MESA UNDERWRITERS SPECIALTY INSURANCE COMPANY v. FIVE STAR HOTELS LLC et al
Filing
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MEMORANDUM OPINION re 90 MOTION to Dismiss filed by FIVE STAR HOTELS LLC. Signed by Chief Judge Joy Flowers Conti on 10/8/2014. (blr)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MESA UNDERWRITERS SPECIALTY
INSURANCE COMPANY,
Plaintiff,
Civil Action No. 13-225
v.
FIVE STAR HOTELS, LLC, et al.
Defendants.
MEMORANDUM OPINION
CONTI, Chief District Judge
Before the court is a motion to dismiss (ECF No. 90) filed by Five Star Hotels,
LLC (“Five Star”). The court reviewed the motion, the response (ECF No. 93) filed by
Mesa Underwriters Specialty Insurance Company (“MUSIC”), and the briefs and
supporting information filed by the parties. Five Star seeks dismissal for lack of
subject-matter jurisdiction, specifically the lack of complete diversity of citizenship
between the parties. See 28 U.S.C. § 1332. The burden of establishing subject-matter
jurisdiction on a motion under Rule 12(b)(1) rests with the party asserting
jurisdiction, which in this case is MUSIC. McCann v. Newman Irrevocable Trust, 458
F.3d 281, 286 (3d Cir. 2006). The applicable standard of proof for establishing
diversity jurisdiction is a preponderance of the evidence. Id.
A limited liability company, such as Five Star, has the citizenship of each of its
members. Johnson v. SmithKline Beecham Corp., 724 F.3d 337, 352 (3d Cir. 2013). The
citizenship of individuals is determined by the state in which the individual is
domiciled. McCann, 458 F.3d at 286. Domicile requires residence plus the intent to
remain. Id. Ad Dhupar, a member of Five Star, submitted an affidavit stating that he is
a resident of New Jersey. (Ex. 2, ECF No. 92.) His affidavit did not state that he
intends to remain in New Jersey. MUSIC was given sufficient time to depose Ad
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Dhupar, but it did not. MUSIC did not show by a preponderance of the evidence that
Ad Dhupar is domiciled in some place other than New Jersey.
The citizenship of MUSIC, a corporation, is governed by 28 U.S.C. § 1332(c)(1),
which provides in relevant part that “a corporation shall be deemed to be a citizen of
every State and foreign state by which it has been incorporated and of the State or
foreign state where it has its principal place of business.” 28 U.S.C. § 1332(c)(1)
(emphasis added). MUSIC acknowledges that its incorporation was “nominally
transferred to New Jersey,” but argues that it is a citizen of Arizona for diversity
purposes because its principal place of business is Arizona under the “nerve center”
test recognized by the Supreme Court in Hertz Corp. v. Friend, 559 U.S. 77 (2010).
(MUSIC’s Resp. Br. 2, ECF No. 94.) The court will assume for the purposes of this
opinion that MUSIC is a citizen of Arizona under the principal place of business
prong of the statute; nevertheless, MUSIC is also a citizen of New Jersey under the
incorporation prong of the statute. See Johnson v. SmithKline Beecham Corp., 853 F.
Supp. 2d 487, 490 (E.D. Pa. 2012) (“[A] business incorporated in one state with a
nerve center in another state is a citizen of both states.”).
MUSIC failed to show that complete diversity of citizenship exists between
MUSIC and the defendants. Specifically, it appears from the record before the court
that MUSIC and Five Star are both citizens of New Jersey. This court lacks subjectmatter jurisdiction and must dismiss this case. Dismissal for lack of jurisdiction is not
an adjudication on the merits and is therefore without prejudice to MUSIC pursuing
its claims in state court. Figueroa v. Buccaneer Hotel, Inc., 188 F.3d 172, 182 (3d Cir.
1999). An appropriate order will be entered.
Dated: October 8, 2014
/s/ Joy Flowers Conti
Joy Flowers Conti
Chief United States District Judge
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