Loan Resolution Corporation et al v. US Bank National Association et al

Filing 5

ORDER DISMISSING Complaint with Leave to Amend. If Plaintiffs choose to file an amended complaint, they must do so no later than September 7, 2017. Signed by Judge M. James Lorenz on 8/24/2017.(sjt)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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LOAN RESOLUTION CORPORATION.
et al.,

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ORDER DISMISSING COMPLAINT
WITH LEAVE TO AMEND

Plaintiffs,

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Case No.: 17cv1691-L(VWG)

v.
U.S. BANK NATIONAL
ASSOCIATION,

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Defendant.

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In this breach of contract action under California law, Plaintiffs claim federal

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jurisdiction based on diversity of citizenship under 28 U.S.C. §1332. (Compl. at 2.)

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Because the complaint does not sufficiently allege citizenship of all the parties, the action

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is dismissed with leave to amend.

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Unlike state courts,

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Federal courts are courts of limited jurisdiction. They possess
only that power authorized by Constitution and statute, which is
not to be expanded by judicial decree. It is to be presumed that
a cause lies outside this limited jurisdiction, and the burden of
establishing the contrary rests upon the party asserting
jurisdiction.

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17cv1691-L(VWG)

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Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted).

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Federal courts are constitutionally required to raise issues related to federal subject matter

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jurisdiction and may do so sua sponte. Arbaugh v. Y&H Corp., 546 U.S. 500, 514

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(2006). A federal court must satisfy itself of its jurisdiction over the subject matter

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before proceeding to the merits of the case. Ruhrgas AG v. Marathon Oil Co., 526 U.S.

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574, 577, 583 (1999).

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The plaintiff bears the burden of demonstrating that jurisdiction is properly before

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the Court. See Thornhill Publ'g Co. v. General Tel. & Elec. Corp., 594 F.2d 730, 733

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(9th Cir. 1979). Plaintiffs rely on 28 U.S.C. §1332, which requires complete diversity of

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citizenship between plaintiffs and defendants. The complaint must affirmatively allege

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the state of citizenship of each party. Bautista v. Pan Am. World Airlines, Inc., 828 F.2d

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546, 552 (9th Cir.1987); see also Kanter v. Warner-Lambert, Co., 265 F.3d 853 (9th Cir.

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2001).

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The complaint names LRC Asset Management LLC ("LRCAM") as one of the

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Plaintiffs. For diversity purposes, the citizenship of a non-corporate business entity is

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determined by the citizenship of each of its members. Carden v. Arkoma Assoc., 494

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U.S. 185, 195-96 (1990). Plaintiffs do not adequately allege LRCAM's membership and

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the citizenship of each member. (See Compl. at 2.) The complaint is therefore

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insufficient to establish that the parties meet all the requirements of diversity jurisdiction.

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Because Plaintiffs do not allege the facts necessary to establish diversity, the

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complaint is dismissed for lack of subject matter jurisdiction. Plaintiffs are granted leave

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to file an amended complaint to supplement the jurisdictional allegations. See 28 U.S.C.

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/////

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17cv1691-L(VWG)

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§1653. If Plaintiffs choose to file an amended complaint, they must do so no later than

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September 7, 2017.

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IT IS SO ORDERED.

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Dated: August 24, 2017

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17cv1691-L(VWG)