1:21-cv-08820
S.D.N.Y.May 5, 2022Background:
- Plaintiff Jamie Derrica (New York citizen) sued Tura, Inc. in New York state court alleging unpaid salesperson compensation under New York law; Defendant removed the case to federal court invoking diversity jurisdiction.
- Tura asserted it is a Pennsylvania citizen because its principal place of business (nerve center) is in Muncy, Pennsylvania; Derrica moved to remand claiming Tura’s nerve center is New York City.
- Key contested facts: Tura’s CEO Scott Sennett works remotely from Connecticut and visits NYC occasionally; Michael Pasnello (VP/CFO) works exclusively from Muncy and supervises operations, finance, and administrative departments located there.
- Plaintiff relied on Tura’s marketing/representations that it is "based in Manhattan," prior statements in a 2012 case (Weinberg) and that top-level activities (design/marketing, meetings, trainings) occurred in NYC.
- Court applied the Hertz “nerve center” test focusing on where high-level officers direct, control, and coordinate corporate activity and found Muncy is the functional center of decisionmaking.
- Holding: Defendant met its burden to show complete diversity; motion to remand denied and federal jurisdiction retained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tura’s principal place of business (nerve center) is in New York or Pennsylvania for purposes of diversity jurisdiction | Derrica: Tura’s top-level functions, marketing, and prior statements show its nerve center is NYC; Muncy is only a back office | Tura: High-level decisionmaking and supervision (operations, finance, admin) occur in Muncy under VP Pasnello; CEO works remotely and does not make Muncy subordinate | Court: Muncy is Tura’s nerve center; diversity satisfied; remand denied |
Key Cases Cited
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (establishes the "nerve center" test for a corporation's principal place of business)
- Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567 (2004) (jurisdictional facts are assessed at time of filing)
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (party invoking federal jurisdiction bears burden to prove it exists)
- Herrick Co. v. SCS Commc’ns, Inc., 251 F.3d 315 (2d Cir. 2001) (party seeking removal must demonstrate complete diversity)
- United Food & Commercial Workers Union, Local 919 v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298 (2d Cir. 1994) (removal/remand burden discussion)
- St. Paul Fire & Marine Ins. Co. v. Scopia Windmill Fund, LP, 87 F. Supp. 3d 603 (S.D.N.Y. 2015) (nerve-center test focuses on where high-level decisions are made)
- Wilds v. United Parcel Serv. Inc., 262 F. Supp. 2d 163 (S.D.N.Y. 2003) (party seeking to sustain removal bears burden of showing complete diversity)