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

Filing 34

ORDER Denying 31 Petitioners Motion Under Federal Rule of Civil Procedure 60(b) to Relieve Claimants from the July 21, 2014 Order Making Absolute Order to Show Cause, by Judge William J. Martinez on 10/28/2014.(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 DENYING PETITIONERS’ RULE 60(b) MOTION

Petitioners Celeste C. Grynberg and Jack J. Grynberg (together “Petitioners”)
bring this action seeking to vacate an arbitration award in favor of Respondents Kinder
Morgan Energy Partners, L.P. (“KMEP”) and Kinder Morgan CO2 Company, L.P.
(“KMCO2”) (together “Respondents”). (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. (Id. 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.”
On July 2, 2014, the Court entered an Order to Show Cause regarding
Petitioners’ failure to allege sufficient facts to show that the Court has diversity

jurisdiction, as the Petition failed to establish the citizenship of the two limited
partnerships that are parties to this action. (ECF No. 19.) In Petitioners’ Response to
the Order to Show Cause, they stated that KMEP was the sole member of KMCO2, but
admitted that the identities of all members of KMEP were unknown, and at least one
member of KMEP was a Colorado citizen. (ECF No. 20 at 1-3.) Because Petitioners
were also Colorado citizens, the Court concluded that Petitioners had f ailed to show
that the parties were completely diverse. Accordingly, on July 21, 2014, the Court
made absolute the Order to Show Cause and dismissed the case for lack of jurisdiction
(“Dismissal Order”). (ECF No. 29.) Judgment was entered on July 22, 2014. (ECF No.
30.)
This matter is before the Court on Petitioners’ Motion Under Federal Rule of Civil
Procedure 60(b) to Relieve Claimants from the July 21, 2014 Order Making Absolute
Order to Show Cause (“Motion”) (ECF No. 31), filed on August 18, 2014. (ECF No. 31.)
Respondents filed an opposition brief (ECF No. 32), and Petitioners filed a reply (ECF
No. 33). For the reasons set forth below, the Court denies Petitioners’ Motion.
I. DISCUSSION
Rule 60(b) permits a Court to grant relief from a final judgment or order for
specified reasons, including “newly discovered evidence that, with reasonable diligence,
could not have been discovered in time to move for a new trial under Rule 59(b).” Fed.
R. Civ. P. 60(b)(2). “Rule 60(b) relief ‘is extraordinary and may only be granted in
exceptional circumstances.’ ‘Parties seeking relief under Rule 60(b) have a higher
hurdle to overcome because such a motion is not a substitute for an appeal.’” Zurich N.
Am. v. Matrix Serv., Inc., 426 F.3d 1281, 1289 (10th Cir. 2005) (quoting Servants of
2

Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000); Cummings v. Gen. Motors
Corp., 365 F.3d 944, 955 (10th Cir. 2004)) (internal citations omitted). Such motions
“are inappropriate vehicles to reargue an issue previously addressed by the court when
the motion merely advances new arguments, or supporting facts which were available
at the time of the original motion.” Servants of Paraclete, 204 F.3d at 1012. W hether
to grant a Rule 60(b) motion rests within the trial court’s discretion. See Beugler v.
Burlington N. & Santa Fe Ry. Co., 490 F.3d 1224, 1229 (10th Cir. 2007).
Petitioners’ Motion cites Rule 60(b)(2), which permits relief from a judgment
based on newly discovered evidence. (ECF No. 31 at 1.) Where a party seeks a new
trial based on newly discovered evidence, the moving party must show:
(1) the evidence was newly discovered since the trial; (2) the moving party
was diligent in discovering the new evidence; (3) the newly discovered
evidence could not be merely cumulative or impeaching; (4) the newly
discovered evidence is material; and (5) that a new trial with the newly
discovered evidence would probably produce a different result.
Zurich, 426 F.3d at 1290 (citing Graham v. Wyeth Lab., 906 F.2d 1399, 1416 (10th Cir.
1990)) (brackets omitted). While Petitioners do not seek a new trial here, they seek
reconsideration of the Dismissal Order, and thus they must show that the newly
discovered evidence would be material to that Order and would probably produce a
different result. Id.
Petitioners contend that the August 10, 2014 announcement that KMEP will be
consolidated into Kinder Morgan, Inc., constitutes new evidence permitting a grant of
relief under Rule 60(b)(2). (ECF No. 31 at 3.) Petitioners argue that, due to this
merger, KMEP can be replaced as Respondent by Kinder Morgan, Inc., a corporation

3

which is diverse from Petitioners. (Id.) Thus, Petitioners request that the Dismissal
Order and Final Judgment be vacated, and that they be permitted to substitute Kinder
Morgan, Inc., for KMEP, or in the alternative, dismiss KMEP as a party. (Id. at 3-4.)
In response, among other arguments, Respondents contend that substituting
Kinder Morgan, Inc. for KMEP will not cure the jurisdictional defect. (ECF No. 32 at 36.) Respondents argue that the other Respondent, KMCO2, destroys diversity
jurisdiction because its only member is KMEP, which was not diverse from Petitioners
at the time of filing the Petition—the relevant time for the purposes of evaluating
jurisdiction. (Id.) In Petitioners’ Reply, they do not respond directly to this argument.
As to the general rule that jurisdiction is determined by the facts at the time the Petition
was filed, Petitioners argue that Federal Rule of Civil Procedure 21 establishes an
exception to that rule and permits the Court “to allow a dispensable nondiverse party to
be dropped at any time”. (ECF No. 33 at 10 (citing Newman-Green, Inc. v. AlfonzoLarrain, 490 U.S. 826, 832 (1989)).) However, this exception applies only to KMEP, not
KMCO2; indeed, Petitioners’ argument that KMEP is dispensable is premised on the
idea that KMCO2 will remain a party. (Id. at 8-9 (noting that liability as to KMEP and
KMCO2 is joint and several, such that complete relief may be granted with a judgment
against KMCO2).) Petitioners have provided no argument indicating that KMCO2 might
also be dispensable or suggesting that KMCO2 might also be substituted.
Accordingly, the Court agrees with Respondents that KMCO2 destroys diversity
because it remains a citizen of Colorado, by way of the Colorado citizenship of its
member, KMEP. Thus, Petitioners’ proposed substitution arising from the purportedly

4

new evidence of KMEP’s merger with Kinder Morgan, Inc. would not cure the
jurisdictional defect, and does not provide reason to vacate the judgment under Rule
60(b)(2). See Zurich, 426 F.3d at 1290.
As the party 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). The Court finds that Petitioners have failed to demonstrate that jurisdiction
would exist here, even with the newly discovered evidence cited in the Motion.
Accordingly, there is no basis on which to grant Rule 60(b)(2) relief. See Zurich, 426
F.3d at 1290.
II. CONCLUSION
For the foregoing reasons, Petitioners’ Motion Under Federal Rule of Civil
Procedure 60(b) to Relieve Claimants from the July 21, 2014 Order Making Absolute
Order to Show Cause (ECF No. 31) is DENIED.
Dated this 28th day of October, 2014.
BY THE COURT:

William J. Martínez
United States District Judge

5