Filed: Jan. 07, 2014
Latest Update: Mar. 02, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-2482 ROGER HOSCHAR, and JUDY HOSCHAR, Plaintiffs – Appellants, v. APPALACHIAN POWER COMPANY, Defendant – Appellee, and INDUSTRIAL CONTRACTORS, INC., Defendant. Appeal from the United States District Court for the Southern District of West Virginia, at Huntington. Robert C. Chambers, Chief District Judge. (3:11-cv-00152) Argued: November 6, 2013 Decided: January 7, 2014 Before GREGORY, DAVIS, and THACKER, Circuit Judges. Affir
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-2482 ROGER HOSCHAR, and JUDY HOSCHAR, Plaintiffs – Appellants, v. APPALACHIAN POWER COMPANY, Defendant – Appellee, and INDUSTRIAL CONTRACTORS, INC., Defendant. Appeal from the United States District Court for the Southern District of West Virginia, at Huntington. Robert C. Chambers, Chief District Judge. (3:11-cv-00152) Argued: November 6, 2013 Decided: January 7, 2014 Before GREGORY, DAVIS, and THACKER, Circuit Judges. Affirm..
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2482
ROGER HOSCHAR, and JUDY HOSCHAR,
Plaintiffs – Appellants,
v.
APPALACHIAN POWER COMPANY,
Defendant – Appellee,
and
INDUSTRIAL CONTRACTORS, INC.,
Defendant.
Appeal from the United States District Court for the Southern
District of West Virginia, at Huntington. Robert C. Chambers,
Chief District Judge. (3:11-cv-00152)
Argued: November 6, 2013 Decided: January 7, 2014
Before GREGORY, DAVIS, and THACKER, Circuit Judges.
Affirmed by published opinion. Judge Thacker wrote the opinion,
in which Judge Gregory and Judge Davis joined.
ARGUED: Alexander Deane McLaughlin, THE CALWELL PRACTICE, PLLC,
Charleston, West Virginia, for Appellants. Daniel Rhys
Michelmore, JACKSON KELLY PLLC, Pittsburgh, Pennsylvania, for
Appellee. ON BRIEF: John Skaggs, THE CALWELL PRACTICE, PLLC,
Charleston, West Virginia, for Appellants. Brian R. Swiger,
Michael P. Leahey, JACKSON KELLY PLLC, Charleston, West
Virginia, for Appellee.
2
THACKER, Circuit Judge:
Appellants, Roger and Judy Hoschar (collectively
“Appellants”), filed this civil action in the Circuit Court of
Mason County, West Virginia, against Appellee, Appalachian Power
Company (“APCO”), and Defendant, Industrial Contractors, Inc.
(“ICI”), seeking damages for an infectious lung disease called
histoplasmosis that Roger Hoschar (“Mr. Hoschar”) allegedly
contracted while working as a boilermaker at one of APCO’s coal-
fired power plants. APCO removed the case to the United States
District Court for the Southern District of West Virginia on the
basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332.
Appellants, West Virginia residents, sought to remand the action
to state court, arguing that APCO’s principal place of business
is in Charleston, West Virginia, and that complete diversity is
therefore lacking. The district court denied Appellants’
motion, concluding that under the “nerve center” test, APCO’s
principal place of business is in Columbus, Ohio. After
discovery, the district court awarded summary judgment to APCO,
holding that, pursuant to West Virginia law, APCO did not owe a
duty to Mr. Hoschar.
In this appeal, Appellants challenge both the district
court’s denial of the motion to remand and the district court’s
grant of APCO’s motion for summary judgment. Because the record
amply demonstrates that the location where APCO’s officers
3
direct, control, and coordinate APCO’s activities is Columbus,
Ohio, we conclude that APCO has carried its burden of
establishing federal subject matter jurisdiction. With respect
to APCO’s motion for summary judgment, we hold that APCO did not
have actual or constructive knowledge of a potential
histoplasmosis risk, and therefore, APCO did not owe Mr. Hoschar
a duty to guard against it. Accordingly, we affirm.
I.
A.
APCO owns the Philip Sporn power plant (“Sporn”) near
New Haven, West Virginia. Sporn is a coal-fired power plant,
generating electricity by burning coal to create steam and then
passing the steam through a turbine. The power plant has five
“precipitators,” which remove granular ash particles (“fly ash”)
from the gasses produced by burning coal. When in operation, a
precipitator generates significant heat, which can cause
corrosion to its exterior steel siding and result in fly ash
leakage.
