Andrews International Inc. et al v. Indian Harbor Insurance Company

Filing 56

ORDER TO SHOW CAUSE by Judge Percy Anderson. Responses to Order to Show Cause due by 2/24/2014. (rne)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-7808 PA (RZx)

Title

Andrews Int’l, Inc., et al. v. Indian Harbor Ins. Co.

Present: The Honorable

Date

February 18, 2014

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Paul Songco

Not Reported

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None

None

Proceedings:

IN CHAMBERS - COURT ORDER

Before the Court are a Motion for Summary Judgment filed by defendant Indian Harbor
Insurance Company (“Indian Harbor”) (Docket No. 43) and a Motion for Leave to Amend Complaint
filed by plaintiffs Andrews International, Inc. (“Andrews”) and Advanced Tech Security (“Advanced”)
(collectively “Plaintiffs”) (Docket No. 46).
In their Opposition to Indian Harbor’s Motion for Summary Judgment, Plaintiffs contend that
“[b]oth Indian Harbor and Andrews are Delaware corporations.” This statement is inconsistent with the
allegations in the operative Complaint, which allege that Andrews “is a corporation organized and
existing pursuant to the laws of the state of Delaware,” that Advanced “is [a] California corporation,”
and that Indian Harbor “is a North Dakota corporation, with a principal place of business . . . [in] North
Dakota, and an administrative office . . . [in] Connecticut.” The proposed First Amended Complaint,
which Plaintiffs seek leave to file, contain the same allegations concerning the parties’ citizenship as
alleged in the operative Complaint. Indian Harbor’s Answer to the operative Complaint states that it “is
a North Dakota corporation, with a statutory home office . . . [in] North Dakota, and a principal place of
business . . . [in] Connecticut.” Plaintiffs’ support for their statement in their Opposition to the Motion
for Summary Judgment that Indian Harbor is a Delaware corporation is a page from Delaware’s Division
of Corporations’ website that describes Indian Harbor’s “residency” as “domestic.”
The Federal Rule of Civil Procedure 8(a) requires that “[a] pleading that states a claim for relief
must contain . . . a short and plain statement of the grounds for the court’s jurisdiction . . . .” Fed. R.
Civ. P. 8(a)(1). This District’s Local Rules further provide that “[t]he statutory or other basis for the
exercise of jurisdiction by this Court shall be plainly stated in . . . any document invoking this Court’s
jurisdiction.” Local Civil Rule 8-1. Federal courts have subject matter jurisdiction only over matters
authorized by the Constitution and Congress. Bender v. Williamsport Area School Dist., 475 U.S. 534,
541, 106 S. Ct. 1326, 1331, 89 L. Ed. 2d 501 (1986). In seeking to invoke this Court’s jurisdiction,
Plaintiff bears the burden of proving that jurisdiction exists. Scott v. Breeland, 792 F.2d 925, 927 (9th
Cir. 1986).
The Complaint alleges that the Court possesses diversity jurisdiction over this action.
Jurisdiction may be based on complete diversity of citizenship, requiring all plaintiffs to have a different
CV-90 (06/04)

CIVIL MINUTES - GENERAL

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-7808 PA (RZx)

Date

Title

February 18, 2014

Andrews Int’l, Inc., et al. v. Indian Harbor Ins. Co.

citizenship from all defendants and for the amount in controversy to exceed $75,000.00. See 28 U.S.C.
§ 1332; Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S. Ct. 2396, 2402, 57 L. Ed. 2d
274 (1978). A corporation is a citizen of both its state of incorporation and the state in which it has its
principal place of business. 28 U.S.C. § 1332(c)(1); see also New Alaska Dev. Corp. v. Guetschow, 869
F.2d 1298, 1300-01 (9th Cir. 1989). The citizenship of a partnership or other unincorporated entity is
the citizenship of its members. See Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th
Cir. 2006) (“[L]ike a partnership, an LLC is a citizen of every state of which its owners/members are
citizens.”); Marseilles Hydro Power, LLC v. Marseilles Land & Water Co., 299 F.3d 643, 652 (7th Cir.
2002) (“the relevant citizenship [of an LLC] for diversity purposes is that of the members, not of the
company”); Handelsman v. Bedford Village Assocs., Ltd. P’ship, 213 F.3d 48, 51-52 (2d Cir. 2000) (“a
limited liability company has the citizenship of its membership”); Cosgrove v. Bartolotta, 150 F.3d 729,
731 (7th Cir. 1998); TPS Utilicom Servs., Inc. v. AT & T Corp., 223 F. Supp. 2d 1089, 1101 (C.D. Cal.
2002) (“A limited liability company . . . is treated like a partnership for the purpose of establishing
citizenship under diversity jurisdiction.”).
The Complaint and proposed First Amended Complaint fail to establish that the parties are
completely diverse. The Complaint does not allege the principal place of business for either Andrews or
Advanced. Additionally, Plaintiffs have made contradictory statements concerning the citizenship of
Indian Harbor. At a minimum, these allegations fail to establish Plaintiffs’ citizenship for jurisdictional
purposes. Accordingly, the Court is unable to ascertain whether it may exercise subject matter
jurisdiction over this action.
Despite these deficiencies a district court may, and should, grant leave to amend when it appears
that subject matter jurisdiction may exist, even though the complaint inadequately alleges jurisdiction.
See 28 U.S.C. § 1653; Trentacosta v. Frontier Pacific Aircraft Industries, Inc., 813 F.2d 1553, 1555 (9th
Cir. 1987). The Court therefore orders the parties to show cause in writing why this action should not be
dismissed for lack of federal subject matter jurisdiction. The parties’ responses to this order to show
cause must be supported with admissible evidence establishing the citizenship of the parties and shall be
filed no later than February 24, 2014. The failure to file an adequate or timely response to this order to
show cause may result in the dismissal of this action without prejudice or the imposition of sanctions.
IT IS SO ORDERED.

CV-90 (06/04)

CIVIL MINUTES - GENERAL

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