visionqwest

1Notice of Removal, Ex. 4 (Complaint), Docket No. 1 (Nov. 7, 2011).

2Complaint at 1.

3Id., ¶ 10.

4Id., ¶ 15.

5Id.

UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 11-09238 MMM (JCx) Date April 26, 2012

Title VisionQwest Resource Group, Inc. v. Pacquiao, et al.

Present: The Honorable MARGARET M. MORROW

ANEL HUERTA N/ADeputy Clerk Court Reporter

Attorneys Present for Plaintiff: Attorneys Present for Defendant:

None None

Proceedings: Order Granting Motion to Remand

I. FACTUAL BACKGROUND

On October 12, 2011, VisionQwest Resource Group, Inc., dba Vision Quest AccountancyGroup (“VisionQwest”), commenced this action in Los Angeles Superior Court against EmmanuelD. Pacquiao and MP Promotions USA, Inc (“MP Promotions”).1 Plaintiff asserted claims for breachof contract, account stated, open account, and unjust enrichment, as well as a claim based on alter egoliability.2

VisionQwest alleges that, on behalf of MP Promotions, Pacquiao contracted with it foraccounting, tax and business advisory services.3 It contends that in addition to performing accounting,tax and advisory services, it also made personal loans to defendants.4 VisionQwest alleges that thevalue of the services and loans it provided was $649,016.95, and that this sum remains unpaid.5

Case 2:11-cv-09238-MMM-JC Document 25 Filed 04/26/12 Page 1 of 12 Page ID #:1029

6Id., ¶ 10.

7Id. at 8-9.

8Notice of Removal, Docket No. 1, Nov. 7, 2011.

9Motion for Remand, Docket No. 13 (January 12, 2012). See also Reply in Support of Motionof Remand, Docket No. 23 (Apr. 4, 2012).

10Defendants’ Memorandum of Points and Authorities in Opposition to Plaintiff’s Motion forRemand (“Opp.”), Docket No. 17 (Feb. 17, 2012).

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VisionQwest asserts that Pacquiao is the alter ego of MP Promotions because he is the onlyshareholder of MP Promotions, MP Promotions is completely dominated and controlled by Pacquiao,no stock was ever issued by MP Promotions, MP Promotions was insufficiently capitalized byPacquiao, and numerous banking transfers were made to foreign bank accounts.6 VisionQwest seeksdamages of no less than $649,016.95, reasonable attorneys’ fees, costs, interest, and such other reliefas the court deems just and proper.7

On November 7, 2011, defendants removed the action to this court, asserting that it fell withinthe court’s diversity jurisdiction.8 On January 12, 2012, plaintiff filed a motion to remand.9

Defendants oppose the motion.10 The motion is currently on calendar for hearing on April 30, 2012at 9:00 a.m. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, thecourt finds the matter appropriate for decision without oral argument. The hearing and schedulingconference set for April 30, 2012 are therefore vacated and taken off calendar.

II. DISCUSSION

A. Whether Plaintiff’s Motion Should Be Denied for Failure to Comply with LocalRule 7-3

Local Rule 7-3 provides, in relevant part, that “counsel contemplating the filing of any motionshall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of thecontemplated motion and any potential resolution. If the proposed motion is one which under theF.R.Civ.P. must be filed within a specified period of time . . . , then this conference shall take placeat least five (5) days prior to the last day for filing the motion; otherwise, the conference shall takeplace at least twenty (20) days prior to the filing of the motion.” CA CD L.R. 7-3 (emphasisoriginal).

Defendants assert that plaintiff failed to comply with Local Rule 7–3 before filing its motion.Defendants acknowledge that plaintiff discussed with them the possibility that it would file a motion


11Opp., Ex. 6 (Declaration of Matthew Mrkonic).

12Stipulation for Extension of Time to File Plaintiff’s Motion to Remand, Docket No. 6 (Nov.14, 2011).

13Opp. at 2.

14Id.

15Order, Docket No. 7 (Nov. 15, 2011).

