Jensen v. Evolve Skateboards PTY LTD ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TAMMI JENSEN, et al., No. 1:20-cv-00110-NONE-HBK 12 Plaintiffs, 13 v. ORDER DISMISSING COMPLAINT AND CROSS-COMPLAINT FOR LACK OF 14 EVOLVE SKATEBOARDS PTY LTD SUBJECT-MATTER JURISDICTION, WITH and EVOLVE SPORTS GROUP, LLC, LEAVE TO AMEND 15 Defendants. (Doc. Nos. 1, 6, 14) 16 17 EVOLVE SPORTS GROUP, LLC, 18 19 Cross Claimant, 20 v. 21 EVOLVE SKATEBOARDS PTY LTD, 22 Cross Defendant. 23 24 On January 21, 2020, plaintiffs Tammi Jensen et al. commenced this products-liability 25 action by filing a complaint against Evolve Skateboards PTY LTD and Evolve Sports Group, 26 LLC. (Doc. No. 2.) Invoking the court’s diversity jurisdiction under 28 U.S.C. § 1332, plaintiffs 27 allege that they are all California residents; that defendant Evolve Skateboards PTY LTD 28 (“Evolve Australia”) is an Australian private company with a principal place of business in 1 Australia; and that defendant Evolve Sports Group, LLC (“Evolve USA”), is a limited liability 2 company registered in Michigan with a principal place of business in California. (Id. ¶¶ 1–4, 9.) 3 On March 6, 2020, defendant Evolve USA filed an answer and cross-complaint against defendant 4 Evolve Australia, invoking the court’s supplemental jurisdiction. (Doc. No. 6.) Defendant 5 Evolve Australia filed a motion to dismiss plaintiffs’ complaint on July 8, 2020. (Doc. No. 14.) 6 For the reasons that follow, the court finds that the complaint fails to sufficiently allege that the 7 court has subject-matter jurisdiction, and the court declines to exercise supplemental jurisdiction 8 over the cross-complaint. The court will therefore dismiss sua sponte both the complaint and the 9 cross-complaint with leave to amend and will hold the motion to dismiss in abeyance until the 10 pleadings in this action are settled 11 DISCUSSION 12 A. Plaintiffs’ Complaint 13 Under 28 U.S.C. § 1332(a), federal district courts have jurisdiction over certain actions 14 between citizens of different states (diversity jurisdiction) and certain actions including aliens or 15 foreign states (alienage jurisdiction). Complete diversity is a requirement of 28 U.S.C. § 1332. 16 Thus, the “citizenship of each plaintiff [must be] diverse from the citizenship of each defendant.” 17 Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). “Complete diversity is required under 28 18 U.S.C. § 1332(a)(1) and under the alienage provisions, 28 U.S.C. § 1332(a)(2)-(3).” Toro-Aire, 19 Inc. v. Williams, No. 13-CV-1719 DMS (RBB), 2013 WL 12186157, at *1 (S.D. Cal. July 25, 20 2013); accord Wardle v. Jeanneau Am., Inc., No. C 05-02515-JF, 2005 WL 2333758, at *2 (N.D. 21 Cal. Sept. 22, 2005) (citing Depex Reina 9 Partnership v. Texas Intern. Petroleum Corp., 897 22 F.2d 461, 464-65 (10th Cir. 1990)) (no jurisdiction under § 1332 in case brought by California 23 plaintiff against various defendants, including a California corporation and foreign corporation); 24 14A Arthur R. Miller, Fed. Prac. & Proc. Juris. § 3661 (4th ed.) (in matters involving aliens, 25 district courts must dismiss actions when “diversity between the United States citizens in the 26 action is not otherwise complete”). 27 For diversity purposes, the citizenship of an individual is “determined by her state of 28 domicile, not her state of residence.” Kanter v. Warner-Lamber Co., 265 F.3d 853, 857 (9th Cir. 1 2001). Foreign corporations are citizens of the state they are incorporated in. JPMorgan Chase 2 Bank v. Traffic Stream (BVI) Infrastructure Ltd., 536 U.S. 88, 91–92 (2002). A limited liability 3 company is the citizen of every state where its owners or members are citizens, regardless of its 4 state of formation or principal place of business; the citizenship of all of its members must be 5 alleged. NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 611–12 (9th Cir. 2016). 