1998); Stockman v. Federal
Election Comm’n, 138 F.3d 144, 151 (5th Cir. 1998) (citing Veldhoen
v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994)).

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Additionally, Marshall argues that the presence of
fictitious, named defendants, e.g., John Does, defeats diversity in
this matter because some of these defendants are likely to be
Mississippi residents. This argument is foreclosed by the removal
statute itself, 28 U.S.C. § 1441(a)(“[T]he citizenship of
defendants sued under fictitious names shall be disregarded.”), and
thus is without merit.

Conversely,

once

a

federal

court

determines

that

it

has

the

requisite authority, its exercise of that authority is mandatory,
and “[t]he parties cannot waive or agree to destroy that original
jurisdiction.” Cuevas v. BAC Home Loans Servicing, LP, No. 1020735, 2011 WL 3112324, at *6 (5th Cir. July 27, 2011). At all
times

during

the

litigation,

a

federal

court

has

an

abiding

responsibility to carefully police its jurisdiction, see Ruhgras AG
v. Marathon Oil Co., 526 U.S. 574, 583 (1999), and accordingly
should raise jurisdictional issues sua sponte if it finds its
authority in doubt. McDonal v. Abbott Labs., 408 F.3d 177, 182 n.5
(5th Cir. 2005).
It

is

incumbent

upon

the

party

who

invokes

federal

jurisdiction to demonstrate to the court that jurisdiction is
proper. See, e.g., Ray v. Bird & Son & Asset Realization Co., Inc.,
519 F.2d 1081, 1082 (1975)(“The burden of pleading diversity of
citizenship is upon the party invoking federal jurisdiction, and if
jurisdiction is properly challenged, that party also bears the
burden of proof.”). This is true for remand motions even though the
plaintiff files the initial motion with the Court. See, e.g., Willy
v.

Coastal

Corp.,

855

F.2d

1160,

1164

(5th

Cir.

1988)(“When

considering a motion to remand, the removing party bears the burden
of showing that removal was proper.”). To overcome the plaintiff’s
challenge in a motion for remand, the defendant must present
evidence that removal was warranted; mere allegations or conclusory
statements will not suffice. Welsh v. American Surety Co., 186 F.2d

16, 17 (5th Cir. 1951). Failure of the Court to require such
evidence from the defendant is reversible error. See Roberts v.
Lewis, 144 U.S. 653, 658 (1892); Guerrero v. State Farm Mut. Auto.
Ins. Co., 181 F.3d 97 (5th Cir. 1999) (unpublished op.) (reversing
the decision of the district court for not requiring the defendant
to supply evidence to support its allegation that its principal
place of business was in Illinois). Further, “[a]ny ambiguities are
construed against removal because the removal statute should be
strictly construed in favor of remand.” Manguno v. Prudential Prop.
and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citing Acuna
v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)).
III. Analysis
A. Vicksburg Healthcare as a Limited Liability Company
The style of the case designates Vicksburg Healthcare as a
limited liability company. It is well-settled in this circuit that
a limited liability company’s citizenship is that of its members,
as opposed to its principal place of business. Harvey v. Grey Wolf
Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).
From the record before the Court, it appears that VHC is
indeed a limited liability company, not a corporation. Both parties
consistently refer to Vicksburg Healthcare, LLC throughout their
briefs

rather

than

“Inc.”,

the

abbreviation

common

for

corporations. These two facts alone would persuade this Court that
Vicksburg Healthcare is a limited liability company but for some

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noticeable inconsistencies in the parties’ pleadings which give
this Court pause.
For

instance,

Marshall

in

his

Amended

Complaint

states

“Defendant Vicksburg Healthcare, LLC d/b/a River Region Medical
Center d/b/a River Region Health Systems is a Delaware corporation
with its principal office address at 1013 Centre Road, Wilmington,
DL 19805. (emphasis added).” Docket entry no. 1, Attachment #2.
Again, in his Motion for Remand, Marshall contends that “the
Delaware Corporation is a mere shell (emphasis added).” Docket
entry no. 7 ¶ 5. Similarly, VHS represented itself as a corporation
in the civil cover sheet attached to its Notice of Removal when it
checked the box: “Incorporated and Principal Place of Business in
Another State.” Docket entry no. 1, Attachment #1. Consistent with
these

representations,

both

parties

have

stated

that

VHC

is

incorporated in Delaware.
Due to the conflicting representations made by both parties,
at this point the Court can only speculate as to whether the
parties’ central argument is founded upon a misapplication of law,
presuming that VHC is indeed a limited liability company, or that
the parties’ legal discussion is correct, indicating that VHC is
incorporated. Either way, the Court cannot determine whether it has
subject matter jurisdiction over the controversy until it is either
disabused of the notion that VHC is in fact unincorporated or is
satisfied that each of VHC’s members are non-Mississippi residents.

5

See Harvey, 542 F.3d at 1080; see also Mechali v. CTZ Mortg. Co.,
LLC, No. 4:11-CV-114, 2011 WL 2683190, at *1 (E.D. Tex. June 7,
2011)(stating that a Delaware LCC’s citizenship is that of its
members);

Oracle

Oil,

LLC

v.

