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Designee LLC v. Honda Aircraft Company LLC

United States District Court, D. Arizona

October 16, 2017

Designee LLC, Plaintiff,
v.
Honda Aircraft Company LLC, et al., Defendants.

          ORDER

          James A. Teilborg Senior United States District Judge.

         Pending before the Court is Defendants' Joint Motion to Dismiss, (Doc. 10), and Plaintiff's Motion to Remand. (Doc. 18.) Both parties have responded, (Docs. 18 & 19), and replied, (Docs. 19 & 22).[1]

         I. Procedural Background

         On July 20, 2017, Designee, LLC (“Plaintiff”) filed this contract action in Maricopa County Superior Court, alleging conspiracy, unfair trade practices, unconscionability as to liquidated damages, and failure of fundamental assumptions. (Doc. 1-2.) Honda Aircraft Company, LLC (“Defendant Honda”) and Cutter Aviation Southwest, L.L.C. (“Defendant Cutter”) (collectively “Defendants”) removed this action to federal court, citing federal question jurisdiction, on August 18, 2017. (Doc. 1.) On August 23, 2017, Defendants moved to dismiss. (Doc. 10.)

         On the same day, this Court ordered briefing on the issue of subject-matter jurisdiction. (Doc. 11.) On September 6, 2017, Plaintiff submitted its Response to Motion to Dismiss. (Doc. 18.) On September 13, 2017, Defendants submitted their Joint Reply in Support of Defendants' Motion to Dismiss. (Doc. 19.) On September 28, 2017, the Court retroactively deemed Plaintiff's Response to Motion to Dismiss to also be a motion to remand and deemed Defendants' Reply in Support of the Motion to Dismiss to be a response to the motion to remand. (Doc. 21.) Furthermore, the Court ordered Plaintiff to file a reply in support of its motion to remand, (id.), which Plaintiff submitted on September 20, 2017, (Doc. 22.)

         II. Removal Standard

         A defendant may, subject to certain restrictions, remove any civil action from a state court to a federal district court that has original subject-matter jurisdiction. 28 U.S.C. § 1441(a) (2012). If the court is without subject-matter jurisdiction, the case must be remanded to state court. § 1447(c); cf. § 1447(d) (“An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise”). Given the plaintiff's initial choice of forum and limited federal court jurisdiction, the removing party must overcome the presumption that the federal court is without jurisdiction. See Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). All ambiguity is interpreted “in favor of remand” to state court. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009); accord Hunter, 582 F.3d at 1042 (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam)). Where a court is satisfied as to its own jurisdiction, however, it has a “‘virtually unflagging obligation' to exercise the jurisdiction conferred upon [it] by the coordinate branches of government and duly invoked by litigants.” Williams v. Costco Wholesale Corp., 471 F.3d 975, 977 (9th Cir. 2006) (per curiam) (alteration in original) (quoting United States v. Rubenstein, 971 F.2d 288, 293 (9th Cir. 1992) (internal citation omitted)).

         Article III of the United States Constitution sets the outer bounds of federal court subject-matter jurisdiction, U.S. Const. art. III, §§ 1-2, within which Congress provides specific grants of jurisdiction, Hertz Corp. v. Friend, 559 U.S. 77, 84 (2010). Diversity jurisdiction, 28 U.S.C. § 1332 (2012), and federal question jurisdiction, § 1331, bear on this case.

         III. Discussion

         A. Diversity Jurisdiction

         This Court has subject-matter jurisdiction where the parties are of diverse citizenship and where the alleged amount-in-controversy is over $75, 000. § 1332; cf. U.S. Const. art. III, § 2. Section 1332 requires complete diversity, meaning that all plaintiffs must be of diverse citizenship from all defendants. § 1332. An individual is a citizen where domiciled. Lew v. Moss, 797 F.2d 747, 749 (9th Cir. 1986). A corporation is a citizen where it is incorporated and where it has its principal place of business. § 1332(c)(1). A corporation's principal place of business is its “nerve center, ” where it directs corporate activities. Hertz, 559 U.S. at 93-95. A limited liability company (“LLC”) is a citizen where its members and owners are citizens. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006).

         The parties are not completely diverse. All parties are LLCs. Plaintiff's sole member is an individual domiciled in California. (Doc. 28.) Defendant Honda's sole member is a corporation incorporated, with its principal place of business, in California. (Id.) Defendant Cutter's sole member is a corporation incorporated, with its principal place of business, in Arizona. (Id.) Therefore, there is no diversity jurisdiction.

         Furthermore, this action would not be removable on diversity grounds, even if there were diversity, because the action was brought in Arizona, where Defendant Cutter is a citizen. See § 1441(b)(2) (barring removal on the basis of diversity jurisdiction where any defendant is a citizen of the state where the action was initiated).

         B. Federal ...


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