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Trelevate LLC v. Dumont Aviation Group Inc.

United States District Court, D. Arizona

September 17, 2019

Trelevate LLC, Plaintiff,
v.
Dumont Aviation Group Incorporated, Defendant.

          ORDER

          DOMINIC W. LANZA UNITED STATES DISTRICT JUDGE.

         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 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).

         “[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).

         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.”).

         Defendants state in their notice of removal that “Defendant Dumont Aviation Group, Inc., is a corporation incorporated in the State of Delaware, with a registered office in New Castle County, Delaware.” (Doc. 1 ¶ 6.) However, Defendants did not affirmatively allege the location of its principal place of business, which is mandatory to establish citizenship for the purposes of establishing diversity.

         Furthermore, Defendants allege that “[u]pon information and belief, Plaintiff Trelevate, LLC, has three members: Ryan Knauss, Kylee Knauss, and Paul Briski, all of whom reside in the State of Arizona.” (Id. ¶ 8.) But Defendants must affirmatively allege the citizenship of the members of the LLC, not merely their state of residence. Defendants may allege the LLC members' citizenship on information and belief if the information is not reasonably ascertainable. Carolina Cas. Ins. Co. v. Team Equipment, Inc., 741 F.3d 1082, 1087 (9th Cir. 2014).

         To cure these pleading deficiencies, the Court will require the removing Defendant to file an amended notice of removal. Star Ins. Co. v. West, 2010 WL 3715155, *2 (D. Ariz. 2010); see also NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 612 (9th Cir. 2016) (“Courts may permit parties to amend defective allegations of jurisdiction at any stage in the proceedings.”). Defendant is advised that its failure to timely comply with this order shall result in the remand of this action without further notice for lack of subject matter jurisdiction.

         Accordingly, IT IS ORDERED that removing Defendant shall file an amended notice of removal properly stating a jurisdictional basis for this action no later than September 30, 2019.

         IT IS FURTHER ORDERED that if Defendant fails to file an amended notice of removal by September 30, 2019, the Clerk of Court ...


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