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The Velveteen Ocelot

(131,313 posts)
4. Sort of but not exactly. One of the parties can be a resident of the federal district
Sat Mar 17, 2018, 05:55 PM
Mar 2018

where the case was filed, but no two parties can be residents of the same state. The case was originally filed in a CA state court because that's where the cause of action arose (where, according to the complaint, the contract was made and negotiated and where "many events giving rise to this action" occurred). http://cdn.cnn.com/cnn/2018/images/03/06/filed.complaint.pdf That's the only way that court, and by extension the federal court in CA, could get personal jurisdiction in the first place. But the removal notice says Daniels is a resident of TX, the LLC is a Delaware corporation, and Trump is a resident of NY and DC. So you have complete diversity on that account, but it would still exist if Daniels had been a CA resident. But the federal court would still have to apply California law because that's the way diversity jurisdiction works, and there is no federal common law of contracts.

On its face, the state court complaint would seem to support the defendant's removal of the matter to federal court. But here's an argument in favor of remand: A corporation is considered to be a resident of the state where it has its principle place of business. The LLC was created for the sole purpose of facilitating the agreement to pay hush money to Stormy Daniels - so the only business it ever did was in California. If the corporation never did any other business anywhere else, maybe one could argue that CA is its principle place of business. The Supreme Court recently held that a corporation's principle place of business is wherever its "nerve center," i.e., its actual center of direction, control, and coordination, is. This LLC exists in a file cabinet in Delaware, but is that its nerve center? Maybe a motion to remand is worth a try.

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