Riggs et al v. Champion Truck Lines L L C et al

Filing 8

SUA SPONTE JURISDICTIONAL BRIEFING ORDER. Signed by Magistrate Judge Joseph H L Perez-Montes on 8/21/2017. (crt,Tice, Y)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
ALEXANDRIA DIVISION

c

RUSSELL RIGGS AND RAMADA
THOMPSON

CIVIL ACTION NO. 1:17-CV-01008

VERSUS

CHIEF JUDGE DRELL

CHAMPION TRUCK LINES, LLC,

MAGISTRATE JUDGE PEREZ-MONTES

ET AL

SUA SPONTE JURISDICTIONAL BRIEFING ORDER
Before the Court is a Complaint removed from a Louisiana state court by
Defendant Hallmark Specialty Insurance Company (“Hallmark”) premising federal
jurisdiction upon diversity of citizenship (Doc. 1).

“[S]ubject-matter jurisdiction,

because it involves a court’s power to hear a case, can never be forfeited or waived.”
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) (citing Ruhrgas AG v. Marathon Oil
Co., 526 U.S. 574, 583 (1999)).

The Court has “an independent obligation to

determine whether subject-matter jurisdiction exists, even in the absence of a
challenge from any party.” Id.
The diversity statute – 28 U.S.C. § 1332 – is satisfied upon a showing of: (1)
diversity of citizenship between the parties; and (2) an amount in controversy in
excess of $75,000, exclusive of interest and costs. “Complete diversity requires that
all persons on one side of the controversy be citizens of different states than all
persons on the other side.” Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079
(5th Cir. 2008) (citing Harrison v. Prather, 404 F.2d 267, 272 (5th Cir. 1968)) (internal
citation and quotation omitted).

“[W]hen jurisdiction depends on citizenship,

citizenship must be distinctly and affirmatively alleged.” Getty Oil Corp., a Div. of
Texaco, Inc. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 1988) (internal
quotation omitted) (See also Mullins v. Testamerica, Inc., 2008 WL 4888576 (5th Cir.
2008)(per curiam). In cases removed from state court, diversity of citizenship must
exist both at the time of filing in state court and at the time of removal to federal
court. Coury v. Prot, 85 F. 3d 244, 249 (5th Cir. 1996). The party invoking subject
matter jurisdiction in federal court has the burden of establishing the Court’s
jurisdiction. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F. 3d 1250, 1253-54
(5th Cir. 1998). In this case, the removing Defendant must bear that burden.
The citizenship of an individual is his or her domicile, meaning the place where
an individual resides and intends to remain. See Acridge v. Evangelical Lutheran
Good Samaritan Soc., 334 F.3d 444, 448 (5th Cir. 2003). A corporation shall be
deemed to be a citizen of every State and foreign state by which it has been
incorporated and of the State or foreign state where it has its principal place of
business. See Tewari De-Ox Systems, Inc. v. Mountain States/Rosen, L.L.C., 757
F.3d 481, 483 (5th Cir. 2014). “[T]he citizenship of a partnership is determined by
reference to the citizenship of each of its partners.” See Int'l Paper Co. v. Denkmann
Associates, 116 F.3d 134, 135, 137 (5th Cir. 1997). The citizenship of a limited
liability company (“L.L.C.”), a limited partnership, or other unincorporated
association or entity is determined by the citizenship of all its members. See Harvey,
542 F.3d at 1079-80.

The Plaintiffs’ Petition for Damages (“Petition”) does not seek a specific
amount of damages (Doc. 1-3). Therefore, the removing Defendant is required to
either (1) demonstrate that it is facially apparent that the amount in controversy
exceeds $75,000; or (2) set forth specific facts in controversy that support a finding of
the jurisdictional amount. St. Paul Reinsurance, 134 F. 3d at 1253. Hallmark alleges
Plaintiffs seek damages for severe and permanently disabling injuries (Doc. 1-3), and
further alleges Plaintiffs have refused to stipulate their damages do not exceed
$75,000, exclusive of interest, costs, and fees (Doc. 1-2, Doc. 1-6). Hallmark alleges it
is clear from the face of Plaintiffs’ Petition that Plaintiffs seek damages in excess of
$75,000 (Doc. 1). Hallmark further alleges the parties are completely diverse and
that the amount in controversy exceeds the amount of $75,000 (Doc. 1).
Plaintiffs sue Defendants, Champion Truck Lines, LLC, Hallmark Specialty
Insurance Company, and Clifford Phelps (Doc 1-3).

