California Union Square L.P. v. Saks & Company LLC.

Filing 53

ORDER DISMISSING CASE FOR LACK OF JURISDICTION AND STRIKING [33-5] DOCUMENT. Signed by Judge Haywood S. Gilliam, Jr. on 5/23/2017. (ndrS, COURT STAFF) (Filed on 5/23/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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CALIFORNIA UNION SQUARE L.P.,

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Plaintiff,

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v.
SAKS & COMPANY LLC.,

United States District Court
Northern District of California

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CALIFORNIA UNION SQUARE L.P.,

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Plaintiff,

Re: Dkt. No. 6
ORDER GRANTING MOTION TO
REMAND

Defendant.

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Case No. 17-cv-1765-HSG

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v.
SAKS & COMPANY LLC.,

Case No. 16-cv-04043-HSG
Re: Dkt. Nos. 33-5
ORDER DISMISSING CASE FOR
LACK OF JURISDICTION AND
STRIKING DOCUMENT

Defendant.

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Pending before the Court is Plaintiff California Union Square L.P.’s motion to remand.

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Case No. 17-cv-1765, Dkt. No. 6. Having read the parties’ papers and carefully considered their

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arguments, the Court finds the matter appropriate for decision without oral argument, see Civil

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L.R. 7-1(b), and GRANTS Plaintiff’s motion for the reasons stated below.

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“Except as otherwise expressly provided by Act of Congress, any civil action brought in a

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State court of which the district courts of the United States have original jurisdiction, may be

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removed” to federal court. 28 U.S.C. § 1441(a). The Ninth Circuit has held that “[f]ederal

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jurisdiction must be rejected if there is any doubt as to the right of removal in the first

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instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Because of this “strong

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presumption against removal jurisdiction,” a defendant “always has the burden of establishing that

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removal is proper.” Id. (internal quotation marks omitted).

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28 U.S.C. § 1332(a)(1) establishes federal jurisdiction over cases in which there is

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complete diversity of citizenship between the parties and the amount in controversy exceeds

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$75,000. “The presence of [a] nondiverse party automatically destroys original jurisdiction: No

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party need assert the defect. No party can waive the defect or consent to jurisdiction. No court

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can ignore the defect; rather a court, noticing the defect, must raise the matter on its own.”

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Wisconsin Dept. of Corr. v. Schacht, 524 U.S. 381, 389 (1998). Plaintiff contends that this Court

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has no jurisdiction over Case No. 17-cv-1765, and must remand the case to state court, because

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complete diversity is lacking. See Case No. 17-cv-1765, Dkt. No. 6 at 7. The Court agrees.

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United States District Court
Northern District of California

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Plaintiff submitted the affidavit of William A. Molinski, an attorney at Orrick, Herrington
& Sutcliffe LLP, and Plaintiff’s counsel of record, describing Plaintiff’s corporate structure. Id.
Dkt. No. 6-2. Plaintiff is a limited partnership. See id., Dkt. Nos. 6-2 ¶¶ 12, 13, 6-3, Ex. L.
Plaintiff’s general partner is California Union Square LLC, a limited liability company. Id.
California Union Square LLC’s sole and managing member is DB Immobilienfonds 13 California
L.P., a limited partnership. Id. Dkt. Nos. 6-2 ¶¶ 12, 14, 6-3, Ex. M. DB Immobilienfonds 13
California L.P.’s general partner is IC Associate LLC, a limited liability company. Id. Dkt. Nos.
6-2 ¶¶ 12, 15, 6-3, Ex. N. IC Associate LLC’s sole and managing member is GSS Holdings (IC
Associate), Inc., a New York corporation with its principal place of business in New York. Id.
Dkt. Nos. 6-2 ¶¶ 12, 16-19, 6-3, Exs. O, P, Q. Because partnerships and limited liability

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companies are “citizen[s] of every state of which [their] owners/members are citizens,” Plaintiff is

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a citizen of New York. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir.
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2006). Defendant is a limited liability company. See Case No. 17-cv-1765, Dkt. No. 1 ¶ 10. Its
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sole member, Saks Incorporated, is incorporated in Tennessee with its principal place of business
in New York. Id. Defendant is therefore also a citizen of New York, and thus there is no diversity
jurisdiction.
The Court accordingly GRANTS Plaintiff’s motion to remand Case No. 17-cv-1765.
Plaintiff’s request for attorneys’ fees and costs incurred as a result of the removal under 28 U.S.C.
§ 1447(c) is DENIED: Plaintiff’s contribution to the confusion surrounding diversity jurisdiction
in this action was substantial, to include a complete reversal from the position it took initially in

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Case No. 16-cv-4043.
The Court also DISMISSES Case No. 16-cv-4043 for lack of subject matter jurisdiction,

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because complete diversity does not exist in that case either, for the reasons described above.1

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Finally, the Court STRIKES Dkt. No. 33-5 in Case No. 16-cv-4043, because that

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document contains confidential business information, trade secrets, and market research. Because

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the case is being dismissed for lack of jurisdiction, the Court finds good cause not to require the

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refiling of a redacted version of the document.
It is ORDERED that Case No. 17-cv-1765 is remanded under 28 U.S.C. § 1447(c) to San

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Francisco County Superior Court. The Clerk of this Court is directed to remand the case forthwith
and close the case. The Clerk is also directed to close Case No. 16-cv-4043.
IT IS SO ORDERED.

United States District Court
Northern District of California

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Dated: 5/23/2017
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

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While the petition in Case No. 16-cv-4043 sought the appointment of an arbitrator under 9
U.S.C. § 5, diversity was cited as the basis for this Court’s jurisdiction. See Case No. 16-cv-4043,
Dkt. No. 1 ¶ 6. Moreover, the Court understands that the sole issue raised in that case—whether
the Court should appoint an arbitrator—has been rendered entirely moot by the completed
arbitration that is the subject of Case No. 17-cv-1765.
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