Restoration Enterprises, LLC v. Travelers Property Casualty Company of America
Filing
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ORDER TO SHOW CAUSE. On or before 5:00 p.m. on January 10, 2018, defendant Travelers Property Casualty Company of America shall show cause why this case should not be dismissed due to the Court's lack of subject matter jurisdiction. By Judge Philip A. Brimmer on 01/02/2018. (athom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 17-cv-02691-PAB
RESTORATION ENTERPRISE, LLC,
Plaintiff,
v.
TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA,
Defendant.
ORDER TO SHOW CAUSE
The Court takes up this matter sua sponte on the Notice of Removal [Docket No.
1] filed by defendant Travelers Property Casualty Company of America. Defendant
states that the Court has subject matter jurisdiction over this lawsuit pursuant to 28
U.S.C. § 1332(a). Docket No. 1 at 2, ¶ 3.
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). Def endant invokes 28 U.S.C.
§ 1332(a) as the basis for this Court’s diversity jurisdiction. Docket No. 1 at 2, ¶ 3.
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 plaintiff’s
citizenship.
The notice of removal identifies plaintiff Restoration Enterprise, LLC as a “limited
liability company organized under the law of Colorado with its principal place of
business located in Colorado.” Docket No. 1 at 2, ¶ 4. T his information is not relevant
to plaintiff’s citizenship. While, 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
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the State or foreign state where it has its principal place of 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. See
Siloam Springs Hotel, L.L.C. v. Century Sur. Co., 781 F.3d 1233, 1237-38 (10th Cir.
2015) (“[I]n determining the citizenship of an unincorporated association for purposes of
diversity, federal courts must include all the entities’ members.”).
The notice of removal further states that “Plaintiff’s sole member is a resident
and citizen of Colorado” and “Plaintiff is a citizen of Colorado.” Docket No. 1 at 2, ¶ 4.
As support for this assertion, defendant provides an email from plaintiff’s counsel
stating that plaintiff is a “single-member LLC, the sole member of which is an individual
resident of Colorado.” Docket No. 1-11. This statement is insufficient for two reasons.
First, domicile, not residency, 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
domiciled in another.” (citations omitted)). Second, defendant fails to identify the
member of plaintiff and the Court is, therefore, unable to independently determine
whether it has jurisdiction. 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
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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, 92-93 (2010).
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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
For the foregoing reasons, it is
ORDERED that, on or before 5:00 p.m. on January 10, 2018, defendant
Travelers Property Casualty Company of America shall show cause why this case
should not be dismissed due to the Court’s lack of subject matter jurisdiction.
DATED January 2, 2018.
BY THE COURT:
s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge
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, 494 U.S. at 196).
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