Elijah Bey v. Mosaic Sales Solutions US Operating Co., LLC et al

Filing 12

(IN CHAMBERS) ORDER TO SHOW CAUSE RE: DIVERSITY OF CITIZENSHIP by Judge Fernando M. Olguin. Response to Order to Show Cause due by 9/29/2016. (vdr)

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

CV 16-6024 FMO (RAOx)

Title

Elijah Bey v. Mosaic Sales Solutions US Operating Co., LLC

Present: The Honorable

Date

Sept. 22, 2016

Fernando M. Olguin, United States District Judge

Vanessa Figueroa

None

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorney Present for Plaintiff(s):

Attorney Present for Defendant(s):

None Present

None Present

Proceedings:

(In Chambers) Order to Show Cause Re: Diversity of Citizenship

The court has reviewed defendant Mosaic Sales Solutions US Operating Co., LLC’s
(“Mosaic”) response to the Court’s Order to Show Cause Re: Remand (Dkt. 9, Court’s Order of
September 1, 2016) and the First Amended Complaint (“FAC”), the operative complaint upon
which remand was based. In addition to CAFA jurisdiction, jurisdiction is based on diversity of the
parties pursuant to 28 U.S.C. 1332(a)(1). (See Dkt. 1, NOR at ¶¶ 49-74; Dkt. 10, Defendant
Mosaic Sales Solutions US Operating Co., LLC’s Response to Order to Show Cause Re: Remand
(“Response”) at 17-23).
The NOR states that Mosaic was formed in Delaware and that its headquarters and
principal place of business are in Texas and Illinois. (See Dkt. 1, NOR at ¶ 17). Relying on the
standard for determining the citizenship of corporations, (see id.) (citing 28 U.S.C. § 1332(c)(1);
Hertz Corp. v. Friend, 559 U.S. 77, 92-93, 130 S.Ct. 1181, 1192 (2010)), Mosaic contends it is
thus a citizen of Delaware, Texas, and Illinois. However, it appears that Mosaic is a limited liability
company, rather than a corporation.
Limited liability companies (“LLCs”) are treated like partnerships rather than corporations
and are deemed “a citizen of every state of which its owners/members are citizens.” Johnson v.
Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006); see Grupo Dataflux v. Atlas
Global Grp., L.P., 541 U.S. 567, 569, 124 S.Ct. 1920, 1923 (2004) (“[A] partnership . . . is a citizen
of each State or foreign country of which any of its partners is a citizen.”). “There is no such thing
as ‘a [state name] limited partnership’ for purposes of diversity jurisdiction. There are only
partners, each of which has one or more citizenships.” Hart v. Terminex Int’l, 336 F.3d 541, 544
(7th Cir. 2003) (internal quotation marks omitted). Moreover, “[a]n LLC’s principal place of
business [or] state of organization is irrelevant” for purposes of diversity jurisdiction. See
Buschman v. Anesthesia Business Consultants LLC, 42 F.Supp.3d 1244, 1248 (N.D. Cal. 2014);
Tele Munchen Fernseh GMBH & Co Produktionsgesellschaft v. Alliance Atlantis Int’l Distribution,
LLC, 2013 WL 6055328, *4 (C.D. Cal. 2013) (“As a limited liability company, [defendant]’s principal
place of business is irrelevant for purposes of diversity jurisdiction.”). If a member of an LLC is
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 16-6024 FMO (RAOx)

Date

Title

Elijah Bey v. Mosaic Sales Solutions US Operating Co., LLC

Sept. 22, 2016

a corporation, then the state of incorporation and its principal place of business must be shown.
Because it appears that Mosaic may not have taken into consideration the distinction
between the citizenship of a corporation and that of an LLC, and has therefore not adequately set
forth its citizenship, the court cannot determine whether it has subject matter jurisdiction.
Accordingly, IT IS ORDERED that no later than September 29, 2016, Mosaic shall show cause
in writing why this case should not be dismissed for lack of subject matter jurisdiction. Among
other things, Mosaic shall identify the citizenship and residence of each of its partners, members,
and owners. Mosaic’s response shall be supported by a declaration as necessary. Failure to
submit a response by the deadline set forth above may be deemed as consent to remand
of the action.

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Initials of Preparer

CV-90 (06/04)

CIVIL MINUTES - GENERAL

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vdr

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