United States District Court, S.D. New York
March 25, 2004.
SUSAN AUGIENELLO, RICHARD J. DORAN, PHILIP EINHORN, CRAIG NAZARRO, and EILEEN PAPP, Plaintiffs
FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for SUPERIOR BANK FSB, Defendant
The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge Page 2
Defendant Federal Deposit Insurance Corporation ("FDIC"), as Receiver
of Superior Bank, FSB ("Superior") (the "FDIC-Receiver"), has moved to
dismiss the amended complaint of pro se plaintiffs Susan Augienello
("Augienello"), Richard J. Doran ("Doran"), Philip Einhorn ("Einhorn"),
Craig Nazzaro ("Nazzaro") and Eileen Papp ("Papp") (collectively, the
"Plaintiffs"), pursuant to Fed.R.Civ.P. 12(b)(1) for lack of jurisdiction
over the subject matter and 12(b)(6) for failure to state a claim upon
which relief can be granted. For the reasons set forth below, the motion
Prior and Related Proceedings
On June 10, 2002, the Plaintiffs commenced the instant case and on
December 18, 2003 filed their amended complaint.
According to the amended complaint, the Office of Thrift Supervision
("OTS") closed Superior and appointed the FDIC as receiver for Superior
on July 27, 2001. The FDIC-Receiver refused to remit to the Plaintiffs
certain deferred compensation to which the Plaintiffs allege they were
entitled under their employment agreements with Superior. Amended
Complaint, ¶¶ 3-5, 29, 42. In October 2001, "pursuant to the mandate
of 12 U.S.C. § 1821(D)," the Plaintiffs timely filed proofs of claim
with the FDIC-Receiver in order to assert, through the receivership claim
process, claims for
deferred compensation they were allegedly owed under their employment
agreements with Superior. Amended Complaint, ¶¶ 14, 30-34. In April 2002,
the Plaintiffs' receivership claims were either disallowed by the
FDIC-Receiver, deemed disallowed by operation of law, or otherwise
rejected by the FDIC-Receiver. Amended Complaint, ¶¶ 14, 35-38.
On December 20, 2001, the Plaintiffs in the instant case commenced a
related action, Augienello v. Coast-To-Coast Financial Corp., U.S.
District Court for the Southern District of New York, Civil Action No. 01
Civ. 11608 ("the Coast-To-Coast case") against numerous defendants
(including Superior's beneficial owners, board members, and certain of
Superior's officers) but not against the FDIC-Receiver or Superior. In
that complaint in the Coast-To-Coast case, the Plaintiffs asserted that
the defendants were liable to them for the deferred compensation that
they were allegedly owed under their employment agreements with
In an August 7, 2002 opinion in the Coast-To-Coast case, the breach of
contract claims were dismissed for failure to state a claim upon which
relief can be granted, holding that the Plaintiffs are not entitled to
any deferred compensation under the terms of their employment agreements
with Superior, as interpreted under federal law. Augienello v.
Coast-To-Coast Financial Corp., 2002 WL 1822926 (S.D.N.Y. Aug. 7, 2002).
The Plaintiffs appealed from the August 7, 2002 opinion
in the Coast-To-Coast case to the U.S. Court of Appeals for the Second
Circuit. By agreement of counsel and with the consent of the court,
further proceedings in the instant case were deferred until after the
disposition of that appeal.
On May 9, 2003, the Court of Appeals issued a summary order affirming
the August 7, 2002 decision in the Coast-To-Coast case and stated,
"Because we agree with the district court's conclusion that the
plaintiffs did not have any vested rights under the employment contracts,
the only remaining argument for a claim against Superior is for a breach
of the implied covenant of good faith and fair dealing." Augienello v.
Coast-To-Coast Financial Corp., 64 Fed. Appx. 820, 822 n. 1, 2003 WL
21069080 (2d Cir. May 9, 2003).
After the Second Circuit issued its May 9, 2003 ruling, the Plaintiffs
filed their amended complaint on November 10, 2003 which is identical to
their original complaint in this case except for the addition of a new
Count II, which alleges a cause of action against the FDIC-Receiver for
breach of "its duty of good faith and fair dealing in its dealings with
plaintiffs." Amended Complaint, ¶¶ 44-48.
The instant motion by the FDIC-Receiver was submitted on January 28,
The following facts are undisputed except as noted.
