As Amended January 13, 2016.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE. Hon. D. Brock Hornby, Senior U.S. District Judge.
Maria Fox, with whom Mittelasen, LLC was on brief, for appellant.
Timothy J. O'Brien, with whom Tyler J. Smith and Libby O'Brien Kingsley & Champion, LLC were on brief, for appellee.
Barbara Archer, Esq. on brief for Amicus Curiae Maine Human Rights Commission.
Jeffrey Neil Young and Johnson, Webbert & Yound, LLP on brief for Amici Curiae Maine State Employees Association and Maine Employment Lawyers Association.
Jeffrey Neil Young, David G. Webbert, and Johnson, Webbert & Young, LLP on brief for Amici Curiae Maine State Employees Association, Maine Education Association, Maine Employment Lawyers Association, and National Association of Social Workers and its Maine Chapter.
Before Howard, Chief Judge, Thompson and Barron, Circuit Judges.
THOMPSON, Circuit Judge.
This case requires us to, once again, interpret and apply Maine's Whistleblower Protection Act, Me. Rev. Stat. tit. 26, § 833. Appellant Torrey Harrison (" Harrison" ), a social worker, wants to be able to tell a jury that appellee Granite Bay Care, Inc. (" Granite Bay" ) illegally fired her in violation of that statute. Her theory is Granite Bay was getting back at her for reporting what she considered to be violations of state employment law to her supervisor and, later, to Maine's Department of Health and Human Services (" DHHS" ). She found herself stymied when, relying on a supposed " job duties exception" we carved out in Winslow v. Aroostook County, 736 F.3d 23 (1st Cir. 2013), the district court said that Harrison's reports do not qualify for whistleblower protection.
Today, after clearing the decks of a jurisdictional issue, we'll explain why Winslow doesn't hand Granite Bay an automatic victory on the facts in this record.
We first address whether we have diversity jurisdiction. See 28 U.S.C. § 1332(a)(1) (extending federal jurisdiction to civil actions between " citizens of different states" ); see also American Fiber & Finishing, Inc. v. Tyco Healthcare Group, LP, 362 F.3d 136, 139 (1st Cir. 2004) (" Federal courts are expected to monitor their jurisdictional boundaries vigilantly and to guard carefully against expansion by distended judicial interpretation." ).
Harrison, a Maine citizen, filed her suit (which raises state law claims only) in Maine Superior Court. Granite Bay evidently preferred to be in federal court and, invoking federal diversity jurisdiction, removed the action to the Maine district court. In doing so, Granite Bay held itself out as a New Hampshire corporation with a principal place of business in Concord, New Hampshire. Neither Harrison nor the district court challenged the jurisdictional claims.
" Even though the parties have assumed the existence of appellate jurisdiction, we enjoy no comparable luxury." Espinal-Dominguez v. Com. of P.R., 352 F.3d 490, 495 (1st Cir. 2003). Far from it. " [W]e have an unflagging obligation to notice jurisdictional defects and to pursue them on our own initiative." Id. (citing cases); see also United States v. Horn, 29 F.3d 754, 758, 768 (1st Cir. 1994) (" Parties cannot confer subject matter jurisdiction on either a trial or an appellate court by indolence, oversight, acquiescence, or consent." ).
Our review of the record and our judicial notice of Granite Bay's filings in another case in the Maine district court, see Affo v. Granite Bay Care, Inc. et al., No. 11-cv-482, 2013 WL 2383627 (D. Me. 2013), raised a question as to whether Granite Bay is a citizen of both New Hampshire and Maine. If it is, this would make the parties non-diverse and render federal jurisdiction phantasmal. We ordered the parties to brief the jurisdiction issue and provided an opportunity for them to submit evidence supporting their position. Based on the additional briefing and our thorough consideration of the issue, we are now satisfied that we have jurisdiction. Certainly, nothing in the additional evidence provided demonstrates a basis for any jurisdictional concern.
1. Jurisdictional Facts
Granite Bay runs group homes and provides services for adults who have cognitive or physical disabilities. Granite Bay is a New Hampshire corporation, and it maintains its corporate headquarters in Concord. Nevertheless, its group homes are all in Maine and all of its clients are Maine residents. In addition to its Concord headquarters, Granite Bay has an administrative office in Portland, Maine.
Granite Bay is owned by two individuals, Kasai Mumpini and Caroletta Alicea, both of whom work out of Concord. Since at least 2009, Mumpini has served as the corporation's President, with Alicea as its Vice President. Mumpini and Alicea are Granite Bay's only two officers. And they're the only corporate directors, to boot. Their role is to maintain a vision for where the company is going, and to set overall corporate policies.
