Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-01322/USCOURTS-casd-3_07-cv-01322-2/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JULIE MAGNUSON, HAYLEE

MAGNUSON, and JEREMY

MAGNUSON,

Plaintiffs,

CASE NO. 07cv1322-LAB (LSP)

ORDER DENYING MOTION TO

REMAND

vs. [Dkt No. 9]

SEA WORLD, INC., BUSCH

ENTERTAINMENT CORPORATION,

and DOES 1-100,

Defendants.

Pursuant to 28 U.S.C. § 1441(b), defendants Sea World, Inc. ("SWI") and Busch

Entertainment Corporation ("BEC") (collectively "Defendants") removed this tort and

premises liability action from state court to federal court asserting diversity jurisdiction, as

a civil action between citizens of different states with an amount in controversy in excess of

the federal jurisdictional threshold. The matter is before the court on Plaintiffs' Motion To

Remand ("Motion") for lack of subject matter jurisdiction. They contest Defendants'

representation they are not citizens of California. Defendants filed an Opposition. Plaintiffs

filed no Reply. Pursuant to Civil Local Rule 7.1(d)(1), the court finds the issues presented

appropriate for decision on the papers and without oral argument. For the reasons

discussed below, the Motion is DENIED.

Plaintiffs are three individuals, all residing in the State of California. Subject matter

jurisdiction based on diversity of citizenship requires that no defendant have the same

citizenship as any plaintiff and the amount in controversy exceed $75,000. 28 U.S.C. §§

1332(a), 1331. The parties do not dispute the amount in controversy exceeds the

Case 3:07-cv-01322-LAB-LSP Document 13 Filed 10/31/07 Page 1 of 6
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1

 Defendants contend, without any contrary argument from Plaintiffs, BEC is a corporation

incorporated under the laws of Delaware with its principal place of business in Missouri.

2

 Plaintiffs also rely on the San Diego SeaWorld web site to argue when the site is

accessed, it states that "SeaWorld may be contacted at SeaWorld San Diego in San Diego

California." Mot. P&A 3:6-9, citing the SeaWorld San Diego site and attaching the home page as

Exhibit 1. However, the home page on its face pertains to the San Diego park, not the corporate SEI

entity, and accordingly the court finds no evidentiary value in that exhibit to resolve the principal place

of business jurisdictional question at issue. Similarly, plaintiffs argue: "The SeaWorld-San Diego

park is located in this district," so that "the primary and principle place of business of the SeaWorld

San Diego park is San Diego California." However, the named plaintiff is SEI, not the local park, and

SEI also operates parks in Florida and Texas.

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jurisdictional threshold. There also appears to be no dispute BWI is not a California citizen.1

The propriety of the removal therefore depends on a determination of SWI's citizenship.

Plaintiffs argue SWI is a California citizen. Defendants contend SWI is incorporated under

the laws of Delaware with its principal place of business in Florida, not California.

 A defendant generally has the right to invoke federal removal jurisdiction if a plaintiff

who initially filed the action in state court could have originally filed the action in federal court

on diversity or federal question grounds. 28 U.S.C. § 1441(a); see City of Chicago v.

International College of Surgeons, 522 U.S. 156, 163 (1997). The rules governing

removable claims are generally the same as the rules for original federal jurisdiction when

predicated on diversity of citizenship. A corporation is 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). Thus, an entity incorporated in one state and having its principal place

of business in another is a citizen of both states, and can sue or be sued in diversity actions

only if no opposing party is a citizen of either of those state. Bank of Calif. Natl' Asn. v. Twin

Harbors Lumber Co., 465 F.2d 489, 491-92 (9th Cir. 1972).

 Plaintiffs move for remand on grounds SWI "is currently incorporated in California,"

SWI operates three SeaWorld parks in the United States (Orlando, San Diego, and San

Antonio), their "review of the SeaWorld web site does not reveal that SeaWorld's principle

[sic] place of business to be [sic] Florida" but rather "the individual parks are each places of

business and no central location is identified," and each individual park purportedly "has its

own hiring and legal affairs office."2 Mot. P&A 2:23-3:4. They cite no authority in support

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3

 Residence and citizenship are not coextensive concepts. "For venue purposes, a

corporate defendant is deemed a 'resident' of every district in which it is doing business, not merely

the state in which it has its principal place of business." Schwarzer, et al., Federal Civil Procedure

Before Trial, The Rutter Group, rev. 2007, Ch. 2:291.

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of their Motion other than the text of 28 U.S.C. § 1332 articulating the corporate citizenship

criteria of state of incorporation and principal place of business.

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). Defendants

support their Opposition with the Declaration of David J. Grabe, who represents he is the

Vice President of Finance for BEI and the Vice President for Finance and Planning and the

Assistant Secretary of SWI. He declares BEI is a Delaware corporation headquartered in

Missouri which owns 100 percent of the SWI shares, and further declares SWI is a Delaware

corporation with its principal place of business in Florida. Grabe Decl. ¶¶ 2-4. The Grabe

Declaration asserts the predominance of SWI's business activity and public contact occurs

in Florida, and it has its nerve center in Missouri. Plaintiffs offer no responsive evidence.

Plaintiffs' assertion "the California Secretary of State web site reveals that SeaWorld,

Inc. is currently incorporated in California" is unsupported by any evidence. Mot. P&A 2:23-

24. The Declaration of Plaintiffs' counsel only avers on that issue: "I have examined the

Sea World web site thoroughly. I believe that a review of that site leads one to reasonably

believe that SeaWorld is a California resident." Ballard Decl. ¶ 6 (emphasis added).

