United States District Court, C.D. California
CIVIL MINUTES - GENERAL
FERNANDO M. OLGUIN, District Judge.
Proceedings: (In Chambers) Order Dismissing Action Without Prejudice Having reviewed all the briefing filed in connection with the Order to Show Cause re: Dismissal for Lack of Jurisdiction, issued June 5, 2015, ("First OSC"), and the Second Order to Show Cause re: Dismissal for Lack of Jurisdiction, issued June 16, 2015, ("Second OSC") (collectively, the "OSCs"), the court concludes as follows:
I. THE COMPLAINT.
On May 19, 2015, Havensight Capital, LLC ("Havensight" or "plaintiff") filed its Complaint against Facebook, Inc. ("Facebook") and Does 1 to 10, alleging state law claims for: (1) intentional interference with prospective economic relations, (Complaint at 11-14); (2) unfair competition and trade practices pursuant to California Business & Professions Code §§ 17200, et seq., (id. at 14-18); (3) intentional interference with contractual relations, (id. at 18-20); (4) negligence, (id. at 20-22); and (5) vertical and horizontal price fixing. (Id. at 22-29). Havensight seeks $278 million in compensatory damages and $200 million in punitive damages. (Id. at 29-30).
Havensight alleges that "[t]he Federal Court of the Central District of California has jurisdiction under 28 U.S.C. Section 1332, because there is diversity of citizenship, and an amount in controversy, which is greater than $75, 000." (Complaint at 1). Specifically, Havensight alleges that it is a U.S. Virgin Islands "limited liability company, " "has a mailing address, at #5 Company Street, Christiansted, USVI 00820, " and "is incorporated in the U.S. Virgin Islands." (Id. at 2). Havensight further alleges that Facebook "is a Delaware Corporation and headquartered, at 1601 Willow Rd., Menlo Park, CA." (Id.).
Facebook's agent for service of process in Sacramento, California was served with the Complaint on May 20, 2015. (Proof of Service, filed May 20, 2015). Facebook timely filed its motion to dismiss on June 10, 2015.
II. FIRST ORDER TO SHOW CAUSE.
In the First OSC, the court explained that "a corporation is a citizen only of (1) the state where its principal place of business is located, and (2) the state in which it is incorporated." (First OSC at 1) (citing Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). The court observed that the Complaint alleged Havensight was a limited liability company, not a corporation. (Id.) When an entity is an unincorporated association like a limited liability company, "[t]he citizenship of each of the entity's partners, members, or owners must... be alleged." (Id.) In light of the allegations in the Complaint and relevant case law, the court ordered Havensight to state why its claims should not be dismissed for lack of jurisdiction, and specifically ordered Havensight to, among other things, "identify the citizenship and residence of each of its partners, members, and owners." (Id.).
On June 5, 2015, Havensight filed Plaintiff's Show of Cause for Proper Subject Matter Jurisdiction [U]nder Diversity Jurisdiction, 28 U.S.[C.] Section 1332. ("Plf's First Resp."). Havensight made two arguments to support its claim that the parties in the action were diverse. First, Havensight stated that it was a "limited liability corporation[, ]" and as such, the "personal citizenship" of its partners, members, or owners was not relevant to its citizenship. (Id. at 3). Havensight stated that it is incorporated in the U.S. Virgin Islands, its central office is located in the U.S. Virgin Islands, and it has an agent for service of process in the U.S. Virgin Islands. (See id. at 2-3). It also attached as an exhibit its certificate of existence, which stated that Havensight is a U.S. Virgin Islands limited liability company, not a "limited liability corporation." (See id. at [Un-numbered] Exh.).
Second, Havensight stated that even if the citizenship of its partners, members, or owners was relevant, diversity is satisfied because Havensight "has one owner and manager and that is Mr. Benjamin Woodhouse, " ("Woodhouse") who is "a citizen of [the] U.S. Virgin [I]slands[.]" (Plf's First Resp. at 2).
Additionally, Havensight stated that neither it nor Woodhouse are citizens of Delaware. (See Plf's First Resp. at 2-4). Were Havensight or Woodhouse citizens of Delaware, then diversity of citizenship would be destroyed as Facebook is incorporated in Delaware. (See id. at 3). Havensight did not comment as to its or Woodhouse's connection to California, (see generally, id.), but did note that Facebook has its "central office" in California and "almost all of their employees are located in Menlo Park, California." (Id. at 3).
III. SECOND ORDER TO SHOW CAUSE.
The Second OSC addressed the two arguments raised by Havensight in response to the First OSC. As to the first argument, the court observed that Havensight attached as an exhibit its U.S. Virgin Islands certificate of existence, which demonstrated that Havensight is a limited liability company - not a "limited liability corporation." (Second OSC at 1) (citing Plf's First Resp. at [Un-numbered] Exh.). The court determined that "[b]ecause Havensight's own evidence demonstrates that it is not a corporation or a limited liability corporation, ' but rather, a limited liability company, it is a citizen of each of its partners, members, or owners." (Id. at 1-2) (citing Johnson, 437 F.3d at 899 ("like a partnership, an LLC is a citizen of every state of which its owners/members are citizens.")).
As to the second argument, the court noted that in yet another action against Nike, Havensight Capital, LLC v. Nike, Inc., CV 14-6517 FMO (ASx) ("Nike 3"), Woodhouse and Havensight provided that they both had an address in Pismo Beach, California, thus raising the question as to whether Havensight is a citizen of California, rather than the U.S. Virgin Islands. (See Second OSC at 2). In light of the allegations in the Complaint and relevant case law, the court ordered Havensight to explain, under penalty of perjury, why the case should not be dismissed without prejudice due to lack of subject-matter jurisdiction. (Id.). The court ordered that, "[a]t a minimum, the declaration shall address the factors set forth" in Lew v. Moss, 797 F.2d 747, 750 (9th Cir 1986), for determining a person's domicile, including (1) current residence, (2) voting registration and voting practices, (3) location of personal and real property, (4) location of brokerage and bank accounts, (5) location of spouse and family, (6) membership in unions and other organizations, (7) place of employment or business, (8) driver's license and automobile registration, and (9) payment of taxes. (Id.)
In response, Havensight filed a Second Show of Cause for Proper Personal Jurisdiction, and Third Request for Immediate Review of Defendant's Fraudulent Pleadings, ("Plf's Second Resp."), and an Amended Second Show of Cause for Proper Personal Jurisdiction, and Third Request for ...