ICI was hired by APCO to perform general maintenance
at Sporn, which included welding metal patches to the exterior
of the precipitators to prevent fly ash leakage. Mr. Hoschar
was a boilermaker employed by ICI from March 2006 to March 2007.
During that time, he worked exclusively at Sporn. His typical
maintenance assignment consisted of hanging from a “pick” --
4
that is, a suspended platform like those used by window washers
-- and welding steel patches over corroded portions of the ducts
leading into and out of the Unit 5 precipitator (“Unit 5”).
During his time at Sporn, Mr. Hoschar frequently worked in and
around Unit 5, spending (by his estimate) at least five months
there. Of note, he did not spend five consecutive months
working on Unit 5. Rather, according to Mr. Hoschar’s work
records, he spent a total of 66 days performing elevated welding
work on the exterior of Unit 5 over the course of 13 months.
Before welding any steel patches, Mr. Hoschar and
other workers had to remove debris that had built up in the
steel channels. Because Unit 5 is an outdoor structure, pigeons
sometimes perched on its steel channels and left their droppings
behind. Therefore, the debris usually consisted of
approximately three to four inch accumulations of bird manure
and two inch accumulations of fly ash. Mr. Hoschar removed the
debris from the steel channels either by hand, with a wire
brush, or using compressed air. When removing debris and while
welding the steel patches, Mr. Hoschar wore a respirator over
his face.
In March 2007, Mr. Hoschar was terminated from his
employment with ICI. In 2009, as part of a routine pre-
operative test before Mr. Hoschar underwent knee surgery, which
was unrelated to his work at Sporn, a chest x-ray revealed the
5
presence of a mass on his right lung. Mr. Hoschar’s physician
feared the mass was cancerous and recommended he undergo a
lobectomy to remove the portion of his lung containing the mass.
After a portion of Mr. Hoschar’s lung was removed, a biopsy
revealed that the mass was not cancer, but instead was a disease
called histoplasmosis.
Histoplasmosis is an infectious disease caused by
inhaling the spores of a naturally occurring soil-based fungus
called histoplasma capsulatum. The histoplasma capsulatum
fungus is endemic in the Ohio Valley region, in which Sporn is
located, because it grows best in soils with high nitrogen
content. Once an individual inhales the fungus, it colonizes
the lungs. However, the vast majority of people infected by
histoplasmosis do not experience any symptoms of infection or
suffer any ill effects.
While Mr. Hoschar was working at Sporn, the
Occupational Safety and Health Administration (“OSHA”) website
maintained a page entitled, “Respiratory Protection: Hazard
Recognition.” One of the reference documents found on that page
was a publication by the National Institute for Occupational
Safety and Health (“NIOSH”) called, “Histoplasmosis: Protecting
Workers at Risk” (the “NIOSH Publication”). The NIOSH
Publication explained that the histoplasma capsulatum fungus
“seems to grow best in soils having a high nitrogen content,
6
especially those enriched with bird manure or bat droppings.”
J.A. at 1052. 1 It further noted that the fungus “can be carried
on the wings, feet, and beaks of birds and infect soil under
roosting sites or manure accumulations inside or outside
buildings.” Id.
B.
On January 31, 2011, Appellants sued APCO and ICI for
negligence in the Circuit Court for Mason County, West Virginia,
seeking damages for Mr. Hoschar’s histoplasmosis infection.
Appellants allege Mr. Hoschar contracted histoplasmosis while
working at Sporn as a result of inhaling contaminated dust when
he swept out the mixtures of bird manure and fly ash that had
accumulated in Unit 5’s steel channels. Appellants also allege
APCO did not provide any written or verbal warnings concerning
the presence of aged bird manure around Unit 5 or of the health
risks associated with accumulations of bird manure, such as
histoplasmosis.
On March, 9, 2011, APCO removed this action to the
United States District Court for the Southern District of West
Virginia pursuant to 28 U.S.C. § 1332, explaining that APCO’s
principal place of business is in Columbus, Ohio, and complete
1
Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.
7
diversity therefore exists between Appellants and APCO and ICI. 2
Appellants filed a motion to remand the case to state court on
March 14, 2011, arguing that APCO’s principal place of business
is in Charleston, West Virginia, and complete diversity is thus
lacking.
C.
Prior to the initiation of this lawsuit, Appellants’
counsel -- representing other clients (also West Virginia
residents) in a different case also pending in the Southern
District of West Virginia against APCO -- took the deposition of
Mark Dempsey, APCO’s Vice President of External Affairs. The
deposition was conducted pursuant to Federal Rule of Civil
Procedure 30(b)(6), which required APCO to designate a
representative to testify about topics relating to APCO’s
principal place of business. After taking the deposition,
plaintiff’s counsel in that case filed a motion to remand the
action to West Virginia state court. That case settled,
however, before a decision on the motion to remand was issued.
