Filed: January 12, 2010
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-2401
(3:08-cv-03996-MJP)
CARL G. FERRELL, individually and on behalf of all others
similarly situated,
Plaintiff - Appellee,
v.
EXPRESS CHECK ADVANCE OF SC LLC,
Defendant - Appellant,
and
ADVANCE AMERICA CASH ADVANCE CENTERS OF SOUTH CAROLINA,
INCORPORATED; LOCAL CASH ADVANCE OF SC III LLC; PAYDAY USA
OF SC LLC,
Defendants.
O R D E R
The court amends its opinion filed January 8, 2010, as
follows:
On page 5, last line of text before section II, the
date “December [21]” is corrected to read “December 22” and the
brackets around the number are deleted.
For the Court – By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CARL G. FERRELL, individually and
on behalf of all others similarly
situated,
Plaintiff-Appellee,
v.
EXPRESS CHECK ADVANCE OF SC
LLC,
Defendant-Appellant, No. 09-2401
and
ADVANCE AMERICA CASH ADVANCE
CENTERS OF SOUTH CAROLINA,
INCORPORATED; LOCAL CASH
ADVANCE OF SC III LLC; PAYDAY
USA OF SC LLC,
Defendants.
Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Matthew J. Perry, Jr., Senior District Judge.
(3:08-cv-03996-MJP)
Argued: October 27, 2009
Decided: January 8, 2010
Before TRAXLER, Chief Judge, and NIEMEYER and
AGEE, Circuit Judges.
2 FERRELL v. EXPRESS CHECK ADVANCE OF SC
Affirmed by published opinion. Judge Niemeyer wrote the
opinion, in which Chief Judge Traxler and Judge Agee joined.
COUNSEL
ARGUED: William Clifford Wood, Jr., NELSON, MUL-
LINS, RILEY & SCARBOROUGH, LLP, Columbia, South
Carolina, for Appellant. Joseph Camden Wilson, PIERCE,
HERNS, SLOAN & MCLEOD, Charleston, South Carolina,
for Appellee. ON BRIEF: C. Mitchell Brown, NELSON,
MULLINS, RILEY & SCARBOROUGH, LLP, Columbia,
South Carolina, for Appellant. Alan P. Sloan, III, PIERCE,
HERNS, SLOAN & MCLEOD, Charleston, South Carolina,
for Appellee.
OPINION
NIEMEYER, Circuit Judge:
In this appeal, we hold that, for purposes of determining
subject matter jurisdiction under the Class Action Fairness
Act of 2005 ("CAFA"), Pub. L. No. 109-2, 119 Stat. 4 (codi-
fied in scattered sections of Title 28, United States Code), a
limited liability company is an "unincorporated association"
as that term is used in 28 U.S.C. § 1332(d)(10) and therefore
is a citizen of the State under whose laws it is organized and
the State where it has its principal place of business.
After Carl Ferrell, a citizen of South Carolina, commenced
this class action in South Carolina state court against Express
Check Advance of South Carolina, LLC, and others, alleging
that their "payday loans" violated South Carolina law,
Express Check removed the action to federal court under
CAFA, 28 U.S.C. § 1453(b), alleging minimal diversity, as
specified in 28 U.S.C. § 1332(d)(2)(A), as the basis for fed-
FERRELL v. EXPRESS CHECK ADVANCE OF SC 3
eral jurisdiction. Express Check contended that the minimal
diversity requirement of CAFA was satisfied because all other
parties are South Carolina citizens, while it, as a limited liabil-
ity company, is a citizen of Missouri and Kansas based on the
citizenship of its sole member, a Missouri corporation with its
principal place of business in Overland, Kansas. Alterna-
tively, it argued that if it was deemed an "unincorporated
association" within the meaning of § 1332(d)(10), it is none-
theless a citizen of Tennessee, under whose laws it is orga-
nized, and of Kansas, where it has its principal place of
business.
