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Rhinehart v. CSX Transportation

June 9, 2010

ALFRED R. RHINEHART, JR., PLAINTIFF,
v.
CSX TRANSPORTATION, INC., AND NORFOLK SOUTHERN RAILWAY COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge

DECISION and ORDER

JURISDICTION

This case was referred to the undersigned by Honorable Richard J. Arcara on February 9, 2010, for pretrial matters including report and recommendation on dispositive motions. The matter is presently before the court on Plaintiff's motion to remand (Doc. No. 6), filed February 17, 2010, and on Defendants' motion to amend the notice of removal (Doc. No. 7), filed February 24, 2010.

BACKGROUND and FACTS*fn1

On December 29, 2009, Plaintiff, Alfred R. Rhinehart, Jr. ("Plaintiff"), commenced this personal injury action in New York Supreme Court, Erie County ("state court"), seeking to recover for personal injuries sustained on September 11, 2009, when Plaintiff, while trespassing on railroad tracks owned by Defendant CSX Transportation, Inc.*fn2 ("CSX"), was struck by a train, allegedly operated by Defendant Norfolk Southern Railway Company ("Norfolk") (together, "Defendants"). The Complaint*fn3 asserts a negligence claim against each Defendant. Complaint First Cause of Action (CSX), and Second Cause of Action (Norfolk). Plaintiff also alleges Defendant CSX is a Virginia corporation, with its principal place of business in Florida, Complaint ¶ 2, whereas Norfolk is a Virginia corporation, with its principal place of business in Virginia, id. ¶ 3. Both Defendants were served with the summons and Complaint on January 4, 2010.

On February 3, 2010, Defendants filed a Notice of Removal (Doc. No. 1) ("Removal Notice"), thereby removing the action to this court, asserting diversity of citizenship as the basis for federal subject matter jurisdiction, given that both Defendants are Virginia corporations, with CSX's principal place of business in Florida, but without identifying Norfolk's principal place of business. Removal Notice ¶¶ 2-3. Defendants also assert Defendants "are not citizens of the State of New York. Thus, complete diversity of citizenship exists."*fn4 Removal Notice ¶ 7. In the answers to the Complaint, filed by each Defendant on February 8, 2010 (Doc. No. 3 ("CSX Answer"), and Doc. No. 4 ("Norfolk Answer"), each Defendant admits to being a Virginia corporation, but is silent as to its respective principal place of business. CSX Answer ¶ 2; Norfolk Answer ¶ 3.

On February 17, 2010, Plaintiff filed the instant motion (Doc. No. 6) ("Plaintiff's Motion") seeking to remand the action to state court on the basis that Defendants, by failing to assert in the Removal Notice Norfolk's principal place of business, have not sufficiently established diversity as the basis for federal jurisdiction. Plaintiff's motion is supported by the attached Affidavit of Laura C. Doolittle, Esq. ("Doolittle Affidavit"), and exhibits A and B ("Plaintiff's Exh(s). __"). On February 24, 2010, Defendants moved for leave amend the Removal Notice (Doc. No. 7) ("Defendants' Motion"). Defendants' Motion is supported by the attached Memorandum of Law in Support of Motion for Leave to Amend Their Notice of Removal ("Defendants' Memorandum"), and the Affidavit of J. Christine Chiriboga, Esq., in Support of Motion for Leave to Amend Notice of Removal ("Chiriboga Affidavit"). On March 1, 2010, Defendants filed amended answers as a matter of course (Doc. Nos. 8 ("CSX Amended Answer") and Doc. No. 9 ("Norfolk Amended Answer"), in which CSX admits being a Virginia corporation with its principal place of business in Florida, CSX Amended Answer ¶ 2, and Norfolk admits being a Virginia corporation with its principal place of business in Virginia, Norfolk Amended Answer ¶ 3.

On March 17, 2010, Defendants filed a Response to Plaintiff's Motion to Remand (Doc. No. 14) ("Defendants' Response"), and Plaintiff filed the Affidavit of Laura C. Doolittle, Esq., in Opposition to Defendants' Motion for Leave to Amend Their Notice of Removal (Doc. No. 15) ("Doolittle Response Affidavit"), and Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Leave to Amend Their Notice of Removal (Doc. No. 16) ("Plaintiff's Memorandum"). On March 22, 2010, Plaintiff filed the Reply Affidavit of Laura C. Doolittle, Esq. in Support of Plaintiff's Motion to Remand (Doc. No. 17) ("Doolittle Reply Affidavit"). Oral argument was deemed unnecessary.

Based on the following, Defendants' motion to amend the Removal Notice is GRANTED; Plaintiff's motion to remand is DISMISSED as moot.

DISCUSSION

Removal of a state court proceeding to federal court is provided for under 28 U.S.C. § 1441(a) ("§ 1441(a)"), which states in pertinent part any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants to the district court of the United States for the district and division embracing the place where such action is pending.

In the instant case, Defendants' removal of the action is predicated on diversity of citizenship, 28 U.S.C. § 1332, as the basis for federal subject matter jurisdiction.

Federal jurisdiction based on diversity requires complete diversity between all plaintiffs and defendants, and an amount in controversy exceeding $75,000.*fn5 28 U.S.C. § 1332(a). Here, both CSX and Norfolk are corporations. A corporation, for purposes of both 28 U.S.C. §§ 1332(a) and 1441, is deemed a citizen of (1) any state in which the corporation is incorporated; and (2) the state of the corporation's principal place of business. 28 U.S.C. § 1332(c)(1). As such, for purposes of diversity jurisdiction, a corporation is deemed a citizen of both its state of incorporation, and the state where the corporation's principal place of business is located. Durant, Nichols, Houston, Hodgson & Cortese-Costa P.C. v. Dupont, 565 F.3d 56, 59 (2d Cir. 2009). Furthermore, although a corporation may conduct business in several states, only one state can serve as the corporation's principal place of business for diversity jurisdiction. See Hertz Corp. v. Friend, __ U.S. __, 130 S.Ct. 1181, 1185-86, 1192-93 (2010) (holding a corporation's principal place of business "should normally be the place where the corporation maintains its headquarters, - - provided that the headquarters is the actual center of direction, control, and coordination, i.e., the 'nerve center,' and not simply an office where the corporation holds its board meetings. . . .").

Plaintiff moves pursuant to 28 U.S.C. §§ 1446(b) and 1447(c), to remand the action to state court, asserting Defendants' failure to allege in the Removal Notice Norfolk's principal place of business have failed to establish a basis for diversity jurisdiction. Doolittle Affidavit ¶¶ 7-10, 18-19. Defendants move pursuant to 28 U.S.C. § 1653 to amend the Removal Notice to assert that Norfolk's principal place of business is in Virginia, thereby asserting and confirming complete diversity between Plaintiff and both Defendants. That Plaintiff's Motion was filed one week before Defendants' Motion strongly suggests Plaintiff's Motion was the impetus for Defendants' Motion. The arguments submitted in support and in opposition to both motions are essentially the same, centering on whether Defendants' omission from the Removal Notice Norfolk's principal place of business is a technical defect, which can be cured by amendment, or a substantive error precluding amendment and requiring remand. In fact, several of the documents filed with regard to one motion reference arguments made in support of, or in opposition to, the other motion. See, e.g., Defendants' Response at 3-4 (discussing, in opposition to Plaintiff's Motion, that defective allegations of jurisdiction may be amended); Doolittle Reply Affidavit ¶ 3 ...


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