Res-NV One, LLC v. Celebrate Properties LLC et al

Filing 29

ORDER DISMISSING CASE for lack of subject-matter jurisdiction. Signed by Judge James C. Mahan on 1/31/12. (Copies have been distributed pursuant to the NEF - ASB)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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RES-NV ONE, LLC,

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2:11-CV-606 JCM (CWH)

Plaintiff,
v.
CELEBRATE PROPERTIES, LLC., et
al.,
Defendants.

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ORDER

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Presently before the court is plaintiff Res-NV One, LLC’s motion for default judgment.

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(Doc. #28). On June 28, 2011, the clerk entered default against Celebrate Properties, LLC. (Doc.

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#8). On August 30, 2011, the clerk entered default against Steven R. Rosenberg. (Doc. #21). On

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October 12, 2011, the clerk entered default against Harry H. Shull. (Doc. #26).

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Plaintiff seeks default judgment against defendants, in the amount of $3,994,466.08 and

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interest accruing from the date of entry of the default judgment. This amount includes actual

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damages, attorney’s fees, and costs. (Doc. #28).

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However, before analyzing the motion for default judgment, the court first must determine

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whether it has subject-matter jurisdiction over this action. Federal courts are courts of limited

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jurisdiction, and “[t]hey possess only that power authorized by Constitution and statute.” United

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States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008) (quoting Kokkonen v. Guardian Life Ins. Co., 511

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U.S. 375, 377 (1994)).

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James C. Mahan
U.S. District Judge

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Federal courts are “presumed to lack jurisdiction . . . unless the contrary affirmatively

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appears.” Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). Thus, the

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party asserting diversity jurisdiction bears the burden of proof. Lew v. Moss, 797 F.2d 747, 750 (9th

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Cir. 1986). Pursuant to Federal Rule of Civil Procedure 12(h)(3), “if the court determines at any

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time that it lacks subject-matter jurisdiction, the court must dismiss the action.”

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The complaint asserts that this court has subject-matter jurisdiction “pursuant to 28 U.S.C.

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§ 1331 and/or 28 U.S.C. § 1332(a).” (Doc. #1). “The presence or absence of federal-question

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jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction

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exists only when a federal question is presented on the face of the plaintiff’s properly pleaded

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complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). While plaintiff has alleged

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federal-question jurisdiction pursuant to 28 U.S.C. § 1331, it is unclear from the face of the

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complaint how plaintiff’s claims arise under the Constitution or laws of the United States. Thus,

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plaintiff has not adequately established the basis for federal-question jurisdiction in the complaint.

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Accordingly, the court determines whether it has subject-matter jurisdiction pursuant to 28

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U.S.C. § 1332(a), which was also pled as a basis for subject-matter jurisdiction in the complaint.

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(Doc. #1). This diversity subject-matter jurisdiction analysis is further supported by the factual

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allegations in the complaint, which revolve around the facts necessary to support diversity

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jurisdiction. (See Doc. #1).

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Plaintiff is a limited liability company wholly owned by Multibank 2009-1 RES-ADC

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Venture, LLC (“Multibank”). (Doc. #1). The Federal Deposit Insurance Corporation (the “FDIC”)

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is one of the two members of Multibank for purposes of diversity jurisdiction. (Docs. #1).

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The motion for default recognizes that this court has dismissed several other similar cases

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for lack of subject-matter jurisdiction due to the involvement of the FDIC. (Doc. #28, citing RES-NV

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TVL, LLC v. Towne Vistas, LLC, et. al., 2:10-cv-1084-JCM-PAL; RES-NV APC, LLC v. Astoria

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Pearl Creel, LLC, et. al., 2:11-cv-00381-LDG-RJJ). These cases present similar fact patterns and

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similar parties to the case currently before the court. In both of those cases, the court held that it

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lacked subject-matter jurisdiction because the FDIC’s status as a federally chartered bank destroys

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James C. Mahan
U.S. District Judge

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diversity citizenship.

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Plaintiff points out that reconsideration motions have been filed in each of the above-

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referenced cases, and states that it believes that “after reviewing the motions in the parallel cases,

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the [c]ourt will determine that it does in fact have subject matter jurisdiction over those actions, and

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has subject matter jurisdiction in this case, as well.” (Doc. #15). On December 30, 2011, this court

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ruled on the reconsideration motion in RES-NV TVL, LLC v. Towne Vistas, LLC, et. al., 2:10-cv-

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1084-JCM-PAL. The court held that “it is apparent that the FDIC is a member of Multibank; thus

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diversity jurisdiction is destroyed.” Id. at doc. #79. Accordingly, this court was not convinced by

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the reconsideration arguments.

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Similar to the court’s finding in RES-NV TVL, LLC v. Towne Vistas, LLC, et. al., 2:10-cv-

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1084-JCM-PAL, the court finds that it lacks subject-matter jurisdiction in the case at bar. The

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involvement of the FDIC precludes the court from exercising diversity jurisdiction.

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As this court stated in its reconsideration order in RES-NV TVL, LLC v. Towne Vistas, LLC,

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et. al., 2:10-cv-1084-JCM-PAL, “this court is guided by current precedent and applies the law as it

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interprets it. Overturning precedent and setting policy falls within the sound discretion of the Ninth

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Circuit.” Id. at doc. #79.

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the case of RES-NV One,

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LLC v. Celebrate Properties LLC, et. al., 2:11-cv-00606-JCM-CWH be, and the same hereby is,

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DISMISSED for lack of subject-matter jurisdiction.

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DATED January 31, 2012.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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