Baldwin et al v. Pelican Reef Management, LLC

Filing 9

ORDER TO SHOW CAUSE by Judge Philip A. Brimmer on 03/19/2018. ORDERED that, on or before 5:00 p.m. on March 26, 2018, plaintiffs 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. 18-cv-00586-PAB
CAROLYN BALDWIN, individually and as next friend of
J.D.B, Jr., her minor child,
Plaintiffs,
v.
PELICAN REEF MANAGEMENT, LLC,
Defendant.

ORDER TO SHOW CAUSE

The Court takes up this matter sua sponte on plaintiffs’ amended complaint
[Docket No. 8]. Plaintiffs state that the Court has subject matter jurisdiction over this
lawsuit pursuant to 28 U.S.C. § 1332(a). Docket No. 8 at 2, ¶ 6.
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. See
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, despite much time and
expense having been dedicated to the case, a lack of jurisdiction causes it to be
dismissed. 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).
“The 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). Plaintiffs assert that this Court has diversity jurisdiction under 28
U.S.C. § 1332(a). Pursuant to that section, “district courts shall hav e 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.” 28 U.S.C. § 1332(a). The facts presently alleged are insufficient to establish
the parties’ citizenship.
The amended complaint states that plaintiffs are residents of Colorado and that
Pelican Reef Management, LLC (“Pelican Reef”) is a “corporation organized and
existing under the laws of Texas” with its principal place of business in Texas. Docket
No. 8 at 1-2, ¶¶ 2-4. The complaint further alleges that Pelican Reef is owned and
operated by Charles Drake and Lori Ruddick who are “longtime residents of Texas.”
Id., ¶ 5. These allegations are insufficient to establish the parties’ citizenship for two
reasons. First, “allegations of mere ‘residence’ may not be equated with ‘citizenship’ for
the purposes of establishing diversity.” Whitelock v. Leatherman, 460 F.2d 507, 514

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(10th Cir. 1972). The relevant inquiry is where the parties are domiciled. See Siloam
Springs Hotel, LLC v. Century Sur. Co., 781 F.3d 1233, 1238 (10th Cir. 2015). T hus,
for purposes of diversity jurisdiction, the residency of plaintiffs or members of Pelican
Reef is not relevant. Second, although plaintiffs allege that Pelican Reef is a
corporation, the name of Pelican Reef suggests that plaintiffs are incorrect. Pelican
Reef’s name ends with “LLC,” meaning it is a limited liability company, not a
corporation. The citizenship of an LLC is determined not by its state of organization or
principal place of business, but by the citizenship of all of its members. Id. at 1237-38.
Plaintiffs have not indicated whether Charles Drake and Lori Ruddick are members of
Pelican Reef and whether Pelican Reef has other members. Plaintiffs have also not
stated the identity and citizenship of Pelican Reef’s members. Because the Court is
currently unable to determine the citizenship of the parties and whether the Court has
jurisdiction, it is
ORDERED that, on or before 5:00 p.m. on March 26, 2018, plaintiffs shall show
cause why this case should not be dismissed due to the Court’s lack of subject matter
jurisdiction.

DATED March 19, 2018.
BY THE COURT:

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

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