On Ferrell’s motion to remand, the district court concluded
that Express Check, as a limited liability company, is an "un-
incorporated association" under § 1332(d)(10) and that its
principal place of business is in South Carolina, not Kansas.
The court accordingly remanded the case to state court for
lack of subject matter jurisdiction.
On appeal, we conclude that (1) a limited liability company
is an "unincorporated association" as used in § 1332(d)(10),
whose citizenship is that of the State under whose laws it is
organized and the State where it has its principal place of
business, and (2) Express Check has its principal place of
business in South Carolina. Accordingly, we affirm.
I
Carl Ferrell commenced this class action in the Richland
County Court of Common Pleas, naming four business enti-
ties as defendants: Advance America, Cash Advance Centers
of South Carolina, Inc.; Local Cash Advance of SC, III, LLC;
Payday USA of SC, LLC; and Express Check Advance of
South Carolina, LLC. The complaint alleges that, in making
payday loans in South Carolina, the defendants violated (1)
the South Carolina Deferred Presentment Services Act, in par-
ticular S.C. Code Ann. § 34-39-200(5), by engaging in unfair,
deceptive, and fraudulent practices; (2) the South Carolina
4 FERRELL v. EXPRESS CHECK ADVANCE OF SC
Consumer Protection Code, in particular S.C. Code Ann.
§ 37-5-108(1), by engaging in unconscionable conduct; and
(3) the South Carolina common-law duties of good faith and
fair dealing. The complaint also alleges that defendants acted
negligently and engaged in a civil conspiracy. Ferrell, a South
Carolina citizen, purports to represent a class of other South
Carolina citizens who had entered into payday loans in South
Carolina. The parties agree that, other than Express Check, all
defendants are also citizens of South Carolina for purposes of
diversity jurisdiction.
Express Check is a limited liability company organized
under the laws of Tennessee, and its sole member is QC
Financial Services, Inc., a Missouri corporation with its prin-
cipal place of business in Overland, Kansas. All the stock of
QC Financial Services is in turn owned by QC Holdings, Inc.,
a Kansas corporation with its principal place of business in
Overland, Kansas. Express Check engages in the business of
making payday loans from stores located solely in South Car-
olina. While its top four officers, who are also officers of QC
Financial Services, are located in Kansas, all other Express
Check employees are located in South Carolina.
Express Check’s operations in South Carolina are substan-
tially controlled by QC Financial Services and QC Holdings.
These two corporations make the major operational and pol-
icy decisions for Express Check, which then are implemented
by Express Check’s employees in South Carolina. QC Finan-
cial Services and QC Holdings also provide a variety of gen-
eral support services to Express Check, such as legal,
marketing, accounting, auditing, information technology, and
collection services.
Invoking federal subject matter jurisdiction based on mini-
mal diversity under 28 U.S.C. § 1332(d)(2)(A), Express
Check filed a notice of removal under 28 U.S.C. § 1453(b),
contending that it is not a citizen of South Carolina and there-
fore that the minimal diversity requirement was fulfilled. Fer-
FERRELL v. EXPRESS CHECK ADVANCE OF SC 5
rell filed a motion to remand, claiming that Express Check is
a citizen of South Carolina and therefore that the minimal
diversity needed for jurisdiction did not exist. The district
court granted Ferrell’s motion to remand, concluding that
Express Check is an "unincorporated association," which,
under 28 U.S.C. § 1332(d)(10), is "deemed to be a citizen of
the State where it has its principal place of business and the
State under whose laws it is organized." Concluding that
Express Check has its principal place of business in South
Carolina, the court found that it did not have subject matter
jurisdiction over the action.
Express Check filed a petition for permission to appeal
under 28 U.S.C. § 1453(c), and we granted the petition by
order dated December 22, 2009.
