Keshock et al v. Metabowerke GMBH et al

Filing 20

Order that Metabo defendants are to file a supplemental notice of removal as set out by 8/3/2015. Signed by Magistrate Judge Katherine P. Nelson on 7/20/2015. (srr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
MICHAEL KESHOCK, et al,
Plaintiffs,
v.
METABOWERKE GMBH, et al,
Defendants.

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Civil Action No. 15-00345-N

ORDER
This action is before the Court sua sponte on review of the Notice of Removal
(Doc. 1) filed by the Defendants Metabowerke GMBH and Metabo Corporation
(collectively, “Metabo Defendants”). Upon review, the Court finds the Notice of
Removal to be deficient for the following reasons.
I.

Subject Matter Jurisdiction

“It is . . . axiomatic that the inferior federal courts are courts of limited
jurisdiction. They are ‘empowered to hear only those cases within the judicial power
of the United States as defined by Article III of the Constitution,’ and which have
been entrusted to them by a jurisdictional grant authorized by Congress.” Univ. of
S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v.
Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)). Accordingly, “it is well settled that a
federal court is obligated to inquire into subject matter jurisdiction sua sponte
whenever it may be lacking.” Id. at 410. “[A] court should inquire into whether it
has subject matter jurisdiction at the earliest possible stage in the proceedings.” Id.

The Notice of Removal alleges diversity of citizenship under 28 U.S.C. §
1332(a) as the sole basis for the Court’s subject matter jurisdiction over the claims
in this action.1 Doc. 1 at 6, ¶ 16-17.
When a [a defendant removes a case to federal court, it] must allege
facts that, if true, show federal subject matter jurisdiction over [its]
case exists. Taylor v. Appleton, 30 F. 3d 1365, 1367 (11th Cir. 1994).
Those allegations, when federal jurisdiction is invoked based upon
diversity, must include the citizenship of each party, so that the court
is satisfied that no plaintiff is a citizen of the same state as any
defendant. Triggs v. John Crump Toyota, Inc., 154 F. 3d 1284, 1287
(11th Cir. 1998) (“Diversity jurisdiction requires complete diversity;
every plaintiff must be diverse from every defendant.”). Without such
allegations, district courts are constitutionally obligated to dismiss the
action altogether if the plaintiff does not cure the deficiency. Stanley v.
C.I.A., 639 F. 2d 1146, 1159 (5th Cir. Unit B Mar. 1981); see also
DiMaio v. Democratic Nat'l Comm., 520 F. 3d 1299, 1303 (11th Cir.
2008) (“Where dismissal can be based on lack of subject matter
jurisdiction and failure to state a claim, the court should dismiss on
only the jurisdictional grounds.” (internal quotation marks omitted)).
That is, if a complaint's factual allegations do not assure the court it
has subject matter jurisdiction, then the court is without power to do
anything in the case. See Goodman ex rel. Goodman v. Sipos, 259 F. 3d
1327, 1331, n.6 (11th Cir. 2001) (“ ‘[A district] court must dismiss a
case without ever reaching the merits if it concludes that it has no
jurisdiction.’ ” (quoting Capitol Leasing Co. v. FDIC, 999 F. 2d 188, 191
(7th Cir. 1993))); see also Belleri v. United States, 712 F. 3d 543, 547
(11th Cir. 2013) (“We may not consider the merits of [a] complaint
unless and until we are assured of our subject matter jurisdiction.”).
Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1268 (11th Cir. 2013) (footnote omitted).
See also, e.g., Ray v. Bird & Son & Asset Realization Co., Inc., 519 F.2d 1081, 1082
(5th Cir. 1975) (“The burden of pleading diversity of citizenship is upon the party

