Ashot Atabekyan et al v. NBS Default Service, LLC et al

Filing 13

MINUTES (IN CHAMBERS) ORDER REMANDING ACTION by Judge Fernando M. Olguin. IT IS ORDERED that: (1) The above-captioned action shall be remanded to the Superior Court of the State of California for the County of Los Angeles, 111 North Hill St., Los Angeles, CA 90012, for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c). (2) The Clerk shall send a certified copy of this Order to the state court. Case Terminated. Made JS-6 (iv)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL
Case No.

CV 18-0686 FMO (JCx)

Title

Ashot Atabekyan, et al. v. NBS Default Services, LLC, et al.

Present: The Honorable

Date

February 14, 2018

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 Remanding Action

On December 12, 2017, Ashot Atabekyan and Anait Kuyumdzhyan (“plaintiffs”) filed a
Complaint in the Los Angeles County Superior Court against NBS Default Services, LLC (“NBS”),
Specialized Loan Servicing LLC (“SLS”), and GMAC Mortgage Corporation (“GMAC”), asserting
claims relating to the foreclosure of their home. (See Dkt. 1, Notice of Removal (“NOR”) at ¶ 1;
Dkt. 1-1, Complaint). On January 26, 2018, SLS and U.S. Bank National Association, as
Indenture Trustee of the GMAC Home Equity Loan Trust 2005-HE31 removed the action on
diversity jurisdiction grounds pursuant to 28 U.S.C. §§ 1332 and 1441. (See Dkt. 1, NOR at 1).
Having reviewed the pleadings, the court hereby remands this action to state court for lack of
subject matter jurisdiction. See 28 U.S.C. § 1447(c).
LEGAL STANDARD
“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. See 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, 1570 (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).
In general, “any civil action brought in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the defendant or the defendants, to the
district court[.]” 28 U.S.C. § 1441(a). A removing defendant bears the burden of establishing that
removal is proper. See Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992) (per curiam)
(“The strong presumption against removal jurisdiction means that the defendant always has the
burden of establishing that removal is proper.”) (internal quotation marks omitted); Abrego Abrego

1

Erroneously sued as GMAC Mortgage Corporation.

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

CV 18-0686 FMO (JCx)

Date

Title

Ashot Atabekyan, et al. v. NBS Default Services, LLC, et al.

February 14, 2018

v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per curiam) (noting the “longstanding,
near-canonical rule that the burden on removal rests with the removing defendant”). Moreover,
if there is any doubt regarding the existence of subject matter jurisdiction, the court must resolve
those doubts in favor of remanding the action to state court.2 See Gaus, 980 F.2d at 566 (“Federal
jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.”).
Indeed, “[i]f at any time before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c); see Kelton Arms Condo.
Owners Ass’n, Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003) (“Subject matter
jurisdiction may not be waived, and, indeed, we have held that the district court must remand if
it lacks jurisdiction.”); Washington v. United Parcel Serv., Inc., 2009 WL 1519894, *1 (C.D. Cal.
2009) (a district court may remand an action where the court finds that it lacks subject matter
jurisdiction either by motion or sua sponte).
DISCUSSION
The court’s review of the NOR and the attached state court Complaint makes clear that this
court does not have subject matter jurisdiction over the instant matter.3 In other words, plaintiffs
could not have originally brought this action in federal court, as plaintiffs do not competently allege
facts supplying diversity jurisdiction. Therefore, removal was improper. See 28 U.S.C. § 1441(a);
Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 (1987) (“Only state-court
actions that originally could have been filed in federal court may be removed to federal court by
the defendant.”) (footnote omitted).
When federal subject matter jurisdiction is predicated on diversity of citizenship pursuant
to 28 U.S.C. § 1332(a), complete diversity must exist between the opposing parties. See
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 472 (1996) (stating that the diversity
jurisdiction statute “applies only to cases in which the citizenship of each plaintiff is diverse from
the citizenship of each defendant”). Plaintiffs appear to be citizens of California. (See Dkt. 1-1,
Complaint at ¶ 1). However, the complete citizenship of SLS and NBS is not provided in the
Complaint or NOR. (See, generally, Dkt. 1-1, Complaint at ¶¶ 2-3; Dkt. 1 NOR at ¶¶ 5, 7).
Instead, the Complaint alleges that SLS is a “Delaware Limited Liability Company” and that NBS
is a “Texas Limited Liability Company[.]” (Dkt. 1-1, Complaint at ¶¶ 2-3). The NOR repeats these
allegations. (See Dkt. 1, NOR at ¶ 5 (stating the SLS is a “Limited Liability Company organized
under the laws of the state of Delaware”); id. at ¶ 7 (stating that NBS is a “Limited Liability

2

An “antiremoval presumption” does not exist in cases removed pursuant to the Class
Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). See Dart Cherokee Basin Operating Co., LLC
v. Owens, 135 S.Ct. 547, 554 (2014).
3

Defendants seek only to invoke the court’s diversity jurisdiction. (See, generally, Dkt. 1,

NOR).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 18-0686 FMO (JCx)

Date

Title

Ashot Atabekyan, et al. v. NBS Default Services, LLC, et al.

February 14, 2018

Company organized under the laws of the state of Texas”)).
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
a corporation, then the state of incorporation and its principal place of business must be shown.
Defendants have failed to set forth the citizenship of each of SLS’s and NBS’s owners
and/or partners. (See, generally, Dkt. 1, NOR). In other words, they have failed to show that
complete diversity of the parties exists. Given that any doubt regarding the existence of subject
matter jurisdiction must be resolved in favor of remanding the action to state court, see Gaus, 980
F.2d at 566, the court is not persuaded, under the circumstances here, that defendants have met
their burden. Therefore, there is no basis for diversity jurisdiction.
This order is not intended for publication. Nor is it intended to be included in or
submitted to any online service such as Westlaw or Lexis.
Based on the foregoing, IT IS ORDERED that:
1. The above-captioned action shall be remanded to the Superior Court of the State of
California for the County of Los Angeles, 111 North Hill St., Los Angeles, CA 90012, for lack of
subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c).
2. The Clerk shall send a certified copy of this Order to the state court.
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