EVEREST REINSURANCE COMPANY v. CENTURY INDEMNITY COMPANY et al

Filing 4

ORDER TO SHOW CAUSE denying petitioner's request for the issuance of an OTSC [1-5]; directing the petitioner to show cause why the petition should not be dismissed for lack of jurisdiction. Show Cause Response due by 5/27/2011. Show Cause Hearing set for 5/31/2011 before Judge Mary L. Cooper, without oral argument pursuant to FRCP 78(b). Signed by Judge Mary L. Cooper on 5/17/11. (eh, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
EVEREST REINSURANCE COMPANY,
Petitioner,
v.
CENTURY INDEMNITY COMPANY,
et al.,
Respondents.

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CIVIL ACTION NO. 11-2789 (MLC)
ORDER & ORDER TO SHOW CAUSE

THE PETITIONER (1) brought this Petition on May 13, 2011,
seeking to appoint an umpire pursuant to a reinsurance agreement,
(2) asserts jurisdiction under 28 U.S.C. § (“Section”) 1332, and
(3) bears the burden of demonstrating jurisdiction.
no. 1, Pet.)1

(Dkt. entry

The Court is examining jurisdiction and

considering dismissal.

See Fed.R.Civ.P. 12(h)(3) (instructing

court to dismiss if jurisdiction is lacking).
IT APPEARS that (1) the petitioner is deemed to be a citizen
of both Delaware and New Jersey, and (2) the respondent Century

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The petitioner also cites the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 5. (Pet.) “The FAA does not create
independent federal question jurisdiction. . . . [A]n independent
basis for jurisdiction must exist, such as diversity.” Trs. of
Gen. Assembly of Church of Lord Jesus Christ of Apostolic Faith
v. Patterson, 300 Fed.Appx. 170, 172 (3d Cir. 2008) (citing Moses
H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32
(1983)); see Hughes v. Papa, 153 Fed.Appx. 125, 125-26 (3d Cir.
2005) (stating same); see also Krantz & Berman v. Dalal, No. 099339, 2010 WL 1875695, at *4, *6 (S.D.N.Y. May 11, 2010) (stating
same where 9 U.S.C. § 5 was at issue).

Indemnity Company is deemed to be a citizen of Pennsylvania only.
(Compl. at 1.)

See 28 U.S.C. § 1332(c)(1).

BUT IT APPEARS that the respondent Resolute Management, Inc.
(“RMI”), according to the Westlaw database and the Delaware
Division of Corporations, is currently incorporated in Delaware
and thus is deemed to be a citizen of, among other states,
Delaware.

See also Compl., AXA Belgium S.A. v. Ace American

Insurance Company, No. 08-1228 (C.D. Cal. Feb. 22, 2008), ECF No.
1 (identifying RMI as Delaware corporation); Removal Notice, Ex.
C, RMI Aff., Liberty Life Insurance Company v. One Beacon
Insurance Company, No. 08-955 (W.D. Mo. Dec. 12, 2008), ECF No. 1
(RMI identifying itself as incorporated in Delaware); RMI 3d
Party Compl., R.E. Kramig Co. v. Resolute Management, Inc., No.
07-658 (S.D. Ohio Sept. 14, 2007), ECF No. 5 (same).

(Cf. Pet.

at 2 (petitioner alleging RMI is Pennsylvania corporation with
Pennsylvania principal place of business).)2
THE COURT is concerned that the petitioner is not a citizen
of a different state in relation to each respondent, i.e., RMI.
See 28 U.S.C. § 1332(a)(1); Lincoln Prop. Co. v. Roche, 546 U.S.
81, 89 (2005) (requiring complete diversity between each plaintiff
and each defendant).

A jurisdictional challenge is measured

“against the state of facts that existed at the time of filing —

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RMI’s principal place of business appears to be in either
Pennsylvania or Nebraska.
2

whether the challenge be brought shortly after filing, after the
trial, or even for the first time on appeal”.
Atlas Global Grp., 541 U.S. 567, 571 (2004).

Grupo Dataflux v.
The Court intends

to dismiss the Petition unless the petitioner properly (1)
demonstrates RMI’s state of incorporation and the state in which
it had its principal place of business on May 13, 2011, and
provides supporting documentation and affidavits from those with
knowledge of RMI’s structure, and (2) shows that there is
jurisdiction under Section 1332.

