Alta Grove, LLC v. Travelers Property Casualty Company of America et al

Filing 11

MINUTE ORDER IN CHAMBERS by Judge Percy Anderson: Plaintiff's allegations are not sufficient to invoke this Court's diversity jurisdiction. Accordingly, the Court dismisses Plaintiff's Complaint for lack of subject matter jurisdiction. Adistrict court may, and should, grant leave to amend when it appears that subject matter jurisdiction may exist, even though the complaint inadequately alleges jurisdiction. Therefore, the Court grants Plaintiff leave to amend the Complaint to esta blish federal subject matter jurisdiction. Plaintiff's First Amended Complaint, if any, is to be filed by February 27, 2015. The failure to file a First Amended Complaint by that date or to adequately allege the Court's jurisdiction may result in the dismissal of this action without prejudice. See document for details. (smo)

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

CV 15-685 PA (JPRx)

Title

Alta Grove, LLC v. Travelers Property Cas. Co. of America, et al.

Present: The
Honorable

Date

February 12, 2015

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Stephen Montes Kerr

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

The Court is in receipt of the Complaint filed by plaintiff Alta Grove, LLC (“Plaintiff”).
(Docket No. 1.) Plaintiff alleges that this Court has subject matter jurisdiction based on diversity. See
28 U.S.C. § 1332(a)(1).
Federal courts are courts of limited jurisdiction, having subject matter jurisdiction only over
matters authorized by the Constitution and Congress. See, e.g., Kokkonen v. Guardian Life Ins. Co.,
511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994). A suit filed in state court may be
removed to federal court if the federal court would have had original jurisdiction over the suit. 28
U.S.C. § 1441(a). A removed action must be remanded to state court if the federal court lacks subject
matter jurisdiction. 28 U.S.C. § 1447(c). “The burden of establishing federal jurisdiction is on the party
seeking removal, and the removal statute is strictly construed against removal jurisdiction.” Prize Frize,
Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1265 (9th Cir. 1999). “Federal jurisdiction must be rejected if
there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564,
566 (9th Cir. 1992).
To establish citizenship for diversity purposes, a natural person must be a citizen of the United
States and be domiciled in a particular state. Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088, 1090
(9th Cir. 1983). Persons are domiciled in the places they reside with the intent to remain or to which
they intend to return. See Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). “A person
residing in a given state is not necessarily domiciled there, and thus is not necessarily a citizen of that
state.” Id. The citizenship of an LLC 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.,

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 15-685 PA (JPRx)

Date

Title

February 12, 2015

Alta Grove, LLC v. Travelers Property Cas. Co. of America, et al.

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”).
Plaintiff alleges that its sole member is Alta Community Investment IX, LLC (“Alta IX”), whose
membership includes “individuals who reside in California, New Jersey, Oregon, New York,
Washington, and Hong Kong.” (Complaint at 2.) The Complaint’s allegations regarding its members’
states of residence are not sufficient to establish Plaintiff’s citizenship. Moreover, 28 U.S.C. 1332(a)(1)
may or may not apply given that one of Alta IX’s members resides in Hong Kong. “Absent unusual
circumstances, a party seeking to invoke diversity jurisdiction should be able to allege affirmatively the
actual citizenship of the relevant parties.” Kanter, 265 F.3d at 857; Bradford v. Mitchell Bros. Truck
Lines, 217 F. Supp. 525, 527 (N.D. Cal. 1963) (“A petition [for removal] alleging diversity of
citizenship upon information and belief is insufficient.”). As a result, Plaintiff’s allegations are not
sufficient to invoke this Court’s diversity jurisdiction.
Accordingly, the Court dismisses Plaintiff’s Complaint for lack of subject matter jurisdiction. 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). Therefore, the Court
grants Plaintiff leave to amend the Complaint to establish federal subject matter jurisdiction. Plaintiff’s
First Amended Complaint, if any, is to be filed by February 27, 2015. The failure to file a First
Amended Complaint by that date or to adequately allege the Court’s jurisdiction may result in the
dismissal of this action without prejudice.
IT IS SO ORDERED.

CV-90 (06/04)

CIVIL MINUTES - GENERAL

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