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K. Durant Enterprises, LLC v. Swanson Travel Professionals, Inc.

United States District Court, C.D. California

February 10, 2014

K. Durant Enterprises, LLC
v.
Swanson Travel Professionals, Inc., et al.

CIVIL MINUTES - GENERAL

MARGARET M. MORROW, Judge.

Proceedings: Order to Show Cause Why Case Should Not Be Dismissed for Lack of Subject Matter Jurisdiction

I. BACKGROUND

On September 30, 2013, K. Durant Enterprises, LLC ("KDE") filed this action against Swanson Travel Professionals, Inc. ("Swanson Travel") and Lynn S. Swanson ("Swanson"), alleging claims for breach of fiduciary duty, unfair competition, breach of implied contract, an accounting, and unjust enrichment.[1] KDE asserts that defendants were its travel agents from May 2007 to October 2012, during which time they charged substantially inflated prices above travel costs, charged KDE for bookings for which they had already been paid and bookings defendants never purchased, and kept the frequent flier miles that accrued from KDE's travel for their personal use.[2] KDE invokes the court's diversity jurisdiction under 28 U.S.C. § 1332(a).[3]

II. DISCUSSION

A. Standard Governing a Plaintiff's Pleading of Jurisdiction

As the party invoking federal jurisdiction, KDE bears the burden of establishing the existence of subject matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); In re Ford Motor Co., 264 F.3d 952, 957 (9th Cir. 2001); Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996). At the pleading stage, this burden is satisfied by alleging facts that show a proper basis for jurisdiction. FED.R.CIV.PROC. 8(a)(1) (a complaint "shall contain a short and plain statement of the grounds upon which the court's jurisdiction depends"); see McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936) ("The prerequisites to the exercise of jurisdiction are specifically defined and the plain import of the statute is that the District Court is vested with authority to inquire at any time whether these conditions have been met. They are conditions which must be met by the party who seeks the exercise of jurisdiction in his favor. He must allege in his pleading the facts essential to show jurisdiction").

The complaint must show "affirmatively and distinctly the existence of whatever is essential to federal jurisdiction, and if [it] does not do so, the court, on having the defect called to its attention or on discovering the same, must dismiss the case, unless the defect be corrected by amendment." Tosco Corp. v. Communities For A Better Environment, 236 F.3d 495, 499 (9th Cir. 2001). Since subject matter jurisdiction must be affirmatively alleged, courts will not infer allegations supporting the exercise of jurisdiction. See Watson v. Chessman, 362 F.Supp.2d 1190, 1194 (S.D. Cal. 2005); see also Tosco Corp., 236 F.3d at 499; Century Sw. Cable Television, Inc. v. CIIF Assocs., 33 F.3d 1068, 1071 (9th Cir. 1994).

B. Requirements for Diversity Jurisdiction

"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between... citizens of different states." 28 U.S.C. § 1332(a); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) ("[J]urisdiction founded on [diversity] requires that the parties be in complete diversity and the amount in controversy exceed $75, 000"). In any case where subject matter jurisdiction is premised on diversity, there must be complete diversity, i.e., all plaintiffs must have citizenship different than all defendants. See Strawbridge v. Curtis, 7 U.S. (3 Cranch) 267 (1806); see also Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 n. 3 (1996).

1. Amount in Controversy

KDE alleges that the amount in controversy "exceeds the sum or value of $75, 000, exclusive of interest and costs."[4] Its prayer for relief seeks compensatory damages of no less than $500, 000.[5] These allegations are sufficient to satisfy § 1332(a)'s amount in controversy requirement. See Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1106 (9th Cir. 2010) ("Where the plaintiff originally files in federal court, the amount in controversy is determined from the face of the pleadings. The amount in controversy alleged by the proponent of federal jurisdiction - typically the plaintiff in the substantive dispute - controls so long as the claim is made in good faith" (citations and internal quotation marks omitted)); Schwarzer, Tashima & Wagstaffe, CAL. PRAC. GUIDE: FEDERAL CIVIL PROCEDURE BEFORE TRIAL § 2:1783 (The Rutter Group) ("Plaintiffs need not itemize or show how they arrived at the amounts of damages claimed. A general conclusory allegation that the damages exceed the minimum jurisdictional limit is usually sufficient").

2. Complete Diversity of ...


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