## F I L E D United States Court of Appeals Tenth Circuit 

### AUG 11 2000 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

PAULETTE GADLIN, as Personal Representative, and BERNELL RICCATONE,

Plaintiffs-Appellants,

v. SYBRON INTERNATIONAL CORPORATION, a Wisconsin corporation; SYBRON DENTAL SPECIALTIES, INC., a Delaware corporation; KERR CORPORATION, doing business as Kerr Dental Corporation, a Delaware corporation; and METREX RESEARCH CORPORATION, a Wisconsin corporation, Defendants-Appellees. Nos. 98-1392 & 98-1399

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

(D.C. No. 97-N-2330)

James F. Scherer, P.C., Denver, Colorado (Sisto J. Mazza, Trinidad, Colorado, with him on the brief for Plaintiff-Appellant Berne ll Riccatone), for PlaintiffsAppellants.-2-

Carolyn L. McIntosh and George R. Coe, Patton Boggs , L.L.P., Denver, Colorado, for Defendants-Appellees.

Before TACHA , McKAY , and ANDERSON , Circuit Judges.

McKAY , Circuit Judge.

Plaintiffs Paulette Gadlin and Bernell Riccatone br ought this wrongful death action in federal district court on October 3 0, 1997, alleging that Defendant Sybron International Corporation was liable for the deaths of Ms. Gadlin’s mother and Ms. Riccatone’s husband. In their amended comp laint Plaintiffs pleaded jurisdiction based on diversity; and in their secon d amended complaint, they added Defendants Sybron Dental Specialties, Kerr Co rporation, and Metrex Research Corporation. Each defendant filed a motio n to dismiss. Arguments supporting these motions included lack of personal jurisdiction, expiration of the statute of limitations, and lack of subject matter jurisdiction. Following jurisdictional discovery, the district co urt found that Plaintiff Gadlin was a Wyoming resident and Plaintiff Riccato ne, a Colorado resident. Of the defendants, the court found that Sybron International was a Wisconsin corporation with its principal place of business inWisconsin; Sybron Dental, a Delaware corporation with its principal place of bu siness in California; and Kerr1 Appellants filed separate appeals. Those appeals w ere consolidated for

procedural purposes only by this court’s order date d January 25, 1999. -3- Corporation, a Delaware corporation with its princi pal place of business in California. The court also determined that Metrex was registered in Wisconsin but that it was a citizen of Colorado because Color ado was its principal place of business. See Gadlin App. at 276-77. The record indicates that Sybron International is a holding company that owns SybronDental, that Sybron Dental owns Kerr, and that Kerr owns Metrex. Without ruling on whether it had subject matter jur isdiction, the district court dismissed the complaint against Sybron Dental , Kerr, and Metrex, holding that the complaint was barred by the statute of lim itations. See id. at 279. The court dismissed the complaint against Sybron Intern ational for lack of personal jurisdiction, observing that this was an additional reason for dismissing the claims against Sybron Dental and Kerr. See id. at 279-80. Plaintiffs timely appealed, challenging the court’s statute of limitations holding. 1 Ms. Gadlin argues that the district court erred i n determining that the amended complaints did not relate back to the origi nal filing pursuant to the requirements of Rule 15(c) of the Federal Rules of Civil Procedure. Ms. Riccatone argues that, instead of addressing the st atute of limitations, the district court should have dismissed the action for lack of diversity.-4-

Our review requires that we determine the appropriate sequence for addressing the issues presented by this case. We r ely on two recent Supreme Court opinions, Ruhrgas AG v. Marathon Oil Co. , 526 U.S. 574 (1999), and Steel Co. v. Citizens for a Better Environment , 523 U.S. 83 (1998). With possible exceptions not applicable here, these cases hold th at “jurisdiction generally must precede merits in dispositional order.” Ruhrgas , 526 U.S. at 577; see Steel Co. , 523 U.S. at 101-02. “Jurisdiction to resolve cases on the merits requires both authority over the category of claim in suit (subje ct-matter jurisdiction) and authority over the parties (personal jurisdiction), so that the court’s decision will bind them.” Ruhrgas , 526 U.S. at 577. While “there is no unyielding jurisdictional hierarchy” requiring federal courts to sequence one jurisdictional issue before the other, id. at 578, “in most instances subject-matter jurisdic tion will involve no arduous inquiry” and “both expediti on and sensitivity to state courts’ coequal stature should impel the federal co urt to dispose of that issue first.” Id. at 587-88. However, a court does not abuse its di scretion if it addresses personal jurisdiction first in a case whe re alleged defects in subject matter jurisdiction raise difficult questions but the personal jurisdiction issue is straightforward and presents no complex questions o f state law. See id. at 588. In the case before us, the issue of subject matter jurisdiction is not unusually difficult. In accordance with Supreme Co urt precedent, we therefore-5-