Because the same jurisdictional issue arises in this litigation,
Appellants attached Dempsey’s Rule 30(b)(6) deposition taken in
the other case to his motion to remand in this case. In
2
ICI is an Indiana corporation with its principal place of
business in Indiana. ICI’s principal place of business was
never in dispute.
8
opposing Appellants’ motion, APCO submitted an affidavit from
Dempsey. The following description of the facts relevant to
APCO’s principal place of business is based on Dempsey’s
deposition testimony and his affidavit.
APCO -- a subsidiary of American Electric Power
Company (“AEP”) -- is incorporated in Virginia and maintains
offices in Charleston, West Virginia and Columbus, Ohio.
In his deposition, Dempsey testified that the
Charleston office is an “administrative office,” but “[they]
refer to it as headquarters.” J.A. 86. In fact, APCO’s website
lists Charleston as its headquarters. With respect to APCO’s
Charleston office being referred to as APCO’s “headquarters,”
Dempsey testified, “headquarters is probably a misnomer when
applied to APCO.” Id. at 107. He explained that it became
known as the headquarters simply because APCO’s former
president, Dana Waldo, lived in Charleston. Waldo is no longer
employed by APCO.
According to Dempsey, of APCO’s 27 officers, only the
following five officers work in the Charleston office. Charles
Patton, APCO’s President and Chief Operating Officer, oversees
and directs all aspects of APCO’s day-to-day operations from
Charleston. He coordinates the allocation of APCO’s resources
as well as APCO’s communication with employees and the public.
With respect to the employees who report directly to him, Patton
9
performs a number of administrative tasks, including evaluating
job performance and assigning goals. Patton also acts as APCO’s
chief representative with the regulatory agencies in West
Virginia, Virginia, and Tennessee. In addition to Patton,
Philip Wright, APCO’s Vice President of Distribution, is
responsible for overseeing APCO’s electricity distribution
operation, which involves the actual delivery of electricity to
residential and business customers. Dempsey himself interacts
with state and local governments and monitors legislation that
affects APCO’s business. Jeff LaFleur, APCO’s Vice President of
Generating Assets, oversees the operation of APCO’s power
plants. Lastly, Chris Potter, APCO’s Vice President of
Regulatory Affairs, oversees APCO’s regulatory operations in
West Virginia, Virginia, and Tennessee.
The remaining 22 out of APCO’s 27 officers maintain
their offices in Columbus, Ohio. These officers include the
Chief Executive Officer, Chief Financial Officer, Secretary, and
Treasurer. In addition, all nine of APCO’s directors are based
in Columbus. From its Columbus office, APCO’s officers are
responsible for: deciding the location and construction of power
plants and transmission lines; operating hydroelectric
facilities, pump storage facilities, coal-fired power plants,
and gas power plants; negotiating and executing contracts for
the procurement of fuel for those generating plants; handling
10
environmental permitting for work at APCO’s West Virginia
generating plants; negotiating and executing contracts to
purchase fleet vehicles; collecting and disbursing revenues;
calculating and paying taxes owed on its West Virginia
facilities; controlling and directing filings made with the
Securities and Exchange Commission (the “SEC”) and the Federal
Energy Regulatory Commission (the “FERC”); determining human
resource policies and codes of conduct; and overseeing APCO’s
legal affairs.
The district court considered these facts and denied
Appellants’ motion to remand, finding that Columbus, Ohio, is
APCO’s principal place of business. The court explained that
although “many of the day-to-day business activities of [APCO]
are conducted in Charleston[,] . . . the ultimate decision-
making power, which directs, controls, and coordinates the big-
picture activities of [APCO], is carried out in Columbus.”
Hoschar v. Appalachian Power Co., No. 3:11-152, 2011 WL 1671636,
at *4 (S.D. W. Va. May 3, 2011) (J.A. 172-73). Therefore, the
district court concluded that complete diversity existed between
the parties and that federal jurisdiction was proper.
After the completion of discovery, APCO and ICI filed
separate motions for summary judgment, which the district court
11
granted on November 30, 2012. 3 See Hoschar v. Appalachian Power
Co., 906 F. Supp. 2d 560, 567, 570 (S.D. W. Va. 2012) (J.A.