See FED. R. CIV. P. 8(a)(1) (“A pleading that states a claim for relief must contain a short and plain
statement of the grounds for the court’s jurisdiction…”).
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invoking federal jurisdiction . . .” (citing Mas v. Perry, 489 F.2d 1396 (5th Cir.
1974)).2
The Metabo Defendants, as the parties invoking this Court’s jurisdiction,
bears the initial burden of pleading sufficient facts establishing jurisdiction. The
Metabo Defendants properly allege that § 1332(a)’s requisite amount in controversy
is satisfied by claiming that it “exceeds $75,000.00, exclusive of interest and costs.”
(Doc. 1 at 7, ¶ 18). See, e.g., Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329
F. 3d 805, 807 (11th Cir. 2003) (“In order to invoke a federal court's diversity
jurisdiction, a plaintiff must claim, among other things, that the amount in
controversy exceeds $75,000.” (citing 28 U.S.C. § 1332)). They also properly allege
the citizenships of corporate defendant Metabo Corporation (a citizen of Delaware
and Pennsylvania (see Doc. 1 at 10, ¶ 25)) by alleging the states under whose laws it
was incorporated and where it has its principal places of business. See 28 U.S.C. §
1332(c)(1). Finally, they properly allege the citizenships of Defendants Craig
Perciavalle, Mike Bell, and Chris Blankenfeld, all natural persons, by alleging that
they are “citizens of Alabama”. See Doc. 1 at 10, ¶ 27; see also Taylor v. Appleton, 30
F. 3d 1365, 1367 (11th Cir. 1994). However, the Metabo Defendants have failed to
properly plead facts establishing the citizenships of the other parties.
a.

Natural-Person Defendants’ Citizenship

First, Metabo Defendants allege that Plaintiffs Michael Keshock, Martin
Osborn, Richard Fitzgerald, and Tyrone Lucas, all natural pesons, are “residents of
“In Bonner v. City of Prichard, 661 F. 2d 1206, 1209 (11th Cir. 1981) (en banc), [the Eleventh
Circuit] adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
the close of business on September 30, 1981.” Travaglio, 735 F. 3d at 1268 n.1.
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Alabama.” Doc. 1 at 9, ¶ 23. The Eleventh Circuit has repeatedly stressed that
“[c]itizenship, not residence, is the key fact that must be alleged . . . to establish
diversity for a natural person.” Taylor v. Appleton, 30 F. 3d 1365, 1367 (11th Cir.
1994) (emphasis added). See also Travaglio, 735 F. 3d at 1269 (“As we indicated in
remanding this case for jurisdictional findings, the allegations in Travaglio’s
complaint about her citizenship are fatally defective. Residence alone is not
enough.”); Molinos Valle Del Cibao, C. por A. v. Lama, 633 F. 3d 1330, 1342 n.12
(11th Cir. 2011) (“Ordinarily, the complaint must allege the citizenship, not
residence, of the natural defendants.”); Corporate Mgmt. Advisors, Inc. v. Artjen
Complexus, Inc., 561 F. 3d 1294, 1297 (11th Cir. 2009) (“If a party fails to
specifically allege citizenship in their notice of removal, the district court should
allow that party to cure the omission . . . ” (quotation marks omitted)); Beavers v.
A.O. Smith Elec. Prods. Co., 265 F. App’x 772, 778 (11th Cir. 2008) (per curiam)
(“The plaintiffs’ complaint alleges only the residence of the nearly 100 plaintiffs, not
their states of citizenship. Because the plaintiffs have the burden to affirmatively
allege facts demonstrating the existence of jurisdiction and failed to allege the
citizenship of the individual plaintiffs, the district court lacked subject matter
jurisdiction on the face of the complaint.” (internal citation and quotation omitted));
Crist v. Carnival Corp., 410 F. App'x 197, 200 (11th Cir. 2010) (per curiam) (“The
allegation that Crist is a ‘resident’ of Florida is insufficient for diversity jurisdiction
purposes because residency is not the equivalent of citizenship.”).

