Berkeley Research Group, LLC v. United Potato Growers of America, Inc. et al
Filing
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ORDER HOLDING MOTION TO REMAND IN ABEYANCE PENDING JURISDICTIONAL DISCOVERY Show Cause Brief due by 3/30/2017. Responses due by 4/6/2017.. Signed by Judge Alsup on 3/13/17. (whalc1, COURT STAFF) (Filed on 3/13/2017)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California
United States District Court
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BERKELEY RESEARCH GROUP, LLC, a
California limited liability company,
No. C 16-07205 WHA
Plaintiff,
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v.
UNITED POTATO GROWERS OF
AMERICA, INC., an Idaho corporation;
UNITED POTATO GROWERS OF IDAHO,
INC., an Idaho corporation; IDAGRO, INC.,
an Idaho corporation; ALBERT WADA, an
Idaho resident; WADA FARMS, INC., an
Idaho corporation; WADA FARMS
POTATOES, INC., an Idaho corporation;
WADA FARMS MARKETING GROUP,
LLC, an Idaho limited liability company;
WADA-VAN ORDEN POTATOES, INC., an
Idaho corporation; CEDAR FARMS, INC., an
Idaho corporation; WADA FAMILY, LLC, an
Idaho limited liability company; PROFRESH,
LLC, an Idaho limited liability company;
JEFF RAYBOULD, an Idaho resident;
RAYBOULD BROTHERS FARMS, LLC, an
Idaho limited liability company’ MICHAEL
CRANNEY, an Idaho resident;
CORNELISON FARMS, INC., a former
Idaho corporation; KEITH CORNELISON, an
Idaho resident; SNAKE RIVER PLAINS
POTATOES, INC., an Idaho corporation;
LANCE FUNK, an Idaho resident;
PLEASANT VALLEY POTATO, INC., an
Idaho corporation; KCW FARMS, INC., an
Idaho corporation; KIM WAHLEN, an Idaho
resident; and DOES 1-100,
Defendants.
/
ORDER HOLDING MOTION
TO REMAND IN ABEYANCE
PENDING JURISDICTIONAL
DISCOVERY
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INTRODUCTION
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Plaintiff moves to remand this contract dispute to state court for lack of subject-matter
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jurisdiction. For the reasons stated herein, the motion will be HELD IN ABEYANCE pending limited
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jurisdictional discovery.
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STATEMENT
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This action arises out of an expert litigation consulting contract between plaintiff
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Berkeley Research Group and defendants — a group of potato farmers, farms, and growing
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associations. Defendants hired BRG to provide expert services in connection with a multi-
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district litigation in the United States District Court for the District of Idaho.*
On November 1, 2016, defendants filed a breach of contract action in Idaho state court
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For the Northern District of California
United States District Court
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claiming BRG billed defendants inappropriately and provided substandard quality work. On
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November 18, BRG filed this breach of contract action in California state court, claiming
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defendants breached by not paying over eight-hundred thousand dollars in outstanding invoices.
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BRG served defendants in this action over a month before defendants served BRG in the Idaho
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action. Prior to serving BRG in the Idaho action, defendants removed this action to federal
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court.
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In late January 2017, BRG moved to dismiss the Idaho action pursuant to Idaho Rule of
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Civil Procedure 12(b)(8) on the ground that another action was pending between the same
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parties for the same cause. In early February 2017, BRG filed this motion to remand for lack of
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subject-matter jurisdiction.
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More than two weeks later, defendants filed their opposition to this motion and
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separately filed a motion to dismiss for lack of personal jurisdiction or to transfer venue.
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Defendants also filed a motion to shorten time to hear their motion to dismiss. BRG opposed
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defendants’ motion to shorten time and separately filed a motion to extend time to file their
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opposition to defendants’ motion. Both timing motions were denied (Dkt. No. 18).
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As of March 2, 2017, only six of the twenty-one captioned defendants have been served in this
action: United Potato Growers of Idaho, Inc.; IdaGro, Inc.; Albert Wada; Wada Farms, Inc.; Cedar Farms, Inc.;
and United Potato Growers of America, Inc. (Dkt. No. 20 at 2).
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Defendants were also allowed (and took) an opportunity to file a surreply to this motion
after BRG filed new evidence in their reply (ibid.).
BRG now asserts diversity is incomplete between them and defendants because United
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Potato Growers of America, Inc., one of the removing defendants, is a citizen of Utah, and at
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least four BRG limited liability company members have “a permanent, primary residence in
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Utah” (Pl.’s Reply Br. at 2). UPGA’s Utah citizenship is not contested.
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This order follows full briefing and oral argument.
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The issue presented is whether at least one of BRG’s members is a citizen of Utah, and
whether defendants should be permitted to engage in limited jurisdictional discovery.
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For the Northern District of California
United States District Court
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ANALYSIS
In determining diversity jurisdiction, a limited liability partnership is a citizen of every
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state in which its members are citizens. Our court of appeals has extended this rule to limited
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liability companies. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir.