6 Here, there are least two deficiencies with the jurisdictional allegations set forth in the 7 pending complaint. First, plaintiffs have alleged only their state of residence, not their state of 8 citizenship. Jeffcott v. Donovan, 135 F.2d 213, 214 (9th Cir. 1943) (holding that complaint did 9 not allege diversity where plaintiff alleged residency, but not citizenship, of the parties); Xie v. De 10 Young Properties 5418, L.P., No. 1:16-cv-01518-DAD-SKO, 2017 WL 1349013, at *6 (E.D. Cal. 11 Apr. 6, 2017) (dismissing a complaint with leave to amend because plaintiffs had alleged their 12 state of residence but not state of citizenship). Second, plaintiffs have not alleged the citizenship 13 of the members of Evolve USA. Newgen, 840 F.3d at 611 (holding that a complaint failed to 14 allege diversity by failing to allege the citizenship of members of LLC); Encompass Grp., L.L.C. 15 v. Evans, No. 2:08-cv-00306-JAM-GGH, 2008 WL 3889584, at *1 (E.D. Cal. Aug. 13, 2008) 16 (dismissing a complaint with leave to amend for lack of subject-matter jurisdiction where the 17 LLC plaintiff alleged its principal place of business and state of incorporation but not the 18 citizenship of its members). Accordingly, the court must dismiss the complaint. See Fed. R. Civ. 19 P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court 20 must dismiss the action.”). 21 “Defective allegations of jurisdiction may be amended, upon terms, in the trial or 22 appellate courts.” 28 U.S.C. § 1653; accord NewGen, 840 F.3d at 612 (under § 1653, “[c]ourts 23 may permit parties to amend defective allegations of jurisdiction at any stage in the 24 proceedings.”). Here, it is possible that plaintiffs may be able to amend their complaints to 25 properly allege federal jurisdiction. Accordingly, plaintiffs will be granted leave to amend their 26 complaints. 27 ///// 28 ///// 1 B. Standing With Respect to Wrongful-Death Claims 2 Plaintiffs agree with defendant Evolve Australia that plaintiffs have failed to allege their 3 relationship to the decedent and accordingly lack standing to pursue their wrongful-death claims. 4 (Doc. No. 25 at 8–9.) Plaintiffs request leave to amend, (id. at 9), and the court will grant this 5 request. 6 C. Cross-Complaint 7 Defendant Evolve USA filed a cross-complaint against defendant Evolve Australia, 8 seeking indemnification, contribution, and a declaratory judgment in connection therewith. (Doc. 9 No. 6.) The cross-complaint seeks to invoke this court’s supplemental jurisdiction under 28 10 U.S.C. § 1367. (Id. ¶ 122.) Because the court will dismiss all claims over which it purportedly 11 had original jurisdiction, it will decline to exercise supplemental jurisdiction over the cross- 12 complaint at this time. 28 U.S.C. § 1367(c)(3). 13 CONCLUSION 14 For the reasons explained above, 15 1. Plaintiffs’ complaint (Doc. No. 1) is DISMISSED for lack of subject matter 16 jurisdiction; 17 2. The court declines to exercise supplemental jurisdiction over the cross-complaint 18 (Doc. No. 6) at this time; 19 3. Within fourteen (14) days of the date of entry of this order, plaintiffs may amend 20 their complaint to address: (a) the jurisdictional deficiency outlined above (i.e., whether there is 21 complete diversity among the parties) and (b) their relationship to decedent for purposes of 22 establishing standing to bring a wrongful-death action;1 23 4. Within fourteen (14) days of the filing of any amended complaint by plaintiffs, 24 defendant Evolve USA may file a cross-complaint; and 25 ///// 26 27 1 The fact that the court has limited its grant of leave to these two issues does not prohibit the parties from stipulating to further amendment, such as for the purpose of resolving additional 28 1 5. Within seven (7) days of the expiration of the cross-complaint deadline outlined 2 | above, the parties shall file a joint status report indicating whether they believe the pending 3 | motion to dismiss (Doc. No. 14) can move forward in whole or in part in its present form and be 4 | ruled upon by the court. The court recognizes that due to the ongoing judicial resource 5 || emergency in this district, this case, along with every other civil case before the undersigned, has 6 || experienced significant delays. The court will endeavor to address the pending motion 7 | expeditiously once the pleadings are settled. Meanwhile, the motion to dismiss will be held in 8 | abeyance. | IT IS SO ORDERED. a | Dated: Sune 29, 2021 LL 1 11 UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28