1366-67, 1372). With respect to APCO’s motion for summary
judgment, the district court held that, as a matter of law, the
histoplasmosis hazard posed by the accumulations of aged bird
manure was not reasonably foreseeable to APCO, and APCO
therefore did not owe Mr. Hoschar a duty to protect against it.
See
Hoschar, 906 F. Supp. 2d at 567 (J.A. 1366). Appellants
timely appealed both the district court’s denial of the motion
to remand and the district court’s grant of APCO’s motion for
summary judgment. We possess jurisdiction pursuant to 28 U.S.C.
§ 1291.
II.
“Like all questions implicating the subject matter
jurisdiction of the federal courts, we review de novo the denial
of a motion to remand to state court.” Lontz v. Tharp, 413 F.3d
435, 439 (4th Cir. 2005) (citing Dixon v. Coburg Dairy, Inc.,
369 F.3d 811, 815-16 (4th Cir. 2004) (en banc)). The burden of
establishing federal subject matter jurisdiction “is placed upon
the party seeking removal.” Mulcahey v. Columbia Organic
Chemicals Co.,
29 F.3d 148, 151 (4th Cir. 1994) (citing Wilson
3
Appellants settled their case with ICI prior to briefing
this appeal. Therefore, ICI is no longer a party to this
litigation.
12
v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921)). “We
review the district court’s factual findings with respect to
jurisdiction for clear error.” Velasco v. Gov’t of Indonesia,
370 F.3d 392, 398 (4th Cir. 2004).
“We review a district court’s grant of a motion for
summary judgment de novo, applying the same legal standards as
the district court.” Glynn v. EDO Corp., 710 F.3d 209, 213 (4th
Cir. 2013). Summary judgment is appropriate where there are no
genuine issues of material fact and the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(a). “In
determining whether a genuine issue of material fact exists, we
view the facts and draw all reasonable inferences in the light
most favorable to the non-moving party.”
Glynn, 710 F.3d at
213. However, to show that a genuine issue of material fact
exists, the non-moving party “must set forth specific facts that
go beyond the ‘mere existence of a scintilla of evidence.’”
Id.
(quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 252
(1986)).
III.
The threshold issue we must resolve is whether the
federal courts have subject matter jurisdiction over this
dispute. Appellants contend that in analyzing this question,
the district court erroneously held that complete diversity
existed among the parties after incorrectly concluding that
13
APCO’s principal place of business is in Columbus, Ohio, rather
than in Charleston, West Virginia. Appellants argue that the
district court incorrectly applied the “nerve center” test, as
set forth by the Supreme Court in Hertz Corp. v. Friend, 559
U.S. 77, 92-93 (2010). According to Appellants, both they and
APCO are West Virginia citizens, which means diversity
jurisdiction does not exist. We disagree.
A.
Although originally filed in West Virginia state
court, APCO removed this action to federal court pursuant to 28
U.S.C. § 1441. Section 1441 provides, “any civil action brought
in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the
defendant . . . to the district court of the United States for
the district and division embracing the place where such action
is pending.” 28 U.S.C. § 1441(a).
APCO’s claimed basis for federal subject matter
jurisdiction in support of removal was diversity of citizenship.
Pursuant to 28 U.S.C. § 1332, a federal district court has
original jurisdiction over all civil actions between citizens of
different states where the amount in controversy exceed $75,000.
28 U.S.C. § 1332(a)(1). Section 1332 requires complete
diversity among the parties, meaning the citizenship of each
plaintiff must be different from the citizenship of each
14
defendant. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68
(1996). For purposes of diversity jurisdiction, “a corporation
shall be deemed to be a citizen of every State . . . by which it
has been incorporated and of the State . . . where it has its
principal place of business.” 28 U.S.C. § 1332(c)(1).
In determining a corporation’s principal place of
business, we previously employed two tests: the nerve center
test and the place of operations test. See Athena Auto., Inc v.
DiGregorio, 166 F.3d 288, 290 (4th Cir. 1999). However, the
Supreme Court in Hertz definitively held that, for purposes of
diversity jurisdiction, a corporation’s principal place of
business is its “nerve center.”
Hertz, 559 U.S. at 80-81.
Accordingly, we apply the nerve center test to determine whether
APCO’s principal place of business is in Charleston, West
Virginia or Columbus, Ohio.
In Hertz, the Supreme Court rejected the more general
“business activities test,” which measured the amount of
business a corporation conducted in a particular state to
determine its principal place of business. See Hertz, 599 U.S.
at 93. The Court explained, “administrative simplicity is a
major virtue in a jurisdictional statute,” and the nerve center
approach “is simple to apply comparatively speaking.”