16Notice of Discrepancy, Docket No. 12 (Jan. 9, 2012).3

to remand, but contends that plaintiff’s counsel did not discuss the substance of the motion.11 Thecourt concludes that any noncompliance was “so slight and unimportant that the sensible treatmentis to overlook [it].” Professional Programs Group v. Dep’t of Commerce, 29 F.3d 1349, 1353 (9thCir. 1994). Defendants agreed to give plaintiff an extended period to file a motion to remand; thisindicates that they were well aware of the possibility that plaintiff would file such a motion.12 Whiledefendants assert that receiving notice of the substance of plaintiff’s motion would have given themtime to adduce proof of their citizenship,13 they have had sufficient opportunity to submit suchevidence in opposition to the motion. While the court does not condone the parties’ failure to complywith the Local Rules, it concludes that enforcing Rule 7-3 would not advance disposition of thislitigation.

Speicifically, defendants identify no cognizable injury or prejudice flowing from plaintiff’sfailure to comply with Local Rule 7-3. The parties clearly dispute whether remand is appropriate andhave adduced factual evidence in support of their respective positions. The court can discern noreason to strike the motion under the Local Rules as it appears that the parties cannot resolve theirsubstantive disagreements. Consequently, the court declines to deny plaintiff’s motion for remandon the basis that plaintiff failed to comply with Local Rule 7-3.

B. Plaintiff’s Failure to File a Timely Motion to Remand

Local Rule 7-12 provides that “[t]he failure to file any required paper, or the failure to file itwithin the deadline, may be deemed consent to the granting or denial of the motion.” CA CD L.R.7-12. As noted, the parties filed a stipulation requesting that the court grant plaintiff additional timeto file a motion for remand.14 Pursuant to the stipulation, the court granted plaintiff until January 9,2012, to seek remand.15 Plaintiff filed a motion to remand on January 9, 2012, but the filing wasrejected because the case was designated for electronic filing.16 Plaintiff electronically filed themotion on January 12, 2012. Plaintiff’s failure to file a timely remand motion could be grounds todeny the motion. See Borchers v. Standard Fire Ins. Co., No. 10-1706, 2010 WL 2608291 *1-2(N.D. Cal. June 25, 2010). Failure to comply with a Local Rule, however, “does not render a timelyfiled motion to remand untimely simply because the movant is required to amend that motion to


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comply with a local rule.” Bilbruck v. BNSF Railway Co., 243 Fed. Appx. 293, 295 (9th Cir. July30, 2007) (Unpub Disp.). See also Phoenix Global Ventures, LLC v. Phoenix Hotel Associates, Ltd..422 F.3d 72, 76 (2d. Cir. 2005) (holding that a district court could excuse failures to comply withrules regulating its electronic case filing system for purposes of determining when a motion was filed).The court thus deems plaintiff’s motion timely and addresses the merits of the motion below.

C. Legal Standard Governing Removal Jurisdiction

The right to remove a case to federal court is entirely a creature of statute. See Libhart v.Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C.§ 1441, allows defendants to remove when a case originally filed in state court presents a federalquestion or is between citizens of different states and involves an amount in controversy that exceeds$75,000. See 28 U.S.C. §§ 1441(a), (b); see also 28 U.S.C. §§ 1331, 1332(a). Only state courtactions that could originally have been filed in federal court may be removed. 28 U.S.C. § 1441(a);see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); Ethridge v. Harbor House Rest., 861F.2d 1389, 1393 (9th Cir. 1988).

The Ninth Circuit “strictly construe[s] the removal statute against removal jurisdiction,” and“[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the firstinstance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs v. Lewis, 863 F.2d662, 663 (9th Cir. 1988), Takeda v. Northwestern Nat’l Life Ins. Co., 765 F.2d 815, 818 (9th Cir.1985), and Libhart, 592 F.2d at 1064). “The ‘strong presumption’ against removal jurisdiction meansthat the defendant always has the burden of establishing that removal is proper.” Id. (citing Nishimotov. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Cir. 1990), and Emrich v. Touche Ross& Co., 846 F.2d 1190, 1195 (9th Cir. 1988)).