On December 30, 1998, Lyons Savings, a Federal Savings and Loan
Association located in Countryside, Illinois, was merged into Lyons
Savings Bank, a Federal Savings Bank located in Hinsdale, Illinois. On
April 27, 1989 Lyon Savings Bank was renamed Superior Bank, FSB. From
April 27, 1989 to July 27, 2001, Superior was a federally chartered
In December 1992, Alliance Funding Company, Inc. was merged into
Superior and became Alliance Funding, a division of Superior. Thereafter,
and until Superior was placed in receivership, Alliance Funding was not a
separate corporation, but rather a division of Superior.
On July 27, 2001, the federal OTS, which was then Superior's primary
regulator, placed Superior into receivership and appointed the FDIC as
In OTS Order 2001-56, dated July 27, 2001, the OTS, inter alia: (1)
found that Superior was in an unsafe and unsound condition to transact
business; and (2) appointed the FDIC as receiver for Superior. The FDIC
accepted that appointment pursuant to 12 U.S.C. § 1821(c)(2)(A).
From December 1992 until July 27, 2001, Superior maintained its
corporate offices in Hinsdale, Illinois and in
Oakbrook Terrace, Illinois. During this same period, Superior also
operated approximately seventeen branch banking offices (seven
full-service branch offices, which included teller or check cashing
functions, and ten financial centers without teller or check cashing
functions) in Chicago, Illinois and the metropolitan Chicago area in
northern Illinois. In addition, during this period, Superior Insurance
and Financial Services ("SIFS"), a wholly-owned operating subsidiary of
Superior, offered insurance services through Superior's offices in
From December 1992 until July 27, 2001, Superior, through its Alliance
Funding division, also maintained offices for mortgage banking and
consumer finance operations in Montvale, New Jersey until approximately
July of 1998, when those operations moved to Orangeburg, New York. During
this same period, Superior's mortgage lending operation expanded to loan
production offices in a number of states other than Illinois and New
York. In addition to its offices in Illinois and New York, immediately
before Superior was closed on July 27, 2001, it had fifteen loan
production offices in twelve states other than Illinois and New York.
According to the following findings of the Office of Inspector General,
FDIC in Audit Report No. 02-005, issued February 6, 2002:
The bank was dominated by one individual the
Chairman of the Board of Directors.
Although Superior's retail operation was located
in the Chicago area, the Chairman worked in New
York and was
instrumental in developing and coordinating Superior's
principal lines of business. He often asserted to OTS
management and examiners that Superior's ownership
would always stand behind Superior in the event it ran
into financial problems. According to OTS examiners,
he was a very persuasive person who knew the most
about Superior's operations.
Reportedly, the Chairman pursued courses of action
contrary to OTS positions. For example, during the
October 2000 OTS field visit, the Chairman disagreed
with regulators on accounting issues related to the
valuation of certain residual assets. The Chairman
adamantly supported Superior's accounting
methodologies as properly applying Generally Accepted
Accounting Principles (GAAP), and sanctioned overall
business strategies that clearly ignored any avenues
to diversify Superior's high-risk and volafile asset
base. Subsequently, he resigned in January 2001 in the
face of overwhelming evidence that Superior's
accounting methodologies were flawed.
Superior's charter the Federal Stock Charter issued to Lyons
Savings Bank states that its "home office shall be located at 440
East Ogden Avenue in Hinsdale, Illinois." Superior prepared its mandatory
periodic Thrift Financial Reports at its headquarters in Illinois, and
filed them with OTS using Superior's headquarters address in Illinois.
OTS's examination and regulation of Superior was conducted by its
Chicago, Illinois Regional Office. OTS Orders and other official
communications from OTS to Superior were sent to Superior's corporate
headquarters address in Illinois. Superior's United States and Illinois
state tax returns likewise indicated Superior's headquarters' address as
being in Illinois.
OTS Order No. Chi-01-01, dated February 14, 2001, and OTS Order No.
Chi-01-04, dated May 24, 2001, both of which are Prompt Corrective Action
Directives addressed to Superior and issued by Superior's primary federal
regulator, refer to Superior as
"Superior Bank, FSB, Oakbrook Terrace, Illinois." In Sections 3.4
and 4.4 respectively, both of those Orders state that any document or
notice provided or permitted to be served under the Order shall be
addressed to Superior as follows: "Superior Bank FSB, Attention: Board of
Directors, 1 Lincoln Centre, Suite 600, Oakbrook Terrace, IL 60181."
The majority of Superior's permanent corporate records such as its
Board of Directors' Meeting Minutes, personnel records, and company-wide
financial records were maintained in its corporate headquarters in
Most of Superior's Board of Directors' meetings were held in Illinois.
