Foltz v. Chase Home Finance, LLC

Filing 40

ORDER re: 38 Notice of Errata. The Court is without assurance that it has diversity jurisdiction over this case and, as a result, will not vacate its order remanding plaintiff's state-law claims. By Judge Philip A. Brimmer on 2/25/15. (pabsec)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 14-cv-01581-PAB-CBS
RENEE FOLTZ,
Plaintiff,
v.
CHASE HOME FINANCE, LLC,
Defendant.
_____________________________________________________________________
ORDER
_____________________________________________________________________
The matter is before the Court on the Notice of Errata Re: Response to Motion to
Dismiss (Doc. 24) [Docket No. 38] filed by plaintiff Renee Foltz. The notice states:
1. In her Response to Motion to Dismiss, Ms. Foltz argued that the sole
basis for jurisdiction before this Court is federal question jurisdiction. That
assertion was incorrect. This Court also has diversity jurisdiction under 28
U.S.C. § 1332 because the parties are citizens of different states, and the
amount in controversy exceeds $75,000. The Court also has supplemental
jurisdiction over those claims under 28 U.S.C. § 1367, as stated in the
scheduling order prepared by both parties.
2. Plaintiff therefore concedes jurisdiction in this Court is proper and is not
challenging the jurisdiction of this Court.
Docket No. 38. According to the Notice of Electronic filing, plaintiff’s notice was filed at
12:26 p.m. on February 25, 2015.
At 12:44 p.m. that same day, the Court’s order on defendant’s motion to dismiss
[Docket No. 39] was docketed, which dismissed plaintiff’s lone claim arising under
federal law. Because no federal claims remained, the Court declined to exercise
supplemental jurisdiction over plaintiff’s state-law claims and remanded the case.

Docket No. 39 at 3. The question therefore becomes whether plaintiff’s notice is reason
to vacate the Court’s order remanding plaintiff’s state-law claims. The Court concludes
that it is not.
Plaintiff’s notice is the first time that either party has suggested that this Court
has diversity jurisdiction over this case. See Docket No. 1 at 3; Docket No. 22 at 2.
The Court concludes that the notice is insufficient to establish diversity jurisdiction
pursuant to 28 U.S.C. § 1332. First, plaintiff’s notice contains only the assertions of
counsel and is unsupported by citation to the second amended complaint, which
asserts jurisdiction only pursuant to § 1331 and § 1367. Pursuant to Fed. R. Civ . P.
8(a), a complaint must contain “a short and plain statement of the grounds for the
court’s jurisdiction.” The proper vehicle by which to amend jurisdictional allegations is
through the filing of an amended complaint, which plaintiff has not done.
Second, although plaintiff’s notice claims that the parties are citizens of different
states, the second amended complaint does not contain sufficient allegations regarding
the citizenship of defendant Chase Home Finance, LLC. The second amended
complaint alleges that
3. Defendant Chase Home Finance, LLC (herein “Chase Finance”) is a New
Jersey limited liability company with an address of 343 Thornall Street, Suite
7, Edison, New Jersey, 08837.
4. Defendant Chase Finance is a subsidiary of Chase Home Finance, Inc.
Neither Chase Home Finance, LLC nor Chase Home Finance, Inc. appear
to be registered and current with the Colorado Secretary of State.
Docket No. 22 at 1, ¶¶ 3-4. W hile, for diversity purposes, “a corporation shall be
deemed to be a citizen of every State and foreign state by which it has been
incorporated and of the State or foreign state where it has its principal place of
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business,” 28 U.S.C. § 1332(c)(1); see Carden v. Arkoma Assocs., 494 U.S. 185, 196
(1990),1 these considerations are irrelevant to the determination of the citizenship of an
LLC. Although the Supreme Court and the Tenth Circuit have not spoken specifically
on the issue of the citizenship of LLCs, the consensus throughout the circuits is that an
LLC, much like a partnership, is deemed to be a citizen of all of the states of which its
members are citizens. See MCP Trucking, LLC v. Speedy Heavy Hauling, Inc., No. 14cv-02427-PAB, 2014 WL 5002116, at *1 (D. Colo. Oct. 6, 2014) (collecting cases).
Furthermore, when an entity consists of multiple tiers of ownership and control, the
entire structure must be considered for diversity purposes. In other words, when an
entity is composed of multiple layers of constituent entities, the citizenship
determination requires an exploration of the citizenship of the constituent entities as far
down as necessary to unravel fully the citizenship of the entity before the court. See
Zambelli Fireworks Mfg. Co v. Wood, 592 F.3d 412, 420 (3d Cir. 2010) (“the citizenship
of unincorporated associations must be traced through however many layers of
partners or members there may be”) (internal quotation marks omitted); see also D.B.
Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d 124, 126 (1st Cir. 2011);
Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42,
49 (2d Cir. 2012); Mullins v. TestAmerica, Inc., 564 F.3d 386, 397-98 (5th Cir. 2009);
Delay v. Rosenthal Collins Grp., 585 F.3d 1003, 1005 (6th Cir. 2009); Jennings v. HCR
ManorCare Inc., 901 F. Supp. 2d 649, 651 (D.S.C. 2012) (“an LLC’s m embers’

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A corporation’s “principal place of business” is “the place where a corporation’s
officers direct, control, and coordinate the corporation’s activities.” Hertz Corp. v.
Friend, 559 U.S. 77, 92-3 (2010).
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citizenship must be traced through however many layers of members there may be”);
cf. Carden, 494 U.S. at 195 (“[W]e reject the contention that to determine, for diversity
purposes, the citizenship of an artificial entity, the court may consult the citizenship of
less than all of the entity’s members.”). The second amended complaint does not
contain sufficient facts to determine the citizenship of Chase Home Finance, Inc. and it
is not clear that Chase Home Finance, Inc. is the only constituent member of Chase
Home Finance, LLC.
Third, although plaintiff suggests that the parties have consented to
jurisdiction,“[s]ubject matter jurisdiction cannot be conferred or waived by consent,
estoppel, or failure to challenge jurisdiction early in the proceedings.” See Laughlin v.
Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995) (“[I]f the parties fail to raise the question
of the existence of jurisdiction, the federal court has the duty to raise and resolve the
matter.”), abrogated on other grounds by Dart Cherokee Basin Operating Co., LLC v.
Owens, 135 S.Ct. 547 (2014).
In every case and at every stage of the proceeding, a federal court must satisfy
itself as to its own jurisdiction, even if doing so requires sua sponte action. Citizens
Concerned for Separation of Church & State v. City & County of Denver , 628 F.2d
1289, 1297 (10th Cir. 1980). Absent an assurance that jurisdiction ex ists, a court may
not proceed in a case. See Cunningham v. BHP Petroleum Great Britain PLC, 427
F.3d 1238, 1245 (10th Cir. 2005). The Court is without assurance that it has diversity
jurisdiction over this case and, as a result, will not vacate its order remanding plaintiff’s
state-law claims.

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It is so ORDERED.

DATED February 25, 2015.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

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