D. Requirements for Diversity Jurisdiction

“The district courts . . . have original jurisdiction of all civil actions where the matter incontroversy exceeds the sum or value of $75,000, exclusive of interest and costs. . . .” 28 U.S.C.§ 1332(a); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003)(“[J]urisdiction founded on [diversity] requires that the parties be in complete diversity and theamount in controversy exceed $75,000”). In any case where subject matter jurisdiction is premisedon diversity of citizenship, there must be complete diversity, i.e, all plaintiffs must have citizenshipdifferent than all defendants. See Strawbridge v. Curtis, 7 U.S. (3 Cranch) 267 (1806); see alsoCaterpillar Inc. v. Lewis, 519 U.S. 61, 68 & n. 3 (1996). “Diversity jurisdiction is determined atthe time the action commences, and a federal court is not divested of jurisdiction . . . if the amountin controversy subsequently drops below the minimum jurisdictional level.” Hill v. Blind Industriesand Services of Maryland, 179 F.3d 754, 757 (9th Cir. 1999) (emphasis added).


17Id. at 2.

18Id. at 7.

19Id., Exs. 1 and 2.

20Id., Ex. 1 at 10; Id., Ex. 2 at 10.

21Plaintiff titles one section of his brief as follows: “The causes of action are state court claims,not federal court causes of action; therefore, the matter should be remanded.” (Motion at 9.) In thatsection, it argues that“[t]he case must be remanded if there is ‘even a possibility’ that a state courtwould find that the complaint stated a cause of action against a resident defendant,” citing Coker v.Amoco Oil Co., 709 F.2d 1433 (11th Cir. 1983). The quotation from Coker addresses therequirements for demonstrating fraudulent joinder, which is not an issue in this case. Insofar asplaintiff asserts that the case must be remanded because the complaint alleges solely state law claims,as noted above, a federal court sitting in diversity may properly hear state law claims, and plaintiffoffers no authority suggesting otherwise.

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E. Whether the Court Lacks Jurisdiction Due to a Provision in the Parties’ Contract

Plaintiff argues there is no diversity jurisdiction because “[d]efendants agreed that the Stateof California maintained jurisdiction over any dispute arising out of the service contracts. . . .”17 Itasserts that “[d]efendants clearly accepted jurisdiction of the State of California.”18 In support of thisargument, it proffers copies of its contracts with Pacquiao and with MP Promotions.19 The contractscontain identical clauses that state: Law: This Contract, and the rights of the parties under thisContract, shall be interpreted according to the internal law, but not the conflict of law rules, of theState of California.”20

These provision merely reflect the parties’ agreement that California substantive law willgovern resolution of any disputes. Nowhere does the contract state that defendants waive their rightto litigate in a federal forum, or that California courts have exclusive jurisdiction over all legaldisputes arising out of the contracts

Morever, it is a basic tenet of civil procedure that federal courts sitting in diversity jurisdictionapply state substantive law. See Erie R. Co. v. Tompkins, 304 U.S. 64 (1938); see also Gee v.Tenneco, Inc., 615 F.2d 857, 861 (9th Cir. 1980) (“The task of a federal court in a diversity actionis to approximate state law as closely as possible. . .”). Federal courts thus apply state law as choiceof law provisions require. The court therefore proceeds to consider whether the requirements fordiversity jurisdiction have been met.21


22Complaint at 8.

23Notice of Removal, ¶ 5(a)(i) (citing Complaint, ¶ 1).

24Id., ¶ 5(a)(ii).

25Id.

26Declaration of Emmanuel D. Pacquiao (“Pacquiao Decl.”), Docket No. 17 (Feb. 27, 2012).6

F. Whether the Court Has Diversity Jurisdiction to Hear This Case

Plaintiff’s complaint seeks damages not less than $649,016.95.22 This amount clearly exceedthe minimum amount in controversy required of more than $75,000. The parties’ primary disputeconcerns the citizenship of Pacquiao and MP Productions.

