Stalwart Capital v. Icap Pac Nw Opp. & Income Fund ( 2018 )

FILED
NOT FOR PUBLICATION
MAR 23 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
STALWART CAPITAL, LLC, a New No. 16-35079
Jersey limited liability company,
D.C. No. C14-01128 TSZ
Plaintiff-Appellant,
v.
MEMORANDUM*
ICAP PACIFIC NORTHWEST
OPPORTUNITY AND INCOME FUND,
LLC, a Delaware limited liability company
et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, District Judge, Presiding
Argued and Submitted March 6, 2018
Seattle, Washington
Before: RAWLINSON and CHRISTEN, Circuit Judges, and BENCIVENGO,**
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
Appellant Stalwart Capital, LLC (“Stalwart”) appeals the district court’s
judgment in favor of Appellees following a jury trial. We have jurisdiction under
28 U.S.C. § 1291. Because we find the record insufficient to establish subject
matter jurisdiction, we remand for further findings regarding whether there was
diversity jurisdiction when the case was filed, and therefore do not reach the merits
of the appeal. Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002) (“Federal
Rule of Civil Procedure 12(h)(3) provides that a court may raise the question of
subject matter jurisdiction, sua sponte, at any time during the pendency of the
action, even on appeal.”); Matheson v. Progressive Specialty Ins. Co., 319 F.3d
1089, 1091 (9th Cir. 2003)(“We cannot consider the merits of the appeal before
assuring ourselves that the district court had jurisdiction.”)
Stalwart filed this case in the district court on the basis of diversity
jurisdiction under 28 U.S.C. § 1332(a). “For a federal court to exercise diversity
jurisdiction under § 1332(a), the amount in controversy must exceed $75,000, and
the parties must be citizens of different states.” Rainero v. Archon Corp., 844 F.3d
832, 839 (9th Cir. 2016). The latter requirement is at issue.
Appellant and three of the Appellees are limited liability companies
(“LLCs”), meaning each one “is a citizen of every state of which its
owners/members are citizens.” Johnson v. Columbia Properties Anchorage, LP,
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437 F.3d 894, 899 (9th Cir. 2006). Because the record on appeal was silent as to
the membership of the LLC parties and the citizenship of those members, this court
ordered supplemental briefing concerning subject matter jurisdiction. Although
the parties’ briefs included details about the citizenship of the members of several
of the LLC parties, the supplemental briefing was not complete as to the
citizenship of all members. When a question about jurisdiction is raised sua sponte
by the court on appeal, and the appellate record is incomplete, it is common to
remand to the district court to conduct fact-finding about the parties’ citizenship.
Matheson, 319 F.3d at 1091.
Accordingly, we remand to the district court to ascertain the citizenship of
all the parties and determine if there was complete diversity of citizenship at the
time the complaint was filed. Neither side shall recover costs.
REMANDED WITH INSTRUCTIONS.
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