Eisenberg et al v. Gerstman et al

Filing 12

ORDER - IT IS ORDERED that the complaint in this action is dismissed for lack of subject matter jurisdiction. IT IS FURTHER ORDERED that the plaintiffs shall file an amended complaint properly stating a jurisdictional basis for this action no later than November 14, 2014. IT IS FURTHER ORDERED that the plaintiffs shall immediately provide a copy of this Order to any defendant already served with process. (See document for further details). Signed by Senior Judge Paul G Rosenblatt on 10/22/14. (LAD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Joel H. Eisenberg, et ux.,

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Plaintiffs,

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vs.
Harvey Gerstman, et al.,
Defendants.

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No. CV-14-08189-PCT-PGR
ORDER

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In a complaint filed on October 6, 2014, the plaintiffs allege that the Court has

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diversity of citizenship jurisdiction over this action pursuant to 28 U.S.C. § 1332.

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Having reviewed the complaint, the Court finds that the jurisdictional allegations

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therein are insufficient as a matter of law to establish the existence of subject matter

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jurisdiction.

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complaint properly stating a jurisdictional basis for this action. See 28 U.S.C. § 1653;

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see also, Smith v. McCullough, 270 U.S. 456, 459, 46 S.Ct. 338, 339 (1926) ("The

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established rule is that a plaintiff, suing in federal court, must show in his pleading,

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affirmatively and distinctly, the existence of whatever is essential to federal

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jurisdiction, and, if he does not do so, the court, on having the defect called to its

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attention or on discovering the same, must dismiss the case, unless the defect be

The Court will therefore require the plaintiffs to file an amended

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corrected by amendment.")

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The existence of diversity jurisdiction is not evident from the face of the

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complaint inasmuch as the complaint fails to properly allege the citizenship of any

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party. First, all of the individual parties are merely alleged to be residents of certain

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states. All of these allegations are deficient because it is black letter law that an

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allegation of residency does not suffice for purposes of §1332. See Steigleder v.

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McQuesten, 198 U.S. 141, 143, 25 S.Ct. 616, 617 (1905) ("It has long been settled

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that residence and citizenship [are] wholly different things within the meaning of the

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Constitution and the laws defining and regulating the jurisdiction of the ... courts of

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the United States; and that a mere averment of residence in a particular state is not

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an averment of citizenship in that state for the purpose of jurisdiction."); accord,

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Kanter v. Warner-Lambert Co., 265 F.3d 853, 857-58 (9th Cir. 2001) (Plaintiffs'

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complaint ... state[s] that Plaintiffs were 'residents' of California. But the diversity

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jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of residency. ...

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[The] failure to specify Plaintiffs' state of citizenship was fatal to [the] assertion of

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diversity jurisdiction.")

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Second, the complaint improperly attempts to allege the citizenship of

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defendant Active Products LLC as if it were a corporation notwithstanding that it has

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been clearly established for years that a limited liability company cannot be treated

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as a corporation for purposes of alleging citizenship under § 1332. See Johnson

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v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006)

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("Notwithstanding LLCs' corporate traits, ... every circuit that has addressed the

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question treats them like partnerships for the purposes of diversity jurisdiction. ... We

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therefore join our sister circuits and hold that, like a partnership, an LLC is a citizen

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of every state of which its owners/members are citizens.") Since the complaint fails

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to set forth the citizenship of any member of Active Products, the Court will require

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the plaintiffs to specifically identity in its amended complaint each LLC member by

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name, specifically allege the type of business entity that any non-individual member

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is, and affirmatively allege the state of citizenship of each member.1

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The plaintiff are advised that their failure to timely or sufficiently comply with

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this Order will result in the dismissal of this action for lack of subject matter

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jurisdiction. Therefore,
IT IS ORDERED that the complaint in this action is dismissed for lack of

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subject matter jurisdiction.

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IT IS FURTHER ORDERED that the plaintiffs shall file an amended complaint

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properly stating a jurisdictional basis for this action no later than November 14,

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2014.

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IT IS FURTHER ORDERED that the plaintiffs shall immediately provide a copy
of this Order to any defendant already served with process.
DATED this 22nd day of October, 2014.

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Since only a corporation or an individual may be a citizen for purposes
of § 1332 jurisdiction, the amended complaint must set forth any sub-layers of
partners or members Active Products may have.
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