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New Enterprises Limited v. SenesTech Inc.

United States District Court, D. Arizona

June 22, 2018

New Enterprises Limited, Plaintiff,
v.
SenesTech Incorporated and Roth Capital Partners LLC, Defendants.

          ORDER

          James A. Teilborg Senior United States District Judge

         On June 7, 2018, the Court issued the following Order:

This case was transferred to the undersigned approximately two months after it was filed. At that time, the Court noted that the civil cover sheet stated that this Court's jurisdiction is based on a federal question. (Doc. 1-1). However, upon closer review of the complaint, the Court discovered that jurisdiction is claimed to exist based solely on diversity, 28 U.S.C. § 1332. (Doc. 1 at 3). “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).
Here, the complaint fails to plead diversity jurisdiction. First, Plaintiff, which is a Trust (see Doc. 1 at 2) fails to properly plead the citizenship of a trust. Compare Navarro Savings Assoc. v. Lee, 446 U.S. 458, 465-66 (1980) with Americold Realty Trust v. Conagra Foods, Inc., 136 S.Ct. 1012, 1016-17 (2016). Thus, Plaintiff must clarify whether it is the type of trust discussed in Navarro versus Americold and then properly allege citizenship accordingly. Second, Plaintiff fails to properly allege the citizenship of Roth Capital Partners, LLC. See Johnson v. Columbia Properties Anchorage, L.P., 437 F.3d 894, 899 (9 th Cir. 2006) (holding that a limited liability company takes on the citizenship of each of its members).
Accordingly, Plaintiff has failed to establish that federal subject matter jurisdiction exists in this court. Therefore,
IT IS ORDERED that Plaintiff must show cause why this case should not be dismissed for lack of federal subject matter jurisdiction. To satisfy this show cause, Plaintiff must file a supplement to the complaint by June 15, 2018 establishing federal subject matter jurisdiction, or this case will be dismissed without prejudice.
IT IS FURTHER ORDERED that Michael DiGiacomo must amend the civil cover sheet to be consistent with the complaint.

(Doc. 45).

         On June 15, 2018, Plaintiff responded and “clarified” certain allegations. First, Plaintiff clarified that it is in fact not a trust, but instead a corporation. (Doc. 46 at 2). Plaintiff claims its citizenship is the British Virgin Islands and Singapore. (Id.). Plaintiff further claims it is diverse from Defendant SenesTech because SenesTech is a citizen of Delaware and Arizona. (Id.).

         With respect to Defendant Roth, Plaintiff admits that it does not actually know whether there is diversity between the parties. Instead, Plaintiff pleads on information and belief that Roth is a citizen of only California. (Doc. 46 at 2-3).

         In this case, Plaintiff argues that under Carolina Cas. Ins. Co. v. Team Equip. Inc., 741 F.3d 1082, 1087 (9th Cir. 2014), Plaintiff may allege jurisdiction without actually knowing the jurisdictional facts. Plaintiff is correct as to the holding of the case. However, that case does not change the fact that this Court must assess whether it has jurisdiction before it presides over this case.

         Plaintiff goes on to state that it is waiting for Defendant Roth to answer to determine whether Roth admits the jurisdictional allegation.[1] While Carolina suggests this approach, Carolina does not seem to anticipate a circumstance where motions to dismiss are filed before the answer, as occurred in this case. It would be pointless for this Court to rule on motions to dismiss for failure to state a claim in a case over which it does not have jurisdiction. Thus, the Court will resolve this jurisdictional inquiry before it turns to the motions.

         Specifically, for this Court to have jurisdiction, this Court must confirm that no member of Roth is foreign.

Complete diversity does not exist under § 1332(a)(2) where the case is between “a single foreign plaintiff ... and numerous foreign defendants (in addition to U.S. defendants) [.]” Craig v. Atl. Richfield Co.,19 F.3d 472, 476 (9th Cir.1994); see Cheng v. Boeing Co.,708 F.2d 1406, 1412 (9th Cir.1983) (‚ÄúDiversity jurisdiction does not encompass foreign plaintiffs suing foreign ...

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