In a succinct per curiam
opinion, the Eleventh Circuit sensibly holds that a formally dissolved
corporation has no principal place of business. Accordingly, for diversity
jurisdiction purposes, such a corporation will be deemed a citizen only of the
states in which it is incorporated. Holston Invs., Inc. v. Lanlogistics,
Corp., 677 F.3d 1068, 2012 U.S. App. LEXIS 7760 (11th Cir. Apr. 17, 2012)
Facts and Procedural Background. Plaintiffs, including an individual
citizen of Florida, brought an action for breach of contract against a
corporation in federal court, asserting diversity jurisdiction [see 28
U.S.C. § 1332]. The defendant had been incorporated in Delaware and had
maintained its corporate headquarters in Florida, but the corporation had
dissolved. The Florida Secretary of State had processed and filed documents
withdrawing the defendant's authority to transact business in Florida. The
plaintiffs filed this lawsuit on June 6, 2008-more than four months after the
defendant had formally forfeited its authority to conduct business in Florida.
Two years later, after summary judgment had been entered for the plaintiff, the
defendant moved to vacate the judgment, challenging the district court's subject
matter jurisdiction. The defendant asserted that it was still a citizen of
Florida and, therefore, the parties were not diverse. The district court denied
the motion, and the Eleventh Circuit affirmed this part of the district court's
judgment, concluding that the district court had diversity jurisdiction because
the defendant was a citizen only of Delaware.
Basic Subject Matter Jurisdiction Rules: The opinion began with a
recitation of some important black letter principles relevant to whether
subject matter jurisdiction existed. First, federal subject matter jurisdiction
is determined based on the facts that exist at the time a law suit is filed,
and not at the time of the events that gave rise to the action [see Smith
v. Sperling, 354 U.S. 91, 93 n.1, 77 S. Ct. 1112, 1 L. Ed. 2d 1205 (1957)].
Additionally, complete diversity is required: the citizenship of each plaintiff
must be different from that of each defendant [see Owen Equip. & Erection Co.
v. Kroger, 437 U.S. 365, 373, 98 S. Ct. 2396, 57 L. Ed. 2d 274
Circuit Split on Citizenship of Dissolved Corporations. Section 1332 of
Title 28, as amended by the Jurisdiction and Venue Clarification Act of 2011,
specifies that a corporation is "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)].
However, the statute does not address how to deal with a corporation that has
been dissolved by the time a law suit is filed. Thus, the issue before the
Eleventh Circuit was whether the dissolved corporation continued to have its
principal place of business in Florida. The Eleventh Circuit had not decided
this issue, but the four other circuits that had ruled on the issue disagreed,
taking essentially three different approaches.
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of the statutes cited in this article:
Holston Invs., Inc. v. Lanlogistics, Corp., 677 F.3d 1068, 2012 U.S. App. LEXIS 7760 (11th Cir.
Apr. 17, 2012) (per curiam)
28 U.S.C. § 1332
Smith v. Sperling, 354 U.S. 91, 93 n.1, 77 S. Ct. 1112, 1
L. Ed. 2d 1205 (1957)
Owen Equip. &
Erection Co. v. Kroger, 437 U.S. 365, 373,
98 S. Ct. 2396, 57 L. Ed. 2d 274 (1978)