The petitioner must specifically

assert citizenship as it existed on May 13, 2011.
THE PETITIONER will not restate the Petition’s citizenship
and jurisdictional allegations in its response.

Furthermore, a

response based upon information and belief, an assertion that is
not specific (e.g., citizen of “a state other than Delaware or
New Jersey”), or a request for time to discern jurisdiction will
result in the dismissal of the Petition, as the petitioner should
have ascertained jurisdiction before choosing to file the
Petition in federal court.

See S. Freedman & Co. v. Raab, 180

Fed.Appx. 316, 320 (3d Cir. 2006) (stating citizenship is to be
alleged “affirmatively and distinctly”); Vail v. Doe, 39
F.Supp.2d 477, 477 (D.N.J. 1999) (stating citizenship allegation
that is based upon information and belief “does not convince the
Court that there is diversity among the parties”).

As the

petitioner is represented by counsel, the Court “should not need

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to underscore the importance of adequately pleading and proving
diversity”.

CGB Occ. Therapy v. RHA Health Servs., 357 F.3d 375,

382 n.6 (3d Cir. 2004).
A DISMISSAL would be without prejudice to the petitioner to
recommence the proceeding in state court, as the limitations
period is tolled by the filing of this federal proceeding.

See

Jaworowski v. Ciasulli, 490 F.3d 331, 333-36 (3d Cir. 2007);
Galligan v. Westfield Ctr. Serv., 82 N.J. 188, 191-95 (1980).
THE PETITION is accompanied by the petitioner’s request for
an order for the respondents to show cause why one of the
petitioner’s umpire candidates should not be appointed.

(Dkt.

entry no. 1-5, Pet’r’s Proposed Order To Show Cause; see dkt.
entry no. 1-2, Pet’r’s Mem. Of Law.)
request at this juncture.
matter jurisdiction.

The Court will deny the

First, the Court may lack subject

Second, the petitioner has not demonstrated

“a clear and specific showing by affidavit or verified pleading
of good and sufficient reasons why a procedure other than by
notice of motion is necessary.”

L.Civ.R. 65.1(a).

The

petitioner argues that the respondents seek to appoint umpires
who are not neutral to an arbitration proceeding, but it fails to
argue at all as to why it is necessary to skirt the usual
procedure of proceeding by notice of motion.
Pet’r’s Mem. Of Law.)

(See generally

For good cause appearing:

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IT IS THEREFORE on this

17th

day of May, 2011,

ORDERED that the petitioner’s request for the issuance of an
order to show cause (dkt. entry no. 1-5) is DENIED; and
IT IS FURTHER ORDERED that the petitioner will SHOW CAUSE
why the Petition should not be dismissed without prejudice to
recommence the proceeding in state court for lack of jurisdiction
under 28 U.S.C. § 1332; and
IT IS FURTHER ORDERED that the petitioner, if responding,
must file a response with the Court electronically by 5 P.M. on
May 27, 2011; and
IT IS FURTHER ORDERED that NO ENLARGEMENTS OF TIME WILL BE
GRANTED to respond, even with the consent of all parties, barring
extraordinary circumstances;3 and
IT IS FURTHER ORDERED that if the petitioner fails to
respond to this Order To Show Cause, then the petitioner will be
deemed to be in support of dismissal; and

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Extraordinary circumstances do not include: (1) upcoming
legal or religious holidays, (2) the parties or counsel being on
vacation when this Order To Show Cause was issued, or upcoming
vacation plans, (3) difficulty in registering for electronic
filing, (4) difficulty in complying with the electronic filing
rules, (5) time to conduct discovery, (6) difficulty with a
computer or internet access, or (7) any purported failure to be
timely notified of this inquiry. See Freedman, 180 Fed.Appx. at
317-20 (noting district court, in sua sponte jurisdiction inquiry,
provided party only seven days to respond).
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IT IS FURTHER ORDERED that this Order To Show Cause will be
decided on TUESDAY, MAY 31, 2011, or soon thereafter, without
oral argument pursuant to Federal Rule of Civil Procedure 78(b).

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge

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