F IL E D United States Court of Appeals Tenth Circuit U N IT E D ST A T E S C O U R T O F A PP E A L S October 27, 2006 FO R T H E T E N T H C IR C U IT Elisabeth A. Shumaker Clerk of Court
N O A H A. SA IN ; M A RILY N SAIN,
Plaintiffs-Appellants,
v. No. 05-2320 (D.C. No. CIV-05-180 RB/RH S ) EOG RESOURCES, INC., a D elaw are ( D. N.M .) C orporation; SST EN ER GY CORPO RATION, a Colorado Corporation,
Defendants-Appellees.
O R D E R A N D JU D G M E N T *
Before O ’B R IE N , PO R FILIO , and A N D ER SO N , Circuit Judges.
Plaintiffs Noah and M arilyn Sain appeal from the district court’s order
dismissing their complaint for lack of jurisdiction based on its determination that
both the Sains and defendant SST Energy Corporation (SST) are W yoming
* After examining the briefs and appellate record, this panel has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. citizens for purposes of diversity jurisdiction. Our jurisdiction arises under
28 U.S.C. § 1291, and we affirm.
Background
On October 16, 2002, M r. Sain was working as a field maintenance
operator on an oil rig in M offat County, Colorado when part of the rig collapsed,
causing him to suffer severe and permanent injuries. The rig was owned by SST,
a company that provides drilling equipment and operations crews for oil and gas
w ells. SST’s equipment had been provided pursuant to a contract with EOG
Resources, Inc. (EOG), which owned the federal lease and state permit to drill for
oil in M offat County.
On February 17, 2005, the Sains sued SST and EOG in U .S. District Court
in N ew M exico alleging that the accident was caused by the defendants’
negligence. The Sains invoked federal jurisdiction under the diversity statute,
28 U.S.C. § 1332, claiming that they are W yoming citizens; that EOG is a citizen
of both Delaware and Texas; and that SST is a citizen of Colorado. On April 8,
2005, SST filed a motion to dismiss for lack of subject matter jurisdiction based
on lack of complete diversity. It argued that in addition to being a citizen of
-2- Colorado, its state of incorporation, it was also a citizen of W yoming because that
is where its principal place of business was located. 1
Following jurisdictional discovery, the Sains responded to the motion with
two arguments. First, they argued that an examination of SST’s total activities
could support no other finding than that its principal place of business was in
Colorado. Second, they argued that SST should be judicially estopped from
asserting that its principal place of business was in W yoming because it had
previously listed Denver, Colorado as its principal office in a filing with the
New M exico Public Regulation Commission.
On A ugust 12, 2005, the Sains filed a motion to supplement their response
with additional evidence that they claimed supported their judicial estoppel
argument. The motion was accompanied by a request to take judicial notice,
which attached pleadings and other filings from an unrelated Colorado state court
case involving SST. The state court complaint alleged that SST’s principal place
of business was in D enver, Colorado, and SST had filed an answ er in the case
admitting that allegation. The Sains argued that this admission, along with the
New M exico public filing, precluded SST from taking a contrary position in the
instant case.
1 SST also argued that it lacked the requisite minimum contacts to establish a basis for personal jurisdiction in New M exico. This argument, however, was not a basis for the district court’s decision and is not raised on appeal.
-3- The district court rejected both of the Sains’ arguments. Employing the
“total activity” test that we adopted in Amoco Rocmount Co. v. Anschutz Corp.,
7 F.3d 909, 915 (10th Cir. 1993), the court found that the m ajority of SST’s
activities took place in W yoming. It went on to reject the Sains’ judicial estoppel
argument based on our refusal to adopt the doctrine in Rascon v. U.S. West
Commc’ns, Inc., 143 F.3d 1324,1332 (10th Cir. 1998). The court did say,
however, that even if the doctrine were recognized in this circuit, it would not
apply to bar SST’s position in this case, because “SST’s principal place of
business was not an issue in the Colorado suit and no judicial body relied on the
New M exico administrative form.” A plt. App. at 260. Having found that SST’s
activities in W yoming “clearly exceed[ed]” its activities in other states, id., and
that the Sains’ judicial estoppel argument was without merit, the court concluded
that W yoming was SST’s principal place of business for purposes of diversity
jurisdiction. Since the Sains were also citizens of W yoming, the district court
concluded that diversity was not complete and dismissed the complaint.