II
Express Check contends that, as a limited liability com-
pany, its citizenship for purposes of diversity jurisdiction
should be determined under traditional rules by looking to the
citizenship of its sole member, QC Financial Services. See
Carden v. Arkoma Assocs., 494 U.S. 185 (1990) (holding that
a limited partnership is not itself a citizen and that courts must
instead look to the citizenship of its members to determine if
diversity jurisdiction exists); Gen. Tech. Applications, Inc. v.
Exro Ltda, 388 F.3d 114, 121 (4th Cir. 2004) (holding that a
limited liability company’s "citizenship is that of its mem-
bers"). It argues that CAFA, which, in 28 U.S.C.
§ 1332(d)(10), changed the traditional rule for determining
the citizenship of "unincorporated association[s]" in class
actions, does not apply to it because a limited liability com-
pany is not an "unincorporated association." It argues that,
under Tennessee law, it is an artificial entity created by stat-
ute, whose nature falls somewhere between that of a corpora-
tion and an unincorporated association. Thus, when applying
the traditional rules, it should not be treated as a citizen of
South Carolina, but rather as a citizen of Missouri and Kan-
6 FERRELL v. EXPRESS CHECK ADVANCE OF SC
sas, the States of citizenship of its sole member, QC Financial
Services. Because the minimal diversity requirement of 28
U.S.C. § 1332(d)(2)(A) is thus satisfied, Express Check
argues that it properly removed this action to federal court
under 28 U.S.C. § 1453(b) and that the district court erred as
a matter of law in concluding otherwise.
Ferrell contends that the term "unincorporated association,"
as used in § 1332(d)(10), is "very broad and encompasses all
non-corporate entities, including limited liability companies."
He argues that in § 1332 Congress created two categories,
corporations and unincorporated associations, both of which
are treated similarly for determining diversity jurisdiction in
CAFA class actions, and that federal courts should not rely on
the nuances of Tennessee law to make their jurisdictional
decisions. See Carden, 494 U.S. at 197 (admonishing against
delving into such an analysis).
The issue thus presented focuses on the single question of
statutory interpretation of whether § 1332(d)(10), which, in
the CAFA context, changed the traditional rule for determin-
ing the citizenship of unincorporated associations, applies to
limited liability companies.
In CAFA, Congress conferred subject matter jurisdiction on
federal courts over class actions in which the amount in con-
troversy exceeds $5 million and in which "any member of a
class of plaintiffs is a citizen of a State different from any
defendant." 28 U.S.C. § 1332(d)(2)(A). The citizenship of a
corporation is determined by the State in which it is incorpo-
rated and the State in which it has its principal place of busi-
ness, see id. § 1332(c)(1), and the citizenship of an
unincorporated association is determined similarly by the
State "under whose laws it is organized" and the State where
it has its principal place of business, see id. § 1332(d)(10).
The provisions for determining the citizenship of corporations
and of unincorporated associations, however, are contained in
separate places in § 1332, reflecting that the provision for
FERRELL v. EXPRESS CHECK ADVANCE OF SC 7
determining the citizenship of unincorporated associations
applies only to class actions covered by CAFA. The signifi-
cance of including a provision for unincorporated associations
only in CAFA informs the proper interpretation of the provi-
sion, and this is better understood against the background
jurisprudence.
In Marshall v. Baltimore & Ohio Railroad Co., 57 U.S. (16
How.) 314, 327-29 (1854), the Supreme Court, noting that
corporations technically were not citizens for diversity pur-
poses, held nonetheless that corporations should be deemed
citizens of the State where they were incorporated because a
corporation’s shareholders could conclusively be presumed to
be citizens of the incorporating State. By contrast, in a line of
cases beginning with Chapman v. Barney, 129 U.S. 677
(1889), the Court made clear that artificial entities other than
corporations are not citizens for diversity purposes and that
courts must look to the citizenship of their members when
determining whether diversity jurisdiction exists. Id. at 682
(holding that a joint stock company "cannot be a citizen of
New York, within the meaning of the statutes regulating juris-
diction, unless it be a corporation"); see also Great Southern
Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 456–57 (1900)
(refusing to extend the jurisdictional rule for corporations to
cover a limited partnership association); United Steelworkers
of America, AFL-CIO v. R.H. Bouligny, Inc., 382 U.S. 145,
149-53 (1965) (maintaining the "distinction between the ‘per-
sonality’ and ‘citizenship’ of corporations and that of labor
unions and other unincorporated associations" and accord-
ingly holding that an unincorporated labor union is not a citi-
zen for diversity purposes); Carden, 494 U.S. at 194-97
(applying "the trilogy of Chapman, Great Southern, and
Bouligny" to hold that a limited partnership is not itself a citi-
zen for diversity purposes).