Granite Bay's day-to-day operations -- things like providing care to its clients and hiring, training, and supervising employees -- are handled out of the Portland office. An employee with the title of State Director runs the show in Maine. Since 2009, there have been two State Directors, Gregory Robinson and Ken Olson, and there are no significant differences between how each one went about the job. Olson, the current State Director, divides his work week between the offices in Portland and Concord.
Although he has " significant flexibility" in managing Granite Bay, Olson nevertheless reports to Mumpini and Alicea. Indeed, he communicates with them daily and meets with them in person at least once per week. Olson keeps the owners updated as to how Granite Bay is doing, and the owners direct him on the overall strategy he should employ in working towards the company's future goals. Furthermore, they give Olson " general financial parameters" in which he may operate, and they give him different objectives to accomplish.
The previous State Director, Robinson, held that position for about seven years before becoming Granite Bay's Chief Operations Officer. He described C.O.O. as a " transition title," and after some time Granite Bay's owners told him they " were eliminating the position." Following this, he began working for a separate company, Granite Bay Connections, which was also owned by Mumpini and Alicea and provided similar services as Granite Bay did, but to adults in New Hampshire.
Although the parties have submitted additional facts, including ones from the Affo case, these are enough for us to get on with the jurisdictional inquiry.
2. Nerve Center Jurisdictional Test
No one doubts that Granite Bay is a citizen of New Hampshire. After all, when it comes to questions of diversity jurisdiction, " a corporation shall be deemed to be a citizen of every State . . . by which it has been incorporated." 28 U.S.C. § 1332(c)(1). What we have to worry about is the location of its principal place of business. See id. (providing that a corporation is a citizen of the state where it has its principal place of business). Is Granite Bay's in New Hampshire or Maine?
Some basics first. Because this case does not present a federal question, the parties' diversity of citizenship is the only hook for federal jurisdiction. See 28 U.S.C. § 1332(a). " For federal jurisdictional purposes, diversity of citizenship must be determined as of the time of suit." Valentin v. Hospital Bella Vista, 254 F.3d 358, 361 (1st Cir. 2001). Here, because Granite Bay removed Harrison's state court case to federal court, we look at the date of removal instead of the date on which the complaint was filed. See Casas Office Machines, Inc. v. Mita Copystar America, Inc., 42 F.3d 668, 673 (1st Cir. 1994).
Several years ago, the Supreme Court established beyond any doubt that federal courts must employ the " nerve center" test to determine the location of a corporation's principal place of business. See Hertz Corp. v. Friend, 559 U.S. 77, 80-81, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010). The test is straightforward. A corporation's " nerve center" (i.e., its principal place of business) is the particular location from which its " officers direct, control, and coordinate the corporation's activities." Id. at 92-93. Generally speaking, this will " be the place where the corporation maintains its headquarters -- provided that the headquarters is the actual center of direction, control, and coordination . . . and not simply an office where the corporation holds its board meetings (for example, attended by directors and officers who have traveled there for the occasion)." Id. at 93.
The party seeking to establish diversity jurisdiction bears the burden of persuasion, and parties must support their
jurisdictional allegations with " competent proof." See id. at 96-97 (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). Although the Supreme Court did not go into depth about the exact quantum of proof required to meet the burden of persuasion, it made it clear that run-of-the-mill corporate filings -- like a Form 10-K -- are not enough on their own to satisfy it. Id. at 97.
The Hertz Court recognized that, " in this era of telecommuting, some corporations may divide their command and coordinating functions among officers who work at several different locations, perhaps communicating over the Internet." Id. at 95-96. But even when presented with such a situation, the nerve center test " nonetheless points courts in a single direction, towards the center of overall direction, control, and coordination." Id. at 96. Federal courts must also be on the lookout for attempts at " jurisdictional manipulation." Id. at 97. Therefore, " if the record reveals attempts at manipulation -- for example, that the alleged 'nerve center' is nothing more than a mail drop box, a bare office with a computer, or the location of an annual executive retreat -- the courts should instead take as the 'nerve center' the place of actual direction, control, and coordination, in the absence of such manipulation." Id.
The test may seem pretty simple, and it is. That's no accident. " Complex jurisdictional tests complicate a case, eating up time and money as the parties litigate, not the merits of their claims, but which court is the right court to decide those claims." Id. at 94. Complicated tests also engender appeals, " encourage gamesmanship, and . . . diminish the likelihood that results and settlements will reflect a claim's legal and factual merits," not to mention demand the expenditure of judicial resources. Id. Accordingly, the test described by the Supreme Court is intended to be " relatively easier to apply" than others that could be imagined. Id. at 96.
At its heart, the nerve center test is an inquiry to find the one location from which a corporation is ultimately controlled. Put slightly differently, the federal court is to look for the place where the buck stops. And where it does, well, ...