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Argyris v. United Parcel Service

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


June 11, 2009

ANDREW ARGYRIS, PLAINTIFF,
v.
UNITED PARCEL SERVICE, INC., DEFENDANTS.

The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER FINDING FEDERAL QUESTION JURISDICTION [Order to Show Cause issued on April 21, 2009]

This matter comes before the Court on the Court's sua sponte Order to Show Cause ("OSC") why the case should not be dismissed for lack of subject matter jurisdiction. After reviewing the materials submitted by the parties and considering the arguments therein, the Court finds that Defendant has properly supported its assertion that Georgia is its principal place of business for purposes of diversity jurisdiction and therefore the Court has subject matter jurisdiction over the claims.

I. BACKGROUND

On April 2, 2009, Defendant United Parcel Service ("UPS") filed a Notice of Removal. On April 20, 2009, the Court*fn1 ordered UPS to show cause why the case should not be remanded for lack of subject matter jurisdiction. Plaintiff Argyris took no action, and UPS filed its response on May 11, 2009.

II. LEGAL STANDARD

Federal courts are courts of limited jurisdiction. "A federal court has subject matter jurisdiction over an action that either arises under federal law, or when there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000." Tosco Corp. v. Cmtys for a Better Env't, 236 F.3d 495, 499 (9th Cir. 2001) (citing 28 U.S.C. §§ 1331, 1332). When bringing a claim in federal court, the "plaintiff has the burden of proving jurisdiction." Id. To establish federal jurisdiction, the plaintiff must show in his pleading affirmatively and distinctly, the existence of whatever is essential to federal jurisdiction, and, if he does not do so, the court, on having the defect called to his attention or on discovering the same, must dismiss the case, unless the defect be correct by amendment. Id. (internal quotation marks omitted).

Here, UPS was ordered to show that its principal place of business is Georgia such that diversity jurisdiction would exist between Argyris, a California resident, and UPS, which is undisputedly incorporated in Ohio. When there are questions as to a corporation's principal place of business, the district court must first determine whether a "substantial predominance" of the corporation's activity can be attributed to a single state. See, e.g., Industrial Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090 (9th Cir. 1990). If not, the corporation's place of business is where the majority of the corporation's executive and administration functions are performed. Id. Relevant factors include location of employees, tangible property, production activities, sources of income, and where sales take place. Tosco Corp. v. Communities for a Better Environment, 236 F.3d 495, 500 (9th Cir. 2001).

III. DISCUSSION

Major nationwide corporations are usually not found to have a state in which a "substantial predominance" of their business activities take place. See, e.g., Ho v. Ikon Office Solutions Inc., 143 F.Supp.2d 1163 (N.D. Cal. 2001). UPS maintains less than ten percent of its workforce and facilities in California. (Swift Declaration ¶ 8-9). Although California does have the highest level of UPS activity, other states fall within four percent of California's numbers and California has a larger population than most other states. (Id.; Response to OSC 3:25-4:6 (quoting Ho, 143 F.Supp.2d. at 1167-68)). Because UPS provides similar service in all fifty states and internationally, a "substantial predominance" of its business activity does not take place in any single state. (Swift Declaration ¶ 4).

When no single state encompasses a "substantial predominance" of an organization's business activity, an organization's principal place of business is the state in which its "nerve center" is located. (Response to OSC 4:7-10 (quoting Ho, 143 F.Supp.2d. at 1167-68)). UPS's executive and administrative functions are all located in Atlanta, Georgia, from corporate headquarters (which oversees all of UPS's major departments) to the members of UPS's Management Committee. (Swift Declaration ¶ 3, 5-6). UPS also files its federal taxes in Georgia and is publicly known as maintaining headquarters in Georgia. (Id. ¶ 7). Therefore, UPS's principal place of business for purposes of diversity jurisdiction is Georgia, and there is diversity between Plaintiff and Defendant.

IV. CONCLUSION

Defendant has demonstrated that its principal place of business is Georgia. The Court is satisfied that subject matter jurisdiction is proper and maintains jurisdiction in this case.

IT IS SO ORDERED.


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