Referring to this jurisprudence, which applies different
rules based on whether the entity in question is incorporated,
the Supreme Court has often characterized any business entity
8 FERRELL v. EXPRESS CHECK ADVANCE OF SC
that is not a corporation as an "unincorporated association."
See Bouligny, 382 U.S. at 149-50; Carden, 494 U.S. at 195
("[I]t is difficult to understand how the dissent can character-
ize as ‘newly formulated’ the ‘rule that the Court will, without
analysis of the particular entity before it, count every member
of an unincorporated association for purposes of diversity
jurisdiction’"); Navarro Savings Ass’n v. Lee, 446 U.S. 458,
461 (1980) ("Although corporations suing in diversity long
have been ‘deemed’ citizens, unincorporated associations
remain mere collections of individuals" (internal citation
omitted)). Even though the Supreme Court has also referred
to unincorporated associations as "artificial entities other than
corporations," Carden, 494 U.S. at 197, it intended no differ-
ence in meaning, and we have recognized that for determining
citizenship for diversity jurisdiction, the Chapman line of
cases established a categorical rule governing all "unincorpo-
rated associations." N.Y. State Teachers Retirement Sys. v.
Kalkus, 764 F.2d 1015, 1017 (4th Cir. 1985) ("[T]he Supreme
Court has consistently held that in diversity actions involving
unincorporated associations, federal courts must look to the
citizenship of each member of the association to determine
whether diversity exists" (emphasis added)); see also Clephas
v. Fagelson, Shonberger, Payne & Arthur, 719 F.2d 92, 93
(4th Cir. 1983) ("It is hornbook law that ‘[u]nincorporated
associations have never been accorded a status as jural per-
sons for purposes of diversity jurisdiction, nor has there
developed a presumption of a single citizenship of the mem-
bers’" (emphasis added) (quoting Henry M. Hart, Jr. & Her-
bert Wechsler, The Federal Courts and the Federal System
917 (1st ed. 1953))); Belle View Apartments v. Realty ReFund
Trust, 602 F.2d 668, 669 (4th Cir. 1979) ("Although the hold-
ing of Bouligny was technically limited to labor unions,
‘every argument advanced by the Court is applicable to all
forms of unincorporated associations’" (emphasis added)
(quoting 13 Charles Alan Wright, Arthur R. Miller & Edward
H. Cooper, Federal Practice and Procedure § 3630, at 849
(1st ed. 1975))); 13F Wright, Miller & Cooper, supra, § 3630
FERRELL v. EXPRESS CHECK ADVANCE OF SC 9
(3d ed. 2009) (addressing the applicable legal landscape in a
section entitled, "Unincorporated Associations—History of
General Principle"); Walter W. Jones, Jr., Annotation, Deter-
mination of Citizenship of Unincorporated Associations, For
Federal Diversity of Citizenship Purposes, In Actions By or
Against Such Associations, 14 A.L.R. Fed. 849 (2004), cited
in S. Rep. No. 109-14, at 46 (2005), reprinted in 2005
U.S.C.C.A.N. 3, 43.
