Columbia National Insurance Company v. Heidbreder Building Group, LLC et al

Filing 13

MEMORANDUM Order Signed by the Honorable Milton I. Shadur on 8/21/2013. Mailed notice by judge's staff. (srb,)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
COLUMBIA NATIONAL INSURANCE
COMPANY,
Plaintiff,
v.
O.M.J.C. SIGNAL, INC., et al.,
Defendants.

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No.

13 C 5526

MEMORANDUM ORDER
Columbia National Insurance Company (“Columbia”) has just
filed its Complaint for Declaratory Judgment against O.M.J.C.
Signal, Inc. (“O.M.J.C.”) and Heidbreder Building Group, LLC
(“Heidbreder”), seeking to ground federal jurisdiction in
diversity of citizenship terms.

Because that effort is

impermissibly flawed, so that Columbia has failed to carry its
burden of establishing subject matter jurisdiction here, this sua
sponte order dismisses the Complaint and this action on
jurisdictional grounds--but with the understanding that if the
present flaws can be cured promptly, the action might then be
reinstated.
As to Columbia (Complaint ¶1) and O.M.J.C. (Complaint ¶2),
each corporation’s citizenship has been properly alleged in
conformity with 28 U.S.C. §1332(c)(1).

But most significantly in

terms of federal jurisdiction,1 all that Complaint ¶3 says as to

1

Complaint ¶6 alleges in part:

codefendant Heidbreder is this:
3. Defendant Heidbreder Building Group, LLC
(“Heidbreder”) is an Illinois Limited Liability
Corporation with its principal place of business in
Vernon Hills, Illinois.
As that language reflects, Columbia’s counsel has spoken
only of facts that are jurisdictionally irrelevant when a limited
liability company is involved.

Those allegations ignore over 15

years of repeated teaching from our Court of Appeals (see, e.g.,
Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998) and a
whole battery of cases since then, exemplified by White Pearl
Inversiones S.A. v. Cemusa, Inc., 647 F.3d 684, 686 (7th Cir.
2011) and by other cases cited there).

And that teaching has of

course been echoed many times over by this Court and its
colleagues.
This Court has a mandated obligation to “police subject
matter jurisdiction sua sponte” (Wernsing v. Thompson, 423 F.3d
732, 743 (7th Cir. 2005)).

There is really no excuse for

counsel’s lack of knowledge of such a firmly established
principle after a decade and a half’s repetition by our Court of
Appeals and others.

Hence it seems entirely appropriate to

impose a reasonable cost for such a failing.
Accordingly not only Columbia’s Complaint but this action

Jurisdiction also lies pursuant to 28 USC Section 2201.
But it is black-letter law that the Declaratory Judgment Act is
not a fount of federal jurisdiction.
2

are dismissed (cf. Held v. Held, 137 F.3d 998, 1000 (7th Cir.
1998)), with Columbia’s counsel obligated to pay a fine of $400
to the District Court Clerk if an appropriate Fed. R. Civ. P.
59(e) motion hereafter provides the missing information that
leads to the vacatur of this judgment of dismissal.2

Because

this dismissal is attributable to Columbia’s lack of
establishment of federal subject matter jurisdiction, by
definition it is a dismissal without prejudice.

________________________________________
Milton I. Shadur
Senior United States District Judge
Date:

August 21, 2013

2

That fine is equivalent to the cost of a second filing
fee, because a new action would have to be brought if the defects
identified here were to turn out to be curable. As to the
identity of the paying party, it would seem difficult to justify
the client’s having to bear the cost of a legal error committed
by counsel in a area about which a nonlawyer would have no reason
to be informed.
3