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DRAKE v. LABORATORY CORPORATION OF AMERICA HOLDINGS

July 12, 2004.

RICHARD W. DRAKE, Plaintiff,
v.
LABORATORY CORPORATION OF AMERICA HOLDINGS, KEVIN WILSON, NORTHWEST TOXICOLOGY, INC., DAVID J. KUNTZ, ELSOHLY LABORATORIES, INC., DR. WILLIAM H. WHALEY, and WEST PACES FERRY MEDICAL CLINIC, Defendants.



The opinion of the court was delivered by: FREDERIC BLOCK, District Judge

MEMORANDUM AND ORDER

Familiarity with the procedural history in this action is presumed. See Drake v. Laboratory Corp. of America Holdings, 290 F. Supp.2d 352, 362-63 (E.D.N.Y. 2003). In sum, plaintiff Richard Drake ("Drake") filed a complaint alleging both federal and state claims; in response to defendants' motions to dismiss, the Court dismissed plaintiff's federal claims and exercised supplemental jurisdiction over his state claims, finding that they were not preempted by federal law, but certified the preemption question for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).*fn1 In light of the Second Circuit's subsequent summary order, denying defendants' petitions for leave to proceed with an interlocutory appeal, and the Circuit Court's comments questioning this Court's jurisdiction over the remaining state common law tort claims — namely, whether diversity jurisdiction existed, and whether this Court had conducted "a full analysis under 42 U.S.C. § 1367" when it decided to exercise supplemental jurisdiction, Drake v. Laboratory Corp., et. al, No. 04-0137, (2d Cir. Mar. 4, 2004), the Court issues this decision regarding its jurisdiction over the state law claims; moreover, because of facts not previously before the Court at the time of its § 1292(b) certification, it once again certifies the preemption issue for interlocutory appeal.

  I. Diversity Jurisdiction

  Under federal diversity jurisdiction, the court has jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between [inter alia] citizens of different states." 28 U.S.C. § 1332(a)(1). Moreover, "diversity jurisdiction is available only when all adverse parties to a litigation are completely diverse in their citizenships." Herrick Co., Inc. V. SCS Communications, Inc., 251 F.3d 315, 322 (2d Cir. 2001).

  Jurisdiction is assessed "as of the moment the complaint was filed," E.R. Squibb & Sons, Inc. v. Lloyd's & Co., 241 F.3d 154, 163 (2d Cir. 2001), even if a complaint is later amended to assert diversity jurisdiction. See Le Blanc v. Cleveland, 248 F.3d 95, 99-100 (2d Cir. 2001) ("an amendment to allege diversity jurisdiction relates back under Rule 15 of the Federal Rules of Civil Procedure, and therefore we assess [plaintiff's] citizenship at the time the complaint was first filed"). "Federal jurisdiction is not defeated if one party, subsequent to the filing of a complaint, becomes a citizen of the same state as his opponent." E.R. Squibb & Sons, 241 F.3d at 163-64. See also Le Blanc, 248 F.3d at 100 ("that [plaintiff] has become a citizen of New York for diversity purposes since filing this lawsuit does not destroy diversity jurisdiction; her status at the time she filed her complaint is controlling"). Thus, the citizenship of each party is based upon citizenship at the time the complaint was filed.

  For the purpose of diversity jurisdiction, "[a]n individual's citizenship . . . is determined by his domicile." Palazo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000). "Domicile is the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning." Id. (internal quotation and citation omitted).

  With regard to corporate citizenship, 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). The "principal place of business prong does not replace the citizenship of the state of incorporation; it merely adds another state of citizenship — either of which could destroy diversity," Grunblatt v. Unumprovident Corp., 270 F. Supp.2d 347, 351 (E.D.N.Y. 2003); therefore, to find complete diversity, a court must be satisfied that the corporatedefendants are not incorporated nor have their principal place of business in the same state in which plaintiff was a citizen, at the time the action was filed.