Thus, under the traditional jurisprudence, corporations were
deemed to be citizens of the State in which they were incorpo-
rated, and all other business enterprises were referred to as
unincorporated associations and treated effectively as citizens
of the States of which their members were citizens. In 1958,
Congress enacted § 1332(c) to modify the traditional rule with
respect to corporations by expanding the citizenship of a cor-
poration to include not only the State of incorporation but also
the State where it has its principal place of business. But no
similar provision was made for unincorporated associations,
which remained governed by the Chapman line of cases.
While the Supreme Court in both Bouligny and Carden recog-
nized that the incorporated/unincorporated dichotomy was
"unresponsive to policy considerations raised by the changing
realities of business organization," it noted that Congress was
better positioned to make the appropriate accommodations.
Carden, 494 U.S. at 196–97; Bouligny, 382 U.S. at 149–51.
And in enacting § 1332(d)(10) as a part of CAFA in 2005,
Congress accepted the Court’s invitation, modifying the rule
for business entities other than corporations to provide, for
purposes of CAFA, that the citizenship of all "unincorporated
association[s]" is determined by the State under whose laws
the unincorporated association is organized and the State
where it has its principal place of business. See 28 U.S.C.
§ 1332(d)(10).
Given this history, we read § 1332(d)(10) to respond to the
categorical distinction that the Supreme Court created in
Chapman and maintained in Bouligny and Carden. Moreover,
10 FERRELL v. EXPRESS CHECK ADVANCE OF SC
the specific language of § 1332(d)(10) indicates that a limited
liability company, if not a corporation, is an unincorporated
association, employing "unincorporated" as the counterpart to
"incorporated." See Gen. Tech. Applications, 388 F.3d at 121
("[A limited liability company] is an unincorporated associa-
tion, akin to a partnership for diversity purposes").
Accordingly, we agree with the district court that, under
§ 1332(d)(10), Express Check’s citizenship for purposes of
CAFA is that of the State under whose laws it is organized
and the State where it has its principal place of business.
To argue that Congress intended "unincorporated associa-
tion" in § 1332(d)(10) to refer to only those non-corporate
entities that lack a distinct legal identity under the law of the
State in which they are organized, Express Check compares
the language of § 1332(d)(10) (referring to "unincorporated
association") with the language in §§ 1332(d)(9)(B) and
1453(d)(2) (referring to "a corporation or other form of busi-
ness enterprise"). Relying on the canon of statutory construc-
tion that, in general, different words used in the same statute
should be assigned different meanings, Express Check rea-
sons that Congress must have intended these two phrases to
have different meanings. Moreover, it argues that the phrase
"other form of business enterprise" should be read naturally
as the broader of the two, connected to "corporation" by the
disjunctive "or," and that therefore "other form of business
enterprise" was the term that Congress employed when it
wanted to refer to all non-corporate entities. Thus, it reasons,
the term "unincorporated association" in § 1332(d)(10) refers
to only a narrower subset of non-corporate business forms, a
class that excludes entities having a distinct legal identity
under the law of the State in which they are organized.
This argument overlooks two linguistic restraints imposed
by the plain language of the statute. First, the use of "a corpo-
ration or other form of business enterprise" in
§§ 1332(d)(9)(B) and 1453(d)(2) refers to the class of all
FERRELL v. EXPRESS CHECK ADVANCE OF SC 11
business entities for the purpose of excluding from CAFA dis-
putes over their internal affairs and governance. As Express
Check appropriately recognizes, "business enterprise" is a
broader term than either "corporation" or "unincorporated
association." Congress undoubtedly intended the exception in
§§ 1339(d)(9)(B) and 1453(d)(2) to apply to all business
forms, whether they be corporations or unincorporated associ-
ations. By using "or other" ("a corporation or other form of
business enterprise"), Congress included "corporation" as an
example form of "business enterprise," so that the term "busi-
ness enterprise" itself includes both "corporations" and any
other form of business enterprise. Thus, "business enterprise"
was the broadest term Congress could use, and this class
includes corporations and non-corporate entities. When using
"unincorporated association" in § 1332(d)(10), therefore,
Congress needed to use a term narrower than "business enter-
prise," because the term "business enterprise" also includes
corporations. In essence, by using "business enterprise," "cor-
poration," and "unincorporated association" as it did, Con-
gress used "business enterprise" as the broadest term and
subdivided the entities covered by that term, as needed, into
two subclasses, corporations and non-corporate entities, refer-
ring to the latter subclass as "unincorporated association[s]."