When removal is based on diversity of citizenship, a defendant’s notice of removal must statethe citizenship of all parties to the action. Barahona v. Orkin , No. CV 08-04634-RGK (SHx), 2008WL 4724054, *2 (C.D. Cal. Oct. 21, 2008). “A person’s domicile is [his] permanent home, where[ ]he resides with the intention to remain or to which [ ]he intends to return. A person residing in agiven state is not necessarily domiciled there, and thus is not necessarily a citizen of that state.”Kanter v. Warner-Lambert Co. 265 F.3d 853, 857 (9th Cir. 2001) (citations omitted). For thisreason, allegations of residence are not adequate to establish diversity. See Seven Resorts, Inc. v.Cantlen, 57 F.3d 771, 774 (9th Cir. 1995) (“It is black letter law that, for purposes of diversity,‘[r]esidence and citizenship are not the same thing,’” quoting Mantin v. Broadcast Music, Inc., 244F.2d 204, 206 (9th Cir.1957)); Bradford v. Mitchell Bros. Truck Lines, 217 F.Supp. 525, 527 (C.D.Cal. 1963). “Absent unusual circumstances, a party seeking to invoke diversity jurisdiction shouldbe able to allege affirmatively the actual citizenship of the relevant parties.” Wingfield v. TargetCorp., No. CV 09-2663 PA (MANx), 2009 WL 1068867, *1 (C.D. Cal. Apr. 21, 2009) (quotingKanter, 265 F.3d at 857).

Defendants assert that complete diversity exists because: (1) plaintiff is a California corporationthat has its principal place of business in Los Angeles, California;23 (2) Pacquiao is a citizen of thePhilippines;24 and (3) MP Promotions is a Nevada corporation with its principal place of business inLas Vegas, Nevada.25 As the parties do not dispute plaintiff’s citizenship, the court examines theircontentions regarding the citizenship of Pacquiao and MP Promotions.

1. Pacquiao’s Citizenship

Pacquiao proffers a declaration stating he is a citizen of the Philippines. He notes that he iscurrently an elected member of Congress in that country,26 and contends that he is neither a United


27Id.

28Motion for Remand, Ex. 3

29Motion for Remand, Exs. 4-6.7

States citizen nor a permanent resident of this country.27

Plaintiff argues that Pacquiao has resided in California. It proffers as evidence the fact thatPacquiao has a California driver’s license that reflects a California address,28 and various bankstatements sent to Pacquiao at different addresses in the Los Angeles vicinity.29 Plaintiff fails torecognize that diversity jurisdiction is premised on citizenship rather than residency. Strawbridge v.Curtis, 7 U.S. (3 Cranch) 267 (1806). “In order to be a citizen of a State within the meaning of thediversity statute, a natural person must both be a citizen of the United States and be domiciled withinthe State.” Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989). Information abouta party’s residence does not prove a party’s citizenship. See Mantin v. Broadcast Music, Inc., 244F.2d 204, 206 (9th Cir. 1957). Plaintiff’s rather thin evidence thus fails to address the relevantinquiry.

Assuming arguendo that Pacquiao maintains a residence in California, that alone does notsuffice to show that his domicile is in the state, especially as it is undisputed that Pacquiao is a citizenof the Phillippines, not the United States. See Kanter, 265 F.3d at 857-58 (“To be a citizen of a state,a natural person must first be a citizen of the United States. The natural person’s state citizenship isthen determined by her state of domicile, not her state of residence. A person’s domicile is herpermanent home, where she resides with the intention to remain or to which she intends to return.A person residing in a given state is not necessarily domiciled there, and thus is not necessarily acitizen of that state. In this case, neither Plaintiffs’ complaint nor Pfizer’s notice of removal madeany allegation regarding Plaintiffs’ state citizenship. Since the party asserting diversity jurisdictionbears the burden of proof, Pfizer’s failure to specify Plaintiffs’ state citizenship was fatal toDefendants’ assertion of diversity jurisdiction” (citations omitted)); Weible v. United States, 244 F.2d158, 163 (9th Cir. 1957) (“Residence is physical, whereas domicile is generally a compound ofphysical presence plus an intention to make a certain definite place one’s permanent abode. . .”);Baldwin v. Monier Lifetile, L.L.C., No. CIV05-1058PHXJAT, 2005 WL 3334344, *2 (D. Ariz. Dec.7, 2005) (“The parties in this case have failed to allege the Plaintiffs’ state of citizenship. Allegationsof residency but not citizenship are insufficient to determine the existence of diversity jurisdiction”(citations omitted)). For these reasons, plaintiff has failed to show that Pacquiao is a citizen of thisstate; his residency here does not controvert strong evidence that he maintains his domicile in thePhillippines.

