LegalZoom.com Inc v. Macey Bankruptcy Law PC et al

Filing 7

ORDER TO SHOW CAUSE RE. LACK OF SUBJECT-MATTER JURISDICTION by Judge Otis D. Wright, II:the Court ORDERS Trepany to SHOW CAUSE in writing, byNovember 18, 2013, why this case should not be dismissed for lack of subject-matter jurisdiction. No hearing will be held. Plaintiff may submit an Amended Complaint if he chooses. Failure to timely respond will result in dismissal of this action. (lc)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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LEGALZOOM.COM, INC.,
v.

Plaintiff,

MACEY BANKRUPTCY LAW, P.C.,
MACEY BANKRUPTCY LAW
HOLDING, P.C., LEAL HELPERS DEBT
RESOLUTION, LLC, JACOBY &
MEYERS–BANKRUPTCY, LLC, and
DOES 1–10, inclusive,

Case No. 2:13-cv-7894-ODW(MRWx)
ORDER TO SHOW CAUSE RE.
LACK OF SUBJECT-MATTER
JURISDICTION

Defendants.

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On October 25, 2013, LegalZoom.com filed a Complaint in this Court.

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LegalZoom contends that this Court has federal-subject-matter jurisdiction over this

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action on the basis of diversity of citizenship under 28 U.S.C. § 1332. (ECF No. 1.)

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To exercise diversity jurisdiction, a federal court must find complete diversity of

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citizenship among the adverse parties, and the amount in controversy must exceed

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$75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a).

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Unlike the citizenship of a natural person, the citizenship of a partnership or

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other unincorporated entity is the citizenship of its members. See, e.g., Carden v.

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Arkoma Assocs., 494 U.S. 185, 195–96, 110 S. Ct. 1015, 108 L. Ed. 2d 157 (1990)

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(“In sum, we reject the contention that to determine, for diversity purposes, the

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citizenship of an artificial entity, the court may consult the citizenship of less than all

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of the entity's members.”); Lindley Contours, LLC v. AABB Fitness Holdings, Inc.,

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414 F. App'x 62, 64 (9th Cir. 2011); Johnson v. Columbia Props. Anchorage, LP, 437

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F.3d 894, 899 (9th Cir. 2006) (“[L]ike a partnership, an LLC is a citizen of every state

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of which its owners/members are citizens.”). The citizenship of each of the entity’s

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partners or members therefore must be alleged.

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The citizenships of Defendants Legal Helpers Debt Resolution, LLC, and

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Jacoby & Meyers–Bankruptcy, LLP, are therefore determined not by reference to their

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principal place of business and “state of incorporation,” as LegalZoom suggests, but

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by the citizenship of the owners and members. Because LegalZoom fails to state the

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citizenship of the partners and members of the above defendants, the Court cannot

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determine whether diversity of citizenship exists between the parties.

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Additionally, LegalZoom alleges that it is “a corporation, organized and

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existing under the laws of the State of Delaware, with its principal places of business

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in Los Angeles County, California and Travis County, Texas.” (emphasis added) A

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corporation is a citizen of both the state in which it is incorporated and the state where

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it has its principal place of business. 28 U.S.C. § 1332(a). A corporation does not

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have two principal places of businesses.

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Accordingly, the Court ORDERS Trepany to SHOW CAUSE in writing, by

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November 18, 2013, why this case should not be dismissed for lack of subject-matter

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jurisdiction. No hearing will be held. Plaintiff may submit an Amended Complaint if

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he chooses. Failure to timely respond will result in dismissal of this action.

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IT IS SO ORDERED.

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November 4, 2013

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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