Hsieh v. Wu ( 2020 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 DANIEL HSIEH and TERESA CHIU, Case No. 20-cv-00543-NC 11 Plaintiffs, ORDER DISMISSING CASE FOR 12 v. LACK OF SUBJECT MATTER 13 JOE WU, GLORIA WU, SUNRISE INN JURISDICTION FOOD PLAZA, LP, and UNITED 14 VENTURE REGIONAL CENTER, LLC, 15 Defendants. 16 In Carden v. Arkoma Assocs., the Supreme Court held that limited partnerships are 17 citizens of every state of which their partners are citizens, regardless of whether those 18 partners are general or limited. 494 U.S. 18 U.S. 195–96 (1990); see also Johnson v. 19 Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (holding that “[a]n 20 unincorporated association . . . has the citizenships of all of its members.”). A result of this 21 holding is that no partners can ever assert diversity jurisdiction in a suit against their 22 partnership. See Whalen v. Carter, 954 F.2d 1087, 1095 (5th Cir. 1992); Buckley v. 23 Control Data Corp., 923 F.3d 96, 97 (8th Cir. 1991); Curley v. Brignoli, Curley, & 24 Roberts Assocs., 915 F.2d 81, 84 (2d Cir. 1990). 25 The complaint in this case alleged that the Court had diversity jurisdiction under 28 26 U.S.C. § 1332(a). Dkt. No. 1, Complaint, at 2. It alleged that one defendant, Sunrise Inn 27 Food Plaza, is a limited liability partnership and that another defendant, United Venture 1 Regional Center, is a limited liability corporation. Id. The complaint did not identify the 2 citizenship of the owners or members of either SIFP or UVRC. The Court therefore 3 ordered the parties to show cause why it had subject matter jurisdiction over this case. 4 Dkt. No. 26. 5 The parties responded with a joint filing stating that United Venture Regional 6 Center’s two members—defendants Joe Wu and Gloria Wu—are both citizens of 7 California. Dkt. No. 28 at 1. They further state that Sunrise Inn Food Plaza’s five 8 members are citizens of California, Washington State, and Canada. Id. at 1–2. Plaintiffs 9 Daniel Hsieh and Teresa Chiu are citizens of Canada. Id. Teresa Chiu is a limited partner 10 of SIFP. Under Carden, then, the plaintiffs cannot assert diversity jurisdiction in this suit 11 against SIFP. 12 The parties state that “[i]f an exception to the Supreme Court’s rule existed 13 allowing a limited partner to claim diversity jurisdiction when suing a partnership, then 14 diversity would exist here.” Id. at 2. However, they were “unable to locate a case 15 establishing such an exception” to the Carden rule in the Ninth Circuit. Id. They identify 16 two California District Court cases applying Carden that similarly find no such exception. 17 See Soward v. The & Tr., Case No. 07-cv-03984-MMC, 2007 WL 2947425, at *2 (N.D. 18 Cal. Oct. 9, 2007); see also Boulder Creek Co. v. Maruko Inc., 772 F. Supp. 1150, 1153 19 (C.D. Cal. 1991). They invite the Court to rely on any such exception of which it is aware. 20 Id. 21 The Court is aware of no exception to the Carden rule. In fact, the Ninth Circuit 22 held in Fadal Machining Centers, LLC v. Mid-Atlantic CNC, Inc., that the citizenship of 23 even a limited member of a partnership determines the citizenship of that partnership. 464 24 F. App’x 672, 673 (9th Cir. 2012). There, the Ninth Circuit stated that “the character of [a 25 member’s] membership interest is irrelevant to the determination of its citizenship.” Id. 26 (citing Carden, 494 U.S. at 192 (“We have never held that an artificial entity, suing or 27 being sued in its own name, can invoke the diversity jurisdiction of the federal courts 1 “Rules governing subject matter jurisdiction are ‘inflexible and without exception.’” 2 || Fadal Machining Centers, LLC, 464 F. App’x at 673-74 (quoting Carden, 494 U.S. at 3 || 195). Therefore, the Court FINDS that it lacks subject matter jurisdiction over this case 4 || because Teresa Chiu, a citizen of Canada, is both a plaintiff and a limited member of 5 || defendant partnership Sunrise Inn Food Plaza. The Court would have subject matter 6 || jurisdiction over this case if plaintiffs dismissed defendant SIFP and moved forward only 7 against defendants UVRC, Joe Wu, and Gloria Wu. However, in their response to the 8 || Court’s order to show cause, the parties jointly state that if the Court cannot exercise 9 || subject matter jurisdiction over SIFP, then “the case should be dismissed, without 10 || prejudice to Plaintiff’s ability to refile in State Court.” Dkt. No. 28 at 2. The Court 11 || understands this to mean that the plaintiffs do not wish to dismiss SIFP from the case. As 12 || such, the Court hereby DISMISSES this case without prejudice for lack of subject matter 13 |} jurisdiction. 14 15 IT IS SO ORDERED. 16 5 17 || Dated: April 28, 2020 Lb+-e = NATHANAEL M. COUSINS 19 20 21 22 23 24 25 26 27 28