Angelina Hernandez v. Legends Hospitality, LLC ( 2019 )

JS-6 2 FILED 3 CLERK, US. DISTRICT COURT 5 py: CW___perury 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 | ANGELINA HERNANDEZ, ) Case No. CV 19-7928 FMO (JPRx) 12 Plaintiff, 13 V. ORDER REMANDING ACTION 14 | LEGENDS HOSPITALITY, 15 Defendant. 16 17 On August 1, 2019, plaintiff filed a Complaint in the Los Angeles County Superior Court against Legends Hospitality LLC (“defendant”). (See Notice of Removal (“NOR”) at 1). On September 12, 2019, defendant removed that action on diversity jurisdiction grounds pursuant to 20] 28 U.S.C. § 1332. (See id. at J 6). 21 “Federal courts are courts of limited jurisdiction. They possess only that power authorized 22 || by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 23 1673, 1675 (1994). The courts are presumed to lack jurisdiction unless the contrary appears affirmatively from the record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126 S.Ct. 1854, 1861 (2006). Federal courts have a duty to examine jurisdiction sua sponte before 26 || proceeding to the merits of a case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119 S.Ct. 1563, 1569 (1999), “even in the absence of a challenge from any party.” Arbaugh v. Y&H 28 | Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244 (2006). 1 “The right of removal is entirely a creature of statute and a suit commenced in a state court 2 must remain there until cause is shown for its transfer under some act of Congress.” Syngenta 3 Crop Protection, Inc. v. Henson, 537 U.S. 28, 32, 123 S.Ct. 366, 369 (2002) (internal quotation 4 marks omitted). Where Congress has acted to create a right of removal, those statutes, unless 5 otherwise stated, are strictly construed against removal jurisdiction.1 See id. Unless otherwise 6 expressly provided by Congress, “any civil action brought in a State court of which the district 7 courts of the United States have original jurisdiction, may be removed by the defendant or the 8 defendants, to the district court[.]” 28 U.S.C. § 1441(a); see Dennis v. Hart, 724 F.3d 1249, 1252 9 (9th Cir. 2013) (same). A removing defendant bears the burden of establishing that removal is 10 proper. See Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per 11 curiam) (noting the “longstanding, near-canonical rule that the burden on removal rests with the 12 removing defendant”); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“The strong 13 presumption against removal jurisdiction means that the defendant always has the burden of 14 establishing that removal is proper.”) (internal quotation marks omitted). Moreover, if there is any 15 doubt regarding the existence of subject matter jurisdiction, the court must resolve those doubts 16 in favor of remanding the action to state court. See Gaus, 980 F.2d at 566 (“Federal jurisdiction 17 must be rejected if there is any doubt as to the right of removal in the first instance.”). 18 “Under the plain terms of § 1441(a), in order properly to remove [an] action pursuant to that 19 provision, [the removing defendant] must demonstrate that original subject-matter jurisdiction lies 20 in the federal courts.” Syngenta Crop Protection, 537 U.S. at 33, 123 S.Ct. at 370. Failure to do 21 so requires that the case be remanded, as “[s]ubject matter jurisdiction may not be waived, and. 22 . . the district court must remand if it lacks jurisdiction.” Kelton Arms Condo. Owners Ass’n, Inc. 23 v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003). Indeed, “[i]f at any time before final 24 judgment it appears that the district court lacks subject matter jurisdiction, the case shall be 25 remanded.” 28 U.S.C. § 1447(c); see Emrich v. Touche Ross & Co., 846 F.2d 1190, 1194 n. 2 26 27 1 For example, an “antiremoval presumption” does not exist in cases removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). See Dart Cherokee Basin Operating 28 1 (9th Cir. 1988) (“It is elementary that the subject matter jurisdiction of the district court is not a 2 waivable matter and may be raised at anytime by one of the parties, by motion or in the 3 responsive pleadings, or sua sponte by the trial or reviewing court.”); Washington v. United Parcel 4 Serv., Inc., 2009 WL 1519894, *1 (C.D. Cal. 2009) (a district court may remand an action where 5 the court finds that it lacks subject matter jurisdiction either by motion or sua sponte). 