BAMKO, LLC v. Paul Emmer

[7] UNITED STATES DISTRICT COURT [8] CENTRAL DISTRICT OF CALIFORNIA [10] BAMKO, LLC, ) Case No. CV 20-5028 FMO (AGRx) 11 ) Plaintiff, ) 12 ) v. ) ORDER REMANDING ACTION 13 ) PAUL EMMER, et al., ) 14 ) Defendants. ) 15 ) ) [16] 17 On April 17, 2020, plaintiff filed a Complaint in the Los Angeles County Superior Court 18 against Paul Emmer and Beau Emmer (collectively, “defendants”). (See Dkt. 1, Notice of Removal 19 (“NOR”) at ¶ 1). On June 5, 2020, defendants removed the action on diversity jurisdiction grounds 20 pursuant to 28 U.S.C. § 1332 . (See id. at ¶ 7 ). 21 “Federal courts are courts of limited jurisdiction. They possess only that power authorized 22 by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 , 114 23 S.Ct. 1673 , 1675 (1994). The courts are presumed to lack jurisdiction unless the contrary appears 24 affirmatively from the record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 , 342 n. 3, 126 25 S.Ct. 1854 , 1861 (2006). Federal courts have a duty to examine jurisdiction sua sponte before 26 proceeding to the merits of a case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 , 119 27 S.Ct. 1563 , 1569 (1999), “even in the absence of a challenge from any party.” Arbaugh v. Y&H 28 Corp., 546 U.S. 500, 514 , 126 S.Ct. 1235, 1244 (2006). 1 “The right of removal is entirely a creature of statute and a suit commenced in a state court 2 must remain there until cause is shown for its transfer under some act of Congress.” Syngenta 3 Crop Protection, Inc. v. Henson, 537 U.S. 28, 32 , 123 S.Ct. 366, 369 (2002) (internal quotation 4 marks omitted). Where Congress has acted to create a right of removal, those statutes, unless 5 otherwise stated, are strictly construed against removal jurisdiction.1 See id. Unless otherwise 6 expressly provided by Congress, “any civil action brought in a State court of which the district 7 courts of the United States have original jurisdiction, may be removed by the defendant or the 8 defendants, to the district court[.]” 28 U.S.C. § 1441 (a); see Dennis v. Hart, 724 F.3d 1249 , 1252 9 (9th Cir. 2013) (same). A removing defendant bears the burden of establishing that removal is 10 proper. See Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per 11 curiam) (noting the “longstanding, near-canonical rule that the burden on removal rests with the 12 removing defendant”); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (“The strong 13 presumption against removal jurisdiction means that the defendant always has the burden of 14 establishing that removal is proper.”) (internal quotation marks omitted). Moreover, if there is any 15 doubt regarding the existence of subject matter jurisdiction, the court must resolve those doubts 16 in favor of remanding the action to state court. See Gaus, 980 F.2d at 566 (“Federal jurisdiction 17 must be rejected if there is any doubt as to the right of removal in the first instance.”). 18 “Under the plain terms of § 1441(a), in order properly to remove [an] action pursuant to that 19 provision, [the removing defendant] must demonstrate that original subject-matter jurisdiction lies 20 in the federal courts.” Syngenta Crop Protection, 537 U.S. at 33 , 123 S.Ct. at 370 . Failure to do 21 so requires that the case be remanded, as “[s]ubject matter jurisdiction may not be waived, and 22 . . . the district court must remand if it lacks jurisdiction.” Kelton Arms Condo. Owners Ass’n, Inc. 23 v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003). Indeed, “[i]f at any time before final 24 judgment it appears that the district court lacks subject matter jurisdiction, the case shall be 25 remanded.” 28 U.S.C. § 1447 (c); see Emrich v. Touche Ross & Co., 846 F.2d 1190 , 1194 n. 2 [26] 27 1 For example, an “antiremoval presumption” does not exist in cases removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332 (d). See Dart Cherokee Basin Operating [28] 1 (9th Cir. 1988) (“It is elementary that the subject matter jurisdiction of the district court is not a 2 waivable matter and may be raised at anytime by one of the parties, by motion or in the 3 responsive pleadings, or sua sponte by the trial or reviewing court.”); Washington v. United Parcel 4 Serv., Inc., 2009 WL 1519894 , *1 (C.D. Cal. 2009) (a district court may remand an action where 5 the court finds that it lacks subject matter jurisdiction either by motion or sua sponte). 