address that question first. Article III of the Un ited States Constitution gives Congress the power to vest jurisdiction in the fede ral courts over controversies between citizens of different states. Congress fir st authorized the exercise of diversity jurisdiction in the Judiciary Act of 1789 . In its current form, the diversity statute provides that “[t]he district cou rts shall have original jurisdiction of all civil actions where the matter in controvers y exceeds the sum or value of $75,000, . . . and is between . . . citizens of dif ferent States.” 28 U.S.C. § 1332(a)(1). Since its enactment, the courts have consistently interpreted it to require complete diversity, i.e., “[a] case falls w ithin the federal district court’s ‘original’ diversity ‘jurisdiction’ . . . only if there is no plaintiff and no defendant who are citizens of the same State.” Wisconsin Dep ’t of Corrections v. Schacht , 524 U.S. 381, 388 (1998); see Carden v. Arkoma Assocs. , 494 U.S. 185, 187 (1990); Strawbridge v. Curtiss , 7 U.S. (3 Cranch) 267 (1806). But cf. Fed. R. Civ. P. 21; Newman-Green, Inc. v. Alfonzo-Larrain , 490 U.S. 826, 832, 837 (1989) (holding that Rule 21 gives appellate, as we ll as district courts, authority to dismiss nondiverse parties in order to cure juri sdictional defects). For diversity purposes, a corporation is “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). When determ ining a corporation’s principal place of business, a court should look to the “total activity of the-6-

company” or the “totality of the circumstances,” co nsidering “the character of the corporation, its purposes, the kind of business in which it is engaged, and the situs of its operations.” Amoco Rocmount Co. v. An schutz Corp. , 7 F.3d 909, 915 & n.2 (10th Cir. 1993). The court’s determinat ion is a question of fact that we review for clear error. See id. at 914. In the instant case, Plaintiff Riccatone is a citiz en of Colorado. The pivotal issue is the citizenry of Defendant Metrex. At lea st one of the plaintiffs argued that Metrex’s administrative headquarters were located in California and that it was a citizen of that state. The district court no ted that the only evidence of the California location was the testimony of the company’s president who listed his address as Orange, California. Against that, evide nce was presented that thirtysix of Metrex’s forty-six employees worked in Color ado and that its manufacturing, production, and distribution facilit ies were located in Parker, Colorado. Based on the record before us, we conclu de that the district court did not clearly err when it found that Colorado was Metrex’s principal place of business and therefore its residence for diversity purposes. As a result, we must conclude that diversity is not complete and that ne ither this court nor the district court has jurisdiction to address the issues presented on the merits. See Basso v. Utah Power & Light Co. , 495 F.2d 906, 909 (10th Cir. 1974) (holding that “[a] court lacking jurisdiction cannot render judgment b ut must dismiss the cause at2 By our decision and mandate, we are in effect denyi ng Plaintiff Gadlin’s

motion to remand this case to the district court to determine whether to allow a dispensable nondiverse party to be dropped pursuantto Fed. R. Civ. P. 21. -7- any stage of the proceedings in which it becomes ap parent that jurisdiction is lacking” (emphasis omitted)). Having determined that Supreme Court precedent coun sels that we address subject matter jurisdiction before personal jurisdi ction in this case and having concluded that subject matter jurisdiction is lacki ng, we need not address the district court’s rulings on personal jurisdiction. Further, we do not address the application of the statute of limitations. While at least one party has argued that the statute of limitations is a procedural rather than a substantive matter, the lack of subject matter jurisdiction precludes our ruling on that issue. 2 We therefore VACATE the judgment and REMAND to the district court with instructions to DISMISS the complaint.