6 The court’s review of the NOR and the attached state court Complaint makes clear that this 7 court does not have subject matter jurisdiction over the instant matter. See 28 U.S.C. § 1441(a); 8 Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 (1987) (“Only state-court 9 actions that originally could have been filed in federal court may be removed to federal court by 10 the defendant.”) (footnote omitted). In other words, plaintiff could not have originally brought this 11 action in federal court, as plaintiff does not competently allege facts supplying diversity 12 jurisdiction.2 See 28 U.S.C. § 1332(a).3 13 When federal subject matter jurisdiction is predicated on diversity of citizenship pursuant 14 to 28 U.S.C. 1332(a), complete diversity must exist between the opposing parties. See Caterpillar 15 Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 472 (1996) (stating that the diversity jurisdiction 16 statute “applies only to cases in which the citizenship of each plaintiff is diverse from the 17 citizenship of each defendant”). Defendant contends that complete diversity exists because 18 plaintiff is a citizen of California, (see NOR at ¶ 6.a), and defendant is a citizen of Delaware and 19 New York. (Id. at ¶ 6.c). However, defendant improperly relies on the standard applicable to 20 corporations despite the fact that defendant is a limited liability company. (See id.) (stating that 21 it is limited liability company under the laws of the State of Delaware and that its principal place 22 23 24 2 Defendant seeks only to invoke the court’s diversity jurisdiction. (See NOR at ¶ 6). Although 25 defendant also cites 28 U.S.C. § 1332(d)(2), there is no indication that this action is a class action, 26 or that the amount in controversy exceeds $5,000,000. (See, generally, NOR). 27 3 In relevant part, 28 U.S.C. § 1332(a) provides that “district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of 28 1 of business is the State of New York).4 2 Limited liability companies (“LLCs”) are treated like partnerships rather than corporations 3 for the purpose of determining citizenship, and are deemed “a citizen of every state of which its 4 owners/members are citizens.” Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 5 (9th Cir. 2006); see Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 569, 124 S.Ct. 1920, 6 1923 (2004) (“[A] partnership . . . is a citizen of each State or foreign country of which any of its 7 partners is a citizen.”). “There is no such thing as ‘a [state name] limited partnership’ for purposes 8 of . . . diversity jurisdiction. There are only partners, each of which has one or more citizenships.” 9 Hart v. Terminex Int’l, 336 F.3d 541, 544 (7th Cir. 2003) (internal quotation marks omitted). 10 Moreover, “[a]n LLC’s principal place of business [or] state of organization is irrelevant” for 11 purposes of diversity jurisdiction. See Buschman v. Anesthesia Business Consultants LLC, 42 12 F.Supp.3d 1244, 1248 (N.D. Cal. 2014); Tele Munchen Fernseh GMBH & Co 13 Produktionsgesellschaft v. Alliance Atlantis Int’l Distribution, LLC, 2013 WL 6055328, *4 (C.D. Cal. 14 2013) (“As a limited liability company, [defendant]’s principal place of business is irrelevant for 15 purposes of diversity jurisdiction.”). If a member of an LLC is a corporation, then the state of that 16 member’s incorporation and its principal place of business must be shown. 17 Defendant has failed to set forth its proper citizenship and that of its members. (See, 18 generally, Dkt. 1, NOR). In short, it has failed to show that complete diversity of the parties exists. 19 Given that any doubt regarding the existence of subject matter jurisdiction must be resolved in 20 favor of remanding the action to state court, see Gaus, 980 F.2d at 566, the court is not 21 persuaded, under the circumstances here, that defendant has met its burden. Therefore, there 22 is no basis for diversity jurisdiction. 23 This order is not intended for publication. Nor is it intended to be included in or 24 submitted to any online service such as Westlaw or Lexis. 25 Based on the foregoing, IT IS ORDERED that: 26 27 4 Defendant makes the same error with respect to its member, Legends Hospitality Holding 28 1 1. The above-captioned action shall be remanded to the Superior Court of the State of 2 California for the County of Los Angeles, 111 N. Hill Street, Los Angeles, CA 90012, for lack of 3 subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c). 4 2. The Clerk shall send a certified copy of this Order to the state court. 5 Dated this 7th day of October, 2019. /s/ Fernando M. Olguin 6 United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28