Matson et al v. Mipro US, Inc. et al

Filing 23

ORDER re jurisdiction. (Written Opinion) Signed by Judge Joan N. Ericksen on January 8, 2018. (CBC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Thomas Matson, Marie Matson, and Robert
Waletzko,
Plaintiffs,
v.

Case No. 17-cv-4571 (JNE/LIB)
ORDER

Mipro US, Inc.; Mipro Ortho Pte. Ltd.;
Maxx Health, Inc.; Maxx Orthopedics, Inc.;
Portland Orthopaedics Limited; Metalicity
Limited; Orchid Orthopedic Solutions, LLC;
John Doe M-Cor Neck Manufacturers 1-5;
John Doe M-Cor Stem Manufacturers 1-5;
John Doe Material Suppliers 1-5; and John
Doe Corporations 1-5,
Defendants.
Asserting several claims based on the failures of Thomas Matson’s and Robert
Waletzko’s hip implants, Thomas Matson, Marie Matson, and Waletzko brought this
action against Mipro US, Inc.; Mipro Ortho Pte. Ltd.; Maxx Health, Inc.; Maxx
Orthopedics, Inc.; Portland Orthopaedics Limited; Metalicity Limited; Orchid Orthopedic
Solutions, LLC; and several unidentified entities. The Matsons and Waletzko invoked 28
U.S.C. § 1332 (2012) as the basis of subject-matter jurisdiction. Observing deficiencies
in their jurisdictional allegations, the Court grants the Matsons and Waletzko an
opportunity to file an amended complaint. See Hertz Corp. v. Friend, 559 U.S. 77, 94
(2010) (“Courts have an independent obligation to determine whether subject-matter
jurisdiction exists, even when no party challenges it.”); Arbaugh v. Y & H Corp., 546
U.S. 500, 506 (2006) (“The objection that a federal court lacks subject-matter jurisdiction