Id. at
94-95 (emphasis in original). Nevertheless, the Supreme Court
recognized that there will be “hard cases.”
Id. at 95. For
15
instance, “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. Even under these
circumstances, however, the nerve center test “points courts in
a single direction, towards the center of overall direction,
control, and coordination.”
Id. at 96. Although the nerve
center test will not, in all instances, “automatically generate
a result,” it nonetheless “provides a sensible test that is
relatively easier to apply.”
Id.
As the Supreme Court explained, “the phrase ‘principal
place of business’ refers to the place where the corporation’s
high level officers direct, control, and coordinate the
corporation’s activities.”
Hertz, 559 U.S. at 80. This is the
corporation’s “nerve center.”
Id. at 80-81. While the Court
noted that in practice, the nerve center “should normally be the
place where the corporation maintains its headquarters,” for a
headquarters to qualify as the nerve center, it must be “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
had traveled there for the occasion).”
Id. at 93. Similarly,
if the record reveals attempts at jurisdictional manipulation --
“for example, that the alleged ‘nerve center’ is nothing more
16
than a mail drop box, a bare office with a computer, or the
location of an annual executive retreat” -- courts should
analyze “the place of actual direction, control, and
coordination, in the absence of such manipulation.” Id. at 97.
The Supreme Court acknowledged that the nerve center
test “may in some cases produce results that seem to cut against
the basic rationale for 28 U.S.C. § 1332.” Hertz, 599 U.S. at
96. As an illustration, the Court explained:
[I]f the bulk of a company’s business activities
visible to the public take place in New Jersey, while
its top officers direct those activities just across
the river in New York, the “principal place of
business” is New York. One could argue that members
of the public in New Jersey would be less likely to be
prejudiced against the corporation than persons in New
York -- yet the corporation will still be entitled to
remove a New Jersey state case to federal court. And
note too that the same corporation would be unable to
remove a New York state case to federal court, despite
the New York public’s presumed prejudice against the
corporation.
Id. (emphasis in original). Despite “such seeming anomalies,”
we must accept them “in view of the necessity of having a
clearer rule.”
Id. Indeed, “[a]ccepting occasionally
counterintuitive results is the price the legal system must pay
to avoid overly complex jurisdictional administration while
producing the benefits that accompany a more uniform legal
system.”
Id.
To date, the only decision from this Circuit to apply
Hertz is Central West Virginia Energy Co. v. Mountain State
17
Carbon, LLC, 636 F.3d 101 (4th Cir. 2011). The plaintiff in
Mountain State Carbon was a West Virginia corporation, and it
brought suit in federal court on the basis of diversity
jurisdiction.
Id. at 102, 103. One of the defendants,
Severstal Wheeling, filed a motion to dismiss due to a lack of
complete diversity, arguing that its principal place of business
was in Wheeling, West Virginia.
Id. at 103. We applied Hertz’s
nerve center test and held that Severstal Wheeling’s principal
place of business was in Dearborn, Michigan, which was where the
majority of corporate officers were located and where those
officers were responsible for oversight and strategic decision-
making.
Id. at 105-06.
In support of our holding in Mountain State Carbon, we
focused particularly on the location with a critical mass of
controlling corporate officers, observing that “[s]even of
Severstal Wheeling’s eight corporate officers -- including its
chief executive officer, chief operating officer, chief
financial officer, and general counsel and secretary -- all
maintain their offices in Dearborn, Michigan.” 636 F.3d at 105.
“Only the eighth corporate officer, a vice president and general
manager, maintains his office in Wheeling, West Virginia.”
Id.
As such, we explained that even though the “day-to-day”
operations are conducted in Wheeling, Severstal Wheeling has
“fail[ed] to show . . . how any of this is relevant to the
18
‘nerve center’ test under Hertz.” Id. We concluded that if a
corporation’s day-to-day operations are managed in one state,
while its officers make significant corporate decisions and set
corporate policy in another, the principal place of business is
the latter. See
id. at 106.
B.
In view of the legal principles outlined above, we
conclude APCO has met its burden of establishing federal subject
matter jurisdiction. In this case, the record demonstrates that
the place where APCO’s “officers direct, control, and coordinate
the corporation’s activities” is Columbus, Ohio. Hertz, 559
U.S. at 92-93.