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2006). Citizenship, for diversity jurisdiction, is synonymous with an individual’s domicile. An
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individual’s domicile is where she is both physically present and evinces an intention to remain
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there indefinitely. Lew v. Moss, 797 F.2d 747, 749–50 (9th Cir. 1986). In Lew, our court of
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appeals indicated a number of objective factors that evince an individual’s domicile (none is
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dispositive alone): Current residence, voting registration and voting practices, location of
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personal and real property, location of brokerage and bank accounts, location of spouse and
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family, membership in unions and other organizations, place of employment or business,
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driver’s license and automobile registration, and payment of taxes. Id. at 750.
THE SHOWING BY BRG IS NOT CONCLUSIVE.
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BRG provides declarations from four of its members, stating: (1) each were members of
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BRG since June 2011 and were members when this action was filed in California in November
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2016; (2) each maintains a permanent residence in Utah; (3) Utah has been the primary
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residence of each since becoming members of BRG; (4) each is registered to vote in Utah; and
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(5) the primary BRG office of three of the four members was in Salt Lake City, Utah
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(Dkt. No. 17-3–17-6). The fourth member did not indicate his primary BRG office, but he
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executed his declaration in Los Angeles and BRG’s website shows Los Angeles as his primary
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BRG office (Defs.’ Surreply at 6).
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BRG argues that its members’ declarations sufficiently “establish the [limited liability
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company] membership status and permanent residence of these individuals in Utah, citing
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factors including primary residence, workplace, and voter registration in the state” (Pl.’s Reply
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at 5).
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Defendants understandably object, pointing out domicile is not the same as residence.
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BRG repeatedly asserts its members’ residence in Utah but, inexplicably, never asserts their
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intent to remain or, explicitly, that their members are domiciled in, or citizens of, Utah. The
objective facts that the members maintain permanent residences, are registered to vote, and have
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For the Northern District of California
United States District Court
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their primary office in Utah would support a statement of intent to remain, but they make none.
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Only two explanations come to mind for not including a statement of intent to remain
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with BRG’s declarations: (1) the neglect of counsel, or (2) the members do not intend to stay in
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Utah. While statements of intent in the domicile context are entitled to little weight when in
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conflict with the facts, Lew, 797 F.2d at 750, the total absence of an assertion of intent to remain
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indefinitely inserts suspicion into BRG’s evidence. Without such an assertion, a permanent
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residence could just as well be a vacation home.
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2.
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“Discovery may be appropriately granted where pertinent facts bearing on the question
LIMITED JURISDICTIONAL DISCOVERY IS APPROPRIATE.
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of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.”
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Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008).
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BRG, unlike defendants, is capable of providing substantial evidence that its Utah
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members are in fact domiciled in Utah. BRG’s unnecessarily cryptic declarations leave us
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needing “a more satisfactory showing of the facts” to determine the intent of the BRG members
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to remain in Utah. As such, BRG’s remand motion will be HELD IN ABEYANCE while
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defendants engage in limited jurisdictional discovery to resolve the issue. BRG shall not try to
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head off the discovery by rushing in with supplemental declarations.
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As a final point, BRG argues that defendants’ request for jurisdictional discovery is
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merely a ploy designed to delay BRG’s motion and hear defendants’ motion to dismiss for lack
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of personal jurisdiction first. This Court suspects the same. BRG offered to provide the Utah
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members’ state driver’s licenses but defendants denied this opportunity to resolve the question
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sooner (Dkt. No. 17-1 at 2). In fact, defendants could have noticed their motion in state court
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two months ago. Instead, they took advantage of this forum. This Court will ensure removal
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was legitimate before hearing defendants’ motion.
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CONCLUSION
For the foregoing reasons, BRG’s motion to remand is HELD IN ABEYANCE pending
limited jurisdictional discovery. Defendants may engage in the following jurisdictional
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For the Northern District of California
United States District Court
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discovery against each asserted Utah BRG member (Paul Shields, Patrick Kilbourne, David
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Judd, and Vernon Calder): (1) ten reasonably narrow interrogatories, (2) ten reasonably narrow
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document requests, and (3) one half-day deposition. The jurisdictional discovery is limited to
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the issue of the citizenship of those individuals. With the benefit of this discovery, defendants
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must then show cause why this action should not be remanded to state court for lack of subject-
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matter jurisdiction by MARCH 30, 2017. BRG may then file a response by APRIL 6, 2017. The
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issue will then be decided on the papers unless a hearing is deemed advisable.
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Defendants’ pending motion to dismiss for lack of personal jurisdiction will be HELD IN
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ABEYANCE until the jurisdictional discovery is complete and the specific subject-matter
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jurisdiction issue presented by the instant motion to remand is resolved. The hearing scheduled
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for March 23, 2017, is VACATED, and it will be re-set if the case is kept here.
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IT IS SO ORDERED.
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Dated: March 13, 2017.
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE
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