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case number 15 at 70 30 cost command LLC appellant versus W. H. Administrators Inc at L. Mr Queenman for the appellant.

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Mr Hill for the athletes.

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Good morning, Your Honors.

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May it please the Court, Patrick Clingman on behalf of Appellant, Custodian, LLC.

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I'd like to reserve two minutes for rebuttal with the Court's permission.

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The docket in this case below still reflects that WHA's principal place of business is Houston, Texas.

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Second, even if there was any doubt as to what the veracity of the quality of that admission was,

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The post discovery that was permitted in connection with the motion for reconsideration illustrates quite clearly that at the time the case was filed, WHA's principal place of business was in Houston, Texas.

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The Hertz Court, Supreme Court's decision in Hertz specifically adopted

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the Seventh Circuit's case law that applied the nerve center test and, in fact, returned back to Judge Weinfeldt of the Southern District of New York's 1959 decision in Scott Typewriter.

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In both Scott Typewriter and the Seventh Circuit, all those cases look at objective criteria for determining what a corporation's nerve center is.

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So let me ask you a question.

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The district court's order didn't say whether the dismissal was with prejudice or not.

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And we presume that it's without prejudice.

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But I'm wondering, is there a statute of limitations bar to you refiling here?

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Not yet, Your Honor.

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OK.

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OK.

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Not yet, Your Honor.

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Obviously, if the district court's decision is upheld, we would have to file in the state court.

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Or, yeah, we have to file in the state court.

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Or drop?

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Or drop over here.

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Wouldn't it have been much easier than appealing?

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I'm sorry, Your Honor.

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Why didn't you do that?

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Wouldn't that have been a lot easier than this?

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Well, quite frankly... What's the advantage to the appeal?

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Well, number one, I'm not admitting in the state of Maryland.

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Wait a minute, that can't be what this is about.

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I'm being facetious, Your Honor.

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I apologize.

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It was because we had, quite frankly, we thought we had a statutory basis to be in the court of our choosing.

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And the court of our choosing was the DC District Court.

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But couldn't you just refile without this defendant in the district right here?

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I'm sorry, Your Honor.

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Couldn't you just refile the case?

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drop the defendant.

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Well, now, at the time, that was a third option that we presented in our appeal.

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No, no, instead of appealing.

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Why?

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What's the advantage of

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Because the corporation, WHA, is a joint or individual port fuser for the claims that we asserted in our action, torsious interference with contract.

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It was a, quite frankly, I didn't think, or rather, we didn't think that we could get full relief without having both defendants in the action.

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So if you lose on the merits here,

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Are you, would you want to drop WHA?

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No, at this point, if I lose on the merits here, I will refile in the state of Maryland.

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Okay, so there's no need for us to remand for dropping WHA or anything if you lose on the merits.

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I'm not prejudging the merits, I'm just trying to figure out the roadmap.

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Correct.

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Well, actually, Your Honor, the roadmap, quite frankly, is the first two issues we present in our appeal.

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It's number one, whether or not the cost command was improperly faulted for not relying on the admission on record about WHA's principal place of business while the motions to dismiss were pending.

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And number two, assuming that that is enough for a remand,

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We would also request a finding, or at least instructions, perhaps more elucidation on Hertz Corporation's decision as to what are the applicable factors to consider when judging a principal place of business.

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Our point would be that Hertz answered the question, what?

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It didn't answer the question, how?

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How it referred back to Scott Typewriter and the Seventh Circuit decisions.

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As measured by the time the complaint was filed, WHA's nerve center was in Houston, Texas.

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The joint appendix displays that the formation documents, the lease for the Bethesda property, contracts with customers, contracts with vendors.

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But Turner's in Bethesda, right?

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Correct.

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And Turner directs, controls?

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coordinates the business activities, correct?

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My understanding is that at this time, and certainly probably at the time that he submitted his initial affidavits, that likely was, if not completely true, close to true at that point.

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There was a transition in the company operations at the time I ultimately took his deposition.

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So is your argument at the time of the filing, though, that it was different?

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Yes.

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Didn't you get a chance to litigate that in the motion to reconsider?

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There was discovery taken at that time.

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What came of that discovery?

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That was the information we submitted in connection with the motion to reconsider.

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At discovery, did you deduce evidence that showed that at the time of filing, Turner was not located and Bethesda was located in Texas or whatever?

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No, Your Honor.

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Why not?

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If that's a critical issue, why didn't you focus on that then?

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The evidence that came out of that discovery on the motion for reconsideration all supports the argument that Maryland is the proper location.

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I would disagree, Your Honor, because at the time that the discovery was conducted, the information that we were able to solicit was not necessarily the location of Turner, but rather the location of where WHA's principal place of business was, because... So your argument isn't that you didn't get a full chance to litigate

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the jurisdictional issue in the motion to reconsideration.

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You're just quarreling with what the district court did with that information.

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Is that right?

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Okay.

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Your Honor, it's the characterization of the evidence that was submitted in connection with the motion for reconsideration that we have the dispute with.

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But the first argument goes to why should we have to have had this

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virtual sword of Damocles hanging over our head at this favorite motion that is rarely granted an extraordinary procedure when at the time that we were confronted with the issue about whether or not the court had subject matter jurisdiction.

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So if we agreed with you that the motion to dismiss was done hastily without proper

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without a proper development of jurisdictional facts, what would happen on remand?

