Rostrum et al v. Harrah's Maryland Heights, LLC

Filing 12

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that defendants motion to dismiss for lack of jurisdiction [#8] is denied. Signed by Honorable Carol E. Jackson on 8/17/2011. (KMS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DENA ROSTRUM, et al.,
Plaintiffs,
vs.
HARRAH’S MARYLAND HEIGHTS, LLC
Defendant.

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Case No. 4:10-CV-1816 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion to dismiss for lack of
subject-matter jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(1). Plaintiffs oppose the
motion and the issues are fully briefed.
I. Background
On September 14, 2008, plaintiff Dena Rostrum slipped on a liquid substance
located on the floor of defendant’s casino. On September 29, 2010, she and her
husband brought this action against the defendant, seeking damages for her injuries
and for loss of consortium. After reviewing the complaint, the Court ordered plaintiffs
to file an amended complaint containing facts sufficient to establish subject-matter
jurisdiction. On December 3, 2010, plaintiffs filed an amended complaint asserting
jurisdiction based on diversity of citizenship, pursuant to 28 U.S.C. § 1332. Plaintiffs
allege that they are citizens of Missouri and the defendant is a citizen of Nevada. On
December 17, 2010, the defendant filed a motion to dismiss for lack of jurisdiction
under Fed. R. Civ. P. 12(b)(1). According to the defendant, diversity does not exists
because both parties are citizens of Missouri.

II. Legal Standard
Dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure is
appropriate if the plaintiff has failed to satisfy a threshold jurisdictional requirement.
See Trimble v. Asarco, Inc., 232 F.3d 946, 955 n.9 (8th Cir. 2000). In order to
properly dismiss for lack of subject matter jurisdiction, the complaint must be
successfully challenged on its face or on the factual truthfulness of its averments.
Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In a facial attack, the court restricts
itself to the face of the pleadings, and all of the factual allegations concerning
jurisdiction are presumed to be true. Id. However, in a factual challenge, the court
considers matters outside of the pleadings, an no presumptive truthfulness attaches
to the plaintiff’s allegations. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir.
1990). Furthermore, the existence of disputed material facts does not preclude the
trial court from evaluating for itself the merits of jurisdictional claims. Id. at 729.
“Because at issue in a factual 12(b)(1) motion is the trial court’s jurisdiction – its very
power to hear the case – there is substantial authority that the trial court is free to
weigh the evidence and satisfy itself as to the existence of its power to hear the case.”
Id. The burden that proving jurisdiction does in fact exist rests with the plaintiff. Id.
III. Discussion
District courts have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000 and is between citizens of different
states. Here, the parties dispute whether the defendant is a citizen of Missouri. For
purposes of diversity jurisdiction, limited liability companies are citizens of every state
of which any member is a citizen. See GMAC Commercial Credit, LLC v. Dillard Dep’t
Stores, Inc., 357 F.3d 827, 829 (8th Cir. 2004). Therefore, to determine whether the

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defendant is a citizen of Missouri, the Court must examine the citizenship of the
defendant’s members.
The defendant has three members, all of which are corporations. One of the
members is Harrah’s Maryland Heights Operating Company (“Harrah’s”).

It is

undisputed that Harrah’s is incorporated in Nevada and operates a casino in Missouri.
Plaintiffs’ contend that Harrah’s is a citizen of Nevada because it is incorporated there
and its executives are located in Las Vegas, Nevada. The defendant, however, argues
that Harrah’s is a citizen of Missouri because it operates a casino in Maryland Heights,
Missouri.
Generally, a corporation is deemed to be a citizen “of the State by which it has
been incorporated and of the State where it has its principal place of business.” 28
U.S.C. §1332(c)(1). The phrase “principal place of business” also known as the “nerve
center,” refers to the place where the corporation’s high level officers direct, control
and coordinate the corporation’s activities.” The Hertz Corp v. Friend, 130 S.Ct.
1181,1192 (2010). Typically, the principal place of business is found at a corporation’s
headquarters: “provided that the headquarters is the actual center of direction, control,
and coordination.” Id. A principal place of business shall not be confused with the
location where a corporation conducts its daily business activities. Id. at 1194 (“if the
bulk of a company’s business activities visible to the public takes place in New Jersey,
while its top officers direct those activities just across the river in New York, the
“principal place of business” is New York.”)
Here, it is clear that Harrah’s principal place of business is in Nevada. The
corporation’s headquarters are located in Nevada. Also, the corporate executives who
direct, control and coordinate the corporation are located in Nevada. The defendant

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has only showed that Harrah’s operates a casino in Missouri. Under Hertz, the location
of a business or of daily business activity does not confer citizenship pursuant to 28
U.S.C. § 1332. Id. Therefore, for purposes of jurisdiction, the Court finds that the
defendant is a citizen of Nevada and not a citizen of Missouri.
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to dismiss for lack of
jurisdiction [#8] is denied.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 17th day of August, 2011.

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