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Thaae Resources Co. Limited v. A.G. Cooper LLC

United States District Court, D. Arizona

July 9, 2019

Thaae Resources Company Limited, Plaintiff,
A.G. Cooper LLC, et al., Defendants.



         The Court has an independent obligation to determine whether it has subject-matter jurisdiction. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). Pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure, “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”

         Diversity jurisdiction exists when there is complete diversity of citizenship between the plaintiff and the defendants and the amount in controversy exceeds $75, 000, exclusive of interests and costs. 28 U.S.C. § 1332. A controversy meets this requirement when “all the persons on one side of it are citizens of different states from all the persons on the other side.” Strawbridge v. Curtiss, 7 U.S. 267 (1806).

         The party seeking to invoke diversity jurisdiction has the burden of proof, Lew v. Moss, 797 F.2d 747, 749-50 (9th Cir. 1986), by a preponderance of the evidence. McNatt v. Allied-Signal, Inc., 972 F.2d 1340 (9th Cir. 1992); see 13B Federal Practice § 3611 at 521 & n. 34. “Absent unusual circumstances, a party seeking to invoke diversity jurisdiction should be able to allege affirmatively the actual citizenship of the relevant parties.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001).

         “[A]n LLC is a citizen of every state of which its owners/members are citizens.” Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Thus, to properly establish diversity jurisdiction “with respect to a limited liability company, the citizenship of all of the members must be pled.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 611 (9th Cir. 2016).

         A corporation, whether incorporated in a state of the United States or in a foreign country, is “deemed a citizen of its place of incorporation and the location of its principal place of business.” Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 990 (9th Cir. 1994). “[D]iversity jurisdiction does not encompass a foreign plaintiff suing foreign defendants.” Id. at 991. “Where an alien is made co-defendant with a citizen-defendant by an alien plaintiff, . . . there is no jurisdiction over the alien, ” and “[i]f the alien defendant is indispensable, . . . there is no jurisdiction at all.” Faysound Ltd. v. United Coconut Chemicals, Inc., 878 F.2d 290, 294 (9th Cir. 1989).

         As to individual natural persons, an allegation about an individual's residence does not establish his or her citizenship for purposes of establishing diversity jurisdiction. “It has long been settled that residence and citizenship [are] wholly different things within the meaning of the Constitution and the laws defining and regulating the jurisdiction of the . . . courts of the United States; and that a mere averment of residence in a particular state is not an averment of citizenship in that state for the purpose of jurisdiction.” Steigleder v. McQuesten, 198 U.S. 141, 143 (1905). “To be a citizen of a state, a natural person must first be a citizen of the United States. The natural person's state citizenship is then determined by her state of domicile, not her state of residence. A person's domicile is her permanent home, where she resides with the intention to remain or to which she intends to return.” Kanter, 265 F.3d at 858-59 (emphasis added) (citations omitted). See also Id. (“In this case, neither Plaintiffs' complaint nor [Defendants'] notice of removal made any allegation regarding Plaintiffs' state citizenship. Since the party asserting diversity jurisdiction bears the burden of proof, [Defendants'] failure to specify Plaintiffs' state citizenship was fatal to Defendants' assertion of diversity jurisdiction.”).

         Plaintiff Thaae Resources Company Limited brings this action asserting diversity as the sole basis of the Court's subject matter jurisdiction. (Doc. 1 ¶ 10.) Plaintiff failed to allege sufficient facts for the Court to determine the citizenship of each party. The deficient allegations are as follows:

(1) Plaintiff alleges that it is incorporated in Bangkok, Thailand (id. ¶ 1), but there is no allegation regarding its principal place of business, which must be alleged. Cf. Nike, 20 F.3d at 990 (“NIL, however, is a corporation and we cannot disregard either its site of incorporation, Bermuda, or its principal place of business, which Nike alleges is Oregon, when testing for complete diversity.”).
(2) The citizenship of each member of Defendant A.G. Cooper, LLC must be pled and has not been pled. NewGen, 840 F.3d at 611.
(3) Defendant A.G. Cooper & Associates is alleged to be “a Texas entity” (Doc. 1 ¶ 3), but there is no allegation as to the type of entity it is and no facts from which the Court can draw legal conclusions regarding this entity's citizenship.
(4) The principal places of business for Defendants Mesa Capital, Inc. and Sphinx Construction, LTD (“Sphinx”) must be pled and have not been pled. Nike, 20 F.3d at 990.

         Moreover, Plaintiff's place of incorporation (Thailand) establishes that Plaintiff is an alien. Id. at 990-91. Defendant Sphinx is alleged to be a Canadian corporation (Doc. 1 ¶ 8), which means it is also an alien. Diversity jurisdiction does not extend to an alien suing an alien, and the presence of non-alien Defendants would not “salvage jurisdiction because diversity must be complete.” Nike, 20 F.3d at 991; cf. Transure, Inc. v. Marsh & McLennan, Inc., 766 F.2d 1297, 1298-99 (9th Cir. 1985) (pursuant to 28 U.S.C. § 1332(a)(3), the presence of aliens on both sides does not defeat diversity when there are citizens of the United States on both sides who satisfy diversity requirements). Thus, the Court lacks subject matter jurisdiction over Sphinx, and if Sphinx is an indispensable party, the Court lacks subject matter over this action in its entirety. Faysound, 878 F.2d at 294.

         Therefore, the Court will dismiss the complaint for lack of subject matter jurisdiction with leave to file-by July 23, 2019-an amended complaint that (1) properly alleges facts from which the Court can determine the ...

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