PGB Holdings LLC v. Ohio Security Insurance Company, et al

Filing 9

MINUTES (IN CHAMBERS) ORDER REMANDING ACTION by Judge Fernando M. Olguin. The above-captioned action shall be remanded to the Superior Court of the State of California for the County of Los Angeles, 111 N. Hill Street, Los Angeles, CA 90012, for lack of subject matter jurisdiction pursuant to 28 U.S.C. 1447(c). Case Terminated. Made JS-6 (iv)

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

CV 20-8208 FMO (ASx)

Title

PGB Holdings LLC v. Ohio Security Insurance Company

Present: The Honorable

Date

October 16, 2020

Fernando M. Olguin, United States District Judge

Vanessa Figueroa

None

None

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorney Present for Plaintiff:

Attorney Present for Defendant:

None Present

None Present

Proceedings:

(In Chambers) Order Remanding Action

On August 3, 2020, plaintiff PGB Holdings LLC (“plaintiff”) filed a Complaint in the Los
Angeles County Superior Court against Ohio Security Insurance Company (“defendant”). (See
Dkt. 1, Notice of Removal (“NOR”) at ¶ 1). On September 8, 2020, defendant removed that action
on diversity jurisdiction grounds pursuant to 28 U.S.C. § 1332. (See id. at ¶ 5).
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, 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).
“The right of removal is entirely a creature of statute and a suit commenced in a state court
must remain there until cause is shown for its transfer under some act of Congress.” Syngenta
Crop Protection, Inc. v. Henson, 537 U.S. 28, 32, 123 S.Ct. 366, 369 (2002) (internal quotation
marks omitted). Where Congress has acted to create a right of removal, those statutes, unless
otherwise stated, are strictly construed against removal jurisdiction.1 See id. Unless otherwise
expressly provided by Congress, “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); see Dennis v. Hart, 724 F.3d 1249, 1252
(9th Cir. 2013) (same). A removing defendant bears the burden of establishing that removal is

1

For example, 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).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 20-8208 FMO (ASx)

Date

Title

PGB Holdings LLC v. Ohio Security Insurance Company

October 16, 2020

proper. See Abrego Abrego 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”); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“The strong
presumption against removal jurisdiction means that the defendant always has the burden of
establishing that removal is proper.”) (internal quotation marks omitted). 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. 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.”).
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. 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). In other words, plaintiff could not have originally brought this
action in federal court, as plaintiff does not competently allege facts supplying diversity
jurisdiction.2 See 28 U.S.C. § 1332(a).3
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”). Defendant contends that complete diversity exists because
defendant is a citizen of New Hampshire and Massachusetts, (Dkt. 1, NOR at ¶ 10.b), and plaintiff
is a citizen of California. (Id. at ¶ 10.d). However, defendant improperly relies on the standard
applicable to corporations despite the fact that plaintiff is a limited liability company. (See id.)
(contending that plaintiff is a citizen of California because it was “incorporated under the laws of
the State of California, and continues to have its principal place of business in Commerce,
California”).
Limited liability companies (“LLCs”) are treated like partnerships rather than corporations
for the purpose of determining citizenship, 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

2

Defendant seeks only to invoke the court’s diversity jurisdiction. (See Dkt. 1, NOR).

3

In relevant part, 28 U.S.C. § 1332(a) provides that “district courts shall have original
jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between . . . citizens of different States[.]”
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 20-8208 FMO (ASx)

Date

Title

PGB Holdings LLC v. Ohio Security Insurance Company

October 16, 2020

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 that
member’s incorporation and its principal place of business must be shown.
Defendant has failed to set forth the proper citizenship of plaintiff and that of its members.
(See, generally, Dkt. 1, NOR). In short, defendant has 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 defendant has met its 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.
CONCLUSION
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 N. Hill Street, 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.
3. Any pending motion is denied as moot.

Initials of Preparer

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