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may be raised by a party, or by a court on its own initiative, at any stage in the litigation,
even after trial and the entry of judgment.” (citation omitted)).
A district court has original jurisdiction of a civil action 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 and in which citizens or subjects of a foreign state
are additional parties.” 28 U.S.C. § 1332(a)(3). “When jurisdiction is based on diversity
of citizenship, the pleadings, to establish diversity, must set forth with specificity the
citizenship of the parties.” Barclay Square Props. v. Midwest Fed. Sav. & Loan Ass’n of
Minneapolis, 893 F.2d 968, 969 (8th Cir. 1990).
The Matsons and Waletzko bear the burden of alleging each party’s citizenship.
Walker v. Norwest Corp., 108 F.3d 158, 161 (8th Cir. 1997). In their complaint, they
alleged that (1) they are citizens of Minnesota; (2) Mipro US, Inc., “at all relevant times
hereto . . . was a foreign corporation organized and existing pursuant to the laws of the
State of Pennsylvania, with its principal place of business” in Pennsylvania; (3) Mipro
Ortho Pte. Ltd. “at all times relevant hereto . . . was a Chinese Company with its principal
place of business” in Singapore; (4) Maxx Health, Inc., “at all times hereinafter
mentioned . . . was and still is a foreign corporation organized and existing pursuant to
the laws of the State of Pennsylvania with its principal place of business” in
Pennsylvania; (5) Portland Orthopaedics Limited “was at all times relevant to this action,
organized and existing pursuant to the laws of Australia, with its principal place of
business” in Australia; (6) Metalicity Limited “at all times relevant hereto . . . was
organized and existing under the laws of Australia, with its principal place of business” in
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Australia; (7) Orchid Orthopedics Solutions, LLC, “at all times relevant hereto . . . was a
foreign limited liability company organized and existing pursuant to the laws of the State
of Delaware,” and “no [m]ember of the Orchid Solutions LLC resides in the State of
Minnesota”; and (8) “the John Doe Defendants are entities whose names and addresses
are unknown.”
Maxx Orthopedics, Inc.
No allegation of Maxx Orthopedics’ citizenship appears in the complaint.
Orchid Orthopedics Solutions, LLC
“While humans and corporations can assert their own citizenship, other entities
take the citizenship of their members.” Americold Realty Tr. v. ConAgra Foods, Inc.,
136 S. Ct. 1012, 1014 (2016). “Despite [its] oft-repetition of the rule linking
unincorporated entities with their ‘members,’ [the Supreme Court has] never expressly
defined the term.” Id. at 1015. It has equated an association’s members with its owners
or the several persons composing the association. Id. “Applying this principle with
reference to specific States’ laws, [the Supreme Court has] identified the members of a
joint-stock company as its shareholders, the members of a partnership as its partners, the
members of a union as the workers affiliated with it, and so on.” Id.
For purposes of diversity jurisdiction, a limited liability company’s citizenship is
that of its members. OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir.
2007); GMAC Commercial Credit LLC v. Dillard Dep’t Stores, Inc., 357 F.3d 827, 829
(8th Cir. 2004). “When diversity jurisdiction is invoked in a case in which a limited
liability company is a party, the court needs to know the citizenship of each member of
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the company.” Delay v. Rosenthal Collins Grp., LLC, 585 F.3d 1003, 1005 (6th Cir.
2009); see D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d 124, 12527 (1st Cir. 2011) (per curiam); Rolling Greens MHP, L.P. v. Comcast SCH Holdings
L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (per curiam); cf. Barclay Square Props.,
893 F.2d at 969 (“Barclay Square Properties is a limited partnership, and because its
complaint did not allege the citizenship of each limited partner, the pleadings were
insufficient to establish diversity jurisdiction.”). “[B]ecause a member of a limited
liability company may itself have multiple members—and thus may itself have multiple
citizenships—the federal court needs to know the citizenship of each ‘sub-member’ as
well.” Delay, 585 F.3d at 1005. The Matsons and Waletzko did not allege the
citizenship of Orchid Orthopedics Solutions’ members. See D.B. Zwirn Special
Opportunities Fund, 661 F.3d at 125-27 (“That Mr. Mehrotra is a citizen of Rhode Island
and that Zwirn is not considered a citizen of Rhode Island ‘is not sufficient to give
jurisdiction in a . . . Court of the United States.’” (alteration in original)); Lindley
Contours, LLC v. AABB Fitness Holdings, Inc., 414 F. App’x 62, 64-65 (9th Cir. 2011)
(“For fourteen of these entities, Appellees assert that ‘none of its members is an Oregon
citizen,’ but do not identify of what state they are a citizen nor whether they are
composed of another layer of partnerships. In light of Appellees’ burden to establish
complete diversity, such conclusory statements are insufficient.” (citation omitted)).
Doe entities
The Matsons and Waletzko alleged that “[o]ne or more John Doe Corporations
supplied materials used in the M-Cor Modular Hip Systems at issue in this case; one or
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more John Doe corporations contracted with Mipro US, Inc., or other entity, to
manufacturer [sic] the femoral necks at issue in this case; and one or more John Doe
Corporations contracted with Mipro US Inc., or other entity, to manufacture the femoral
stems at issue in this case.” “‘For almost two centuries the diversity statute has been
interpreted to require “complete” diversity of citizenship,’ a crucial prerequisite which
every plaintiff seeking diversity jurisdiction has the burden of alleging and eventually
proving. Given this burden, ‘[t]he general rule . . . has been that, on challenge, the
diverse citizenship of the fictitious defendants must be established by the plaintiff in
order to continue a federal court action.’” Lee v. Airgas–Mid S., Inc., 793 F.3d 894, 899
(8th Cir. 2015) (alterations in original) (citations omitted). 1
Conclusion
“Defective allegations of jurisdiction may be amended, upon terms, in the trial or
appellate courts.” 28 U.S.C. § 1653 (2012); see Dubach v. Weitzel, 135 F.3d 590, 593
(8th Cir. 1998). The Court grants the Matsons and Waletzko seven days from the date of
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In Lee, the plaintiff avoided a “jurisdictional quandary” by failing to assert any
claim against the Doe defendants:
Lee inadvertently avoids this jurisdictional quandary and satisfies
diversity by failing to levy a single claim against a John Doe defendant. In
Lee’s amended complaint, the John Does are mentioned precisely twice,
and in both instances the complaint states only that the John Does “are
persons or corporations or other entities whose identity and whereabouts
are unknown at the time of filing this Complaint. None of the John Doe
defendants are believed to be citizens of Arkansas.” The John Does are
obviously fictional placeholders, and because Lee raises no claim against
them, their presence in the complaint is also nominal and, as such, cannot
affect diversity jurisdiction.
793 F.3d at 899.
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this Order to file an amended complaint that rectifies the deficiencies noted above. If
they fail to do so, the action is subject to dismissal for lack of subject-matter jurisdiction. 2
IT IS SO ORDERED.
Dated: January 8, 2018
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge

2

Citing Rule 41(a)(1)(B)(ii) of the Federal Rules of Civil Procedure, the Matsons,
Waletzko, and Orchid Orthopedic Solutions filed a stipulation of dismissal in which the
Matsons agreed to a dismissal of their claims against Orchid Orthopedic Solutions with
prejudice and Waletzko agreed to a dismissal of his claims against Orchid Orthopedic
Solutions without prejudice. The Court assumes the stipulating parties meant to invoke
Rule 41(a)(1)(A)(ii). The Court will consider the stipulation in due course.
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