From January 1996 through July 27, 2001, twenty-four of Superior's Board
of Directors' meetings were held in Illinois, four were held in New York,
and two were held in New Jersey.
Superior's Human Resource Department, its payroll activities and
accounting and administrative services were all headquartered in
Illinois. Other than operations related to Alliance Funding, Superior's
Alliance Funding division did not control, direct or manage any part of
Superior's business operations from its offices in New York.
Neal T. Halleran ("Halleran") was president and chief executive officer
of Superior from January 1, 1993 until OTS closed Superior on July 27,
2001, and a director of Superior from January
1993 until July 27, 2001. Halleran's office was in Illinois, and he
worked in Illinois. On a few occasions, Halleran traveled to New York to
meet with Superior's Board of Directors although Superior's board
meetings normally were held in Illinois. Also, on a few occasions,
Halleran traveled to New York to meet with Nelson Stevenson, the former
chairman of the board of Superior, and Monte Kurs, a senior vice
president of Superior and president of Superior's Alliance Funding
The Standard to be Applied
In addressing the present motion, the Court is mindful that the
plaintiffs are proceeding pro se and that their submissions should be held
"`to less stringent standards than formal pleadings drafted by lawyers .
. . .'" Hughes v. Rowe, 449 U.S. 5, 9, 101 S.Ct. 173, 176 (1980) (per
curiam) (quoting Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 595
(1972)); see also Ferran v. Town of Nassau, 11 F.3d 21, 22 (2d Cir.
1993). Indeed, district courts should "read the pleadings of a pro se
plaintiff liberally and interpret them to raise the strongest arguments
they suggest.'" McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999)
(quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994).
Nevertheless, the Court is also aware that pro se status "Moes not exempt
a party from compliance with relevant rules of procedural and substantive
law." Traguth v. Zuck, 710 F.2d 90, 95 (2d Cir. 1983) (quotations
A court must decide a Rule 12(b)(1) motion before other motions to
dismiss. See Circle Industries v. City Federal Savings Bank,
749 F. Supp. 447, 449 (E.D.N.Y. 1990) (citing Rhulen Agency, Inc. v.
Alabama Ins. Guaranty Ass'n, 896 F.2d 674, 678 (2d Cir.) ("[w]here . . .
the defendant moves for dismissal under Rule 12(b)(1), Fed.R. Civ. P., as
well as on other grounds, `the court should consider the Rule 12(b)(1)
challenge first since if it must dismiss the complaint for lack of
subject matter jurisdiction, the accompanying defenses and objections
become moot and do not need to be determined'") (quotation omitted),
aff'd, 931 F.2d 7 (2d Cir. 1990) (per curiam).
Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a facially
sufficient complaint may be dismissed for lack of subject matter
jurisdiction if the asserted basis for jurisdiction is not sufficient.
See Peterson v. Continental Airlines, Inc., 970 F. Supp. 246 (S.D.N.Y.
1997). Once challenged, the burden of establishing jurisdiction rests
with the party asserting that it exists. See Thomson v. Gaskill,
315 U.S. 442, 446, 62 S.Ct. 673, 86 L.Ed. 951 (1942). The party asserting
subject matter jurisdiction has the burden of proving, by a preponderance
of the evidence, that the court has subject matter jurisdiction. Malik
v. Meissner, 82 F.3d 560, 562 (2d Cir. 1996); Gallo v. United States,
950 F. Supp. 1246, 1248 (S.D.N.Y. 1997) (citing Robinson v. Overseas
Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994)).
On a motion to dismiss for lack of subject matter jurisdiction, the
court may resolve disputed jurisdictional factual issues by reference to
evidence outside the pleadings. Kamen v. American Telephone & Telegraph
Co., 791 F.2d 1006, 1011 (2d Cir. 1986); see also Cauthorne v. Mutual Life
Ins. Co. of New York, No. 96 Civ. 0232, 1997 WL 154019, at *2 (S.D.N.Y.
