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Plush Lounge Las Vegas, LLC v. Admin Lalji

December 7, 2010

PLUSH LOUNGE LAS VEGAS, LLC, PLAINTIFF,
v.
ADMIN LALJI, STEPHEN J. ROUGHLEY, THADDAS L. ALSTON,
LARCO INVESTMENTS LTD., MAPLE LEAF PROPERTY MANAGEMENT INC., HOTSPUR GLOBAL LTD., HOTSPUR RESORTS NEVADA, INC., DEFENDANTS.



The opinion of the court was delivered by: George H. WU United States District Judge

REMAND/MADE JS-6

I. Introduction

DECISION AND ORDER re APPLICATION FOR REMAND

On November 4, 2008, plaintiff Plush Lounge Las Vegas, LLC ("Plaintiff" or "Plush Lounge") filed this action against defendants Amin Lalji, Stephen J. Roughley, Thaddas L. Alston, Larco Investments Ltd., Maple Leaf Property Management Inc., Hotspur Global Ltd., and Hotspur Resorts Nevada, Inc. ("Hotspur Resorts") (collectively "Defendants") for fraud, negligent misrepresentation, intentional interference with contract, conversion and unfair competition. On December 19, 2008, Defendants removed this matter to federal court on the basis of diversity of the parties.

A number of motions have been filed. Plaintiff has applied to have the case remanded back to state court because there is a lack of complete diversity. See Docket Item Number ("Doc. No.") 23. Defendants have filed: 1) a motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6) and a motion to strike under FRCP 12(f) (see Doc. No. 9); 2) a motion to transfer this action to the District of Nevada pursuant to 28 U.S.C. § 1404(a) (see Doc. No. 26); and 3) except for Hotspur Resorts, a motion to dismiss for lack of personal jurisdiction pursuant to FRCP 12(b)(2) (see Doc. No. 10).

As this Court finds that there is not complete diversity herein, it will remand the matter back to state court. Consequently, it need not address Defendants' motions.

II. Legal Standard

A suit filed in state court may be removed to federal court by the defendant or defendants if the federal court would have had original subject matter jurisdiction over that suit. 28 U.S.C. § 1441(a); Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977). A motion to remand is the proper procedure for challenging removal. See 28 U.S.C. § 1447(c). Courts construe the removal statute strictly against removal, and any doubts must be resolved in favor of remand. Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988). The defendant always bears the burden of establishing that removal is proper. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). "Federal juris-diction must be rejected if there is any doubt as to the right of removal in the first instance." Id.

III. Discussion

A. Background

The Complaint herein avers that Plush Lounge "is a limited liability company, duly organized and validly existing under the laws of the state of California." See ¶ 3 of Complaint attached as Exhibit A to Notice of Removal, Doc. No. 1. Defendant Roughley is alleged to be "an individual residing in Nevada and doing business in Angeles County [sic], California" (Id. at ¶ 5), and Hotspur Resorts "is a purported corporation allegedly organized and existing under the laws of Nevada . . . ." See Id. at ¶ 10.

In support of its application for remand, Plush Lounge submitted the Declaration of John C. Kirkland (the general outside counsel for Plush Lounge) who states (and provides documentary evidence from the State of Nevada Secretary of State) that "since October 2008, the managing member of Plush [Lounge] has been PLLV Holdings, LLC, a Nevada limited liability company." See ¶ 2 of Doc. No. 24-2. Plaintiff has also included the Declaration of Roland Katavic who states he is a citizen of Nevada and has been a member of PLLV Holdings, LLC, since October 2008. See Doc. No. 25, at ¶ 3. Plaintiff argues that since there are Nevada citizens on both sides of this litigation, there is no diversity jurisdiction.

A little litigation history is appropriate here. Prior to this action, Plush Lounge had brought a lawsuit against Hotspur Resorts. See Plush Lounge Las Vegas, LLC, v. Hotspur Resorts Nevada, Inc., Case No. CV-06-2626 (C.D. Cal.). In that case, Hotspur Resorts took the position that Plush Lounge had to be treated as a Nevada citizen because it was (at that time) a limited liability company with one or more members who were citizens of Nevada. See e.g. Hotspur Resorts' Notice of Motion and Motion to ...


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