2. MP Promotions’ Citizenship

Plaintiff also disputes MP Promotions’ allegations regarding its citizenship. Plaintiff notes that


30Motion for Remand at 7.

31Id. at 8-9.

32While plaintiff contends that MP Promotion’s default status is relevant in assessing diversityjurisdiction, the authority it cites shows that it is actually addressing personal jurisdiction. As aNevada corporation, Nevada laws determine whether MP Promotions can sue or be sued in federalcourt. See FED.R.CIV.PROC. 17(b)(2) (“Capacity to sue or be sued is determine as follows: . . .(2) for a corporation, by the law under which it was organized”). A Nevada corporation in defaultmay sue and be sued in any court for up to one year after it enters default status. After the passageof a year, the corporation’s charter is revoked if it fails to correct its default status. NEV. REV. STAT.§§ 78.060(2), 78.175(2). As a result, MP Promotions’ default status does not affect its citizenshipfor purposes of this suit. The court notes further that MP Promotions has apparently cured its defaultstatus with the Nevada Secretary of State. As of February 27, 2012, MP Promotions’ current statusis “Active.” (See Business Entity Search, NEV. SEC’Y OF STATE,http://nvsos.gov/sosentitysearch/CorpSearch.aspx: see also Viper Networks, Inc. v. Rates TechnologyInc., Civil No. 09cv768 L(RBB), 2009 WL 4261167, *5 (S.D. Cal., Nov. 23, 2009) (holding thata Nevada corporation that cured its default status was an active corporation under state law and couldsue or be sued)).

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at one point, MP Productions was in “default status” with the Nevada Secretary of State, indicatingthat it had let its registered status in the state lapse.30 Plaintiff also argues that despite defendant’sassertions to the contrary, MP Promotions’ principal place of business is California.31

Plaintiff’s argument regarding MP Promotions’ default status conflates its state of incorporationwith its current status in that state. It is undisputed that MP Promotions was incorporated inNevada.32 The court must base its determination regarding MP Promotions’ citizenship not on itscurrent status with the Nevada Secretary of State, but on the state where it chose to incorporate. Thatstate was Nevada. The court thus turns to assessing MP Promotions’ principal place of business.

28 U.S.C. § 1332(c) states that “a corporation shall be deemed to be a citizen of any State bywhich it has been incorporated and of the State where it has its principal place of business.” 28U.S.C. § 1332(c). Plaintiff relies on outdated tests for determining corporate citizenship, such as the“place of operations” test. The Supreme Court has conclusively determined that the nerve center testmust be used to determine a corporation’s principal place of business. Hertz Corp. v. Friend, 130S.Ct. 1181 (2010). A corporation’s nerve center is typically its corporate headquarters. Id. at 1186.As the Supreme Court has stated, the principal place of business is best understood as the “placewhere a corporation’s officers direct, control, and coordinate the corporation’s activities” Id. at 1192.

Plaintiff asserts it had a working relationship with MP Productions in California, access todocuments and information regarding the corporation here, and direct interaction with Michael Koncz,


33Motion for Remand at 12-15. Lodge’s declaration was not filed as a separate document. (Id.at 12.)

34Id. at 3.

35Id. at 4.

36Id. at 5.

37Id.

38Id.

39Id. at 8.

40Id. at 15.

41Id.

42Id.9

a corporate representative, in the state.33 Relying on this information, it argues that MP Promotions’principal place of business is California because (1) “MP Promotions conducts business and ownsproperty in California”;34 (2) MP Promotions’ bank accounts list a California address;35 (3) MPPromotions does not have a Nevada bank account;36 (4) MP Promotions does not have a headquartersor office in Nevada;37 (5) business was rarely conducted in Nevada, and operations generally tookplace in California or the Philippines;38 and (6) excepting a tax return that listed another business’address, and the address used for service of process, MP Promotions has no Nevada address whereit regularly receives correspondence.39

