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McLaughlin v. ARCO Polymers Inc.

decided: November 15, 1983.

DONNA LEE MCLAUGHLIN
v.
ARCO POLYMERS, INC., A CORPORATION AND ATLANTIC RICHFIELD COMPANY, A CORPORATION APPELLANTS



On Appeal from the United District Court for the Western District of Pennsylvania (Pittsburgh).

Gibbons, Sloviter and Becker, Circuit Judges.

Author: Sloviter

Opinion OF THE COURT

SLOVITER, Circuit Judge.

Before us is an appeal by defendants ARCO Polymers, Inc. and Atlantic Richfield Company (referred to jointly as ARCO) from an order transferring this case to the Court of Common Pleas of Beaver County, Pennsylvania pursuant to 42 Pa. Cons. Stat. Ann. § 5103(b).

I.

Plaintiff-appellee Donna Lee McLaughlin filed a complaint in federal court characterized as a "claim in Assumpsit" alleging that she is a "resident" of Pennsylvania; that she was hired as an Occupational Health Nurse in October 1974 by defendant ARCO Polymers, Inc., a division of the Atlantic Richfield Company, for its Beaver Valley Plant which produces polystyrene plastics; that in that capacity she was the "principal site source of medical attention for approximately 1,200 employees"; that she became aware that the plant's employees had hematological abnormalities; that shortly thereafter a complaint was filed with the Department of Labor, Occupational Safety and Health Administration (OSHA) which resulted in the issuance of a citation to defendant; that defendant's officers and agents "blamed" her for the OSHA inquiry "and the employee concern for test results"; and that she was dismissed in 1978 as a result. The complaint also alleges, "At the time plaintiff was dismissed no male employee [in related positions] was either subject to employer criticism or dismissal." The complaint then alleges:

The aforesaid conduct of Defendant's was violative of public policy by wrongfully discharging Plaintiff and/or otherwise discriminating against her in retaliation against her with respect to the terms, conditions and privileges of her employment because of her involvement with the Occupational Safety and Health Act investigation and/or violative of public policy by discharging the Plaintiff and otherwise discriminating against her with respect to the terms, conditions and privileges of her employment because of her sex.

The complaint identifies jurisdiction as founded only on diversity of citizenship and an amount in controversy, exclusive of interest and costs, exceeding $10,000.

ARCO moved to dismiss the action for lack of subject matter jurisdiction on the ground there was no diversity of citizenship between the parties. It attached affidavits showing that both defendants Atlantic Richfield Company and ARCO Polymers, Inc. (before its merger into Atlantic Richfield) were incorporated in Pennsylvania. In response, plaintiff filed a "Motion to Transfer Claim in Lieu of Answer to Motion to Dismiss" which averred that "The Plaintiff herein has stated a cause of action cognizable under the laws of the Commonwealth of Pennsylvania, to wit, an unlawful dismissal from employment"; admitted that "all parties reside in Pennsylvania"; and requested in lieu of a dismissal "a transfer of the state claim " to the Court of Common Pleas, Beaver County, Pennsylvania. Plaintiff also filed an answer to the motion to dismiss, with affidavits, stating that the Atlantic Richfield Company, though incorporated in Pennsylvania, maintains its principal office in Los Angeles.

After a hearing and argument on Defendants' Motion to Dismiss and Plaintiff's Motion to Transfer, the district court found there was no diversity of citizenship since plaintiff is a citizen of Pennsylvania and defendants are incorporated in Pennsylvania. Although there was no other basis for federal jurisdiction alleged in the complaint, the district court also found that it lacked jurisdiction over "claims pertaining to sex discrimination" and "a complaint of retaliatory discharge" resulting from a filing of an OSHA complaint. The district court concluded it had no basis for exercising jurisdiction, "although Plaintiff may have state law causes of action." The district court stated that the case was erroneously filed in the Western District of Pennsylvania, and thereupon ordered it transferred to the Court of Common Pleas of Beaver County, Pennsylvania "pursuant to the provisions of 42 Pa. C.S.A. § 5103(b) and in accordance with Weaver v. Marine Bank [683 F.2d 744 (3d Cir. 1982)]." Defendants appeal.*fn1

II.

There can be no diversity jurisdiction under 28 U.S.C. § 1332 (1976) when plaintiff is a citizen of Pennsylvania and defendants are incorporated there. Since the statute expressly defines corporate citizenship to include the state of incorporation, 28 U.S.C. § 1332(c), plaintiff's affidavit alleging ARCO's principal place of business is in California was irrelevant. The district court recognized that the underlying suggestion that the state of incorporation can be overlooked in determining corporate citizenship was totally wrong.

ARCO contends that because there was no diversity, the only order the district court could have entered was one dismissing the complaint for lack of subject matter jurisdiction. It stresses the mandatory nature of the language of Fed. R. Civ. P. 12(h)(3): "Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." (emphasis added). ARCO relies on those cases which hold a court without subject matter jurisdiction has no power to transfer but only to dismiss. See Grand Blanc Education Association v. Grand Blanc Board of Education, 624 F.2d 47, 49 n.4 (6th Cir. 1980); Dantes v. Western Foundation Corporation Association, 614 F.2d ...


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