Second, the phrase "unincorporated association" distin-
guishes itself linguistically from incorporated associations,
thereby suggesting two mutually exclusive classes of business
enterprises -– those that are incorporated, i.e., corporations,
and those that are not.
Moreover, Express Check’s argument overlooks the devel-
opmental history of § 1332. In 1958, in response to Marshall,
57 U.S. (16 How.) at 327-29, where the Supreme Court
defined in effect the citizenship of a corporation as deter-
mined by only its State of incorporation, Congress statutorily
expanded that holding to provide that the citizenship of the
corporation is also determined by the State where it has its
principal place of business. At that time, it left all other busi-
12 FERRELL v. EXPRESS CHECK ADVANCE OF SC
ness enterprises subject to the traditional rule of looking to the
citizenship of members, as provided in Chapman, 129 U.S. at
682, and its progeny. But in 2005, in order to give CAFA
broad application, Congress defined the citizenship of those
other business enterprises narrowly, i.e., limiting their citizen-
ship to one or two States—where they were organized and
where they had their principal place of business—and thus
facilitating federal court jurisdiction over CAFA class actions.
Accordingly, we reject Express Check’s linguistic argu-
ment.
Express Check also makes an argument that "unincorpo-
rated association" as used in § 1332(d)(10) is limited to only
entities that lack a distinct legal identity based on some lan-
guage contained in Navarro. Lifting isolated phrases from
Navarro, it argues that "unincorporated associations" are
"mere collections of individuals." 446 U.S. at 461. And
because a limited liability company organized under Tennes-
see law is "a legal entity distinct from its members," Tenn.
Code Ann. § 48-249-116, it is thus more than a "mere collec-
tion[ ] of individuals." Navarro, however, did not define or
even describe "unincorporated associations" as "mere collec-
tions of individuals." Rather, the language lifted by Express
Check from Navarro was simply Navarro’s restatement of
Chapman’s rule that, for diversity purposes, "unincorporated
associations remain mere collections of individuals," even
though corporations are deemed citizens. Navarro, 446 U.S.
at 461 (emphasis added).
In sum, we conclude that the term "unincorporated associa-
tion" in § 1332(d)(10) refers to all non-corporate business
entities. This interpretation not only serves the language and
history of § 1332 but also the purpose of broadening the reach
of CAFA. Thus, a limited liability company, such as Express
Check, is an "unincorporated association" within the meaning
of § 1332(d)(10).
FERRELL v. EXPRESS CHECK ADVANCE OF SC 13
III
That still leaves the question of where Express Check has
its principal place of business. Express Check contends that
because its operations, even though conducted in South Caro-
lina, are controlled by officers in Kansas, Kansas should be
found to be its principal place of business, thus establishing
it as a Kansas citizen, as well as a citizen of Tennessee under
whose laws it is organized.
Ferrell, on the other hand, contends that Express Check’s
principal place of business is in South Carolina because all of
its business operations are conducted there. It makes payday
loans only in South Carolina from locations only in South
Carolina through its employees, all of whom function in
South Carolina, except for its top four officers, who are also
among the top officers of QC Financial Services and who
function in Overland, Kansas.