APCO’s entire Board of Directors is located in
Columbus. Additionally, from its office in Columbus, 22 out of
APCO’s 27 officers -- including its Chief Executive Officer,
Chief Financial Officer, Secretary, and Treasurer -- make
significant corporate decisions and set corporate policy such
that they direct, control, and coordinate APCO’s activities.
Together, they decide the location and construction of power
plants and transmission lines, and they negotiate and execute
contracts for the procurement of fuel for APCO’s hydroelectric
facilities, pump storage facilities, coal-fired power plants,
and gas power plants; all of which are decisions at the core of
APCO’s business. The Columbus officers handle environmental
19
permitting for work at APCO’s West Virginia facilities and
calculate and pay taxes owed on these facilities. Moreover,
they collect and disburse revenues, control and direct the
filings made with the SEC and the FERC, determine human resource
policies and codes of conduct, and oversee APCO’s legal affairs.
On the other hand, only five out of APCO’s 27 officers
are based in Charleston, West Virginia. The Charleston officers
are responsible for implementing the large-scale directives
received from Columbus and for managing APCO’s day-to-day
operations in West Virginia, Virginia, and Tennessee. For
example, Patton oversees all aspects of APCO’s day-to-day
operations. Wright oversees APCO’s distribution operations
group -- that is, “the guys in the line trucks and the service
trucks.” J.A. 77. Dempsey interacts with state and local
government and monitors legislation, while LaFleur oversees the
operation of APCO’s power plants. And, finally, Potter oversees
the regulatory operations in West Virginia, Virginia, and
Tennessee.
The responsibilities of APCO’s Charleston-based
officers are exactly the kinds of “day-to-day operations and
public interface” that we found insufficient in Mountain State
Carbon to support a finding that West Virginia is the
corporation’s nerve center. See Mountain State Carbon, 636 F.3d
at 106. Indeed, the corporation’s day-to-day operations are not
20
“relevant to the ‘nerve center’ test under Hertz.” Id. at 105.
When a corporation’s day-to-day operations are managed in one
state and its officers make significant corporate decisions and
set corporate policy in another, the corporation’s nerve center
and principal place of business is the latter. See
id. at 106.
The record demonstrates that APCO’s day-to-day operations are
managed in Charleston, while its officers direct, control, and
coordinate APCO’s activities from Columbus. Therefore, APCO’s
principal place of business is in Columbus, Ohio.
Appellants further contend the district court
misapplied the nerve center test by looking to the location of
“ultimate” control over APCO’s activities, rather than the
location of “actual” control over APCO’s activities. See
Appellants’ Br. 13-14. This is a distinction without a
difference. First, looking to the location of ultimate control
over a corporation’s activities is not inconsistent with Hertz.
This is because ultimate control is actual control, provided
that ultimate control amounts to directing, controlling, and
coordinating the corporation’s activities. See Hertz, 559 U.S.
at 95-96 (explaining that some corporations “divide their
command” among different locations but that the nerve center
test “points courts in a single direction, towards the center of
overall direction, control, and coordination” (emphasis
supplied)).
21
Moreover, the Supreme Court’s use of the word “actual”
was simply in the context of distinguishing a nominal nerve
center from a legitimate nerve center. See Hertz, 559 U.S. at
93 (explaining that normally the corporation’s nerve center is
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”
(emphasis supplied));
id. at 97 (explaining that “if the record
reveals attempts at [jurisdictional] manipulation[,] . . . the
courts should instead take as the ‘nerve center’ the place of
actual direction, control, and coordination” (emphasis
supplied)). Therefore, under either phrasing, APCO’s principal
place of business is in Columbus, Ohio, because that is the
location where APCO’s officers direct, control, and coordinate
its activities -- actually and ultimately. 4
4
It is of no consequence that APCO’s parent company
maintains its headquarters in Columbus. See Mountain State
Carbon, 636 F.3d at 107 (“[A]lmost all of Severstal Wheeling’s
own officers work out of Dearborn, Michigan, as do some of its
directors. That they may do so from a building owned by
Severstal Wheeling’s parent company is irrelevant. And the fact
that they may also be engaged in affiliated companies’ business
activities is also of no import.”). Of course, we do not
automatically impute a parent corporation’s principal place of
business to its subsidiary. Instead, we focus on the location
of direction, control, and coordination of the subsidiary’s
activities.
22
Finally, Appellants argue that APCO’s nerve center
must be Charleston because some of APCO’s officers have referred
to the Charleston office as the company’s “headquarters.” And,
indeed, APCO's website lists Charleston as its headquarters.
