Lemon v. Musk, 3:24-cv-06487

Don Lemon, a journalist and New York resident, filed suit in California state court against Elon Musk (a Texas resident) and X Corp., operator of the "X" (formerly Twitter) platform, alleging several California state-law claims arising from a failed business relationship.
X Corp. was originally headquartered in San Francisco, California, since 2011, and retained that location after Musk's 2022 acquisition and Twitter’s rebranding to X.
In April 2024, X Corp. executed a commercial lease in Bastrop, Texas, and claimed to close its San Francisco office in September 2024; however, key corporate filings and activities remained tied to San Francisco.
Musk timely removed the case to federal court, asserting diversity jurisdiction and seeking dismissal; Lemon moved to remand based on the "local defendant rule," arguing X Corp. was still a California citizen at removal.
The court reviewed both parties’ motions and found that the evidence did not support X Corp.'s claim of a headquarters change to Texas by the date of removal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether removal to federal court was proper under the local defendant rule	X Corp. was a California citizen at removal, making removal improper.	As of removal, X Corp.'s principal place of business was in Texas.	Removal was improper; X Corp. was still a California citizen.
Whether X Corp.’s principal place of business (“nerve center”) was in Texas at removal	Nerve center remained in San Francisco; filings/activity still tied to CA.	Headquarters and decision-making had shifted to Bastrop, TX.	Evidence insufficient to establish Texas nerve center; still in CA.
Award of attorneys’ fees for improper removal	Sought costs and fees for remand motion.	Removal arguments were objectively reasonable.	Fees denied; removal was not objectively unreasonable.
Dismissal/Strike of Complaint	n/a	Sought dismissal/strike if removal proper.	Dismissal/strike motions denied as moot (without prejudice).

Emrich v. Touche Ross & Co., 846 F.2d 1190 (9th Cir. 1988) (burden on removing party to establish federal jurisdiction)
Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (strong presumption against federal removal jurisdiction)
Duncan v. Stuetzle, 76 F.3d 1480 (9th Cir. 1996) (federal jurisdiction must be rejected if there is any doubt)
Hertz Corp. v. Friend, 559 U.S. 77 (2010) (principal place of business is corporation's “nerve center”)
Lively v. Wild Oats Markets, Inc., 456 F.3d 933 (9th Cir. 2006) (local defendant rule is procedural, not jurisdictional)
Hunter v. Philip Morris USA, 582 F.3d 1039 (9th Cir. 2009) (ambiguity resolved in favor of remand)
Martin v. Franklin Cap. Corp., 546 U.S. 132 (2005) (standard for attorney’s fees on remand)