Opinion
Case No. 2.-03-CV-763 DAK
November 26, 2003
ORDER REMANDING CASE
This matter is before the court on the Plaintiffs Motion to Remand pursuant to 28 U.S.C. § 1447. On September 5, 2003, Defendants removed this action from the Fourth Judicial District Court for Millard County, State of Utah, civil no. 030700118.
Because this case presents only state law causes of action, Defendants removed this case on the basis of diversity of citizenship under 28 U.S.C. § 1332. Under 28 U.S.C. § 1441(b) a case based on diversity of citizenship "shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." Plaintiff is a Utah corporation and asserts that Defendant Sunnyside Cogeneration Associates ("SCA") is as well. SCA is a joint venture doing business in Utah.
The citizenship of a partnership or joint venture is determined by the citizenship of each of its partners or owners. Garden v. Arkoma Assoc., 494 U.S. 185, 195 (1980); Depex Reina 9 Partnership v. Texas Int'l Petroleum Corp., 897 F.2d 461, 483 (10th Cir. 1990). A corporation's citizenship is determined by both the state of its incorporation and its principal place of business. 28 U.S.C. § 1332(c)(1). The participants in the SCA joint venture are Sunnyside Holdings I, Inc., a Delaware corporation, and Sunnyside II, L.P., a Delaware limited partnership whose partners are Sunnyside II, Inc., a Delaware corporation, and Sunnyside III, Inc., a Delaware corporation (participants in SCA will hereinafter be referred to collectively as "SCA Partners").
The parties' dispute is whether the SCA Partners' principal place of business is in Utah. In Amoco Rocmount Co. v. Anschutz Corp., 7 F.3d 909 (10th Cir. 1993), the Tenth Circuit adopted a "total activity" approach to determine the location of a company's principal place of business. Id. at 915. Therefore, a company's principal place of business is where it conducts the bulk of its daily operations, even if a company's executive headquarters is located in a different state. Id. The factors considered to determine the "principal place of business" include: location of corporate offices, location of corporate assets, location of manufacturing facilities, residence of corporate directors, officers, and employees, location of bank accounts, location where accounts are managed, location of board of directors meetings, and location where sales are made. United Nuclear Corp. v. Moki Oil rare Metals Co., 364 F.2d 568 (10th Cir. 1966).
The SCA Partners argue that their activities are centered outside of Utah-their officers and directors reside outside of Utah, their corporate offices are outside of Utah, their administrative activities such as bookkeeping and accounting are performed outside of Utah, their officers and directors meet outside of Utah, they do not have employees in Utah, they do not own property in Utah, do not have bank accounts, and do not have the majority of their assets in Utah.
However, Plaintiff argues that the SCA Partners also have no real corporate activity elsewhere and their single line of business and sole raison d'etre is to be owners of SCA, a Utah power production venture. District courts within the Tenth Circuit, applying the total activity approach adopted by the Tenth Circuit, have also adopted the single line of business rule. See Pine Ridge Realty Corp. v. Block Co., Inc., 1997 WL 292136 (D. Kan. May 16, 1997). "[W]hen a corporation is engaged in a single line of business with its operating functions located in one state, and executive and administrative offices in another state, its principal place of business for diversity purposes is the former state." 13B Charles A. Wright et al., Federal Practice and Procedure § 3625, at 625-32 (2d ed. 1984).
The SCA Partners have no employees, production facilities, distribution facilities, or managers in any state. Their single line of business is to own and operate the waste coal fired power project in Sunnyside, Utah. The fact that the SCA Partners have chosen to delegate management and operational responsibilities contractually to an entity under their control, COSI, does not lessen the SCA Partners business in Utah. Under the single line of business rale, which this court concludes is applicable, the SCA Partners' principal place of business is Utah, The SCA Partners have not met their burden that their principal place of business is not in Utah. See Amoco, 7 F.3d at 914.
Accordingly, diversity jurisdiction does not exist in this court and Plaintiffs motion to remand is granted. This case is remanded to the Fourth Judicial District Court for Millard County, State of Utah. Pursuant to 42 U.S.C. § 1447(c), the clerk of this court shall mail a certified copy of this order of remand to the clerk of said state court. DATED this 26th day of November, 2003.
Plaintiff seeks an award of attorney fees because removal was wrong as a matter of law. However, the language of 28 U.S.C. § 1447(c) is discretionary, and the court declines to award fees in this case.