United Services Automobile Association et al v. Omega Flex, Inc.

Filing 20

MEMORANDUM AND ORDER REMANDING ACTION - IT IS ORDERED: The Plaintiff United Services Automobile Association's Motion to Remand (Filing No. 12 ) is granted; and This action is remanded to the District Court of Sarpy County, Nebraska. Civil Case Terminated. Ordered by Judge Laurie Smith Camp. (TEL)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
UNITED SERVICES AUTOMOBILE
ASSOCIATION, as subrogee of Roger
Meisinger
Plaintiff,
v.
OMEGA FLEX, INC., a Pennsylvania
Corporation,
Defendant.

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CASE NO. 8:10CV431

MEMORANDUM AND ORDER
REMANDING ACTION

This matter is before the Court on the Plaintiff’s Motion to Remand (Filing No. 12).
Defendant Omega Flex, Inc. (“Omega”), removed the action to this Court on November 9,
2010, on the grounds of diversity of citizenship, asserting that Plaintiff United Services
Automobile Association (“USAA”) “is an Association domiciled in the State of Texas” and
“Defendant represents that it is a Pennsylvania corporation with its principal place of
business in Pennsylvania.” (Notice of Removal, Filing No. 1, at 1.) USAA asks the Court
to remand the action to the District Court of Sarpy County, Nebraska, for the reason that
this Court lacks diversity jurisdiction.
As an unincorporated association, USAA argues that it is a citizen of each and every
state in which it has members. (Affidavit of George Joy, Filing No. 17-1, ¶ 3.) USAA has
presented evidence to the effect that it has approximately 2.43 million members, 56,745
of whom reside in Pennsylvania. (Id., ¶¶ 7-9.) Omega argues that USAA should be
estopped from denying that diversity jurisdiction exists, because USAA has taken contrary
positions in other litigation. (Filing No. 15, at 5.)
As the party opposing remand, Omega has the burden of establishing federal
subject matter jurisdiction. Transit Cas. Co. v. Certain Underwriters at Lloyds of London,
119 F.3d 619, 625 (8th Cir. 1997) (“[A] district court is required to resolve all doubts about

federal jurisdiction in favor of remand.”); Green v. Ameritrade, Inc., 279 F.3d 590, 595 (8th
Cir. 2002) (“The party opposing remand has the burden of establishing federal
subject-matter jurisdiction.”).
Omega relies upon the decisions in United Servs. Auto. Ass'n v. Muir, 792 F.2d 356
(3d Cir. 1986), and United Servs. Auto. Ass'n v. Foster, 783 F. Supp. 916 (M.D. Pa. 1992).
In Muir, the Third Circuit stated in a footnote that “[f]or diversity purposes, USAA and its
subsidiaries are residents of Texas.” Muir, 792 F.2d at 359 n.1. As USAA notes, however,
the district court and appellate court in Muir also had federal question jurisdiction, and the
diversity matter was not pivotal or subjected to analysis. Similarly, in Foster the court had
federal question jurisdiction, and USAA amended its complaint “to delete a reference to
diversity jurisdiction which plaintiffs have since found does not apply.” Foster, 783 F. Supp.
at 919 n.8.
USAA refers the Court to the decisions in Norton v. Gurley, 2000 WL 1408168 (E.D.
La. 2000), and Ourso v. United Servs. Auto. Ass’n, 2007 WL 275902 (E.D. La. 2007), in
which the citizenship of USAA was specifically litigated. In Norton, the district court stated:
The evidence submitted . . . shows that USAA is not a corporation but
instead an unincorporated association, or otherwise referred to as a
reciprocal insurance exchange, organized under the laws of Texas.
The United States Fifth Circuit Court of Appeals has determined that
“an unincorporated association is considered to have the citizenship of its
members.” USAA has members residing in all fifty states . . . . [T]his suit
lacks complete diversity and a dismissal of the action is required.
Norton, 2000 WL 1408168, at *1 (citations omitted).
Similarly, in Ourso, another judge of the same district court determined that USAA
was an unincorporated association having members in all fifty states, defeating the
plaintiff’s claim of federal diversity jurisdiction. Ourso, 2007 WL 275902, at *1.
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The United States District Court for the Eastern District of Missouri, and the United
States Court of Appeals for the Eighth Circuit reached the same conclusion in 1994. Lewis
v. United Servs. Auto. Ass’n, 45 F.3d 433, No. 94-2284, 1994 WL 717650, at *1 (8th Cir.
Dec. 29, 1994) (“[T]he district court correctly determined that the Lewises failed to show
complete diversity with USAA, which, as an unincorporated association, is a citizen of the
states of each of its members.”).
Although USAA may have taken a contrary position when asserting diversity
jurisdiction decades ago in pleadings unrelated to the case now before this Court, it is not
“estopped” from denying the existence of such jurisdiction in this case. A party cannot
confer subject matter jurisdiction upon the Court when none exists. See Insurance Corp.
v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982) (“[N]o action of the
parties can confer subject-matter jurisdiction upon a federal court.”). All evidence before
the Court indicates that USAA is an unincorporated association with members in all fifty
states, including Pennsylvania. Accordingly, Omega has not met its burden of establishing
subject matter jurisdiction, and USAA’s Motion to Remand will be granted.
IT IS ORDERED:
1.

The Plaintiff United Services Automobile Association’s Motion to Remand
(Filing No. 12) is granted; and

2.

This action is remanded to the District Court of Sarpy County, Nebraska.

DATED this 5th day of May, 2011.
BY THE COURT:

s/Laurie Smith Camp
United States District Judge
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