David Reams v. Xpress Global Systems, LLC et al

Filing 5

MINUTE ORDER IN CHAMBERS by Judge Percy Anderson remanding case to Los Angeles Superior Court, Case number BC675055. Case Terminated. Made JS-6. (mrgo)

JS-6

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

CV 17-7427 PA (AGRx)

Title

David Reams v. XPRESS Global Systems, LLC, et al.

Present: The Honorable

Date

October 16, 2017

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Kamilla Sali-Suleyman

Not Reported

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiff:

Attorneys Present for Defendant:

None

None

Proceedings:

IN CHAMBERS - COURT ORDER

Before the Court is a Notice of Removal filed by defendant XPRESS Global Systems, LLC
(“Defendant”) on October 11, 2017. The Notice of Removal states that co-defendant XPRESS Global
Systems, Inc. is a dissolved corporation. Defendant asserts that this Court has jurisdiction over the
action brought against it by plaintiff David Reams (“Plaintiff”) based on the Court’s diversity
jurisdiction. See 28 U.S.C. § 1332.
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).
In attempting to invoke this Court’s diversity jurisdiction, Defendant must prove that there is
complete diversity of citizenship between the parties and that the amount in controversy exceeds
$75,000. 28 U.S.C. § 1332. 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). For the purposes of diversity jurisdiction, a corporation is a citizen of any state where it is
incorporated and of the state where it has its principal place of business. 28 U.S.C. § 1332(c); see also
Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990). 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

CV-90 (06/04)

CIVIL MINUTES - GENERAL

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JS-6

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

CV 17-7427 PA (AGRx)

Date

Title

October 16, 2017

David Reams v. XPRESS Global Systems, LLC, et al.

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 Notice of Removal alleges that Defendant is a “Limited Liability Company organized and
existing under the laws of the State of Georgia with its headquarters and principal place of business
located in Tunnel Hill, Georgia.” The Notice does not identify Defendant’s members, much less state
their states of citizenship. Instead, Defendant has alleged its citizenship as if it were a corporation.
“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.”). A defendant is presumed to know
the facts surrounding its own citizenship. See, e.g., Dugdale v. Nationwide Mut. Fire Ins. Co., No. Civ.
A. 4:05 CV 138, 2006 WL 335628, at *5 (E.D. Va. Feb. 14, 2006) (“[A]lthough . . . a defendant need
not investigate a plaintiff’s citizenship, certainly a defendant is responsible for knowing its own
citizenship, and could not ignore such only to later claim that subsequent documents revealed to the
defendant its own citizenship.”); Day v. Zimmer, Inc., 636 F. Supp. 451, 453 (N.D.N.Y. 1986) (finding
that, even if plaintiff misidentifies a defendant’s address, “obviously defendant is in the best position to
know its residence for diversity purposes”). As a result, Defendant’s failure to allege facts concerning
its own citizenship is insufficient to invoke this Court’s diversity jurisdiction. See Kanter, 265 F.3d at
857.
For the foregoing reasons, Defendant has failed to satisfy its burden of showing that diversity
jurisdiction exists over this action. Accordingly, this action is hereby remanded to Los Angeles Superior
Court, Case No. BC675055 for lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c).
IT IS SO ORDERED.

CV-90 (06/04)

CIVIL MINUTES - GENERAL

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