Cail v. Joe Ryan Enterprises, Inc.
65 F. Supp. 3d 1288
M.D. Ala.2014Background
- Plaintiff (widower/estate) sued Joe Ryan Enterprises and a tire maker in Alabama state court after a contract driver died in Alabama; defendant removed based on diversity jurisdiction.
- Joe Ryan is incorporated in Georgia (since 1985) and operates a hauling business with ~30 employees; primary operational facility, trucks, mechanics, dispatcher, and Mr. Quick (CEO) are in Phenix City, Alabama.
- Mr. Norbert Quick (president/CEO) works six days a week from Phenix City and performs ~90% of managerial, operational, and revenue-generating decisions (hiring/firing, bids, safety compliance, equipment purchases).
- Diane Quick (secretary/CFO) works from a home office in Columbus, Georgia; she handles payroll, banking, tax filings, corporate records, billing, and other financial/administrative tasks.
- Dispute centers on Joe Ryan’s "principal place of business" (nerve center): if Alabama, no federal diversity jurisdiction; if Georgia, diversity exists. Court allowed limited jurisdictional discovery before ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Principal place of business (nerve center) | Phenix City, AL is nerve center because CEO directs, controls, and coordinates operations there | Columbus, GA is nerve center because CFO handles corporate records, banking, tax filings, and administrative control there | Held: Phenix City, AL is the principal place of business; defendants failed to show it is not in Alabama |
| Application of Hertz nerve-center test | Nerve center is where officers direct/control — here the CEO in Phenix City | Nerve center may be where key corporate functions (finance, records) are performed — here Columbus | Held: Court applied Hertz and found control/decisionmaking centered in Phenix City despite administrative functions in Columbus |
| Burden of proof for removal | Plaintiff emphasizes defendants must prove diversity; Joe Ryan’s AL nerve center defeats removal | Defendants must provide competent proof that nerve center is GA | Held: Burden on defendants; they failed to meet it |
| Remand remedy | Remand required if no complete diversity | Defendants contended removal proper if nerve center in GA | Held: Case remanded to Russell County, AL state court under 28 U.S.C. §1447(c) |
Key Cases Cited
- Hertz Corp. v. Friend, 559 U.S. 77 (adopts nerve-center test for corporation's principal place of business)
- Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242 (defendant must show principal place of business is not in forum state to preserve diversity)
- Miedema v. Maytag Corp., 450 F.3d 1322 (removal statutes construed strictly; doubts resolved in favor of remand)
- Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (federal courts have limited jurisdiction)
- MacGinnitie v. Hobbs Group, LLC, 420 F.3d 1234 (corporate citizenship derives from state of incorporation and principal place of business)