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“Citizenship is equivalent to ‘domicile’ for purposes of diversity jurisdiction.
A person's domicile is the place of his true, fixed, and permanent home and
principal establishment, and to which he has the intention of returning whenever
he is absent therefrom.” McCormick v. Aderholt, 293 F. 3d 1254, 1257-58 (11th Cir.
2002) (citations, quotations, and footnote omitted). See also Travaglio, 735 F.3d at
1269 (“ ‘Citizenship is equivalent to “domicile” for purposes of diversity jurisdiction.’
And domicile requires both residence in a state and ‘an intention to remain there
indefinitely . . . ’ ” (quoting McCormick, 293 F. 3d at 1257-58 (internal quotation
marks omitted)) (internal citation omitted)); Mas, 489 F. 2d at 1399 (“For diversity
purposes, citizenship means domicile; mere residence in the State is not
sufficient.”).
As such, if the Metabo Defendants wish to adequately plead diversity, they
must allege the state of citizenship/domicile of each natural defendant.
b.

LLC Parties

Unlike a corporation, for purposes of assessing diversity of citizenship “a
limited liability company is a citizen of any state of which a member of the company
is a citizen.” Rolling Greens, MHP, L.P. v. Comcast SCH Holdings, L.L.C., 374 F. 3d
1020, 1022 (11th Cir. 2004) (per curiam). Accord Mallory & Evans Contractors &
Eng’rs, LLC v. Tuskegee Univ., 663 F. 3d 1304, 1305 (11th Cir. 2011) (per curiam).
Therefore, to sufficiently allege the citizenship of an LLC, “a party must list the
citizenships of all the members of the limited liability company . . .” Rolling Greens,
374 F. 3d at 1022.

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The Metabo Defendants have alleged the citizenship of Defendant Austal
USA, LLC, as if it were a corporation, failing to mention any LLC members. Doc. 1
at 10, ¶ 26. The Metabo Defendants must allege the citizenship of each member of
the Austal USA, LLC, in order to properly allege diversity.3 “This can require
tracing through several layers.” BouMatic, LLC v. Idento Operations, BV, 759 F. 3d
790, 791 (7th Cir. 2014) (Easterbrook, J.) (citing Cosgrove v. Bartolotta, 150 F. 3d
729 (7th Cir. 1998) (citizenship of an LLC depends on citizenship of its members,
traced through as many levels as necessary to reach corporations or natural
persons)). See also Azzo v. Jetro Rest. Depot, LLC, 2011 WL 1357557, at *2 n.2 (M.D.
Fla. Apr. 11, 2011) (in pleading the citizenships of the members, “each member's
citizenship must [also ]be properly alleged, be it an individual, corporation, LLC, or
other entity”)
c.

“GMBH” Party

Regarding Metabowerke GMBH, the Metabo Defendants allege only that it is
a “foreign corporation with its principal place of business in Germany.” Doc. 1 at 10,
¶ 24. While this might be nominally adequate for an American corporation, the
Metabo Defendants have made no attempt to explain what the suffix “GMBH”
means or to plead to the Court how it should be treated for purposes of diversity.
Generally, “a corporation shall be deemed to be a citizen of every State and
foreign state by which it has been incorporated and of the State or foreign state
where it has its principal place of business . . . ” 28 U.S.C § 1332 (c)(1). However, a

The Amended Corporate Disclosure Statement of Austal USA, LLC, alleging all LLC members, is
due to the Court on or before Friday, July 24, 2015.
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court should not “assume[] that [a foreign state] has business entities that enjoy
corporate status as the United States understands it[,]” as “not even the United
Kingdom has a business form that is exactly equal to that of a corporation.” White
Pearl Inversiones S.A. (Uruguay) v. Cemusa, Inc., 647 F. 3d 684, 686 (7th Cir. 2011).
“Deciding whether a business enterprise based in a foreign nation should be treated
as a corporation for the purpose of § 1332 can be difficult. Businesses in other
nations may have attributes that match only a subset of those that in the United
States distinguish a ‘corporation’—a business with indefinite existence, personhood
(the right to contract and litigate in its own name), limited liability for equity
investors, and alienable shares, among other features—from forms such as the
limited liability company, the limited partnership, and the business trust.”
Fellowes, Inc. v. Changzhou Xinrui Fellowes Office Equip. Co., 759 F. 3d 787, 788
(7th Cir. 2014) (Easterbrook, J.) (vacating district court’s judgment and remanding
with instructions to dismiss for want of subject-matter jurisdiction where, on
appeal, the defendant business established under the law of China was found to be
“closer to a limited liability company than to any other business structure in this
nation,” thus defeating diversity where both the plaintiff and a member of the
defendant entity were citizens of Illinois) (internal citation omitted). See also
BouMatic, 759 F.3d at 791 (“Classification of a foreign business entity can be
difficult, because other nations may use subsets of the characteristics that
distinguish corporations from other business entities in the United States.”
(internal citation omitted)).

