Grynberg et al v. Kinder Morgan Energy Partners, L.P. et al

Filing 29

ORDER That the Court's 19 Order to Show Cause, is MADE ABSOLUTE and the above-captioned action is DISMISSED WITHOUT PREJUDICE for lack of jurisdiction. The parties shall bear their own costs, by Judge William J. Martinez on 7/21/2014. (evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 14-cv-1832-WJM-KMT
CELESTE C. GRYNBERG, individually and as Trustee on behalf of the RACHEL
SUSAN TRUST, the STEPHEN MARK TRUST, and the MIRIAM ZELA TRUST, and
JACK J. GRYNBERG,
Petitioners,
v.
KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware Master Limited
Partnership, and
KINDER MORGAN CO2 COMPANY, L.P., a Texas Limited Partnership,
Respondents.

ORDER MAKING ABSOLUTE ORDER TO SHOW CAUSE
AND DISMISSING CASE FOR LACK OF JURISDICTION

Petitioners Celeste C. Grynberg and Jack J. Grynberg (together “Petitioners”)
bring this Petition to Vacate Arbitration Award as to their claims against Respondents
Kinder Morgan Energy Partners, L.P. (“KMEP”) and Kinder Morgan CO2 Company, L.P.
(collectively “Respondents”). (Petition (ECF Nos. 1 & 4).) Petitioners assert that this
Court has jurisdiction over the above-captioned action based on diversity of the parties
pursuant to 28 U.S.C. § 1332. (Petition at 2.) Section 1332(a)(1) states that the
“[federal] district courts shall have original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest and
costs, and is between . . . citizens of different States.” Exercising its independent duty
to examine its subject matter jurisdiction, the Court entered an Order to Show Cause
requiring Petitioners to allege “sufficient facts to show that the Court has diversity

jurisdiction over this matter.” (ECF No. 19.) Amongst other things, the Order provided:
The Petition to Vacate Arbitration Award alleges that the Court has
jurisdiction pursuant to 28 U.S.C. § 1332 based on the diversity of the
parties. Petitioners fail, however, to establish the citizenship of the two
limited partnerships that are parties to this action. The Court must
consider the citizenship of all members of an entity such as a partnership
in determining whether diversity jurisdiction exists. See Carden v. Arkoma
Assocs., 494 U.S. 185, 195 (1990) (citizenship of limited partners must be
taken into account to determine diversity of citizenship of the parties;
limited partnership is not in its own right a citizen of the state that created
it for purposes of diversity).
(Id.) On July 12, 2014, Petitioners filed their Response to the Order to Show Cause.
(ECF No. 20.) On July 21, 2014, Respondents filed a Reply. (ECF No. 27.) For the
reasons set forth below, the Order to Show Cause is made absolute and the case is
dismissed for lack of jurisdiction.
I. ANALYSIS
As the parties invoking federal court jurisdiction, Petitioners “bear[] the burden of
proving that such jurisdiction exists.” Montoya v. Chao, 296 F.3d 952, 955 (10th Cir.
2002); see also McPhail v. Deere & Co., 529 F.3d 947, 953 (10th Cir. 2008); Merida
Delgado v. Gonzales, 428 F.3d 916, 919 (10th Cir. 2005). Because federal courts are
courts of limited jurisdiction, there is a presumption against the existence of jurisdiction
and “[t]he party invoking the jurisdiction of the court has the duty to establish that
federal jurisdiction does exist.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909
(10th Cir. 1974).
Petitioners’ Response states that the sole owner and member of Respondent
Kinder Morgan CO2 Company, L.P. is the other Respondent, KMEP.1 (ECF No. 20 at
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Although Respondents contest this assertion in their Reply (ECF No. 27 at 3), the
Court will take Petitioners’ assertion as true for the purposes of this analysis.

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1.) However, Petitioners do not describe the citizenship of the members of KMEP,
choosing instead to challenge the basis for the Court’s Order to Show Cause. (Id. at 2.)
Petitioners contend that KMEP should be treated like a corporation for purposes of
diversity because it is not a private limited partnership, but is instead a master limited
partnership that is publicly traded. (Id.) Therefore, Petitioners argue, KMEP should be
considered to be a citizen of Delaware, the state that created it. (Id.) In response to
the Order to Show Cause’s citation to Carden v. Arkoma Associates, 494 U.S. 185, 195
(1990), which held that a limited partnership’s citizenship is determined by the
citizenship of its general and limited partners, Petitioners contend that Carden should
not apply to a master limited partnership like KMEP because it is more akin to a
corporation than a private partnership. (Id. at 4-6.)
The Court finds Petitioners’ argument intriguing, but insufficiently supported to
persuade the Court that it may ignore binding Supreme Court precedent. Petitioners
ask the Court to follow the reasoning of the Carden dissent, which argued in favor of
considering whether an entity’s component members were the real parties in interest
rather than establishing a bright-line rule applicable to non-corporate entities. (ECF No.
20 at 3-4.) Petitioners further contend that the cases in which other district courts have
applied Carden to master limited partnerships are unpersuasive, but fail to provide any
authority on which the Court could rely to distinguish this matter and follow the Carden
dissent. (See id.)
The Carden Court held that the “firmly established” rule that corporations be
treated as citizens does not extend to other entities, despite their “functional[]

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similar[ity]” to corporations, and established that for diversity purposes, non-corporate
entities are citizens of “all of the entity’s members.” Carden, 494 U.S. at 189, 195-97.
Thus, Carden does not allow the Court to choose how to evaluate the citizenship of an
entity such as KMEP based on its functional equivalency to a corporation. Instead, the
Court is bound to follow Carden and must determine KMEP’s citizenship by the
citizenship of its partners.
In reliance on the argument discussed above, Petitioners have failed to state the
citizenship of each member of KMEP. (ECF No. 20 at 3 (noting that “[i]f KMEP is the
sum of all of its shareholders, the precise contours of KMEP’s citizenship would be
unknown to the Plaintiffs”).) Therefore, the Court finds that the Response is deficient,
and Petitioners have failed to satisfy the Order to Show Cause. As a result of this
failure, the Court cannot properly determine whether diversity jurisdiction exists. See
Carden, 494 U.S. at 195-96.
The Court notes that Petitioners were specifically warned that this action would
be dismissed if they did not properly respond to the Court’s Order to Show Cause.
(ECF No. 19.) Despite this warning, Petitioners failed to provide the information
requested. On the current record, the Court finds that Petitioners have not met their
burden of showing that this Court has jurisdiction over this action. Therefore,
Petitioners have failed to overcome the presumption against federal jurisdiction, and
dismissal of this case is appropriate. See Basso, 495 F.2d at 909.

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II. CONCLUSION
For the foregoing reasons, the Court’s Order to Show Cause is MADE
ABSOLUTE and the above-captioned action is DISMISSED WITHOUT PREJUDICE for
lack of jurisdiction. The parties shall bear their own costs.
Dated this 21st day of July, 2014.
BY THE COURT:

William J. Martínez
United States District Judge

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