Court Opinion

ID: 2683551
Source: CourtListenerOpinion
Date Created: 2014-07-15 05:00:31.073159+00
Date Added: 2024-06-11T09:43:18.109330
License: Public Domain

Case: 13-50956   Document: 00512691634     Page: 1   Date Filed: 07/09/2014

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                United States Court of Appeals

                               No. 13-50956
                                                                         Fifth Circuit

                                                                       FILED
                             Summary Calendar                       July 9, 2014
                                                                   Lyle W. Cayce
TEWARI DE-OX SYSTEMS, INCORPORATED,                                     Clerk

                                           Plaintiff – Appellant
v.

MOUNTAIN STATES/ROSEN, LIMITED LIABILITY CORPORATION,

                                           Defendant – Appellee

                Appeal from the United States District Court
                     for the Western District of Texas
                          USDC No. 5:08-CV-190

Before DAVIS, SOUTHWICK, and HIGGINSON, Circuit Judges.
HIGGINSON, Circuit Judge:
      Tewari De-Ox Systems, Incorporated (“Tewari”) appeals from the district
court’s denial of its motion to dismiss for lack of jurisdiction. Because the
district court was correct to find complete diversity between Tewari and
Appellee Mountain States/Rosen, LLC (“MTSR”), we AFFIRM.
                        FACTUAL BACKGROUND
      Tewari initially filed this suit against MTSR in federal court by invoking
diversity jurisdiction. After the district court granted summary judgment on
Tewari’s claims, we reversed in part and remanded. Tewari De-Ox Sys. v.
Mountain States/Rosen, L.L.C., 637 F.3d 604, 607 (5th Cir. 2011). With trial
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fast approaching, Tewari changed course and moved the district court to
dismiss its case for lack of subject matter jurisdiction. The district court denied
Tewari’s motion, concluding that “[t]he parties to this suit are clearly
completely diverse,” and noting that it was “painfully obvious to this Court that
plaintiff sought to proceed in federal court so long as it was advantageous, and
now seeks a dismissal without prejudice in order to pursue its claims in a
different forum, or at least, filed this motion for purposes of delay.” The district
court subsequently granted judgment as a matter of law in favor of MTSR.
      On appeal, Tewari does not challenge the district court’s adverse grant
of judgment as a matter of law, but instead appeals the district court’s denial
of its motion to dismiss for want of subject matter jurisdiction.
                          STANDARD OF REVIEW
       “We review de novo a district court’s ruling on a 12(b)(1) motion to
dismiss for lack of subject matter jurisdiction.” Den Norske Stats Oljeselskap
As v. HeereMac Vof, 241 F.3d 420, 424 (5th Cir. 2001). In evaluating subject
matter jurisdiction on a motion to dismiss a court may consider “(1) the
complaint alone, (2) the complaint supplemented by undisputed facts
evidenced in the record, or (3) the complaint supplemented by undisputed facts
plus the court’s resolution of disputed facts.” Id.
                                 DISCUSSION
      For diversity jurisdiction to be proper, the “court must be certain that all
plaintiffs have a different citizenship from all defendants.” Getty Oil Corp., a
Div. of Texaco, Inc. v. Insur. Co. of N. A., 841 F.2d 1254, 1258 (5th Cir. 1988)
(citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806)). For the purposes
of diversity jurisdiction, a corporation is a citizen of the state in which it was
incorporated and the state in which it has its principal place of business. Id.;
28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen of every
State and foreign state by which it has been incorporated and of the State or
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                                 No. 13-50956
foreign state where it has its principal place of business.” (emphasis added)).
The parties do not dispute that Tewari is a Texas corporation with its principal
place of business in Texas. Therefore, Tewari is a citizen of Texas for the
purpose of diversity jurisdiction.
      Because MTSR is a limited liability company, however, its citizenship is
determined by the citizenship of all of its members. See Harvey v. Grey Wolf
