MD Propertyco LLC v. Mad Dog Saloon AZ LLC et al

Filing 8

ORDER re 1 Complaint filed by MD Propertyco LLC: ORDERED that Plaintiff's Complaint, doc. 1, is hereby STRICKEN without prejudice. FURTHER ORDERED that Plaintiff may file an Amended Complaint on or before Monday, December 10, 2012 which shall comply in all respects with this Order and the District Court's Local Rules. See Order for full details. Signed by Magistrate Judge Lawrence O Anderson on 11/28/12. (SJF)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 MD Propertyco, LLC, a Texas limited) liability company, ) ) Plaintiff, ) ) vs. ) ) Mad Dog Saloon AZ, L.L.C., an Arizona) limited liability company; Boulder) Junction-Greenfield, Inc., a Wisconsin) corporation; Thomas Lalicata, an adult) individual, ) ) Defendants. ) ) No. CV-12-2516-PHX-LOA ORDER 17 This action arises on the Court’s review of Plaintiff’s Complaint, filed on November 18 26, 2012 by Texas counsel, Christianne L. Edlund, who has moved for admission pro hac 19 vice to represent Plaintiff in the District Court of Arizona per LRCiv 83.1(b)(2). (Docs. 1, 20 6) 21 The Complaint violates the District Court of Arizona’s civil Rules of Practice (“Local 22 Rules” or “LRCiv”) because it was not properly filed in text-searchable format per LRCiv 23 7.1(c), 5.5(b), and the definition of “.pdf,” in the District Court’s ECF Manual, at I(A), p. 24 4. The Court will strike the Complaint without prejudice with leave to file an Amended 25 Complaint. Moreover, Plaintiff alleges federal jurisdiction is predicated, in part, on “28 26 U.S.C. § 1332 as the matter in controversy exceeds the sum or value of $75,000 and is 27 between citizens of different states.” (Doc. 1, ¶ 5 at 3) As discussed below, the Complaint’s 28 citizenship allegations as to MD Propertyco, LLC, a Texas limited liability company, and 1 Defendant Mad Dog Saloon AZ, L.L.C., an Arizona limited liability company, are 2 insufficient to establish complete diversity. 3 A. Local Rules 4 The Ninth Circuit has “explain[ed], yet again, the importance of following the court’s 5 local rules. ‘District courts have broad discretion in interpreting and applying their local 6 rules.’” Simmons v. Navajo Cnty, 609 F.3d 1011, 1017 (9th Cir. 2010) (quoting Miranda v. 7 S. Pac. Transp. Co., 710 F.2d 516, 521 (9th Cir. 1983)). Local rules have “the force of law.” 8 Hollingsworth v. Perry, 558 U.S. 183, 130 S.Ct. 705, 710 (2010) (quoting Weil v. Neary, 278 9 U.S. 160, 169 (1929)). They “are binding upon the parties and upon the court, and a 10 departure from local rules that affects substantial rights requires reversal.” Professional 11 Programs Group v. Department of Commerce, 29 F.3d 1349, 1353 (9th Cir. 1994) (internal 12 quotation marks omitted). 13 The Complaint was not properly filed electronically in text-searchable .pdf format. 14 LRCiv 7.1(c) mandates that “[d]ocuments submitted for filing in the ECF System shall be 15 in a Portable Document Format(PDF).” LRCiv 7.1(c). Compliance with the District Court’s 16 electronic filing format and the ECF Manual is not a petty requirement. Improperly filing 17 pleadings, motions, briefs or other documents in non-text searchable format precludes judges, 18 law clerks and adverse counsel from, among others, highlighting a portion of a pleading or 19 brief and copying it onto another document or order. Thus, use of unauthorized formatting 20 forces extremely busy District of Arizona judges, law clerks and adverse counsel to 21 unnecessarily retype portions of a filed document to be quoted or referenced and causes 22 unnecessary delay in the creation of orders and responsive briefs. Compliance with LRCiv 23 7.1(c) and the ECF Manual by lawyers is not optional. 24 B. Citizenship of Limited Liability Companies 25 A federal district court is a court of limited jurisdiction, and the burden of establishing 26 jurisdiction is on the party claiming jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 27 511 U.S. 375, 377 (1994) (“Federal courts are courts of limited jurisdiction. . . . It is to be 28 presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the -2- 1 contrary rests upon the party asserting jurisdiction.”) (citations omitted). Here, “Plaintiff has 2 the burden of establishing the Court’s jurisdiction.” San Carlos Irrigation and Drainage 3 Dist. v. U.S., 2005 WL 3434704, at *1 (D. Ariz. Dec. 14, 2005) (citations omitted). “A 4 [district] court has an obligation to inquire sua sponte into its subject matter jurisdiction, and 5 to proceed no further if such jurisdiction is wanting.” Feldman v. Allstate Ins. Co., 322 F.3d 6 660, 665 (9th Cir. 2003). 7 When there is complete diversity between the parties and the amount in controversy 8 is over $75,000.00, a district court may property assert subject-matter jurisdiction over a case 9 pursuant to 28 U.S.C. § 1332. In cases where entities, like corporations, rather than 10 individuals are litigants, diversity jurisdiction depends on the form of the entity. In 11 Hertz Corp. v. Friend, ___ U.S. ___, 130 S. Ct. 1181, 1192 (2010), the Supreme Court held 12 that, for diversity jurisdiction purposes, a complaint or removal notice must allege both the 13 corporation’s state of incorporation and location of the principal place of business, which is 14 its “nerve center,” i.e., “the place where a corporation’s officers direct, control, and 15 coordinate the corporations activities.” At the pleading stage and absent unusual 16 circumstances, a party seeking to invoke diversity jurisdiction should affirmatively allege, 17 but need not prove, the actual citizenship of the parties. Kanter v. Warner–Lambert Co., 265 18 F.3d 