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“In Carden v. Arkoma Assocs., 494 U.S. 185, 195–96, 110 S. Ct. 1015, 1021,
108 L. Ed. 2d 157 (1990), the Supreme Court held that for purposes of diversity of
citizenship, a limited partnership is a citizen of each state in which any of its
partners, limited or general, are citizens. In reaching this holding, the Court noted
the long-standing rule that the citizenship of an artificial, unincorporated entity
generally depends on the citizenship of all the members composing the
organization.” Rolling Greens, 374 F. 3d at 1021. Thus, “the Court in Carden
provided a general rule: every association of a common-law jurisdiction other than a
corporation is to be treated like a partnership. That rule applies without regard to
the corporation-like features or other business realities of the artificial entity.”
Underwriters at Lloyd's, London v. Osting-Schwinn, 613 F. 3d 1079, 1087 (11th Cir.
2010) (internal citation and quotations omitted). Moreover, “[i]f it is hard to
determine whether a business entity from a common-law nation is equivalent to a
‘corporation,’ it can be even harder when the foreign nation follows the civil-law
tradition.” White Pearl Inversiones, 647 F.3d at 686 (“Uruguay has at least three
forms of limited-liability businesses: sociedad anónima (S.A.), sociedad anónima
financiera de inversión (S.A.F.I.), and sociedad responsabilidad limitada (S.R.L.).
White Pearl did not say which kind it is, and its lawyers did not analyze whether
that kind of business organization should be treated as a corporation . . . . They
simply assumed that Uruguay has such a beast as a ‘corporation’ and that White
Pearl is one. The lawyers for Cemusa made the same assumption.”).

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As such, if the Metabo Defendants wish to adequately plead diversity, she
must allege what kind of entity Defendant Metabowerke GMBH is– that is, whether
it is a corporate or unincorporated entity. If it is to be treated as a corporation, they
must allege “every State and foreign state by which it has been incorporated and
[]the State or foreign state where it has its principal place of business . . . ” §
1332(c)(1). If it is to be treated as an unincorporated entity, they must allege the
citizenships of each of its members.
“Defective allegations of jurisdiction may be amended, upon terms, in the
trial or appellate courts.” 28 U.S.C. § 1653. “[L]eave to amend should be freely
granted when necessary to cure a failure to allege jurisdiction properly.” Majd-Pour
v. Georgiana Cmty. Hosp., Inc., 724 F. 2d 901, 903 n.1 (11th Cir. 1984). As such, the
Metabowerke Defendants will be given an opportunity to file a supplementary
notice of removal that properly alleges subject-matter jurisdiction.
II.

Conclusion

Accordingly, the Metabo Defendants are hereby ORDERED to file, no later
than Monday, August 3, 2015, a supplementary notice of removal that cures the
defects specified in this Order.4
DONE and ORDERED this the 20th day of July 2015.
/s/ Katherine P. Nelson
KATHERINE P. NELSON
UNITED STATES MAGISTRATE JUDGE
In this District, “[a]ll civil actions” are “automatically referred” to the Magistrate Judges, inter alia,
“for the purpose of hearing and determining all non-dispositive pretrial motions.” S.D. ALA. L.R.
72.2(c)(1). Amendment of pleadings is generally considered a non-dispositive pretrial matter. See 12
Charles Alan Wright et al., FED. PRAC. & PROC. CIV. § 3068.1 (2d ed. 1997); 32 AM. JUR. 2d Federal
Courts § 132.
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