Plaintiffs allege Defendant

Clifford Phelps is a resident of, and domiciled in, the State of Oklahoma (Doc. 1-3).
Accordingly, Defendant Phelps is a citizen of Oklahoma (Doc. 1-2). Plaintiffs’ Petition
further alleges that Defendant Champion Truck Lines, LLC is a foreign corporation
(without giving more detail), and that Defendant Hallmark Specialty Insurance
Company is a foreign corporation (without giving more detail) authorized to do and
doing business in the State of Louisiana (Doc. 1-3). In its Complaint for Removal,
Defendant Hallmark alleges Champion Truck Lines, LLC is a limited liability
company incorporated in the State of Oklahoma, domiciled in the State of Oklahoma,

and with its principal place of business in the State of Oklahoma (Docs. 1-2, 1-3, and
1-4).
However, while the state of incorporation and principal place of business are
sufficient jurisdictional facts to establish a corporation’s citizenship, Defendant
Champion Truck Lines, LLC is an LLC. 1

The Fifth Circuit has held that the

citizenship of an LLC “is determined by the citizenship of all its members.” Harvey,
542 F.3d at 1079-80. However, neither the Plaintiffs’ Petition for Damages nor
Defendant’s Complaint for Removal allege facts regarding the citizenship of the
members of Champion Truck Lines, LLC. Therefore, the citizenship of Defendant
Champion Truck Lines, LLC is not clear from the pleadings.
Further, the citizenship of Defendant Hallmark is not clear from the
pleadings. Defendant Hallmark alleges it is incorporated in Texas, with its principal
place of business in Texas (Docs. 1-2 and 1-5). However, the designation of Hallmark
as a corporation is uncertain. Further, Defendant’s Exhibit 3 (Doc. 1-5) indicates
Hallmark’s domicile is Oklahoma, as identified by the Louisiana Department of
Insurance. The Oklahoma Secretary of State shows Hallmark Specialty Insurance
Company is a domestic for-profit insurance corporation. 2 Therefore, while it is not
clear from the pleadings, it appears that Hallmark Specialty Insurance Company
may also be a citizen of Oklahoma.

Defendant shows Champion Truck Lines, LLC is a domestic limited liability company with an
inactive status with the Oklahoma Secretary of State (Doc. 1-4). See
https://www.sos.ok.gov/corp/corpInformation.aspx?id=3512496434.
2 See https://www.sos.ok.gov/corp/corpInformation.aspx?id=3100451491.
1

Additionally, the Defendants’ Complaint for Removal and Plaintiffs’ Petition
for Damages contain no allegations regarding the domicile or citizenship of Plaintiffs,
Russell Riggs and Ramada Thompson.

The Court cannot determine from the

pleadings whether the parties are diverse in citizenship. Therefore, the existence of
federal jurisdiction is in question.
Accordingly,
The Clerk of Court is DIRECTED to serve a copy of this order upon the
Plaintiffs, Russell Riggs and Ramada Thompson, and Defendants, Clifford Phelps
and Champion Truck Lines, LLC IMMEDIATELY upon receipt of proof of service or
an appearance.
IT IS ORDERED that, not later than twenty-one (21) days from service of this
Order, Defendant Hallmark Specialty Insurance Company SHALL FILE:

(1) a

Jurisdictional Memorandum setting forth specific facts, including the citizenship of
Hallmark Specialty Insurance Company, including sufficient facts to establish every
State and foreign state by which it has been incorporated and the State or foreign
state where it has its principal place of business; the citizenship of all the members
of Champion Truck Lines, LLC; and the citizenship of Russell Riggs and Ramada
Thompson, both at the time of filing in state court and at the time of removal to
federal court, that support a finding that the parties are diverse in citizenship; and
(2) a motion for leave to amend the jurisdictional allegations of the Complaint for
Removal pursuant to 28 U.S.C. § 1653 to adequately allege diversity jurisdiction.

IT IS FURTHER ORDERED that Plaintiffs, Russell Riggs and Ramada
Thompson, and Defendants, Clifford Phelps and Champion Truck Lines, LLC, will be
allowed seven (7) days from receipt of Defendant Hallmark’s memorandum regarding
jurisdiction to file a response.
21st
THUS DONE AND SIGNED in chambers in Alexandria, Louisiana, this _____
day of August, 2017.

____________________________________
Joseph H.L. Perez-Montes
United States Magistrate Judge