Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-00849/USCOURTS-cand-5_06-cv-00849-1/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:1442 Petition for Removal

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United States District Court

For the Northern District of California

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*E-FILED 5/25/06*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ALISON WHITE, 

Plaintiff,

 v.

TERMINIX INTERNATIONAL, INC et al.,

Defendants. /

NO. C 06 00849 RS

ORDER DENYING MOTION TO

REMAND

I. INTRODUCTION

Before the Court is plaintiff Alison White’s motion to remand this action to Santa Cruz

Superior Court. Defendants are Terminix International Inc. (“Terminix Inc.”) and Terminix

International Company, LP (“Terminix LP”). Upon initial consideration of White’s motion, the

Court determined that the factual record was incomplete with respect to the citizenship of the

partners of defendant Terminix LP, preventing a determination as to whether complete diversity of

citizenship exists. The Court therefore ordered defendants (collectively “Terminix”) to submit

additional evidence on the point, which they have now done. The additional evidence establishes

that none of the partners of Terminix LP are citizens of California.

White’s motion is premised on the argument that Terminix’s principal place of business is

California. White relies on information tending to show that Terminix may operate more retail

locations in California than in any other single state, and on the legal principle that it is Terminix’s

burden to establish jurisdiction. Terminix has met that burden by showing that for diversity

Case 5:06-cv-00849-RS Document 18 Filed 05/25/06 Page 1 of 6
United States District Court

For the Northern District of California

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1

 “Terminex” is the spelling used in the caption of the case as reported in the Federal

Reporter. However, the body of the opinion uses the spelling “Terminix.”

2

purposes, it is a citizen of Delaware or Tennessee, but not California. Even if a plurality of

Terminix’s retail locations are in California, its operations here constitute a small enough percentage

of its business activities that it cannot be said that California is its “principal place of business.”

The Court finds this matter suitable for disposition without oral argument, pursuant to Local

Rule 7-1 (b). The motion for remand will be denied.

 II. DISCUSSION

Terminix removed this action to this court pursuant to 28 U.S.C. § 1441 (a), which confers

removal jurisdiction over actions as to which the federal courts have original jurisdiction. Under 28

U.S.C. § 1332(a), “the district courts shall have original jurisdiction of all civil actions where the

matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is

between (1) the citizens of different states . . . .” 

There is no dispute here regarding the amount in controversy, but White contends that the

parties lack diversity because Terminix may be viewed as a citizen of California. Terminix, Inc. is a

corporation. Section 1332 (c), which expressly applies to determining the existence of diversity for

purposes of original jurisdiction and to removal jurisdiction under section 1441, provides that “a

corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the

State where it has its principal place of business.” 28 U.S.C. § 1332 (c)(1). Terminix, Inc. is a

Delaware corporation.

Terminix LP is a limited partnership. “For purposes of deciding whether a suit by or against

a limited partnership satisfies the requirement of complete diversity of citizenship . . . the citizenship

of all the limited partners, as well as of the general partner, counts.” Hart v. Terminex International,

336 F.3d 541, 542 (7th Cir. 2003).1

 Furthermore, where a partnership has as one of its partners a

second partnership, “it is the citizenship of the partners of the second partnership that matters (and if

those partners are themselves partnerships, the inquiry must continue to their partners and so on.)” 

Id. at 543.

Case 5:06-cv-00849-RS Document 18 Filed 05/25/06 Page 2 of 6
United States District Court

For the Northern District of California

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2

 Terminix objects to and moves to strike the exhibits to the declaration of David Beck

submitted in support of the motion. Even assuming the evidence offered by White is fully

admissible, however, it is insufficient to defeat the more detailed showing Terminix has made to

establish that California is not its principal place of business. The motion to strike is therefore moot.

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 Some authorities use a third label, the “total activities” test. See, e.g., J.A. Olson Co. v.

Winona, 818 F.2d 401, 404 (5th Cir. 1987). That formulation, however, merely incorporates and

harmonizes the other two tests. Id. That approach is consistent with the analysis of the Industrial

Tectonics opinion, as discussed herein.