We have recognized two tests for determining a business’
principal place of business: the "nerve center" test, which
makes determinative the home office or place where the cor-
poration’s officers direct, control, and coordinate its activities,
and the "place of operations" test, which makes determinative
the place where the bulk of corporate activity takes place. See
Peterson v. Cooley, 142 F.3d 181, 184 (4th Cir. 1998) (quot-
ing Mullins v. Beatrice Pocahontas Co., 489 F.2d 260, 262
(4th Cir. 1974) (per curiam)). Although these tests were
developed in the context of ascertaining a corporation’s prin-
cipal place of business under § 1332(c)(1), we conclude that
it is logical to apply the same tests when determining an unin-
corporated association’s principal place of business under
§ 1332(d)(10). See Davis v. HSBC Bank Nevada, N.A., 557
F.3d 1026, 1032 n.16 (9th Cir. 2009) (Kleinfeld, J., concur-
ring) ("We apply the same tests to determine the ‘principal
place of business’ for corporations and unincorporated associ-
ations").
14 FERRELL v. EXPRESS CHECK ADVANCE OF SC
Although we have not endorsed either test to the exclusion
of the other and have noted that both tests need not be applied
in any given case, we have recognized that the nature of the
business involved determines best which test is the more
appropriate to apply. Thus, in Peterson, we explained that the
place of operations test, which "presumes the existence of
physical operations by which a corporation’s presence in dif-
ferent states can be measured," is "applied when a company
has multiple centers of manufacturing, purchasing, or sales."
142 F.3d at 184. But when, for example, a company "eng-
age[s] primarily in the ownership and management of invest-
ment assets such as debt or equities," so that it "is not really
geographically bound," we apply the nerve center test. Id.; see
also Athena Auto., Inc. v. Digregorio, 166 F.3d 288, 290 (4th
Cir. 1999).*
The nature of Express Check’s business, simply put, is to
make payday loans from its numerous store locations in South
Carolina, where all of its employees, except four officers, also
work. We conclude that when a company has all of its physi-
cal operations for doing business in a given State and its four
top officers in another, the place of operations test should be
applied to most accurately reflect its principal place of busi-
ness. In this case, that is South Carolina.
Express Check’s primary challenge to this conclusion is
that we should attribute to it the citizenship of its parent com-
panies because they exercise complete control over it. Express
Check argues that it is merely the alter ego of its sole mem-
ber, QC Financial Services, and QC Financial Services’ par-
ent, QC Holdings. Thus, it concludes that the citizenship of
those companies—Missouri and Kansas—should be imputed
*Resolving the simply stated question of where a business entity has its
principal place of business is not a simple matter, and the circuit courts
have developed different tests. In June 2009, the Supreme Court granted
certiorari in Hertz Corp. v. Friend, 129 S. Ct. 2766, to resolve the split,
and that case was argued in November 2009.
FERRELL v. EXPRESS CHECK ADVANCE OF SC 15
to it. In the circumstances of this case, we reject that argu-
ment.
Express Check’s corporate parents decided to maintain it as
a legally separate entity and have undoubtedly benefited from
this arrangement. It may not now complain that it would
improperly elevate form over substance for us to respect the
very corporate structure its parents selected. See J.A. Olson
Co. v. City of Winona, 818 F.2d 401, 414 (5th Cir. 1987)
("We hold then that the alter ego doctrine may not be used to
create diversity jurisdiction by ignoring the principal place of
business of a subsidiary corporation and imputing to it the
principal place of business of the parent").
In sum, because Express Check has its principal place of
business in South Carolina, it is a citizen of South Carolina
for purposes of diversity jurisdiction under CAFA. 28 U.S.C.
§ 1332(d)(10). Accordingly, it has not carried its burden of
demonstrating that minimal diversity as defined in
§ 1332(d)(2)(A) exists. See Johnson v. Advance America,
Cash Advance Ctrs. of S.C., Inc., 549 F.3d 932, 936 (4th Cir.
2008); Strawn v. AT&T Mobility LLC, 530 F.3d 293, 298 (4th
Cir. 2008).
The order remanding this case to state court is accordingly
AFFIRMED.