Rooftop Restoration, Inc. v. Certain Underwriters at Lloyd's of London et al

Filing 41

ORDER to Remand Case by Chief Judge Philip A. Brimmer on 11/16/2021, re: 39 Response filed by Scottsdale Insurance Company. ORDERED that this case shall be REMANDED to the District Court for Boulder County, Colorado, where it was filed as Case No. 2021CV30021. (sphil, )

Case 1:21-cv-00824-PAB Document 41 Filed 11/16/21 USDC Colorado Page 1 of 4

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Philip A. Brimmer
Civil Action No. 21-cv-00824-PAB
ROOFTOP RESTORATION, INC., a Colorado corporation,
Plaintiff,
v.
CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON,
ASPEN INSURANCE UK LIMITED, and
SCOTTSDALE INSURANCE COMPANY,
Defendants.

ORDER

This matter is before the Court on Defendant Scottsdale Insurance Company’s
Response to Second Order to Show Cause [Docket No. 39].
In its notice of removal, Scottsdale Insurance Company (“Scottsdale”) asserted
diversity jurisdiction, Docket No. 1 at 3, ¶ 4, but its allegations were not well-pled. See
Docket No. 32. Specifically, the Court noted in its first order to show cause that
defendant Certain Underwriters at Lloyd’s of London (“Lloyd’s) is an unincorporated
association and, as a result, the citizenship of each member of the association must be
well-pled. See id. at 3-4. Accordingly, Scottsdale’s allegation that Lloyd’s was a foreign
corporation with its principal place of business in the United Kingdom was insufficient to
demonstrate diversity jurisdiction. Id.
Scottsdale responded to the Court’s first order to show cause by noting that
Lloyd’s membership laws changed in 2015. See Docket No. 35 at 5. Specifically,

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Scottsdale asserted that Lloyd’s now requires its members to be “United Kingdom
residents.” Id. Because each Lloyd’s member purportedly had to be a UK resident,
Scottsdale asserted that diversity jurisdiction existed. See id. at 6. The Court rejected
this argument in its second order to show cause. First, the Court noted that Scottsdale
explicitly ignored the Court’s directive that Scottsdale had to identify each member
individually and that a blanket statement that “each ‘name’ or member of the Syndicate
is not the same citizenship of plaintiff” was insufficient. See Docket No. 38 at 2.
Second, the Court analyzed Lloyd’s membership rules and determined that, while
Lloyd’s required a member to be a UK tax resident, such membership did not serve to
establish the citizenship of a member for purposes of diversity. See id. at 3-8. The
Court again ordered Scottsdale to identify each member and that member’s citizenship.
Id. at 8.
Scottsdale’s response to the Court’s second order to show cause does not
attempt to identify the various members or those members’ citizenship. See Docket
No. 39 at 4. Rather, Scottsdale lists some entities it “believes” are members, but does
not identify what sort of entity that member is or its citizenship. Id. Furthermore,
Scottsdale admits that it does not know whether this information is accurate. Id.
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). T herefore, when a defendant
removes a case from state court asserting the Court’s diversity jurisdiction, the
removing defendant has the burden of establishing that the jurisdictional prerequisites

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of § 1332 have been satisfied. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290
(10th Cir. 2001), abrogated on other grounds by Dart Cherokee Basin Operating Co.,
LLC v. Owens, 574 U.S. 81, 89–90 (2014). Defendant has failed to do so.
“[T]he presumption is that [federal courts] lack jurisdiction unless and until a
[proponent] pleads sufficient facts to establish it.” Celli v. Shoell, 40 F.3d 324, 327
(10th Cir. 1994) (citing United States v. Bustillos, 31 F.3d 931, 933 (10th Cir. 1994)).
Where uncertainties exist regarding the Court’s jurisdiction, those uncertainties are
resolved in favor of remand. Martin, 251 F.3d at 1290; see also Laughlin v. Kmart
Corp., 50 F.3d 871, 873 (10th Cir. 1995) (“[T]here is a presumption against removal
jurisdiction.”), abrogated on other grounds by Dart Cherokee Basin , 574 U.S. at 89–90;
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (“[I]t is to be
presumed that a cause lies outside this limited [federal] jurisdiction, . . . and the burden
of establishing the contrary rests upon the party asserting jurisdiction.”). The Court
gave Scottsdale two opportunities to demonstrate subject matter jurisdiction. Because
the subject matter jurisdiction allegations in the notice of removal and responses to the
Court’s orders to show cause were not well pled, the Court finds that Scottsdale has
failed to carry its burden of establishing subject matter jurisdiction as a threshold
matter.1 See McPhail v. Deere & Co., 529 F.3d 947, 955 (10th Cir. 2008) (“[A]
1

Scottsdale requests that the Court order limited jurisdictional discovery into
Lloyd’s membership. See Docket No. 39 at 5. Scottsdale asserts that it has been
unable to get the requested information from Lloyd’s and that it will not be able to
absent court intervention. Id. However, Scottsdale has had over five months to secure
the information from its co-defendant, and there is no indication given the reluctance of
Lloyd’s to cooperate that this will not turn into a protracted legal battle that wastes
judicial resources and prevents plaintiff from litigating this case. The Court has broad
discretion to deny a “discovery request[] with respect to jurisdictional issues.” See
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proponent of federal jurisdiction must, if material factual allegations are contested,
prove those jurisdictional facts by a preponderance of the evidence.” (quotations
omitted)); see also HTO Holdings, Inc. v. Lebsock, No. 20-cv-02186-PAB, 2020 WL
5321894, at *2 (D. Colo. Sept. 4, 2020). W herefore, it is
ORDERED that this case shall be remanded to the District Court for Boulder
County, Colorado, where it was filed as Case No. 2021CV30021.

DATED November 16, 2021.

BY THE COURT:

PHILIP A. BRIMMER
Chief United States District Judge

Dental Dynamics, LLC v. Jolly Dental Grp., LLC, 946 F.3d 1223, 1233 (10th Cir. 2020)
(citation omitted). Only where a lack of discovery will prejudice a party will a denial of a
discovery request be inappropriate. Id. However, the only prejudice Scottsdale claims
is that it will not be able to litigate this case in federal court. See Docket No. 39 at 5.
Scottsdale offers no support for the proposition that litigating a state law claim in a state
forum is somehow prejudicial. Accordingly, the Court finds this argument unpersuasive
and will not order limited jurisdictional discovery.
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