Henry v. Gershan

Background

Seana Henry filed a personal-injury action in New York State Supreme Court, Bronx County, alleging severe and permanent injuries from a motor-vehicle accident in which she was a passenger in a taxicab operated by Steven Gershan. The complaint named Gershan, James Kim, and Dream NJ, Inc. as defendants.

Kim and Dream removed the action to the U.S. District Court for the Southern District of New York based on diversity jurisdiction under 28 U.S.C. § 1332(a). Diversity jurisdiction generally requires complete diversity—no plaintiff and defendant may be citizens of the same state—and an amount in controversy exceeding $75,000. Henry requested remand, arguing that information she obtained indicated Kim was a New York resident.

Jurisdictional standards

The defendants who removed the case bore the burden of showing that removal was proper. For individuals, citizenship depends on domicile—the person’s legal home—not merely residence. For a corporation, citizenship depends on its state of incorporation and its principal place of business, meaning the place where its officers direct, control, and coordinate the company’s activities.

Court’s analysis

The court found that the record did not establish the citizenship of the parties. The defendants described Henry, Gershan, and Kim by their states of residence, but those statements did not establish their domiciles. Kim’s affidavit likewise stated only that he had been a New Jersey resident since 2018. The court therefore did not decide what effect the skip-trace results had on Kim’s domicile.

The defendants also described Dream as a New Jersey resident. The court explained that a corporation’s residence was not the relevant test. The record did not identify Dream’s state of incorporation or provide facts showing that its listed New Jersey address was the place where its officers directed, controlled, and coordinated its activities. The court also did not address the amount-in-controversy requirement at that point.

Ruling and next steps

The court did not conclude that complete diversity existed and did not yet remand the action. Judge Vernon S. Broderick ordered Henry to file an affidavit describing her domicile when she started the action and when it was removed. He ordered Kim and Dream to file affidavits addressing Gershan’s and Kim’s domiciles at those times, including the possible effect of the skip-trace results on Kim’s domicile. He also ordered Kim and Dream to submit an affidavit from a knowledgeable officer or representative identifying Dream’s state of incorporation and providing facts about its principal place of business. The deadline for these filings was January 11, 2021. The court stated that it would remand the case to New York State Supreme Court, Bronx County if the affidavits showed that subject-matter jurisdiction was lacking.