Bolthouse Farms, Inc. v. Atkinson Staffing, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 WM. BOLTHOUSE FARMS, INC., No. 1:19-cv-01560-NONE-JLT 12 Plaintiff, 13 v. ORDER DISCHARGING ORDER TO SHOW CAUSE AND DISMISSING COMPLAINT 14 MESA UNDERWRITERS SPECIALTY FOR LACK OF SUBJECT-MATTER INSURANCE COMPANY, JURISDICTION WITH LEAVE TO AMEND 15 Defendant. (Doc. No. 1) 16 17 18 On November 1, 2019, plaintiff Wm. Bolthouse Farms, Inc., commenced this action by 19 filing a complaint against defendants Atkinson Staffing, Inc., Mesa Underwriters Specialty 20 Insurance Company (“Mesa”) and 50 Doe defendants. (Doc. No. 1.) The case now proceeds 21 only against defendant Mesa and the Doe defendants. (See Doc. No. 37 (order of magistrate 22 judge concerning voluntary dismissal).) Plaintiff’s claims against Mesa arise under California 23 law and relate to an insurance contract. (Doc. No. 1.) On September 9, 2020, Mesa filed a 24 motion for judgment on the pleadings. (Doc. No. 40.) On August 18, 2021, the court ordered 25 plaintiff to show cause why this action should not be dismissed due to lack of subject-matter 26 jurisdiction. (Doc. No. 47.) Mesa filed a response to the order to show cause on August 27, 27 2021, providing information concerning its principal place of business. (Doc. No. 48.) Plaintiff 28 filed a response to the order to show cause on August 31, 2021. (Doc. No. 49.) 1 As discussed in the order to show cause, plaintiff alleges that plaintiff is “a corporation 2 organized under the laws of the state of Michigan with its principal place of Business in Kern 3 County, California.” (Doc. No. 1 ¶ 1.) It further alleges that Mesa “at all relevant times was, a 4 corporation organized under the laws of the state of Arizona,” and that “[t]his court has 5 jurisdiction as the Parties are diverse, i.e. Plaintiff’s place of incorporation is different than that of 6 each Defendant, and the amount in controversy exceeds $75,000.” (Id. ¶¶ 3, 6.) There are no 7 allegations, however, concerning Mesa’s principal place of business. Atkinson Staffing, which 8 has since been dismissed as a defendant from this action, is alleged to be “a corporation organized 9 under the laws of the state of Oregon and doing business in Benton County, Washington.” (Id. 10 ¶ 2.) In response to the court’s order to show cause, Mesa filed a declaration indicating that its 11 state of incorporation and principal place of business are in New Jersey. (Doc. No. 48-1 ¶ 3.) 12 Plaintiff’s response argued that there is diversity among the parties and over $75,000 in 13 controversy and the court therefore has diversity jurisdiction over this action. (Doc. No. 49.) 14 No party argues that the complaint alleges the court has subject-matter jurisdiction over 15 this action. Rather, the parties’ arguments appear to rely on information outside of the complaint. 16 Although Mesa has filed a declaration stating its state of incorporation and principal place of 17 business are in New Jersey, (Doc. No. 48-1 ¶ 3), and argues that the court has diversity 18 jurisdiction (Doc. No. 48 at 1), this information is not reflected in the allegations of the 19 complaint. See Leite v. Crane Co., 749 F.3d 1117, 1122 (9th Cir. 2014) (holding that facial 20 attacks on subject-matter jurisdiction are resolved by looking at the allegations in the complaint 21 and determining whether they “are sufficient as a legal matter to invoke the court’s jurisdiction”). 22 The court notes one other aspect of diversity jurisdiction that may be relevant to this case. 23 Under 28 U.S.C. § 1332(c)(1), “in any direct action against the insurer of a policy or contract of 24 liability insurance, whether incorporated or unincorporated, to which action the insured is not 25 joined as a party-defendant, such insurer shall be deemed a citizen of . . . every State and foreign 26 state of which the insured is a citizen” along with its other states of incorporation. (paragraph 27 break omitted). A “direct action” for these purposes is a case “in which a party suffering injuries 28 or damage for which another is legally responsible is entitled to bring suit against the other’s 1 | liability insurer without joing the insured or first obtaining a judgment against him.” Beckham 2 | v. Safeco Ins. Co. of Am., 691 F.2d 898, 901-02 (9th Cir. 1982). It is not immediately clear to the 3 | court whether this matter is a “direct action” under § 1332(c)(1) which would cause Mesa to take 4 | on Atkinson’s citizenship as well. See Searles v. Cincinnati Ins. Co., 998 F.2d 728, 729-30 (9th 5 | Cir. 1993) (discussing the distinction between first-party actions and direct actions). However, 6 | this analysis will be unnecessary if Atkinson’s citizenship is diverse. In the event plaintiff files an 7 | amended complaint, it would be prudent for plaintiff to make more complete allegations 8 | regarding defendant Atkinson’s citizenship. 9 Accordingly, 10 1. The order to show cause (Doc. No. 47) is DISCHARGED; 11 2. The complaint (Doc. No. 1) is DISMISSED; 12 3. Plaintiff is granted leave to file an amended complaint to address the deficiency with 13 respect to jurisdictional allegations outlined above (1.e., whether there is complete 14 diversity among the parties) within fourteen days of the date of this order;! and 15 4. Within seven days of the expiration of the deadline to file a first amended complaint, 16 the parties shall file a joint status report indicating whether they believe the pending 17 motion for judgment on the pleadings (Doc. No. 40) can move forward in whole or in 18 part in its present form and be ruled upon by the court.” 19 | IT IS SO ORDERED. □ 20 I} ff Aa. G Dated: _ September 1, 2021 See | ae 21 UNITED STATES DISTRICT JUDGE 22 23 24 | The fact that the court has limited its grant of leave to amend to this issue does not prohibit the 25 || parties from stipulating to further amended, such as for the purpose of resolving additional issues raised in the pending motion for judgment on the pleadings. 26 > The court recognizes that due to the ongoing judicial resource emergency in this district, this 27 | case, along with every other civil case before the undersigned, has experienced significant delays. 28 The court will attempt to address the pending motion expeditiously once the pleadings are settled. Until then, defendant’s motion for judgment on the pleadings will be held in abeyance.