Corrugated Synergies International, LLC v. Goldencorr Sheets, LLC

Filing 10

(IN CHAMBERS) ORDER TO SHOW CAUSE by Judge Fernando M. Olguin. Response to Order to Show Cause due by 3/13/2017. (vdr)

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

CV 17-1423 FMO (AGRx)

Title

Corrugated Synergies International, LLC v. GoldenCorr Sheets, LLC

Present: The Honorable

Date

March 6, 2017

Fernando M. Olguin, United States District Judge

Vanessa Figueroa

None

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 Subject Matter Jurisdiction
and Venue

On February 22, 2017, plaintiff Corrugated Synergies International, LLC (“plaintiff”) filed a
complaint against GoldenCorr Sheets, LLC (“defendant”) for breach of a Consultation and Fee
Agreement (“Agreement”) and intentional interference with contract. (See Dkt. 1, Complaint at ¶¶
29-54).
“Federal courts are courts of limited jurisdiction. They possess only that power authorized
by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114
S.Ct. 1673, 1675 (1994). The courts are presumed to lack jurisdiction unless the contrary appears
affirmatively from the record. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126 S.Ct.
1854, 1861 (2006). Federal courts have a duty to examine jurisdiction sua sponte before
proceeding to the merits of a case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119
S.Ct. 1563, 1569 (1999), “even in the absence of a challenge from any party.” Arbaugh v. Y&H
Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244 (2006). Indeed, “[i]f the court determines at any
time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed. R. Civ. P.
12(h)(3); see Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002) (“Federal Rule of Civil
Procedure 12(h)(3) provides that a court may raise the question of subject matter jurisdiction, sua
sponte, at any time during the pendency of the action, even on appeal.”) (footnote omitted).
The party asserting jurisdiction has the burden of establishing subject matter jurisdiction.
See Kokkonen, 511 U.S. at 377, 114 S.Ct. at 1675. Federal subject matter jurisdiction may be
established on the basis of diversity jurisdiction under 28 U.S.C. § 1332. A district court has
diversity jurisdiction “where the matter in controversy exceeds the sum or value of $75,000, . . .
and is between citizens of different states[.]” 28 U.S.C. § 1332(a). Citizenship is determined as
of the time the lawsuit is filed. Lew v. Moss, 797 F.2d 747, 750 (1986).
Here, plaintiff alleges that it is a Washington limited liability company with a principal place
of business in Renton, Washington. (See Dkt. 1, Complaint at ¶ 1). Plaintiff alleges that
defendant is a California limited liability company, with a principal place of business in City of
Industry, California, whose members are Jellco Container, Inc., Fleetwood-Fibre Packaging &
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 17-1423 FMO (AGRx)

Date

Title

Corrugated Synergies International, LLC v. GoldenCorr Sheets, LLC

March 6, 2017

Graphics, Pacific Western Container, and Georgia-Pacific Corrugated LLC. (See id. at ¶ 2).
Because both plaintiff and defendant are unincorporated associations, the Complaint must allege
the citizenship of each of plaintiff’s and defendant’s partners, members, or owners to properly
assert subject-matter jurisdiction on the basis of diversity pursuant to 28 U.S.C. § 1332. 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.”); Carden v. Arkoma Assocs., 494 U.S. 185, 195, 110 S.Ct. 1015, 1021 (1990) (diversity
jurisdiction depends on the citizenship of all members of an artificial entity); Johnson v. Columbia
Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A]n unincorporated association such
as a partnership has the citizenship of all of its members.”).
Moreover, plaintiff has pled the existence of the Agreement, but has not attached that
agreement as an exhibit or pled whether the Agreement contains a choice of forum provision.
(See, generally, Dkt. 1, Complaint). “[F]orum selection clauses are prima facie valid and should
not be set aside unless the party challenging enforcement of such a provision can show it is
‘unreasonable’ under the circumstances.” Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th
Cir. 1996) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 1913
(1972)).
Based on the foregoing, IT IS ORDERED THAT no later than March 13, 2017, plaintiff shall
file a Response to this OSC, not to exceed five (5) pages, addressing why this action should not
be dismissed for lack of subject matter jurisdiction or transferred pursuant to the terms of the
Agreement. Among other things, plaintiff shall identify the citizenship and residence of each of
its and defendant’s partners, members, and owners. Plaintiff shall also attach the Agreement as
an exhibit to its Response. Failure to respond to this order to show cause by the deadline set forth
above shall be deemed as consent to the dismissal of the action without prejudice for failure to
prosecute and/or failure to comply with a court order. See Fed. R. Civ. P. 41(b); Link v. Wabash
R. Co., 370 U.S. 626, 629-30, 82 S.Ct. 1386, 1388 (1962).
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Initials of Preparer

CV-90 (06/04)

CIVIL MINUTES - GENERAL

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vdr

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