Marshall Wealth Management Group, Inc. et al v. Santillo
Filing
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ORDER DISMISSING CASE. The action is DISMISSED WITHOUT PREJUDICE. The Clerk shall close the file. Signed by Judge Edward J. Davila on 6/8/2018. (ejdlc1S, COURT STAFF) (Filed on 6/8/2018)
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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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MARSHALL WEALTH MANAGEMENT
GROUP, INC., et al.,
Plaintiffs,
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United States District Court
Northern District of California
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Case No. 5:18-cv-03051-EJD
ORDER DISMISSING CASE
v.
PERRY C. SANTILLO,
Defendant.
The court ordered Plaintiffs to show cause no later than June 8, 2018, why this action
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should not be dismissed without prejudice for lack of subject matter jurisdiction. Dkt. No. 10.
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Specifically, the court instructed Plaintiff to “file a written response that demonstrates the basis for
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this court’s subject matter jurisdiction in a manner” consistent with the discussion detailed in the
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Order to Show Cause. Plaintiffs filed a timely return. Dkt. No. 11. Their showing, however, does
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not satisfy the burden 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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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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Case No.: 5:18-cv-03051-EJD
ORDER DISMISSING CASE
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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 Complaint states that federal jurisdiction arises on the basis of diversity. For that to
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occur, “there must be complete diversity of citizenship between the parties opposed in interest.”
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Kuntz v. Lamar Corp., 385 F.3d 1177, 1181 (9th Cir. 2004). The amount in controversy must also
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exceed $75,000. Naffe v. Frey, 789 F.3d 1030, 1039 (9th Cir. 2015). For jurisdictional purposes,
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individuals are citizens of their states of domicile. Kanter v. Warner-Lambert Co., 265 F.3d 853,
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857 (9th Cir. 2001) (“The natural person’s state citizenship is [] determined by her state of
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domicile, not her state of residence.”). And “[a] corporation is a citizen of (1) the state under
whose laws it is organized or incorporated; and (2) the state of its ‘principal place of business.’”
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United States District Court
Northern District of California
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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
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all 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, Plaintiffs state in the return and supporting declaration that Marshall Wealth
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Management Group, Inc. is a dissolved California corporation with a principal place of business in
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California, and that David T. Marhsall is domiciled in California. As to the Defendant, Perry C.
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Santillo, Jr., Plaintiffs state “upon information and belief” that he is domiciled in New York.
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The clarification provided by the return is not enough, because citizenship allegations
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made only on “information and belief” are inadequate to demonstrate subject matter jurisdiction
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on the basis of diversity. See Robichaux v. Fidelity Natl’l Ins. Co., No. CV-12-02464-PHC-GMS,
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2013 WL 356902, at *2 (D. Ariz. Jan. 29, 2013). This is because such allegations, which by their
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own nature reveal that the plaintiff has not confirmed the truth of the implied assertion, do not
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fulfill the obligation that citizenship of the relevant parties be affirmatively pleaded, not just
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speculated.
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Case No.: 5:18-cv-03051-EJD
ORDER DISMISSING CASE
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Accordingly, Plaintiffs have not discharged the order that they demonstrate subject matter
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jurisdiction in a manner consistent with the prior instructions. The court therefore finds that it
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lacks subject matter jurisdiction over this action, and further finds that permitting additional
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amendment would be futile given Plaintiffs’ inability to confirm the existence of jurisdiction even
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after the deficiency was identified and explained in detail.
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Because the court cannot proceed further with Plaintiffs’ claims, the action is DISMISSED
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WITHOUT PREJUDICE. See Ex Parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1868) (“Without
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jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law,
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and when it ceases to exist, the only function remaining to the court is that of announcing the fact
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United States District Court
Northern District of California
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and dismissing the cause.”).
The Clerk shall close the file.
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IT IS SO ORDERED.
Dated: June 8, 2018
______________________________________
EDWARD J. DAVILA
United States District Judge
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Case No.: 5:18-cv-03051-EJD
ORDER DISMISSING CASE
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