Holston Investments, Inc. v. Lanlogistics Corp.
677 F.3d 1068
11th Cir.2012Background
- LanLogistics owned LanBox Inc., a delivery company serving the U.S., Latin America, and Europe.
- In 2007 LanLogistics sold LanBox and two other firms to Gartlan for $3.5 million, with $450,000 allocated to LanBox.
- LanLogistics’s sale breached a contract with Holston Investments Inc. B.V.I. by failing to offer a right of first refusal.
- Holston filed suit in federal court asserting diversity jurisdiction based on LanLogistics’s citizenship.
- LanLogistics dissolved and withdrawn its authority to conduct Florida business before Holston filed suit, raising the diversity issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a dissolved corporation can have a principal place of business for diversity | Holston argued LanLogistics remained a Florida citizen | LanLogistics contends the dissolution leaves it with no principal place of business and is a Delaware citizen | Dissolved corporation has no principal place of business; LanLogistics is Delaware citizen, court has jurisdiction. |
| Whether summary judgment was proper on LanBox purchase price without FMV evidence | Need fair market value of LanBox and package deal to determine price | Price allocation in the package should control | Summary judgment improper; remand to determine FMV and damages. |
Key Cases Cited
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (straightforward rule for determining principal place of business (nerve center) per Hertz)
- Pantry Pride Enterprises., Inc. v. Stop & Shop Cos., Inc., 806 F.2d 1227 (4th Cir. 1986) (rejecting artificial price allocations for tax purposes in first-refusal context)
- Smith v. Sperling, 354 U.S. 91 (1957) (jurisdiction attaches at filing; changes after filing do not defeat diversity)