Lakeside Industries Inc v. General Reinsurance Corporation et al

Filing 4

ORDER TO SHOW CAUSE. Plaintiff is ordered to show cause no later than October 4, 2024 why this case should not be dismissed for lack of subject matter jurisdiction. Signed by U.S. District Judge David G Estudillo. (MW)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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LAKESIDE INDUSTRIES INC.,
v.

Plaintiff,

CASE NO. 3:24-cv-05754-DGE
ORDER TO SHOW CAUSE

GENERAL REINSURANCE
CORPORATION et al.,
Defendant.

This matter comes before the Court on its own review of the record. Plaintiff asserts that
this Court has subject matter jurisdiction over this matter under 28 U.S.C. § 1332, the diversity
jurisdiction statute. (Dkt. No. 1 at 4.) However, Plaintiff’s complaint leaves ambiguity as to the
basis for diversity jurisdiction.
Plaintiff is a Washington corporation with its principal place of business in Issaquah,
Washington. (Id. at 2; Dkt. No. 3.) Defendants are all corporate entities, insurers licensed to sell
insurance in Washington and incorporated in Connecticut, New York, Illinois, New Hampshire,
and Massachusetts, respectively. (Dkt. No. 1 at 2–4.) Despite that, Plaintiff also states that

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ORDER TO SHOW CAUSE - 1

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“[u]pon information and belief, all of the defendants are residents of, are domiciled within, or

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have transacted business within the state of Washington.” (Id. at 2.) That statement creates

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problems for the diversity analysis.

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A corporate defendant is “deemed to be a citizen of every State and foreign state by

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which it has been incorporated and of the State or foreign state where it has its principal place of

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business.” 28 U.S.C. § 1332(c). The “principal place of business” is “the place where a

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corporation's officers direct, control, and coordinate the corporation's activities. . . . And in

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practice it should normally be the place where the corporation maintains its headquarters.” Hertz

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Corp. v. Friend, 559 U.S. 77, 92–93 (2010). Moreover, “[t]he diversity jurisdiction statute, as

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construed for nearly 200 years, requires that to bring a diversity case in federal court . . . each

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plaintiff must be diverse from each defendant.”  Lee v. American Nat’l Ins. Co., 260 F.3d 997,

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1004 (9th Cir. 2001).  Failure to meet the requirements of the diversity statute for each defendant

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destroys “‘complete diversity,’ rendering the entire case beyond the federal court’s power to

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decide.”  Id. at 1005. 

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Here, if any of the defendants actually “are residents of, [or] are domiciled within”

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Washington, it would ruin complete diversity of the parties. As stated above, a corporate

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defendant is “at home” in two places: its place of incorporation and its principal place of

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business. Plaintiff has pleaded that Defendants are each incorporated outside of Washington, but

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the complaint does not state Defendants’ principal places of business. If any defendant is in fact

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domiciled in Washington, i.e. its principal place of business is within this state, complete

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diversity would be destroyed and the Court would not have jurisdiction over this matter.

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Therefore, Plaintiff is ordered to show cause no later than October 4, 2024 why this case

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should not be dismissed for lack of subject matter jurisdiction. Plaintiff may do so by amending

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ORDER TO SHOW CAUSE - 2

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its complaint to state that no defendant is domiciled in Washington, and providing information

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(to the extent possible) as to the principal place of business for each defendant.

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The Clerk is directed to calendar the date for Plaintiff’s response to this Order.

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DATED this 25th day of September 2024.

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a

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David G. Estudillo
United States District Judge

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ORDER TO SHOW CAUSE - 3