The court evaluates these allegations to determine what they show about the direction, control,or coordination of MP Promotions’ activities. Where bank accounts are held, where physical officesare located, and which address is used to receive mail are all indicia of such control or coordinationof corporate activities. The strongest evidence that MP Productions is a California citizen is the factthat Koncz conducted business for it at an office located in his California home. Plaintiff proffers thedeclaration of Michael Lodge, an accountant for defendants and someone who has knowledge ofdefendants’ business operations. Lodge states that Pacquiao purchased Koncz’s California residencein order “to conduct Defendants’ various business enterprises.”40 He also asserts that Konczmaintains a business office at his home “for the sole purpose of running MP Promotions USA, Inc.and Mr. Pacquiao’s other business affairs.”41 Lodge contends he traveled to Koncz’s home to pickup business documents, lending credibility to his claim that that is where “all of Defendants’ businessrecords” were kept.42 Plaintiff’s evidence gives rise to a colorable claim that Koncz was directing MPProductions’ corporate activities from California.


43Opposition to Motion to Remand, Docket No. 17 (Feb. 27, 2012) at 8, 10-11.

44Declaration of Michael Koncz (“Koncz Decl.”), Docket No. 17 (Feb. 27, 2012), ¶ 3.Defendants note that Pacquiao and his brother Rogelio hold officer positions in MP Promotions.(Id..) Pacquiao’s declaration primarily addresses his citizenship for diversity jurisdiction purposes;it discusses where he fights and trains, but is silent as to where, if anywhere, he directs, controls, orcoordinates the activities of the corporation. (Pacquiao Decl.) No information has been submittedregarding Rogelio Pacquiao’s activities. Lacking any record as to either Pacquiao’s or his brother’srole as a corporate officer, the court limit its analysis to Koncz’s activities on behalf of thecorporation.

45Id., ¶ 11.

46Opposition to Motion to Remand at 12.

47Declaration of Michael Koncz, ¶ 7.

48Id., ¶ 4.

49Id., ¶ 7.

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Defendants agree that their Nevada headquarters is shared with another business, but contendthis does not show that the headquarters are a “sham.”43 Where, as here, there is a factual disputeas to whether the corporate headquarters are in fact the principal place of business of the company,however, the court must determine “where the corporation’s officers direct, control, and coordinatethe corporation's activities.” Hertz Corp., 130 S.Ct. at 1192. As defendant admits that Koncz is thebusiness manager and only compensated employee of MP Promotions,44 the court must conclude thathe is the individual who directs, controls, and coordinates corporate activities. While Koncz does notdispute that he lives in California, and admits that he receives some mail in the state,45 defendantscontend that he conducted no work for MP Promotions in California.46 The evidence they proffer tosupport this contention is more notable for its gaps than its probative weight. While Koncz states thathe spends two to three months a year in Las Vegas, and four to five months a year in thePhilippines,47 he does not address where he spends the balance of his time. It is thus a reasonableinference is that Koncz spends four to six months at his home in California. Moreover, Koncz’sgeographic location during certain times of the year does not address where it is that he directs,controls, and coordinateds MP Productions’s activities. This, of course, is the crucial inquiry.

Koncz describes his activities on behalf of MP Promotions as “promoting professional boxingmatches,”48 “negotiating agreements, making strategic decisions for the company, and communicatingwith the company’s boxers.”49 While Koncz asserts that he makes a majority of MP Promotions’


50Id.

51Koncz does allow, without further specificity, that none of the strategic decisions he makesfor the corporation take place in “California property owned by Pacquiao.” Id.

52The remaining cases defendants cite merely establish the general proposition that acorporation’s principal place of business is where its headquarters are located, where its CEO works,

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strategic decisions in Las Vegas, and that seventy percent of the agreements into which thecorporation enters are negotiated in Las Vegas,50 no breakdown of the other activity in which heengages as a corporate officer is provided. Nor is there any indication where this other activity takesplace.51 For example, Koncz discusses various activities he undertakes for the business, such as“making strategic decisions,” marketing and advertising promoted fights, and conducting otherpromotional activities. He proffers no evidence, however, as to where these activities take place.That certain company-sponsored events take place in Las Vegas does not prove that corporate activitythat led to the events was directed or controlled in that state. Nor is evidence as to where the boxingmatches promoted by the corporation take place, where the corporation’s associated boxers reside,and where contractors who are typically used for corporate events are located probative of the locationfrom which the corporation’s activities are directed, controlled or coordinated. The fact that abusiness contracts with third parties outside California does not demonstrate that it directs, controlsor coordinates its activities from the state(s) where the third parties are located.

