Charter Asset Management Fund, L.P. v. Indiana College Preparatory School, Inc. et al

Filing 15

ORDER REMANDING CASE. This action is REMANDED to Santa Clara County Superior Court and the Clerk shall close the file. Signed by Judge Edward J. Davila on 7/6/2017. (ejdlc1S, COURT STAFF) (Filed on 7/6/2017)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6

SAN JOSE DIVISION

7
8

CHARTER ASSET MANAGEMENT
FUND, L.P.,

9

Plaintiff,

10

United States District Court
Northern District of California

11
12

Case No. 5:17-cv-03577-EJD
ORDER REMANDING CASE

v.
INDIANA COLLEGE PREPARATORY
SCHOOL, INC., et al.,
Defendants.

13
14

On June 27, 2017, Magistrate Judge Howard R. Lloyd issued an order to show cause

15

regarding subject matter jurisdiction requiring Defendants Massa Financial Solutions, LLC and

16

Christopher David Massa (collectively, “Defendants”) to file a response with evidence, in

17

reference to Plaintiff Charter Asset Management Fund, LP (“Plaintiff”), “that all of the partners of

18

the limited partnership are diverse in citizenship from the Defendants.” Dkt. No. 7. Judge Lloyd

19

observed that in a diversity action like this one, the existence of federal jurisdiction depends on the

20

citizenship of each of the partners of a limited partnership, and the citizenship of each of the

21

owners/members of a limited liability corporation. Johnson v. Columbia Props. Anchorage, LP,

22

437 F.3d 894, 899 (9th Cir. 2006).

23

Defendants’ Notice of Removal was facially defective because it did not supply this

24

information for each of Plaintiff’s partners, despite Defendants’ obligation to provide it at the time

25

of removal. See Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“Absent

26

unusual circumstances, a party seeking to invoke diversity jurisdiction should be able to allege

27

affirmatively the actual citizenship of the relevant parties.”); see also Strotek Corp. v. Air Transp.

28

1
Case No.: 5:17-cv-03577-EJD
ORDER REMANDING CASE

1

Ass’n of Am., 300 F.3d 1129, (9th Cir. 2002) (holding that the “core principle of federal removal

2

jurisdiction on the basis of diversity” is that “it is determined (and must exist) as of the time the

3

complaint is filed and removal is effected”); see also DaimlerChrysler Corp. v. Cuno, 547 U.S.

4

332, 342 n.3 (2006) (holding that because “federal courts lack jurisdiction unless the contrary

5

appears affirmatively from the record, the party asserting federal jurisdiction when it is challenged

6

has the burden of establishing it.”). And, importantly, “the diversity jurisdiction statute, 28 U.S.C.

7

§ 1332, speaks of citizenship, not of residency.” Kanter, 265 F.3d at 857. A “natural person’s

8

state citizenship is . . . determined by her state of domicile, not her state of residence.” Id.

9

This case has since been reassigned to the undersigned, and Defendants filed a timely
response to the order to show cause indicating in a declaration that Plaintiff’s website identifies its

11
United States District Court
Northern District of California

10

partners “as living in California.” Dkt. No. 8. Defendants’ response, however, does not satisfy its

12

burden to affirmatively demonstrate federal subject matter jurisdiction under these circumstances.

13

As noted, diversity jurisdiction is established based on citizenship, not residence, because “[a]

14

person residing in a given state is not necessarily domiciled there, and thus is not necessarily a

15

citizen of that state.” Kanter, 265 F.3d at 857.

16

Accordingly, the court finds that Defendants have not adequately established diversity of

17

the parties in response to the order to show cause. The court must therefore presume that it lacks

18

jurisdiction to proceed further. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377

19

(1994) (holding that “[i]t is to be presumed that a cause lies outside” federal jurisdiction).

20
21
22
23

Consequently, this action is REMANDED to Santa Clara County Superior Court and the
Clerk shall close the file.
IT IS SO ORDERED.
Dated: July 6, 2017
______________________________________
EDWARD J. DAVILA
United States District Judge

24
25
26
27
28

2
Case No.: 5:17-cv-03577-EJD
ORDER REMANDING CASE