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)

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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

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