The authority defendants cite is either inapposite or supports the court’s conclusion. InL’Garde, Inc. v. Raytheon Space & Airborne Sys., 805 F.Supp.2d 932 (C.D. Cal. 2011), the courtfound that a corporation’s principal place of business was where its physical headquarters werelocated, where five of twelve executive officers, including the CEO, worked, where other departmentsconducted operations, where its board met, and where official forms designated the principal placeof business. Id. at 940. Here, the sole corporate employee appears to spend as much time inCalifornia as in Nevada and there is no evidence that executive officer activities, departments, orboard meetings take place exclusively in Nevada.

In re Hydroxycut Marketing and Sales Practices Litigation, No. 09MD2087-BTM (AJB), 2010WL 2998855 (S.D. Cal. July 29, 2010), held that even though the business activities of a corporationthat were visible to the public took place in one location, its principal place of business was locatedwhere those activities were directed. Id. at *4. This demonstrates that while MP Promotions’publicly visible business activities – its promoted fights – might take place in Nevada, it principalplace of business is determined by the location from which those activities were directed. Given theparties’ dispute, and defendant’s burden of proving that diversity jurisdiction exists, the court iscompelled to resolve all doubts about where MP Promotions’ principal place of business is locatedin favor of plaintiff.52


and where other business functions are handled. See Central W. Va. Energy Co., Inc. v. MountainState Carbon, LLC, 636 F.3d 101, 106-07 (4th Cir. 2011); Miller v. Swiss Re Underwriters Agency,Inc., No. 09-09551, 2010 WL 935697, *1 (C.D. Cal. Mar. 15, 2010). In this case, where MPPromotions’ headquarters are located, and where Koncz directed, controlled and coordinated MPPromotions activities are in dispute. The Ninth Circuit requires that all doubts be resolved in favorof remand.

53Plaintiff argues that defendants “colluded by misrepresenting that this matter should beremoved to federal jurisdiction.” (Motion for Remand at 11.) It misconstrues the statute it cites –28 U.S.C. § 1359. That statute states; “A district court shall not have jurisdiction of a civil actionin which any party, by assignment or otherwise, has been improperly or collusively made or joinedto invoke the jurisdiction of such current defendants in its complaint.” There is no evidence that anyparty has been improperly or collusively joined, and this statute thus does not assists plaintiff inshowing that federal jurisdiction exists.

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The Ninth Circuit strictly resolves all doubts in favor of removal, Gaus, 980 F.2d at 566, anddefendant bears the burden of proving that removal is proper. Nishimoto v. Federman-Bachrach &Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990). As a result, other courts in this circuit have foundthat remand is appropriate where a genuine factual dispute exists as to whether the citizenship of theparties is completely diverse. See Goldenberg Family Trust v. Travelers Comm. Ins. Co., No. 11-04312, 2011 WL 3648490, *2 (C.D. Cal. Aug 18, 2011) (remanding because there was a factualdispute regarding a corporation’s principal place of business); Health Facilities of California Mut. Ins.Co., Inc. v. British American Ins. Gp., Ltd., No. 10-3736, 2011 WL 97695, *3 (C.D. Cal. Jan. 11,2011) (dismissing for lack of jurisdiction because the burden of showing complete diversity was notmet); Arellano v. Vogel, No. 10-4534, 2010 WL 5148292 (N.D. Cal. Dec. 14, 2010) (competingfactual showings required the court to resolve the uncertainty in favor of remand).

Because a genuine factual dispute exists as to whether MP Productions is a California citizen,its presence in the case defeats complete diversity. Applying the general principle that all doubts areresolved in favor of remand, the court directs that the case be remanded.53

III. CONCLUSION

For the reasons stated, plaintiff’s motion to remand is granted. The court orders the clerk toremand this action to Los Angeles Superior Court forthwith.


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