Opinion ID: 76995
Heading Depth: 2
Heading Rank: 1

Heading: Jurisdiction Over Sweet Pea's Diversity Claims

Text: 8 Because federal courts are courts of limited jurisdiction, we must address as a threshold matter APJ's argument that the district court lacked subject matter jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (1998) (noting that appellate courts must examine the subject matter jurisdiction of the trial court before considering the merits of the appeal). We review a district court's determination of its subject matter jurisdiction de novo. See Asociacion De Empleados Del Area Canalera v. Pan. Canal Comm'n, 329 F.3d 1235, 1237 (11th Cir.2003). A district court's finding as to a corporation's principal place of business (PPB) for purposes of establishing diversity jurisdiction, however, is a question of fact and cannot be overturned unless it was clearly erroneous. See Vareka Invs., N.V. v. Am. Inv. Properties, Inc., 724 F.2d 907, 910 (11th Cir.1984). 9 Subject matter jurisdiction based on diversity of citizenship exists in civil actions where the amount in controversy exceeds $75,000 and the action is between citizens of different States and in which citizens or subjects of a foreign state are additional parties. 28 U.S.C. § 1332(a)(3). Diversity jurisdiction requires complete diversity between named plaintiffs and defendants. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 580 n. 2, 119 S.Ct. 1563, 1568 n. 2, 143 L.Ed.2d 760 (1999) (citing Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435 (1806)). For purposes of determining diversity, 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). A corporation's principal place of business is determined by looking at the `total activities' of the corporation. Bel-Bel Int'l Corp. v. Cmty. Bank of Homestead, 162 F.3d 1101, 1106 (11th Cir.1998). This analysis incorporates both the `place of activities' test (focus on production or sales activities), and the `nerve center' test (emphasis on the locus of the managerial and policymaking functions of the corporation). Vareka Invs., N.V., 724 F.2d at 910. The burden for establishing federal subject matter jurisdiction rests with the party bringing the claim. See McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir.2002) (per curiam). 10 Based on these standards, the district court's exercise of diversity jurisdiction was not improper. It was undisputed that the amount in controversy requirement was met and that Stevenson was a citizen of Texas, Sweet Pea was a Cayman Islands corporation, and Jellis and APJ were Florida citizens. Accordingly, APJ's argument hinges on its assertion that Sweet Pea's PPB was in Florida. With regard to Sweet Pea's PPB, however, the district court recited several facts which supported a finding that Sweet Pea's PPB was in the Cayman Islands: (1) Sweet Pea's mailing address was in the Cayman Islands; (2) the corporate records were maintained in the Cayman Islands; (3) the directors of Sweet Pea were located in the Cayman Islands; (4) annual meetings were held in the Cayman Islands; and (5) the Vessel, which was essentially Sweet Pea's only asset, was flagged under the Cayman Islands. See Vareka Invs., N.V., 724 F.2d at 910 (finding PPB based on the location of directors, corporate meetings, company records, and corporate mailing address). Because Sweet Pea's business was essentially the maintenance and use of the Vessel, which traveled to different destinations and throughout the Atlantic Ocean, the district court was entitled to give these nerve-center-related facts greater significance in determining PPB under the total activities test. See J.A. Olson Co. v. City of Winona, 818 F.2d 401, 409 (5th Cir.1987) (noting that the nerve center test predominates in determining the PPB of a corporation with far-flung activities that cannot be confined to one location). Moreover, the court found several facts which supported the contention that Sweet Pea's PPB was located in Colorado: (1) the sole shareholder of Sweet Pea, the Bobby Stevenson Revocable Trust, operated under the laws of Colorado; (2) most of the payments made by Sweet Pea to APJ were made by Stevenson from his Colorado bank account; (3) invoices for APJ's work were sent to Stevenson in Colorado. In addition, the court found that neither Sweet Pea nor Stevenson owned property or maintained bank accounts in Florida. While the Vessel was in Florida for more than two years while it was being refurbished by APJ, neither Sweet Pea nor the Vessel had any other regular contacts with Florida either before the contract with APJ was executed or after it was terminated. Accordingly, based on these facts, the district court's determination that Sweet Pea's PPB was not in Florida was not clearly erroneous. 2 Therefore, because there was complete diversity between the parties, the district court had subject matter jurisdiction over Sweet Pea's claims pursuant to § 1332(a)(3). 11