Source: https://casetext.com/case/acco-brands-us-llc-v-pineyro-y-lara-comercial-sa-1
Timestamp: 2019-04-25 20:11:38+00:00

Document:
ACCO Brands USA LLC v. Piñeyro y Lara Comercial S.A.
ACCO Brands USA LLCv.Piñeyro y Lara Comercial S.A.
ACCO BRANDS USA LLC, et al., Plaintiffs, v. PIÑEYRO Y LARA COMERCIAL S.A., et al., Defendants.
Jeremy Tor, Baker & McKenzie LLP, New York, NY, Michael A. Duffy, Baker & McKenzie LLP, Chicago, IL, William V. Roppolo, Jr., Baker & McKenzie LLP, Miami, FL, Manuel A. Pietrantoni, Nayuan Zouairabani–Trinidad, Carlos A. Valldejuly–Sastre, O'Neill & Borges, LLC, San Juan, PR, for Plaintiffs. Heriberto Lopez–Guzman, Jeanne Habib–Figueroa, Sonia I. Torres–Pabon, Melendez Torres Law, PSC, San Juan, PR, for Defendants.
FRANCISCO A. BESOSA, District Judge.
Before the Court is defendant Piñeyro y Lara of Puerto Rico, Inc. (“PyL PR”)'s motion to dismiss the complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) (“Rule 12(b)(1)”). (Docket No. 16.) After considering defendant's motion, as well as all relevant oppositions and replies (Docket Nos. 23 & 32), the Court now DENIES WITHOUT PREJUDICE the motion to dismiss and ORDERS jurisdictional discovery.
Defendant's motion to dismiss challenges the factual accuracy—rather than the sufficiency—of plaintiffs' jurisdictional allegations. See Valentin v. Hosp. Bella Vista, 254 F.3d 358, 363 (1st Cir.2001). Such a challenge permits the Court to engage in differential factfinding, under which the plaintiffs' “jurisdictional averments are entitled to no presumptive weight.” Id. Rather, the Court must resolve the factual disputes between the parties in order to rule on the merits of the jurisdictional claim. Id. (internal citations omitted). In some situations, a court presented with such a challenge may rule without a hearing, taking into consideration “whether the parties have had a full and fair opportunity to present relevant facts and arguments, and whether either party seasonably requested an evidentiary hearing.” Id. at 364.
As the party asserting diversity jurisdiction, plaintiffs carry the burden of persuasion. Hertz Corp. v. Friend, 559 U.S. 77, 96, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) (internal citations omitted). “When challenged on allegations of jurisdictional facts, the parties must support their allegations by competent proof.” Id. at 96–97, 130 S.Ct. 1181 (internal citations omitted).
Defendant PyL PR, as a corporation, is “deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.” 28 U.S.C. § 1332(c) (emphasis added). The parties agree that PyL PR is incorporated in Puerto Rico, and is a citizen of Puerto Rico for diversity purposes. A court determines a corporation's principal place of business by identifying the corporation's “ ‘nerve center,’ usually its main headquarters.” Hertz Corp., 559 U.S. at 93, 130 S.Ct. 1181. The parties dispute the location of PyL PR's principal place of business and whether it has dual citizenship for diversity purposes.
In light of the recent amendment to the diversity statute—which sought to limit rather than expand the availability of diversity jurisdiction—the Court agrees that the statute “does not permit domestic corporations to select among their two jurisdictional citizenships in order to preserve or defeat diversity.” Caribbean Telecom., 594 F.Supp.2d at 530. Rather, “[d]iversity must be satisfied by both corporate citizenship designations.” Id. (citing Panalpina Welttransport GmBh v. Geosource, Inc., 764 F.2d 352, 354 (5th Cir.1985) (“A party cannot ... pick and choose among the places of citizenship ignoring one or more in an effort to preserve diversity jurisdiction. Such a practice would be contrary to the historical intent of Congress.”)).
Here, PyL PR is incorporated in Puerto Rico; its principal place of business is either in Puerto Rico or the Dominican Republic. If jurisdictional evidence establishes that defendant PyL PR's principal place of business is the Dominican Republic, as defendant contends, defendant would have dual citizenship, Puerto Rico, because of its incorporation, and the Dominican Republic, because of its principal place of business. Plaintiffs would not be permitted to choose one of PyL PR's two citizenships in order to satisfy section 1332(a)(3)'s minimal diversity requirement; diversity would fail because PyL PR's foreign citizenship would result in no United States citizen appearing on the defendants' side of the suit. On the other hand, if jurisdictional evidence establishes that defendant PyL PR's principal place of business is Puerto Rico, as plaintiffs assert, diversity exists.
In support of its motion to dismiss, defendant PyL PR produced evidence that its “nerve center” is in Santo Domingo, Dominican Republic. At this time, plaintiff has not provided the Court with sufficient evidence to satisfy its burden of establishing that diversity exists—namely, that PyL PR's principal place of business is in fact Puerto Rico. The Court permits the parties, however, to conduct further jurisdictional discovery on the issue of PyL PR's “nerve center,” and to file final dispositive jurisdictional motions by August 15, 2014. Defendant's motion to dismiss (Docket No. 32) is accordingly DENIED WITHOUT PREJUDICE.
Defendant PyL PR also requests information regarding the citizenship of ACCO, which it claims plaintiffs have failed to provide. (Docket No. 32.) Plaintiff ACCO is a limited liability company organized under the laws of Delaware. The citizenship of a limited liability company “is determined by the citizenship of all of its members.” D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d 124, 126 (1st Cir.2011) (internal quotations and citations omitted). ACCO has clarified to defendants and the Court that all of its members live in the United States, and none reside in Puerto Rico or the Dominican Republic. ( Docket No. 23–11.) This negative information fails to establish the Court's jurisdiction. See id. at 125. Accordingly, the Court ORDERS plaintiffs to provide, no later than July 3, 2014, an affidavit of jurisdictional facts describing its members' identities and places of citizenship.
For the reasons articulated above, the Court does not have sufficient information to make a determination regarding the parties' citizenship. In order to ensure that the parties have had a full and fair opportunity to present relevant facts and arguments regarding jurisdiction, see Valentin, 254 F.3d at 364, the Court DENIES WITHOUT PREJUDICE defendant's motion to dismiss (Docket No. 32), and allows the parties to conduct jurisdictional discovery concurrently with ongoing discovery. Dispositive jurisdictional motions shall be filed no later than August 15, 2014; responses to those motions shall be filed by August 29, 2014; no replies will be filed without prior leave of Court. Furthermore, plaintiff ACCO shall provide the Court with an affidavit detailing its members' names and places of citizenship no later than July 3, 2014.

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