A nalysis
A . Standard of R eview
A district court’s “determination of a corporation’s principal place of
business is a question of fact that we review under the clearly erroneous
standard.” Shell Rocky M ountain Prod., LLC v. Ultra Res., Inc., 415 F.3d 1158,
-4- 1162 (10th Cir. 2005). To the extent that the district court’s decision depended
on whether SST may be judicially estopped from asserting its position regarding
its principal place of business, however, it is a question of law that we review
de novo. See Rascon, 143 F.3d at 1329 (“The issue of the application of judicial
estoppel presents a legal question.”).
B . Judicial E stoppel
The Sains’ primary challenge is directed at the district court’s refusal to
apply judicial estoppel against SST to preclude it from asserting that its principal
place of business is in W yoming. They accuse the district court of “completely
ignor[ing] the fact that SST has blow n hot and cold on its residence,” Reply Br.
at 4, and urge this court to revisit Rascon “to the extent that it abrogates the
responsibility of parties to act in a consistent fashion relative to jurisdictional
issues,” Opening Br. at 12. SST defends the district court’s decision not to apply
judicial estoppel, arguing that the prerequisites for invoking the doctrine are not
present in this case. 2
2 Interestingly, neither party has raised the issue of whether the application of judicial estoppel in this context is governed by state or federal law. Com pare Rishell v. Jane Phillips Episcopal Mem’l M ed. Ctr., 12 F.3d 171, 172-73 (10th Cir.
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F IL E D United States Court of Appeals Tenth Circuit U N IT E D ST A T E S C O U R T O F A PP E A L S October 27, 2006 FO R T H E T E N T H C IR C U IT Elisabeth A. Shumaker Clerk of Court
N O A H A. SA IN ; M A RILY N SAIN,
Plaintiffs-Appellants,
v. No. 05-2320 (D.C. No. CIV-05-180 RB/RH S ) EOG RESOURCES, INC., a D elaw are ( D. N.M .) C orporation; SST EN ER GY CORPO RATION, a Colorado Corporation,
Defendants-Appellees.
O R D E R A N D JU D G M E N T *
Before O ’B R IE N , PO R FILIO , and A N D ER SO N , Circuit Judges.
Plaintiffs Noah and M arilyn Sain appeal from the district court’s order
dismissing their complaint for lack of jurisdiction based on its determination that
both the Sains and defendant SST Energy Corporation (SST) are W yoming
* After examining the briefs and appellate record, this panel has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. citizens for purposes of diversity jurisdiction. Our jurisdiction arises under
28 U.S.C. § 1291, and we affirm.
Background
On October 16, 2002, M r. Sain was working as a field maintenance
operator on an oil rig in M offat County, Colorado when part of the rig collapsed,
causing him to suffer severe and permanent injuries. The rig was owned by SST,
a company that provides drilling equipment and operations crews for oil and gas
w ells. SST’s equipment had been provided pursuant to a contract with EOG
Resources, Inc. (EOG), which owned the federal lease and state permit to drill for
oil in M offat County.
On February 17, 2005, the Sains sued SST and EOG in U .S. District Court
in N ew M exico alleging that the accident was caused by the defendants’
negligence. The Sains invoked federal jurisdiction under the diversity statute,
28 U.S.C. § 1332, claiming that they are W yoming citizens; that EOG is a citizen
of both Delaware and Texas; and that SST is a citizen of Colorado. On April 8,
2005, SST filed a motion to dismiss for lack of subject matter jurisdiction based
on lack of complete diversity. It argued that in addition to being a citizen of
-2- Colorado, its state of incorporation, it was also a citizen of W yoming because that
is where its principal place of business was located. 1
Following jurisdictional discovery, the Sains responded to the motion with
two arguments. First, they argued that an examination of SST’s total activities
could support no other finding than that its principal place of business was in
Colorado. Second, they argued that SST should be judicially estopped from
asserting that its principal place of business was in W yoming because it had
previously listed Denver, Colorado as its principal office in a filing with the
New M exico Public Regulation Commission.