6 The court’s review of the NOR and the state court complaint makes clear that this court 7 does not have subject matter jurisdiction over the instant matter. See 28 U.S.C. § 1441 (a); 8 Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 , 107 S.Ct. 2425, 2429 (1987) (“Only state-court 9 actions that originally could have been filed in federal court may be removed to federal court by 10 the defendant.”) (footnote omitted). In other words, plaintiff could not have originally brought this 11 action in federal court, as plaintiff does not competently allege facts supplying diversity 12 jurisdiction.2 See 28 U.S.C. § 1332 (a).3 13 When federal subject matter jurisdiction is predicated on diversity of citizenship pursuant 14 to 28 U.S.C. 1332(a), complete diversity must exist between the opposing parties. See Caterpillar 15 Inc. v. Lewis, 519 U.S. 61, 68 , 117 S.Ct. 467, 472 (1996) (stating that the diversity jurisdiction 16 statute “applies only to cases in which the citizenship of each plaintiff is diverse from the 17 citizenship of each defendant”). Defendants contend that complete diversity exists because 18 “plaintiff is a Delaware limited liability company[,]” (see Dkt. 1, NOR at ¶ 8), and defendants are 19 citizens of Georgia. (Id.). However, defendants improperly rely on the standard applicable to 20 corporations despite the fact that plaintiff is a limited liability company. (See id.) (stating that 21 “plaintiff is a Delaware limited liability company”). 22 Limited liability companies (“LLCs”) are treated like partnerships rather than corporations 23 for the purpose of determining citizenship, and are deemed “a citizen of every state of which its 24 owners/members are citizens.” Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 , 899 [25] 26 2 Defendants seek only to invoke the court’s diversity jurisdiction. (See Dkt. 1, NOR at ¶ 7). 27 3 In relevant part, 28 U.S.C. § 1332 (a) provides that “district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of [28] 1 (9th Cir. 2006); see Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 569 , 124 S.Ct. 1920 , 2 1923 (2004) (“[A] partnership . . . is a citizen of each State or foreign country of which any of its 3 partners is a citizen.”). “There is no such thing as ‘a [state name] limited partnership’ for purposes 4 of . . . diversity jurisdiction. There are only partners, each of which has one or more citizenships.” 5 Hart v. Terminex Int’l, 336 F.3d 541, 544 (7th Cir. 2003) (internal quotation marks omitted). 6 Moreover, “[a]n LLC’s principal place of business [or] state of organization is irrelevant” for 7 purposes of diversity jurisdiction. See Buschman v. Anesthesia Business Consultants LLC, 42 [8] F.Supp.3d 1244, 1248 (N.D. Cal. 2014); Tele Munchen Fernseh GMBH & Co 9 Produktionsgesellschaft v. Alliance Atlantis Int’l Distribution, LLC, 2013 WL 6055328 , *4 (C.D. Cal. 10 2013) (“As a limited liability company, [defendant]’s principal place of business is irrelevant for 11 purposes of diversity jurisdiction.”). If a member of an LLC is a corporation, then the state of that 12 member’s incorporation and its principal place of business must be shown. 13 Defendants have failed to set forth plaintiff’s proper citizenship. (See, generally, Dkt. 1, 14 NOR). In short, they have failed to show that complete diversity of the parties exists. Given that 15 any doubt regarding the existence of subject matter jurisdiction must be resolved in favor of 16 remanding the action to state court, see Gaus, 980 F.2d at 566 , the court is not persuaded, under 17 the circumstances here, that defendants have met their burden. Therefore, there is no basis for 18 diversity jurisdiction. 19 This order is not intended for publication. Nor is it intended to be included in or 20 submitted to any online service such as Westlaw or Lexis. 21 Based on the foregoing, IT IS ORDERED that: 22 1. The above-captioned action shall be remanded to the Superior Court of the State of 23 California for the County of Los Angeles, 111 North Hill Street, Los Angeles, CA 90012 for lack 24 of subject matter jurisdiction pursuant to 28 U.S.C. § 1447 (c). 25 2. The Clerk shall send a certified copy of this Order to the state court. 26 Dated this 29th day of June, 2020. /s/ Fernando M. Olguin 27 United States District Judge