901 F. Supp. 2d 649
D.S.C.2012Background
- Plaintiff Gantt, a South Carolina resident, died after care at Heartland of West Ashley (an LLC).
- Original wrongful death/survival action filed April 16, 2012 in SC state court by Ermine Jennings as Personal Representative.
- Defendants removed to federal court May 25, 2012 based on diversity jurisdiction.
- Plaintiff moved to remand June 22, 2012; Defendants opposed July 23, 2012.
- Court analyzes LLC citizenship, the ownership chain to Manor Care, Inc., and whether Ohio is Heartland’s principal place of business under Hertz and related authority; remand denied.
- Court rejects Brewer approach and adopts Hertz-based nerve-center framework for LLCs with multi-tier ownership.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Heartland’s LLC citizenship is Ohio-based due to Manor Care, Inc. | Nerve center of Heartland; Charleston operations dominate. | Nerve center of Manor Care, Inc. (Ohio) determines Heartland's citizenship. | Ohio is Heartland’s principal place of business; complete diversity exists. |
| Whether Brewer v. SmithKline Beacham should control LLC citizenship analysis | Brewer should apply to look at Heartland’s nerve center. | Brewer is not controlling; Hertz governs nerve center. | Brewer rejected; Hertz governs. |
| Whether complete diversity exists between Gantt and Heartland for removal jurisdiction | Diversity not complete if Heartland is SC/Ohio or otherwise non-diverse. | Heartland is diverse from Plaintiff due to Ohio/Delaware citizenship via Manor Care. | Yes, complete diversity exists; removal proper; remand denied. |
| Whether the court should remand if subject matter jurisdiction is doubtful | Remand when jurisdiction doubtful. | Jurisdiction exists under 28 U.S.C. § 1332. | Remand denied; jurisdiction found. |
Key Cases Cited
- Brewer v. SmithKline Beecham Corp., 774 F. Supp. 2d 720 (E.D. Pa. 2011) (held nerve center approach for an LLC may control citizenship in some structures)
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (nerve center test for corporation citizenship; focus on top officers' direction)
- Mountain State Carbon, LLC v. S. Coal Corp., 636 F.3d 101 (4th Cir. 2011) (discusses Hertz nerve center and complexity of holding structures)
- Ferrell v. Express Check Advance of SC LLC, 591 F.3d 698 (4th Cir. 2010) (LLC citizenship determined by members, not place of organization)
- N.Y. State Teachers Ret. Sys. v. Kalkus, 764 F.2d 1015 (4th Cir. 1985) (earlier guidance on diversity and corporate/LLC citizenship)
- Clephas v. Fagelson, Shonberger, Payne & Arthur, 719 F.2d 92 (4th Cir. 1983) (concepts on corporate/ownership-based citizenship)
- Gen. Tech. Apps., Inc. v. Exro Ltda, 388 F.3d 114 (4th Cir. 2004) (LLC citizenship through its members)
- Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412 (3d Cir. 2010) (LLC citizenship determined by members’ citizenship)