Afshar v. WMG, LC, et al
SUA SPONTE ORDER to Show Cause Why This Case Should Not Be Dismissed for Lack of Subject Matter Jurisdiction: Not later than 10/5/15, the Plaintiff shall file a brief showing why this court has subject matter jurisdiction or a notice that she does n ot dispute dismissal of this case, without prejudice, for lack of subject matter jurisdiction. Not later than, 10/12/15, the Defendants may file any response to the plaintiff's filing pursuant to this order. Signed by Judge Mark W Bennett on 9/21/15. (djs)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
No. C 14-3054-MWB
WMG, L.C., MICHAEL GOCHE,
JOSEPH GOCHE, and JEANNE
SUA SPONTE ORDER TO SHOW
CAUSE WHY THIS CASE SHOULD
NOT BE DISMISSED FOR LACK OF
SUBJECT MATTER JURISDICTION
This diversity action arises from disputes among siblings who are members of a
limited liability company, which their parents established as an estate-planning tool for
the transfer of farm real estate in Kossuth County, Iowa, to their children. Plaintiff Renee
Afshar, who alleges that she is a “citizen” of Georgia, has brought suit against WMG,
L.C., (WMG), which she alleges, and all defendants admit, is an Iowa limited liability
company; Michael Goche, who admits Renee’s allegation that he is a “resident” of
Wisconsin; Joseph Goche, who denies Renee’s allegation that he is a “resident” of
Fairmont, Minnesota, but does not clarify his residence or state citizenship; and Jeanne
Goche-Horihan, who admits Renee’s allegation that she is a “resident” of Iowa. All four
siblings are “Members” of WMG, with equal shares in the company, but only the three
individual defendants are “Managers” of WMG. In her Complaint (docket no. 2), filed
September 8, 2014, Renee alleges breach of WMG’s operating agreement by WMG and
the individual defendants for failing to carry out a resolution at WMG’s June 2014 annual
meeting that required the company to transfer money and property to her. She seeks
specific performance or, in the alternative, damages on these claims. She also asserts
claims for breach of fiduciary duty, i.e., minority shareholder oppression, by her
siblings; a declaration that the resolution to transfer money and property to her was
properly passed and that the company, through its managers, is required to carry out the
resolution; and appointment of a receiver.
In her Motion For Partial Summary Judgment (docket no. 15), filed June 2, 2015,
Renee seeks summary judgment that the defendants are obligated to perform the
resolution to transfer money and property to her. This case was reassigned to me on
August 20, 2015. I find that I need not consider Renee’s Motion For Partial Summary
Judgment, until I have resolved the question of whether this court lacks subject matter
jurisdiction over this action.
Because federal courts are courts of limited jurisdiction, they must assure
themselves that they have subject matter jurisdiction over claims before them at all stages
of the proceedings, even if the parties do not raise the question of subject matter
jurisdiction themselves. As the Eighth Circuit Court of Appeals explained, when holding
that a district court did not err in sua sponte ruling on the issue of subject matter
It is well established that a court has a special obligation to
consider whether it has subject matter jurisdiction in every
case. See Clark v. Baka, 593 F.3d 712, 714 (8th Cir.2010)
(per curiam). This obligation includes the concomitant
responsibility “to consider sua sponte [the court's subject
matter] jurisdiction ... where ... [the court] believe[s] that
jurisdiction may be lacking.” Id.
Hart v. United States, 630 F.3d 1085, 1089 (8th Cir. 2011); see also Crawford v. F.
Hoffman–La Roche, Ltd., 267 F.3d 760, 764 n. 2 (8th Cir. 2001) (“[F]ederal courts are
obligated to raise the issue of subject-matter jurisdiction sua sponte.”) (citing Andrus v.
Charlestone Stone Products Co., 436 U.S. 604, 608 n. 6, 98 S.Ct. 2002, 56 L.Ed.2d
570 (1978)); see also Morris v. Winnebago Indus., Inc., 936 F. Supp. 1509, 1530 n.8
(N.D. Iowa 1996); McCorkindale v. American Home Assur. Co., 909 F. Supp. 646, 649
n.4 (N.D. Iowa 1995); Laird v. Ramirez, 884 F. Supp. 1265, 1269–70 (N.D. Iowa 1995).
In this case, subject matter jurisdiction is premised on “diversity jurisdiction,”
pursuant to 28 U.S.C. § 1332. As the Eighth Circuit Court of Appeals recently reiterated,
Diversity jurisdiction “requires an amount in controversy
greater than $75,000 and complete diversity of citizenship of
the litigants.” OnePoint Solutions, LLC v. Borchert, 486 F.3d
342, 346 (8th Cir. 2007) (citing 28 U.S.C. § 1332(a)).
“Complete diversity of citizenship exists where no defendant
holds citizenship in the same state where any plaintiff holds
citizenship.” Id. “An LLC's citizenship, for purposes of
diversity jurisdiction, is the citizenship of each of its
E3 Biofuels, L.L.C. v. Biothane, L.L.C., 781 F.3d 972, 975 (8th Cir. 2015). The parties
cannot confer subject matter jurisdiction by consent or agreement. See, e.g., Clark v.
Matthews Int’l Corp., 639 F.3d 391, 396 (8th Cir. 2011).
Here, it appears that WMG, a limited liability company, is a citizen of Georgia,
where Renee, a “member” of the limited liability company, is also a citizen. E3 Biofuels,
L.L.C., 781 F.3d at 975. Thus, it appears that “complete diversity” is lacking, id., and
that this case should be dismissed for lack of subject matter jurisdiction. Hart, 630 F.3d
at 1091 (modifying the district court’s sua sponte dismissal for lack of subject matter
jurisdiction only to require that the dismissal be without prejudice). However, before
dismissing this case, I will give the parties the opportunity to brief the question of whether
there is, nevertheless, some basis for subject matter jurisdiction in this case.
THEREFORE, not later than October 5, 2015, the plaintiff shall file a brief
showing why this court has subject matter jurisdiction or a notice that she does not dispute
dismissal of this case, without prejudice, for lack of subject matter jurisdiction. Not later
than October 12, 2015, the defendants may file any response to the plaintiff’s filing
pursuant to this order.
IT IS SO ORDERED.
DATED this 21st day of September, 2015.
MARK W. BENNETT
U.S. DISTRICT COURT JUDGE
NORTHERN DISTRICT OF IOWA
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