On A ugust 12, 2005, the Sains filed a motion to supplement their response
with additional evidence that they claimed supported their judicial estoppel
argument. The motion was accompanied by a request to take judicial notice,
which attached pleadings and other filings from an unrelated Colorado state court
case involving SST. The state court complaint alleged that SST’s principal place
of business was in D enver, Colorado, and SST had filed an answ er in the case
admitting that allegation. The Sains argued that this admission, along with the
New M exico public filing, precluded SST from taking a contrary position in the
instant case.
1 SST also argued that it lacked the requisite minimum contacts to establish a basis for personal jurisdiction in New M exico. This argument, however, was not a basis for the district court’s decision and is not raised on appeal.
-3- The district court rejected both of the Sains’ arguments. Employing the
“total activity” test that we adopted in Amoco Rocmount Co. v. Anschutz Corp.,
7 F.3d 909, 915 (10th Cir. 1993), the court found that the m ajority of SST’s
activities took place in W yoming. It went on to reject the Sains’ judicial estoppel
argument based on our refusal to adopt the doctrine in Rascon v. U.S. West
Commc’ns, Inc., 143 F.3d 1324,1332 (10th Cir. 1998). The court did say,
however, that even if the doctrine were recognized in this circuit, it would not
apply to bar SST’s position in this case, because “SST’s principal place of
business was not an issue in the Colorado suit and no judicial body relied on the
New M exico administrative form.” A plt. App. at 260. Having found that SST’s
activities in W yoming “clearly exceed[ed]” its activities in other states, id., and
that the Sains’ judicial estoppel argument was without merit, the court concluded
that W yoming was SST’s principal place of business for purposes of diversity
jurisdiction. Since the Sains were also citizens of W yoming, the district court
concluded that diversity was not complete and dismissed the complaint.
A nalysis
A . Standard of R eview
A district court’s “determination of a corporation’s principal place of
business is a question of fact that we review under the clearly erroneous
standard.” Shell Rocky M ountain Prod., LLC v. Ultra Res., Inc., 415 F.3d 1158,
-4- 1162 (10th Cir. 2005). To the extent that the district court’s decision depended
on whether SST may be judicially estopped from asserting its position regarding
its principal place of business, however, it is a question of law that we review
de novo. See Rascon, 143 F.3d at 1329 (“The issue of the application of judicial
estoppel presents a legal question.”).
B . Judicial E stoppel
The Sains’ primary challenge is directed at the district court’s refusal to
apply judicial estoppel against SST to preclude it from asserting that its principal
place of business is in W yoming. They accuse the district court of “completely
ignor[ing] the fact that SST has blow n hot and cold on its residence,” Reply Br.
at 4, and urge this court to revisit Rascon “to the extent that it abrogates the
responsibility of parties to act in a consistent fashion relative to jurisdictional
issues,” Opening Br. at 12. SST defends the district court’s decision not to apply
judicial estoppel, arguing that the prerequisites for invoking the doctrine are not
present in this case. 2
2 Interestingly, neither party has raised the issue of whether the application of judicial estoppel in this context is governed by state or federal law. Com pare Rishell v. Jane Phillips Episcopal Mem’l M ed. Ctr., 12 F.3d 171, 172-73 (10th Cir. 1993) (stating that “diversity, as it affects jurisdiction, is a matter of federal and not state law,” and holding that federal principles must dictate whether diversity exists) with Okland Oil Co. v. Conoco Inc., 144 F.3d 1308, 1325 (10th Cir. 1998) (stating generally that state law determines whether and how to apply doctrine of judicial estoppel). Given that the ultimate issue is (continued...)
-5- The district court’s decision was based in part on our historical rejection of
the judicial estoppel doctrine. See Rascon, 143 F.3d at 1332 (reaffirming our
refusal to adopt the doctrine). Last year, however, following the Supreme Court’s
guidance in New Hampshire v. M aine, 532 U .S. 742 (2001), we reversed course
and recognized the doctrine’s limited applicability. See Johnson v. Lindon City
Corp., 405 F.3d 1065, 1068, 1069 (10th Cir. 2005). Therefore, the district court’s
statement that “[t]he Tenth Circuit has rejected the doctrine of judicial estoppel,”
Aplt. App. at 260, is incorrect in light of recent precedent. The district court
went beyond our historical disapproval of the doctrine, however, in finding that
judicial estoppel was not applicable in this case because “SST’s principal place of
business was not an issue in the Colorado suit and no judicial body relied on the
New M exico administrative form.” Id.