  Here, the original complaint was not predicated upon diversity jurisdiction; rather, federal question and supplemental jurisdiction were alleged. The complaint alleged that at the time of filing, Drake was a resident of New York; it did not allege his domicile, nor did it allege facts about the citizenship of each defendant. See Canedy v. Liberty Mutual Insur. Co., 126 F.3d 100, 103 (2d Cir. 1997) ("it is well-established that allegations of residency alone cannot establish citizenship"). However, at a status conference on June 2, 2004, subsequent to the Second Circuit's denial of defendants' petitions for an interlocutory appeal, all the parties contended that complete diversity did indeed exist.

  At the Court's direction, the parties thereafter submitted affidavits regarding their respective citizenships. The Court is satisfied that complete diversity exists between the parties; none of the defendants are citizens of the same state as plaintiff. See In re Ski Train Fire in Kaprun, Austria on November 11, 2000, 257 F. Supp.2d 717, 727 (S.D.N.Y. 2003) (finding diversity existed, based upon uncontested affidavits regarding diversity of citizenship). Moreover, the requisite amount in controversy is satisfied. Drake alleges an amount of damages that well exceeds the required $75,000; he claims $100,000 in damages for each state law claim. See Creaciones Con Idea, S.A. de C.V. v. MashreqBank PSC, 75 F. Supp.2d 279, 281 (S.D.N.Y. 1999) (finding amount-in-controversy requirement satisfied because plaintiff alleged damages in excess of $75,000). Defendants do not dispute that the amount in controversy and complete diversity requirements are satisfied.

  Accordingly, the Court deems the complaint amended to allege diversity jurisdiction. See 28 U.S.C. § 1653 ("Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts."); In re Ski Train Fire in Kaprun, 257 F. Supp.2d at 727 (S.D.N.Y. 2003) ("deem[ing] the [c]omplaint amended to include" facts regarding diversity of citizenship, contained in uncontested affidavits); American National Fire Insurance Co. v. Mirasco, Inc., 2000 WL 1368009, *3 (S.D.N.Y. Sept. 20, 2000) ("If the record established complete diversity then the Court could simply deem the complaint to have been amended and the jurisdictional problem would be cured.").

  II. Supplemental Jurisdiction

  In any event, even if diversity jurisdiction did not exist, the Court would still exercise supplemental jurisdiction over Drake's state law claims. Supplemental jurisdiction is "a doctrine of discretion," United Mine Workers of America v. Gibbs, 383 U.S. 715 (1966), and a "doctrine of flexibility," which is "designed to allow courts to deal with cases involving pendent claims in the manner that most sensibly accommodates a range of concerns and values." Carnegie-Mellon University v. Cohill, 484 U.S. 343, 350 (1988). However, a district court's discretion is "not boundless." Valencia v. Lee, 316 F.3d 299 (2d Cir. 2003). In its decision, the Court simply stated that it was retaining jurisdiction after "consider[ing] all the factors set forth in the Second Circuit's recent decision in Valencia," Drake, 290 F. Supp.2d at 375, and discussed fairness to the litigants. The Valencia court discussed the following factors a district court should consider when deciding whether to exercise supplemental jurisdiction: (1) whether state law claims "implicate[] the doctrine of preemption," Valencia, 316 F.3d at 306; (2) "judicial economy, convenience, fairness, and comity," id. at 305 (quotation and citation omitted); (3) the existence of "novel or unresolved questions of state law," id., and (4) whether state law claims "concern the state's interest in the administration of its government." Id. (quotation and citation omitted). In light of the Second Circuit's concern that the Court did not explicitly address some of these factors, the Court now discusses each in detail, and concludes that each weighs in favor of retaining jurisdiction.

  A. Federal Preemption

  Initially, the Court notes that the invocation of a simple federal preemption defense does not create federal question jurisdiction because the well-pleaded complaint rule "requires a complaint invoking federal question jurisdiction to assert the federal question as part of the plaintiff's claim, and precludes invoking federal question jurisdiction merely to anticipate a federal defense." Fleet Bank Nat'l Assoc. v. Burke, 160 F.3d 883, 886 (2d Cir. 1998); see also Spieleman v. Merill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116, 130 (2d Cir. 2003) (Newman, J. concurring) ("Because a defense based on federal law does not provide a basis for invoking the jurisdiction of a federal court, defendant's assertion of the usual form of preemption would not provide a basis for invoking the district court's federal question jurisdiction.") (internal citation omitted); Trump Hotels & Casino Resorts Development ...


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