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Danzik v. CWT Canada II Limited Partnership

United States District Court, D. Arizona

June 20, 2017

Dennis M Danzik and RDX Technologies Corporation, Plaintiffs,
v.
CWT Canada II Limited Partnership, Resource Recovery Corporation, Changing World Technologies Incorporated, Jean Noelting, Unknown Noelting, Bruce MacFarlane, Unknown MacFarlane, Brian Appel, and Unknown Appel, Defendants.

          ORDER

          James A. Teilborg Senior United States District Judge

         On June 9, 2017, the Court issued the following Order:

“Inquiring whether the court has jurisdiction is a federal judge's first duty in every case.” Belleville Catering Co. v. Champaign Market Place, L.L.C., 350 F.3d 691, 693 (7th Cir. 2003).
In this case, the complaint alleges jurisdiction based on diversity. See 28 U.S.C. § 1332. However, the complaint does not allege sufficient facts for the Court to determine whether there is jurisdiction. See Valdez v. Allstate Insurance Co., 372 F.3d 1115, 1116-1118 (9th Cir. 2004) (remanding to the district court to conduct proceedings and consider evidence as necessary to determine subject matter jurisdiction).
First, the complaint fails to allege the principal place of business of Plaintiff corporation RDX Technologies. [footnote omitted] Hertz Corp. v. Friend, 559 U.S. 77, 80, 92-93 (2010) (discussing the citizenship of a corporation). Second, the complaint fails to allege the names and citizenship of each partner of Defendant CWT Canada II Limited Partnership. Carden v. Arkoma Associates, 494 U.S. 185, 195-96 (1990) (discussing the citizenship of limited partnerships). [footnote omitted] Third, the complaint fails to allege the citizenship of all partners in Defendant Changing World Technologies, LP. [footnote omitted] Fourth, no allegation of citizenship of any kind is made for the following individual Defendants: 1) Jean Noelting; 2) Jane Doe Noelting; 3) Bruce MacFarlane; 4) Jane Doe MacFarlane; 5) Brian Appel; and 6) Jane Doe Appel. See generally Kanter, 265 F.3d 857-58. Fifth, the complaint makes no showing that the amount in controversy exceeds the jurisdictional minimum. See generally Valdez, 372 F.3d at 1116-1118. Sixth, diversity jurisdiction will not exist if both the Plaintiff and the Defendant are foreign, which appears to be true in this case. See Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 990 (9th Cir. 1994).

(Doc. 18).

         On June 15, 2017, the Court issued the following Order:

On June 9, 2017, the Court ordered Plaintiffs to supplement the complaint by June 16, 2017, to cure six defects in jurisdiction identified by the Court. Today, Plaintiffs filed a supplement addressing 5 of the 6 identified defects. IT IS ORDERED that by the original deadline, Plaintiffs must file a further supplement addressing the sixth defect or this case will be dismissed, without prejudice. (See Doc. 18 at 2 (“Sixth, diversity jurisdiction will not exist if both the Plaintiff and the Defendant are foreign, which appears to be true in this case. See Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 990 (9th Cir. 1994).)”).

(Doc. 24).

         Following the second order, Plaintiffs filed a second supplement. Two jurisdictional issues remain.

         First, with respect to one Defendant, CWT Canada II Limited Partnership, Plaintiffs have pleaded a citizenship for the general partner, then state “Upon information and belief, [the general partner] is the only partner in CWT Canada II Limited Partnership.” (Doc. 23 at 2). Initially, the Court finds it curious that a “partnership” would be created with only one “partner.” Additionally, the Court notes that this is the only party whose citizenship has been pleaded “on information and belief” rather than actual knowledge.

         The Court finds this allegation is insufficient to establish diversity jurisdiction. However, the Court notes that it must permit jurisdictional allegations on information and belief until the Defendant has been served. See Carolina Cas. Ins. Co. v. Team Equipment, Inc., 741 F.3d 1082, 1087 (9th Cir. 2014). Thus, the Court will require a further supplement regarding jurisdiction after the Defendant has been served.

         The second remaining jurisdictional issue stems from the Ninth Circuit Court of Appeals holding in Nike. 20 F.3d at 990-91. Specifically, the Court held that if there are foreign plaintiffs and foreign defendants, there can be no diversity jurisdiction. Id. (citing Cheng v. Boeing Co, 708 F.3d 1406, 1412 (9th Cir.) cert. denied, 464 U.S. 1017 (1983)). Further, the Court of Appeals held that a United States citizen plaintiff or defendant (added to the foreign plaintiffs and foreign defendants) would not be sufficient for diversity jurisdiction. Id. (citing Faysound Ltd. v. United Coconut Chem., Inc. 878 F.2d 290, 294 (9th Cir. 1989)). However, the Court then held that even though a foreign plaintiff and a foreign defendant would not be completely diverse, so long as a United State citizen plaintiff and United State citizen defendant (who were diverse from each other) were added to the case, it would cure the lack of complete diversity between the foreign plaintiffs and defendants such that the federal court would have diversity jurisdiction. Id. (citing Transure, Inc. v. Marsh & McLennan, Inc., 766 F.2d 1297, 1298-99 (9th Cir. 1985).

         Against this backdrop, this Court must consider whether, when the Court has diverse United States plaintiffs and defendants, but also foreign plaintiffs and foreign defendants, does the Court disregard the foreign plaintiff's and foreign defendant's actual citizenship? In other words, in Transure, the foreign plaintiff was a citizen of Great Britain and the foreign defendant ...


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