853, 857 (9th Cir. 2001) (“[I]n a diversity action, the plaintiff must state all parties’ 19 citizenships such that the existence of complete diversity can be confirmed.”) (citation 20 omitted). The Ninth Circuit has recently established that a complaint that follows the general 21 framework set forth in Form 7(a) in the Appendix of Forms to the Federal Rules of Civil 22 Procedure is sufficient to satisfy Rule 8(a)(1)’s jurisdictional pleading requirement.1 Harris 23 24 25 26 27 28 1 Federal Rules of Civil Procedure Form 7(a) in the Appendix of Forms sets out a proposed format for alleging diversity: The plaintiff is [a citizen of Michigan ] [a corporation incorporated under the laws of Michigan with its principal place of business in Michigan ]. The defendant is [a citizen of New York ] [a corporation incorporated under the laws of New York with its principal place of business in New York ]. The amount in controversy, without -3- 1 v. Rand, 682 F.3d 846, 850-52 (9th Cir. 2012). 2 For purposes of diversity jurisdiction and unlike corporations, limited liability 3 companies “are analogized to partnerships, which take the citizenship of every general and 4 limited partner. Lincoln Prop. Co., 546 U.S. at 84 n. 1 (citing Carden v. Arkoma Assocs., 494 5 U.S. 185, 189 (1990) (“for diversity purposes, a partnership entity, unlike a corporation, does 6 not rank as a citizen; to meet the complete diversity requirement, all partners, limited as well 7 as general, must be diverse from all parties on the opposing side.”)); Johnson v. Columbia 8 Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[E]very circuit that has 9 addressed the question treats [an LLC] like partnerships for the purposes of diversity 10 jurisdiction.”) (citations omitted). “We therefore join our sister circuits and hold that, like 11 a partnership, an LLC is a citizen of every state of which its owners/members are citizens.” 12 Id. A complaint “must expressly identify each member of any limited partnerships, and/or 13 limited liability companies, along with each member’s citizenship. Such jurisdictional 14 allegations are necessary for this Court to conclude whether diversity jurisdiction is 15 satisfied.” Liberty Propane, L.P. v. Feheley, 2006 WL 2553396, at *1 n. 1 16 (D. Ariz. Aug. 29, 2006). 17 “Diversity jurisdiction is based on citizenship, not residency.” Kalinowski v. 18 Davol, Inc., 2006 WL 2615894, at *2 (D. Ariz. Sept. 11, 2006 ) (emphasis in original). “To 19 be a citizen of a particular state, a natural person must both be a citizen of the United States 20 and be domiciled within that state.” Id. (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 21 U.S. 826, 828 (1989)). “A person’s domicile is his or her permanent home, where he or she 22 resides with the intention to remain or to return.” Id. (citing Lew v. Moss, 797 F.2d 747, 749 23 (9th Cir. 1986)). A person residing in a given state, however, is not necessarily domiciled 24 there, and is not necessarily a citizen of that state. Kanter, 265 F.3d at 857. 25 On the Court’s own motion and because the Clerk of Court is not authorized to strike 26 27 28 interest and costs, exceeds the sum or value specified by 28 U.S.C. § 1332. Fed.R.Civ.P. Form 7(a) (2007) (brackets in original). -4- 1 a non-conforming pleading or filing, Rule 5(d)(4), Fed.R.Civ.P., 2 IT IS ORDERED that Plaintiff’s Complaint, doc. 1, is hereby STRICKEN without 3 prejudice. If Plaintiff timely and fully complies with this Order, Plaintiff’s Amended 4 Complaint shall relate back to its initial filing date pursuant to Rule 15, Fed.R.Civ.P. If 5 Plaintiff elects to base jurisdiction on 28 U.S.C. § 1332, the Amended Complaint must 6 expressly identify each member of each limited liability company, along with each member’s 7 citizenship. 8 IT IS FURTHER ORDERED that Plaintiff may file an Amended Complaint on or 9 before Monday, December 10, 2012 which shall comply in all respects with this Order and 10 the District Court’s Local Rules. 11 IT IS FURTHER ORDERED that counsels’ pleadings, motions, memoranda, or 12 other filings in this case shall be created via personal computer with a word processing 13 application, e.g., Microsoft Word® or Corel WordPerfect®, then converted to portable 14 document format (.pdf). See LRCiv 7.1(c) and definition of “.pdf”, ECF Manual, at I(A), 15 p. 4. (“[E]lectronic documents must be converted to .pdf directly from a word processing 16 program (e.g., Microsoft Word® or Corel WordPerfect®) and must be text searchable.”). 17 Such filings shall not be printed to paper and then scanned and saved as portable document 18 format (.pdf). Documents which exist only in paper form, like exhibits or certain attachments 19 to pleadings may, however, be scanned from a paper copy and saved in a portable document 20 format (.pdf). 21 IT IS FURTHER ORDERED that counsel shall hereinafter comply with the Rules 22 of Practice for the United States District Court for the District of Arizona, as amended on 23 December 1, 2012. The District’s Rules of Practice may be found on the District Court’s 24 internet web page at All other rules may be found at 25 Counsel are also reminded of the certification to comply with the 26 Local Rules and Standards of Professional Conduct with admission to practice pro hac vice 27 in this District Court. The Standards of Professional Conduct are located on the District’s 28 website, click on link “Attorney Information,” and then click on link “Attorney Admissions -5- 1 2 Information.” Dated this 28th day of November, 2012. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6-

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