Lai v. Allstate Insurance Corporation

Filing 14

ORDER DISMISSING CASE. The action is DISMISSED WITHOUT PREJUDICE. The Clerk shall close the file. Signed by Judge Edward J. Davila on 12/1/2017. (ejdlc1S, COURT STAFF) (Filed on 12/1/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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SHARON LAI,

Case No. 5:17-cv-05125-EJD

Plaintiff,
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ORDER DISMISSING CASE

v.
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United States District Court
Northern District of California

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ALLSTATE INSURANCE
CORPORATION,
Defendant.
On November 28, 2017, the court ordered Plaintiff to show cause no later than December

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4, 2017, why this action should not be dismissed without prejudice for lack of subject matter

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jurisdiction and for failure to timely effectuate service of process. Dkt. No. 11. Specifically, the

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court instructed Plaintiff to “file a written response that demonstrates the basis for this court’s

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subject matter jurisdiction in a manner” consistent with the discussion detailed in the Order to

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Show Cause, and also to “file documents to show proof of service of the Summons and Complaint

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on Defendant[] or otherwise explain in writing why service has not been accomplished.” In

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response, Plaintiff filed two documents on November 30, 2017: (1) an amended complaint, and (2)

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a waiver of service of summons executed by an attorney on behalf of Defendant. Dkt. Nos. 12,

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13. Having reviewed those documents, the court finds the latter satisfies the previously-identified

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service of process deficiency. The former document, however, does not satisfy Plaintiff’s burden

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to affirmatively allege subject matter jurisdiction.

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The court previously explained that as opposed to state courts, “[f]ederal courts are courts

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of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

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“They possess only that power authorized by Constitution and statute[.]” Id. Consequently,

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Case No.: 5:17-cv-05125-EJD
ORDER DISMISSING CASE
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federal courts are presumed to lack jurisdiction unless the contrary appears affirmatively from the

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record (DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3 (2006)), and must examine their

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own ability to proceed even if no party raises the issue. See Henderson v. Shinseki, 562 U.S. 428,

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434 (2011) (“[F]ederal courts have an independent obligation to ensure that they do not exceed the

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scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that

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the parties either overlook or elect not to press.”); see also Snell v. Cleveland, Inc., 316 F.3d 822,

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826 (9th Cir. 2002) (“[A] court may raise the question of subject matter jurisdiction, sua sponte, at

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any time during the pendency of the action, even on appeal.”).

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The amended complaint alleges that federal jurisdiction arises on the basis of diversity.
For that to occur, “there must be complete diversity of citizenship between the parties opposed in

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United States District Court
Northern District of California

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interest.” Kuntz v. Lamar Corp., 385 F.3d 1177, 1181 (9th Cir. 2004). The amount in controversy

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must also exceed $75,000. Naffe v. Frey, 789 F.3d 1030, 1039 (9th Cir. 2015). For jurisdictional

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purposes, individuals are citizens of their states of domicile. Kanter v. Warner-Lambert Co., 265

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F.3d 853, 857 (9th Cir. 2001) (“The natural person’s state citizenship is [] determined by her state

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of domicile, not her state of residence.”). But “[a] corporation is a citizen of (1) the state under

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whose laws it is organized or incorporated; and (2) the state of its ‘principal place of business.’”

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Davis v. HSBC Bank Nev., N.A., 557 F.3d 1026, 1028 (9th Cir. 2008).

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“Absent unusual circumstances, a party seeking to invoke diversity jurisdiction should be

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able to allege affirmatively the actual citizenship of the relevant parties” in order to confirm that all

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parties are diverse. Kanter, 265 F.3d at 857 (emphasis added). Indeed, “[a] party invoking the

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federal court’s jurisdiction has the burden of proving the actual existence of subject matter

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jurisdiction.” Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996).

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Here, Plaintiff alleges in the amended complaint that she is a California citizen. Dkt. No.

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12, at ¶ 1. As to the Defendant, she alleges “upon information and belief” that it is an Illinois

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corporation. Id. at ¶ 2. She also alleges “upon information and belief” that Defendant maintains

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its principal place of business in Illinois. Id.

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The amended complaint is not enough, because citizenship allegations made only on
Case No.: 5:17-cv-05125-EJD
ORDER DISMISSING CASE
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“information and belief” are inadequate to demonstrate subject matter jurisdiction on the basis of

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diversity. See Robichaux v. Fidelity Natl’l Ins. Co., No. CV-12-02464-PHC-GMS, 2013 WL

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356902, at *2 (D. Ariz. Jan. 29, 2013). This is because such allegations, which by their own

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nature reveal that the plaintiff has not confirmed the truth of the implied assertion, do not fulfill

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the obligation that citizenship of the relevant parties be affirmatively pleaded, not just speculated.

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Accordingly, Plaintiff has not discharged the order that she demonstrate this court’s subject

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matter jurisdiction in a manner consistent with the court’s prior instructions. The court therefore

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finds that it lacks subject matter jurisdiction over this action, and further finds that permitting

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additional amendment would be futile given Plaintiff’s inability to confirm the existence of

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jurisdiction even after the deficiency was identified and explained in detail.

United States District Court
Northern District of California

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This court lacks the ability to proceed further with Plaintiff’s claims. See Ex Parte

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McCardle, 74 U.S. (7 Wall.) 506, 514 (1868) (“Without jurisdiction the court cannot proceed at all

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in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function

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remaining to the court is that of announcing the fact and dismissing the cause.”). The action is

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DISMISSED WITHOUT PREJUDICE.

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The Clerk shall close the file.

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IT IS SO ORDERED.
Dated: December 1, 2017
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EDWARD J. DAVILA
United States District Judge

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Case No.: 5:17-cv-05125-EJD
ORDER DISMISSING CASE
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