Apr. 1, 1997). The court may decide the matter on the basis of affidavits
or other evidence, and "no presumptive truthfulness attaches to the
complaint's jurisdictional allegations." Guadagno v. Wallack Ader
Levithan Assoc., 932 F. Supp. 94, 95 (S.D.N.Y. 1996); accord Integrated
Utils. Inc. v. United States, No. 96 Civ. 8983, 1997 WL 529007, at *3
(S.D.N.Y. Aug. 26, 1997) ("`argumentative inferences favorable to the
party asserting jurisdiction should not be drawn'" (quoting Atlantic
Mutual Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d
Subject Matter Jurisdiction is Lacking
1. Jurisdiction Exists only in the District in which the Failed
Bank's Principal Place of Business is Located and the United States
District Court for the District of Columbia
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), Pub.L. No. 101-73, 103 Stat. 183 (1989), set forth the
regulatory and receivership powers and duties of the federal banking
agencies. See 12 U.S.C. § 1821(d). One of the powers provided to the
receiver in FIRREA was the power to determine claims and to disallow
claims not proven to the
receiver's satisfaction. See 12 U.S.C. § 1821 (d)(3) (A) and (d)(5)(D). A
fundamental requirement of the statutory claims procedures created by
FIRREA is that all claimants against the institution must file their
claims with the receiver. 12 U.S.C. § 1821 (d)(5). If a claimant is
dissatisfied with the receiver's determination of its claim, the claimant
may seek de novo adjudication in the appropriate federal district court.
Section 1821(d) (13) (D) bars the jurisdiction of all courts over
claims against the failed bank unless jurisdiction is otherwise
authorized in section 1821(d).*fn1 Section 1821(d)(13)(D) provides as
(d) Limitation on judicial review
Except as otherwise provided in this subsection,
no court shall have jurisdiction over
(i) any claim or action for payment from, or any
action seeking a determination of rights with
respect to, the assets of any depository institution
for which the [FDIC] has been appointed receiver,
including assets which the [FDIC] may acquire from
itself as such receiver; or
(ii) any claim relating to any act or omission
of such institution or the [FDIC] as receiver.
The only jurisdiction "otherwise provided" in 12 U.S.C. § 1821(d) is
contained in section 1821(d)(6)(A), which provides for federal
court adjudication of claims after exhaustion of the claims procedures.
12 U.S.C. § 1821 (d)(6)(A) and 1821(d)(8)(C); see also Meliezer v. RTC,
952 F.2d at 882. Section 1821(d)(6) (A) expressly limits jurisdiction to
the federal courts because it specifies that, after disallowance of a
claim by the receiver:
the claimant may . . . file suit on such claim (or
continue an action commenced before the appointment of
the receiver) in the district or territorial court of
the United States for the district within which the
depository institution's principal place of business
is located or the United States District Court for the
District of Columbia (and such court shall have
jurisdiction to hear such claim).
12 U.S.C. § 1821 (d)(6)(A). Section 1821(d)(6)(B) then confirms that the
federal courts granted jurisdiction by § 1821(d) (6)(A) are the only
avenues to seek the prescribed de novo judicial adjudication because
section 1821(d)(6)(B) eliminates all further remedies if litigation is
not continued in the federal forum under section 1821(d)(6)(A). See
Mustang Partners, 946 F.2d at 106; Capital Data Corp. v. Capital Nat'l
Bank, 778 F. Supp. 669
, 674 (S.D.N.Y. 1991).
In Resolution Trust Corporation, as Receiver for Columbia Banking
Federal Savings and Loan Association v. J.F. Associates, 813 F. Supp. 951
(N.D.N.Y. 1993), when determining whether the Northern District of New
York would have subject-matter jurisdiction over the counterclaims
involved in the action after the administrative review process was
exhausted, the court said:
This analysis necessarily begins with a review of the
two most pertinent statutory provisions of FIRREA
12 U.S.C. § 1821(d)(13)(D) and 1821(d)(6)(A). Under §
1821(d)(13)(3), the jurisdictional capacity of the
federal courts with regard to claims against the
assets of failed depository institutions is barred
except as expressly provided for in the various
subsections of § 1821(d). Section 1821(d)(6)(A) is one
such grant of jurisdiction. Thereunder, the federal
courts are given jurisdiction to adjudicate matters
seeking assets from a failed depository institution
once RTC is appointed receiver provided the dictates
of § 1821(d) (6)(A) are complied with . . . A cursory
reading of § 1821(d)(6)(A) appears to indicate that
this jurisdiction is limited to one of two district
courts the District of Columbia or the district
court in which the failed depository institution's
principal place of business is located. Thus, the
combination of § 1821(d) (13) (D) (barring
jurisdiction) and § 1821(d)(6)(A) (expressing limited
jurisdiction) seemingly precludes further analysis in
the instant case.
Id. at 954. Similar findings have been made by courts in other
districts>. In Mansolillo v. Federal Deposit Insurance Corporation, as
Receiver for Capital Bank and Trust Co., 804 F. Supp. 426, 428 (D.R.I.