Liberty

Mut.

Ins.

Co.,

No.

10-388-JJB-DLD, 2010 WL 5575758, at *2 n.1 (M.D. La. Nov. 22, 2010)
(same). In the event that VHC is found to be a corporation, the
Court will briefly turn to the argument contained in the parties’
briefs concerning VHC’s principal place of business.
B. Vicksburg Healthcare as a Corporation
A corporation is said to have dual citizenship: it is deemed
a citizen of both the state in which it is incorporated and the
state where it has its principal place of business. 28 U.S.C.
§1331(b)(1). VHC contends that Marshall judicially admitted that
VHC’s principal place of business is in Delaware in its Amended
Complaint; however, VHC’s reliance on Marshall’s Amended Complaint
is problematic for at least two reasons. First, VHC misconstrues
Marshall’s Amended Complaint. Marshall did not state that VHC’s
principal place of business is in Delaware, rather he stated that
its

principal

office

is

in

Delaware.

These

terms

are

not

interchangeable, and the fact that a business maintains a principal
office in a state does not mean that its principal place of
business is located there, although it is a factor to be considered
in the Court’s overall principal-place-of-business analysis. See
Hertz Corp. v. Friend, --- U.S. ---, ---, 130 S. Ct. 1181, 1190

6

(2010) (noting that a corporation’s “principal office” is not
always located in its principal place of business); Gavin v. Read
Corp., 356 F. Supp. 483, 486 (D.C. Pa. 1973)(“It is worth noting
that

the

term

‘principal

place

of

business’

does

not

mean

‘principal office’” (citations omitted)). Therefore, the Court does
not agree with VHC’s assessment that this statement is tantamount
to a judicial admission that its principal place of business is in
Delaware. See Hesse v. Blue Cross Blue Shield of Texas, No.
4:11-CV-362, 2011 WL 4025453, at *2 (E.D. Tex. August 15, 2011)
(“Defendant did not say that its ‘principal place of business’ was
in Texas. The words ‘principal office’ do not amount to a judicial
admission.”).
More importantly, even if Marshall had made such an admission,
parties cannot confer jurisdiction upon this Court by agreement.
See Cuevas, 2011 WL 3112324, at *6. While VHC correctly points out
that Marshall has offered no evidence to support his Motion for
Remand,2 the same can be said of its justification for removal, and
as the party originally invoking this Court’s jurisdiction, it
maintains the burden of proof. See Willy, 855 F.2d 1160, 1164. VHC
may not rely on Marshall’s unsupported allegation as proof of fact,

2

Marshall merely concludes: “In this case, upon information
and belief the Defendant’s only place of business, place of
operation and place of activity is Vicksburg, Mississippi. It
appears that the Delaware Corporation is a mere shell, set up
solely for the purpose of lawsuit removal and increased burden upon
Plaintiff.”
7

see Welsh, 186 F.2d at 17, and the Court finds it problematic that
VHC chose to rely on Marshall’s ambiguous statement as a “judicial
admission” rather than offer substantive facts to support its
invocation of the Court’s jurisdiction.
III. Conclusion
This Court may not assert jurisdiction over this cause without
evidence that it has the requisite authority to do so. Home
Builders Ass’n, 143 F.3d at 1010. As it stands, the evidence is
insufficient for the Court to make a determination in this matter,
but the Court, mindful of the rule that the “removal statute should
be strictly construed in favor of remand”, Manguno 276 F.3d at 723,
is inclined to remand the action to state court. Nevertheless, out
of an abundance of caution, the Court will give VHC seven (7) days
from the filing of this Order to either (1) explain why this Court
has jurisdiction over VHC as a limited liability company or, if VHC
continues to maintain that it is incorporated, (2) to produce
satisfactory evidence and further argument to support its claim
that its principal place of business is in Delaware, consistent
with the guidelines outlined by the Supreme Court. See Hertz Corp.
v. Friend, --- U.S. ---, 130 S. Ct. 1181 (2010)(adopting the nerve
center test for determining a corporation’s principal place of
business). Should VHC respond to this Order, Marshall will be
allotted

an

equal

amount

of

time

to

address

VHC’s

argument;

however, if the Court hears nothing from VHC within seven (7) days,

8

the above styled and numbered cause will be remanded to the Circuit
Court of Warren County, pursuant to 28 U.S.C. § 1447(c).
Accordingly,
IT IS HEREBY ORDERED that the Defendant present argument and
evidence either (1) explaining why this Court has jurisdiction over
VHC

as

a

limited

liability

company,

or

alternatively,

(2)

supporting its claim that its principal place of business is in
Delaware within seven (7) days of filing this Order, otherwise the
Plaintiffs’ Motion to Remand [docket entry no. 7] will be granted.
SO ORDERED AND ADJUDGED this the _17th_ day of October 2011.

/s/ David Bramlette
UNITED STATES DISTRICT COURT

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