Asphalt Paving Systems, Inc. v. Southern States Pavement Markings, Inc.
3:18-cv-00255
| M.D. Fla. | Feb 20, 2018Background
- Plaintiff Asphalt Paving Systems, Inc. filed a complaint asserting diversity jurisdiction under 28 U.S.C. § 1332 and an amount in controversy over $75,000.
- Complaint alleges Asphalt Paving is a New Jersey citizen; Southern States Pavement is a Florida citizen; Merchants Bonding Company is a citizen of Iowa and has its principal place of business in Iowa.
- The Complaint failed to identify the state of incorporation for Merchants Bonding, pleading only its principal place of business.
- Federal law treats a corporation as a citizen of both its state of incorporation and its principal place of business (Hertz/Holders standard), so both facts must be pleaded to establish diversity.
- The court struck the Complaint sua sponte for insufficient jurisdictional allegations and ordered Plaintiff to file an amended complaint curing the deficiency by a specified deadline, warning that failure to do so could result in dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court has diversity jurisdiction under 28 U.S.C. § 1332 | Plaintiff alleges diversity: parties are citizens of different states and amount exceeds $75,000 | No specific opposing jurisdictional argument presented in the order | Complaint insufficient because Plaintiff failed to allege state of incorporation for Merchants Bonding; jurisdiction not established |
| What facts must be pleaded to establish corporate citizenship | Alleged principal place of business for Merchants Bonding (Iowa) | N/A | Must plead both state of incorporation and principal place of business for a corporation |
| Whether the Court may raise jurisdictional defects sua sponte | Plaintiff invoked federal diversity jurisdiction | N/A | Court may and must inquire sua sponte into subject matter jurisdiction and struck the deficient pleading |
| Remedy for deficient jurisdictional pleading | Plaintiff requested to proceed in federal court | N/A | Court struck complaint and gave leave to amend to cure jurisdictional deficiencies by a deadline; warned of dismissal if not cured |
Key Cases Cited
- Kirkland v. Midland Mortgage Co., 243 F.3d 1277 (11th Cir. 2001) (federal courts must inquire into subject matter jurisdiction)
- Burns v. Windsor Ins. Co., 31 F.3d 1092 (11th Cir. 1994) (court obligation to ensure subject matter jurisdiction)
- Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405 (11th Cir. 1999) (federal courts must inquire sua sponte into jurisdiction when doubtful)
- Hertz Corp. v. Friend, 559 U.S. 77 (U.S. 2010) (corporation is citizen of state of incorporation and principal place of business)
- Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020 (11th Cir. 2004) (pleading requirement for corporate citizenship)
- Thermoset Corp. v. Bldg. Materials Corp. of Am., 849 F.3d 1313 (11th Cir. 2017) (insufficient pleading of LLC members’ citizenship can defeat jurisdiction)
- Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218 (11th Cir. 2017) (sanctions and consequences when jurisdictional pleadings are inadequate)
- McCormick v. Aderholt, 293 F.3d 1254 (11th Cir. 2002) (party invoking diversity bears the burden to prove jurisdictional facts)
- Taylor v. Appleton, 30 F.3d 1365 (11th Cir. 1994) (pleader must affirmatively allege jurisdictional facts)