1992), the court stated:
The Court agrees with the FDIC that the choice of
forum provision in 12 U.S.C. § 1821 (d)(6) (A) is
jurisdictional. This conclusion is inescapable given
the language of FIRREA. Section 1821(d)(13)(D) clearly
states that "[e]xcept as otherwise provided in this
subsection, no court shall have jurisdiction over . .
. any claim . . ." Section 1821(d)(6)(A) states that a
claimant may file suit in the district court "within
which the depository institution's place of business
is located or the United States District Court for the
District of Columbia" (and such court shall have
jurisdiction to hear such claim).
The cases indicate that jurisdiction over these actions is limited
to the precise parameters of the statute. See also Federal Deposit
Insurance Corporation v. The Satter Companies, 791 F. Supp. 26, 28
(D.Me. 1992) (Court would have no subject-matter jurisdiction over
counterclaim in light of 12 U.S.C. § 1821(d)(6)(A) where failed bank's
principal place of business is located in New Hampshire, not Maine).
2. The Amended Complaint Sets Forth Claims Against a Failed Bank in
The caption of Plaintiff's amended complaint names as the only
defendant, "Federal Deposit Insurance Corporation, as Receiver for
SUPERIOR BANK FSB." Plaintiffs' claims are claims based on alleged acts
or omissions of the FDIC in its "receiver" capacity. Amended Complaint,
¶¶ 4, et seq. Therefore, pursuant to 12 U.S.C. § 1821(d)(6)(A), a judicial
determination of a claim against the FDIC as receiver for Superior can be
obtained only in the U.S. District Court for the District of Columbia or
the U.S. District Court for the district within which Superior's
principal place of business is located.
3. Superior's Principal Place of Business is in the Northern District
In determining where Superior's principal place of business is
located, the court must first address the threshold issue of whether
Superior is an active, going concern or has ceased business activity.
Although the citizenship of the parties to a lawsuit is normally
determined as of the time the action is commenced, see Smith v.
Sperling, 354 U.S. 91, 93 n.1 (1957);
Krauth v. Executive Telecard, Ltd., 887 F. Supp. 641, 646 (S.D.N.Y.
1995), when a corporation has ceased business activity, its principal
place of business is determined by the place in which it last transacted
business. See Pinnacle Consultants, Ltd. v. Leucadia Nat'l Corp.,
101 F.3d 900, 907 (2d Cir. 1996); Wm. Passalaccrua Builders, Inc. v.
Resnick Developers South, Inc., 933 F.2d 131, 141 (2d Cir. 1991). On July
27, 2001, the OTS, which was then Superior's primary regulator, placed
Superior into receivership and appointed the FDIC as receiver.
Plaintiffs' Amended Complaint, ¶¶ 3, 24, 25. Therefore, Superior must be
treated as an entity that has ceased business activity and its principal
place of business determined as of the date on which it last transacted
business, July 27, 2001.
Courts in the Second Circuit recognize two different tests for
determining the principal place of business of a corporation. The choice
of which test to apply depends on the structure and nature of the
corporation. See Krauth, 887 F. Supp. at 646. Where a corporation's
activities are decentralized and spread across numerous states, courts
apply what is known as the "nerve center" test to determine a
corporation's principal place of business. Under that test, courts focus
on those factors that identify the place where the corporation's overall
policy originates. See R.G. Barry Corp. v. Mushroom Makers, Inc.,
612 F.2d 651, 655 (2d Cir. 1979); Refco Properties, Inc. v. Trump, No. 94
Civ. 2124, 1995 WL 412423, at *2 (S.D.N.Y. July 12, 1995); Scot Typewriter
Co. v. Underwood Corp., 170 F. Supp. 862, 865 (S.D.N.Y.
1959) ("Where a corporation is engaged in far-flung and varied activities
which are carried on in different states, its principal place of business
is the nerve center from which it radiates out to its constituent parts
and from which its officers direct, control and coordinate all activities
without regard to locale, in the furtherance of the corporate
objective."). In other words, the "nerve center" test places the
principal place of business at the location of the corporation's
headquarters. See Compucon Distrib. of New England, Inc. v. Cooper,
685 F. Supp. 424, 425 (S.D.N.Y. 1988).
In contrast, where corporations are centralized, courts apply the
"place of operations" or "locus of operations" test to determine a
corporation's principal place of business. A corporation's principal
place of business under this test is the location in which the corporation
has its most extensive contacts with, or its greatest impact on, the
general public. See R. G. Barry, 612 F.2d at 655; Krauth, 887 F. Supp. at
647; Center for Radio Information, Inc. v. Herbst, 876 F. Supp. 523, 525
Here, Superior was a federally chartered savings association that
conducted its operations on a nationwide basis with eighteen offices
located in the metropolitan Chicago area in northern Illinois, and
sixteen offices in twelve states other than Illinois, including one
office in New York.
