USAV Group LLC v. Stampede Presentation Products Inc.

Filing 26

ORDER TO SHOW CAUSE by Judge Philip A. Brimmer on 10/19/2017. On or before 5:00 p.m. on November 2, 2017, Plaintiff USAV Group LLC shall show cause why this case should not be dismissed due to the Courts lack of subject matter jurisdiction. (sphil, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 17-cv-01793-PAB
USAV Group LLC,
Plaintiff,
v.
STAMPEDE PRESENTATION PRODUCTS INC.,
Defendant.

ORDER TO SHOW CAUSE

The Court takes up this matter sua sponte on plaintiff’s amended complaint
[Docket No. 19]. Plaintiff states that the Court has subject matter jurisdiction over this
lawsuit pursuant to 28 U.S.C. § 1332(a). Docket No. 19 at 3, ¶ 15.
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). Courts are well-advised to raise the issue of
jurisdiction on their own, regardless of parties’ apparent acquiescence. First, it is the
Court’s duty to do so. Tuck v. United Servs. Auto. Ass’n, 859 F.2d 842, 844 (10th Cir.
1988). Second, regarding subject matter jurisdiction, “the consent of the parties is
irrelevant, principles of estoppel do not apply, and a party does not waive the

requirement by failing to challenge jurisdiction.” Ins. Corp. of Ireland v. Compagnie des
Bauxites de Guinee, 456 U.S. 694, 702 (1982) (internal citations omitted). Finally,
delay in addressing the issue only compounds the problem if it turns out that, despite
much time and expense having been dedicated to a case, a lack of jurisdiction causes it
to be dismissed or remanded regardless of the stage it has reached. See U.S. Fire Ins.
Co. v. Pinkard Constr. Co., No. 09-cv-00491-PAB-MJW, 2009 WL 2338116, at *3 (D.
Colo. July 28, 2009).
It is well established that “[t]he party invoking federal jurisdiction bears the
burden of establishing such jurisdiction as a threshold matter.” Radil v. Sanborn W.
Camps, Inc., 384 F.3d 1220, 1224 (10th Cir. 2004). Plaintif f invokes 28 U.S.C.
§ 1332(a) as the basis for this Court’s diversity jurisdiction. Docket No. 19 at 3, ¶ 15.
Section 1332(a)(1) states: “The 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.” The facts as
presently averred, however, do not provide sufficient information regarding the parties’
citizenship.
The amended complaint identifies plaintiff USAV Group LLC as a “two-member
limited liability company, the two members are Chris Whitley and K.C. Schwarz.”
Docket No. 19 at 1, ¶ 3. 1 Plaintiff alleges that each of its members “resides” in
1

Plaintiff also claims that it is “incorporated,” Docket No. 19 at 1, ¶ 2, but this
allegation is almost certainly incorrect. Compare Colo. Rev. Stat. § 7-90-601(3)(a)
(“The entity name of a corporation shall contain the term or abbreviation ‘corporation’,
‘incorporated’, ‘company’, ‘limited’, ‘corp.’, ‘inc.’, ‘co.’, or ‘ltd.’”) with Colo. Rev. Stat. § 790-601(3)(c) (“The entity name of a limited liability company shall contain the term or
abbreviation ‘limited liability company’, ‘ltd. liability company’, ‘limited liability co.’, ‘ltd.
2

Colorado. Id., ¶ 4. However, domicile, not residency or mailing address, is
determinative of citizenship. Whitelock v. Leatherman, 460 F.2d 507, 514 (10th Cir.
1972) (“[A]llegations of mere ‘residence’ may not be equated with ‘citizenship’ for the
purposes of establishing diversity.”); see also Mississippi Band of Choctaw Indians v.
Holyfield, 490 U.S. 30, 48 (1989) (“‘Domicile’ is not necessarily synonymous with
‘residence,’ and one can reside in one place but be dom iciled in another.” (citations
omitted)). Plaintiff has not identified the citizenship of its members. Cf. Fifth Third Bank
v. Flatrock 3, LLC, 2010 WL 2998305, at *3 (D.N.J. July 21, 2010) (concluding that an
allegation that “upon information and belief, the members of [an LLC] are citizens of
New York” was insufficient because plaintiff “failed to identify or trace the citizenship of
each individual member” of the LLC (internal quotation marks omitted)).2 The Court is
therefore unable to determine the citizenship of plaintiff and whether the Court has
jurisdiction. See United States ex rel. General Rock & Sand Corp. v. Chuska Dev.
Corp., 55 F.3d 1491, 1495 (10th Cir. 1995) (“The party seeking the exercise of
jurisdiction in his favor must allege in his pleading the facts essential to show
jurisdiction.”) (citations and internal quotation marks omitted).
Additionally, plaintiff does not show the citizenship of defendant. The amended

liability co.’, ‘limited’, ‘l.l.c.’, ‘llc’, or ‘ltd.’”). The Court will assume that plaintiff is a limited
liability company (“LLC”), not a corporation.
2

This Court has previously noted that, “[w]hile various state legislatures have
decided to permit the members of LLCs to remain anonymous to the public at large,
Congress has not created an exception to the requirements of diversity jurisdiction
which would allow the members of LLCs to remain anonymous in federal court.” U.S.
Advisor, LLC v. Berkshire Prop. Advisors, No. 09-cv-00697-PAB-CBS, 2009 WL
2055206, at *3 (D. Colo. July 10, 2009) (citing Carden v. Arkoma Assocs., 494 U.S.185,
196 (1990)).
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complaint states that, “[o]n information and belief,” defendant is a Delaware corporation
and “[i]t is believed” the defendant’s principal place of business is in New York. Docket
No. 19 at 2, ¶ 5. The Court reads plaintiff’s averment of defendant’s citizenship, made
on information and/or belief, to mean that plaintiff does not have affirmative knowledge
of defendant’s citizenship. Such unsupported allegations do not confer subject matter
jurisdiction over this case. See Yates v. Portofino Real Estate Props. Co., LLC, No. 08cv-00324-PAB-MJW, 2009 WL 2588833, at *3 (D. Colo. Aug. 17, 2009) (requiring
plaintiff to “address the citizenship of each of [defendant’s] members without resorting
merely to their ‘information and belief’ as to the same”); Pinkard Constr. Co., 2009 WL
2338116, at *3 (allegations made on information and belief “mean that plaintiffs have no
affirmative knowledge of a lack of diversity”).
For the foregoing reasons, it is
ORDERED that, on or before 5:00 p.m. on November 2, 2017, plaintiff USAV
Group LLC shall show cause why this case should not be dismissed due to the Court’s
lack of subject matter jurisdiction.

DATED October 19, 2017.
BY THE COURT:

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

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