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California Federal Court Decides It Lacks Diversity Jurisdiction over Company that Garth Brooks Started in Tennessee
The U.S. District Court for the Central District of California decided it lacked diversity jurisdiction over a suit filed by the former general manager of Red Strokes Entertainment, a production company Garth Brooks owned. Sanderson v. Brooks, CV13-03497. Red Strokes, which was incorporated in Tennessee, closed in 2011. After Lisa Sanderson, who worked for Red Strokes primarily from Los Angeles, sued in Los Angeles Superior Court alleging Red Strokes owed payments to her, Brooks had the case removed to federal court. (In a related suit by Brooks and Red Strokes against Sanderson in the Middle District of Tennessee, the Nashville federal court decided it has diversity jurisdiction. Red Strokes Entertainment Inc. v. Sanderson, 3:12-cv-0008.) California federal District Judge Otis D. Wright noted that “a 'last principal place of business' approach is the best determination of an inactive corporation's citizenship. Because Red Strokes's last principal place of business while it was active was in California, complete diversity is lacking between Red Strokes and Sanderson.” The district judge added: “Brooks alleges that because he lived in Nashville from 1994 to 2000, Red Strokes's business decisions were made in Nashville. But this assertion is limited until 2000.” Judge Wright thus sent Sanderson's suit back to Los Angeles County Superior Court.
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