In Johnson, we described the doctrine of judicial estoppel as follow s:
“[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary
2 (...continued) whether federal subject matter jurisdiction exists, however, the parties’ and the district court’s assumption that federal law governed the judicial estoppel issue was reasonable. M oreover, since the Sains failed to make any argument under state law or even tell us w hich state’s law would apply here, any such arguments have been waived. State Farm Fire & Cas. Co. v. M hoon, 31 F.3d 979, 984 n.7 (10th Cir. 1994). Therefore, for the purposes of this case, we will assume that federal law governs the judicial estoppel question and proceed accordingly.
-6- position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him.”
405 F.3d at 1069 (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)).
W e cautioned that the doctrine should only be applied “in the narrowest of
circumstances,” and should be limited to situations where a party was successful
in “persuading a court to accept” his earlier position. Id. (emphasis added)
(quotation omitted). Therefore, the district court’s understanding of the doctrine,
in particular, its narrow applicability to situations where the party’s previous
position was asserted before a “judicial body,” Aplt. App. at 260, was correct, as
was its decision not to apply judicial estoppel based on statements made before
the New M exico Public Regulation Commission, a non-judicial body.
W e also conclude that it would have been error to preclude SST from
claiming W yoming citizenship based on a formulaic admission made in the
Colorado state case. The location of SST’s principal place of business was only
relevant in that case in the context of proper venue within Colorado. The state
court had neither an opportunity nor a reason to compare the company’s activities
in Colorado versus W yoming. The district court’s determination that “SST’s
principal place of business was not an issue in the Colorado suit,” id., was
therefore correct. M ore importantly, we need not be concerned with a party’s
inconsistent position “creat[ing] the perception that either the first or second court
was misled.” Johnson, 405 F.3d at 1069 (quotation omitted). Insofar as the
-7- prerequisites for judicial estoppel have not been met, we conclude that the district
court correctly declined to apply the doctrine against SST.
C . T he T otal A ctivity T est
“For diversity purposes, a corporation is deemed to be a citizen of any State
by which it has been incorporated and of the State where it has its principal place
of business.” Gadlin v. Sybron Int’l Corp., 222 F.3d 797, 799 (10th Cir. 2000)
(quotation omitted). W e have held that a corporation’s principal place of business
is to be determined by examining “the total activity of the company or the totality
of the circumstances, considering the character of the corporation, its purposes,
the kind of business in which it is engaged, and the situs of its operations.” Id.
(quotations omitted). The determination “does not hinge on one particular facet
of corporate operations” but is based on a variety of factors, including “the
location of the corporation’s nerve center, administrative offices, production
facilities, employees, etc.” Shell, 415 F.3d at 1162 (quotations omitted); see also
Amoco Rocmount Co, 7 F.3d at 915, n.2 (stating that a corporation’s principal
place of business is located in “the state w here a substantial part of its business is
transacted and from which centralized general supervision . . . is exercised.”).
The Sains argue that the district court erred in failing to consider the
evidence of SST’s prior statements among the factors relevant to determining its
principal place of business. This argument is without merit. The district court
-8- unquestionably considered the factors that we have held relevant to the principal
place of business determination. The court recognized that SST maintains an
office in Denver, Colorado and that the company’s sole marketing manager, who
is responsible for negotiating contracts, resides in Denver. It noted, however, that
in contrast to SST’s sole employee in Colorado, the company’s “management,
operations, accounting, and engineering functions” are all located in W yoming.
Aplt. App. at 259-60. In addition, the court found that the company’s “real
property, home office, and maintenance shop are located in W yoming,” and that
the “bulk of its work” takes place in, and “[a]ll employees are paid out of the
W yoming office.” Id. at 260.
Based on the record before us, we conclude that the district court did not
clearly err in determining that SST’s principal place of business was located in
W yoming rather than Colorado. Since a corporation’s principal place of business
determines its citizenship for purposes of diversity jurisdiction, 28 U.S.C.
§ 1332(c)(1), diversity was not complete in this case, and the district court
properly dismissed the complaint for lack of subject matter jurisdiction. Its
judgm ent is therefore A FFIR ME D.
Entered for the Court
Stephen H. Anderson Circuit Judge
-9-