The Branson Label, Inc. v. City of Branson
2015 U.S. App. LEXIS 12358
| 8th Cir. | 2015Background
- This case concerns Florida Branson Label, Inc., a Florida corporation, appealing a district court dismissal for alleged collusive manufacture of diversity under 28 U.S.C. § 1359.
- The dispute centers on ownership of 27 acres in Branson, Missouri, alleging title through a chain from Tori, Inc. to the Reas and then to Missouri Branson Label.
- Missouri and Florida Branson Labels merged, transferring the land-ownership claim and enabling a federal suit; Elfant funded related actions.
- Elfant and entities merged Missouri Branson Label into Florida Branson Label to create diversity and file the instant federal suit in May 2014.
- The district court applied a six-factor test to determine collusion; it found all factors favored dismissal for lack of jurisdiction.
- On appeal, the Eighth Circuit reviews jurisdiction de novo but with factual findings under clear-error, affirming the district court’s approach and result.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the six-factor framework for § 1359 review is correct. | Florida Branson Label argues the totality-of-circumstances standard should apply. | Appellees contend the six-factor test properly guides totality-based analysis. | Six-factor framework appropriate; totality considerations permissible. |
| Whether the facts show collusion to manufacture diversity. | Record may reflect legitimate business reasons for merger. | Record shows no legitimate purpose; timing and control indicate collusion. | Evidence supports collusion to manufacture diversity; dismissal affirmed. |
| Whether the burden of proof and the appellate standard support affirmance given the factual record. | Florida Branson Label bears burden; factual record may undercut collusion finding. | District court’s factual determinations are not clearly erroneous. | District court’s factual findings sustained; no reversible error. |
Key Cases Cited
- Nat'l Fitness Holdings, Inc. v. Grand View Corporate Centre, LLC, 749 F.3d 1202 (10th Cir. 2014) (totality-of-circumstances factors for § 1359 review)
- Toste Farm Corp. v. Hadbury, Inc., 70 F.3d 640 (1st Cir. 1995) (merger to create diversity scrutinized; factors guide inquiry)
- Loegering v. Doe, 297 F.2d 473 (8th Cir. 1961) (prior connection and control considerations in misused diversity)
- Osborn v. United States, 918 F.2d 724 (8th Cir. 1990) (facial vs factual attack on subject-matter jurisdiction; standard of review)
- Great Rivers Habitat Alliance v. Fed. Emergency Mgmt. Agency, 615 F.3d 985 (8th Cir. 2010) (de novo review of Rule 12(b)(1) with factual considerations)