E3 Biofuels, LLC v. Biothane Corporation et al
Filing
357
MEMORANDUM AND ORDER adopting 320 Findings and Recommendation; overruling 337 Objections to Magistrate Judge's Findings and Recommendation; and denying 271 Defendant's Motion to Dismiss. Ordered by Chief Judge Laurie Smith Camp. (JSF)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
E3 BIOFUELS, LLC,
Plaintiff,
8:11CV44
vs.
MEMORANDUM AND ORDER
BIOTHANE, LLC, successor in interest and
liability to; PERENNIAL ENERGY, INC.,
MARVIN ENTERPRISES, INC. F/K/A,
AMERICAN BOILER COMPANY,
KATZEN INTERNATIONAL, INC.,
Defendants.
This matter is before the Court on Magistrate Judge F.A. Gossett’s Findings and
Recommendation (Filing No. 320), filed on September 19, 2013, and Defendant
Perennial Energy, Inc.’s (“PEI”) Statement of Objections to the Findings and
Recommendation (Filing No. 337), filed as allowed by 28 U.S.C. § 636(b)(1)(C) on
October 2, 2013. On October 7, 2013, Plaintiff, E3 Biofuels, LLC (“E3 Biofuels”), filed a
Brief (Filing No. 345) in opposition to PEI’s Objections. For the reasons explained
below, the Court will adopt the Findings and Recommendation of the Magistrate Judge
and PEI’s motion to dismiss (Filing No. 271) will be denied.
BACKGROUND
This Court adopts the Background section from the Magistrate Judge’s Findings
and Recommendation, and that section is incorporated herein. In PEI’s Objections, it
argues that E3 Biofuels impermissibly manufactured diversity by assigning a legal claim
to a diverse member either improperly or collusively and, as the alleged “real parties in
interest,” the AltEn entities, including DFRG, Inc., must be considered “members” of E3
Biofuels for diversity purposes.
The Magistrate Judge addressed the question of
whether the citizenship of “members” of the AltEn entities should be considered for
determining diversity jurisdiction. However, because PEI failed to raise its argument
that E3 Biofuels impermissibly manufactured diversity in its briefing before the
Magistrate Judge (Filling Nos. 271-73 and 289-90), he did not consider this claim in his
Findings and Recommendation.
DISCUSSION
“The district judge must determine de novo any part of the magistrate judge's
disposition that has been properly objected to.” Fed. R. Civ. P. 72. In conducting its
review, the Court may “accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C).
PEI objected to the Magistrate Judge’s recommendation that this Court should
conclude it has subject matter jurisdiction based on diversity. E3 Biofuels argues that
PEI is not entitled to a de novo review of PEI’s new argument alleging impermissibly
manufactured diversity because this argument was not made before the Magistrate
Judge. This Court agrees that “[a] party objecting to a report and recommendation is
‘not entitled to a de novo review of an argument never raised’ before the magistrate
judge.” Salgado-Candelario v. Ericsson Caribbean, Inc., 614 F. Supp. 2d 151, 164
(D.P.R. 2008) (quoting Borden v. Sec’y of Health and Human Servs., 836 F.2d 4, 6 (1st
Cir.1987).
Therefore, this Court will not consider PEI’s claim that E3 Biofuels
impermissibly manufactured diversity by assigning a legal claim to a diverse member
either improperly or collusively.
The Magistrate Judge correctly concluded that E3 Biofuels and PEI are citizens
of different states for purposes of diversity jurisdiction and that this Court has subject
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matter jurisdiction in this case. This Court incorporates the Magistrate Judge’s factual
and legal findings herein. After a de novo review of the issues properly before this
Court, the Court concludes that the Magistrate Judge fully, carefully, and correctly found
the facts and applied the law; and PEI’s motion to dismiss will be denied.
CONCLUSION
For the reasons stated above, this Court adopts the Magistrate Judge’s Findings
and Recommendation, and denies PEI’s Objections and its motion to dismiss.
IT IS ORDERED:
1.
The Magistrate Judge’s Findings and Recommendation (Filing No. 320)
are adopted;
2.
Defendant Perennial Energy, Inc.’s Statement of Objections to the
Magistrate Judge’s Findings and Recommendation (Filing No. 337) are
overruled; and
3.
Defendant Perennial Energy, Inc.’s motion to dismiss (Filing No. 271) is
denied.
Dated this 25th day of October, 2013.
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge
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