3

Pursuant to Court’s prior order, Terminix has now submitted evidence showing that tracing

through the layers of the partnerships behind Terminix LP ultimately leads only to corporations that

are all incorporated and headquartered outside California. There is also nothing to suggest there is

any reason to believe that any of those corporations should or could be deemed as having a

“principal place of business” in California separate and apart from the business operations of

Terminix at issue. Accordingly, despite the multiple corporate and partnership entities involved, the

jurisdictional question boils down to whether Terminix (collectively) can be said to have its

principal place of business in California.

The party asserting jurisdiction has the burden of proving all jurisdictional facts. Industrial

Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092, (9th Cir. 1990). Relying on that principle,

White’s motion offered certain information tending to show that Terminix likely operates more retail

locations in California than it operates in any other single state, but White did not attempt to set out

a full description of Terminix’s operations.2

Federal courts generally use one of two tests for locating a corporation’s principal

place of business. See 1 J. Moore, Moore’s Federal Practice ¶ 0.77 [3] (2d ed. 1989). 

 Under the “nerve center test,” developed in Scot Typewriter Co. v. Underwood

Corp., 170 F.Supp. 862, 865 (S.D.N.Y.1959), a corporation’s principal place of

business is where its executive and administrative functions are performed. Under

the “place of operations test,” developed in Inland Rubber Corp. v. Triple A Tire

Service, Inc., 220 F.Supp. 490, 496 (S.D.N.Y.1963), the principal place of business is

the state which “contains a substantial predominance of corporate operations.” See

Co- Efficient Energy Systems v. CSL Industries, 812 F.2d 556, 558 (9th Cir.1987)

Industrial Tectonics, 912 F.2d at 1092.3

Here, Terminix’s “nerve center” undeniably is located in Tennessee. Teminix’s executive,

financial, and sales offices are headquartered in Memphis and day-to-day control of the business is

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4

 Based on dubious methodology, White calculates that 40.8% of Terminix’s retail locations

are in California; Terminix puts the real number at 49 out of “approximately 400.” Even assuming

White’s percentage is correct, though, that is not enough to bring this case within the rationale of

Industrial Tectonics. 

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exercised there. See Declaration of Stephen F. Carter ¶¶ 4-11, 15. Industrial Tectonics, however,

holds that the nerve center test is properly applied “only when no state contains a substantial

predominance of the corporation’s business activities.” 912 F. 2d 1094 (emphasis added). Relying

on that rule, White attempts to argue that the fact that Terminix apparently has more retail locations

in California than in any other single state is enough to justify a conclusion that the “substantial

predominance” of it business activities are here. 

Even by White’s count, however, far less than a majority of Terminix’s retail locations are

located in California.4 There is also no dispute that Terminix operates in all but a handful of states

across the nation. Thus, the facts here are unlike the situation in Industrial Tectonics, where the

defendant’s operations were confined to two states, in one of which a clear majority of the

company’s operations took place, by any measure. 912 F.2d at 1093, 1094 (61% of sales, 69% of

operating income, 64% of receivables, 75% of inventories, 63% of equipment, and more than half

the employees all attributed to one state.)

It may be that “substantial predominance” would not always require that a majority of the

operations be found in one state. Under the facts here, though, where a nation-wide business merely

appears to have retail outlets in California in numbers reasonably consistent with California’s

position as a large and populous state, it would be inconsistent with the reasoning of the Industrial

Tectonics court and common sense to conclude that the “substantial predominance” of the business

is here.

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United States District Court

For the Northern District of California

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ORDER DENYING MOTION TO REMAND 

C 06 00849 RS 

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III. CONCLUSION

The motion to remand is DENIED.

IT IS SO ORDERED.

Dated: May 25,2006 

RICHARD SEEBORG

United States Magistrate Judge

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United States District Court

For the Northern District of California

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ORDER DENYING MOTION TO REMAND 

C 06 00849 RS 

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THIS IS TO CERTIFY THAT NOTICE OF THIS ORDER HAS BEEN GIVEN TO:

David Russell Beck Beckandmathiesen@calcentral.com,

Dean M. Robinson drobinson@lowball.com

Guy W. Stilson gstilson@lowball.com,

Counsel are responsible for distributing copies of this document to co-counsel who have not

registered for e-filing under the Court's CM/ECF program. 

Dated: May 25, 2006 Chambers of Judge Richard Seeborg

By: /s/ BAK 

Case 5:06-cv-00849-RS Document 18 Filed 05/25/06 Page 6 of 6