Trelevate LLC v. Dumont Aviation Group Incorporated ( 2019 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Trelevate LLC, No. CV-19-05171-PHX-DWL 10 Plaintiff, ORDER 11 v. 12 Dumont Aviation Group Incorporated, 13 Defendant. 14 15 The Court has an independent obligation to determine whether it has subject- 16 matter jurisdiction. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). 17 Pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure, “[i]f the court 18 determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the 19 action.” 20 Diversity jurisdiction exists when there is complete diversity of citizenship 21 between the plaintiff and the defendants and the amount in controversy exceeds $75,000, 22 exclusive of interests and costs. 28 U.S.C. § 1332. A controversy meets this requirement 23 when “all the persons on one side of it are citizens of different states from all the persons 24 on the other side.” Strawbridge v. Curtiss, 7 U.S. 267 (1806). 25 The party seeking to invoke diversity jurisdiction has the burden of 26 proof, Lew v. Moss, 797 F.2d 747, 749-50 (9th Cir. 1986), by a preponderance of the 27 evidence. McNatt v. Allied-Signal, Inc., 972 F.2d 1340 (9th Cir. 1992); see 13B Federal 28 Practice § 3611 at 521 & n. 34. “Absent unusual circumstances, a party seeking to 1 invoke diversity jurisdiction should be able to allege affirmatively the 2 actual citizenship of the relevant parties.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 3 857 (9th Cir. 2001). 4 A corporation, whether incorporated in a state of the United States or in a foreign 5 country, is “deemed a citizen of its place of incorporation and the location of its principal 6 place of business.” Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 7 F.3d 987, 990 (9th Cir. 1994). 8 “[A]n LLC is a citizen of every state of which its owners/members are citizens.” 9 Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). 10 Thus, to properly establish diversity jurisdiction “with respect to a limited liability 11 company, the citizenship of all of the members must be pled.” NewGen, LLC v. Safe Cig, 12 LLC, 840 F.3d 606, 611 (9th Cir. 2016). 13 As to individual natural persons, an allegation about an individual’s residence does 14 not establish his or her citizenship for purposes of establishing diversity jurisdiction. “It 15 has long been settled that residence and citizenship [are] wholly different things within 16 the meaning of the Constitution and the laws defining and regulating the jurisdiction of 17 the . . . courts of the United States; and that a mere averment of residence in a particular 18 state is not an averment of citizenship in that state for the purpose of jurisdiction.” 19 Steigleder v. McQuesten, 198 U.S. 141, 143 (1905). “To be a citizen of a state, a natural 20 person must first be a citizen of the United States. The natural person’s state citizenship 21 is then determined by her state of domicile, not her state of residence. A person’s 22 domicile is her permanent home, where she resides with the intention to remain or to 23 which she intends to return.” Kanter, 265 F.3d at 858-59 (emphasis added) (citations 24 omitted). See also id. (“In this case, neither Plaintiffs’ complaint nor [Defendants’] 25 notice of removal made any allegation regarding Plaintiffs’ state citizenship. Since the 26 party asserting diversity jurisdiction bears the burden of proof, [Defendants’] failure to 27 specify Plaintiffs’ state citizenship was fatal to Defendants’ assertion of diversity 28 jurisdiction.”). 1 Defendants state in their notice of removal that “Defendant Dumont Aviation || Group, Inc., is a corporation incorporated in the State of Delaware, with a registered office in New Castle County, Delaware.” (Doc. | § 6.) However, Defendants did not 4|| affirmatively allege the location of its principal place of business, which is mandatory to 5 || establish citizenship for the purposes of establishing diversity. 6 Furthermore, Defendants allege that “[u]pon information and belief, Plaintiff Trelevate, LLC, has three members: Ryan Knauss, Kylee Knauss, and Paul Briski, all of 8 || whom reside in the State of Arizona.” (/d. § 8.) But Defendants must affirmatively 9|| allege the citizenship of the members of the LLC, not merely their state of residence. || Defendants may allege the LLC members’ citizenship on information and belief if the 11 || information is not reasonably ascertainable. Carolina Cas. Ins. Co. v. Team Equipment, Inc., 741 F.3d 1082, 1087 (9th Cir. 2014). 13 To cure these pleading deficiencies, the Court will require the removing Defendant 14|| to file an amended notice of removal. Star Ins. Co. v. West, 2010 WL 3715155, *2 (D. Ariz. 2010); see also NewGen, LLC vy. Safe Cig, LLC, 840 F.3d 606, 612 (9th Cir. 2016) (‘Courts may permit parties to amend defective allegations of jurisdiction at any stage in the proceedings.”). Defendant is advised that its failure to timely comply with this order 18 || shall result in the remand of this action without further notice for lack of subject matter 19 || jurisdiction. 20 Accordingly, 21 IT IS ORDERED that removing Defendant shall file an amended notice of 22 || removal properly stating a jurisdictional basis for this action no later than September 30, || 2019. 24 IT IS FURTHER ORDERED that if Defendant fails to file an amended notice of 25 || removal by September 30, 2019, the Clerk of Court shall remand this action to state 26 || court. 27 Dated this 17th day of September, 2019. 28 fu 7 3. United States District Judge