Defendants assert the Delaware incorporation is "clearly stated on the California Secretary

of State website." Opp. 2:18-20 (emphasis added). Plaintiffs do not reply.

Defendants' Opposition also refutes Plaintiffs' contention each SWI park has its own

legal affairs office. Opp. 6:1-3 ("none of the parks has its own local in-house legal

department"); Grabe Decl. ¶ 18. Defendants further argue doing business in three different

states neither establishes nor defeats diversity jurisdiction: "while a corporation is deemed

a 'resident' of every district in which it does business for purposes of venue [see 28 U.S.C.

§ 1391(c)], the fact that a corporation does business in a given state does not make that

state its principal place of business."3 Opp. 6:18-22. 

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The dispositive issue for purposes of this ruling is where SWI has its principal place

of business. If it is in California, the matter must be remanded to state court for lack of

diversity jurisdiction. If elsewhere, despite the business activity conducted at SeaWorld in

San Diego where the injuries giving rise to this litigation allegedly occurred, this court may

exercise removal jurisdiction over the action on the basis of diversity of citizenship. 

Courts have evolved various tests to determine a corporation's principal place of

business when the corporation is engaged in multistate operations, a problematic

undertaking when, as here, management is located in one state with its physical facilities

located in other states. Defendants contend the Ninth Circuit has adopted a two-stage

inquiry, looking first to whether any state has a "substantial predominance" of the

corporation's business activity, the "place of operations" test. If no one state predominates,

then courts apply a "nerve center" test to identify the location of the corporation's executive

and administrative functions, deeming that place to be the principal place of business. See

Industrial Tectonics, 912 F.2d at 1094 (holding "where a majority of a corporation's business

activities takes place in one state, that state is the corporation's principal place of business,

even if the corporate headquarters are located in a different state," and "[t]he 'nerve center'

test should be used only when no state contains a substantial predominance of the

corporation's business activities"); Tosco Corp. v. Communities for a Better Environment,

236 F.3d 495, 500 (9th Cir. 2001) ("the Ninth Circuit applies the place of operations test

unless the [party] shows that its activities do not substantially predominate in any one state")

relying on Industrial Tectonics, 912 F.2d at 1094. 

Defendants contend the analysis ends at the "place of operations" consideration

because SWI does business in only three states, and "a review of the business activity at

each of SWI's three parks clearly reveals that Florida has a substantial predominance of

SWI's corporate activity." Opp. 4:1-8. Supported by annual average statistics authenticated

in the Grabe Declaration, Defendants identify factors sanctioned in Industrial Techtonics as

appropriate for principal place of business analysis, including location of employees, tangible

property, sources of income, and points of sale. Using those, they demonstrate the Orlando,

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Florida park predominates over the other two sites of SWI corporate activity. See Opp. 4:4-

5:1; Grabe Decl. ¶¶ 7-10. "The relative attendance levels and the number of employees at

each of the SWI three parks establish that SWI has without question the most contact with

the public in Florida," so that Florida is SWI's principal place of business. Opp. 5:9-11.

Alternatively, if the court finds Florida does not have a "substantial predominance" of

SWI's business activity, Defendants argue California is not SWI's "nerve center," and

consequently not its principal place of business under that theory either. Defendants

establish through the Grabe Declaration, without contradiction, SWI's executive and

administrative functions are conducted elsewhere:

SWI's coporate headquarters are located in Florida. (Grabe

Decl., ¶ 5.) This information is clearly noted on the Annual

Report filed on behalf of SWI with the Florida Secretary of State.

(Grabe Decl., ¶ 12 and Exhibit A to Grabe Decl.) All corporate

policy decisions affecting SWI are made in Missouri. (Grabe

Decl., ¶ 19.) All SWI asset acquisitions and dispositions are

reviewed and approved in Missouri. (Grabe Decl., ¶ 20.) All of

SWI's legal affairs are overseen by a centralized in-house legal

department located in Missouri. (Grabe Decl., ¶ 18.) This legal

department approves the form of all contracts executed by SWI

and oversees all litigation at each of the three SWI parks.

(Grabe Decl., ¶ 18.) . . . SWI has ten officers of which only one

works in California, while seven others, including SWI's sole

director who is also the chairman of the board and the president,

have their offices in Missouri. (Grabe Decl., ¶¶ 11-12.) Payroll,

procurement, and accounts payable departments are all

centralized in Missouri. (Grabe Decl., ¶ 17.) SWI corporate

records are also kept in Missouri. (Grabe Decl., ¶ 14.) The

corporate income tax return is both prepared and filed in

Missouri. (Grabe Decl., ¶¶ 15-16.) While Plaintiffs contend that

each park has its own hiring office, the hiring of each of the three

general managers is overseen in Missouri. (Grabe Decl., ¶ 13.)

Opp. 5:22-6:10.

This court has considered the Grabe Declaration's descriptions of SWI's activities

and the conduct of its corporate business to conclude California does not predominate as

its principal place of business from among the three states where SWI operates parks. The

/ / /

/ / /

/ / /

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court also finds Defendants have carried their burden to show they meet the other federal

removal jurisdiction criteria. Accordingly, IT IS HEREBY ORDERED the Motion is DENIED.

IT IS SO ORDERED.

DATED: October 29, 2007

HONORABLE LARRY ALAN BURNS

United States District Judge

Case 3:07-cv-01322-LAB-LSP Document 13 Filed 10/31/07 Page 6 of 6