However, Dempsey’s Rule 30(b)(6) deposition clarified that the
use of the term “headquarters” to refer to APCO’s Charleston
office was a misnomer. Rather, as Dempsey’s affidavit makes
clear, the “headquarters-type” decisions -- that is, setting the
overarching direction and control of APCO -- occur in Columbus.
To hold otherwise would run afoul of Hertz.
As the Supreme Court in Hertz explained, “in practice
[a corporation’s nerve center] should normally be the place
where the corporation maintains its headquarters -- provided
that the headquarters is the actual center of direction,
control, and coordination.” 599 U.S. at 93 (emphasis supplied).
But “normally” does not mean “always,” and there is nothing in
Hertz to suggest that a company cannot refer to one office as
its “headquarters” while maintaining its “nerve center” in
another office. Cf. Mountain State
Carbon, 636 F.3d at 105 n.2
(considering a newspaper article, which referred to Wheeling,
West Virginia, as the corporation’s headquarters, and citing
Hertz to explain that “[s]uch materials, however, do not convert
Wheeling, West Virginia into the place where the corporation’s
23
high level officers direct, control, and coordinate the
corporation’s activities” (internal quotation marks omitted)).
Therefore, the focus remains on the location of
direction, control, and coordination of the corporation’s
activities. Because the record demonstrates that APCO’s
Columbus officers are responsible for directing, controlling,
and coordinating APCO’s activities, we conclude that, pursuant
to the nerve center test, APCO’s principal place of business is
in Columbus, Ohio, and the parties are thus completely diverse.
IV.
Having concluded that the federal courts have subject
matter jurisdiction over this dispute, we must decide whether
the district court erred by granting APCO’s motion for summary
judgment. The district court held that, as a matter of law,
APCO did not have actual or constructive knowledge that the bird
manure on its premises presented a potential histoplasmosis
risk, and that APCO therefore did not owe Mr. Hoschar a duty to
protect against it. We agree.
Appellants have asserted a negligence claim against
APCO based on premises liability under West Virginia law. To
prevail on such a claim, a plaintiff must show: (1) the owner
owed a duty to the person injured; (2) that duty was breached;
and (3) the breach of the duty proximately caused (4) an injury.
Senkus v. Moore, 535 S.E.2d 724, 727 (W. Va. 2000). As the
24
district court correctly concluded, APCO did not owe Mr. Hoschar
a duty of care as a matter of law.
Under West Virginia law, the question of whether a
duty is owed turns on the foreseeability of harm. As the
Supreme Court of Appeals of West Virginia has made clear, “[t]he
ultimate test of the existence of a duty to use care is found in
the foreseeability that harm may result if it is not exercised.”
Syl. Pt. 3, Sewell v. Gregory, 371 S.E.2d 82 (W. Va. 1988).5
“The test is, would the ordinary man in the defendant’s
position, knowing what he knew or should have known, anticipate
that harm of the general nature of that suffered was likely to
result?”
Id.
In the employment context, an employer owes a duty to
provide a “reasonably safe place to work” to employees of
independent contractors who are on the premises. Pasquale v.
Ohio Power Co.,
418 S.E.2d 738, 751 (W. Va. 1992). “This duty
includes the duty to warn of latent defects existing before the
work is started that are known to the employer, but are not
readily observable by the employee.”
Id. It is well-settled
that “before [a premises] owner can be liable under a negligence
5
Pursuant to West Virginia’s Constitution, the Supreme
Court of Appeals of West Virginia articulates new points of law
through its syllabus. See Walker v. Doe, 558 S.E.2d 290, 296
(W. Va. 2001) (citing W. Va. Const. art. VIII, § 4).
25
theory, he must have had actual or constructive knowledge of the
defective condition which caused the injury.” Hawkins v. U.S.
Sports Ass’n, Inc., 633 S.E.2d 31, 35 (W. Va. 2006) (per
curiam).
In this case, Appellants argue that the existence and
availability of the NIOSH Publication provided APCO with
knowledge of the danger of histoplasmosis, which gave rise to a
duty owed to Mr. Hoschar. The NIOSH Publication, which appeared
on OSHA’s website while Mr. Hoschar was working at Sporn,
explained that the histoplasma capsulatum fungus “seems to grow
best in soils having a high nitrogen content, especially those
enriched with bird manure or bat droppings.” J.A. 1052. It
further noted that the fungus “can be carried on the wings,
feet, and beaks of birds and infect soil under roosting sites or
manure accumulations inside or outside buildings.” Id. Aside
from the mere existence of the NIOSH Publication on OSHA’s
website, however, Mr. Hoschar has offered zero evidence that
APCO had actual or constructive knowledge of the NIOSH
Publication itself or that APCO had actual or constructive
knowledge that the histoplasma capsulatum fungus was associated
with accumulations of bird manure.
