MIRO Advisory Services, Ltd. v. D.A. Davidson & Co. et al

Filing 32

ORDER TO SHOW CAUSE AND RESETTING HEARING ON MOTION TO DISMISS 8 . Plaintiff must show cause in writing why this action should not be dismissed for lack of federal subject matter jurisdiction by 7/8/2014. Motion Hearing reset for 8/6/2014 01:00 PM in Courtroom A, 15th Floor, San Francisco. Signed by Judge Nathanael Cousins on 6/24/2014. (lmh, COURT STAFF) (Filed on 6/24/2014)

Download PDF
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN FRANCISCO DIVISION 10 11 MIRO ADVISORY SERVICES, LTD., a 12 corporation incorporated under the laws of the British Virgin Islands, 13 Plaintiff, 14 v. Case No. 14-cv-01618 NC ORDER TO SHOW CAUSE AND RESETTING HEARING ON MOTION TO DISMISS Re: Dkt. No. 1 15 D.A. DAVIDSON & CO., an ENTITY OF UNKNOWN FORM, RICHARD L. 16 WENDT TRUST, JWTR - OREGON, 17 18 LLC and JWTR, LLC, Defendants. 19 20 Plaintiff MIRO Advisory Services, Ltd. brings this action for declaratory relief and 21 negligent misrepresentation against defendants D.A. Davidson & Co.; Richard L. Wendt 22 Trust; JWTR Oregon, LLC; and JWTR, LLC. Dkt. No. 1. The complaint asserts that this 23 Court has subject matter jurisdiction under 28 U.S.C. § 1332 in that this is “a civil action 24 between citizens of a State and citizens or subjects of a foreign state and the matter in 25 controversy exceeds, exclusive of interest and costs, the sum of $75,000.” Dkt. No. 1 ¶ 1. 26 D.A. Davidson & Co. filed a motion to dismiss the complaint for lack of subject matter 27 jurisdiction on the basis that plaintiff has failed to properly allege that the amount in 28 controversy exceeds the $75,000 threshold. Dkt. No. 27. The motion is pending and is set Case No. 14-cv-01618 NC ORDER TO SHOW CAUSE 1 for hearing on August 6, 2014. The Court now issues this order because, aside from the 2 amount in controversy issue, the complaint does not contain sufficient allegations to 3 establish the citizenship of all defendants for diversity purposes. 4 Federal courts are courts of limited jurisdiction and are presumptively without 5 jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A 6 federal court may dismiss an action on its own motion if it finds that it lacks subject matter 7 jurisdiction over the action. Fiedler v. Clark, 714 F.2d 77, 78-79 (9th Cir. 1983); see also 8 Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter 9 jurisdiction, the court must dismiss the action.”). “Absent unusual circumstances, a party 10 seeking to invoke diversity jurisdiction should be able to allege affirmatively the actual 11 citizenship of the relevant parties.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th 12 Cir. 2001). 13 The diversity statute provides that “a corporation shall be deemed to be a citizen of 14 every State and foreign state by which it has been incorporated and of the State or foreign 15 state where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). Unlike a 16 corporation, a partnership and an LLC are treated for purposes of diversity as citizens of 17 every state of which their owners/members are citizens. See Johnson v. Columbia 18 Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006); Cosgrove v. Bartolotta, 150 19 F.3d 729, 731 (7th Cir. 1998). Moreover, if any member of a partnership or an LLC is itself 20 a partnership or association (or another LLC), the Court needs to know the citizenship of 21 each “sub-member” as well. V & M Star, LP v. Centimark Corp., 596 F.3d 354, 356 (6th 22 Cir. 2010). 23 The complaint here alleges that D.A. Davidson & Co. is “an entity of unknown form 24 with a principal place of business in Montana, and with offices throughout California, and 25 transacting business in this judicial district.” Dkt. No. 1 ¶ 5. The complaint alleges that 26 Richard L. Wendt Trust “is a trust existing under and administered under the laws of the 27 State of Oregon, with offices and operations in Klamath Falls, Oregon.” Id. ¶ 6. The 28 complaint further alleges that defendants JWTR Oregon, LLC and JWTR, LLC are limited Case No. 14-cv-01618 NC ORDER TO SHOW CAUSE 2 ng e e Oregon, eac with ch 1 liability companies organized and existin under the laws of the State of O pal f n F on” at ly 2 a princip place of business in Klamath Falls, Orego and tha “both are beneficiall b t.” 3 owned by the Trust Id. ¶ 7. 4 Th complain fails to al he nt llege the cit tizenship of the memb f bers, and any sub-mem y mbers, efendants li imited liability compan nies. Furth ermore, the allegations in the com e mplaint 5 of the de a cient to esta ablish the citizenship o the defen of ndant trust. See Johnso on, 6 do not appear suffic d A t rustee or tru ustees.” (cit ting Navarr Sav. ro 7 437 F.3d at 899 (“A trust has the citizenship of its tr U 64 ; merald Inve estors Trust v. Gaunt t 8 Ass’n v. Lee, 446 U.S. 458, 46 (1980))); but see Em d ng p 9 Parsippany Partners, 492 F.3d 192, 205 (3d Cir. 2007) (holdin that “the citizenship of e d iciary shoul control in determini the citiz ld n ing zenship of a 10 both the trustee and the benefi 0 11 trust”). 1 12 2 Be ecause the complaint does not con c d ntain suffic cient allegat tions to esta ablish that t there is te hip n and ndants, by J July 8, 2014 4, 13 complet diversity of citizensh between plaintiff a all defen 3 f w w t sed k 14 plaintiff must show cause in writing why this action should not be dismiss for lack of 4 s tter tion. If plai intiff is una to alleg the citize able ge enship of al ll 15 federal subject mat jurisdict 5 nts t g y ue, ff 16 defendan without conducting discovery on this issu plaintiff should so indicate in its 6 e 17 response to the order to show cause. 7 18 8 Th hearing on the moti to dismi filed by JWTR Ore he o ion iss egon, LLC a JWTR, LLC, and inued from July 2 to August 6, 20 A 014, at 1:00 p.m. in Courtroom A, 15th , 19 Dkt. No. 8, is conti 9 U t 0 e, cisco, Calif fornia. 20 Floor, U.S. District Court, 450 Golden Gate Avenue San Franc 0 21 1 IT IS SO OR T RDERED. 22 2 Date: June 24 2014 4, 23 3 _____ _________ __________ ____ Nath hanael M. C Cousins Unit States M ted Magistrate J Judge 24 4 25 5 26 6 27 7 28 8 Case No. 14-cv-01618 NC ORDER TO SHOW CAUSE R 3

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?