Drilling, Co., 542 F.3d 1077, 1080 (5th Cir. 2008). B. Rosen & Sons, Inc. (“B.
Rosen”) and Mountain States Lamb & Wool (“Lamb & Wool”) are the two
members of MTSR. Tewari does not dispute that B. Rosen is a New York
corporation with its principal place of business in New York. B. Rosen, a New
York citizen, is therefore diverse from Tewari.
      The parties do not dispute that Lamb & Wool’s principal place of
business is in Wyoming, but they do dispute whether Lamb & Wool is a
corporation or an unincorporated association. MTSR submitted to the district
court evidence that Lamb & Wool is a Wyoming Corporation. First, MTSR
produced a certificate from the Wyoming Secretary of State declaring Lamb &
Wool to be a “Profit Corporation.” MTSR also submitted an affidavit declaring
that Lamb & Wool is a Wyoming Corporation. Faced with this evidence, the
district court held “the Secretary of State where an entity is organized shall
have the definitive word on whether or not a cooperative has a corporate
character.” Therefore, the court concluded, Lamb & Wool was a citizen of
Wyoming and diverse from Tewari.
      On appeal, Tewari contends that Lamb & Wool is an unincorporated
association, despite the Wyoming Secretary of State’s certification otherwise
because (1) Lamb & Wool’s name declares it is a “cooperative” and not a
corporation, and (2) Lamb & Wool’s articles of organization explain that it is
an unincorporated association. Other circuits have rejected similar arguments:
“[F]or purposes of diversity jurisdiction, the Cooperative is to be treated as a
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corporation simply because it has been incorporated under Idaho law,
regardless of the Cooperative’s individual structure, purpose, operations, or
name.” Kuntz v. Lamar Corp., 385 F.3d 1177, 1183 (9th Cir. 2004). In Pastor
v. State Farm Mut. Auto. Ins. Co., 487 F.3d 1042, 1048 (7th Cir. 2007), the
Seventh Circuit further explained:
      And the corporate status of State Farm is not transparent, since it
      is a mutual insurance company rather than a conventional
      business corporation and does not have “corporation” or “inc.” in
      its name, although in fact it is incorporated and all corporations
      (including business, charitable, and religious corporations) are
      treated the same for purposes of determining whether the
      requirements of diversity jurisdiction are satisfied.
We find this reasoning persuasive, but we need not decide whether Lamb &
Wool’s evidence suffices because, even assuming that the ambiguity recognized
by the district court in Lamb & Wool’s articles of organization allowed it to be
considered an unincorporated association for the purposes of diversity
jurisdiction, MTSR further produced record evidence that Lamb & Wool is
owned by a different Wyoming corporation named Mountain States Lamb with
its principal place of business in Wyoming. 1 MTSR provided a certificate from
the Wyoming Secretary of State attesting that Mountain States Lamb is “a
corporation organized under the laws of the state of Wyoming, whose date of
incorporation is 12/27/1999.” MTSR also provided a stock certificate explaining
that Mountain States Lamb is “incorporated under the laws of the State of
Wyoming.”
      In response, Tewari argues that Mountain States Lamb has Texas
shareholders. But a corporation’s shareholders’ citizenships are irrelevant to

      1 “Mountain States Lamb Cooperative owned 100 percent of Mountain States Lamb
and Wool Cooperative on March 7, 2008. There were no other members or owners of Mountain
States Lamb and Wool Cooperative on March 7, 2008.” Tewari filed this lawsuit on March 7,
2008. See Teal Energy USA, Inc. v. GT, Inc., 369 F.3d 873, 876 n.5 (5th Cir. 2004) (“The
existence of diversity jurisdiction is determined at the time suit is filed.”).
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diversity jurisdiction under § 1332(c)(1); a corporation is the citizen of its
principal place of business and place of incorporation. See Lincoln Prop. Co. v.
Roche, 546 U.S. 81, 94 (2005) (explaining that § 1332(c)(1) “is unambiguous
and . . . not amenable to judicial enlargement”). Therefore, the parties remain
diverse. In light of this evidence, the district court properly denied Tewari’s
Rule 12(b)(1) motion.
                                CONCLUSION
      For the above stated reasons, we AFFIRM.

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