Adouk v. FilmTec Corporation
- John Tunheim
- 0:19-cv-01407
- U.S. District Court · District of Minnesota
- 6
In Adouk v. FilmTec, Judge Tunheim denied remand because FilmTec showed its corporate nerve center was in Delaware, supporting diversity jurisdiction.
Sonia Adouk’s lawsuit remained in federal court rather than returning to Minnesota state court; FilmTec Corporation prevailed on the remand issue.
What happened
Sonia Adouk sued her former employer, FilmTec Corporation, in Minnesota state court, alleging sex discrimination and reprisal under the Minnesota Human Rights Act. FilmTec moved the case to federal court, and Adouk asked the federal court to send it back.
The court decided that FilmTec had shown its main center of corporate control was in Delaware when Adouk filed the case. Although FilmTec operated in Minnesota, important decisions required approval from Delaware, its board members were there, and its corporate records were maintained there.
In Adouk v. FilmTec Corporation, Judge Tunheim ruled that the parties were citizens of different states and that federal diversity jurisdiction existed. The court denied Adouk’s Motion to Remand.
The detailed version
- Adouk v. FilmTec Corporation · No. 0:19-cv-01407
- John Tunheim
- Oct. 4, 2019
Background
Sonia Adouk brought a Minnesota state-court lawsuit against FilmTec Corporation, alleging sex discrimination and reprisal under the Minnesota Human Rights Act. Adouk alleged that several supervisors repeatedly subjected her to unwanted sexual harassment during her employment and that FilmTec fired her in December 2018.
FilmTec removed the case to federal court based on diversity jurisdiction. Diversity jurisdiction allows a federal court to hear certain cases involving citizens of different states when the amount in controversy exceeds $75,000. Adouk moved to remand, or return, the case to Hennepin County District Court. The parties did not dispute that the amount-in-controversy requirement was satisfied.
Legal standard
For diversity jurisdiction, a corporation is a citizen both of its state of incorporation and of the state containing its principal place of business. The principal place of business is the corporation’s “nerve center”—the place where its officers direct, control, and coordinate its activities.
The party that removes a case to federal court must prove federal jurisdiction by a preponderance of the evidence, meaning that the jurisdictional facts are more likely true than not. Any remaining doubts generally favor returning the case to state court.
The court explained that a subsidiary generally has its own principal place of business unless it is merely the parent company’s alter ego or agent. The determination is fact-based.
Court’s analysis
FilmTec’s only physical location and all of its employees were in Minnesota. FilmTec had also identified Minnesota as its principal place of business in two official filings in 2018. However, the court focused on FilmTec’s citizenship when Adouk began the case in May 2019.
FilmTec became a wholly owned subsidiary of DuPont de Nemours, Inc. on April 1, 2019. After that reorganization, strategic instructions and guidance came from DuPont’s headquarters in Delaware. The highest-ranking manager at FilmTec’s Minnesota location needed approval from Delaware before making significant operational decisions. DuPont’s headquarters also approved FilmTec employee terminations and reviewed FilmTec’s legal issues. FilmTec’s three board members were based in Delaware, and its corporate books and records were managed and maintained there.
The court concluded that these facts sufficiently showed that FilmTec’s nerve center was in Delaware before Adouk filed the case. FilmTec therefore met its burden of showing that complete diversity existed, making federal jurisdiction proper. The court found that FilmTec’s earlier representations about Minnesota did not change the analysis because they concerned a period before April 1, 2019.
Disposition
The court DENIED Plaintiff’s Motion to Remand. The opinion did not state that the motion was denied with or without prejudice.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.