Turning first to actual knowledge, there is no
evidence that APCO employees actually knew that the histoplasma
capsulatum fungus is associated with accumulations of bird
26
manure. Of course, there is evidence that APCO and its
employees knew that birds were present at Sporn and that those
birds left accumulations of manure at Unit 5. However,
knowledge of the existence of birds and their manure does not
mean that APCO actually knew that the histoplasma capsulatum
fungus was present at Sporn. See, e.g., Mowry v. Schmoll, 441
F.2d 1271, 1273 (8th Cir. 1971) (holding defendants’ general
knowledge of the histoplasmosis disease “cannot in any way
constitute evidence that the defendants knew or should have
known that the attic would contain spores from the fungus”);
Henderson v. Volpe-Vito, Inc., No. 266515,
2006 WL 1751832, at
*3 (Mich. Ct. App. June 27, 2006) (unpublished per curiam)
(determining that landowner’s acknowledgement of the presence of
geese and their feces did not “attenuate into an implied
knowledge of the fungus, the spores[,] and the dangerous
condition of [landowner]’s land”). Indeed, Appellants’ own
experts could not definitively say that the histoplasma
capsulatum fungus actually existed at Sporn, and Appellants did
not conduct any tests to determine whether it was, in fact,
actually present there. Therefore, APCO did not have actual
knowledge that the bird manure on its premises presented a
potential histoplasmosis risk.
Turning next to constructive knowledge, Appellants
argue that because the NIOSH Publication was disseminated
27
through various means and was generally available to APCO, the
risk of histoplasmosis was foreseeable to APCO and gave rise to
a duty to at least warn Mr. Hoschar of the bird manure and the
risk of histoplasmosis. The mere existence of the NIOSH
Publication, however, is insufficient. Indeed, APCO cannot be
charged with knowledge of what is contained within the NIOSH
Publication if APCO had no reason to even be aware of its
existence. See Black’s Law Dictionary (9th ed. 2009) (defining
constructive knowledge as “[k]nowledge that one using reasonable
care or diligence should have, and therefore that is attributed
by law to a given person.”). Without any evidence that APCO was
aware or should have been aware of the NIOSH Publication or its
contents, APCO could not have constructive knowledge that the
bird manure on its premises may have presented a potential
histoplasmosis risk.
Nevertheless, Appellants contend that the question of
whether APCO knew or should have known of a histoplasmosis
hazard on its premises is necessarily a factual determination
that must be made by a jury in every instance. Contrary to
Appellants’ assertion, however, this question does not
automatically go to a jury. The determination of whether APCO
had actual or constructive knowledge of a histoplasmosis risk
relates to whether a legal duty was owed to Mr. Hoschar in the
first place. See Hawkins, 633 S.E.2d at 35 (“[B]efore an owner
28
can be liable under a negligence theory, he must have had actual
or constructive knowledge of the defective condition which
caused the injury.”). It is true that often, whether or not an
individual has actual or constructive knowledge of a risk is a
question of fact that cannot be resolved without weighing
conflicting evidence. But where, as here, the facts are
undisputed, the district court can make this determination as a
matter of law. See Fed. R. Civ. P. 56(a). Here, Appellants
failed to present any evidence to create a genuine issue of
material fact concerning whether APCO had actual or constructive
knowledge of the histoplasmosis risks associated with
accumulations of bird manure. Therefore, the district court
properly granted APCO’s motion for summary judgment. 6
6
In the alternative, APCO argues -- as it did in the
district court -- that its motion for summary judgment should be
granted because Appellants cannot satisfy the causation element
of their negligence claim. See Senkus, 535 S.E.2d at 727
(explaining that to prevail on a negligence claim based on
premises liability, a plaintiff must show that the breach of a
duty proximately caused an injury). The district court found it
unnecessary to evaluate APCO’s causation argument, having
concluded that Mr. Hoschar could not satisfy the duty element of
his negligence claim. While we note that there are serious
causation concerns here, we need not address APCO’s alternative
argument inasmuch as our conclusion that APCO owed no legal duty
to Mr. Hoschar is sufficient to affirm the district court’s
order granting APCO’s motion for summary judgment.
29
V.
Pursuant to the foregoing, the district court’s denial
of Appellants’ motion to remand and the district court’s grant
of APCO’s motion for summary judgment is
AFFIRMED.
30