Under the "nerve center" test, Superior's nerve center was its Oakbrook
Terrace, Illinois corporate headquarters office. Superior's president and
chief executive officer had his offices in Oakbrook Terrace, Illinois and
no meaningful part of his employment activities with Superior was
conducted in New York. Superior's charter the Federal Stock Charter
issued to Lyons Savings Bank states that its "home office shall be
located at 440 East Ogden Avenue in Hinsdale, Illinois." Superior
prepared its mandatory periodic Thrift Financial Reports at its
headquarters in Illinois, and filed them with OTS using Superior's
headquarters address in Illinois. OTS's examination and regulation of
Superior was conducted by its Chicago, Illinois Regional Office. OTS
orders and other official communications from OTS to Superior were sent
to Superior's corporate headquarters address in Illinois. Superior's
United States and Illinois state tax returns likewise indicated
Superior's headquarters address as being in Illinois. The majority of
Superior's permanent corporate records such as its board of directors
meeting minutes, personnel records, and company-wide financial records
were maintained in its corporate headquarters in Illinois. The great
majority of Superior's board of directors meetings were held in
Illinois. Kay corporate departments were located in Illinois: Superior's
Human Resource Department, its payroll activities and accounting and
administrative services were all headquartered in Illinois.
According to Halleran, the majority of Superior's general policies and
procedures, including some that applied to Alliance
Funding, were formulated at Superior's corporate headquarters in
Illinois. Id. Other than operations related to Alliance Funding,
Superior's Alliance Funding Division did not control, direct or manage
any part of Superior's business operations from its offices in New York.
In the related Coast-To-Coast case, the Plaintiffs averred, "Upon
information and belief, non-party Superior is a federal savings bank with
its principal place of business in the State of Illinois." In their
original complaint filed in the instant case on June 10, 2002, the
Plaintiffs averred, however, "Venue in this district is proper pursuant
to 12 U.S.C. § 1821(d)(6) as Superior's principal place of business was
located in New York through its mortgage banking and consumer finance
division, Alliance Funding." In Peters v. Timespan Communications, Inc.,
97 Civ. 8750, 1999 WL 135231 (S.D.N.Y. March 12, 1999), a decision
involving the location of a corporation's principal place of business for
diversity jurisdiction purposes, the Honorable Denny Chin noted with
disapproval that a party had made similar conflicting allegations in
pleadings in termination of jurisdiction, stating, "Timespan's claim that
its principal place of business was California is particularly
disingenuous given that it has taken inconsistent positions with respect
to this issue in the past. While not controlling, the above evidence [the
previous inconsistent position] is entitled to considerable weight." Id.
at *7 n.3.
The Plaintiffs' entire argument regarding Superior's principal place of
business is premised upon the conduct and principal location of one
individual, the chairman of Superior's board of directors, who resigned
from Superior's board in January 2001. Because Superior's principal place
of business must be determined as of the date on which it last transacted
business, July 27, 2001, accepting Report No. 02-005 as quoted by the
Plaintiffs, states nothing about Superior on July 27, 2001, the date
relevant to the FDIC-Receiver's motion to dismiss for lack of subject
It is not controverted that Superior, which had its home office and
corporate headquarters and seventeen other banking offices in Illinois
and sixteen offices in thirteen other states, including New York, was a
decentralized entity. The Plaintiffs have not argued that Superior's
principal place of business is to be determined by using anything other
than the "nerve center" test.
Application of the appropriate test for determining Superior's
principal place of business establishes that because Superior's nerve
center was its Oakbrook Terrace, Illinois corporate headquarters office,
its principal place of business was not in the U.S. District Court for
the Southern District of New York. Accordingly, under FIRREA,
12 U.S.C. § 1821(d), this Court lacks subject matter jurisdiction over
the claims asserted in Plaintiffs amended complaint.
For the reasons set forth above, this action is dismissed pursuant to
Fed.R.Civ.P. 12(b)(1) for lack of jurisdiction over the subject matter.
It is so ordered.