Sahlein et al v. Caliber Home Loans, Inc. et al

Filing 58

MEMORANDUM OPINION re 57 Order Dismissing Case. Signed by District Judge Sharion Aycock on 5/17/2016. (dbm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
OXFORD DIVISION
STEVEN SAHLEIN,
EMELINE SAHLEIN, and
RITA SAHLEIN

PLAINTIFFS

V.

CIVIL ACTION NO. 3:15-CV-109-SA-JMV

CALIBER HOME LOANS, INC., et al

DEFENDANTS

MEMORANDUM OPINION
Plaintiffs filed this action on June 30, 2015, pursuing, inter alia, a claim for relief under
Mississippi’s Quiet Title action, and premising federal jurisdiction on diversity of citizenship.
The diversity statute, 28 U.S.C. Section 1332, is satisfied upon a showing of (1) diversity
between the parties; and (2) an amount in controversy in excess of $75,000, exclusive of interest
and costs. Diversity, as prescribed by Section 1332, 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) (internal quotation marks omitted).
Where “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). The burden of proving diversity jurisdiction “rests upon the party who seeks to
invoke the court’s diversity jurisdiction.” Id. Further, the Court has “an independent obligation to
determine whether subject-matter jurisdiction exists . . .” Arbaugh v. Y&H Corp., 546 U.S. 500,
501, 126 S. Ct. 1235, 163 L. Ed. 2d 1097 (2006).
Because the Plaintiffs, as the parties invoking this Court’s jurisdiction, failed to
“distinctly and affirmatively” allege the citizenship of the parties in their complaint, this Court
issued an order to show cause as to jurisdiction [28]. Getty Oil, 841 F.2d at 1259. This case

involves more than sixteen parties including individuals, corporations, trusts, LLCs, and national
banking associations. In the order to show cause, the Court specified several insufficiencies in
the Plaintiffs’ jurisdictional allegations and described the jurisdictional requirements for a variety
of party types. The Court provided substantial time for the parties to conduct jurisdictional
related discovery and to respond to the Court’s order. The Parties requested additional time to
respond, and the Court granted the Parties’ request. The Plaintiffs filed a proposed amended
complaint on March 1, 2016 [48-1]. The amended complaint contains many of the same defects
as the original complaint.
For example, based on the language used it is unclear whether several of the allegations
refer to principle places of business or agents for service of process. This distinction is critical
for the Court to assess diversity. See, e.g., Getty Oil, 841 F.2d at 1259 (stating “when ‘distinctly
and affirmatively alleged,’ the state of incorporation and principal place of business are
sufficient jurisdictional facts to establish a corporation’s citizenship”) (emphasis added). The
Plaintiffs have also failed to allege jurisdictional facts as they existed at the time the complaint
was filed despite this issue being highlighted in the Court’s previous order. See Grupo Dataflux
v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570, 124 S. Ct. 1920, 1924, 158 L. Ed. 2d 866 (2004)
(stating “[i]t has long been the case that ‘the jurisdiction of the court depends upon the state of
things at the time of the action brought’” (quoting Mollan v. Torrance, 9 Wheat. 537, 539, 6 L.
Ed. 154 (1824)).
Further, for several of the LLCs involved, the Plaintiffs have failed to adequately allege
the citizenship of all of their members, and all of the members of the successive LLCs. See
Harvey, 542 F.3d at 1079-80 (stating that the Fifth Circuit has held that the citizenship of an
LLC “is determined by the citizenship of all its members”) (emphasis added). The Plaintiffs have

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also failed to adequately allege the citizenship of several national banking associations involved.
See Wachovia Bank v. Schmidt, 546 U.S. 303, 307, 126 S. Ct. 941, 942, 163 L. Ed. 2d 797
(2006).
It is well established that federal courts have limited subject matter jurisdiction, and
“there is a presumption against subject matter jurisdiction that must be rebutted by the party
bringing an action to federal court.” Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996); 13 Charles
Alan Wright & Arthur R. Miller, et al, Federal Practice & Procedure § 3522 (3d ed.). A “district
court must be certain that the parties are in fact diverse before proceeding to the merits of the
case” Getty, 841 F.2d at 1258 (citing B. Inc. v. Miller Brewing, 663 F.2d 545, 548–49 (5th Cir.
1981); see also FED. R. CIV. P. 12(h)(3). Because the Plaintiffs failed to meet their burden of
proving diversity, and failed to comply with the Court’s order to show cause, Federal Rule of
Civil Procedure 12(h)(3) requires dismissal.
This case is DISMISSED without prejudice pursuant to Federal Rule of Civil Procedure
12(h)(3) for lack of subject matter jurisdiction. This case is CLOSED.

SO ORDERED, this the 17th day of May, 2016.

/s/ Sharion Aycock___
____
UNITED STATES DISTRICT JUDGE

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