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The same thing that happened in the motion for reconsideration, right?

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The same discovery would be adduced then.

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Why do that?

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That seems to be

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That seems to be a waste of effort.

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The facts have been developed now.

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We know the facts.

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They're in front of us.

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Correct.

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And now we have to determine what the facts mean under Hertz, right?

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Correct.

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And Your Honor, that's why in answer to Judge Kavanaugh's question earlier, we would request not only a reversal and a remand as to the November

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order granting the motion to dismiss for lack of subject matter jurisdiction.

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But we'd also ask for some instruction to the court below that these are the types of factors you can consider in determining where a corporation's principal place of business is.

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Of course, if we agree that the facts are in front of the district court, and if we agree with the interpretation of Hertz, then that's the end of the matter, right?

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Well, if you agree with the interpretation of Hertz,

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that the district court.

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Yes, you're right.

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Absolutely.

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I would just point out, Your Honor, that there were three directors of this company.

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Mr. Ring, Mr. Monteith, Mr. Turner.

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Mr. Turner was located in Bethesda.

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We have no dispute about that.

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Mr. Ring was the financier.

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Mr. Ring was also the secretary treasurer.

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Mr. Ring never stepped foot in the office in Bethesda.

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He says in his affidavit that he left the operations of the company to the sound discretion of Turner.

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Correct.

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But he had power of the purse, Your Honor.

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He says, left operation of the company to the sound discretion of Turner.

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Well, and exactly, I would point to the Fourth Circuit's decision in central West Virginia and also postcard, where they indicated that in light of Hertz, the day-to-day operations are not the critical decision anymore in determining where principal place of business is.

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It's the traditional criteria for nerve center that was adopted by the Seventh Circuit and also by Scott Typer.

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Thank you, Your Honor.

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Good morning.

[00:11:33] Speaker 00:
David Hill for Pelley's Brendan Turner and WH Administrators.

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Picking up on where you left off with Mr. Klingman, there were three directors.

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Mr. Turner, Mr. Ring, Mr. Monte.

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As Mr. Ring states in his affidavit, everything was left to Mr. Turner.

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At the time the suit was fought, from the inception of the company,

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all business operations were left with Mr. Turner.

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Mr. Ring had the power of the purse, but Mr. Turner made all of the business decisions.

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There are lots of sites in the right.

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What does that mean then that he had the power of the purse?

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He was the fine.

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He was the financial.

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He financed the initial startup of the company and could he say no to Mr Turner?

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He could say no, but he did not say no on the and there was ample discussion with this between Mr Clement and Mr Turner during the deposition that was ordered by the district court.

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Uh, so the facts here support that the nerve center was from

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from the inception of the company in Bethesda because Mr. Turner was in Bethesda.

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All the employees with save one were in Bethesda.

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The financial and administrative functions that Mr. Klingman relies so heavily on in his brief were directed by Mr. Turner.

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Mr. Ring, Mr. Andy Ring reported to Mr. Brendan Turn.

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So throughout this throughout this company's history,

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everything was run out of Bethesda.

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And as a result of that fact, and it's virtually undisputed, the appellant's asking you to rewrite Hertz.

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The Hertz test is clear.

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Where do the high-level officers of the company direct, control, and coordinate the business activities of the company?

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That was Mr. Turner from Bethesda from the beginning of WH Administrator's history.

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So he's asking you to rewrite Hertz to say you have to weigh the other factors that he cites and trump.

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pardon the pun and the history of what we're dealing with right now, but Trump, the determining factors of where Mr. Turner was directing, controlling, and managing.

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There's no instruction necessary to the district court about what factors to comply.

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Contrary to Appellant's brief, we're not saying you can't consider those factors.

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Those factors can't be part of a jurisdictional determination.

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We're not saying that.

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We are saying it can be part of the analysis of where the business activities of the corporation are directed, controlled, and coordinated.

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And here, I believe that's exactly what Judge Berman Jackson did.

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Cost Command Appellate was given multiple opportunities to have at this issue.

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They deposed Mr. Turner for the full two hours.

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They went back and forth.

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And the record shows from the inception, he made the decisions.

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for this business.

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So there's no reason to somehow order the weight of the business activities and say, oh, this, this, this, this, and this, regulatory filings, tax filings, accounting, et cetera, were done out of Houston.

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So more work was done out of Houston than out of Bethesda.

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That's essentially returning to the business activities rule, which was specifically rejected in Hertz.

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So we would strongly urge you to affirm Judge Berman Jackson's decision.

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There's no need to rewrite Hertz.

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There's no need to muddy an already clear bright line test that was established by the Supreme Court in Hertz, certainly not on the facts of this case, which clearly demonstrate that from its inception, WH Administrators was directed, controlled, and coordinated all business decisions by Mr. Turner from Bethesda, Maryland.

[00:15:11] Speaker 05:
Thank you.

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Do you need any more time?

[00:15:23] Speaker 01:
Hertz directed courts to adopt a straightforward approach.

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It referred back to administrative simplicity.

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It referred back to predictability.

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It should not take a deposition to determine where a corporation's principal place of business is.

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If you look at all objective factors, regulatory filings, state tax filings,

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You look at the charter, you look at the formation documents, where every single contract, every single formation document points to one location, that should be the principal place of business.

[00:15:56] Speaker 01:
Thank you.

[00:15:57] Speaker 05:
Thank you.

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Case is submitted.