A homeowner who is domiciled in Ohio sues a roofing company in federal court in Ohio for breach of contract under state law, seeking $90,000. The company is incorporated in Delaware, and its officers direct and control all of its business from headquarters in Columbus, Ohio. After answering the complaint, the company moves to dismiss for lack of subject-matter jurisdiction. How should the court rule?
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Answer: B
Deny the motion, because a corporation is a citizen only of its state of incorporation.: Under 28 U.S.C. § 1332(c)(1) a corporation is a citizen of every state where it is incorporated AND of the state of its principal place of business, so this rule is incomplete.
Grant the motion, because the company is a citizen of Ohio as well as of Delaware.: Correct. The company's nerve center (Hertz Corp. v. Friend) is in Ohio, so it shares Ohio citizenship with the plaintiff. Complete diversity is missing, and no federal question is presented.
Deny the motion, because the company waived the objection by answering first.: Lack of subject-matter jurisdiction can never be waived or forfeited; the court must dismiss whenever it appears (FRCP 12(h)(3)).
Grant the motion, because a claim arising under state law cannot be heard in federal court.: Diversity cases are almost always state-law claims; state law is not the problem. The problem is the lack of complete diversity.
Diversity requires complete diversity plus more than $75,000. A corporation is a citizen of its state(s) of incorporation and of its principal place of business (its nerve center). Subject-matter jurisdiction cannot be waived.