Gail Laule v. JV China, Inc.

USCA11 Case: 22-10263 Date Filed: 06/29/2022 Page: 1 of 5
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10263
Non-Argument Calendar
____________________
GAIL LAULE,
SCOTT SHARPE,
ERIC MONTANDON,
Plaintiffs-Appellants,
versus
JV CHINA, INC.,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 8:21-cv-02023-SDM-TGW
____________________
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2 Opinion of the Court 22-10263
Before ROSENBAUM, GRANT, and BLACK, Circuit Judges.
PER CURIAM:
Appellants Gail Laule, Scott Sharpe, and Eric Montandon,
shareholders of JV China, Inc., sued JV China for a declaration that
JV China refused to accurately record certain transfers of shares.
The district court, sua sponte, requested the parties submit evi-
dence to satisfy complete diversity. The parties submitted re-
sponses, attaching affidavits and declarations as evidence. After re-
viewing the submissions, the district court held the shared Califor-
nia citizenship of Laule and JV China precluded diversity jurisdic-
tion and dismissed the case. Appellants assert the district court
erred because the parties are citizens of different states and com-
plete diversity exists. After review, 1 we affirm the district court.
The complaint asserts that JV China is a Florida corporation.
The complaint also states that “[p]ursuant to its Bylaws, [JV
China’s] principal place of business is to be within the state of Flor-
ida.” However, the complaint does not plead that JV China oper-
ates its principal place of business in Florida. In response to the
district court’s sua sponte order to establish diversity jurisdiction,
1 We review de novo a dismissal for lack of subject matter jurisdiction. Clem-
ents v. LSI Title Agency, Inc., 779 F.3d 1269, 1273 (11th Cir. 2015). “A district
court’s finding as to a corporation’s principal place of business . . . for purposes
of establishing diversity jurisdiction . . . is a question of fact and cannot be
overturned unless it was clearly erroneous.” Sweet Pea Marine, Ltd. v. APJ
Marine, Inc., 411 F.3d 1242, 1247 (11th Cir. 2005).
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22-10263 Opinion of the Court 3
Appellants argue JV China maintains no physical office and that its
Bylaws require it to have any office it maintains in Florida. Appel-
lants contend JV China’s “primary purpose is to hold the shares of
a separate company” named Subic Bay Marine Exploratorium, Inc.
Appellants contend JV China is only domiciled in Florida. 2
JV China contends that California is its principal place of
business. A declaration by corporate secretary Brian Desmond as-
serts (1) he directs strategic decisions from California, (2) California
is the domicile of three of JV China’s five executive officers, (3) JV
China’s bookkeeper operates from California, and (4) JV China
maintains corporate records in California.
Diversity jurisdiction exists if the amount in controversy ex-
ceeds $75,000 and the parties are citizens of different states. 28
U.S.C. § 1332(a). “Diversity jurisdiction, as a general rule, requires
complete diversity—every plaintiff must be diverse from every de-
fendant.” Palmer v. Hosp. Auth. of Randolph Cnty., 22 F.3d 1559,
1564 (11th Cir. 1994). Plaintiffs bear the burden of showing the
court that diversity jurisdiction exists and must support their alle-
gations by competent proof. Hertz Corp. v. Friend, 559 U.S. 77,
96-97 (2010).
2 On appeal, Appellants contend JV China is a citizen of Florida, “and may be
considered a citizen of the Philippines.” Appellants did not argue that JV
China is a citizen of the Philippines before the district court and we will not
consider it for the first time on appeal. See Charles v. Burton, 169 F.3d 1322,
1327 n.8 (11th Cir. 1999)
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4 Opinion of the Court 22-10263
For a natural person, citizenship is equivalent to domicile.
McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir. 2002). The
complaint alleges, and Appellants’ affidavits support, that Laule’s
domicile is California, Montandon’s domicile is Massachusetts, and
Sharpe’s domicile is Hawaii.
“[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 foreign state where it has its principal place of business.”
28 U.S.C. § 1332(c)(1). A corporation’s “principal place of business”
is “the place where the corporation’s high level officers direct, con-
trol, and coordinate the corporation’s activities,” often called the
corporation’s “nerve center.” Hertz, 559 U.S. at 80-81. Normally,
a corporation’s headquarters would constitute its nerve center, but
“some corporations may divide their command and coordinating
functions among officers who work at several different locations,
perhaps communicating over the internet.” Id. at 81, 95-96. How-
ever, the test points “toward the center of overall direction, con-
trol, and coordination.” Id. at 96.
We agree with the district court’s conclusion that Appellants
did not meet their burden of establishing diversity jurisdiction with
competent proof. See Hertz, 559 U.S. at 96-97. Before the district
court, Appellants argued that (1) JV China’s Bylaws required it to
have any office it maintains in Florida, (2) JV China maintains no
physical office, and (3) JV China’s primary purpose is to hold the
shares of a company that operates a resort and marine park in the
Philippines.
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22-10263 Opinion of the Court 5
In contrast, JV China responded with a declaration from its
corporate secretary, Brian Desmond, that (1) he directs strategic
decisions from California, (2) California is the domicile of three of
JV China’s five executive officers, (3) JV China’s bookkeeper oper-
ates from California, and (4) JV China maintains corporate records
in California.
Appellants did not identify JV China’s principal place of busi-
ness; rather, they alleged JV China had no principal place of busi-
ness. While Appellants argue on appeal that courts have recog-
nized that companies without a physical, ongoing place of business
are typically only citizens of their place of incorporation, see Hol-
ston Inv., Inc. B.V.I. v. LanLogistics Corp., 677 F.3d 1068, 1071
(11th Cir. 2012), JV China did submit evidence of an ongoing place
of business in California. Thus, the district court did not clearly err
in finding that JV China’s leadership directs, controls, and coordi-
nates activity from California. See Hertz, 599 U.S. at 80-81.
Because JV China’s principal place of business is in Califor-
nia, and Laule is domiciled in California, the parties are not com-
pletely diverse. See Palmer, 22 F.3d at 1564. We affirm the district
court’s dismissal.
AFFIRMED.